Sky News Australian Agenda Interview with Prime Minister Julia Gillard 19 August 2012

Interview with Prime Minister Julia Gillard Australian Agenda program, 19 August 2012

Peter van Onselen: We are joined now by the Prime Minister, Julia Gillard. Prime Minister, thanks very much for your company.

Julia Gillard: Good morning, Peter.

Peter van Onselen: About a decade ago you made an observation in the parliament, slightly sarcastically, about whether Nauru would still be up and functioning by now and for another decade from now. Is it humiliating to have to be in a situation now you're embracing a report that recommends the reopening of Nauru?

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Julia Gillard: Peter, if your point is has the Government compromised, have I compromised; yes, I have. And I've done that in the nation's interest. People smuggling is a resilient trade, it's a trade that mutates, that learns from experience, and we have people smugglers out there enticing people to risk their lives at sea and we've seen too many deaths and too many tragedies. So in those circumstances we needed to act. We've been prepared to compromise for some time, that has been met with no compromise from the Opposition. I'm very glad that through Angus Houston and the report that he and his fellow panel members delivered we've been able to put in place what they described as a circuit breaker, and now we need to put in place the rest of the measures recommended by the Houston report rover time.

Peter van Onselen: Do you agree with Kevin Rudd, that you had a mandate as a government in 2007 to unwind the Pacific Solution?

Julia Gillard: We certainly stood in the 2007 election on a policy of not having offshore processing, but we face a circumstance now where we're seeing large numbers of people lose their lives at sea because they are enticed by people smugglers who say pay your money and get to Australia. Which is why the underlying reasoning of the Houston report, I think, is so compelling that we've got to be very, very clear with asylum seekers that you will get no advantage by having paid a people smuggler and having risked your life.

Paul Kelly:

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Prime Minister, what's the practical effect of your new policy? In particular does this mean protracted or even indefinite detention on Nauru and Papua New Guinea?

Julia Gillard: It certainly means that people could be on Nauru or in PNG for an extended period of time. What the Houston report is saying to us - and we have certainly embraced this is that you need to equalise the waiting times that people have whether or not they move. So you look in the region where people are processed by UNHCR and you ask yourself the question: how long would they wait if they stayed where they were and waited for the UN High Commissioner for Refugees and their officers to process their claims...

Peter van Onselen: That could be years though.

Julia Gillard. ...and to get a resettlement opportunity. Have them wait the same amount of time on Nauru and PNG.

Paul Kelly: It could be a very long period of time. Surely we're talking about many years.

Julia Gillard:

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Prime Minister Julia Gillard

Yes. This is a tough policy, Paul. This is a tough policy. I can't give you what the timeframe is today; we need to do some consultations including with UNHCR to ascertain what that timeframe is. But let's not forget there is a balance here in the Houston report. He says equalise the amount of time that people wait so that there is no incentive, no advantage, from having risked your life at sea and giving a people smuggler your money. He says also that we need to make available more refugee places. So the message to people is if you stay, if you don't get on that boat, then more places will be made available for you. If you do get on that boat then you won't get any advantage out of it.

Paul Kelly: I understand that trade-off, but when you look at this is it fair to say that your policy is now a tougher policy than John Howard's previous Pacific Solution?

Julia Gillard: People will do all of this commentary.

Paul Kelly: But I'm asking you.

Julia Gillard: Yeah, and I'm going to answer your question, Paul. People will obviously do comparisons between aspects of this policy and aspects of the policy of the former government. I actually don't think it's the comparison of aspects that's compelling, I

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think you've got to look at this as an integrated package the way that Angus Houston and his team asked us to do. People will say some elements are tougher, people will say that there are some new elements that are humanitarian, like the more refugee places. This is a package and we have endorsed the package in principle.

Paul Kelly: What's your response to the criticism, particularly from your own Human Rights Commission, which says that under your new law the High Court is not able to look and make a judgment about the human rights aspect of processing offshore.

Julia Gillard: We will have a proper processing regime offshore to assess who is a refugee, the mechanics of all of that regime will be worked through. But, yes, there will be a proper assessment of who is a refugee and a proper assessment of who isn't and who ought to return to their homeland.

