Albo's Trump-sized headache

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Today the Australian people have voted for Australian values.

Government is always formed in a sensible centre but our Liberal Party reflects a range of views.

Politics is the brutal game of arithmetic but no one's going to vote for you don't stand for something.

We've always been about the planet but we've got to make sure that people have their daily needs met.

People are starting to see that there is actually a different way of doing politics.

Hello and welcome to the party room.

I'm Patricia Carvellis joining you from Rurundary Country in Melbourne.

And I'm Frank Kelly on the Gadigal Land of the Aura Nation in Sydney and PK it's been a wild month in politics hasn't it since the election?

I mean we had Labour's thumping victory.

took us all by surprise really.

Not just a huge majority but they also got rid of Peter Dutton, the opposition leader along the way.

Then they claimed the scalp of the Greens leader Adam Bant.

But wait, there's more.

In the months since the election, the coalition has broken up and now it's made up again.

One of their highest-profile members left the Nats and joined the Liberals.

And then this week, another shock defection to add to that list: West Australian Senator Dorinda Cox defecting from the Greens to Labor.

I want to thank the Labor team for welcoming me, and I've spoken to the Prime Minister about the work I would like to do in the future as a member of a party of government.

PK, it's another senator in the PM's hat, I guess, in his Acubra, but it doesn't come without risks.

And we're going to talk about that with Paul Sakal, who's chief political correspondent for the Sydney Morning Herald in the age.

But before we talk about that, let's just deal with the absolute tying the bow in this election.

The count is over, PK, or is it?

Yeah, that's in relation to that seat we've been waiting for an outcome on, and that's the seat of Bradfield.

Bradfield is, you know, one of the last bastions of a liberal stronghold, or it was

even in the Scott Morrison

wipeout at the last election, 22, Bradfield held on, right?

When lots of the Teal Independents won a swathe of seats across the country, but not Bradfield.

This time, for her third time, in fact, as the independent candidate, Nicolette Buller ran ran again, this time against Giselle Kaptarian, who was the Liberal candidate.

But actually, the Independent has been successful after a full recount.

She's only won, though, by 26 votes.

Wow.

That is extraordinarily close.

She concedes it's close.

And she even said, sort of, when asked, actually, this morning, we're recording this on a Thursday, when asked about, you know, whether she thinks there'll be, this will end up in the courts, she said, it could happen, yeah, because it is so close.

It's completely understandable that there might be questions about that.

But from what I've seen in the last four and a half weeks, I'm very confident with the process that's been run by the AEC and the outcome that we have here.

So, but I can understand you might need to ask that question to Giselle Capterian, I think.

They've had a few recounts, though, haven't they?

I think they've had a double recount.

Yeah, this is the full proper Australian Electoral Commission recount.

But, you know, watch this space.

I've spoken to some very senior Liberals who say the party is poised.

So this will be announced later on today.

It's a prediction by me because it hasn't finally been ticked off.

Full sort of disclaimer, someone could, you know, hold that off, but they will contest this in the court of disputed returns.

And so this is heading for a court battle.

I was surprised when I was told this because

I think that it's a hard by-election if it ends up there for the Liberal Party to potentially win when so much policy is up in the air, including even their commitment to net zero and some big issues that are really hard.

It looks like it might be headed towards this.

A lot of informal votes, apparently, in this seat, too.

So I think they'll be scrutinising those.

And just, you know, so you know, there are scrutinies everywhere in a count like this, and they are there every minute and every hour of that day.

And it's, you know, there's a lot, a lot of scrutiny goes on.

Yeah, and just to explain, because a few people, like people are not sort of as into politics as perhaps we are, have actually asked me, oh, why would the votes be different?

Like, and I've said, look,

because it does sound confusing, like, how was she ahead?

And then 26 votes all of a sudden changed.

No, they didn't.

Like the same things were written on the pieces of paper, but the interpretations, right?

So the Liberal Party have their scrutinies, the independent candidate would have their scrutinies, a lot of people pouring over one vote.

And I don't know about your handwriting, Fran, but mine is appalling.

Is that a one?

Did they fill in every box?

