By court reporter Jamelle Wells

Updated Mon Apr 29, 2013 6:51pm AEST

 

The ICAC hears evidence that a so-called 'independent' report was in fact edited by former Minister Ian Macdonald's department.

Related Story: Coal licence a 'goldmine' for union boss: ICAC

Related Story: Mining consultant appears at Macdonald corruption inquiry

A corruption inquiry has been told an "independent" report on a mining licence issued by former New South Wales Labor minister Ian Macdonald was in fact edited by his own department.

The director-general of the Primary Industries Department, Dr Richard Sheldrake, told the Independent Commission Against Corruption (ICAC) his portfolio included mining when the licence for the Doyles Creek mine in the Hunter Valley was awarded in 2008.

The ICAC alleges the licence was "gifted" to former union official John Maitland without a tender, and that his $165,000 investment in the project turned into a $15 million profit three years later.

The inquiry was shown notes that suggested a company doing an "independent" review of the licence asked for feedback from Ian Macdonald's department before giving the report to the Department of Premier and Cabinet.

Mr Sheldrake admitted changing a paragraph about the financial gain the state would get from the licence, but said he did not mean to be misleading.

He wrote that the licence would generate between $7.5 million to $15 million for the state, but did not include any extra money that could be generated if the mine was put out for competitive tender.

One report into the controversial licence found Mr Macdonald acted within his power in granting it, but another one then found that conflict of interest issues had not been properly dealt with.

When Mr Macdonald's barrister Tim Hale asked if he could cross examine Mr Sheldrake, Commissioner David Ipp said he could see no need to.

When Mr Hale argued the point, the Commissioner told him, "This is my inquiry, not your inquiry and not Mr Macdonald's."

The inquiry continues.

Corruption inquiry told of 'independent' report - ABC News (Australian Broadcasting Corporation)

Mark Kenny Chief political correspondent

April 30, 2013

Julia Gillard has opened the way for a range of policy reversals, including tax increases, as her government struggles to contain a ballooning budget deficit, and to dampen expectations of a return to the big surpluses of the past.

In a landmark economic speech in Canberra two weeks before the budget, the Prime Minister has signalled big changes to taxes and spending, arguing the days of strong revenue flows during the first phase of the resources boom are over and will not return.

Bold declaration: Julia Gillard and Treasurer Wayne Swan before her speech in Canberra on Monday. Photo: Andrew Meares

She said all options were ''back on the table'' because the rate of revenue growth had fallen $12 billion short of Treasury expectations due to structural changes that were not likely to change for the better.

The bold declaration raises the possibility of budget initiatives once regarded as politically unthinkable, such as increasing the Medicare levy to fund billions in new disability spending - as signalled by the Productivity Commission.

Increasing the Medicare levy has been previously ruled out but is now being considered as a way of spreading the burden of new expenditure as broadly as possible.

Illustration: Ron Tandberg

But Ms Gillard promised that the desperate fiscal situation would not mean the government would ''cut to the bone'' or ''chase revenue down'' in a bid to replace a shortfall just for the sake of it.

Rather, she recommitted her government to more social spending, justified as wise investments in the nation's future.

The complex budgetary situation means Labor is now banking not only its future on securing the permission of voters for changes it will announce in the budget on May 14 but the very viability of its signature reforms.

Its plan is to simultaneously limit the growth of the deficit to a manageable size capable of being erased within the budget's four-year period, but also to lock in funding sustainability in future years for the $14 billion disability insurance scheme and the school education reforms. ''I have expressly determined we need to have every reasonable option on the table to meet the needs of the times - even options previously taken off the table,'' she said.

''The nation and the government must have maximum flexibility to deal with these complex, and rapidly changing, events … that is my approach.

''As a Labor Prime Minister, I find these decisions both urgent and grave.''

The comments immediately unleashed claims of secret government plans to introduce death duties and end negative gearing on investment properties.

''They are bullet words from the Prime Minister,'' said the opposition's spokesman on the economy, Joe Hockey.

''All options are on the table, so increased tax on superannuation, increased taxes on the family home, death duties, which Wayne Swan ruled out in Parliament - all options are on the table.''

He said it was clear from Ms Gillard's words that she was preparing voters for unpalatable new taxes, declaring: ''There is no limit to what they [Labor] will do or consider doing to the Australian economy, to families across Australia.''

While Ms Gillard quickly ruled out any changes to the 10 per cent GST, a promise matched by the opposition, her proposal to revisit previous decisions has opened the way for other changes in the budget, including increases in capital gains tax on the family home, to superannuation, and changes to the private health insurance rebate.

The Greens, which have submitted their costings to the independent Parliamentary Budget Office, say there are big savings to be made from fixing the underperforming mining tax (raising $26 billion over four years); abolishing the resource industry's advantageous tax treatment on diesel fuel (raising $33 billion over four years); and introducing its ''too-big-to-fail'' banking levy which has been projected to raise $11 billion by 2017 if introduced immediately.

Labor argues that if the rate of revenue growth that pertained under the Coalition government had continued, it would now have $23 billion extra in revenue to play with. Instead, it is dealing with a projected $12 billion hole.

''The persistent high dollar, as well as squeezing exporting jobs, also squeezes the profits of exporting firms: with lower profits for these companies comes lower company tax going to government,'' Ms Gillard told the Per Capita seminar series. ''We can't assume this will change soon.''

''The high dollar is also placing competitive pressures on firms here, who face new pressures from cheaper imports, holding down prices across the board - with the high dollar making it hard for these firms to pass on price increases - holding down profits and, in turn, holding down company tax.''

Embrace the pain

Kate McClymont Senior Reporter

April 29, 2013

Papers: Eddie Obeid, Nathan Rees, Kristina Keneally and Ian Macdonald.

Almost 1000 pages of documents concerning the allegedly corrupt coal deal involving two former Labor ministers Ian Macdonald and Eddie Obeid were withheld from Parliament in 2009, a parliamentary inquiry has found.

In November 2009 the Legislative Council issued a call for papers regarding the exploration licence for Mount Penny, in the Bylong Valley near Mudgee.

Since then, an explosive public inquiry by the Independent Commission Against Corruption has uncovered a treasure trove of documents. Most of the crucial documents were withheld from Parliament. Those documents revealed Mr Macdonald may have corruptly granted a coal exploration licence for Mount Penny, which happened to be where the Obeid family had bought rural properties.

The Obeids have made $30 million from the coal deal and could reap a further $100 million if approval is granted for an open-cut mine at Bylong, which could be worth up to a billion dollars.

In March the Privileges Committee of the Legislative Council announced an inquiry into a possible cover-up over the failure to produce documents when Parliament asked for them in 2009.

There is some confusion about which minister had responsibility for producing the documents back then. On November 17, 2009, five days after the call for papers, Mr Macdonald and Joe Tripodi lost their cabinet spots.

In retaliation, Mr Obeid orchestrated a revolt against sitting premier Nathan Rees. Within days of Kristina Keneally becoming premier, Mr Macdonald was back in the resources portfolio. His replacement for those few weeks was Peter Primrose. There is no suggestion he was involved in any possible withholding of documents.

On November 23, 2009, the Director-General of the Department of Industry and Investment, Richard Sheldrake, wrote to the Premier's Department, saying ''I certify to the best of my knowledge all documents held by I & I and covered by the terms of the resolution have been produced''.

But the subsequent inquiry by ICAC into the Mount Penny exploration licence has revealed that Parliament was sorely misled. About 140 documents, totalling almost 1000 pages, were withheld from Parliament. These documents were obtained by ICAC using its powers to compel agencies to hand over their relevant holdings.

It is a criminal offence to thwart ICAC, but the penalties for thwarting Parliament are minor. Non-compliance over a call for papers affects only current parliamentarians. However, ministerial staff and departmental officers could be held in contempt of Parliament if they are found to have breached the request to produce the relevant Mount Penny papers.

Some of those documents revealed how Mr Macdonald had personally ordered the department to produce an exploration licence for Mount Penny, in spite of advice that more drilling was required in order to determine just how much coal was there.

On Tuesday, the Privileges Committee will release its report into the potential cover-up. Prominent barrister Bret Walker, SC, was retained by the Privileges Committee to work out which documents in ICAC's holdings should have been given to Parliament. It is understood no witnesses were called to give evidence to the Privileges Committee, so recommendations may include a formal investigation.

Mr Macdonald quit Parliament in mid-June 2010 over allegations he had rorted travel expenses. During the recent ICAC investigation, evidence was given suggesting that he was to be paid $4 million from the allegedly rigged coal tender. Notes tendered during the inquiry indicated he had previously received thousands of dollars in secret payments for advancing the interests of mates in other deals involving the government.

