PM: Thank you to everybody for being here. I’m joined today by Minister Peter Garrett but also by David Gonski. David Gonski is an eminent Australian. He volunteered upon my request to lead what is the first review into school funding and school education for almost 40 years and today we are publicly releasing that report, the Gonski review. The way in which we will deal with this today is I will ask David to explain the key findings of his report, then I and Minister Garrett will respond, take questions on David Gonski’s work and the Government’s response. Then Mr Gonski needs to go to catch a plane back to Sydney for another commitment and we’ll take questions of the day.
So at this stage, David, over to you.

MR GONSKI: Thank you Prime Minister. Prime Minister, it has been an absolute honour and a privilege to lead this review; the first comprehensive review of funding arrangements for schooling in this country since 1973. From the outset, I saw the invitation to lead this review as a genuine opportunity to change things for the better and to make a real difference in the lives of young Australians and I know my fellow panel members felt exactly the same way. We were given very broad terms of reference; to focus on the funding needs of all students in all schools and to consider funding provided from all sources. At no stage did we underestimate the complexity of this task. We engaged in a comprehensive, national consultative process; over the course of the review we met with over 70 education groups, we visited 39 schools in every state and territory in Australia, and we received more than 7000 submissions in response to two national consultative processes. The report proposes arrangements that we believe will deliver a funding system that is transparent, equitable and financially sustainable, and is also effective in providing an excellent education for all Australian students. We’ve provided in the report a snapshot of our current schooling system. It shows that Australia’s schooling performance has slipped over the past decade; and is at serious risk in our opinion of continuing to slide further. The report considers the funding arrangements and concludes that Australia lacks a logical, consistent and publically transparent approach to funding schooling. Importantly the report says that differences in educational outcomes must not be the result of differences in wealth, income, power or possessions. There is growing evidence that an increased concentration of disadvantaged students in a school has an impact on education outcomes. This finding is significant because it has informed the development of the loadings component of our Schooling Resource Standard, which we call SRS, which is the key to the new funding framework that we are recommending. The standard represents a new approach to resourcing Australian schools that is based on acknowledging students and school needs in all schools regardless of sector and funds an aspirational outcome rather than just costs. The standard has two components. Firstly, it includes a standard amount per student, with separate amounts for primary and secondary students. Secondly, it includes provision for additional funding to address disadvantage through a series of loadings.  The panel has proposed loadings covering this disadvantage. We have five loadings; school size and location; the proportion of students in a school who are Indigenous or from low socio‑economic backgrounds; or limited English proficiency; and of course for students with a disability. Our report sets out how the resource standard should be funded from public sources in different types of sectors and schools. Government schools, Special schools and the disability loadings, in our opinion, should be fully funded.  Other non-government sector payments should be based on the anticipated level of a school’s private contribution, which to begin with, though not in the long term, would be based on the socioeconomic status, SES score, of the school with a prescribed minimum level of public contribution. I should point out that, while the panel has done considerable work to develop the SRS, the figures in the report are indicative, and are based on 2009 data, which was the latest we had. Further work must be done to develop and test the per-student amounts and the loadings in particular. The report recommends that this be a collaborative process, which should involve state and territory governments and also the non-government sector, using the most recent and detailed data to be confident that the amounts are right. The panel was concerned to ensure that its recommendations would enable the Australian Government to meet its commitment that no school will lose a dollar per student as a result of the review. The report addresses in general terms transitional arrangements that would facilitate this as well as the respective roles of the Commonwealth and states in funding all school sectors. Accordingly, the review calls for an additional investment from all governments. We have said we believe an additional $5 billion in funding is required across all schooling sectors to address Australia’s schooling challenges. That is in 2009 dollars. We note in our report that this figure is an estimate and that the funding model should be thoroughly tested and refined over the coming months. Now of course we know that additional investment alone will not be sufficient to fully address Australia’s schooling challenges and opportunities. Funding reform will need to be accompanied by continued and renewed efforts to strengthen Australia’s schooling system;  things like excellent teaching and school leadership, the ability for schools to manage resources at the school level, and effective engagement with parents and the community. Clearly these are complex issues and change will not occur overnight. Our report seeks to provide the impetus and we may call it a road map for a genuine, long-term partnership involving all levels of government and across schooling sectors. As you would expect, I truly believe that this report offers an opportunity to embrace change and to do something that will transform our schooling system for the better. This is the only way we can ensure that our children and young people receive an excellent education in schools that are funded appropriately for need regardless of sector and jurisdiction. Thank you for your time.

