TONY JONES, PRESENTER: I was joined in the studio a short time ago by the Opposition Leader, Tony Abbott.

Tony Abbott, thanks for joining us.

TONY ABBOTT, OPPOSITION LEADER: Nice to be with you, Tony.

TONY JONES: Now, what is it you think about you that a lot of people aren't liking?

TONY ABBOTT: Look, I'm not going to run a commentary on myself, Tony.

TONY JONES: It's a serious question though. The Coalition's got a commanding lead in two-party preferred and in the primary vote, but your own personal polling is not good. What do you think is going - why the disconnect?

TONY ABBOTT: Look, as I said, Tony, I'm not going to run a commentary on myself. Many people are paid good money to explain where I'm going wrong and what I can do better.

TONY JONES: But you look at the polls. I mean, you know that there is this difference between your personal polling, which, like Julia Gillard's, is actually quite low, and the polling of the Coalition per se. Why is there a disconnect between those two things?

TONY ABBOTT: And I'm happy to take credit for the strong polling of the Coalition and I'm happy to try every day to do better, and hopefully that will ultimately be reflected in all the other polls.

TONY JONES: Are you worried that it's your level of intensity, the impression that you don't just oppose, but actually hate your opponents?

TONY ABBOTT: Well, I really dislike bad policy which is damaging our country and who wouldn't dislike bad policy which is damaging our country?

TONY JONES: Because I don't think we've ever seen an opposition leader quite like you, as relentless as you.

TONY ABBOTT: And I'm not sure, Tony, that we've ever seen a prime minister who's quite like the incumbent. I don't believe any recent prime minister, including Paul Keating, would be as relentlessly and remorselessly partisan as Julia Gillard is.

TONY JONES: Yes, but I've got to ask you about yourself. I mean, we're here to talk about Tony Abbott, the alternative Prime Minister. And can you remember any opposition leader who carried the case in quite the way that you do?

TONY ABBOTT: Well, the important thing, Tony, when you are in the presence of a really bad government, is to properly convey just the magnitude of the mistakes and the damage that they're doing to the country.

Now, when you've got a government which is hitting our country with two unnecessary new taxes, with repeated wasteful expenditure in the face of a gathering international economic storm, you should be pretty angry about it and you should be pretty keen to see better policies pursued as soon as possible.

TONY JONES: OK, but these polling figures must be something your advisors are asking themselves about, because for a while there it looked like you were actually going to be able to force the Government out of office early.

It seems pretty clear now you're not going to be able to do that. Will we see a change in style, in leadership style, in presentation style, or will you be the same relentless opposition leader you've been up until now?

TONY ABBOTT: Well, Tony, I suspect that learned commentators will read all sorts of things into whatever tea leaves they have available to them, but my job will be exactly the same tomorrow as it is today, as it was yesterday and as it will be next week and next year. It's a two-fold job.

First of all, to hold the Government to account, and sometimes I will hold them relentlessly to account.

But it's also to be a credible alternative. Now I suspect that at different times in the political cycle the commentariat tends to focus on different things, but my job is the same every day.

TONY JONES: The political game has changed now, you'd have to admit, with Peter Slipper's defection. I mean, your own MP Alex Somlyay belled the cat here; he said Tony Abbott can no longer consider that he's likely to get in before the next two years, before the Government serves its full term. I mean, do you accept that changes the game, and is there a Plan B?

TONY ABBOTT: Well, I make two points.

At the beginning of last week, the Prime Minister's mortal enemies and difficult parliamentary problems were Kevin Rudd, Andrew Wilkie and Craig Thompson. At the end of last week, she had added to her enemies and problems; she had Kevin Rudd, Andrew Wilkie, Craig Thompson and Peter Slipper. Now, I think that it's an even more motley collection today upon which the Government rests than it was a week or so back.

TONY JONES: Didn't you see the Peter Slipper thing coming?

TONY ABBOTT: Oh, we obviously knew that Peter had some issues, but the interesting thing, Tony ...

TONY JONES: More than issues. I mean, the LNP in Queensland was moving to take his seat. I mean, wasn't it obvious to everyone involved that he's likely to defect under those circumstances?

TONY ABBOTT: And the interesting thing, Tony, is that we were trying to manage Peter Slipper out of the Parliament. Now the Prime Minister has given him the biggest job that anyone can have in the Parliament. A week or so back Peter was my problem and now he's the Prime Minister's problem.

TONY JONES: So you were deliberately trying to get him out of the Parliament. You yourself as well, as the rest of the LNP operation in Queensland, is that right?

TONY ABBOTT: Well it was pretty obvious that Peter had lost support inside the party. It was pretty obvious that his parliamentary career, at least in terms of the Coalition, had well and truly peaked, and that is valuable political real estate and it's important that we try to renew our party and that was one of the seats where I thought it would be important to renew our party.

