PM KEVIN RUDD (Tuesday): The Commonwealth expects education authorities to take serious action such as replacing the school principal, replacing senior staff, reorganising the school or even merging that school with other, more effective schools.

JOHN BATTAMS, QUEENSLAND TEACHERS' UNION (Wednesday): Well, a number of members suggested that it really should be Kevin Howard and Julia Bishop, because the sorts of things that the Prime Minister and Deputy Prime Minister are saying are very similar to what the previous prime minister and education minister were saying.

SHADOW EDUCATION MINISTER TONY SMITH (Wednesday): We put these promises forward. We put these policies forward. We wanted the States to move. They've blocked at every step. And it'll be a test to see whether he can actually get them to change their mind. PAUL BONGIORNO: Deputy Prime Minister and Minister for Education and Industrial Relations, Julia Gillard is our guest. And later, we discuss the US presidential election. But first, what the nation's press is reporting this Sunday, August 31. In breaking news on the 'Sunday Mail's website - "Hurricane Gustav forces city to evacuate." Desperate to avoid a repeat of

Katrina in 2005, New Orleans is preparing for a mandatory evacuation ahead of another deadly storm.

NEW ORLEANS MAYOR RAY NAGIN: If it continues on its current path, we will start the mandatory evacuation process first thing in the morning at 8:00am.

PAUL BONGIORNO: The 'Sunday Telegraph' leads with "Home-loam rate cut." Wizard Home Loans has become the first lender to cut interest rates in seven years. It's a 25 basis-point reduction and is sure to put pressure on the major banks to follow. The Sunday 'Herald Sun' has "Maths, science teachers to get HECS relief." The Federal Government has extended its HECS-HELP repayments to graduates who take up primary-school positions. The 'Sunday Times' in Perth has "Poll shows election down to the wire." A galaxy poll has picked up a 3% swing against the Carpenter Labor Government, which points to a very tight election next Saturday. It was a big week for education - first came the announcement parents whose kids don't go to school could lose their welfare benefits. Then, the education revolution burst back onto the scene - with a big carrot and stick. I mixed my metaphors there, Deputy Prime Minister, but welcome back to the program.

DEPUTY PM JULIA GILLARD: Thank you very much, Paul. PAUL BONGIORNO: Let's unpack something of the announcements of this week. There is no doubt what you and the Prime Minister want to achieve, but let's get down to it. You say that $500,000 will be needed for disadvantaged schools. How many schools, and where? JULIA GILLARD: Well, Paul, I think we can all think of pockets of disadvantage in major cities and in regional centres, and they're the kind of areas we want to assist. We're obviously involved in what the Prime Minister would call 'argy-bargy' - that is, working with the States and Territories, and with the Catholic and independent school systems to come to new funding arrangements by the end of this year, with those new funding arrangements to start next year. And what are we absolutely focused on achieving? We're absolutely focused on making sure every school in this country is a great school. To do that, we've got to improve teacher quality right around, and we've got to lift up the circumstances of those schools that are falling behind, starting with schools in disadvantaged communities.

PAUL BONGIORNO: The last 4-year funding model had $42 billion coming from the Federal Government, 67% of which went to non-government schools. Now it is Labor policy that government schools get more funding. Can you give us some ballpark figure there - will you lift up the percentage of funding from the Federal Government to the State government schools? JULIA GILLARD: Given we're in a negotiation with our State and Territory colleagues and the other school systems, I wont be naming figures, because that will be fairly poor negotiating tactics, if you think about it. What I will certainly say is this - we are talking about renewing the schools agreement. We are talking about new and extra resources for teacher quality. New and extra resources for disadvantaged schools. And that comes on top of the billions of dollars this government has already committed in relation to our election promises, including $2.5 billion for new trades trading centres in secondary schools, $1.2 billion for our digital education revolution, and the list goes on. So we're talking about substantial new investments into education. PAUL BONGIORNO: OK. But isn't one of the facts - I guess it's the facts of the Federation - is that only 9% of the budgets of State Government schools are provided by the Federal Government? And the point there is - I think we saw an example of this during the week, with the Liberal leader in Western Australia said that as far as he's concerned, you and the Prime Minister can go jump - you won't be dictating to a Liberal Government in Western Australia about their schools. JULIA GILLARD: Well, of course we've got the Western Australian election to come, with Alan Carpenter offering a vision for that State and a continuation of good government. But I'd say to any member of the Liberal Party around the country in relation to our education policies, that if they want to stand up in front of their people and say that they don't want new resources for the children in their schools, then they can do that. But that would seem to me to be a pretty amazing thing to say to the people of Western Australia or, indeed, any other part of this nation. We are talking about extra resources to make sure that every school is a great school, to make sure every Australian child gets the best possible start in life, and if a Liberal member in Western Australia can't endorse that as a concept, then I would just shake my head in wonderment. PAUL BONGIORNO: Minister, we will come back to education. But the