PM: Thank you very much to David for those statements today but for what has been many, many, many months of very hard work. We’re here today because education is at the centre of my vision for our nation’s future. Nothing is more important to what will happen in tomorrow’s economy than what is happening in our schools today. Education is vital to achieving our aim to be a prosperous nation in the future with a new economy that offers opportunity. Education is also vital to the kind of nation we will be tomorrow and as Mr Gonski has outlined today and as he’s dealt with very clearly in his report, there are some worrying signs about the standards of our education system, of our schools compared with the standards of the world. Now we should remind ourselves that by world standards we’ve got a schooling system, but we also know that there are worrying signs that it is not keeping pace as the rest of the world seeks to improve. And to take you to just some of those statistics: now we face a situation where four of the top five schooling systems in the world are in our region. In the past ten years we’ve slipped from being equal second in reading internationally to equally seventh and from being equal fifth in maths to equal thirteenth. Now what that is telling us is we need both continuing reform and to work through funding issues for Australian schools. We have been delivering reform and those reforms are making a difference. Those reforms are in many areas, they include the new transparencies through MySchool so everyone can know what is happening in Australian schools. They include the high quality national curriculum which is being rolled out today. They include our many efforts to improve teacher quality including getting the best and brightest into teaching and rewarding the best teachers to go to schools that need these skills the most. They include the investments that we’re making in disadvantaged schools because we know too from our comparisons with nations overseas that our children who come from poorer backgrounds are at risk of being left behind and too many of them are left behind. We are also making investments into literacy and numeracy to enable people to get the foundation stones of learning and of course when we needed to support jobs in the Australian economy we chose to do that by renewing school capital through the Building the Education Revolution program. So we have been reforming Australian schools. But we also need now to address the question of funding. Reforms matter but money matters too. I don’t believe we should have a debate about one or the other, we need to keep reforming but we also need to look at the question of resources and that’s what David’s has brought us to, with this report on school funding. This report on school funding is very detailed and, as Mr Gonski has just outlined, proposes an entirely new system for funding schools. It is a report that is impressive in its insights. It is, of course, complex in its detail. We intend to take the insights from this report, roll up our sleeves and get to work with schools and school communities and education stakeholders on the in-detailed work that now needs to be done. David Gonski has given us great insights as to what a school funding system for the future could look like. But he set us a challenge. He set us a challenge of not only working through all of the details of that funding system, he has actually set us a challenge because some of the tools we would need to build that funding system aren't at our disposal today. For example, the Gonski Review says to us that we need to have a new way of looking at funding students with disabilities. We don't have the tools today to enable us to even have common national definitions of students with disabilities. The Gonski review tells us to look at how we measure socio-economic status in our schools, believing that current measures are not adequate. So we not only have to build the system of the future, we need to think about the tools we need to build that system. That means that drawing on these insights there is a lot of nuts and bolts work to do. Minister Garrett will outline exactly how we are going to do that work, but it will be inclusive, of working with states, working with stakeholders in education, but working with parents, teachers and school communities too, because no-one is more expert in the workings of their local school than the teachers who work within it and the parents who send their children to that local school. The approach that we will take as we go about this work will be informed by the approach we've taken so far. That is, first as Education Minister, then as Prime Minister, I've driven a policy suite from the Federal Government that is about every child in every school. We haven't looked at school sectors. We've looked at every child in every school, and in working through the in-detailed conversations we now need to have following the receipt of the Gonski Review, our focus will be on all schools. We will continue that approach. Second of course, we have to ensure that we work through these issues mindful of budget sustainability. There is a challenge in here for both the Federal Government and for State Governments. We need to make sure that any new funding model is sustainable over time and fits within government budgets, that we can make the right choices for Australian schools. And third, we are setting a number of tests as we work through. Can we create this model? Would this model work? A number of tests to assess whether we would implement such a model. First and foremost amongst those tests is it has got to drive better student results. It’s got to be focused on excellent learning and teaching outcomes. It’s got to be focused on continuous improvement and innovation over time. We are not going to win the education race unless that is key to a funding reform agenda. In addition, we want there to be equitable access to a great education, knowing as we do today, too many poorer students fall behind. We want to support school choice, we want to see fairness, transparency and accountability. We want to see financial sustainability and we want to see sustainability and certainty for schools about their funding. I understand that any big reform conversation has those who will try and engender fear and stop the conversation proceeding and I'm sure we will see some of that in coming days from the Opposition. The approach the Government is taking is that indexation will be a feature of the system and no school will lose a dollar. We will be working with schools and school communities. There is a major reform opportunity here that is important to our nation and we should be up to having the national debate and conversation we need to have to seize that reform opportunity. To choose to do otherwise is to basically choose to stand still with today's education system. Standing still with today's education system means we will fall further and further and further behind the standards of the world because other nations are not standing still. So we will be there, sleeves rolled up and Minister Garrett will now describe the exact work processes we will go through.