Is that just a scribble?

You know, everything poured over and perhaps different analysis and different conclusion that the AEC comes to about a particular one vote.

And that's why I think the Liberal Party wants to go to, at this stage, as I say, I'm saying this before it's officially announced to the Court of Disputed Returns.

But yeah, it's officially, though, the Australian Electoral Commission's called it.

The Libsmay Challenge, as you say, the High Court could sit as the Court of Disputed Returns.

And in one way, that does make sense because Bradfield has been in Liberal hands since 1949, since it was created as a seat in Sydney's North Shore.

So it is, you know, if this isn't suburban liberal heartland, then really it's very unclear what is.

And this is a double blow for the Liberals, for Susan Lee, because, you know, her party room is another seat down, but also because she had optimistically named the candidate, Giselle Kapterian, in her shadow cabinet as Assistant Minister for Communications.

And in fact, Giselle Kapterian, you'll remember PK, was down in Canberra in the Liberal Party room for the leadership vote.

I think it's highly likely she was a vote for Susan Lee.

So, you know, that's another interesting twist here, and there are so many.

So, you know, in one way, the Libs do not want to give up a seat like this.

They don't want the optics of it, the reality of it.

There is a history of independence independence becoming entrenched though tim wilson the liberal candidate in the seat of goldstine he did overturn the teal zoe daniel who got elected last time so that was close to us but he is back and so maybe they've seen that and they think yeah well you know we'll have a crack yeah have a crack look

Just to give a bit of context on Giselle Kapteran, because it's worth just mentioning, she has gone through Helen back to even be the candidate.

I've been briefed by a few people about just how intense this has been.

The right-wing faction of the Liberal Party has gone in really hard to make her life difficult.

She's, you know, pushed on, pushed on, pushed on, so much so that I think even her opponent, the independent that's won the seat, acknowledged that she was an excellent candidate, worked her

use a rude word.

You know,

if your opponent is going on about how good you were, how incredible your CV is and how hard you worked, that sort of speaks volumes, doesn't it?

You don't have your opponent often talking you up like that.

So this is the kind of candidate they need.

If even the fact that she got this close, I don't mean to be rude to Paul Fletcher, but I'm going to say it.

I think if he was the candidate again, he would have been smashed.

And I'm saying this based on just analysis.

It's not a scenario that's played out, but I think she even got them as close as they got because of her and what she stood for and how she campaigned.

So I'm sure they'll be thinking about that.

But you know what?

It's all happened at the same time, Fran.

It has to be mentioned that the Liberal Party has had another seriously embarrassing, embarrassing's too polite.

It's beyond embarrassing.

It's a clanger and it's an outrage, really, isn't it?

It is.

So this is the New South Wales Liberal Women's Council, two white old men, party elders who, you know, have had very senior roles in government and in the Liberal Party.

One of the issues that was raised on a phone call that got leaked, Alan Stockdale, who I recall from my childhood.

An XXXXX Liberals treasurer.

So the issue of quotas comes up in the meeting.

And of course, we know that it would come up because even Susan Lee others have said we're going to have to do this, even as a sort of emergency measure, maybe not even permanent.

And he says, he says, this guy who was the treasurer when I was a baby, that women are sufficiently assertive now and suggested it might be time to look at giving men in the party a bit of a leg up.

Oh,

a bit of a leg up.

Let's help the men.

Read the room, Alan Stockdale.

Read the room, Alan Stockdale.

Look, he's actually gone to the Telegraph now, the Daily Telegraph, and said he made a light-hearted but poorly chosen remark.

I'll say.

So even he realises, whoops, that didn't go down very well.

Look, I think that speaks volumes to the

resistance the women who are fighting for

basic representation are going to deal with because I'm just going to give you a little note, Alan, and it's a note from many women too.

You don't have a men representation problem in your party.

My note was going to be, Alan, be quiet.

Stay silent.

Less is more.

Less is more.

That's incredible, really.

I'm reeling from that.

The count's done.

The numbers are settled, we think, but maybe not.

So it's a case of let the games begin, and there's plenty of gamesmanship going on right now ahead of the first clash of the new parliament when it sits next month.

