Gillard in hot seat on tax, refugees and Rudd

All of my life, I have been driven by a passion for making sure kids get the opportunity of a great education. That's an equity measure, but it is also an economic measure and it's core to what I want to do to strengthen our economy.

WE get the feeling that the opposition's slogan of "Stop the Waste" is resonating with people, that they are disappointed with the government's performance over the Pink Batts program, green loans, to some extent the school building program. Now, you have made the argument strongly that the global financial crisis was the overriding consideration and therefore some mistakes had to be made. Nevertheless, Tony Abbott is promising more accountability, more checks. How will a Labor government in its second term avoid such problems?

I've learned some things during the rollout of economic stimulus, for example, with the Building the Education Revolution program. I've learned to listen about involving commercial and corporate expertise in the design and rollout of government programs.

As education minister, I took more steps than any government in Australia's history at a Commonwealth level to empower principals. For the future rollout of capital, I'd want school principals centrally involved.

The insulation scheme became a mess … we've learned some lessons from that. But I think we've got to not lose sight of the fact that all of this was about making difficult decisions in crisis days.

Around the world, governments were guaranteeing their banking systems because they feared that if banks opened their doors without the benefit of a government guarantee, there would be catastrophic collapses. We did what we had to do. We guaranteed our banks … and we started economic stimulus, timely, targeted, temporary. Economists from around the globe have looked to Australia and the work that's been here to support jobs.

I understand that Mr Abbott can use a slogan and he can seek to channel people's complaints, but at some point he's got to stump up to the big-picture argument. We supported jobs, he would not have. As a result of us supporting jobs, we're not in recession and we're coming out of this global financial crisis able to prosper and build for the future.

If Mr Abbott had had his way, we would be in recession with all of the waste of human potential that that implies and all of the problems with government financing that implies. As businesses collapse, people lose their jobs, people lose their homes and need government benefits to survive.

THERE are not competing offers of income tax cuts on the table nor competition over income tax reform at this election. Nevertheless, there's a lot of pressure for more to be done on tax. Are you committed, at some point, to further income tax reform?

The Henry tax review has pointed us in a number of important reform directions. The government's response was to accept some recommendations immediately, rule some others out as things that we would never do. But there are some important reforms where we've said, as budget circumstances permit, we would look at simplifications in the tax system and in some of the social welfare payments that Ken Henry and his team worked through.

We have pledged to enact the Henry recommended system of an automatic tax deduction. So instead of filling in all the forms, you get the benefit of a $500 deduction in the first year, $1000 in the years after that, to give people a little bit back on their tax. And we've picked up the big-picture recommendations, supports, superannuation.

BUT income tax in the third term?

When budget circumstances permit. The overriding priority is to bring the budget back to surplus in 2013 and we will do that.

THIS campaign began with the Opposition Leader pledging not to touch your industrial laws. You've got a different view about whether that's believable. But don't we need a workplace relations system that continues to change and modify? Are you going to rule out doing anything to the workplace laws in the next term?

The Fair Work Act got the balance right. I had to fight all of the way to get it through the Parliament so excuse me for cynicism in looking at Mr Abbott's pledges to not touch it. He is a man deeply committed to workplace deregulation and was deeply committed to WorkChoices. His assurances given in an election campaign are simply not believable.

The Fair Work Act got it right. We've got productivity and participation improvements that we need for long-term prosperity.

We've also got major infrastructure investments we need to make and none of them bigger or more important than the national broadband network.

LET'S look at an announcement you made recently about building the rail network in outer Sydney. Do you have any plans for anything like that for Melbourne?

We have already announced our commitment to the regional rail link, an infrastructural investment of more than $500 billion. What we've been seeking to do is to partner with state governments in modernising public transport.

MOST Australians have shown that they support action to stop climate change. Your Citizens' Assembly has been widely criticised. It was cited as the reason you dropped in the polls in the first week of the campaign. Will you revisit this idea if you are re-elected?

I'm determined to deliver the Citizens' Assembly.

I think the Citizens' Assembly is just one way of engaging the community and having them work through the details of what carbon pricing means. People want action on climate change, but people also did become a little bit concerned, and some of them a little bit afraid, when Mr Abbott started his campaign with the slogan "A great big new tax on everything". I think it's important that people understand the foundation stones here, what the policy's about, and a Citizens' Assembly will help us work through that degree of community engagement.

BUT are you saying that as a part of that deep and lasting consensus, a crucial ingredient in that is bipartisan support, and that you won't move towards a price-based mechanism without opposition support?

There are two ways of getting bipartisanship. You can seek to do a deal between politicians in Parliament. We tried that and, gee, we almost got there. If it hadn't been for Mr Abbott and changes in the Liberal Party, we would have got there.