Paul Kelly: But what about circumscribing the authority of the High Court when it comes to scrutinising this. That's the accusation, the accusation from the human rights lawyers is that this legislation is too tough and that it limits the capacity of the High Court to judge this in human rights terms. What's your response to that particular point?

Julia Gillard:

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Prime Minister Julia Gillard

My response to that particular point is we needed in this legislation to make arrangements so we could process offshore, as a result of a High Court decision about the arrangement with Malaysia we could not. We have taken a very rigorous legal approach to that, given our circumstances in the High Court before, and we stand by it. There will be proper assessments of whether or not people are refugees.

Peter van Onselen: But, Prime Minister, a best case scenario here if this does work is that we're going to have at least a few hundred people locked up indefinitely, possibly for years, in Nauru, costing taxpayers an awful lot of money and 70% to 90% of those people, judging on estimates over the last decade, are going to be genuine refugees but they're going to be sort of held in detention despite all the psychological issues and all the mental health issues that a whole range of Labor politicians talked about during the Howard years. That is going to be a best-case scenario. The worst-case scenario is the boats keep coming and people keep drowning.

Julia Gillard: Well, Peter, I'm going to disagree with you on aspects that sentence. The Houston panel is not saying that people should be on Nauru or PNG indefinitely, no-one is saying that. They are saying look for the times for resettlement if people hadn't moved. Second, when you use the terminology 'locked up', we are obviously working, particularly with Nauru, for arrangements where people will have some freedom of movement so that they can move around. Yes this is tough policy, and I understand for many people that it's hard for them, that it's emotionally hard for them. I've seen that written on the faces of some of my Labor colleagues. And let's be fair, there are some parts of the Liberal Party too that were anxious in the days of John Howard's policy and I suspect have some heaviness of heart about aspects of the Houston report. But our

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aim here is to stop people risking their lives at sea and too often losing that bet when they get on a boat and are actually drowning at sea. Some of them we know about, some of them we don't even know when boats have gone down.

Peter van Onselen: Paul Kelly before likened the policy or asked you to sort of compare it to John Howard. Jon Kudelka, one of the cartoonists at 'The Australian' has a cartoon, I've just put it up on the screen now, where he has you morphing into John Howard. It's making light of a serious issue but it must irk at least your Labor colleagues, certainly on the Left, you were of course factionally in the Labor Left before becoming Prime Minister, it must irk them to sort of be compared to John Howard, whether it is tougher or slightly less tough, it's so far removed from where the Labor Party was during its years in Opposition.

Julia Gillard: Well, with respect, the feelings of me or any Labor member are a second order issue, indeed a 100th order issue, compared with saving lives at sea.

Paul Kelly: Can I just ask Prime Minister, what do you do if Nauru and PNG don't work? You must be concerned that the boat arrivals are still coming at a very high rate. So is there a next step? What do you do if the boats continue to come?

Julia Gillard:

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Paul, let's be clear about this and let's take it a step at a time. We have got through legislation which will enable us to do the things that Angus Houston and his review team referred to as a circuit breaker, and we are getting about doing those things quickly. I am not at all surprised that the people smugglers are running around saying to people: move now, get in quick, circumstances are changing. That is to be expected and I think we are seeing some of that evidence in boat arrivals now. We will get in place the circuit breaker but we have also committed in principle to the rest of the Houston report that is about increasing refugee places to change the incentives about whether or not people move. It's also about building on the arrangement with Malaysia. So we will get on with all of that work, as the Houston report has recommended.

Paul Kelly: OK, just changing the subject, I want to refer to the article in yesterday's 'Australian'. Is it correct that in 1995 you had to resign as a partner from Slater & Gordon as a result of their investigation into misappropriation of funds around the legal entity that you had established?

Julia Gillard: I am not dignifying all of this scurrilous campaigning by going through these things point by point. Paul, we are talking about matters 17 years ago which have been dealt on the public record for most of that time. As long as 15 years ago these matters were dealt with on the public record. I did nothing wrong. If you've got an allegation that I did something wrong then put it. If you don't have an allegation I did something wrong then let's ask a question that matters to the nation today. On Slater & Gordon you're talking about a firm with which I've got continuing good relationships and as recently as the last few weeks was giving a speech in their building and greeting staff at their Sydney office.