TONY JONES: So, you knew in advance that this move on Peter Slipper was going to happen, in fact supported it, because it looks tactically like a blunder when you've ended up losing a vote in the House.

TONY ABBOTT: Well, let's wait and see who Peter Slipper ends up ultimately damaging. There may well be, as you say, another two years for this Parliament to run and let's see how the speakership pans out for the Prime Minister. But, let me finish, Tony.

TONY JONES: What could damage the Prime Minister from any issues that Peter Slipper has?

TONY ABBOTT: Well, the point I'm trying to make, Tony, is that no-one, no-one in the Labor Party would be brazen enough to suggest that replacing Harry Jenkins with Peter Slipper has improved the standards of the speakership.

TONY JONES: Yeah, but where do you see the problems emerging with Peter Slipper? If you think he's going to be one of the worst problems facing the Government, where's it going to emerge?

TONY ABBOTT: Well, that's something only time will tell. But the point I made and I reiterate is that no-one - and it would be interesting if the Prime Minister was to submit herself to cross-examination on this issue - but no-one in the Labor Party would surely be brazen enough to say that the speakership was enhanced by the change from Harry Jenkins to Peter Slipper.

TONY JONES: But the most intriguing thing about what you've just said is that you knew in advance this move was going to be made on him and you must have therefore had a pretty fair idea that he was going to defect.

TONY ABBOTT: This is no revelation, Tony.

TONY JONES: But it doesn't look like a tactically brilliant move.

TONY ABBOTT: No, this is no revelation that Peter had problems in his electorate. He had problems with the LNP. It was in the newspapers every day. So I'm just in possession of the ordinary information that anyone that follows these matters would be.

TONY JONES: Yes, but a lot of your colleagues were a bit shocked to find you'd lost the vote in the House and wondered why something couldn't have been done about it. Did they actually know that you were part of the equation?

TONY ABBOTT: Look, I'm happy to answer your questions, Tony, but I think this is in a sense yesterday's issue. If there are more developments, I'll come on the program and we'll talk about them further.

But it was pretty obvious that at some point in time, had Peter remained in the Coalition and had he lost his pre-selection, as was likely, he would be an issue for me, a problem for me. Now, I think it's the Prime Minister who's got the Slipper matter to deal with.

TONY JONES: Except you're the one that's lost the vote. She's the one who's gained the vote.

TONY ABBOTT: And let's see how things pan out. Who knows what's going to happen in the first half of next year? Who knows what's going to happen with the Andrew Wilkie? Who knows what's going to happen with Craig Thompson?

This is a Prime Minister who will do whatever it takes, will stop at nothing, to shore up her numbers. We saw the political execution of Kevin Rudd. Now the Sussex Street death squads, if you like, have been out again for the Speaker of the Parliament ,and I think it was very undignified. And, sure, her numbers are up for the time being, I accept that, I accept that, Tony. Yes, tactical defeat, if you like, but at what long-term cost?

TONY JONES: Well, short-term benefit to the Government is what they're worried about at the moment, coming to the end of the year and looking better than they were.

TONY ABBOTT: Ah, I really wonder about that. As I said, we had the Treasurer of the country looking a little bit like a frightened rabbit in the spotlights of an oncoming truck yesterday, telling us that the European crisis was serious, that there was a gathering economic international storm, that it would impact on Australia, and yet, what was his answer?

His answer was a series of very modest cuts, a series of frankly hard-to-credit forecasts, and in the end it's going to give us a microscopic surplus that's almost too small to be seen with the naked eye.

TONY JONES: Let's look then at your side of the equation. Your Finance spokesman Andrew Robb has estimated you'll be cutting as much as $70 billion from expenditure. Is he right about that?

TONY ABBOTT: We've obviously got a serious fiscal task.

TONY JONES: $70 billion.

TONY ABBOTT: We've got a serious fiscal task. I'm not going to put a figure on it because the figure ...

TONY JONES: He has.

TONY ABBOTT: Well, I think lots of figures have been speculated upon, Tony. But let me make this point to you: by not going ahead with the mining tax, you actually benefit the budget bottom line by $6 billion.

By not going ahead with the carbon tax, you benefit the budget bottom line by $4 billion. This is such a brilliant government that it can impose new taxes and actually hurt the bottom line.

TONY JONES: Andrew Robb said last night on this program that $70 billion was put forward as the order of magnitude for the cuts, for this task that you face. So is he right about that?

TONY ABBOTT: Well, that's one of the figures that's been bandied around. We want to cut as much as we can because we want to return to surplus as quickly as we can. We want to get the debt down as quickly as we can, but we want to do it in an economically responsible way. And what you can say ...