Macdonald deal documents kept from Parliament

John Watson Senior writer April 26, 2013

Soaring living costs and a rising reliance on private services are a double blow.

Australians are irate about all the demands on good incomes. Photo: Louise Kennerley

''You need to earn $150,000 just to live in Sydney,'' read the online comment on the recent article, ''High earners don't realise own wealth'' - one of many that unwittingly confirmed the point.

Labor MP Joel Fitzgibbon added his $250,000-worth. Families on that income in Sydney's west were ''still struggling'', he said.

''Coal miners in my electorate earning 100, 120, 130, 140,000 a year are not wealthy.''

Get real, Joel: such earnings are way above average.

Half of all employees earn less than $50,000 a year, the Australian Bureau of Statistics reports. Only one in 10 full-time workers gets more than $123,000.

As for households, half get by on less than $70,000.

Yes, living in Sydney is expensive. But the cut-off mark for Australia's top 5 per cent of earners, 530,000 of them, is just above $130,000. Almost all Sydney's 4.6 million residents live on much less.

So why don't the wealthy feel well off? They can't blame tax. Australia ranks 30th of 34 Organisation for Economic Co-operation and Development nations, with taxation as a share of the economy about 8 percentage points below average.

Taxation by all governments has fallen from a high of 30.4 per cent of GDP in 2000 and 29.7 per cent as recently as 2007 to about 26 per cent. Personal taxes are down from 12.6 per cent in 1999-00 to 9.5 per cent of GDP, although the GST offset much of that shift.

The reason wealthy households ''struggle'' is two-fold: higher living costs and consumption - think big houses and purchases, plus GST - and cost shifting from government.

The biggest household costs are housing, groceries and transport. Where were the big increases between the past two ABS Household Expenditure Surveys? In six years, the costs of food and drink, miscellaneous goods and services (driven by a doubling of school fees) and housing costs rose two to three times as fast as the consumer price index.

Wealthy households also have much of their money tied up in superannuation and homes. Many years paying much higher interest rates than most of the world hasn't helped, especially as Australian houses are the biggest and least affordable relative to income.

Non-housing living costs are high, too. The Economist Intelligence Unit's global living cost rankings put Sydney at three, Melbourne at four, Perth at 11, Brisbane at 13 and Adelaide at 14.

We pay more for everything from groceries, restaurants and parking to cinema tickets, IT products and electronic goods.

Just as the big four banks have exploited domestic dominance to grow into some of the world's biggest, so have our big two retailers. Woolworths and Wesfarmers have tied up almost 70 per cent of supermarket spending, 60 per cent of the liquor market and 50 per cent of fuel sales. Australia had the fastest-rising food and grocery prices of any developed nation in the past decade.

Retailers in general charged what a captive market would bear until online competition arrived.

Higher-income groups face extra costs, though, because they also tend to use private service providers instead of public services. This is related to the fact that governments get roughly $60 billion less revenue this year than if the tax-to-GDP ratio were the same as in 2000.

Spending on transport and infrastructure, health and education must suffer, leaving the private sector to fill the gap. Poor public transport leads many of us to bear the considerable costs of a car. And governments have not just run down public education and health but promoted the private alternatives.

Over five years to 2010-11, the ABS reports, household education spending, including university fees, grew 40 per cent faster than government spending.

Total private spending on education is nearly two-thirds of government spending.

The Independent Schools Council of Australia calculates more than half the sector's funding comes from private sources, mostly parents, ''saving'' government nearly $4 billion a year.

Families of the 37 per cent of students in Catholic and independent schools (up from 22 per cent in 1980) spend three to eight times as much on schooling as those using government schools.

They face an average extra cost per child of between $140,000 and $435,000, the Australian Scholarships Group estimates.

Half the population also has private health cover, up from 30 per cent 17 years ago, and their premiums total $17 billion a year - equal to a third of the federal Department of Health and Ageing budget. Premiums have risen three times as fast as the CPI for a decade, with no relief in sight.

Private patients spend several times as much on their health as public patients, and ''gap'' charges just add to the pain.

Prime Minister Julia Gillard recently hinted at why millions are burdened by the soaring costs of private services: ''In Australia, revenue to government for every unit of GDP has been at its lowest since the recession of the early 1990s. In other words, for a given amount of economic income generated, less money is finishing in the public purse, to be used for the Australian people.''

That is a deliberate policy choice of recent decades, as Australians repeatedly voted for big tax cuts. It seems they do not feel better off as a result, especially those most reliant on private services.

Australians are irate about all the demands on good incomes. Should they feel dudded by two decades of government tax and spending policy? That is a debate for this year's election. Let's see whether politicians venture there, let alone do anything about it.

John Watson is a senior writer at The Age.

As the public purse thins, the rich feel the pinch

Mark Kenny Chief political correspondent

April 25, 2013

EXCLUSIVE

Sought a sweet deal: Tony Abbott. Photo: Glenn Hunt

Tony Abbott has attacked a government decision to double termination payouts for federal political staff to four weeks' pay, despite having sought more generous arrangements for outgoing Liberal employees when he became Opposition Leader in 2009.

Correspondence from Mr Abbott to the then special minister of state Joe Ludwig shows Mr Abbott asked for eight weeks of ''settling out'' time for seven staff who had been employed in the private office of Malcolm Turnbull when Mr Abbott replaced him as leader on December 1, 2009.

The letter, dated December 2, noted the Turnbull employees were limited to a ''settling out period that expires at COB 15 December, 2009''.

''While I am aware that some staff will elect to move on, I hope to retain a small number either within my office or the broader Coalition,'' he wrote.

''I am mindful that we are only three weeks away from Christmas and, accordingly, I seek your agreement to extend the settling out period for the following staff until 31 January, 2009 [sic].''

Turnbull advisers named in the correspondence include Peta Credlin, Mr Abbott's present chief of staff, and Mark Roberts, the man demoted last week from his post as senior policy adviser for threatening funding to an indigenous education body.

Special Minister of State Mark Dreyfus confirmed on Wednesday that advisers working for Labor would be eligible for four weeks' separation pay among other entitlements, in the event of the ALP being defeated in September, an increase of two weeks. There are some 550 political advisers employed across all offices.

''Two weeks had been found, in practice, not to be long enough - you need the four weeks,'' Mr Dreyfus told Fairfax Radio, arguing it had ''nothing to do with what is going to happen at the election''.

Mr Dreyfus said the new standard applied to staff across all parties and formalised a growing practice observed in 10 instances since 2007 when staff had been given the greater four-week payout. These included when the Howard government lost the 2007 election.

Asked about the new payout standard on Wednesday, Mr Abbott was scathing.

''This is another sign of the Labor Party's contempt for taxpayers,'' he said. ''This is a taxpayer-funded handout to political staffers and, frankly, it's just not on. It shouldn't be happening.''

The comments reflected opposition talking points circulated to Coalition MPs on Wednesday after newspaper reports of a $6000 ''golden handshake'' designed to keep staff loyal up to the election, despite a likely defeat for Labor.

Questioned specifically on the payouts to Turnbull employees, on Wednesday, Mr Abbott suggested there was no comparison.

The private Coalition briefing paper advised MPs to respond as follows if asked by journalists whether a Coalition government would reverse the four-week entitlement: ''If asked would you reverse the decision: We are taking advice on this. We understand that staff need time to pack up their desks and make arrangements to move out of their office. Two weeks is enough time to do this but four weeks is excessive and it is not something we support.''

Abbott sour on payouts, despite request for sweeter conditions

Mark Kenny Chief political correspondent

April 26, 2013

Putting tax offsets on the table: Tony Abbott. Photo: James Brickwood

Major companies face higher costs under a future Coalition government after Tony Abbott signalled introducing his $3.3 billion paid parental leave scheme without fully offsetting company tax cuts.

In the first sign that business might get the downside cost but be forced to wait longer for tax relief as the opposition considers the fiscal situation, Mr Abbott has hinted at uncoupling the two promises.

That could see the top 3200 companies hit with a 1.5 per cent parental levy from say, July 1, 2015, but denied an offsetting business tax cut until a later time.

''Well, my hope - and we can't finalise the fiscal position, we can't finalise the timings of these initiatives until we've seen the pre-election fiscal outlook and I fear that that will be much worse than the government is currently letting on,'' he said in an interview on the ABC's 7.30 program. ''My hope is that we are able to introduce paid parental leave at the same time as we have an offsetting company tax cut.''