What I think is appropriate now is to aim for a community consensus that will drive politicians into a political consensus rather than looking just to the politicians.

I believe many Australians are frustrated that we don't have a carbon pollution reduction scheme now. I share their frustration. But to make sure we have a sustainable change, not one that's put into place and then cast aside when government changes, we need the community to be on board.

MANY people would say, why don't you go and see Bob Brown after the election? He'll have the numbers in the Senate to deliver real action. Why not do that? Will you at least engage the Greens much more than in the past in building community consensus?

We've got different policies and different perspectives but I've always found Bob Brown someone you can talk to and worth through issues with. Our policies will be our policies, but I'll deal with Bob Brown and everybody in this debate with appropriate respect.

We legislated [on a carbon pollution reduction scheme], only to have the opposition campaign against it for three years and vow to ''unlegislate'' it if they were successful in the next election. We can't have a carbon pollution reduction scheme for a few years, then take it away, then put back. Our economy couldn't stand that uncertainty.

ONE of the big areas all year has been the push to get more money for mental health but it seems to be pushed down Labor's agenda. There's a huge difference in the funding promises between Labor and Tony Abbott. Why have you decided not to give more attention to mental health? You say it's priority in the second term. Does that mean more money or something else?

I haven't endorsed Mr Abbott's plan on mental health and that's because it is funded by cutting other areas of health. It relies on cutting GP super-clinics, which offer people with mental illnesses integrated primary care.

Mr Abbott's plan relies on getting rid of our GP After-Hours Hotline. People with mental health conditions are also Australians who would go looking for medical care in the middle of the night.

It also requires us to abandon electronic health records, an important innovation in health care, particularly for people with chronic and complex conditions who rightly get sick of retelling their story to every new health professional they meet.

We have announced a plan for a targeted focus on suicide prevention. But I agree there is much more to be done here and what I mean by "second-term agenda" is working through the way that services are provided now. We have this division between what federal government does, what the states do. States end up bearing the burden of people who are chronically unwell. Federal government of course has its contributions through Medicare and the PBS. But I believe we can do better, and we will be able to do better as we roll out our reform agenda. I believe redefining how we deal with mental health can be a big part of this new change in health care.

Click here to watch Julia Gillard discuss mental health.

ISN'T there another way to put more money into mental health? You do have the experts saying Labor's position is not enough.

If we look at the record of this government, more money has gone into mental health. We've been investing in some of the areas that the Coalition now also points to. The new resources going into health care can also provide benefits in mental health. We have added 50 per cent into what flows through healthcare agreements. That does matter for things such as sub-acute hospital beds. Those beds are used for mental health patients as well as other patients. So there's been a pattern of investment, but there is more to do and we'll work through that in the second term.

WOULD you be prepared to take this into your department, say with a special taskforce or something of that nature, to try to give it more priority?

Certainly I would like to be personally engaged in the efforts here. I come off a base as the daughter of a psychiatric nurse. When I was shadow minister for health, I personally put a focus on mental health so I would want to be personally involved in it, working with the external expertise available to government, as well as the internal expertise. It would require more than the Health Department … it's a whole-of-government approach.

AND you commit here to drive personally that whole-of-government approach?

I certainly want to be centrally involved in this because I can see that it is a great area of need.

WOULD you commit, for example, to lay out your approach in this area within six months of being re-elected?

I believe that as we roll out and define our plans for reform, we can address how mental health fits in with that and what else we need to do. I believe we can do that in a fairly quick way. I don't want to set deadlines but I'm genuine when I say this would be a priority for us in a second term.

DISABILITY is another area where you've said that there is more to do. The Productivity Commission is delivering a report next year. If it recommends a national disability insurance scheme, would you implement that?

We've given it the reference deliberately because we believe there is merit in looking at such a scheme. It's a big change coming off our basis as a nation that has run a targeted social security system and welfare system to conceptualise this sort of social insurance model. Of course you could say, "Well we do have universal platforms, we've got Medicare", which is a pool which we all contribute to so we can take out of it when we need it, a sort of risk-based approach. So we need to conceptualise this right, but we wouldn't be giving it to the Productivity Commission if we weren't serious about addressing what comes through the other end of the process.

KEVIN Rudd has come to the aid of the party, campaigning in Queensland. Obviously the party was anxious to get him involved but, nevertheless, you're going to have to do quite a lot to heal your relationship with him for next term. How are you going to do that and what does the party owe Kevin Rudd?

Kevin and I know each other well and we've got the same beliefs that drive us. What I think has been remarkable is that Kevin has come off a sickbed to get involved because he's so passionate about seeing the government re-elected and seeing the work of the government continue. Many of the things that Kevin believes in so deeply, including health reform, he drove initially.

BUT he's so wounded too, isn't he?

