SARAH FERGUSON, PRESENTER: Labor's performance in the recent WA Senate election was the party's worst in more than a century. Their share of the vote was a miserly 22 per cent. That disastrous result was caused in part by an ugly factional fight that may have cost the party a second seat.

The ALP's only successful candidate, Joe Bullock, confessed he didn't always vote for the party. While losing candidate Louise Pratt described him as disloyal and deeply homophobic.

In the aftermath, Labor's leader Bill Shorten announced he would shake up the party. Today he delivered a speech laying out his plans for reforms, which included a revived ALP with a youthful membership of more than 100,000 people. But first he needs to confront the factional system that contributed to the disaster in WA.

To discuss this I'm joined from Melbourne by the leader of the opposition, Bill Shorten, welcome to 7.30.

BILL SHORTEN, OPPOSITION LEADER: Good evening, Sarah.

SARAH FERGUSON: Now have you been driven to these reforms by the despair of presiding over a broken party?

BILL SHORTEN: No, Labor lost the last election and we need to rebuild as a result. That's what's driving me. Making sure that the Labor Party's strong, that people see that we're changing and so that we can be competitive on the matters which are important to people, such as jobs and health care and the National Disability Insurance Scheme. But for people to listen to us at the next election to say that Labor is in touch with their lives we do need to rebuild. That's what's driving me.

SARAH FERGUSON: Let's hear what you think will actually turn your fortunes around then. You said today that you want to redraft Labor's platform. What do you want it to say?

BILL SHORTEN: Well, we'll send out the first chapter of the platform to all our members. Our National President Jenny McAllister's working with caucus members and shadow ministers. It's still a work in progress. We will ask our members to give us their views.

SARAH FERGUSON: I think what people want to hear from though, particular today, is your view. You said specifically that you want to redraft the opening statements. They say amongst other things that our partnership with the trade union movement remains crucial for Australia's future. What do you want to change that to?

BILL SHORTEN: Well, unions are important and I've been a union member and they've done good things. But we also need to modernise the Labor Party. I want to make it clear today and every day up till the next election that we want to be the political arm of all Australians. Not just trade unions. We want to talk to and invite people from all walks of life to join our Labor Party, to get involved, to recognise that by being involved in the Labor Party you can tackle issues in the communities. A lot of these people are not people who traditionally the ALP has appealed to. Small business. People in regional towns. Professional women.

SARAH FERGUSON: So does that mean then that the unions, this is your end game, that the unions will have less say in deciding policy. Let's be a bit specific if you would.

BILL SHORTEN: I've asked that the Labor Party change its national rule, which says that - currently says it's compulsory to be a member of a union to join the Labor Party. Now, this is a symbolic change but it's more than that. I make very clear today that we are a Labor Party for all Australians, not just one sector ever the economy or one group of people.

SARAH FERGUSON: But are you also saying you want the unions to have less role in policy?

BILL SHORTEN: Well, what I've also said is that I want to have more involvement from the Labor Party membership. I'd like a bigger Labor Party, I want people to be able to join easily. If you've ever thought about getting involved in politics, who knows you might be thinking tonight about getting involved in the Labor Party. I want you to be able to join online. I don't want to you have to wait a long time. We want your commitment and your ideas right now. What that means in answer to your question is that whilst unions will be one part of what contributes to the Labor Party, I want a bigger, more diverse Labor Party, with more Labor Party members having a greater say in the selection of our candidates.

SARAH FERGUSON: Obviously you're a former union leader yourself. Factional battles have been central to your political career up to and including very recently. How are you the person to remove union influence from the Labor Party?

BILL SHORTEN: Well I want to lead a membership-based party, not a faction-based party. And I recognise that Labor lost the last election not because of an image issue, not because of a communications problem, but Australians, it wasn't Tony Abbott who got rid of Labor, it was Australians. And to win the trust of Australians back, we need to represent and be in touch with modern Australia. That means reaching out to a lot more people. That means inviting a lot more people to get involved. I am sure there are people watching this show who think that politics doesn't change their lives and nothing they can do in politics will have a material impact on their day-to-day lives. I want to convince people over the next two years that Labor wants you, that we do want your ideas, and that we will have a rebuilt structure, we will rebuild ourselves so we can be stronger and people will say yeah, I get why I should get involved.

SARAH FERGUSON: There are already some powerful factional leaders, like Joe de Bruyn, who said that these reforms are not what the public is interested in. Is he wrong about that?