MINISTER GARRETT: Thanks very much, Prime Minister. Mr Gonski has provided a major review to the Government on school funding and as he's indicated to you this is the first time in nearly 40 years that such work has been undertaken David I want to acknowledge the work that you and your panel have done and the thoughtful way in which you've presented these recommendations to Government. The fact is that this report continues an unstoppable journey on making sure that every school in Australia is the best that it can be for the kids in our country, and we are committed to continuing that journey as we respond to the recommendations of Mr Gonski's panel. In particular, I do want to say to you that we look forward to continuing to work closely with the many education stakeholders who already have participated not only in providing submissions to Mr Gonski's panel but also working with the Government as we consider education reforms more generally. The fact is that this report continues an unstoppable journey on making sure that every school in Australia is the best that it can be for the kids in our country and we are committed to continuing that journey as we respond to the recommendations of Mr Gonski's panel. In particular, I do want to say to you that we look forward to continuing to work closely with the many education stakeholders who already have participated not only in providing submissions to Mr Gonski's panel, but also working with the Government as we consider education reforms more generally. We want to start work immediately and we'll take a set of funding principles to be agreed at the next COAG and we'll begin working immediately with States and Territories and non-government sectors to develop and test a new funding model. We'll establish a number of working groups to test the recommended model and those working groups, of course, will be in the areas identified as the additional loadings to the schooling resource standards. So working groups in areas of disability led by my colleague Minister O'Connor, areas of indigeneity, low SES schools, and the like. We'll also establish a specific ministerial reference group that brings together the key stakeholders and governments so we can consult and work with those who are affected and make sure that we have an opportunity for views about proposed changes to be canvassed thoroughly. At the same time, it's really important for the community to continue to have its say, because it's the community interest that lies at the heart of the education reforms that this Government has already undertaken. So we will have a number of public stakeholder events and community events around Australia, local information sessions, online forums and the like. And my expectation is that we will have an opportunity now, as we roll our sleeves up and get stuck into this important work, to work closely with the community and with schools around Australia as we do that. Nothing in this report removes support for schools, but what's important about this report is that it shows a way for governments to deliver the most effective funding for schools so that our kids can achieve to the best level possible.  And we owe it to kids in Australia to give them the skills that they need to be able to live and to work and to prosper in an increasingly globalised economy and we owe it to the kids in Australia to do it in a way that is effective, that is fair and that is transparent. And so I want to thank you David for the work that you and your panel have done and we look forward to getting on with it right now. Thanks Prime Minister.

PM: So we’ll take questions on Mr Gonski's review first. We'll go to the grey eminence in the back and come to these two in the front. Yes, Paul Kelly, sir.

JOURNALIST: Given this report shows declining school performance across the board, that it wants another $5 billion, will you give a commitment to increase substantially funding for schools at the next funding period?