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Paul Kelly: Can I just ask, given your good relations with the firm would you like to see them make some statement to clarify this matter?

Julia Gillard: Look, what Slater & Gordon says is a matter for Slater & Gordon, but, Paul, my essential point here is there's delving into matters 17 years ago for what purpose? If you've got an allegation I did something wrong put it. If you can't put it why are we talking about this?

Paul Kelly: No, I've got no allegation but the point is...

Julia Gillard: Well if you've got no allegation and I've not seen in yesterday's 'Australian' or anywhere else an allegation put about my conduct, if there is no allegation to deal with then why are we dealing with this issue when we could be dealing with the Australian economy, schools, health.

Paul Kelly:

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No we are very keen to deal with those issues Prime Minister, but there were a series of allegations made in yesterday's 'Australian' by a former senior partner which questioned your integrity. Surely you need to respond to those allegations.

Julia Gillard: Well, I am not going to get into a circumstance where we've got people blogging malicious nonsense and we're having some of this penetrate into the media. I'm not going to get myself into a circumstance where I spend my time dealing with these events 17 years ago when the people who are asking me questions about them are unable to even articulate what it is that they say I did wrong. This is just nonsense and a distraction from the important work I have got to do as prime minister and the important issues for this nation's future. I've just said to you, Paul, I continue to have very good relationships with Slater & Gordon, you know going and greeting the staff and all of that kind of stuff, it's not the first time I've done that, it won't be the last time I do that.

Paul Kelly: OK, I understand your point. You're saying it's all nonsense. Can I just ask you then this direct question

Julia Gillard: Paul, I've dealt with it.

Paul Kelly:

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The central point was that the partner alleged that you had to resign because of this issue. Is that correct or not?

Julia Gillard: Look, Paul, I did resign from Slater & Gordon, that's a matter of public record. I made the decision to do that. All the rest of this is just, you know, the sort of scurrilous...

Paul Kelly: But you're not answering the specific point.

Julia Gillard: Paul, I'm not getting into specifics about issues 17 years ago when you are not able to put to me any contention about why this is relevant to my conduct as prime minister today. I mean, join the dots for me, Paul, what matters about this today for Australia and me being prime minister? Just articulate that.

Paul Kelly: Well I will. I mean, the point is that a partner in your former firm has made a series of allegations which go to your integrity...

Julia Gillard: And the relevance to me being prime minister today, Paul?

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Paul Kelly: Well, I think when accusations are made about the integrity of a prime minister going to the professional position that she had before she came into politics surely that is relevant.

Julia Gillard: And, Paul, I did nothing wrong. Are you challenging that?

Paul Kelly: No, I'm just asking questions.

Julia Gillard: Well - and this is the issue, isn't it, because I understand you're being asked to ask questions today.

Paul Kelly: No, sorry, there's no-one asking me to ask questions.

Julia Gillard: Right, well that wasn't my advice from a little bit earlier before this show.

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Paul Kelly: I'm sorry Prime Minister, I ask my own questions, nobody tells me what questions to ask.

Julia Gillard: And I'll give you an answer to them. I did nothing wrong, Paul. Have you got an allegation to put to me? If you do not why are we discussing this?

Peter van Onselen: Can I just ask one question on this and then we'll move on. Last question. Why not just put it all out there. I believe you that you did nothing wrong, I made a comment on Friday on my show 'The Contrarians' that I thought that this is all a beat-up and that we should move on the major issues. But why not just address it straight down the barrel so that we can move on and all of the scuttlebutt that goes on on-line, which frankly I'm sick of people e-mailing me about this, we can just move on from it.

Julia Gillard: Well, Peter, let me welcome but also question your grand naivety, the people who are dealing with this on-line in their malicious and motivated way would not stop no matter what explanation I gave. You know that, I know that. And that is why there is no point in flogging through all of the details of this because the people who are pursuing this malicious campaign will continue to do it. They are not at all interested in the truth. The truth is I did nothing wrong, no-one has put any direct assertion to me. You haven't done it today, it hasn't been done in the newspaper, that I did anything wrong. In these
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circumstances why are we, 17 years later, when these matters have been dealt with on the public record for the best part of a decade and a half, still talking about this?