BILL SHORTEN: The public is interested in Labor having good policies and good ideas. Part of that process is rebuilding Labor. Part of that is, if we want Australia, our home to be a modern outward confident democratic nation, then the Labor Party needs to be part of the change we want for Australia. The Labor Party needs to be modern, confident, outward looking and democratic.

SARAH FERGUSON: You also singled out specifically reforms that you need to bring in WA, in Western Australia. Did the debacle there over Joe Bullock muffling his way to the top of the Senate ticket make these reforms more urgent for you?

BILL SHORTEN: The rancour in Western Australia, I'm not talking about the individuals, but the rancour in Western Australia raised again the prospect of division and disunity in the Labor Party. What we need to do is make it very clear that Labor wants the best possible candidates. We want them all from all walks of life and that we will be a membership-based party, not a faction.

SARAH FERGUSON: Well then, aright, excuse me for interrupting, where were you when Louise Pratt warned you in December that Joe Bullock would be a problem for the Labor Party in WA, that he was the wrong person to put at the top of the ticket? This goes to the conviction of your belief in this change. Why did you ignore her?

BILL SHORTEN: Well, the issue was that the Labor Party in Western Australia consistent with the rules that are in operation made the choices they did. But of course, we've seen after that, the division and rancour. I'm not going to blame Joe Bullock for the result solely in Western Australia. But nor am I going to shirk away from the hard truth. And it's not easy for people to hear the hard truth in the Labor Party, but the hard truth is that we need to have Senate processes in the future which give our local members a voice as well as having a central component.

SARAH FERGUSON: Unions obviously contribute huge amounts of money to the Labor Party. You can't forgo those funds. Why would an organisation or a series of organisations that supplies you with all that cash, enabling you to stay competitive, why would it give up its hold on the party?

BILL SHORTEN: Well, the Labor Party needs to change and we need to rebuild to be competitive...

SARAH FERGUSON: That's you what need to do, but why would the unions allow this to happen?

BILL SHORTEN: 'Cause otherwise Labor will be consigned to opposition and that's not good for working people. What motivates trade unions and I understand them very well, is the best interests of their members and working people. It's in no one's interests, it's not in working people's interests to have the Abbott Liberal carrying out the policies they are, for instance the way they're attacking Medicare, the way they're breaking their promises on pensioners. That's not in trade unionists' interests to have. So what I'm interested in is how we create a fairer Australia, how do we involve more people? That's why these changes are necessary.

SARAH FERGUSON: Yet if you look at the speech that you made today, these reforms have been mooted for years within the Labor Party, a number of years John Faulkner suggested you go further, they're very short on detail. Again it goes to your own personal conviction in making these changes. Are these for real or are they just cosmetic?

BILL SHORTEN: They're for real. I think will you find that in the Labor Party in the last two decades, I've raised issues today which no one has tackled. What I've done is I've outlined the principles of the change of the rebuilding that we need to have. The Labor Party's going to work through the principles which I've enunciated and other people have other ideas as well. But I'm determined to lead a rebuilt Labor Party. I'm determined that we actually are a competitive opposition at the next election with strong ideas. Rebuilding is an important part of making Australians, of getting Australians to reengage with Labor, and to reengage with politics.

SARAH FERGUSON: Let me just ask you a quick question about something that's come up today, Clive Palmer has said that he won't vote for the Government's Direct Action policy, even if it's attached to supply. Will Labor allow Direct Action to pass in those circumstances?

BILL SHORTEN: It's a hypothetical. What I will say is that the Direct Action policy that the Abbott Government's putting up is an expensive plan to pay polluters to do not very much...

SARAH FERGUSON: It's not really a hypothetical. Clive Palmer has made it very clear that he will block that vote.

BILL SHORTEN: Let's see what Clive Palmer does when he's there. Our view on Direct Action is very clear. We think that the Abbott Government doesn't believe in climate change, we think they're sceptics. We think their Direct Action policy is just an expensive alibi to prove that they're not serious about - to prove that they're serious on climate change when the truth is they're not. We think the Abbott Government needs to come up with proper policies on climate change and they have to dump attacking the science and get with the program on start working on issues which will tackle climate change and not leave it to our kids.

SARAH FERGUSON: Bill Shorten thank you very much indeed for joining us.

BILL SHORTEN: Good evening Sarah.