PM: Look, we are going to do exactly what we've just outlined. On the $5 billion, as Mr Gonski indicated in his opening presentation, that is the panel's view, working on 2009 figures, about the additional resources required from all levels of government, Federal and State. Now of course we want to work through on all of the details, all of the current information. We want to work through with our State colleagues, because this report presents a challenge to all of us. But I am happy to say to you, if you're assessing the credentials of the Government I lead when it comes to school funding, if you're assessing our credentials, then look at the track record so far. We have almost doubled the amount of money going to school education when we needed to engage in economic stimulus we said there was no higher priority in the nation than renewing school capital. We have understood as we've brought reforms that resources matter. But, of course, we're going to do the in detailed work now and I'm not going to make financial commitments for forthcoming government budgets until–

JOURNALIST: (inaudible)

PM: I’m not going to make financial commitments for forthcoming government budgets until we’ve done all of that work.

JOURNALIST: Prime Minister, you say that no school's going to lose a dollar, but for parents who may be listening to this, would it be fair for them to assume that a greater share of funding in the future is going to go to less well-off schools? And what do you say to people who say "Well, hang on, maybe some of these wealthier schools should lose a dollar." What do you say to those people?

PM: There is no hit list. I understand this has been raised in the public debate. There is no hit list, this is about all children in all schools, the challenge that we are being confronted with as a nation is that at the top we are falling behind the standards of the world and we've got an unacceptable gap between the top and the bottom in terms of students from wealthier backgrounds and students from poorer backgrounds. So we've got to get this right for all schools and for students from all backgrounds. So I would say to parents who will be vitally interested in this debate, it's about their child, it's about their school, to get involved in the discussion. But there is nothing to be afraid of here. There is plenty of opportunity for the future.

JOURNALIST: Prime Minister, you referred to the Opposition earlier. Tony Abbott has in fact said this morning that it's in Labor's DNA to want to attack the independent school sector. Can you reflect on that comment? And secondly, back on Paul's question, what about an in-principle commitment? I mean you are laying out, you are the education Prime Minister, you’re laying out a big reform proposal here, surely are going to have to commit to spending more money? 

PM: Foremost and foremost the only – the only - national political leader with an agenda of cutting funding for schools is Mr Abbott who is making these criticisms. He in his figures has factored in cutting more than $2 billion away from Australian schools. He’s said get rid of computers in schools, get rid of trade training centres, get rid of investments in teacher investments in teacher quality – get rid of investments in teacher quality - and get rid of investments in disadvantaged schools. So that's his pitch to the nation - cuts, cuts and cuts. Of course our pitch to the nation in education is always you should judge us on what we have achieved so far and we mean to go on in the same spirit. And that spirit has been one of reform. That spirit has been one of looking at every school, not looking at school systems and trying to play that combative politics, but looking at every school and delivering reforms to every school and we will go on in that spirit. On the committing of specific dollars, we will work this through exactly as Minister Garrett has outlined. We do not go around making promises about the Government's budget until we are in a position to deal in a very concrete way about what it might mean and we're going to do that here.

JOURNALIST: Prime Minister, what are the chances of getting a funding model agreed in place by the next election? Do you think that is a feasible thing given the situation with the States at the moment?

PM: We are going to have our foot on the accelerator working with school communities, with education stakeholders and with our State and Territory colleagues. There is a major challenge in this report for our State and Territory colleagues. They are the principal funders of state schools and when we look at things like the circumstances of students from disadvantaged backgrounds, students with disabilities, challenges of underachievement, of course they present challenges for State Governments. So we are going to work this through with the States. But we've got a collective interest as a nation in getting this right, we can't have the economy we will need tomorrow if we lose the education race today. We can't be the nation we want to be tomorrow if we lose the education race today. I think we've shown an ability to work with governments of different persuasions to secure reform, even governments of our own political persuasion, who might have come to the table with a different education agenda. Let's go through the track record. I got told we'd never get MySchool up and running and no-one would ever deliver transparency to this nation's schools – tick that box and MySchool is getting better all the time. I got told as Education Minister, national curriculum, 100 years later, it's impossible, just forget it, you'll never get it done. Here we stand today and national curriculum is being rolled out around the country.  So I think we've got an impressive track record of getting some hard education reforms done. We will now take a spirit of working together to the COAG table and, of course, Peter will take it directly his ministerial colleagues that he deals with. We need to renew school funding. Schools are funded under the current system to the end of 2013. We are talking about school funding beyond that and we've got to work through to make sure that we are satisfied with how schools are being funded beyond 2014. Sorry, beyond 2013 I should have said, in 2014 and beyond.