It's been an incredibly tough time for Kevin Rudd. I think we can all imagine the weight of that, the hurt of it, the difficulty of it. It's shown, I think. It certainly showed at his press conference on the day the prime ministership changed. But he's a very resilient person, a very determined person. And he wants to make a further contribution to Labor.

SO what do you think the party owes him?

He has the capacity, to be a huge contributor to the team. I don't think Kevin would want the sense that the party is having him in a position because he's owed something. I think he would want the sense that he has a position because he's the best person to do it. If we're re-elected, obviously I want to see Kevin in a senior role in the team.

ON asylum-seeker policy, Tony Abbott is promising that Nauru would be up and running within weeks of him winning government. When would you expect your regional processing centre to be operating?

I'm not going to make any false promises here and I think a real difference between the perspective I'm taking and the one that Mr Abbott is taking is that I'm trying to tell people the truth. He's walking around saying, "peaceful invasion, armada of boats". I'm making the very simple point first that at current rate of arrivals it would take 20 years to fill the MCG. I'm also telling people the truth that there's no quick fix. I'm not going to set a deadline. I'm talking about a regional solution with a regional processing centre where countries come together and cooperate. And that is a long-term basis on which we take away from people smugglers the very product that they sell.

THE regional processing centre is just one element of a regional solution. Would negotiations with the UNHCR and their imprimatur be just as important as getting East Timor on side?

Certainly. When I outlined all of this in my first speech on the question, I talked about a regional processing centre involving the United Nations High Commissioner for Refugees, who would need to be involved in identifying who are genuine refugees.

I also talked about more developed nations than Australia stepping forward to assist those who are found to be genuine refugees.

WOULD you be willing to go to East Timor after the election to try to clinch these negotiations?

I will do what is necessary to pursue the negotiations. I'd be more than happy to travel to East Timor.

DO you acknowledge there is a sense of urgency among many members of the public about doing something substantial and reasonably speedily about this issue?

Yes. We've settled a lot of refugees in this country and done it so well but people do feel a sense of anxiety when they see boats on the horizon. And I do think people don't want to see people taking risks. They don't want to see people profiting from human misery.

They do want to see a sustainable solution that would make a difference. I believe I have outlined the plan for that. But I'm being also honest about complexity and time frames of getting it done. Slogans like Mr Abbott's "Stop the Boats" don't take us anywhere.

WHAT plans do you have about taking the country towards becoming a republic?

I'm a Republican, so I would like to see us progress towards being a republic. Community interest in this topic has not gone away though the tempo of debate has certainly cooled since the days of the republic referendum. I think Australians may re-engage in this question again. I would be happy as prime minister to be there as a participant in that debate but I think the history of the last referendum and why it was lost tells us that people don't want politicians coming along and imposing models on them. They want to feel an organic sense of connection to this debate, and so we would need a step up in community advocacy and community activity.

Click here to watch Julia Gillard discuss the republic issue.

SO you wouldn't be looking to drive it - it would need to come from somewhere else?

No. The movement for it needs to be deeper than politicians.

YOUR predecessors, going back to Kim Beazley, outlined a process to achieve that by having an indicative plebiscite on the model and then, if there is a strong support on a particular model, putting that to a referendum. Is that something you would embrace?

We saw last time that disputation around the model caused the failure of the referendum overall, and unless you get a sense of what the model is going to like you are going to always end up in that terrain

I am certainly not a supporter of the direct election of a president. I think it would be a distortion to our system of government. On what basis would one stand for election on a position that is like the governor-general as we know it, because by definition we don't seek to have political partisanship or political power projected from that office, so I don't think we should introduce a system where you can have a president and prime minister at odds on day-to-day contemporary political questions, with all the stresses and strains that could put on our system.

CAN we ask about former prime ministers. Clearly Kevin Rudd will be a colleague, but particularly Paul Keating and Bob Hawke, do they have a relevance to how you will govern and will you be calling on them for advice?

Bob and Paul have great insights to share about what it is to do this job. I have highlighted Bob's contribution as prime minister as to the way he led his government. It is something that I would seek emulate, the sense that we are al strengthened by being members of a team.

WHAT have you learnt about yourself during this campaign?

I suppose I have learned some things about how you keep your energy levels up. I think I am very even tempered. I don't think I get stressed very easily. I like being out talking to the members of public, so maybe I am learning some more about the weight you can bear, because I have never had to do it with this intensity before. But I am feeling good, ready for it.

HOW would you handle loss if that was to occur?

The psychology of campaigning is you have to keep your eyes on the day, the victory, the moment. I don't think anybody starts a sporting contest saying ''I am going to run in my head the what-ifs if I don't get there''. You have to be focused. Whether I win or whether I lose, the internal mettle and fortitude will come to the fore.

Click here to watch Julia Gillard discuss Melbourne's beleaguered train network.