BARRIE CASSIDY:

Prime Minister, good morning, welcome.

PRIME MINISTER:

Great to be here.

BARRIE CASSIDY:

A test of political system. Given some of the rhetoric already around these issues, it just feels as if the system is going to fail?

PRIME MINISTER:

Well, I'm an optimist. I'm very confident that we'll find the good sense, the patriotism, the commitment, to securing Australia's future in this Parliament, and we'll find the support that we need in the Senate to secure the passage of the legislation that is so important for budget repair and for ensuring that we continue to have a strong economy. We remain a first world economy, with the generous social welfare safety net, in these very exciting times.

BARRIE CASSIDY:

Where, though, on what, are you prepared to negotiate with the Labor Party on? Where will you genuinely compromise?

PRIME MINISTER:

We need to begin the process and that begins this week where we'll be introducing into the House a number of very critically important bills - the Industrial Legislation Bills, the Building and Construction Commission Bill, the Registered Organisation Bills. These were the triggers for the double dissolution. These are critical to restoring the rule of law in the construction sector, which employs a million people, we'll be introducing the legislation that will protect the volunteers, here in Victoria, of the Country Fire Authority. We'll be introducing the Omnibus Savings Bill, which will invite Bill Shorten to support in the Parliament the savings that he supported in the campaign.

BARRIE CASSIDY:

Sure. All of that is take it or leave it stuff. There is no room for compromise on any of that?

PRIME MINISTER:

Barrie, the first thing we have to do is deliver on our commitments, and we will introduce them into the House, they will be passed in the House, where we have a majority, and there are a number of other important bills that will be going in this week and then we will obviously see where we stand in the Senate.

BARRIE CASSIDY:

Where is the room to compromise on any of this?

PRIME MINISTER:

Barrie, that remains to be seen. You know, you've been around politics for a very long time, from Bob Hawke's day and even before, and you know that governments very rarely have a majority in the Senate. That's what I said yesterday in Brisbane it has been ever thus, the road of compromise and negotiation in the Senate. There are 11 crossbenchers, if nine of them vote with the Coalition, that's a majority. If Labor votes for the Coalition, that's a majority. If the Greens vote with us, that's a majority. So, what we have to do is work with the crossbenchers, work with Labor, work with the Greens and we will find the best outcome to secure our program.

BARRIE CASSIDY:

Can you understand the Labor Party's argument, though, they'd like to see the Omnibus Bill before they declare themselves?

PRIME MINISTER:

Sure. No-one is denying them the right to see the Bill.

BARRIE CASSIDY:

They haven't...

PRIME MINISTER:

It's the legislative process.

BARRIE CASSIDY:

They haven't seen it yet.

PRIME MINISTER:

It will be presented this week.

BARRIE CASSIDY:

Have you seen it?

PRIME MINISTER:

I have seen all the measures, yes, absolutely.

BARRIE CASSIDY:

Why can they not see it?

PRIME MINISTER:

The measures are ones they announced and relied on in the campaign.

BARRIE CASSIDY:

Politics being what it is they want to be sure you are not slipping something through they didn't agree to. That's not unreasonable.

PRIME MINISTER:

Barrie, seriously, you know as well as I do you can't slip something through in the Parliament. A Bill has to be presented, the Treasurer will present the Bill, give a second reading speech, it will lay on the table, the Opposition will read it and respond.

BARRIE CASSIDY:

You want them to meet you in the sensible centre. That’s the right asking the left to meet in the sensible centre. That kind of implies a lot of give and take, doesn't it?

PRIME MINISTER:

I think there will be give and take in this Parliament. We have a very, very real challenge to our sense of fairness, our sense of justice. This is the fundamental test for this Parliament. We are currently living beyond our means. We are in deficit. We are spending more than we are receiving in revenue, we are increasing debt. We cannot keep doing that. Now, we set out in the Budget a clear plan to reduce that deficit and then, over time, bring that debt down. Now, the Labor Party supports some of our measures, they have opposed others. They have some others - increased taxes - that they propose. There is a variety of views in the Senate. One way or another, at the end of this 45th Parliament, I want Australians to be able to say that this Parliament, which they elected, has come to terms with the budgetary challenge we face and has stopped this irresponsible business of loading a mountain of debt, mountain after mountain of debt, on the shoulders of our children and grandchildren.

