LEIGH SALES, PRESENTER: Joining me now in our Canberra studio is the Communications Minister, Malcolm Turnbull.

Good to have you with me, Minister.

MALCOLM TURNBULL, COMMUNICATIONS MINISTER: Great to be with you.

LEIGH SALES: Isn't it fair to say that these changes to Australia Post can be summed up as: people will pay more to send letters but they'll be slower to arrive? You're spending more money for less service?

MALCOLM TURNBULL: Well, you certainly, they will be slower to arrive on the regular service and they will be more expensive. But the alternative is either massive subsidies which would run over a decade into $7 billion of taxpayers' money to keep the status quo going or, alternatively, abandoning the letters business altogether.

So, you know, we've been, we've been very up-front about this. I mean, from the day of the election, once we got into office, I said to Ahmed Fahour, the CEO and John Stanhope, the chairman: "You have to be completely open and transparent about Post's issues." And so they were, they just told the unvarnished truth for 18 months about the fact that they had a very high-cost business in the letters business.

People are sending fewer letters - the internet, you know, that sort of thing - and so they're sending a billion fewer letters than they were in 2008. And so this letters business is just going into more and more red. It's lost $1.5 billion since 2008.

LEIGH SALES: But won't the effect of these changes to be, probably, to kill off Australia Post altogether, because businesses and individuals will now look for other ways to communicate given, as I say, that they'll be paying more for less under these changes?

MALCOLM TURNBULL: Well, that's a really good question and, but there's a very interesting answer: the response of senders of letters - which is overwhelmingly, 95, 97 per cent business and government - is actually quite inelastic. It's quite insensitive to price.

And the reason for that, of course, is that if you put the price of a regular letter up from 70 cents to $1, the fact is that whether it's 70 cents or $1, it's still vastly more expensive than sending an email.

So the only reason people, businesses and governments are still sending letters is because of inertia and because they haven't updated their billing systems and they haven't, you know, addressed their own internal mechanics. But the trend is inexorable.

Now, as far as consumers are concerned, we focussed very keenly on that. So any concession card holders can get up to 50 stamps a year for 60 cents - and that's good, you know, that's frozen - and there will be Christmas card stamps, which are available in November and December, available in unlimited quantities - so send as many cards as you like - at 65 cents. And those two categories, concession card holders and Christmas cards, represent about half of the non-business/government mail.

So we think we've got the, we think we've got the balance right and, you know, business have got a massive incentive to move online. And frankly, in terms of national productivity, they should.

LEIGH SALES: OK. On another matter: you've confirmed that you sometimes communicate via an app called Wickr. I'd like to... I'm tempted to ask what your user name is?

MALCOLM TURNBULL: (laughs)

LEIGH SALES: Now, it's encrypted and it avoids...

MALCOLM TURNBULL: Yeah, well, I'll just get too many messages but it wouldn't be too hard to find out.

LEIGH SALES: "Alternate PM"?

MALCOLM TURNBULL: (laughs)

LEIGH SALES: It's encrypted and it avoids data retention. Doesn't that prove exactly why the Government's proposed metadata policy won't work: because people will just circumvent them by using different methods to communicate?

MALCOLM TURNBULL: Well, there are many ways to... Well, actually, let's just go back and talk about what we mean by metadata. Relevantly, all we're talking about in terms of metadata retention is ensuring that ISPs do, for at least two years, that which they are currently doing anyway, OK. So this is not a big revolutionary change. It's been grossly misunderstood and overhyped by all sides.

LEIGH SALES: But sure. My point is that people always find ways to get around things?

MALCOLM TURNBULL: Of course. Of course they do. Of course they do.

LEIGH SALES: So aren't they going to in regards to this policy?

MALCOLM TURNBULL: Well, some people will. Nobody said it's a silver bullet. I mean, law enforcement...

LEIGH SALES: So why have it then?

MALCOLM TURNBULL: Well, just because something isn't 100 per cent effective doesn't mean you don't do it. You know, the business of law enforcement and security involves getting a scrap of information here, a scrap of information there and being able to link it together.

And what we're talk-, just so we're really clear what we're talking about metadata here: this is the number - the IP address it's called - that is allocated to your device: a phone, a computer, an iPad or whatever, when you are connected to the internet by your ISP.

So that if that IP address is found, perhaps by the FBI in some, you know, child pornography ring or terrorist ring or something like that, they can come back through the AFP and say, "We found this Australian IP address. Can you find out who, which account holder was using it on such and such a time and such and such a day?" And unless that's retained, Leigh, you can't do that. So that's all it is.

LEIGH SALES: But when Labor was proposing something similar to this in 2012, you called it "the latest effort to restrain freedom of speech" and something that you had grave misgivings about. Isn't this the reason why people get cynical about politics? Because when your side proposes something it's all good, when the other side proposes it, it's all bad?

MALCOLM TURNBULL: No, what Labor was proposing was quite different. What Labor was proposing... I mean, they were quite unclear about what they were proposing, by the way. There wasn't a lot of precision there, nor a lot of technical understanding as far as I could tell.

