LEIGH SALES, PRESENTER: Joining me from Melbourne is the Opposition Leader, Tony Abbott.

Welcome to the program, Mr Abbott.

TONY ABBOTT, OPPOSITION LEADER: Good evening, Leigh.

LEIGH SALES: Let me start with a really simple question: when will you level with Australians and say, "Here's a full list of what the Abbott Government is going to spend money on, along with a full list of what we're going to save or cut and here's our plan for a return to surplus"?

TONY ABBOTT: Well, Leigh, every policy that we put out will be costed and funded. We intend to keep putting out policies right up into the last week of the election campaign. So, when all our policies are out, we will be able to tell you exactly how much we're gonna spend, exactly how much we're gonna save and exactly what the overall budget bottom line will be and how much better it will be than under the Labour Party.

LEIGH SALES: But from what you've just said, it sounds like that could come on the very last day of the campaign. Is that really enough time for people to make up their minds?

TONY ABBOTT: Well, it certainly won't be as late as that, although, let's be candid with the public, Leigh, that is when the Labor Party released their costings both in the 2010 election and in the 2007 election at 5 o'clock on a Friday.

LEIGH SALES: Sure, but I want to know when you're releasing yours.

TONY ABBOTT: People will be under no doubt when they go to the polls exactly how much we're gonna spend, exactly how much we're gonna save and exactly how the budget bottom line will be better off overall. In the end, Leigh, our challenge is to build a stronger economy, and that's what we're determined to do: to build a stronger economy. That's why we're cutting tax, that's why we're cutting regulation, that's why we're determined to get productivity up.

LEIGH SALES: But we have to take you on faith with that until we see the actual numbers. We know that credibility on economic management is going to be critical to the outcome of this election. I can add up at least $30 billion worth of new spending promises or foregone revenue that you've announced so far ranging from school funning to the abolition of the carbon tax. The figure you've put on savings yourself is $17 billion. Do you agree that's a substantial hole in your budget?

TONY ABBOTT: It will be well and truly filled before polling day, Leigh, because we are going to live within our means, we're not going to over-promise, we're determined that we won't under-deliver and we are absolutely confident that as the party that when we were last in government gave Australians the four biggest surpluses in history, we can do vastly better than the current government, which so far has given us the five biggest deficits in our history.

LEIGH SALES: Well let's stick to what you're doing. Do you agree with me that that's actually a fair bit of ground to make up there?

TONY ABBOTT: It's nothing like the $70 billion lie which is being peddled by the Labor Party and which the respected PolitiFact fact-checking organisation has said is simply false.

LEIGH SALES: But you will have to announce substantial further cuts or savings to make up that shortfall?

TONY ABBOTT: I absolutely accept that there's more to say and we will level with the public because the last thing I want to do is act like the current government. One of the reasons, Leigh, why there is such a trust deficit at the moment is because this government has consistently deceived people and that's the last thing that I'm gonna do.

LEIGH SALES: But on the trust issue, we're now just 23 days away from the election, you've not provided comprehensive costings so far of what you're pledging and you've not announced detailed policy in areas like health and education, so how can Australians trust that you're ready to govern?

TONY ABBOTT: Well they've had a good look at us over the last three years, and let's not forget, Leigh, that for the last three years we've had the same strong, united team and for the last three years we've had the same clear policy positions. Now, that's ...

LEIGH SALES: But you haven't had that many of them.

TONY ABBOTT: Well I'd recommend, Leigh, that you and your viewers look at the book that I published late last year, A Strong Australia, and our Real Solutions booklet that we put out earlier this year.

LEIGH SALES: Well, I have had a look at that actually, and in it, your health policy so far runs to just half a page of text. That's a slap in the face, isn't it, to Australians who face long waiting lists, who struggle to get a timely appointment with their GP, who can't get their teeth fixed?

TONY ABBOTT: Look, I accept there's more to say on this, Leigh, and there will be a lot more to say. Let's face it, we've still got three and a half weeks to go in this campaign. We've already had some important things to say about health. We've talked about quarantining health and medical research from further cuts, we've talked about getting drugs in a timely fashion onto the Pharmaceutical Benefits Scheme after they've been through the PBAC process. And let's never forget that this is the government which cut $1.5 billion from public hospitals, including, if I may say so, a retrospective cut in the last financial year.

LEIGH SALES: Let's stick with what you're doing. One of the things that you've pledged on health so far is that you will ensure hospitals are managed by local boards to get better services and better value for money. How will the use of boards help people in a practical way, like, cut waiting times?