However, it is expected that even if a cut is proposed, it would be less than the 1.5 per cent reduction promised in 2010 when the parental scheme was first proposed.

His office on Thursday said that nothing had changed and that Mr Abbott remained firmly committed to the parental initiative, albeit with an as-yet unspecified start-up date.

In 2010, it was planned to commence, subject to legislative passage, by July 1 last year.

The latest comments raise the likelihood of the big end of town paying more tax under the Coalition if it finds as expected, that the federal budget is deeper into the red than is stated.

''I know that there are some people who are unhappy about that element of our policy,'' Mr Abbott said of his generous parental leave scheme, which would pay a mother's full salary over a six-month period post-birth, capped at an income of $150,000 a year.

He said it remained an aspiration to deliver modest relief to business but stopped short of guaranteeing it would start at the same time as the parental scheme kicked in.

''What we want to do is have a modest reduction in company tax that will mean that for big businesses, there is no net increase in tax, despite the paid parental leave levy,'' he said.

The equivocation will send shockwaves through the big end of town where the reluctant acceptance of the leave policy had been secured only through the promise of lower company taxes across the board, leaving top corporations at least no worse off.

Mr Abbott argued that assuming the two things were eventually introduced, small business would get ''a company tax cut and a paid parental leave without having to pay the levy''.

Key Nationals MPs and free-market-oriented Liberals have privately criticised the leave policy as a project of Mr Abbott in search of more support from women.

Business groups have slammed the proposal as an impost they cannot afford at a time of a soaring Australian dollar and a softening domestic economy.

The Business Council of Australia has gone on the record saying the policy ''defies commonsense''.

It has also dismissed Mr Abbott's claim that big businesses may find the levy cheaper, because they can scrap their in-house parental leave arrangements.

Abbott kicks tax offsets down road

 Judith Ireland April 26, 2013 - 2:26PM

Clive Palmer for PM?

Mining billionaire Clive Palmer forms a new political party to contest the federal election, saying it's "up to the people" whether he becomes Prime Minister.

Katter's Australian Party is welcoming Clive Palmer's new party with open arms, describing it as a ''strengthening of forces'' against the Labor Party and the Coalition.

KAP national director Aidan McLindon told Fairfax Media on Friday that far from seeing the billionaire miner’s election plan as a threat, it would strengthen his party's election chances.

Mining magnate Clive Palmer has re-formed the UAP to contest the federal election. Photo: Rob Homer

This came after Mr Palmer insisted that he had nothing to do with KAP.

On Thursday, Mr Palmer announced he was restarting the United Australia Party, which was dissolved in 1945.  The former life member of the Liberal National Party (LNP) – who quit the party last year – initially said the new UAP would contest 127 lower house seats in the federal election and stand for all seats in the Senate.

After strong interest following the announcement, Mr Palmer said the party would stand in all 150 lower house seats.

The mining magnate later confirmed that he would run in the Liberal-held seat of Fairfax, held by Alex Somlyay since 1990. Mr Somlyay will retire at the September election and Sunshine Coast businessman Ted O'Brien will contest the seat which houses Mr Palmer's Coolum resort and dinosaur park.

Mr O'Brien said the news that Mr Palmer would run against him in Fairfax was ''unexpected but not alarming''.

He said had been a full-time candidate for almost six months, and that the news would not change his strategy or plan.

Mr Palmer also has larger ambitions, telling reporters at a press conference in Brisbane that he was running to be prime minister of Australia.

He said he was not throwing his hat into the ring for personal gain. ''I have no personal interest. I have made enough money in my life,'' he said. ''I'm not seeking any enrichment or wealth for myself; I am seeking it for the Australian people.''

Mr Palmer, who had threatened to run for parliament and set up his own party before, said there were key differences between his new UAP and the Liberals, including on refugee policy and the axing of the carbon tax.

Palmer's party will also pit him against fellow Queenslander Bob Katter's party – formed in 2011 – which is also planning to contest every seat in the election.

Mr McLindon said that Mr Palmer's decision backed up what Mr Katter had been saying for the past 10 years – that there was no difference between the Labor Party and the Coalition.

''We certainly welcome more players onto the field,'' he said.

The national director said that while there may be ''fringe differences'' between Mr Katter and Mr Palmer on economic issues, they shared a lot of common ground, particularly around nation building or ''developmentalism''.

Mr McLindon said KAP had talked to the miner as recently as late last year and would now seek to begin negotiations with Mr Palmer, with the hope of reaching preference deals.

But on Friday, the co-operative rhetoric did not appear to be matched by Mr Palmer, who told ABC Radio he was ''totally different'' from Mr Katter on a range of policy questions, including gun control.

''We have nothing to do with the Katter Party,'' he said, adding that Mr Katter had no experience of business.

When asked about an alliance with the KAP at a later press conference in Brisbane, Mr Palmer replied: ''No, any other questions?''

But Mr McLindon said that with Mr Katter's political experience and Mr Palmer's business background, the two could make a formidable team.

''They are pretty different in appearance but pretty similar in objectives,'' he said.

Risky proposition

Australian National University emeritus professor of political science John Warhurst said that while Mr Palmer's plan to field candidates in every lower house seat and Senate spot was possible, there were risks in running a last-minute campaign.

With about three and a half months to go until the election campaign starts on August 12, Mr Palmer's party would struggle to carry out due diligence on potential candidates, Professor Warhurst said.

''The difficulty is finding good candidates,'' he said, noting that One Nation and Family First struggled with the same issue.

''Its a question of getting people without baggage.''

Professor Warhurst said that it was also very late to be starting local campaigns, but added that Mr Palmer had the advantage of funds and a public profile.

''With money and energy it's possible for him to get it done.''

Professor Warhurst said that Mr Palmer's party could confuse voters and split the Coalition vote. The new UAP may be a complicating factor in the Queensland Senate race and in the seat of Fairfax.

'Why now?'

On Friday, former prime minister Queenslander Kevin Rudd called Mr Palmer’s new party a ''last-minute stunt'', questioning why he was setting up the party so close to the election.

''Why on earth are you doing it now?'' Mr Rudd told Channel Seven.

''If you're going to run and put a lot of money behind your campaign, at least the Australian people have the right to put you under some scrutiny about what policies you’re going to take to an election.''

In a rare show of bi-partisanship, shadow treasurer Joe Hockey agreed Mr Palmer needed to detail his policies.

''I'm with Kevin I want to see his policies,'' he said.

Of Mr Palmer, Mr Hockey also said: ''He's out there in his own orbit and he’s entitled to that place.''

Opposition Leader Tony Abbott told reporters in Adelaide that ''anyone'' was entitled to run for parliament and aspire to be leader of the country.

But Mr Abbott dismissed Mr Palmer as a threat to the Coalition's electoral chances.

''If you are serious about changing the prime minister, well, there's one candidate,'' Mr Abbott said.

''I suspect that if there's another party on the fridge, it might compete with Mr Katter's party.''

What's in a name?

There is a question as to whether Mr Palmer will be able to re-register "The United Australia Party" as his party's name.

A different group, the Uniting Australia Party, has already lodged an application with the Australian Electoral Commission.

The Electoral Act says the Commission can refuse a registration if the party's name "so nearly resembles" the name of another political party that it is likely to be confused with or mistaken for that name.

Mr Palmer did not appear to see this as an issue on Friday.

"The AEC doesn't have the power not to accept it, we own the trademark," he told Fairfax Media.

"They may not care about [trademarks] but maybe the courts will care about them."

With AAP

Palmer's party a 'welcome' addition to political landscape

Mark Baker Editor-at-Large, The Age

April 6, 2013

Nothing if not his own man, Bob Katter's political rise has seen his transformation from a Bjelke-Petersen state-government minister, to independent MP maverick, to party leader. What next?

Back in the day … Katter with his father, Bob snr, in 1974. Photo: AAP

It's sweltering in Cairns. A small crowd has gathered in the shade of a huge Moreton Bay fig on the waterfront to support a protest rally by hospital staff. More than 400 of them are about to lose their jobs, thanks to the cost-cutting crusade by Campbell Newman's Liberal National Party (LNP) Queensland government.

Bob Katter, the workers' new best friend, has turned up early with state MP Shane Knuth. Katter, whose federal seat of Kennedy stretches from here to the Northern Territory border and covers more than half a million square kilometres, has come prepared.