JOURNALIST: Does the Government accept in-principle the idea of the resource funding per student?

PM: We think that this is a good insight into a new approach to school funding. We also think identifying the loadings which make a difference to students as they come to school and consequently to the education task, identifying that expressly is a good insight, too. If we're talking about lifting education standards then we need a lift overall. We need a lift at the top, but we also need a very big lift for those kids at risk of getting left behind and we know in today's system that poorer kids, Indigenous kids, students with disabilities, students in remote locations and obviously there's combinations of those things, that they are more likely to be left behind. So I think identifying expressly loadings to make a difference to those children's education is a good insight.

JOURNALIST: Prime Minister, if the COAG consultation and work with states takes longer than anticipated, will the Government extend the current funding arrangements past 2014?

PM: We aim to get into this, get the discussions happening and to get it done, so that is what we are planning for, we are planning on working through so we can go through the process I've outlined. We are in that process testing can this work, how would it work, will it meet the tests that we have set for it, what should we be doing for the future of our schools? But we are going into that process with a determination to get it done. Of course we will make sure as we go about that work that we are working directly with schools and school communities. I don't want anybody in any school community to have the sense that they don't know what's going to happen next. We will be working with them very directly so they know what's happening at every step of the way. 

JOURNALIST: Prime Minister, I'm interested in the recommendations for schools with high Indigenous populations. Will they be caught under the umbrella of the top-up funding to target disadvantage, or are there specific recommendations that you're keen to pursue there?

PM: I might turn to Peter and even David on that, because there's some specific work in this report about individual students, but also how concentrations of students in a school community who might be bringing a particular disadvantage to school in terms of their learning can affect that school community. So I'll go to Peter.

MINISTER GARRETT: Yeah, thanks Prime Minister. Look, Mr Gonski’s recommendations identify that there would be loadings that accompany the schooling resource standard. One of those loadings identified is indigeneity and it's absolutely appropriate that it be identified like that, because it's certainly the case that despite some welcome signs of improvement across some cohorts of Indigenous kids, we still have generally Indigenous students not achieving to their capacity. It's also the case that in a number of Indigenous communities they are also kids from a low SES background and Mr Gonski's report envisages effectively cumulative loadings around these disadvantaged identified areas. So they will be addressed. It is something we'll look at closely. I've actually appointed the First People's Advisory Group on Education to provide me with specific advice and we've also provided additional investment last year on the focus schools that exist under the existing National Aboriginal and Torres Strait Islander Educational Action Plan. So it will be a part of the work that we need to do and I'm looking forward to working with both stakeholders and states on that. And David, if you wanted to add anything extra?

MR GONSKI: The only thing I would just add, you've expressed it very well, but we have a category of special schools, which irrespective of whether they're government or non-government we're suggesting should be funded 100 per cent and some of those special schools are the schools you're talking about in remote areas which deal with Indigenous kids and who do a wonderful job.

JOURNALIST: Prime Minister, Mr Gonski recommends that you implement these or come up with a working model in mid 2012 which is months away, are you confident that you will be able to do that? And is there a necessity for more consultation given the Gonski review went 18 months, had 7000 submissions and spoke to 70 education groups - why do you need to keep talking to people?

PM: Well I can answer that very simply. Yes we need to keep talking to people, because when you work your way through the entirety of this report, what David and his team have done is they’ve given us some very good work about what a model for the future could look like, but they in this report themselves say that further work is needed. Further work is needed to design some of the tools that we would need to have a system that worked like this. Further work is needed to look at the figures. David Gonski and his team were using 2009 figures - that's not a criticism of them - they were using the most using the most up-to-date information they had available. But we need to get today's information and work it through. And then of course in order to make a change we need to work with our State colleagues and Territory colleagues and then with education stakeholders. So David has been teasing me a little today about using my car analogies. I used a car analogy before, but if you imagine we were designing a wholly new motor vehicle, David has given us a lot of insights as to what that vehicle might do, how it might perform, but he hasn't given us the specifications for building it and he is actually saying, ‘we need to build some of the tools to build it before we can even get to the job of building the car’. That's why further work is necessary. 