BARRIE CASSIDY:

This expression you used yesterday, the ‘sensible centre,’ are you satisfied that your own party is happy to live in the sensible centre? I'm sure the sensible part, no problem, but what about the centre?

PRIME MINISTER:

The Liberal Party and indeed the National Party are known for a very good reason as parties of the centre right. We are centrous parties.

BARRIE CASSIDY:

Because Tony Abbott said in his speech on Friday that you shouldn't move closer to Labor. Now compromising means, by definition, moving closer. He says you have to show some fight in the things you believe in.

PRIME MINISTER:

Well, you know, look at the double dissolution election. The Registered Organisations Bill and the ABCC Bills, we showed the fight, the real fight, of taking them to the people in a double dissolution election. That's fight. That's commitment. That's character.

BARRIE CASSIDY:

You have got a lot of crossbenchers out of that process?

PRIME MINISTER:

We have got 11, but, Barrie, I think, again this program is called Insiders so forgive me for insider political analysis, there were eight crossbenchers in the last Senate, six of whom were elected in the half Senate election of 2013. If we'd had another half Senate election this year rather than a double dissolution we could have reasonably expected another six crossbenchers elected, in which case we would have 12. Having a large crossbench of this size is neither unusual or unexpected, and I think we would have had that number, thereabouts, if we'd gone with a half Senate election. But if we'd not had the double dissolution election - that would have meant that the Government I lead would have not had the courage of its convictions on the Australian Building and Construction Commissions, it would not have had courage of its convictions on the Heydon Royal Commission.

BARRIE CASSIDY:

You wouldn't have finished up with four Pauline Hanson’s.

PRIME MINISTER:

Barrie, the reality is, Pauline Hanson and her colleagues are there because 570,000-odd Australians voted for her Party. I mean every single member of the Senate -

BARRIE CASSIDY:

The point is, in a half Senate it would have taken twice that many to get four.

PRIME MINISTER:

Well, that may be right. That may be right I think - that may be right. It would have been harder to get a quota, but the reality is, it's a democratic process and, you see, you've got to ask yourself – we have got to ask ourselves this question - my Party has been arguing the case for restoring the rule of law to the construction sector for years. We took those bills to the 2013 election. They were rejected twice in the Senate. I, as Prime Minister, had the character, the commitment, the courage to take that to a double dissolution. That was the only way we could secure those bills' passage. We would have had to simply say, those people who say shouldn't have had a double dissolution are saying, ‘We should have said the Heydon Royal Commission didn't happen, the CFMEU are charming gentlemen, who don't impinge on anybody's right to work, they are not adding 30 per cent to the cost of infrastructure.’ Come on. Governments have to lead and leaders have to have courage and that's what we did.

BARRIE CASSIDY:

Look at the superannuation issue, now, it's fair to say that Labor is probably closer to you on superannuation than the Greens and the crossbenchers. They are talking about a cap on the non-concessional contributions at $500,000, that's where you have it at the moment, as long as it's not retrospective. They also talk about the 30 per cent tax rate on salaries over $200,000. They say $200,000, you say $250,000. You are not that far apart on superannuation. Isn't that one area where you can actually talk to the Labor Party?

PRIME MINISTER:

Well, the really concerning thing about the Labor Party's proposals on super, which Mr Shorten revealed in his speech to the Press Club, information he wasn't prepared to disclose during the election campaign, you might recall - we had a comprehensive super policy, Mr Shorten declined to produce any details. He pocketed our savings but said he wouldn't tell anyone what he was going to propose. Let me tell you what the significant changes to our policy that he proposes. Firstly, the ability to catch up for concessional contributions that have been missed because people have been out of the workplace - massively beneficial for women in particular. He doesn't want a bar of that. The ability for older Australians, over 65 and under 75, to continue making concessional contributions - he doesn't want a bar of that. He doesn't want to give older Australians a break. And, above all - and this shows how wedded he is to the industry super funds and how beholden he is to the unions, militant unions - he is opposing our reform which will enable self-employed people, independent contractors, to make concessional contributions in the same way as if they were employees. Now, that is - so what we have done with super, yes, people on higher incomes will pay some more super, yes, people with very large balances will pay some more tax but we are making it fairer for women, self-employed people, independent contractors and older Australians and Mr Shorten stands in the way of those reforms.

