LEIGH SALES, PRESENTER: The Prime Minister Tony Abbott joined me from his office in Canberra earlier today.

Prime Minister, thank you very much for your time.

TONY ABBOTT, PRIME MINISTER: Thanks, Leigh.

LEIGH SALES: How will Australia decide who gets to be among the 12,000?

TONY ABBOTT: We will work very closely with the UN High Commissioner for Refugees. We are sending a team of officials to the Middle East as soon as possible. But we are gonna focus on persecuted minorities, on women, children and families who are in refuges on the borders of Syria.

LEIGH SALES: We have Syrian refugees in our own detention centre on Manus Island. Why do those people not deserve a chance at refuge in Australia?

TONY ABBOTT: Well we don't want to reward people smugglers and we don't want to reward people smuggling. So, we are very much going to go to people who have sought asylum, sought refuge on the borders of Syria, in Turkey, in Lebanon, in Jordan. We're not particularly going to go and look for people who have used the services of people smugglers to get into Europe, because the last thing we want is to add to the problem of people smuggling, the last thing we want is to reward people smugglers and their clients. What we want to do is help people who really, under these circumstances, are never able to go back to their ancestral homes.

LEIGH SALES: The cause of these refugee flows are of course the huge level of violence and instability in Syria and Iraq. You've announced that Australian air strikes will now extend into Syria as well as Iraq. What is the overall strategy? What is the outcome that you're working towards?

TONY ABBOTT: Well what we want to achieve throughout the Middle East is governments which don't commit genocide against their own people, nor permit terrorism against ours, and obviously, we are currently involved in an international campaign, a US-led air campaign against the death cult, as I call it, which has created so much havoc in Iraq and in Syria. And in order to help defeat and destroy Daesh in Iraq, it's important to strike at their bases and supply lines in Syria as well.

LEIGH SALES: How will you judge though when that mission is complete?

TONY ABBOTT: Well when the Daesh death cult has been destroyed, when the self-proclaimed caliph and his lieutenants are no longer able to inflict these dreadful atrocities on the people who they are persecuting. And as we've all seen on our screens, we've seen the beheadings, the crucifixions, the mass executions, the sexual slavery. Every day, Leigh, this death cult is putting up on the internet ever more gruesome imagery on people being killed.

LEIGH SALES: You mentioned also in the first part of your answer that we need to eradicate governments which commit genocide against their people. The Assad regime in Syria is obviously one of those. What is Australia's strategy for regime removal of the Assad Government?

TONY ABBOTT: These air strikes are targeting Daesh, they're not targeting the Assad regime, evil though it is. There is obviously a separate process to try to deal with the Assad regime. It's a process in which Australia is a bit player, if anything. Our commitment is to work with our international partners to disrupt, degrade and ultimately destroy this death cult, which has done so much damage to the people of Iraq. And let's not forget that it was Iraq that invited us in about 12 months ago to help defend Iraq, and more recently, it's been President Obama who's asked us to join the US-led air strikes against Daesh and Syria as well.

LEIGH SALES: But on the Assad regime, their behaviour is a key recruitment tool generating people towards IS, so you can't possibly tackle IS in isolation without attempting to tackle the Assad regime.

TONY ABBOTT: Well I certainly accept, Leigh, that the humanitarian crisis on the borders of Syria is driven by people fleeing the mass executions of Daesh on the one hand and the chemical weapons and the other atrocities of the regime on the other hand.

LEIGH SALES: But other strategy seems only focused on one end of that.

TONY ABBOTT: Well, just because there is one evil that at the moment we are not proposing specifically to address with air strikes doesn't make it wrong to extend our air strikes against Daesh targets in Syria, given that the focus of our efforts is to protect the people of Iraq and to try to help the Iraqi Government to regain control over its own territory. That's the focus of our military efforts and obviously that is helped if we can target Daesh operations over the border which are contributing to their operations in Iraq.

LEIGH SALES: The former head of the CIA and the former military commander of US forces in Iraq and Afghanistan General David Petraeus was on this program on Monday night and he says that the US and its allies need to do more to equip moderate opposition forces in Syria to attack both Assad and IS. What is Australia's position on that?