As we march down the esplanade towards the rally, Katter, in trademark Akubra with jeans and a tie, parades a huge Australian flag tied to a freshly cut sapling. Knuth has a matching Eureka flag. Workers cheer from a construction site and greetings are shouted from passing cars.

Bob on the job … (from left) Katter, Rodeo Queen of Australia Courtney McGeechan, Shane Knuth (top) and Adrian McLindon by a KAP campaign bus. Photo: AAP

So far so good for two politicians on the make. But Katter is about to put his foot in it. Or, more precisely, his size 11, suede bush boot. After short, stirring speeches from various union officials, Katter takes the microphone. He denounces Newman for taking an axe to public service jobs while preparing to spend $700 million on a new parliamentary precinct. "He's got enough money to build a pleasure palace for himself," he says, drawing a chorus of approving outrage.

He then chides the previous Labor state government for shedding railway jobs and tells a rambling story about a nurse sacked in Charters Towers, his current home. A worker standing towards the front yells: "What about Cairns, Bob? We're not interested in railways and bloody Charters Towers."

"God bless you," says Katter.

Roping 'em in … Bob Katter expects Katter's Australian Party to one day "control Queensland". Photo: Tim Bauer

"And God bless the gays and lesbians," chimes in a woman up the back, triggering a ripple of laughter.

Then comes the porkie. Katter recalls his time as a minister in Joh Bjelke-Petersen's Queensland state government. "Joh had a blind spot on unions and that was bad. But he didn't shed a job," he declares. "Whatever the shortcomings of that government - and there were plenty - we didn't sack people." Katter has failed to notice Stewie Traill, the Electrical Trades Union (ETU) organiser for far north Queensland, standing to one side of the crowd. "That's bullshit, Bob, don't play that game," shouts Traill. "Don't go back to 1985, Bob, because you'll never win that one."

In the mid-'80s, the Bjelke-Petersen government sacked 1000 union linesmen employed by the South East Queensland Electricity Board (SEQEB), replacing them with contract workers. The confrontation triggered violent street protests and protracted power blackouts before the government won. Later, Katter will concede over a meal that the SEQEB fight was a shameful episode in which Bjelke-Petersen sought to break the union and crush its membership. The events contributed to his disillusionment with and ultimate estrangement from the National Party.

Stetson and son … Katter with his son Robbie, last year. Photo: AAP

Today, while the Queensland branch of the ETU might be slow to forgive or forget, Katter is best mates with a bunch of union leaders, including Victorian ETU boss Dean Mighell, whose support has been pivotal in his bold campaign to build a new force in Australian politics that will challenge both his old conservative cronies and Labor.

The ambition of Katter's Australian Party (KAP) is to seize the balance of power in the Senate and pick up seats in the House of Representatives in this year's federal election. And Katter is determined to use that power, if he gets it, to turn back the tide of free trade, to revive Australia's embattled manufacturing and agricultural sectors and to usher in a new era of "developmentalism" in Australia.

But before all that, Katter clearly needs to polish a few aspects of his CV - including his record on industrial relations, his position on gay rights and on the story of his remarkable transformation from a leading light in one of the most right-wing governments in Australian history to the picket-line maverick of today.

Bob Katter began life with his fists - in Cloncurry, western Queensland, the hottest town in Australia. He says his childhood made Huckleberry Finn "look like a wuss", with he and his mates spending their free time exploring abandoned mine shafts, swimming in flooded rivers and playing with guns.

"My mother was a Brisbane girl and in Brisbane children go to school in shoes and socks," says Katter. "I nearly got killed. Every night after school I was bashed up. What do you think is going to happen when you are the only kid in the school wearing shoes and socks? Those kids teethed on leather. It was sort of get tough or die. So I got tough. I got real tough, actually." Jack Fraser, an old cattleman and longtime friend of Katter who we meet one night in Mareeba, west of Cairns, can vouch for that. Fraser - whose rugged credentials include a severed hand sewn back on after a confrontation with a bull - remembers a brawl at a pub at Julia Creek when Katter was in his 20s. "This bloke kept badgering Bob, poking him in the side. He wouldn't leave him alone. In the end Bob just turned around and flattened him," says Fraser. "He's a wildcat, that one."

The young brawler and captain of the Cloncurry Tigers rugby league team took a while to settle down. In a private tribute to his mother several years ago, Katter wrote: "After many years at university I left a failure and I buried myself in Cloncurry, the hard-bitten frontier town of my childhood. I had no profession, no business, a wife, two kids and eked out a living as a projectionist in my parent's picture theatre. My mother's interest in me was just the same as it would have been if she'd lived for another 10 years and actually seen me sworn in as Queensland's youngest cabinet minister, owner of a working copper mine and 250,000 acres of unencumbered cattle station."

Politics was always Katter's destiny. His grandfather, a businessman of Lebanese descent, was active in local government and his father, Bob snr, was a Catholic trade unionist who quit the ALP during the 1950s split and held the federal seat of Kennedy for the Country Party and its successor, the National Party, from 1966 until his retirement in 1990.

Bob jnr was elected to the Queensland Parliament in 1974 and was a National Party minister between 1983 and 1989 before falling out with Bjelke-Petersen's successor, Mike Ahern. He moved to federal politics in 1993, recapturing Kennedy from Labor. Increasingly disaffected with the Coalition's economic policies, he turned independent in 2001.

"I had to get out of the National Party because they were ruining my electorate. I was a dingo who stayed too long," he says, citing the destruction of the sugar and tobacco industries and the loss of jobs in fisheries and boat-building in Cairns. "When they deregulated dairy, I had just reached the end of the road."

He thought his political career was doomed: "No one had ever been re-elected as an independent. I was walking into an open grave." He has been returned at the four elections since then, now drawing more than 50 per cent of the primary vote. Kennedy has become Katter freehold.

Bob Katter is easy to caricature: the hat, the three-piece suits, the snowy hair and rugged facial features that might cast him as a character in a Norman Lindsay sketch. Peter Beattie, the former Labor Premier of Queensland, says: "I quite like him, but he can be as mad as a cut snake. Because he is so outspoken, his political support often looks better than it is."

Katter is irrepressible, a whirlwind of words, ideas and energy. He turns 68 next month and had quadruple heart bypass surgery in late 2007, but nothing seems to slow him. On a two-day tour of Cairns and the Atherton Tableland, he seems to know every second person and everyone knows him. Strangers greet him like an old friend. Even folks from the opposite side of politics are polite and curious to engage with him, and he with them.

There's a meeting in Mareeba for workers who have lost their jobs and entitlements with the collapse of mining company Kagara. The bank is about to foreclose on George Peterson and his wife, Flo. "If Bob can't do anything to help us, no one can," says Peterson. "At least he has a go."

Katter is tough and temperamental, but away from the political bear pit in Canberra he is polite and personable in the nicest way of the bush. In restaurants in Sydney and Melbourne, he remembers the names of waiters and drops by the kitchen to thank the bemused staff before leaving. At a busy intersection in Cairns, he winds down the window to greet a couple of kids wrestling a curbside advertising hoarding in the heat.

Over a sandwich in a coffee shop, he shares a table and animated conversation with an elderly couple who ask for his autograph and a bearded cyclist who declares himself a Greens stalwart. He wanders back from an op-shop in Mareeba with a book he doesn't want. "Her business was slow, so I thought I should buy something," he says, with a hint of embarrassment at the soft-heartedness of the gesture. He eschews the gold-pass perks that are the right of all members of Federal Parliament. He insists on flying economy class and refuses to use the luxurious Qantas Captain's Club lounges, preferring to sit in the public areas with a milkshake, chatting with whoever wanders by. "How can I go travelling in first class? What would people think?" he says.

He is an idealist in an age of cynicism, an unaffected political everyman at a time of every man for himself. He proposes tough options when the leaders of Labor and the Coalition often chart the path of least electoral resistance on big issues.

For a man with a keen interest in world events and the sweep of history, Katter is surprisingly untravelled. He has been overseas just once - a tour in 2006 that took him to Canada, the US and Brazil fact-finding on perhaps the dearest of his pet projects: ethanol.

Political opponents dismiss Katter as being mad and many journalists regard him as a clown. On both counts they sell him and themselves short. Some of his policy pronouncements may be radical and unconventional - even naive and unworkable - but they are heartfelt and spring from a passionate nationalism and a conviction that the Australian economy has lost its way.

Katter wants to abandon free-trade agreements and restore protection for manufacturing and agricultural industries. He wants to stem the tide of foreign takeovers of Australian industries, farms and jobs. He wants an end to the privatisation of state-owned assets. He wants ethanol mandated as a fuel additive to revitalise the sugar cane and grain industries. He wants a return to full arbitration in industrial relations. He wants the Coles-Woolworths supermarket duopoly broken up. He wants to force Qantas to keep most of its crew and engineering jobs in Australia. He wants it all and he wants it now.

