EMMA ALBERICI, PRESENTER: It's time for our Friday night forum.

Joining us tonight from our Canberra studio is the Minister for Trade, Craig Emerson, and from Adelaide we're joined by the Manager of Opposition Business in the House, Christopher Pyne.

Now, if we can just leave the elephant in the room for later - the question of leadership - I will start with you if I can, Craig Emerson.

The Prime Minister this week gave a speech in which she talked a lot about building a new economy. Why do we need a new economy when the one your party is presiding over is doing very well indeed, in fact, the envy of the world?

CRAIG EMERSON, MINISTER FOR TRADE: It is arguably the strongest economy in the developed world. Associated with that strength is a very high Australian dollar, and what that means is that it is a two-speed economy where you've got mining going like the clappers, and other parts of the economy, particularly the export ... or compete against imports are being affected adversely by that very high dollar.

The high dollar is a vote of confidence in the Australian economy, but what we're wanting to do is spread the benefits of economic growth more broadly so that everyone shares in it. And there's no better way of doing that, of course, than the mining tax which is designed to take some of those profits from the mining sector and then use those proceeds to improve the competitiveness of the other parts of the economy by cutting the company tax rate, providing small business tax breaks, and also increasing our national savings through an increase in the superannuation guarantee, so that's what the plan is.

The second part of that plan, of course, is to invest in future sources of productivity growth, a big new investment in education to build on the investment that has already taken place, particularly vocational education and training.

EMMA ALBERICI: Christopher Pyne, Tony Abbott also delivered a speech this week outlining his vision for the country, which will involve something in the order of $70 billion in spending cuts. For most people, that would be a very scary prospect?

CHRISTOPHER PYNE, MANAGER OF OPPOSITION BUSINESS: Well, Emma, Tony Abbott didn't outline $70 billion worth of spending cuts at all.

EMMA ALBERICI: But he said that his aspiration is for a 1 per cent of GDP surplus which amounts to around $15 billion. On any estimate, that would have to involve some pretty savage cuts to spending?

CHRISTOPHER PYNE: Well, Emma, it's important to get the facts right.

Joe Hockey said that he was aiming for a 1 per cent of GDP surplus, that was an aspiration. Tony Abbott didn't outline $70 billion worth of spending cuts. What Tony Abbott did say in his speech on Tuesday - and I was there - is that the Opposition, if we are elected, in an election maybe this year will do, as our number one priority, getting the budget back into a healthy surplus, delivering tax cuts by also abolishing the carbon tax and the mining tax which is an immediate tax cut to Australians, ending the spiral of spending that the Labor Party is on, stopping this constant borrowing in order to fund the Labor Party's spending addiction.

And then down the track, when we've returned the budget to a healthy surplus, we'll be able to do things like a national dental scheme, the national disability insurance scheme, and further tax cuts because rather than taking people's money and spending it, like the Labor Party has done, we would rather people make their own decisions about how they spend their hard earned dollars.

EMMA ALBERICI: Are you backing away then from this claim of a 1 per cent surplus because you've said then that that was something Joe Hockey said, but in your government he would be Treasurer, wouldn't he?

CHRISTOPHER PYNE: No, Emma, I just think it's important to get the facts right on this program. So, you said that Tony Abbott had said we would have wanted a 1 per cent of GDP surplus and had announced $70 billion of spending cuts.

EMMA ALBERICI: No, I said that ...

CHRISTOPHER PYNE: Neither of those statements were true.

EMMA ALBERICI: I said what he said would involve $70 billion worth of spending cuts, because on anyone's estimate you can't achieve a one per cent surplus without some pretty drastic spending cuts or tax rises.

CRAIG EMERSON: That's right.

CHRISTOPHER PYNE: Well, I don't want to be accused of splitting hairs Emma, but the Labor Party's spin ...

CRAIG EMERSON: $70 billion worth of (inaudible).

CHRISTOPHER PYNE: ... is that the Coalition has $70 billion worth of spending cuts and putting it to me as a question based on saying that that's what Tony Abbott had proposed on Tuesday is simply factually wrong.

EMMA ALBERICI: No, I said that his vision would involve that.

CRAIG EMERSON: It's factually right actually.

EMMA ALBERICI: Sorry, Craig Emerson.

CRAIG EMERSON: It's factually right, and the $70 billion not only comes from Mr Abbott but comes from Mr Hockey and Mr Robb who have both said publicly that there is a $70 billion funding task here. That is, in order to meet the various commitments that they've made, they have to cut spending by $70 billion.

Not the Labor Party's words, those words came out of Joe Hockey's mouth, they came out of Andrew Robb's mouth and they're reaffirmed by Mr Abbott. Then they say that they're going to have tax cuts in the first term. Then Mr Abbott pressed on that, says it's an aim. Julie Bishop says it's an aspiration and Joe Hockey says, "No, we will definitely going to do it".