And I'm talking about Jim Chalmers' contentious superannuation changes.

This is a change that would oppose, it would double the tax on super earnings from 15 to 30%

on an individual's account balance if it's over $3 million.

It's on the earnings from the portion.

of an individual's account that is over $3 million.

It affects just 0.5% of people with super.

That's only about 80,000 people.

But it's not indexed.

We discussed that last week, how there's a lot of concern about that.

It doesn't seem fair or right.

And the government's response is, well, that's for now.

And it's not going to catch up for quite a few years yet.

But that's not the only issue.

People are coming down very hard.

The coalition is coming down very hard, saying things like the Prime Minister is not going to be captured by that tax.

Well, the Treasurer, PK, he's come out swinging.

It's all on, accusing the Coalition of lying.

I'm so pleased you asked me this question because people have been lying about this.

We've had people, I think, shamefully, say that the Prime Minister or other senior politicians at the federal level on defined benefits are somehow exempt from this change.

They are not.

So it's getting pretty willing, PK,

and the opposition is going in hard, though they had a bit of a switcheroo to this week.

I mean, how is this playing?

How is this playing, do you think?

And how will it play out in the new Senate when it comes back?

Well, I think that Ted O'Brien tried to open some sort of door, or, well, the Australian reported that he did.

And

then a whole bunch of his backbench kind of went bit nuts, like, yeah, no deals.

And then he shut that door.

But at the same time, it was always going to be thus, I think, that the Liberals were going to fight hard against.

this measure.

This comes, can I say, as the Grattan Institute and other really reputable think tanks on the economy say super perks and tax treatment must be in the mix for reform.

I mean you might not like this version but the idea of looking at reform and tax treatment, intergenerational issues and fairness comes into that.

Then there are of course issues around the state of our budget and the health of our budget.

So this is all this was always going to be testy, I think.

But you know the government's going to end up getting a deal with the Greens.

It's obvious.

The Greens have already

sound to me a little more open about this.

They wanted to fight on a couple of fronts, but I reckon the government might even get their bill, and it's a big call I'm about to make, but even pretty close to the way it looks, I don't know if they're going to force the government's hand.

I think the government will get it through.

I think that the whole general vibe, though, of how the Senate operates, this is its first test, this issue, and I think it's already emerging that it'll be a sort of Greens-government deal.

But

I think it's fair to say that we've got a very different Senate now, Fran.

One Nation's got higher numbers.

Things are changing in the Senate.

That's true.

I mean, James Patterson, he's the new shadow finance minister.

He sort of leapt on, because I think you're right, the government will get a deal with the Greens for sure.

And James Patterson says, well, it's not surprising that the government prefers to do a deal with their, quote, unofficial coalition partner.

So I think we'll hear a lot of that over this term, PK.

But just on that unrealised capital gains, that's where the opposition is going hard.

And to be fair, that's one one of the elements of it that a lot of senior people don't like including i think we said last time former head of treasury ken henry former reserve bank governor philip lowe they're uncomfortable about that but you know the opposition is what that is just to explain to people is that would mean that if you have an investment property or maybe your farm or some other capital property asset listed in your self-managed super fund and it gains in value, it goes up in value over the 12-month period, then the tax would apply to the amount of improved value, even though it's what they call just a paper profit.

You don't actually have the money, you don't get the money from that because you haven't sold it.

Now, the extreme impact of that could be that someone can't afford to pay that $15,000, $10,000 extra and they have to sell the asset that's within their super to pay for it.

And people say, Well, that's unfair.

The opposition makes that point, going very hard against it.

And PK, I think, may be showing signs of going early, going hard, and going over the top.

Now, this crosses a red line in Australian tax law.

It will be an absolute disaster.

It will lead to scope creep.

In other words, where does that then go?

Will Labor start taxing unrealised capital gains on your primary residence?

We don't want a bar of that.

The reason I say that the shadow treasurer Ted O'Brien has gone over the top here is that, you know, we don't tax the family home in this country.

So the idea that this unrealised capital tax could apply to to your home through something called scope creep, which Ted O'Brien said there, well, I just don't, I just think that's kind of way out of the ballpark.