His message resonates with a diverse array of Australians. James Packer donated $250,000 to the party last year, praising Katter's "passion for this great country". Ad man John Singleton gave $50,000, as did the Victorian branch of the ETU and the Construction, Forestry, Mining and Energy Union.

The ETU's Dean Mighell, who, unlike his Queensland comrades, is a strong friend and supporter of Katter, has resisted intense pressure to head the party's Senate ticket in Victoria. "Bob could be the saviour of the Australian working people if he wins the balance of power," says Mighell. "A huge number of blue-collar people are attracted to Bob when they hear him. He has a very powerful message that free trade is killing this country."

Two years ago, Mighell invited Katter to address a gathering of 380 ETU shop stewards from across Victoria. "He got a standing ovation, and our blokes wouldn't stand for the f...ing Queen. I've done a lot of speaking, but he put me in the shade. He absolutely killed them. He talked their language and that's something Gillard and Rudd can't do."

One of Bob Katter's greatest passions is the plight of indigenous Australians.

"I identify with them. I'm not white and I come from Cloncurry. I'm not too sure where my racial background has come from but I am not going to argue if someone calls me a blackfella. I'm not going to argue that I am not," he says.

"There's a name in Cloncurry. We call ourselves the Curry Mob. There's Afghans and Lebanese, a lot of Chinese. You name it, you'll find them in Cloncurry. They've all intermarried over 220 years and they just refer to themselves as the Curry Mob. The blackfella radio station is Mob FM - it's the Curry Mob. We stick like glue and it doesn't matter whether you are blackfella, whitefella, pinkfella or whatever." Katter is furious that native title legislation has failed to give effective land ownership to indigenous communities. He wants "Mabo II" - a fresh High Court challenge to ensure communities get land titles that enable them to borrow to build houses and businesses.

He describes a confrontation a couple of years ago with federal Indigenous Affairs Minister Jenny Macklin, during which she defended 99-year leases. "I got angry. I said, 'I'm taking off my member of parliament hat and now I am putting on my blackfella hat. You will not bloody well tell me, in my country, where my forebears have lived for 40,000 years, that I will have an inferior title deed to everyone else in this country.' I was so bloody wild, she burst into tears. And I said, 'I'm telling you, Jenny. You can cry and bawl and throw yourself on the floor, but we won't be copping it. We want the same title deed as everyone else in this country - perpetual, freehold title deed.' " He says they have not spoken since. Macklin's office declines to respond.

Katter is proud of his four years as Queensland Aboriginal affairs minister in the '80s. He gave communities land ownership through "deeds of grant in trust" - a scheme later abolished by Labor - and promoted projects employing Aborigines to build houses in their communities.

Cape York Aboriginal leader Noel Pearson says he originally opposed a lot of what Katter was doing. "I realise now that I was wrong. He was 25 years ahead of his time. A lot of the things on our developmental agenda were things Bob commenced when he was state minister. I didn't understand what he was doing breaking down the socialist enclaves in indigenous communities."

Pearson says Katter was a role model for his career as an activist and John Howard "made a big mistake" not appointing him Aboriginal affairs minister during his decade in power. "One of the reasons I got into advocacy and public debate was Bob. I was just out of my teens when I first got to know him. He said, 'You guys have got to have a go. Get into the debate. Get into politics.' "

Bob Katter's faith in the power of independent mps was shattered after the last federal election when he and two other independents - Tony Windsor and Rob Oakeshott - emerged with the power to determine whether Julia Gillard or Tony Abbott would form government. Katter presented a 20-point list to both leaders and said he was ready to back whichever side signed up to his agenda.

Despite their deep policy differences, Katter is close to Kevin Rudd and respects Gillard: ''She's got guts and she sticks to her word.'' But in the end he sided with the Coalition, while Windsor and Oakeshott backed Labor.

The failure of the process to advance his agenda left Katter disillusioned and convinced there was no future for independents: "We had two weeks of negotiations. All three of us represent rural Australia. But we failed to deliver anything for the people of Australia. We had the greatest platform that any three people have ever had in Australian history and we came away with nothing." That sense of failure drove Katter to form his own party.

Now the stars are aligning for the KAP in Queensland. The state election last March saw Labor routed after a decade in power, reduced to just seven MPs. And already the gloss has gone from Campbell Newman's LNP government as it has moved to slash 14,000 public sector jobs.

A Galaxy poll in late February showed LNP support had fallen to 43 per cent, down 6.7 percentage points since the 2012 state election. This followed the resignation of two ministers for misconduct and the defection of three more disgruntled MPs. One of them was Ray Hopper, a former LNP front bencher who is now state leader of the KAP, joining Shane Knuth and Robbie Katter, Bob's son, in state parliament.

Katter believes he can capture enough support in the coming federal election to build the KAP into the new "third force" in Australian politics. He reckons he can expand on the base already established in northern Queensland by drawing voters disaffected with both major parties around the state, while capitalising on Labor's unpopularity across the nation.

The party has vowed to field Senate candidates in every state and territory and to contest all 150 House of Representatives seats. "That might be a bit aspirational, but we need to win not just in the Senate," says Katter.

In the Queensland election, the party scored 11.6 per cent of the vote. Exit polling indicated they would have got an extra 8.3 per cent - or a total of one in every five votes - had the state electoral commission not abbreviated their name to "Australian Party" on the ballot papers, confusing many supporters.

Katter predicts the party will take at least four Senate seats - two in Queensland, and one each in NSW and Victoria, where he thinks it can draw sufficient support to beat other minor parties to the sixth seat at stake. He is also optimistic of snaring the House of Representative seats of Herbert and Dawson in north Queensland.

But before it gets to the election, the KAP faces two existential challenges - maintaining unity and discipline among a disparate membership and raising enough money to run an effective national campaign. Public bickering over gay marriage and internal squabbling over preselections has cost momentum and diverted attention from policy priorities over recent months.

The party's former national secretary, Bernard Gaynor, was suspended in January after tweeting that he would not let gay people teach his children. He later resigned, accusing the party of refusing to oppose abortion. Then Tess Corbett withdrew her nomination for the federal seat of Wannon in Victoria after claiming paedophiles would be "next in line to be recognised in the same way as gays and lesbians and get rights".

Other party members have condemned Katter for failing to take a stronger stance against "gay bashers" within their ranks. At the same time, Katter has had to fend off party conservatives angered by his refusal to condemn ACT Senate candidate Stephen Bailey for publicly supporting gay marriage in defiance of party policy. The public slanging has been damaging, but Katter shrugs it off: "We have a crisis every day in this party. One day I am a homophobe, the next I am soft on gays."

More pressing is the issue of fundraising. The party received $2.1 million in donations last financial year. It will need a lot more to fight a federal election. "All this is predicated on us raising a lot of money. We are talking millions and there is a lot of work to do," Katter concedes.

He is still in touch with mining magnate Clive Palmer, who shares his distaste for the Newman government and could solve the KAP's financial problems with one signature - if not for some serious differences on policy. Katter says he told Palmer - who was a fellow Young Country Party member in their university days - that he didn't think they could "climb into bed together" because Palmer supports privately owned rail lines, anathema to the KAP. "That's a beat-up by Bob," says Palmer. "I don't care who builds them, so long as they are built."

Palmer says he has a problem with Katter's position on guns: "He's not in favour of the current gun-control laws, and I believe what John Howard has done has saved many lives in Australia." Palmer predicts the KAP will do well drawing support from voters unhappy with both Labor and the Coalition, but not as well as Katter thinks. "There is great dissatisfaction with both major parties," he adds.

Driving through Melbourne late one night, Katter has his hat on his lap and his heart on his sleeve. "I haven't ever attempted what I am doing now. I've never asked the Australian people to believe there is a third way. But when I see another part of Australia being sold overseas, I just go into a rage. When I see jobs being taken away from Australia and going overseas, I get furious."

He sees his task as a matter of destiny: "Our family have been powerful, off and on rich, and when we walk into a room they say, 'He's a Katter, you know.' And there are certain responsibilities that fall upon our shoulders. You know you are expected to stand up."

His ambition is to build a political movement that "ensures Australia once again becomes a country passionately committed to development, the building of railway lines, electricity lines, an ethanol industry, mobilising the superannuation funds, restoring the two million megalitres that have been taken out of the Murray Darling."