And you just heard from Christopher adding to the confusion because they don't know how to make this add up. They went to the last election with an $11 billion black hole. It's blown out to $70 billion and they're all over the place. It depends on who you talk to, as they make it up as they go along.

EMMA ALBERICI: Christopher Pyne, the Opposition leader, your leader has promised personal and company tax cuts in the first term of a government led by Tony Abbott. If the Coalition does win the election next year, how is it possible that you will achieve these tax cuts while also vowing to scrap the mining tax and the carbon tax?

CHRISTOPHER PYNE: Well, we will deliver an immediate tax cut Emma, through abolishing the carbon tax. The mining tax is a fraud. The numbers in the mining tax simply don't stack up. Everybody knows that in Treasury and in the Government. That's why they're finding it very hard to bring it to the Senate to actually get it through because they know the figures aren't right.

A lot of people in the mining sector are making it very clear that BHP, Rio and Xstrata won't pay the tax, some people say for up to 19 years. The only people who will pay it will be the small and medium sized miners. So, all the rhetoric from the Government is built on very shifting sands.

What we've said is that before the next election, which is due at the end of 2013, that given the chaos that currently surrounds the Government and the moving feast that is their leadership could be any time, but before the election is held, we will announce detailed spending cuts and how we will fund tax cuts and pension rises. All of that will happen.

But as if we are going to announce in February of 2012, 18 months before a federal election, all of our detailed policies, simply to have them stolen by the Labor Party, (inaudible) of policies on their own side.

CRAIG EMERSON: We won't be stealing your policies on abolishing the mining tax.

EMMA ALBERICI: Craig Emerson, we are currently enjoying relatively high growth rates in Australia, low unemployment, low debt, but your party also has a low primary vote, the lowest in fact in the history of Newspoll. How do you explain that?

CRAIG EMERSON: I think in part it's the fact that we have taken on some very big reforms.

We knew when we took on the pricing of carbon that that would be a real issue for Australia. It's the classic reform where politically you bear some short term costs, but it's for the long term benefit of the country.

Similarly, when we announced the mining tax, you might remember that wasn't all that popular, but in fact people are coming to appreciate that the mining tax is essential to spreading the benefits of the mining boom to the rest of the economy, to working Australians more generally.

And this is a gigantic con job on the part of the Coalition to say that they are providing tax cuts to average Australians by getting rid of the mining tax. The mining tax itself funds tax cuts for small business, and for superannuation increases. By getting rid of the mining tax, they are actually going to increase the tax burden on small business, increase the overall company tax rate, and why should we be surprised about that when the Coalition, in government over many years was the highest taxing government in Australia's history.

They promise a return to that if we are ever to see the unfortunate situation of Tony Abbott being the Prime Minister of this country.

EMMA ALBERICI: Christopher Pyne?

CHRISTOPHER PYNE: Look Emma, I'm not going to be in the business of responding to Craig's near hysteria on national television.

Most of what he has said is utter nonsense, but I can understand why members of the Labor Party are nervous. Steve Conroy said only yesterday that members of the Labor Party Caucus were nervous.

The reason why the Labor Party is tracking so badly in the polls is because the Government is built on a lie. Before the election they promised they would not have a carbon tax, as the Prime Minister said there would be no carbon tax under a government I lead. She then introduced a carbon tax.

People just don't like a Prime Minister who got elected on the basis of a bald faced lie. Wayne Swan described Coalition claims that there would be a carbon tax as hysterical claims that it would never happen. Well, we know what happened.

Now Craig Emerson is claiming it to be a great celebratory reform of the Labor Party. So, the reason why the Labor Party is doing as badly as it is because the Australian public want a Prime Minister and a political party that don't make promises they don't intend to keep.

I mean, Andrew Wilkie was promised pokie reforms, the contract was broken. Harry Jenkins was dispatched at the end of last year ...

CRAIG EMERSON: Completely untrue.

CHRISTOPHER PYNE: And Kim Carr was dispatched in the shadow cabinet ... in the Cabinet reshuffle. And the Prime Minister's own office on Australia Day was involved in creating a protest simply to use political dirty tricks.

Unfortunately the reason why the public don't want to vote Labor at the moment is because Labor is entirely internally focused and the public care about cost of living, they care about job security and border security, and the only party that is talking about that is the Coalition.

CRAIG EMERSON: You've just spent the last three minutes talking about politics. I was talking about policy.

EMMA ALBERICI: Can we move to the story of the day, Craig Emerson, the question of your party leadership? Isn't it time for Kevin Rudd to put up or shut up, to say once and for all whether or not he is going to challenge Julia Gillard?