developments at Fairfax, the publishers of the 'Sydney Morning Herald' and the 'Age', must be a concern to you, developments there, given that they're the only other major voice in our print media in Australia, apart from News Limited. JULIA GILLARD: I am concerned, Paul. I am obviously someone who reads a lot of newspapers. And I'm someone who's concerned about the quality and diversity of our media market. We want to see quality and diversity - certainly the Fairfax newspapers are part of our quality and diversity across the system. And anything that would lead to a reduction, either in the quality of those newspapers, or in the diversity of views in our media market, is of concern to me. Can I say, too, with my industrial relations hat on - there's never been an industrial dispute in this country that wasn't solved by talking. There were always rules, there were always technicalities, there were always complexities. But at the end of the day, the thing that solves industrial relations disputes is talking. I think when we look at the Fairfax dispute, we need to remember that rule. But I certainly want to see a great 'Sydney Morning Herald' and a great 'Age' continuing. PAUL BONGIORNO: Just picking up on your point there - the journalists' union claims that management didn't enter into any sort of discussion or negotiation - it just lumped it on them. They say it's bad faith. Well, as it stands, there's nothing to compel the management to discuss anything with their staff, is there? JULIA GILLARD: Well, of course, under WorkChoices, people deputy need to talk to each other - WorkChoices, the extreme industrial relations laws of the Howard government, were all about having it one way, all about that industrial-relations pendulum being right up the employers' side. We've already started to dismantle WorkChoices, and we'll do the rest of it with our substantive bill in Parliament later this year. But a pivotal point of that new legislation will be that people have to deal with each other in good faith. Now, that will be a legal rule when our new legislation comings into force. But I think it's a practical rule at the moment - if you want good workplace relations, if you want to resolve disputes, then good-faith talking is the way that it happens. PAUL BONGIORNO: When we return with the panel - the unions' million-dollar attack on the Rudd Government. And on Monday, Treasurer Wayne Swan hit his straps as something of an attack dog, perhaps in the style of a

Keating or a Costello. In his sights - the former treasurer and the Opposition leadership.

TREASURER WAYNE SWAN: You've got the Leader of the Opposition - one of the Three Stooges - who can't do his job. You've got the Member for Wentworth, who can't get the job, Mr Speaker. And of course you've got the Member for Higgins, who hasn't got the courage to take the job! PAUL BONGIORNO: You're on Meet the Press with the Deputy Prime Minister. And welcome to our panel, Gemma Daley from Bloomberg News. And good morning, Gemma. GEMMA DALEY, BLOOMBERG NEWS: Good morning, Paul.

PAUL BONGIORNO: And Brian Toohey from the 'Financial Review'. BRIAN TOOHEY, THE ‘AUSTRALIAN FINANCIAL REVIEW’: Good morning, Paul. PAUL BONGIORNO: The ACTU believes there's some major unfinished business for the Government.

TV ADVERTISEMENT VOICE-OVER: Laws brought in by the Howard Government mean construction workers have fewer rights than anybody else. PAUL BONGIORNO: The construction unions are calling for the industry watchdog to be defanged, if not completely put back in the kennel. And they've won considerable support inside the Federal Labor Caucus.

CFMEU NATIONAL SECRETARY DAVE NOONAN (Monday): We find it amazing that the Rudd Labor Government elected to restore Australia's rights at work, should care so little about the rights of construction workers.

LABOR MP DICK ADAMS (Tuesday): I don't think we need to keep this at the extreme end of where it is at the moment. We should be able to wind that back somewhat. PAUL BONGIORNO: A question from Gemma?

GEMMA DALEY: Deputy Prime Minister, only one section of the Australian workforce faces these draconian laws. Why do you need a review to tell you that? JULIA GILLARD: We promised at the last election that we would retain the Australian Building and Construction Commission until the end of January 2010. Then, the work that it does, doing compliance in the building and construction industry, would be brought through to our new industrial umpire, Fair Work Australia. We want that to be a one-stop shop. We are going to honour that election commitment. And what we asked His Honour, Murray Wilcox, to do is to guide us through that process of honouring the election commitment, and most particularly, giving us some advice about what the new inspectorate in Fair Work Australia should look like - the one that's going to focus on building and construction. GEMMA DALEY: The WorkChoices will be in force longer under your government than it was under Howard. Don't you find that embarrassing? JULIA GILLARD: That's a very silly claim made by the Liberal Opposition. It really is completely ridiculous. What it fails to acknowledge - and obviously I expect the Liberal Opposition to be their there casting around for any desperate line they can to cover up their ongoing support for WorkChoices - but what it completely fails to acknowledge is we have already made substantial and powerful changes to the industrial-relations extremism that was WorkChoices - particularly, we've stopped the making mew of new Australian Workplace Agreements, and we've seen set the safety net at the appropriate level at the level of industrial awards. What that already means is no worker need any longer walk into their workplace fearful that an agreement is going to be shoved into their hand which takes away basic aspects of the safety net. That was the heart of WorkChoices, and we've already cut it out. BRIAN TOOHEY: You say you've been inspired - that's your word - by the head of the New York school system, Joel Klein, who boasts about closing 70 schools and sacking teachers and that. However, in May this year, a nationwide survey of highschools in America found that not a single highschool in New York made it into the top 200. Why would you pick a failed example or a failed system like that, rather than modelling changes on the best in the world - countries like Finland, which come top all the time of international comparisons, while rejecting Klein's tough love and failed