Peter Beattie is sceptical: "The history of elections in Queensland is that the winners tend to win by big margins. John Howard did, Joh did, I did and Campbell Newman did. Smaller players tend not to do so well. Katter is a very good grassroots campaigner. But if Abbott can hold his support in Queensland, then I don't think Katter's party will do that well."

But Katter has no doubts: "I expect we will control Queensland in my lifetime. As Victor Hugo said, there is nothing so powerful as an idea whose time has come."

Lone ranger

Dean Frenkel April 23, 2013

Has Julia Gillard been getting voice and breathing training to improve her speech? One voice coach reckons she has.

Just 15 days before Julia Gillard became Prime Minister in 2010, a Fairfax Media poll asked who among our leading politicians had the best speechmaking skills. The results are much more surprising now than they were then.

Julia Gillard won by a healthy margin. The names behind her were Kevin Rudd, Tony Abbott, Joe Hockey, Lindsay Tanner and more. At this time she seemed ready to step up into the top job.

But Ms Gillard's ascension was not accompanied by a lift in communication performance. It declined.

When she became PM, her speech skills were mostly very good with a few significant problems. She performed strongly in spontaneous challenging circumstances such as Q&A but poorly for prepared speeches. Her delivery was too wooden, speech rate too slow, resonance too throat-based, articulation heavy and her dominant sound accentuated the negatives. The overall impression she left listeners with was that these flaws dominated and overshadowed her good points.

Despite being a naturally fast speaker, her advisers have probably suggested she slow down her speech rate to seize the moment, enhance clarity and appear statesmanlike. But those advisers failed to tell her that when speech rate is slowed, the range of the speech melody should expand.

Anyone can try this: read a sentence very quickly, then very slowly. Note how faster speech requires less melody, slower requires more.

During her first two years in office Ms Gillard and her speechmaking skills were under inordinate pressure. Her confidence had diminished and she was leaving a dissonant impression on many Australian voters. Her speech manner was so widely discussed among voters that it had become an issue.

But not any more. Julia Gillard's communication skills have stepped up. She has established her own public speaking manner for the electronic formats of media conferences, formal speeches and media statements; this is where the improvement has occurred.

Each day her ''listenability'' continues to improve. Ms Gillard has removed the edges off her voice and added a mixture of strength and softness. Her voice has more body. She speaks with a grounded deep resonance that sounds more relaxed. There is more strength in her voice and she no longer sounds stilted. She is relaxed enough to reveal more of herself. The floor of her voice is more solid and it now dominates her overall sound. Her degree of projection control with microphone technique takes considerable respiratory and vocal strength. And she has better control over her nerves.

Has she learned some yoga breathing to calm herself before speaking? I think so.

These identifiable changes reveal evidence that she has been working on her voice. Her new ability to deliver with projection control and an established consistency is most likely the result of practice and coaching.

Yet it appears that Ms Gillard has consciously decided to defiantly maintain her controversial accent and articulation patterns. Interestingly there has been no effort to refine them, which is probably a reflection of her personal values. The way she articulates may be a product of her union background or perhaps is her way of expressing her Australian pride. Which begs the question: does poor articulation make you more ''Australian''?

Here are some of her articulation bloopers: 'd's sound more like 'dge's as in 'ed(dj)ucation revolution'; 't's are expressed as 'd's as in 'bedder' (better), 'ee's become 'eryees', as in 'berleryeeve' (believe) and 'a's become 'eyes' as in 'Ostrylya' (Australia) …

Ms Gillard has different speech manners for different formats. Her inter-personal manner where she puts in more emotion and colour has not changed - and her resonance is mostly throaty. In Parliament the controlled resonance is gone. She projects well with a slower speech rate and more throaty resonance. Yet she can change her intensity and speech rate by many grades. She certainly amped-up the passion when she delivered her ''misogyny speech'' which broadcast her unmistakable accent around the world.

Ms Gillard's most impressive speechmaking skills are her quick mind, memory, speech fluency and an ability to rarely stumble when she's talking. She shares with Kevin Rudd the rare ability to deliver dialogue without any stumbles or mistakes (other than perhaps when he's speaking in Mandarin.)

Some of Ms Gillard's values are detectable through her speech. She is very proud to be Australian. She wants to appear solid and grounded and is prepared to sacrifice colour from her delivery. She always has a sense of purpose and wants the world to know that she has strength. The dour demeanour is consistent with trying to project that she wants us to feel we are in safe hands. We will know if that's worked on election day, less than five months away.

Dean Frenkel is a speech analyst, coach and author of Evolution of Speech (2011).

Plain-speaking PM might just deliver

Bianca Hall Bianca Hall is immigration correspondent

April 23, 2013 - 9:32AM

Opposition Leader Tony Abbott, centre, with the billboard.

Tony Abbott's office has defended his continued use of the word ''illegal'' to describe asylum seeker boats by referring to the UN Refugee Convention.

But the Office of the United Nations High Commissioner for Refugees says it does not use the word ''illegal'' to describe asylum seekers' boats, and nor does it encourage others to do so.

They're not illegal - you've lied. You know it's a lie.

The Opposition Leader on Monday re-launched the Coalition's famed ''illegal boats'' billboards - used during the last election campaign - in Perth, saying a Coalition government would ''stop the boats''.

The billboards read: ''How many illegal boats have arrived since Labor took over? 639 illegal boats. Labor has lost control of Australia's borders''.

Reactions were swift, with a petition launched calling on Mr Abbott to apologise for his use of the word and refugee advocates accusing the opposition of fear-mongering.

But Mr Abbott's office referred to Article 31 of the UN Convention to defend the opposition's continued use of the word ''illegal''. The article states: ''the Contracting States shall not impose penalties, on account of their illegal entry or presence, on refugees who, coming directly from a territory where their life or freedom was threatened … enter or are present in their territory without authorisation''.

A UNHCR spokesman said he could not comment on domestic politics, but said: ''the term 'illegal' is not one that UNHCR uses, or encourages the use of, in relation to refugees or asylum seekers.

''Both the Refugee Convention and the Universal Declaration of Human Rights acknowledge that, in exercising the basic human right of seeking international protection, asylum seekers are often forced to arrive at, or enter, a territory in an irregular or illegal manner. Thus the Refugee Convention explicitly notes that penalties should not be imposed on refugees on account of their illegal entry or presence in a territory.''

Mr Abbott is by no means the only politician to use the term ''illegal'' when referring to boat people.

In 2009, then prime minister Kevin Rudd said: ''I make no apology whatsoever for adopting a hardline approach when it comes to illegal immigration activity, and I make no apology whatsoever having a hardline and humane approach to dealing with asylum seekers. That's the balance the Australian community expects of us.''

In a 2010 speech Prime Minister Julia Gillard referred to ''more than 5000 foreign nationals coming to our shores illegally''.

Abbott heckled about 'illegal' arrivals

 Mark Kenny, Josephine Tovey April 23, 2013

Retired top soldier Peter Cosgrove has emerged as the man most likely to replace Australia's first female governor-general under a future Coalition government intent on putting the Anzac tradition above indigenous history.

General Cosgrove's name has emerged from a phantom political row over Australia's next head of state after Opposition Leader Tony Abbott first demanded the government not appoint a successor to Quentin Bryce, before then ruling out a recall to public service of former prime minister John Howard.

The vice-regal stoush came as opposition education spokesman Christopher Pyne appeared to re-open the so-called ''history wars'' which raged during the Howard years, by attacking the school curriculum for putting Aboriginal and multicultural commemoration days on the same level as Anzac Day.

The national curriculum would be reviewed under a Coalition government, he said. ''The Coalition believes that, on balance, Australia's history is a cause for celebration,'' he said.

''It is because of our history that we are a confident and positive nation. We must not allow a confidence-sapping 'black armband' view of our history to take hold.

''That history, while inclusive of indigenous history, must highlight the pivotal role of the political and legal institutions from England, Ireland, Scotland and Wales.''

In the new curriculum Anzac Day is studied in year 3 as one of a number of days of national significance. The Gallipoli campaign is studied in year 9.

Mr Pyne criticised the fact that Anzac Day is ''locked in with NAIDOC Week, Reconciliation Day and Harmony Day'' in the national curriculum.

Mr Pyne's sentiment was similar to that expressed by former prime minister John Howard, who last year accused the government of purging British history from the curriculum.

Anne Martin, co-chairwoman of the national NAIDOC committee, said she was disappointed by Mr Pyne's comments regarding the ''black armband'' view of history. ''I thought we had moved beyond all that,'' she said. She said she hoped there would be widespread, open consultation before any changes to the curriculum.