TONY ABBOTT: Well there's no magic wand here, Leigh, and let's not forget that I was the Health Minister for four years and I think that we can say that the federally-run part of the health system (coughs) - excuse me - was in pretty good shape when the Howard Government left office. But certainly if you've got local boards, if you've got a manager who is accountable to a local board, if you've got a budget that is being spent by the local manager in accountability to the local board, you are going to have a lot more responsiveness to local people and to local clinicians than if the whole thing is being run from head office. And this is why Kevin Rudd went down this path himself or started down this path himself several years ago. I think we can go further down this path and that's what we'll be talking about in the days and weeks to come.

LEIGH SALES: Do you want to have a sip of water, Mr Abbott, 'cause ... ?

TONY ABBOTT: I'm very happy to have a sip of water. Thank you, Leigh.

LEIGH SALES: Alright. I'll ask this question while you do that. On education, you've said that you will match the Rudd Government's spending, that you will dish it out with no strings attached. So, you're gonna splash around billions of dollars with no national plan or accountability for how it's spent?

TONY ABBOTT: Leigh, I think the education debate, the school education debate shouldn't be about funding, it should be about quality, and that's what we're on about. We're on about higher-quality schools. We want to see better teachers, we want to see better teaching, we want to see more parental engagement, more community engagement. That's what the debate should be about and that's where it'll be between now and polling day.

LEIGH SALES: But you've said there are no strings attached to the provision of that funding, so how will you ensure any of those things?

TONY ABBOTT: What we've said, Leigh, is that there won't be additional - additional bureaucracy. There won't be a separate federal inspectorate. There's not gonna be these federal management plans. We think there's quite enough bureaucracy in our school education system already. We don't need more.

LEIGH SALES: In your Real Solution plan it says, "We will work with states and territories to encourage state schools to become independent schools." Why do you want fewer state schools?

TONY ABBOTT: Well we don't want fewer state schools, we want to have a very vibrant public education system, but we are very attracted to the independent public school model which has been extremely successful in WA under the Barnett Government. Now, hundreds of public schools in WA are going down this path. If you're an independent public school in the west, the school council appoints the principal and the principal is essentially given a one-line budget that he and the council can then manage. Now, there are certain parameters within which they've got to operate, but it's a much freer system than that which operates typically in other states.

LEIGH SALES: But the Liberal NSW Education Minister, Adrian Piccoli, says the NSW Government won't back that because there's no evidence that independent schools improve student performance.

TONY ABBOTT: He has made some moves in that direction though and I think they're commendable moves and we're not going to be dictating to the states, but we are gonna be working with the states. And certainly in WA, both the parents and it seems teachers in these independent public schools are very happy with the outcome.

LEIGH SALES: The GST we know will be included as part of a tax review that you're promising. Your frontbench have made some diverging comments on this with Christopher Pyne saying that the GST will never be changed, but Arthur Sinodinos says that that promise applies only to your first term. I'm just wondering if you can just clarify that for us, please?

TONY ABBOTT: Well the Labor Party, Leigh, are gonna tell a lot of lies about this between now and polling day.

LEIGH SALES: That's why I'm asking you to clarify.

TONY ABBOTT: But the truth is the GST is not going to change, full stop, end of story.

LEIGH SALES: Why?

TONY ABBOTT: It only can change, it only can change if all the states and the territories agree. That includes the Labor states. So unless Mr Rudd has cooked up a secret plan with the state Labor premiers for an increase in the GST, it can't change.

LEIGH SALES: But we know that economic circumstances change, international circumstances change, what's going on domestically changes. Wouldn't a prudent economic manager leave open the possibility of change to the GST so that you can have maximum flexibility in your fiscal policy?

TONY ABBOTT: The reality, Leigh, is that the GST can only change if the states and the territories agree. The GST - let me repeat it - can only change if the states and the territories agree and that's the Labor states as well as the Coalition states. That's why I say it's not gonna change, full stop, end of story.

LEIGH SALES: But that doesn't necessarily mean it won't change, full stop, end of story. Why not say to the Australian people, "Well we reserve the right to look at anything we like. We're not planning to at the moment, but we do have the options available."

TONY ABBOTT: There will be a comprehensive tax white paper and I don't know what different people are going to put forward for consideration, but in the end it will be up to the government of the day to take recommendations forward. And the point I repeat - and I know you're sick of hearing it, Leigh - but the point I repeat and which the public need to know is that the GST can't change unless the Labor states agree to a change, so unless Mr Rudd is getting information from the state Labor premiers that they've got a secret plan to change the GST, this is nothing but another Labor lie.

LEIGH SALES: Let me ask you a few quick policy questions. Will you keep Labor's tobacco excise increase?

TONY ABBOTT: This is yet another tax hike from a government addicted from tax hikes and the point I make is they hit people with three new or increased taxes just before the election starts. If they hit you with tax increases before the election, I hate to think what's gonna happen after the election.