CRAIG EMERSON: Well, of course I read the newspapers and watch television and listen to radio. And of course, I accept that there is speculation about this, but I would say this: I haven't had anyone talk to me about leadership, about changing the leader, and I would further add this, that there is an alternative to Julia Gillard and that's Tony Abbott, and we don't want Tony Abbott.

The Australian people do not deserve to have Tony Abbott imposed upon them, and so I say stick with Julia Gillard because she is a visionary leader, she is a tough leader. The only mutterings I've heard about this are mutterings in the media.

I'm not suggesting that no one is speaking to the media. I'm not blaming the media, I'm simply saying ...

EMMA ALBERICI: If you haven't been canvassed, Craig Emerson, it sounds like you would be about the only one who hasn't been because, of course today you would have read anything up to 40 per cent of the Caucus is backing Kevin Rudd and 60 undecided ...

CRAIG EMERSON: Yeah exactly, I read that.

EMMA ALBERICI: So it sounds like pretty much everyone in the Caucus has been consulted. Are you really saying that no one has tapped you on the shoulder to ask your opinion on the matter?

CRAIG EMERSON: That's exactly what I'm saying, and I've talked to a few colleagues because they're friends of mine and they haven't either.

EMMA ALBERICI: Ever since Mr Rudd lost to Julia Gillard in the last leadership contest there has been ongoing speculation about his intentions. Why don't you all just test the political waters once and for all and perhaps that's the only thing that might put a lid on his ambitions?

CRAIG EMERSON: Because the speculation is in the media and the speculation according ...

EMMA ALBERICI: Well Simon Crean ...

CRAIG EMERSON: Yeah I'll come to that.

EMMA ALBERICI: With all due respect Simon Crean has also weighed into this and quite publicly made this an issue?

CRAIG EMERSON: Yes sure, and I will come to that, but what I'm saying is that the speculation is in the media. I imagine on that basis some people are talking to the media. Basically they are anonymous people.

Simon made a strong statement because I think Simon himself had been through a fair bit of hardship as leader of the Opposition, so he feels strongly about these things. I feel strongly about it, too.

EMMA ALBERICI: Christopher Pyne, do you have something to add?

CHRISTOPHER PYNE: Well I have been very patient, Emma, while Craig has slowly dug himself deeper and deeper into a hole. I think all of that is ...

CRAIG EMERSON: I'm really worried Christopher.

CHRISTOPHER PYNE: All of that is blather. We all know what's going on. The media knows it, the public knows it. What the Australians deserve is an unambiguous government that can get on with governing for the everyday issues that concern Australians. What the Australian public deserve is a government that is focused on their issues, not focused on themselves.

While Kevin Rudd remains in the Caucus, no Labor leader will ever have any peace. That has been the reality of the time that he has been in Parliament. The public want the Labor Party to settle their leadership issues and focus on what's good for Australia.

This chaos that we're seeing at the moment, this self inflicted shambles that is the Labor Party, is not good enough for a country like Australia. 23 million people who rely on the Government to provide confidence, strength and direction.

The business community is concerned about confidence. The public are hanging onto their money. Last year was the first year in 20 when there has been a net loss of jobs in Australia under the Government's watch.

This hung Parliament hasn't worked, and whoever becomes Labor leader, whether it's Bill Shorten or Steve Smith or Simon Crean or even if Julia Gillard remains or Kevin Rudd, they owe it to the Australian people to call an election and let the public have a verdict on who they want in government.

CRAIG EMERSON: That's what you want, isn't it, Christopher. Christopher has just given yet another political diatribe.

The point is when you talk about the Australian economy, he says no jobs. 700,000 jobs under this Government, 700,000 new jobs. Andrew Robb is complaining about interest rates under this Government. The Reserve Bank cash rate is 4.25 per cent. Under the previous government when we took over, it was 6.75 per cent.

We've got reasonably strong economic growth, we've got inflation within the Reserve Bank's level of tolerance. We know that there are requirements to spread the benefits of the mining boom and the other parts of the Australian economy that are going quite well, that's why we're doing this for working Australians.

That's why the sorts of reforms of investing in education, investing in skills, introducing the mining tax, which Tony Abbott will repeal because he says that the mining industry pays too much tax, they're the policy debates and I'm happy to have policy debates with Christopher at any time.

But I would ask your viewers to ask themselves this question; what is he the Shadow Minister of? I don't think anyone knows. I'll help you out. I think it's health, I think he's the shadow health minister. Maybe education, no, it is education. And that's my point, no one knows who the Coalition line up is, because a) they are a shemozzle and b) all they do is talk politics.

When they do get onto policy, they get $70 billion black holes that they can't fill and mass confusion following Mr Abbott's vacuous speech earlier in the week.

EMMA ALBERICI: Craig Emerson, Christopher Pyne, we have to leave it there. Thank you very much.

CRAIG EMERSON: Thanks very much.