A government insider described Mr Pyne's comments as nonsense. ''You can't grow up in this country and not know about the Anzacs. To suggest it is not being taught properly is just nonsense,'' the source said.

But Australia's military tradition looks set for another boost in any event if the Coalition is elected. Mr Abbott dismissed the suggestion of appointing his former boss to be governor-general with Coalition insiders admitting General Cosgrove probably was favourite.

''I have enormous respect for John Howard,'' Mr Abbott said in Perth on Tuesday. ''But he served almost 12 years in a very difficult and demanding job and I think he's really enjoying his retirement.''

Mr Abbott, who is favoured to become the next prime minister, refused to be drawn on the existence of a Coalition shortlist of candidates for the five-year post.

''I'm on the record as saying that I think former military personnel and former judges, by and large, make the best vice-regal appointments,'' he said.

The exchange over a replacement for Ms Bryce, whose term has already been extended by six months to avoid a clash with the election in September, deepened on Monday after a stern letter from Mr Abbott to Prime Minister Julia Gillard in which he argued strongly against any appointment being made before the poll.

As reported on Monday, Mr Abbott criticised recent high-level appointments to public service positions. ''There is no way that a decent, honest government, would be making appointments now, to take effect in a year's time,'' he said.

''There's no way that a government facing an election should be attempting to manipulate our country from beyond the political grave.''

A Liberal source said that despite its lead in opinion polls, the opposition did not want to be seen to be ''getting ahead of itself'' by discussing personnel decisions, while acknowledging that the name of General Cosgrove, 65, who was chief of defence forces from 2002 to 2005, headed the list.

But a government spokesman said there were no plans to name a replacement for Ms Bryce.

''In relation to the office of the governor-general, the Prime Minister recommended to the Queen that the current Governor-General's term be extended beyond the election period to avoid questions of her re-appointment becoming subject to partisan debate.''

A poll released on Tuesday shows that Labor's vote has stabilised but the government remains a long way behind the opposition.

The government's primary vote sits at 32 per cent, while the opposition dropped two points to 46 per cent, according to a Newspoll conducted at the weekend and published in The Australian.

Support for the Greens fell one point to 10 per cent.

The Coalition still commands a massive two-party preferred lead of 55 to 45 per cent, the same level as a fortnight ago, and would win the September 14 election in a landslide if the numbers are repeated.

Julia Gillard slipped two points to 35 per cent in the preferred prime minister stakes, five points behind Tony Abbott, who was steady at 40 per cent.

Libs reignite culture wars over Anzac Day teaching

Photo: Tony Abbott served as a cabinet minister under John Howard. (Tracey Nearmy: AAP)

Opposition Leader Tony Abbott has played down suggestions he would appoint former prime minister John Howard as the next governor-general.

The term of current Governor-General, Quentin Bryce, expires next March.

Mr Abbott has indicated he does not expect Mr Howard will be a candidate for the position.

"I have enormous respect for John Howard, but he served almost 12 years in a very difficult and demanding job and I think he's really enjoying his retirement," Mr Abbott said.

"I'm on the record as saying I think former military personnel and former judges by and large make the best vice regal appointments."

Opposition treasury spokesman Joe Hockey has warned Prime Minister Julia Gillard against making official appointments for the next term of government.

He says the prime minister of the day should get to appoint the Governor-General.

"This is a government that is desperate to have a hand coming out of the grave, to shape the future of Australia, sadly someone has to stomp [on] it and I think the Australian people will," he said.

Ms Bryce, meanwhile, has arrived in Papua New Guinea on a five-day visit.

She flew into Port Moresby and was welcomed by the unique sounds of a bamboo band from Bougainville island.

Ms Bryce is scheduled to meet her PNG counterpart, Sir Michael Ogio, and prime minister Peter O'Neill.

During the visit Ms Bryce will travel to Rabaul on New Britain Island and to Alotau on Papua New Guinea's eastern tip.

On Thursday, weather permitting, Ms Bryce will take part in Anzac Day commemorations at the village of Kokoda.

She will also visit numerous local initiatives that focus on education, health and violence against women.

Abbott plays down talk of Howard as G-G - ABC News (Australian Broadcasting Corporation)

Mark Kenny Chief political correspondent

April 22, 2013

'A blatant abuse of power': Opposition Leader Tony Abbott has warned Prime Minister Julia Gillard not to appoint Australia's next Governor-General before the election, fuelling suspicions within the government he wants the position for John Howard. Photo: Andrew Meares

Tony Abbott has accused Prime Minister Julia Gillard of ''a blatant abuse of power'' over the appointment of Australia's next governor-general, despite there being no evidence of an announcement being made before the election.

The escalation in rhetoric has fuelled suspicions within the government that Mr Abbott wants to keep the position vacant so he can appoint his old boss and mentor John Howard to the role.

Fairfax Media has obtained a copy of a letter from Mr Abbott to Ms Gillard written on Sunday, expressly warning against her naming a replacement for Governor-General Quentin Bryce, whose term will end in March, 2014.

Ms Bryce's five-year term has already been extended by six months to avoid any clash with the September election.

In the letter, Mr Abbott complains about the recent reappointment of the Australian Electoral Commissioner and other public service appointments, and invokes the ''caretaker'' convention to suggest the current government is going beyond its legitimate authority.

''In my view, the decision to announce these appointments subverts the established convention that no government should make decisions that are legitimately the province of a potential successor,'' he wrote in the letter dated April 21.

''The announcement of appointments expressed to take effect almost nine months into the term of the next parliament and some 15 months before they become operative is a blatant abuse of power.''

Mr Abbott argues that to attempt to recommend the appointment of a new governor-general more than six months before the term would commence is ''without modern precedent''.

''Quite properly, arrangements regarding the appointment of a new governor-general would be, and should be, a matter for a new or a returned prime minister after the September 14 election.

''Thus, I seek your specific assurance that this precedent will be respected and that arrangements for the appointment of a new governor-general will be a matter for an incoming or re-elected government.''

A senior government figure said it was believed Mr Abbott would seek to politicise the plum governor-general position by awarding it to former Coalition prime minister and avowed monarchist John Howard.

''Abbott has missed the point of due diligence,'' the figure said. ''This is not just a matter of putting out a press release; we cannot afford another Peter Hollingworth.''

Speaking on Sky News on Sunday, Mr Abbott initially avoided direct reference to the governor-general's post before conceding it was his view that it should be left to the next prime minister.

Gillard should not appoint next GG: Abbott

Peter Martin, Tim Colebatch April 19, 2013

Joe Hockey. Photo: Stefan Postles

The Coalition has abandoned its plan to quickly return the budget to surplus, citing deteriorating government finances, while a sharp slump in revenue has raised fears in business circles that the Gillard government will shut down a range of business tax breaks in the May budget.

Shadow treasurer Joe Hockey told a forum organised by The Australian Financial Review on Thursday it was important to be prudent. ''We are not going to go down the path of austerity simply to bring the budget back to surplus because it would end up being a temporary surplus, depending on how big the deficit is that we inherit.''

His remarks are a departure from a commitment he made on the ABC's AM program in January.

''Our commitment is emphatic,'' he said then. ''Based on the numbers published today we will deliver a surplus in our first year and every year after that.''

Opposition Leader Tony Abbott backed him up, saying that afternoon: ''Based on the published figures we believe we can deliver surpluses in each year of the first term of a Coalition government.''

Meanwhile, Treasurer Wayne Swan has warned major economies against leaning toward ''mindless austerity'' to repair their balance sheets, as Labor prepares for its own tough budget choices.

Mr Swan is in Washington this week for the spring round of top level Group of 20 industrialised nations and International Monetary Fund meetings.

In an economic note published on Friday, he said governments around the world, including Australia, faced difficult choices due to weaker world growth, following the 2008-2009 global financial crisis.

Mr Swan reiterated jobs and growth would be at the forefront of any decisions.

''To cut to the bone – as our political opponents advocate – would drive our economy into the ground and send unemployment skywards,'' he said.

''We now see countries with very weak economies falling into the trap of mindless austerity, when they should be trying to provide support to activity in the short term while improving fiscal sustainability in the medium term.''

Updated figures released by Finance Minister Penny Wong show that in the three months to February, tax revenue fell 0.5 per cent year on year. The budget had forecast annual growth of 10.8 per cent.