It is, and it's a scare campaign and should be called out for being one because it's exactly what it is.

Look, Fran, should we bring our guest in?

Let's do it.

Paul Sakal is the chief political correspondent for the Sydney Morning Herald and the Age.

Paul, welcome to the party room.

Hello, guys.

Paul, it's fantastic to have you and congratulations.

You've had a promotion there at the nine papers, which is well deserved.

Paul, this post-election period has been full of surprises, and I think that's putting it mildly.

This week, Donald Trump has re-entered the domestic political frame again, doubling the tariffs on steel and aluminium.

But there was also, and let's start with this, that shocked affection of WA Green Senator Dorinda Cox to Labor because she says her values are more aligned there.

Paul, the PM was all smiles when he made the announcement.

The values that Dorinda has are perfectly consistent with the values of the Labor Party and I'm sure that she will pursue those as a member of the Corporation.

Chuff, no doubt, I'm sure, to strike another blow to the Greens.

But this move doesn't come without some political risks for Labor and for the PM.

How do you see the ledger on this?

Is it as simple as a win is a win is another senator?

Yeah, I can see both sides in this.

If you put yourself in his shoes, he has had an incredible election win.

He has a personal distaste for the Greens that maybe is even stronger than his dislike of many in the coalition.

He's fought the Greens in his seat of Grainlaw all his life.

They were extremely bulshy in his seat in prosecuting him on the issue of Gaza.

They blockaded his office.

He has personal antipathy towards some on the left of the Greens, in particular in New South Wales.

And he's still bitter about Fatima Payman's defection last term and how badly that stung him and his party.

Dorinda Cox now jumps into that number three position probably on the WA Senate ticket at the next election.

He gains a senator from the Greens, which is symbolically important

in his task of kind of grounding down the Greens.

I mean they're pretty well ground down, but I think he sees this as kind of a cherry on top of

an already fantastic election result.

And so I can see why he's done it, but I think there is a chance that he has overlooked as well some of the risk attached to it.

The bullying allegations that my colleague James Massola reported on consistently last year were still being looked at by the WA Greens until last week.

They'd hired a law firm to conduct this investigation.

That's now had to be dropped because they have no jurisdiction to investigate an MP that is not in their party anymore.

The PWSS, which is the parliamentary watchdog, looked at this.

Sarah Hanson-Young confirmed this in the corridors of Parliament on Thursday morning.

So this was not a, you know, this was not one or two disgruntled staff members leaking to the press.

This was quite a lot of staff who believe that Dorinda Cox did not provide a safe working place.

And that can have flow-on effects.

There can be future leaks.

There could be more investigations.

There could be lawsuits.

And that's now on the PM's head.

So I can see both sides here.

Yeah, I can too.

But what's the counterfactual, right?

She obviously approached...

the government or the Labour Party.

What does he say?

No, we don't want you to become a member.

Like, that would have been hard too.

He's a First Nations woman.

She was previously a member of the Labour Party.

And there's the delicious recruitment element.

And you're right.

He doesn't love the Greens.

Some people would hear that and think, well, hang on a minute.

If they are left-leaning, like, shouldn't they all be best friends?

Well, he feels like they've gone hard against him and his political interests for a long time.

So there is something very personal there.

But how does he say no to her?

And she's the one that came up with the idea, it seems.

Well, I think, I mean, he would say no to the defence minister in a cabinet meeting when he asks for more tanks or something.

He's got an an ability to say no to whoever he wants.

This is an out-of-the-box request.

I don't think it really matters that she's an Indigenous woman in making that request.

I don't think that was how he saw it.

He's also not someone who really gives much weight to identity politics, the PM.

I think he could easily have said no and thought it was

an unnecessary risk that was a bit of a stunt at a time when he wants to appear as if his government is on the front foot doing the important work of government, thinking about his trip to the US, thinking about defence, thinking about his economic agenda, trying to kickstart the economy.

And instead, he held a snap press conference

with a kind of sense of political showmanship.

It's interesting, you described it as a bit of a stunt.