TONY JONES: Is $70 billion the magnitude of the task, as your Finance spokesman says?

TONY ABBOTT: Tony, a lot of figures have been bandied around, and on this program last night, the Finance spokesman did not say that that was the magnitude of the task. With respect, he's being verballed at the moment.

We have a big task ahead of us; I accept that. Going into the last election, we identified $50 billion worth of savings. That was going to produce about a $10 billion improvement to the budget bottom line.

TONY JONES: I've kind of got to interrupt you there because he's not been verballed in the sense that on previous occasions he has called this $70 billion figure, "An estimate of the sort of challenge we will have." And last night, as I said, he said it was - this figure was put forward as the order of magnitude. And then he went on to discuss, as you have, the mining tax and the carbon tax and how much he could take off that to reduce the $70 billion task.

TONY ABBOTT: Yes, and as I said ...

TONY JONES: He wasn't being verballed.

TONY ABBOTT: And if you don't go ahead with the carbon tax and you don't go ahead with the mining tax, that's a $10 billion improvement over the forward estimates period.

TONY JONES: OK. Aren't you planning though to keep some of the big ticket spending items that are paid for by those taxes, and I'm thinking of the increase in the superannuation levy, which you've done a backflip on and of course the personal income tax cuts, which appear to be paid for by the carbon tax?

TONY ABBOTT: We demonstrated, Tony, in the run-up to the last election that it is possible to have a modest cut to the company tax rate without a mining tax to pay for it. Now, I'm not going to speculate on the ultimate size of the tax cuts that we deliver this time round, but there will be an income tax cut without a carbon tax cut - without a carbon tax imposition, and certainly we do intend to try to get the company tax rate down too.

TONY JONES: Let's just quickly go over the backflip on the - increasing the superannuation guarantee. Do you regret not consulting your senior colleagues on this?

TONY ABBOTT: Well I did consult my senior colleagues on this.

TONY JONES: Which ones?

TONY ABBOTT: Well, there was a leadership group hook-up.

TONY JONES: Yes, so, who was consulted then? Because as has been reported, Andrew Robb, Julie Bishop, Mathias Cormann, and then lower down the scale, quite a number of other people, were a bit shocked by this backflip.

TONY ABBOTT: Well, there was a leadership group hook-up and Mathias Cormann, as the relevant shadow minister, was also part of that hook-up.

Now, we are a collegial party. All legislation in our party goes to the shadow Cabinet and then it goes to the partyroom. But, no, we do sometimes take policy decisions without going through a full shadow Cabinet, full partyroom process. It's always been that way and it always will be that way.

TONY JONES: Let's go back to the carbon tax dilemma. When you scrap this tax, will you immediately get rid of all the compensation arrangements which are funded by the price on carbon?

TONY ABBOTT: Well what we've said, Tony, is that we aren't going ahead with the tax. We aren't going ahead with the spending associated with the tax. But, in good time before the next election, we will announce what we are doing and how we are going to pay for it. Now, ...

TONY JONES: Are you talking about - what about the compensation arrangements which are built into it?

TONY ABBOTT: Well if you don't have the tax, you don't need the compensation.

TONY JONES: But you can't get rid of the tax immediately after an election. You've then got to go to a double dissolution election in order to do that, so there will be an interregnum at least where you're governing with all this compensation in place. Would you keep it in place at least for that period?

TONY ABBOTT: But once the tax has gone, obviously you don't need the compensation. While the tax is there, obviously the compensation continues, but our objective is to get the tax and everything associated with it out as quickly as possible. That's our objective.

TONY JONES: So what happens if you actually take away people's compensation and electricity prices either stay the same as they've risen to or keep increasing?

TONY ABBOTT: Well the ACCC did a very good job at the time of the introduction of the GST in monitoring prices and price changes, and some prices fell significantly as a result of the ACCC's work and the taking off of taxes. Other prices rose, but not excessively, again because of the ACCC and the changed tax mix.

Now, there's no reason why you couldn't do the same thing with the carbon tax, and if the tax comes off power, the price of power should fall. I'm not saying that there would never, ever be a power price increase absent a carbon tax, but when the carbon tax comes off, the price of power and the price of transport, which are primarily impacted by the carbon tax, will come down.

TONY JONES: That's hope more than anything, isn't it?

TONY ABBOTT: And there are bodies like the ACCC that are there to ensure that companies aren't ripping people off.

TONY JONES: While we're on this issue, how will the carbon tax that you advocated before you became leader differ from the one that the Gillard Government has in place?

TONY ABBOTT: Well, I don't advocate a carbon tax ....

TONY JONES: No, you did.