Company tax was projected to grow 8.9 per cent, but with the financial year two-thirds gone, it instead rose just 0.8 per cent. The mining and petroleum resource rent taxes were projected to raise 390 per cent more revenue this year, but in fact they have raised just 30 per cent more.

By the end of February, the budget deficit for 2012-13 was already $24 billion, with tax revenue on track to end up a massive $17.5 billion short of the budget estimate of $343 billion. Most of the shortfall is in company tax and the mining tax.

Senior officials say mining companies will be able to reduce their tax payments for years ahead as they write off their record $285 billion investments over the past decade. The weakness of the rest of the economy has also punched a hole in company tax revenue.

As this implies a much lower revenue base for 2013-14, tax experts and business groups are worried that the May 14 budget will now seize on a range of options originally floated in a report last year as potential offsets for a cut in company tax.

The cut to company tax rates was abandoned after business failed to agree on how to offset the revenue loss. But in February the government slashed research and development incentives for big business, which had been one of the options, and there is widespread speculation that it will now go ahead with the others.

Paul Stacey, tax counsel for the Institute of Chartered Accountants, says it is ''a racing certainty'' that the budget will tighten the ''thin capitalisation'' rules to hit multinationals seen as using excessively high debt (usually to their parent company) to reduce their tax bills.

Coalition backs down on budget

Michael Gordon Political editor, The Age

April 19, 2013 - 7:56AM

Opposition leader Tony Abbott has conceded that some of the actions of an incoming Coalition government would ''hurt'' people, but vowed that voters will have advance warning before the September 14 election.

''I have to warn you, in all candour, that an incoming Coalition government will do some things that are unpopular,'' Mr Abbott told a forum of undecided voters at Geelong on Thursday night.

''We will do some things that will hurt because when a country, a government, has been living beyond its means, you've got to take remedial action,'' he said.

''And you can't reduce expenditure, reduce the growth of expenditure, without looking at some of the existing expenditure measures. So, if we're going to do our job properly, we've got to get the budget under control and inevitably that is going to involve some tough things.''

But Mr Abbott insisted that the Coalition would be upfront about its intentions, citing the example of its plan to abolish Labor's low-income super contribution, which cuts tax to zero on 3.6 million super accounts.

''Mark us down if you like for what we are proposing to do, but please mark us up for having the honesty to tell people before an election,'' he said.

On workplace relations, Mr Abbott vowed that the policy to be announced soon would give small business owners a level of comfort, while reassuring the workers of Australia ''that their pay and conditions are safe''.

''The worker deserves justice, just as the owner and the manager deserves justice, and it's a question of getting the balance right. We got the balance wrong in our last term. I think the current government has got the balance wrong and we do need to take it back to the sensible centre.''

The Opposition Leader won the biggest applause of the evening when he declared himself an ''absolute believer'' in the proposed National Disability Insurance Scheme.

After the hour-long question and answer session at the Geelong RSL, 50 of those present said they supported Mr Abbott, 17 were opposed and 41 were undecided.

Prepare for some pain, says Abbott

Michael Gordon Political editor, The Age

April 15, 2013

Analysis

Julia Gillard's government is now trapped in a vortex of miserable morale, low expectations and sullied credibility - almost all of its own making and all neatly reflected in another shocker Age/Nielsen poll.

After the coup that collapsed, Labor's 29 per cent primary vote has a two in front of it for the first time since June last year, and Julia Gillard's dismal approval ratings are back where they were before last year's grinding comeback.

The numbers are so bad that they undermine any confidence that Labor will be around to implement the big picture policies it hopes will restore voter confidence and leave a lasting legacy - school funding reform and a National Disability Insurance Scheme.

Polling woes confirmed

Nielsen director John Stirton says Labor's previous period of gradual polling improvement is over and unlikely to return, with the PM's leadership style out of favour with respondents.

The promise of an extra $14.5 billion in public investment in schools over the next six years would resonate much more if there seemed a reasonable prospect of Labor still being in power in six months. As things stand, there isn't.

The plan unveiled on Sunday is bold and visionary, but invites its own tough set of questions: whether conservative states will come on board; whether it will be undermined by funding cuts to universities and the removal of the incentive for university students and parents to pay their fees up front; whether Gillard, Treasurer Wayne Swan and School Education Minister Peter Garrett can sell it.

The biggest question, however, is whether the voters have already written off this government and stopped listening - especially when it comes to plans that will be implemented years after the September 14 poll.

Source: April Fairfax/Nielsen poll.

Having executed one successful comeback in which Labor's and Gillard's ratings returned to competitive levels in the months after the carbon price was introduced, there seems little prospect of this happening twice - not least because of the internal doubts and divisions that propelled last month's fiasco of a leadership challenge without a challenger.

This is the third consecutive month when the Prime Minister's net approval rating - approval minus disapproval - is worse than minus-20. In the first half of last year, there were six such months before Gillard squared the ledger and pulled well clear of Tony Abbott.

Abbott leads an utterly ascendant opposition and enjoys an 8-percentage-point edge as preferred prime minister, but his own ratings provide a faint ray of light for Labor, perhaps its only ray of light.

While the Coalition leads Labor, 49 to 29, on the primary vote, Abbott leads Gillard by just 43 to 37 when it comes to the percentage of voters who approve of his performance.

Will the race tighten as more scrutiny is applied to the man who now looks a shoo-in to be our next PM?

PM's comeback now consigned to history

Mark Kenny Chief political correspondent

April 15, 2013

Support for Prime Minister Julia Gillard's government has slumped further since she vanquished her leadership rival Kevin Rudd, a poll shows.

The latest Fairfax-Nielsen poll has revealed only 29 per cent of voters backed Labor, down 2 percentage points, while 49 per cent favoured the Coalition for their first preference vote.

That represents the Coalition's equal highest primary vote since last May at the height of its scare campaign against the carbon tax.

Flatlining

Federal Labor and Julia Gillard have experienced no improvement in the latest Fairfax/Nielsen poll, despite seeing off Kevin Rudd.

This is Labor's first primary vote result below 30 per cent since last June, before the carbon tax began and proved milder in impact than its critics warned. Its primary support had gone as low as 26 per cent the previous month.

After the distribution of preferences, the Coalition would easily have won an election held now with a 7 per cent nationwide swing.

Pollster John Stirton cautioned that the variations on last month's poll were within the margin of error but showed that even on an optimistic reading, Labor's support was not moving.

Trending downward: Julia Gillard. Photo: Alex Ellinghausen

"We're running slightly against trend with this poll but it seems clear that the government's support has, at best, remained pretty much static since the beginning of February," he said.

The bad news for Labor comes after Ms Gillard had one of her best weeks in many months before the survey period, securing a historic partnership agreement with Beijing, and announcing a populist-inspired soak-the-rich strategy to tax superannuation accounts worth more than $2 million.

But the superannuation changes have received a mixed response with voters, with 52 per cent opposed despite its application to only 16,000 or so wealthier individuals.

Forty-five per cent support the tax rise, although that increases to 61 per cent among Labor voters exclusively.

Tony Abbott now leads Ms Gillard as preferred prime minister by a solid 8 percentage points, 50 per cent to 42 per cent, entrenching the gain he made in February.

Approval ratings showed a similar slide, with Ms Gillard now on a negative approval rating (the proportion of those who approve minus the proportion who disapprove) of minus 22 per cent, down 2 points since March.

Mr Abbott's net approval remained steady on a less severe minus 10 points.

Ms Gillard also languishes well behind the former prime minister Mr Rudd, whose supporters launched a leadership tilt against her last month, which collapsed spectacularly when Mr Rudd refused to stand in a spill of positions because he didn't have enough support. After that Mr Rudd declared he would never again challenge for the leadership. But he was still preferred Labor leader for 57 per cent of survey respondents, down from 62 per cent in March. Ms Gillard's support was 35 per cent, up from 31 per cent.

Among Labor voters though, Ms Gillard is preferred over Mr Rudd by 54 per cent to 44 per cent.

The poll results will harden fears among Labor MPs of a Queensland-style rout in which the Bligh government was swept from office, leaving only seven Labor seats in the 89-member Parliament.

Labor squeaked home at the federal election in 2010 after securing a micron-thin 50.1 per cent of the national vote compared with the Coalition on 49.9.

But it was Ms Gillard's superior post-election negotiations with the Greens and the independents which allowed her to form a minority government.

Only in Victoria is Labor's vote showing signs of holding up, with 35 per cent of voters backing it on first preference.

In South Australia/Northern Territory, support is down as low as 23 per cent although the margin of error is very high in that breakdown, due to the small sample size

Good news can't stop PM's slump