JOURNALIST: (inaudible question)

PM: We are going to work through this in a consultative way and also in as expeditious way as possible. We've got partners that we need in reform here. The States, Territories and education stakeholders and most importantly, schools and school communities and parents who understand and care passionately about what is happening in their own school, in their child's school. So we are going to get on with this work. Our aim remains to be legislating on this, to be bringing legislation to the Parliament in this year, in 2012, but we need to get on with all of the work we've described. 

JOURNALIST: The report talks about offering State governments incentives to get them to come to the negotiating table and even come up with an extra $5 billion or so, what sort of incentives could you offer the States? As to the principles of funding you'd take to COAG, they seem to mirror the principles that Mr Gonski and his colleagues have used have used - why are you questioning that the model would meet those principles when the report basically says it does?

PM: We need to do all of the nuts and bolts work I've described and Minister Garrett has been describing and it is only when we've done that nuts and bolts work we can get very detailed results for schools around the nation, that we will be in a position as a government to make the judgments that we need to and I've outlined to you the principles that we will be using to make those judgments. On incentives to get States and Territories to the table, I would have thought seeing our schoolchildren and our schools slip behind the standards of the world should be a big enough incentive for people around the nation to come together and to work together in a spirit of goodwill. That doesn't mean I expect any Premier or any Chief Minister to come to the table and say come to the table and say ‘I'm going to tick everything’. Of course they bring their own expertise and their own views and results and information from their own schools as will other education stakeholders. But I would expect them to bring a spirit of goodwill, because this is a national task that is pivotal to our future. I said at the opening of this discussion, education is absolutely key to my vision of this nation's future. We can't be a high-skill, high wage modern economy unless we've got an education race happening that we are winning, and we can't be the nation we want to be for the future if we are seeing our schools slip behind the standards of the world. Our top kids not being as extended as they could be and our kids bringing the most disadvantages to school left behind.

JOURNALIST: The report offers no particular rationale for government funding for top or high-fee private schools. What's your rationalisation? Why does the Federal Government continue to do that? Why do you say no dollar would be taken away?

PM: We gave a commitment that no school would lose a dollar, because we wanted schools to be able to have some sense of certainty as we went through this reform process and I do want to say about our schools to say about our schools and education stakeholders, whether it be the independent schools, the Catholic schools, our State and Territory colleagues, they have been very brave and willing partners in reform to date. We've asked them since we were elected in 2007 to engage in a bigger education reform agenda at a quicker pace than the nation has seen before in our history, putting on the agenda things that have been in the too-hard basket since Menzies was a boy like national curriculum, and they've been very brave and very willing partners in getting that done. In looking for collaboration and goodwill now, I think we can look for that knowing can look for that knowing we've seen collaboration and goodwill on reforms in the past. And in order to have people engage in that journey with us, of course, they wanted some reassurance about their own position and I think they're entitled to that reassurance. On the question of funding for all schools, I do believe that as effectively a citizenship entitlement, people are entitled to see Government support for the funding of their child's education. Of course, how you work that through and get it right is a very big question. That's my philosophical approach to it. 

JOURNALIST: Saying no school will lose a dollar – is that in real terms?

PM: Well we’ve said indexation will be a feature of the system and no school will lose a dollar.

JOURNALIST: Mr Gonski, I was just wondering what sort of transition you saw in terms of getting to the new model, what sort of period of time do you think it would take to transition, and is that to do with the 25 per cent? Is that how you would actually be able to keep the existing promise that no school would lose a dollar?

MR GONSKI: I think the transitional provisions we've just suggested in general terms, we haven't put any dates on it. We expect and understand this is a very big change, involves a lot of stakeholders, and we believe it is important to go forward and that's why we've suggested there can be transitional procedures, but we haven't basically stipulated what they are.