TONY ABBOTT: I speculated that a carbon tax might make more sense than an emissions trading scheme in the context of an opposition that had not yet settled its position.

TONY JONES: What were the thought processes that went into the kind of carbon tax that you were talking about?

TONY ABBOTT: Well the advantage of a carbon tax as opposed to an emissions trading scheme is that it's easier to remove a tax than it is to remove a trading scheme that involves quasi property rights.

Now, the Government, rightly or wrongly, has gone for a tax, initially, followed by an ETS. But my point is that this is a bad tax based on a lie. And if we're talking about the year that's just gone, the fact that the Prime Minister notoriously said before the last election, "There will be no carbon tax under the government I lead," and equally notoriously did the opposite after the election, will haunt her to her political grave.

TONY JONES: Well, it may haunt you to a certain degrees that you advocated a carbon tax yourself, but we'll put that aside for the moment.

Now, on industrial relations, in the light of criticism from some senior Liberals and senior business representatives as well, are you prepared to reconsider your position on industrial relations reform?

TONY ABBOTT: Well, there will be industrial relations change under us, Tony. I've said that we will have a strong and effective policy. It'll be released in good time before the election.

TONY JONES: But your opposition to statutory individual contracts is totally locked in, is it?

TONY ABBOTT: We are not going back to AWAs. We are not going back to statutory individual contracts, but there is a lot that can be done with individual flexibility agreements. As Heather Ridout herself has said on a number of occasions - no industrial relations firebrand - "They promised so much, delivered so little. Let's see if we can get them to deliver some more."

TONY JONES: Yes, but the business community's saying these type of contracts that you're ruling out were in place 10 years before WorkChoices.

TONY ABBOTT: And I accept that. That's a statement of fact. But ...

TONY JONES: So why wouldn't you want to go back to them?

TONY ABBOTT: Because I've said ...

TONY JONES: Is it a matter of principle or is it a matter of politics?

TONY ABBOTT: Well, I've said, regardless, that we aren't going back to them, but what we will do is inject more flexibility into the system.

TONY JONES: It's not a matter of principle then.

TONY ABBOTT: Well, I'm not saying that the position that the Howard Government had prior to WorkChoices was wrong in principle; I'm just saying that we don't need to go back to it.

TONY JONES: Because it's politically dangerous, is that right?

TONY ABBOTT: Well, I'm just saying that we don't need to go back to it. I mean, I don't want to live in the past, Tony. I am a conservative, but that doesn't mean that we have to roll back the hands of time in every sense.

I think we can do a lot within the framework of the current act to improve flexibility, to bring up productivity. We do have a flexibility problem, we do have a productivity problem; let's address them, but let's be careful, cautious reformers in this area. People's livelihoods should not be trifled with.

TONY JONES: OK - alright, let's talk about a reform that's just happened. The remuneration tribunal is scrapping the gold pass for politicians and retired politicians. In return they're increasing the salaries of federal MPs and ministers. Good or bad? Do you support this?

TONY ABBOTT: I think the remuneration tribunal should be trusted to come up with a better system, and certainly, I'm no fan of the old gold pass, and if it goes, I'll be cheering.

TONY JONES: OK. Finally, it does seem to me there are two Tony Abbotts. There's a conciliatory one who's called for a kinder, gentler polity, and there's the ideological warrior version of Tony Abbott.

As prime minister, if you were to become prime minister, how would you go govern? Would you govern as a consensus leader, a moderate, conservative, as you've just suggested, a cautious man, or would you be an ideological warrior?

TONY ABBOTT: Well I think it would depend on the circumstances. And as you know, Tony, capable and accomplished people are what they ought to be in the particular circumstances that they find themselves in. Sometimes you might need to be very forceful indeed. Other times you might have to be very conciliatory.

For instance, the attitude that a national leader takes in the face of external aggression might be quite different to the attitude that is rightly taken in the face of an internal issue between our own citizens. Sometimes you've got to be very forceful; other times you've got to be very understanding.

TONY JONES: So, if I understand it correctly, your plan would be to be understanding of your enemies at home, but not understanding of your enemies abroad?

TONY ABBOTT: I'm just saying, Tony, that you've always got to bring a sympathetic intelligence to the problems that you face, but what is the ...

TONY JONES: Even if they come from people who you regard as ideological opponents?

TONY ABBOTT: But what is the appropriate response will depend very much upon your assessment of the particular situation you find yourself in.

TONY JONES: Tony Abbott, we'll have to leave you there. We thank you very much for coming in. It's been a long time between interviews, but we thank you for being here tonight.

TONY ABBOTT: And I hope the Prime Minister comes on tomorrow night because she's been hiding for the last fortnight.

TONY JONES: We shall see.