I mean, you and your colleague James Massola have been publishing a whole lot of leaked texts.

And, you know, when there's leaked texts, that's not a great sign, really.

And it's always going to be difficult for any party where there's that happening.

And some of the statements from the senator are pretty pretty wild when she on her application to join the greens back in 2020 she had to explain why she was no longer a member of the labor party which she used to be um and she said it was because the labor party was quote patronizing to women and people of colour and claimed the party cared more about donors than members okay now that's historical she could say it's changed under the leadership of yeah i mean isn't that surprising that she felt like that at that point pretty standard left-wing critique isn't it of yeah yeah if you want to join the the Greens, those are the things that you say about Labour.

Yes, exactly.

And then if you want to join Labor, you say the things about the Greens that she said this week about them.

Yes, that's right.

No, that's exactly right.

But these sort of things will dog her, is all I'm saying.

Yeah.

You know, and it will also have bad blood continuing with the Greens.

And look, I think there was clearly, this is no secret, there was...

It was difficult for Dorinda Cox within the Greens party room at times.

She was not really supported by the Greens Black caucus.

Lydia Thorpe, who's also said she has a bullying claim out against Senator Cox, did not make life easy for her, reportedly, within the party room.

So I think

it was not an easy place for her to be either.

And, you know, she threw her hat

in the ring for a leadership position and didn't get one.

It's an interesting and quick progression that came as a, seems like it came as a total surprise to her party room.

Yeah, it came as a surprise in terms of her splitting off to Labor, I think, but

the internal hostility that she held towards quite a few of her colleagues had been building for months and months.

It had been building from the time when Lydia Thorpe was there, because Lydia was seen as the more radical black sovereignty-aligned Indigenous MP, and Dorinda Cox was seen as more moderate.

And being moderate in the Greens in this day and age can be troublesome for you.

In the leadership ballot, and I remember hearing this the day after it, this is in Melbourne, maybe three or four weeks ago, whenever Larissa Waters was elected.

Dorinda Cox came in, unannounced, really, ran for the deputy leadership against Maureen Faruqi.

She only won three votes out of, I think it was 12 or 11.

That upset her.

Her other colleagues believed she had no reason to be upset because she hadn't actually flagged her run before entering the room.

She then ran for a more junior position, the deputy whip, and lost that ballot as well to Senator Penny Almond Payne from Queensland.

Dorinda Cox believed that Almond Payne should not have been able to run for that second position because she'd already been elected the party room chair, which is just an organising process role.

And she had a view that there was like a conspiring between Maureen Faruqi and Larissa Waters and Sarah Hanson-Young to deprive Dorinda Cox of any position in the party, stemming from personal animosity, from the bullying allegations against her.

So this is a long period of splitting away from the core of the party, not feeling like she was part of the team.

She's ideologically not quite in step with the modern Greens in a few different ways.

She's a former police officer.

There's quite a lot of consternation within the Greens about having, you know, what they would describe as a cop in the party.

So she was never a perfect fit for the Greens, perhaps.

And in some ways,

her movement away, well, inevitable is too strong, but there were quite a few signs pointing to it.

And just one final point, I know I've spoken for too long.

Dorinda Cox is very close with the Labor senator, Jana Stewart, and her husband, Marcus Stewart, who was the head of the the Victorian First People's Assembly.

So she has close links to Labour figures.

Yeah, and by the way, you can't talk for too long when you've been invited to

the podcast.

So

you've actually met your KPIs of why you're invited.

But yeah.

But you two are people who I spend so much of my life listening to, and I want to hear from you.

So I want to thank you for that.

Thank you for making us feel old.

But yes, no, I appreciate it.

Look, on the broader problem, though, for the Greens now, other than they've lost a senator, which is always a problem,

there's also the Indigenous issue for them.

They've lost their two Indigenous women.

They have no Indigenous MPs and they're the Progressive Party.

That's how they sort of frame their position.

That used to be a problem for them, that they had none, then they did some of this work, which is why they got these women into the parliament and now they've both abandoned them.

Now, there's different reasons, obviously, for why this has happened, but that's a bigger issue for them, isn't it?