TONY ABBOTT: Well it's a nice idea. It's not easy to find moderates in that part of the world, particularly in Syria. At the moment the main forces are the gruesome Assad regime, the if anything even more diabolical Daesh death cult and then of course there's people linked with al-Qaeda. So, it's difficult to find effective moderates in Syria. Obviously, if we can find them, we're happy to provide help, along with our allies. But let's not underestimate just what kind of a cauldron this is. That said, Leigh, that said, it is important to do what we can in partnership with our allies against the death cult which has done so many gruesome things over the last 12 months.

LEIGH SALES: Let's quickly run through some other issues, Prime Minister, starting with the economy. When Labor left office, unemployment was 5.8 per cent; it's now 6.3 per cent. Growth was 2.5 per cent; it's now two per cent. The Australian dollar was 92 cents; it's now around 70 cents. The budget deficit was $30 billion when you took office and now it's $48 billion. How do you explain to the Australian people that you were elected promising, in your words, to fix the budget emergency, yet in fact, Australia's economic position has worsened under your leadership?

TONY ABBOTT: Well I don't accept that. The boats have stopped. The carbon tax has ...

LEIGH SALES: We're talking about the economy.

TONY ABBOTT: The boats have stopped, the carbon tax has gone, the mining tax has gone. We are now on a path to sustainable surplus and we've got three free trade agreements finalised. If only the Labor Party and the CMFEU weren't trying to sabotage the Free Trade Agreement with China. And we've got ...

LEIGH SALES: Prime Minister, I just ran you through ...

TONY ABBOTT: And we've got 335,000 more jobs. Now, ...

LEIGH SALES: I just ran you through a series ...

TONY ABBOTT: ... that is the one achievement of which I am most proud, if I may, the 335,000 extra jobs that are there ...

LEIGH SALES: Yet unemployment is still going up.

TONY ABBOTT: But we have 335,000 more jobs. Jobs growth now is at four times the rate as in Labor's final year and all of the recent indicators of economic activity say that business conditions are stronger now than at any time since 2008.

LEIGH SALES: But Prime Minister, I just ran you through numerous independent statistics showing that the economy is in a weak position. I'm just wondering: why has the language changed so much that it was an emergency when the numbers were better than that, but now it's not an emergency?

TONY ABBOTT: And let me give you some statistics. Bankruptcies at record lows, company registrations at record highs, car sales and housing approvals at near-record highs. So, a lot of very good things are happening in our economy, and Leigh, I refuse to talk our country down. I refuse to talk our country down and I hope the national broadcaster might join me in looking for the good and boosting our country, which has so much potential.

LEIGH SALES: I wonder what you would've done if I'd helped Wayne Swan and Julia Gillard look for the good.

TONY ABBOTT: Well, we were prepared to work with the Labor Party where it did good things. Where they did bad things, like spend like drunken sailors, put batts into roofs that caught fire, waste billions and billions on unnecessary school halls, bring in a carbon tax - when they did all those things, we worked against them.

LEIGH SALES: OK. At the start of the year you promised a families package that was meant to boost growth and productivity. How do you explain the fact that all those months later, it hasn't been legislated?

TONY ABBOTT: Well we also said when we brought it down on Budget night that it had to be paid for, and so far, the Senate has not been prepared to pass the savings measures that we think are important if this very, very necessary improved and expanded child care package is to come into force.

LEIGH SALES: But it's your job to negotiate that.

TONY ABBOTT: And that's exactly what Minister Morrison is doing. He is talking every day to the Labor Party and to the crossbenchers saying, "If you want a better child care system, it has to be done responsibly and prudently. Here are some savings in what we think are lesser priorities so that we can have additional spending in what we think is a higher priority."

LEIGH SALES: You were highly critical of Kevin Rudd for governing by review. Given that, why have you spent your first term in government commissioning white papers into things like tax and federation, you've not done anything on labour market reform - why have you spent your time doing reviews rather than taking action?

TONY ABBOTT: Well, Leigh, with respect, we have done a very great deal on labour market reform. We have sought to do a very great deal on labour market reform. We've sought to restore the Australian Building and Construction Commission which would bring back the rule of law on construction sites. We've sought to impose the same standards on union officials which we typically impose on company directors. We've got the Royal commission into trade union corruption going on right now.