Paul Kelly: If we can go to the question of Gonski, to move on to a fundamental policy issue. How soon before we get the Commonwealth's response to the Gonski report, can you meet the commitment of $5 billion which was mentioned in that report, and do you anticipate that the states will come to the party and be part of the package?

Julia Gillard: Paul, I think for our viewers we've got to decode what we are talking about. Inside the beltway people are wandering around talking about Gonski, outside the beltway people are raising their eyebrows going what on earth does all of that mean. To me it means improving Australian schools. That's what doing work on school funding is about. We will be responding to the work of David Gonski and his review team and that won't be too far away from here. It will be in a number of weeks time. But I want to make this point very clearly: if we're talking about money for Australian schools and David Gonski's work is centrally on the funding, we've got to be talking about what is that money for. That money in my view - any money we give to schools needs to be about driving better outcomes for kids, higher quality, and better standards. I am worried as prime minister that whilst our school reform work is gathering results because our schools were neglected for too long under the former government we are now slipping behind the education race in our region and in the world. That's ultimately bad news for our economy, it's bad news for the lifetime opportunities of our children, and it is that question of how we improve schools that's got to be front and centre of everything we talk about in this area.

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Paul Kelly: And what about the financial commitment and whether the states come to the party?

Julia Gillard: Well, of course, states need to be working too to improve the outcomes in state schools. The work of David Gonski and his review team is work for every school and its advice to all governments, and my concern as prime minister is for every child in every school. It's not about school systems or school sectors, it's about that child and their opportunity in life and the standard of education they get. So we will certainly be looking to work with our state and territory colleagues, with the independent schools and with the Catholic school system, and our mission will be how can we improve each and every school for each and every child within it because it's not satisfactory for our nation to be slipping behind the standards of the world and it's not satisfactory for some kids to be left at the back of the class and slipping behind the standards of the other children.

Peter van Onselen: Prime Minister, can I ask you, how do you do that in relation to the funding side of the mechanism. Whether it's schools or the National Disability Insurance Scheme, there's a lot of talk about state versus Commonwealth share of funding arrangements. Do you acknowledge, I guess, that state governments, whatever you sort of think of them at the end of the day they've got far greater funding pressures than the Commonwealth just by virtue of if nothing else the vertical fiscal imbalance that exists and the regressive nature of the kind of taxation take that they have open to them.

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Julia Gillard: At every step of the way this has been a government that's been prepared to step up and provide additional resources to states for important national outcomes. Look at health. I mean health, single biggest thing on the state government budget, single biggest pressure on them. Health costs rising far more quickly than revenue rises or normal CPI rises. In those circumstances we said we will step up and be an equal partner in growth. So we have alleviated in a big way what was going to actually bust state budgets apart if we didn't change arrangements. In education we've more than doubled the funding. Every step of the way it's come with a reform agenda: better quality teachers in front of classrooms; more empowered school leadership to get on with the job; more information for school communities, for parents, than they've ever had before. As we work on the next stage of improving schools and on the next stage of the National Disability Insurance Scheme we'll take the same approach of working with states, understanding their revenue challenges but also being prudent on the Federal Government's budget.

Peter van Onselen: But they still don't believe that there is that understanding about their revenue structure, they still believe that as things stand now they're under enormous pressure, much less with the kind of extra funding that you're talking about.

Julia Gillard: Well, let me be a little bit clear about some of the things that get said in the public domain and some of the things that get said privately. Of course I understand that state premiers and chief ministers will be out there on behalf of their jurisdictions always arguing for more federal money, so is the way of the world until the end of

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time. When I sit around the COAG table and people raise issues with me and I say would you prefer to have the Liberal view of health funding the way it used to happen or what this Government has done for you I don't get too many hands up for the past, and there's a reason for that. We've been more generous and more prepared to tackle issues of national concern like health funding, like education where we've got more to do, and like disability where we've got a lot more to do for people in our nation who currently get left on the sidelines.

Paul Kelly: Just on that question of disability, when will you announce the final arrangement for the National Disability Insurance Scheme and what will it cost?