It's not great.

It's not a great look, is it?

I listened to a post-election forum.

Someone was sending me clips from it.

The Greens held a forum which Maureen Faruqi was on.

Jonathan Sri, the Brisbane city councillor, who's a prominent Greens member in Queensland, and two other younger activists whose names I can't remember.

And there was a very widespread sense from those speakers on this call that the Greens needs to diversify its membership.

And this was a point being made by the people on the call, not by me, that there is too much influence from what they describe as non-people of of colour in the party.

Maureen Faruqi made the point that she had been told or it had been suggested to her over the years being in the Greens that, you know, what would she know as a Muslim woman?

Leave it to the white male lawyers.

So there is this sense in the Greens that they need to open up to different groups of people in the society.

Yeah, just like the Liberal Party is having an existential crisis about its membership base, the Greens also are having actually their own soul searching, I think, about their ability to appeal to a broader range of people.

Hey, like Paul, the other big thing that's happening, which is very substantial for our country, is

tariffs, tariffs, tariffs and defence spending.

These are the big themes of, I think, our international

positioning as well.

So even

before Anthony Albanese has made it back to Parliament, although not a lot of parliament this year, that's another topic.

Donald Trump is giving Australia a pretty hard time again.

Tariffs on steel and aluminium have just been increased from 25 to 50%,

which is really difficult for our industry.

UK seems to be the only country to have been given a partial exemption.

So they still have to pay a tariff though, can I say?

Like no one's got a free run, but they get to keep it.

keep it at 25%

until July.

And, you know, apparently people have been sent letters or people being countries.

Donald Trump is doing deals we know or trying to do deals what's going to happen here I'm not asking you to like predict the future but like how does our government handle this Australia didn't receive that letter yesterday it and the reason for that was because it went to the countries that have a tariff higher than the baseline 10%

because we're at the bottom rung.

They're trying to do deals with the countries who they've really hit hard to allow them to come down.

So we're not on that list.

The Australian officials are working

quite hard behind the scenes to see what they can come up with ahead of the Prime Minister's meeting with Donald Trump in the middle of the month.

There's a few new ideas up the sleeves of officials, but I think there is also a sense inside the government that they are dealing with an erratic administration.

The briefing coming out of senior levels of the government is that we shouldn't be looking at this meeting between Albanese and Trump as a kind of deal or no deal moment.

They're trying to downplay the expectation for there to be a special negotiation that leads to a really clear-cut, straightforward reduction in tariffs.

Even Keir Starmer, who executed that deal that you mentioned, PK, that has allowed them to retain the lower metals tariff, he's been heavily criticised domestically for not getting more out of that.

They retain a baseline tariff.

They're still at the 25% on metals.

It may jump up to 50% again if they don't follow the set of rules that that the Trump administration has given them.

So Albanese and if you listen to his public comments in both the way he's talking about tariffs and the way he's talking about defence spending, he's taken the Mark Carney Canadian approach.

He's muscling up.

He's talking about Australian sovereignty.

He's emphasising our, he's emphasising patriotism each time he speaks.

He's trying to play into this sense that we are not, you know, price takers, that we set our own destiny.

Well, he is, but how successful will he be?

Because he's also got, you know, double steel and aluminium tariffs, and that gives the opposition a chance to say, well, come on, you've got to do at least as well as the UK or you're pathetic, you're weak and we can hear all that coming out again.

Defence spending is in the frame.

The US Secretary of Defence, Pete Heckseth, has put it firmly there, saying publicly, Australia needs to increase our military spending, our defence spending, to 3.5%, which is a massive step up from where we are now, which is around 2% heading to, I think, 2.3% over the next few years.

As you say, the Prime Minister is staring that down for now.

No, they're entitled to express views, but we're entitled as a sovereign nation to ensure that

we look after Australia's national interests.

Suggesting that spending on defence shouldn't be an arbitrary number, Albanese's point is it should be increased on a needs basis, which is a view shared by the former Chief of the Defence Force, Chris Barry.

He said that on Radio National Breakfast on this Thursday morning when we're recording.

No number up front.