LEIGH SALES: And yet business is still unhappy with the pace of reform and what you've done.

TONY ABBOTT: And business is right to be very unhappy with the Senate and with the Labor Party in particular, which is still protecting dodgy union officials.

LEIGH SALES: But you're the Government.

TONY ABBOTT: And it's important to know who the villains are here, and the villains, Leigh, are the Labor politicians who are protecting dodgy union officials who have been ripping off workers blind for years, led by none other than the Opposition Leader himself, who was very happy to see workers earn less so that money could go to his then-union to feather his political nest.

LEIGH SALES: In February you said at a press conference that, of your government, "I think we're getting our message across clearly and I think that over time, the public will respond more appreciatively than they seem to be now." The polls show that they're not. Why?

TONY ABBOTT: Well I'm not obsessive about polls. Obviously people in the press gallery like to hyperventilate about polls. My job, Leigh, every day, is to get on with doing the right thing by Australia; in this instance, doing the right thing by the world.

LEIGH SALES: But do you think really - Prime Minister, sorry to interrupt, but do you really think that any viewers think that politicians don't care about polls?

TONY ABBOTT: Well, what I'm on about is more jobs, higher economic growth, safe communities - that's what I'm on about. And the policies that I'm on about to bring that about are lower taxes, more infrastructure and freer trade. That's what I'm focused on every day. Sure, the Labor Party wants to play politics with our future, sabotage things like the China Free Trade Agreement, but we're just getting on ...

LEIGH SALES: But let's talk about - let's not talk about Labor.

TONY ABBOTT: We're just getting on with the things that we know will benefit the people of Australia.

LEIGH SALES: Of recent times we've seen your cabinet repeatedly leak, we've seen open displays of disagreement between cabinet members. Is that a sign of a dysfunctional government?

TONY ABBOTT: Look, this is a government which is getting on with the job. And, you know, I'm not going to tell you that from time to time there haven't been things that people hyperventilate over.

LEIGH SALES: But does the degree of dysfunction ...

TONY ABBOTT: But the truth is we've got on with the job. We have got on with the job. We've cut taxes, we've cut regulation, we've finalised free trade agreements, we've stopped the boats ...

LEIGH SALES: Well you've also introduced taxes.

TONY ABBOTT: And right now, this very day, this very day, we're doing the right thing by Australia. We're honouring our traditions of being a country which steps up to the mark when people are in trouble around the world. And it's only because we're doing the right thing by Australia that we can do the right thing by the wider world.

LEIGH SALES: Just finally, Prime Minister, you were considered one of the most effective

opposition leaders in Australian history. Do you ever stop to wonder why that hasn't translated into being one of the most effective prime ministers?

TONY ABBOTT: Well, I think this has been a very, very effective government, Leigh, a very, very effective government. And I even had a Labor person say the other day that if they in government had done half the things that we have achieved in government, they would be patting themselves on the back every night.

LEIGH SALES: But I just wonder ...

TONY ABBOTT: Now I am extremely proud of what's been achieved. I'm very proud of the fact that all the major commitments that we made pre-election have been honoured. The carbon tax is gone, the boats are stopped, ...

LEIGH SALES: You made those points earlier.

TONY ABBOTT: ... the roads are building - yes, and I'm gonna keep making them.

LEIGH SALES: Well I'd ...

TONY ABBOTT: The roads are building and the budget is coming back under control.

LEIGH SALES: But when you say - and very quickly: I know you've got to go. When you say that it's a very effective government, are you not saying to the Australian voters who are unhappy with your performance that they've got it wrong, you're being dismissive of their concerns?

TONY ABBOTT: Well no. Obviously we can always do better. And every day, we are striving to do better. But if you take, for argument's sake, the Canning by-election which is coming up in a couple of weeks' time, we have an outstanding candidate and we've got a very good record in Canning getting rid of anti-Western Australian taxes like the carbon tax and the mining tax and we are building the infrastructure that Western Australia needs and when Western Australia had a GST problem, we didn't just wring our hands, we provided practical help.

LEIGH SALES: Prime Minister, we appreciate your time very much today. Thank you.

TONY ABBOTT: Thank you, Leigh.