policies? JULIA GILLARD: I don't accept your analysis, Brian. I don't agree with it. BRIAN TOOHEY: What about the survey? That's a fact, those results. You don't accept that? JULIA GILLARD: If I can respond to that - I think we all know from our television screens as much as anything else that New York is a city with pockets of very great wealth and pockets of very great poverty and disadvantage. And Joel Klein's model has made a difference to those pockets of poverty and disadvantage. And when you see a model that is working in some of those tough suburbs in New York, then I think you've got to take notice of it. That doesn't mean that it's the only place in the world that we look at when we're looking for inspiration on education policy. And I'm well aware of the results in Finland - they're doing very well on the equity of their system. And what that reinforces in me is it's possible for a developed nation like this one to organise its education system so we don't see poor kids getting a rough deal. At the moment, we do. The Rudd Labor Government is determined to fix that. That is about new resources. But it's all also about insisting on standards of excellence in every school. BRIAN TOOHEY: But a report released at the same time as you were releasing your new program last week by the Organisation of Economic Cooperation and Development - a well-regarded body, which studied 19 countries, not just the New York school system - rejected Joel Klein's approach, and said it was much better to go down the path of Finland, which doesn't do this sort of public reporting. Why are you going down the failed path rather than modelling the system here along the lines recommended by the OECD? JULIA GILLARD: Well, I simply don't accept the 'failed path analysis'. If you see a system - and the New York system is making a difference for schools that struggle with real disadvantage - then I think you've got to learn the lessons from it. Secondly, right around the world, right around the world, we are seeing moves to greater school transparency. That's so that we can understand what's happening in schools, what value schools are adding. We can make sure that best practise is shared, and we can make sure that those schools that are falling behind get additional resources and additional help. Now, I would struggle to see how anyone could argue that averting your eyes

and not knowing what is going on is somehow better than bringing the clear light of day and understanding precisely what's going on - and that's what we want. PAUL BONGIORNO: Just before we go, minister - you gave Peter Costello one up the bracket on Thursday, and by the looks of it, you were right - jelly was the dessert. But this attack - is this basically because Labor really would see in Peter Costello a more formidable opponent than Dr Nelson? JULIA GILLARD: Paul, I'm going to say the stereotypical thing - that the leadership of the Liberal Party is a matter for the Liberal Party. But can I add to it one additional sentence - should the Liberal Party determine that Mr Costello should become the leader, I'd relish the opportunity each and every day to remind the Australian public that he's the architect of WorkChoices, and I would relish the opportunity each and every day - and I'm sure Wayne Swan would relish it too - to remind people of the high-inflation, high-interest-rate legacy he left this country when he left the office of treasurer last November. PAUL BONGIORNO: So you're not trembling in your boots? JULIA GILLARD: Ah, it's a matter for the Liberal Party. Matter for the Liberal Party, Paul. But there are some very clear facts about Mr Costello's track record which I'm sure we would be pointing out. PAUL BONGIORNO: Thank you very much for being with us today, Julia Gillard. JULIA GILLARD: Thanks. PAUL BONGIORNO: After the break - on the eve of the Republican presidential convention, we analyse the issues with the Liberal deputy chair of the Senate Foreign Affairs Standing Committee, Russell Trood. PAUL BONGIORNO: You're on Meet the Press. The Republicans begin their presidential convention tomorrow in what is the most fascinating of US elections. John McCain seized back the limelight yesterday when he announced the little-known Alaskan Governor and mother of five Sarah Palin as his running mate.

US VICE-PRESIDENTIAL CANDIDATE SARAH PALIN: Hillary left 18 million cracks in the highest, hardest glass ceiling in America. But - it turns out the women of America aren't finished yet, and we can shatter that glass ceiling once and for all! PAUL BONGIORNO: The Democrats, still basking in the glow of Barack Obama's acceptance speech on Friday, say the choice shows the arguments about experience now ring hollow. Welcome to the program deputy chair of the Senate Foreign Affairs Committee Senator Russell Trood. Good morning, Senator Trood.