I think it's got to be linked to a plan.

No, I think we need to have a much more careful look about how we spend our defence money and on what.

And I think, you know, that's a...

a wise frame to see it in.

But, you know, is the Prime Minister's resistance here on defence spending the right strategy?

Or should he be coming to any meeting with Donald Trump with some kind of

ready to negotiate?

Because as I say, the opposition will be heaping the pressure on before that G7 meeting for him to come out with some kind of outcome.

I think you're definitely right on the fact that Starmer achieved any kind of exemption even if it was not everything he would have liked gives the opposition in Australia something to compare Albanese to.

However, if you look at the comments from Susan Lee and their liberals make this distinction clear, she's not going anywhere near as hard as Peter Dutton went during the campaign when he kept repeating the fact that I could get a better deal.

That argument fell flat.

Yeah, exactly.

And this could be a slow burn.

As the opposition builds itself up, it will become more firm on this.

And these calls for defence spending from civil society like ASPI, from the opposition, from former defence chiefs, from people like Kim Beasley, that appetite to do more on defence, and we're seeing many European countries move in this direction too, will continue to grow.

And I think there is a limit to the Prime Minister's rhetoric on this.

So

it's going to continue to be a really tricky issue for him, given the budget pressures that Australia faces in so many other areas.

And just on this point, I think what this week is, I think this is the first week where the atmospherics have shifted to normal

governance again.

We're not focusing on the opposition.

We're into the hard issues of government.

You mean adversarial?

No, I don't mean

adversarial and tough for the government and focus on their actions and their performance.

And tough issues.

Tough issues.

The economy's not moving quickly enough.

Productivity is slow.

Defence spending is an issue.

figuring out our place in the world.

These are all the actual media issues that the election in some ways at points skated over.

Yeah, I think that's right.

And I think the GDP figures are key to actually just mention here since you've raised them.

Like the economy is in a very, very dark place.

Barely a heartbeat.

Right.

And now the Treasurer has been spinning it as positive because there was some growth better than not having any growth.

Well, he might be right on sort of that on a sort of basic level.

Can I just chip in here before you come in, Paul?

I do think the government is on strong ground because our unemployment has stayed low through all of this, and I do think that

surprises most economists, but it's it's something and the inflation's back within the band and we've had two rate cuts and maybe another one, maybe even another one as early as this month.

So there are some wins there for the government, which they can claim, but it's all about how people are feeling, right?

And yes, we're we're going forwards finally with wages growth just, but a lot of catching up to do and times are still hard.

And this, you know, the opposition, Paul, has really

jumped on this.

And it'll be interesting to see how hard they can go.

I was going to make the same point as you, actually, Fran.

I think that the achievement of bringing inflation right in the middle of the band and probably hopefully keeping it there at the same time as keeping unemployment low is a pretty remarkable achievement.

And it is good to sometimes pause and give credit to the country and the government for getting through a really

kind of once in a few decades inflation outbreak.

That is a special achievement.

But I think GDP per capita has declined for nine out of the last 11 quarters, I think is the stat.

I'm sure someone will correct me on that.

That means that people are not necessarily feeling fantastic.

So we didn't have a huge downturn as some of our

like-minded nations have.

But people aren't feeling great.

Productivity is still low.

Our growth has been underpinned by public sector spending in largely non-productive areas in the care economy for a little while now.

And then you look at what the government is proposing on budget management and productivity.

And yes, they can point to a number of different, I'd say, probably smaller things.

The Treasurer will probably disagree with that, but there doesn't seem to be a clear big picture growth agenda.

And on the fiscal side, we're talking about the super tax on wealthy superannuants, which is, yes, significant.

It raises two and a bit billion in its first year, but it's not wholesale reform.

And with a 94-seat win, there will be a growing sense inside and outside the government.

And I know there's a bunch of MPs who believe this, that Chalmers can have a bigger look at the economy now with the authority he has.

Yeah, there is a big view emerging on that, that's for sure.

Paul, you've been such a great guest.

Thanks for coming into the party room.

Thanks, PK.

Thanks for it.

Terrific to have you on, Paul.

Thank you.