LEIGH SALES: So will you keep it?

TONY ABBOTT: But there is a budget emergency, there is a budget emergency and there are a number of things that this government has done recently which we don't like, Leigh, we don't like one little bit, but under the circumstances we might have to accept.

LEIGH SALES: So you will possibly have to hit people with that same tax?

TONY ABBOTT: We possibly might have to, and we will be very upfront with people in good time before the election.

LEIGH SALES: Does that also apply to possibly keeping Labor's bank levy?

TONY ABBOTT: Again, same thing.

LEIGH SALES: Labor's fringe benefits tax on cars?

TONY ABBOTT: No, no. We've said this is a disaster for a motor industry which is already under pressure. We're not going ahead with that.

LEIGH SALES: You accept that if you don't keep the first two items, that's going to be another $5 billion worth of savings that you'll have to find?

TONY ABBOTT: (Coughs) Excuse me, Leigh. Look, I accept that we do have a savings challenge. I absolutely accept that. But look at our record. The Coalition is the party that delivers consistent surpluses of one per cent of GDP last time we were in government. The Labor Party hasn't delivered a surplus since 1989. We know we've got a challenge ahead of us, but we also know that if we can get taxes down, if we can get productivity up, we get growth up and that means revenue up.

LEIGH SALES: But given the magnitude of the challenge, to be honest with the Australian people, you'd have to say, "We're looking at substantial either cuts to spending or increases to taxes."

TONY ABBOTT: Well, there will be no overall increase in the tax burden whatsoever.

LEIGH SALES: So therefore we'd have to have very substantial cuts to spending.

TONY ABBOTT: Well, you will know in good time, Leigh, before the election where we will make savings, but let's not forget that there is an enormous amount of waste in the system already, enormous amount of waste in the system, whether it's big waste: the $11 billion of border protection blowouts, or small waste: the $180,000 that the Department of Human Services spent on ergonomic chair design when they could've just gone down to Harvey Norman and asked for a decent chair. There's an enormous amount of waste in the system. Our NBN costs under $30 billion. Labor's NBN costs over $90 billion and they are sitting on an accountants report on the cost blowout. Mr Rudd went up to Darwin today, came up with a thought bubble, completely uncosted, changed the policy three times in the course of the press conference. I mean, please, Leigh, please, please, we are the Opposition, we are the Coalition that delivers surpluses. This government has not got a single figure right in six years.

LEIGH SALES: You yourself have written in your book Battlelines that you were the hard man of the Howard Government and that you attracted that reputation. Labor's now running attack ads saying that you're suppressing your real self and that you're still that guy, but you're just trynna keep a lid on him. What do you say to that?

TONY ABBOTT: Look, Labor will tell fibs. Labor will tell fibs. I mean, Kevin Rudd said at the start of this campaign that in the depths of his heart he wanted to be positive. Well, plainly Mr Rudd is not fair dinkum because the attack ads have started.

LEIGH SALES: But we're talking about you. Does a leopard change its spots?

TONY ABBOTT: Well, look, people have seen me for almost 20 years in public life. I've published again and again and again, including my book Battlelines. I am prepared to submit myself to the judgment of the Australian people, and let's not forget, let's not forget, Leigh, when Mr Rudd was Prime Minister before, his own party sacked him for incompetence. When he became Prime Minister six weeks ago, a third of the cabinet wouldn't serve with him.

LEIGH SALES: Mr Abbott, we know as yet there's no agreement between you and Mr Rudd on when the next debate will take place, even though we know that there is a public appetite for it. Why don't we just stop politicking and you and Mr Rudd can come in here, sit down, just of two of you and go head to head, I'll moderate it to make sure you have equal time and a fair right of reply. Why don't we just get Kevin Rudd in and do that?

TONY ABBOTT: Well, I've put forward a proposal, Leigh, for two public forums. You get your go quite a lot, Leigh. Every day, in some cases twice or three times a day during the campaign, the journos have their go.

LEIGH SALES: But it's not about me. It's simply about you and Mr Rudd having a place where you can be facilitated to simply go head to head so people get a good look at you, both together, actually debating your policies.

TONY ABBOTT: Well I think the people have a good look at us every day and you have a fair go at us quite regularly, Leigh. I think it's now the chance of the public to ask their questions. That's why I'll be going to these two public forums in the next couple of weeks and I hope Mr Rudd does too.

LEIGH SALES: Tony Abbott, thank you very much. I hope your throat's better.

TONY ABBOTT: Well, look, when you do as much talking as I do, Leigh, during an election campaign, sometimes the voice starts to wear out on you, but it's nice to be with you.

LEIGH SALES: Thank you very much.

TONY ABBOTT: No worries.