Julia Gillard: Well the costings have been - the all-up envelope has been dealt with at COAG and it's in the order of $7.8 billion is my recollection. Now we have said that we get the launch sites up and running, we will learn from the launch sites, and learning from the launch sites we will work towards rolling out the full scheme. So, Paul, we've got some more decisions and more work to do in disability but we're taking the approach that the Productivity Commission recommended, which is get the launch sites happening first so we can learn about the model.

Paul Kelly: Can I just clarify, will the policy be finalised before the election and will the cost of the policy therefore be in the Government's forward estimates in that period before the election?

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Julia Gillard: Paul, we will be working in the Government's budget arrangements on National Disability Insurance Scheme and on other issues including the further work we've got to do in improving school funding. Your next point is going to be well how will the Government make provision for this. We will do it the way we have always done it, that is we will work hard to ensure that we are dealing with savings, we are dealing with priorities in the Government budget so that the budget is in surplus as promised, and we have got a very good track record of doing that.

Paul Kelly: OK, so you will make more savings?

Julia Gillard: Paul, yes. There's nothing new in that.

Paul Kelly: Sure.

Julia Gillard: This is a government that has been offsetting new spending with savings as a routine part of our approach. We live in limited fiscal times and so you've got to be prudent with every dollar, and we are.

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Paul Kelly: Will these be substantial savings?

Julia Gillard: Of course we will be working through to support our further expenditure. We have shown the ability to save tens and tens of billions of dollars in the Federal Government's budget to make available resources for the things that we believe really matter to the Australian community and we will continue to take that approach.

Paul Kelly: And as you have indicated, the surplus is non-negligible.

Julia Gillard: Correct.

Peter van Onselen: Is that the same with the carbon price, there's not going to be a reduction in that going forward or indeed a lowering of the floor price once it floats?

Julia Gillard:

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We have been consulting on floor price arrangements as is well-known and we will continue with those consultations. When we are in a position to say something about that we will. For carbon pricing all of the money arrangements for the Commonwealth's budget are there for all to see.

Paul Kelly: But presumably if you are having these consultations you do intend to change the policy?

Julia Gillard: We said a long time ago we would be consulting about the floor price and we have been consulting about the floor price.

Paul Kelly: What's your thinking about this? Do you think that it's desirable probably to alter the floor price or to alter the arrangement concerning permits?

Julia Gillard: Paul, when we're in a position to deal with these issues we will. We've been in a period of consultation.

Peter van Onselen:

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One final question if I can, Prime Minister, before we let you go. Corporate taxes, this is something that we've seen hit the headlines again this week. Business is keen for a company tax cut, there's been some discussion that there may need to be reductions in other areas in terms of reclaiming for tax. What's your view on this? Do you see room not just in the next year but in the next couple of years to be able to revisit this idea of a corporate tax cut, which after all was originally going to happen but, you know, for various reasons hasn't?

Julia Gillard: Well, the corporate tax cut didn't happen because Mr Abbott and his opposition didn't want to give businesses a tax break; that's why it didn't happen. We then said in those circumstances we were prepared to work with the business community for a revenue neutral change to look at the whole area of business taxation and to say how can we make it more streamlined, more efficient in a way that enables us to reduce the company tax rate. Now that's hard work, and, you know, we're seeing, I think, in the public dialogue some of the symptoms about how hard that work is. But we are still saying to the business community keep working, keep discussing, keep trying to come to a consensus about the nature of the changes.

Peter van Onselen: But there's always a bit of a leap of faith when you cut company tax because the argument from business is that it will drive investment and therefore that will naturally bring in more tax receipts but there is a leap of faith when you model doing that. Are you prepared to take that leap of faith, cut it and see whether or not that's right?

Julia Gillard:

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We don't take leaps of faith in the Government's budget, we get hard-headed analysis and numbers and that's what you see come into the Government's budget. The work here between the business community needs to keep continuing. Yes, you know, people are going to see the world through their own eyes, which sector of the economy that they are in and the like, but we've said this is something that business wants to see so we expect the business community overall to try and work through a consensus for change here.

Peter van Onselen: Prime Minister Julia Gillard, you've been very generous with your time, we appreciate you joining us on Australian Agenda. Thank you.

Julia Gillard: Thank you.

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