But what I gathered from their proposal was that they wanted ISPs to retain not simply the customer IP address, but they wanted the ISPs to retain all the details of your log session, which would record the websites you were visiting. So in other words, record a record of your web browsing activities. Now that... One of the things...

You know, I introduced this bill into the House and one of the things I made very clear in the bill and on my second reading speech is that there is no requirement to retain anything to do with your web browsing history. So where you go on the Internet: that's a matter for you. The Government's got no interest in that information being retained. Now that was what was, as we understood at the time, under contemplation by the Labor Party: hence the criticism I made of it.

LEIGH SALES: All right. Let's move to something that I alluded to before. As we all know, the Government's been having some trouble in the polls. Many members of your own backbench have lost confidence in the Prime Minister. He survived a spill motion just halfway or so through his first term. His personal approval ratings are dismal. Given that backdrop, why do you consider Tony Abbott to best person to lead the party forwards?

MALCOLM TURNBULL: Well, he is the best person because he has the confidence of the party room.

LEIGH SALES: But what about his personal attributes?

MALCOLM TURNBULL: Well, (laughs) his, the-the, to be the leader of a political party you only need one attribute and that is to have the confidence of the party room (laughs). So...

LEIGH SALES: The public would like to think that the Prime Minister has a lot more attributes than that?

MALCOLM TURNBULL: Well, that's a matter for the public. You know, there's 102 members of the party room and they are the ones that decide who will lead the party. And the only attribute... You can have all the attributes in the world - perceived, real, unreal, imagined - the only attribute that matters is the one, as John Howard would say, governed by the iron laws of arithmetic and that is to say whether the majority of the party room support you. And it's quite clear that Tony...

You know, there was a spill. There were 39 votes in favour of a spill. No-one challenged him, by the way. Just be very clear about that: nobody challenged him. So he-he, you know, the issue was about whether the party wanted him to remain as leader and only 39 were in favour of it and that was obviously nowhere near, you know, 50 per cent plus one of the 102.

LEIGH SALES: Let me ask you: do you lack the ticker to challenge Mr Abbott?

MALCOLM TURNBULL (laughs): My ticker is in very good shape.

LEIGH SALES: Some your colleagues privately say you just want the job handed to you; that you want them to come cap in hand and beg you to do the job?

MALCOLM TURNBULL: Well, I talk to Mike... You know, I'll tell you something, Leigh. The, the... There's two universes going on in respect of politics. There is the one that goes on in the media and there is a lot of commentary and speculation, some of it completely and utterly wild, some of it, you know, a sort of a mixture of feverish imagination laced with late nights and probably a glass or two of wine too many.

And then there is the real world and the real world is the 102 members of the party room. And I can assure you that all of us are absolutely committed to giving Australia sound, responsible, good Government. We support Tony Abbott as our leader. He has the support of the party room. Yes, there was a spill motion but it was not carried and we are all behind the leader, every single one of us.

LEIGH SALES: Again: what do you consider his strengths as Prime Minister to be?

MALCOLM TURNBULL: Well, he's got many strengths. I mean, he's a... I, you know, how can I... It will take too long. We haven't got time tonight. But he's a very, you know, intelligent, courageous, brave man, a very thoughtful guy. He's got a wonderful self-deprecating sense of humour.

Look, Tony is a, Tony has many good attributes but, relevantly, the only one that matters is whether you have the support of the party room.

LEIGH SALES: Do you accept, as some of your critics claim, that there's a section of the Liberal Party that would never again be able to tolerate you as leader because they consider that you're too far to the left on social policy?

MALCOLM TURNBULL: Well, yeah, there's a... This is something that's put around in the media and I just don't...

Let me just make this point. The Liberal Party is at its strongest when the leading figures in the party, and that includes Tony Abbott, obviously he is the leading figure, and others including myself, are seen to be as close as possible. The public and the party want us to be seen to have as close as possible, while retaining our own personalities and own idiosyncrasies, not a cigarette paper between us.

Now, you take social issues. People often talk about gay marriage. You get all people saying, "Malcolm Turnbull is in favour of gay marriage." The reality is that Tony Abbott and my position on gay marriage is very close. Both of us believe the party room should decide whether there should be a free vote, a "conscience vote", so-called.

LEIGH SALES: But beyond that...

MALCOLM TURNBULL: No, no, but hang on. But hang on. And then it's up - and I have no doubt that if a private member's bill comes up, I've got no doubt the party room will decide there will be a free vote: that is actually the long-standing Liberal tradition.

Now, the only difference is that Tony as an individual, not as a Prime Minister telling people what to do, as an individual member with the same vote as the newest backbencher would vote against it. I, as an individual member with no more vote than any backbencher, would vote for it.

But the fact is we... So our, you know, in a sense his view on the matter and my view on the matter are relevant only insofar as it applies to our own vote. So you know, the idea that there's this massive gulf between us is quite imaginary and it's been put around by people, frankly, who I suspect don't bare either Tony or me a lot of good will.

LEIGH SALES: We'll have to explore that another time. Malcolm Turnbull, thank you very much.

MALCOLM TURNBULL: Thank you very much.