BARRIE CASSIDY:

But you are not done with negotiations yet. If you negotiate with your own backbench and end up letting the non-concessional contribution to blow out to say $750,000, you are moving further away from the Labor Party and the numbers and will end up with nothing. That might satisfy some of your own backbench, but that's what will happen?

PRIME MINISTER:

This is your gloomy prediction. We are working, the super package has been very - our super package has been very well received. It's about a $6 billion package. The only area of controversy relates to the $500,000 non-concessional lifetime cap, which is around $500 million of that $6 billion. So the vast bulk is broadly accepted, and we have won the arguments on that in a very complex area. It's a great tribute to Kelly O’Dwyer and Scott Morrison for doing that. What Scott and Kelly have been doing, is, as we said we would, consulting on implementation, and some details with colleagues, back bench and ministers, and, of course, above all with stakeholders and they have been doing that around the country.

BARRIE CASSIDY:

On the plebiscite, is it doomed, is the legislation doomed?

PRIME MINISTER:

No, the legislation will be introduced. It will be passed in the House and then we'll have to see how it goes in the Senate. I think Labor will support it.

BARRIE CASSIDY:

Even now? They were briefing last night that they weren't. They were even...

PRIME MINISTER:

They would say that, wouldn't they.

BARRIE CASSIDY:

They were briefing getting information from pollsters that if you have a plebiscite it will go down.

PRIME MINISTER:

The Labor Party must want to delay same-sex marriage for a very long time, if they are briefing that. I mean, there are arguments to put against a plebiscite. You can see it costs too much money and so forth. The worst argument, the absolutely worst argument against a plebiscite is to say that it wouldn't be passed. So if Labor is seriously saying that, they are saying: ‘Don't consult the Australian people because they won't give you the answer you want.’ It is the most anti-democratic argument. I mean, Bill Shorten, if his people have been briefing that last night, Bill Shorten should stand up today and disown that, otherwise he has absolutely destroyed the credibility of his case against the plebiscite.

BARRIE CASSIDY:

If the legislation, though, does fail, what happens? Does that put an end to the resolution of this for at least three years?

PRIME MINISTER:

Barrie, you're a forward-thinking person, so you are always looking forward to hypothetical situations. I'm confident the legislation will pass through to the Parliament.

BARRIE CASSIDY:

But if it doesn't there won't be a vote in the Parliament.

PRIME MINISTER:

Barrie, there is no question that the fastest way, the way to guarantee that there is a vote in the Parliament on gay marriage in this Parliament, is to support the plebiscite. Personally, I have no doubt the plebiscite will be carried and the same-sex marriage legislation will then sail through the Parliament. I support it. I will be voting yes. So will Lucy.

BARRIE CASSIDY:

Without the legislation, do you feel as if you are being set up here because if that goes down you'll get the blame?

PRIME MINISTER:

I'm the Prime Minister, I get the blame for almost everything, even for the ABC, Barrie.

BARRIE CASSIDY:

You are ready for that?

PRIME MINISTER:

I'm a volunteer, it's a great job - blame comes with it.

BARRIE CASSIDY:

How good a job? When you go to what Tony Abbott said on Friday, you're in office but you're not in power. Do you agree with that?

PRIME MINISTER:

No, no, that - well, on the basis that we don't have a majority in the Senate? That would suggest the only Governments that have been in power in, you know, recent times have been John Howard and Malcolm Fraser for a few years. Governments normally don't have majority in the Senate. Governments normally, historically, have to negotiate with other parties in the Senate. It has been ever thus. That's the nature of our system.

BARRIE CASSIDY:

Right.

PRIME MINISTER:

We have a majority in the House, well, we have a majority in the House, obviously Julia Gillard didn't, but she got some numbers from the crossbenchers, she governed as a minority Government. We are a majority Government, the majority in the House, and we'll have to negotiate with senators. That has been the task of Governments from time in memorial.

BARRIE CASSIDY:

Just something that you said yesterday as well, you're not going to be distracted by peripheral issues. Does 18C come into that category?