LIBERAL SENATOR RUSSELL TROOD: Good morning, Paul. PAUL BONGIORNO: Just stepping back, I suppose - from Australia's point of view, does it make much difference whether a Democrat or a Republican wins the presidential election? RUSSELL TROOD: Well, potentially could make quite a lot of difference. Republicans are traditionally more oriented towards free trade than the Democrats are going to be, so the free-trade agenda is a very important one, of course, from Australia's perspective. The acceptance speech by Obama earlier in the week suggested to me that there was a very strong direction that he was going to be at least, to some degree, protectionist - those remarks in his speech about jobs in the rust-bucket States of the United States cause me concern. But I think perhaps it's less of worry with regard to the presidential victor than perhaps the Congress, which is almost certainly going to be a Democratic Congress, and I suspect that the people who are going to come into that Congress after the November election are more inclined to be protectionist than not. PAUL BONGIORNO: Do we know much about McCain's views on trade? RUSSELL TROOD: Well, I think - he occupies, relatively, the central ground on trade, as a Republican. I think he's more inclined to support free trade agreements than Obama would do, but the political climate in the United States, I think, is probably pressing both of these candidates to a more protectionist position. BRIAN TOOHEY: Both sides of US politics - likewise here - say they'll stay the course in the civil war in Afghanistan. How would you define 'victory' in

that war, and how likely do you think it is that it can be achieved? RUSSELL TROOD: Well, Brian, there's no doubt that this is one of the great challenges of international politics for the moment. My view is that the secret, or the solution, to the situation in Afghanistan, depends very largely on stability in Pakistan and sealing those border areas along the Pakistan-Afghanistan border. If that can't be done, it's going to be very difficult to achieve stability in Afghanistan itself. GEMMA DALEY: Senator, the AFP last week took Mohamed Haneef off its person-of-interest list. Doesn't that prove that the prosecution of Haneef was a political witch hunt? Does it harm the Coalition's credibility? And should Mick Keelty resign? RUSSELL TROOD: Well, Gemma, this inquiry has been ongoing for quite a period of time, and I think we should wait till all the evidence is in until the findings have actually been reached, and there's been a publication to the findings until such time as we're making conclusions about the actual role that the AFP played in the matter, it's better to have a considered view, I think, rather than just responding to each of the new revelations that are coming out on the subject. BRIAN TOOHEY: You've been very critical of the cutbacks in the Foreign Affairs Department. Do you think, then, it makes sense to spend extra money on, as the Rudd Government has done, appointing a full-time ambassador to the Holy See - a part-time job at best, if ever there was one? RUSSELL TROOD: Brian, the Department of Foreign Affairs is in desperate need of a greater number of resources. And particularly in the context of a government which is setting a very ambitious foreign-policy agenda. These two propositions are completely inconsistent with each other. On the one hand, you can't expand your foreign policy ambitions, you can't suggest you have to be more actively engaged at the United Nations in Europe, in the Asia-Pacific region, opening new posts in the Holy See - you can't reasonably hope that you can have a professional foreign service and not adequately fund it. The Rudd Government - one of the very first decisions it made in relation to foreign policy, of course, was to take a $57 million cut in the Department's budget. And then of course it's withdrawn 25 people from posts around the world. These are mutually inconsistent positions. There's a great degree of incoherence in the way in which the Rudd Government is

approaching this issue. BRIAN TOOHEY: But on the other hand, isn't it inconsistent for the Liberal and National parties in the Senate to be putting forward proposals or changes to the Budget which would knock $6 billion off the Government's revenue? So how can it spend more on foreign affairs when you're willing to do that? RUSSELL TROOD: It's a matter of priorities, obviously. All the indications are that the Budget surplus will be, in all likelihood, greater than the $21 billion that are provided for in the Budget. The indications are that there will be a much larger surplus. So the Department of Foreign Affairs - the operational dimensions of it - are less than $1 billion. So it's not impossible within a Budget surplus of $20 billion-plus that some extra millions could be found to fund the activities and services of the Department. PAUL BONGIORNO: As a member of the parliamentary Liberal party room, obviously you'll get a vote in any leadership. Is it frustrating for you that Peter Costello as late as Friday is keeping his options open? His decision to retire still stands - if he changes his plans, he'll let us know. It's hardly satisfactory six or seven months down the track, is it? RUSSELL TROOD: Paul, I'm surprised it's taken you so long to ask the question! This is a matter for Peter and his family, obviously. I was at the trivia dinner on Friday night. What I heard on Friday led me to believe that his view on this matter hasn't changed from November 25. And I expect it will remain so for the time being. So it's a matter for him to decide his future. PAUL BONGIORNO: I know it's a matter for him but - I've got to go. I'm out of time. Thank you very much for being with us today, Senator Trood. And thanks to our panel, Gemma Daley and Brian Toohey. Until next week, goodbye.