See ya.

Bye.

We'll move to questions without notice.

We'll give the call to the Leader of the Opposition.

Thank you very much, Mr Speaker.

My question is to the Prime Minister.

Order.

The bells are ringing.

That means it's time for question time.

And this week's question comes from Amanda.

Hi, Pik and Fran.

It's Amanda from Melbourne here.

My question relates to what does increasing productivity actually mean?

When I hear it I sort of worry we'll have to all start working longer hours which is not really what I want to be doing.

What am I not understanding about what this thing means?

Can you explain it to us a bit better?

Thanks.

Great question Amanda.

Yeah I'll try and explain it a little better.

It absolutely should not mean working longer hours.

If it means that then we're all in trouble because I think Australia actually, if you look at Australian workers, we do actually work long hours and work very hard.

So

it's a cliche what I'm about to say that I'm cliche quoting from somebody who I think has big standing here, and that's the Productivity Commission's boss, Danielle Wood.

She says it's about working smarter, not longer.

She argued to me, I had her on afternoon briefing, that

what the problem is, is that we, yeah, we are working long hours, but we're not getting enough out of it, if you like, not enough productivity like results if you can use it that way it depends what your business is so it's a big broad word there's lots of reasons for that but

if you look at the kind of deep work that's been done on it it's not like the fault of workers in fact in some places it's the fault of not entirely, but partly business even for not spending enough, not investing in innovations that can make you more productive.

Now, what would make you more productive?

I want to give some tangible examples.

If you are doing sort of an office job and there are AI tools that could make some of the tasks you do, that you do them in one hour rather than four, that would make you more productive as a worker than you could do other things.

You know, in a perfect world, that shouldn't mean that you end up sacked, although, you know, that's the AI question broadly later.

If businesses are not investing in those tools and

they've got workers on their books who are working long hours but are not getting enough out of those hours, then that is a problem for our country in terms of what we do, make, export.

And so that's the question as well.

So the AI part of the conversation is actually really big in this discussion at the moment, that it's not just a question of like industrial relations reform.

It's about investments to make us more productive.

Fran, is that sort of ish-fair?

Yeah, that's exactly right.

It's less focused on penalty rates and more focus on investment in research and development, in new technology, AI in particular, just like you said, PK.

And Australian businesses are laggards in spending on these new technologies, and we shouldn't be.

We have the know-how, we just have to get the investment right.

Now,

there's a job of work for the government, any government, to do on that too.

It means they've got to get the tax settings right and the subsidies.

This government is spending heavily on skills and training.

That's another big part of productivity because we have skills gaps in this country, significant ones.

You know, there's some people focusing very heavily on all those people who are no longer required because of Elon Musk's cuts to civil service over in the United States.

And so there's maybe a brain drain going on globally and we need to attract some of those smart minds here to help with that.

Training,

better educated, better skilled workers, a better tooled workforce with technology, that's part of the key.

Focusing on things like circular economy, the rest of the world, again, much of it more advanced than us on that vital part, which is sort of getting more out of your resources, all your resources, not just talking about things in the ground.

All these are important.

I think, you know, Australia has let it slip.

And most of the world is having a productivity slump at the moment.

But we just need to focus on what we can do.

And others are doing things better and smarter and quicker than us.

And we need to learn those lessons and spend that investment.

Yeah, there's a lot of work to be done on that.

And the treasurer says it's a priority.

And the dividend is significant.

For sure.

All right.

Well, that's it for the party room.

I've had a big bit of a good time today, actually.

There's all the things that were on my mind.

Yeah, there are.

There's a lot going on.

We're not counting votes anymore.

We're not counting.

party room members, all that.

It's actually into the real stuff.

We are into the next era for sure of the second term of the Albanese government, that's for sure.

We love getting your questions.

Send them in to thepartyroom at abc.net.au.

And follow us on the Politics Now feed.

That's where you find this podcast and Politics Now.

Follow us so you never miss an episode.

That's it for the party room.

David Spears will be back in your feed on Saturday morning for Insiders on Background.

And he's going deeper into the world of defence.

See you, Fran.

See you, Piquet.