PRIME MINISTER:

It isn't a priority. I'm not suggesting it isn't an important issue.

BARRIE CASSIDY:

So it's not peripheral?

PRIME MINISTER:

Well, what I'm saying is that we have got a - we are focused on the needs of Australians. We are focused on Australian families and their need to ensure that they have a job, their kids and grandkids will have a job, there will be strong economic growth, the revenues to pay, the Government revenues to pay for health and education, and infrastructure. All of that is put at risk if we don't manage our economy, and our budget, and so that is my focus. That's what I took to the election. I took a strong economic plan for jobs and growth.

BARRIE CASSIDY:

On 18C when you were asked about it this week, you said: ‘Not at this stage.’ Does that mean at one stage you'll be open to the idea of taking ‘insult’ and ‘offend’ out of the Bill?

PRIME MINISTER:

Barrie, it is not on our agenda. Look, Tony Abbott took this to the election in 2013. This is the history of it. He took it to the election in 2013, the Abbott Government, of which I was a member, made some proposals which Tony then took off the table and said the matter was, you know, put to one side. We did not take a position on 18C to the last election. Obviously it's a matter of considerable interest to some members, indeed both members in my party and also crossbenchers. Private members bills may - I think would very likely be proposed. But it’s not a priority of the Government and you've got to look at the focus, on delivering strong, economic growth. That's what we were elected for. People expect us to get on with the business of ensuring that their children and grandchildren can enjoy the prosperity, the opportunities that they have enjoyed. That requires leadership on the economy, and that is my focus.

BARRIE CASSIDY:

We are running out of time. A couple of other questions - one is on the NBN and the raids on Parliament House. Is there anything about that that makes you feel uncomfortable?

PRIME MINISTER:

Well, it's a police matter. You know, Barrie, I don't think I can comment on it other than to say that the police are investigating, you know, the alleged commission of a crime. They are going about it in the usual way. The Senate has got certain rights as Parliament does in terms of privilege, the Senate will form its own view, and I'll leave the Senate and the AFP to do their job.

BARRIE CASSIDY:

But if, as you said, you're fixing up the mess that Labor left...

PRIME MINISTER:

It is one of the biggest...

BARRIE CASSIDY:

Why the sensitivity around the material? If that is the case?

PRIME MINISTER:

Well, that's a matter for the NBN. You have to ask the NBN board that. Again, I don't want to speak for them, but it is a matter for the NBN management, for their Chairman, Ziggy Switkowski, or their CEO, Bill Morrow, for them to talk about that.

BARRIE CASSIDY:

I saw a figure just yesterday that suggested that 3 million households or something are now connected - only one million have taken it up?

PRIME MINISTER:

There are over 3 million households who can order a service, that's available. There is about 1.25 million households are paying customers. The NBN is connecting at currently over 20,000 a week, so over 80,000 a month, to the service - paying customers. They are ahead of all of their targets. This was a mess that we inherited, we sorted it out. Remember, we are connecting 80,000 a month. Labor connected 50,000 in six years. So, they have got - they are approaching 30 per cent of the country being covered by. Their forecast is that in 12 months they’ll have half of the country covered and two years, three quarters and then it will be complete in 2019-20.

BARRIE CASSIDY:

Just a quick one. I read a report during the week that in a private conversation you said that Mike Baird got the greyhound ban in New South Wales wrong. Is that your view?

PRIME MINISTER:

Barrie, this is a report of a dinner, but...

BARRIE CASSIDY:

Sure – but is that your view?

PRIME MINISTER:

I'll stay out of the state matters and leave that - leave the state matters to Mike as I'm sure he'll leave Federal issues to me.

BARRIE CASSIDY:

One Territory matter and your reaction to what happened in the Northern Territory yesterday?

PRIME MINISTER:

Adam Giles summed it up, it was a landslide, a thumping, but it was a massive win for the Labor Party, Mr Gunner.

BARRIE CASSIDY:

Any lessons?

PRIME MINISTER:

There are a lot of local issues there. It was driven overwhelmingly by local issues and I think Lisa, your correspondent, adverted to that. But the point that Adam made about unity, that is a wise insight into politics in every level in every generation.

BARRIE CASSIDY:

Thanks for your time this morning.

PRIME MINISTER:

Great to be with you.