JOURNALIST: Prime Minister, do you believe you'll be around by the end of 2012 to see these reforms through?

PM: Thanks very much Paul, but we'll keep taking questions on Gonski and then you'll have every opportunity to ask that question later.

JOURNALIST: Should a school that can raise more money than the school resourcing standard, whatever level you set that at, should they still be entitled to indexation above that standard?

PM: We have given you today the way in which the Government is going to go about its response and the work that we are going to do. That means, of course, there will be a set of in-detailed questions you may want to ask that we will have to say to you "We are working through" and “we will work through." It wouldn't be sensible or responsible to say "Let's engage with our continuing partners in reform, let's engage with schools and school communities, let's get parents in talking about this, really working through what it means for their child and their school”, and then to stand here today and rule things in and rule things out all over and I'm not going to do that.

JOURNALIST: Prime Minister, will you be personally chairing the event on Wednesday and sitting through the whole thing, the schools summit?

PM: I’m at a set of events this week talking to schools and school communities and I'll be maximising my time there given other pressures of daily business.

JOURNALIST: Is returning the Budget to surplus in 2012-13 more important than tackling the sort of disadvantage that this report has outlined?

PM: We are determined to return the Budget to surplus and we will. We're determined to make the right Budget choices that enable us to have our economic settings right as well as to fund the things that are most valuable to our community. We've got a track record of doing that to date. You look at the growth in Government expenditure under this Government compared with the last five years of the Howard Government, you see that we've been a government that's made some tough choices. If you look at how we've matched spending with saves since mid 2009 we're a Government that's made tough choices. This is not an either/or equation. I do note that we're talking about the funding system, school funding for calendar year 2014 and beyond, but in general beyond, but in general terms I'd say to you for us as a government it's not an either/or equation between a Budget surplus or funding the things that you believe in. It's about making the two work together. I want Australians to have jobs, I want us to have the strongest possible economy, bringing the Budget to surplus in 2012-13 is the right thing to do by having the strongest possible economy and I want us to keep reforming Australian schools and to work as schools and to work exactly as we've outlined following up the receipt of this Gonski review. Are there any other further questions?

JOURNALIST: Do you believe you'll be around by the end of this year as leader to see these reforms through?

PM: Yes I do.

JOURNALIST: Simon Crean was just on 3AW and essentially said unless Kevin Rudd chose loyalty one of your options would be to sack him. And he said, if I could quote, "She's got the authority, she's got to assert it, she's got the numbers in caucus and should use them accordingly, because that helps her assert her authority”. Are you in any mood to bring Kevin Rudd home earlier and sort this out for the good of the government and the good of the nation?

PM: I've got the strong support of my colleagues and I'm getting on with the job of delivering the big changes and reforms the nation needs. This is the most important thing for the Government today - releasing the Gonski review and that's why I'm here with Peter, with David, with the team working on this important area of reform.

JOURNALIST: Andrew Wilkie revealed yesterday that he had a 90-minute conversation with Kevin Rudd in which the leadership was talked about. It's been reported that he's briefing journalists on a two-step challenge. It's known that he bagged your speech at the ALP conference to journalists and colleagues. How can you not describe his behaviour as disloyal and what are you going to do about it?

PM: Just to take a couple of the examples you've put in your question. On the question of the conversation with Mr Wilkie, the Minister for Foreign Affairs has denied that version of events. On the question of journalists and background briefings, it's been reported that the Minister for Foreign Affairs has denied that too.

JOURNALIST: Are you seriously attempting to tell us that you think Kevin Rudd has not been disloyal to you?

PM: What I’m here telling you is I'm getting on with the job, with the strong support of my caucus colleagues. Kevin Rudd is overseas getting on with his job too as Minister for Foreign Affairs.

JOURNALIST: When did you last have a conversation with Kevin Rudd about these matters?

PM: I have conversations with Kevin Rudd frequently in his capacity as Minister for Foreign Affairs.

JOURNALIST: Do you think it's tenable for the situation within the Labor Party to continue as it is at the moment?

PM: I’m here today with the strong support of my colleagues getting about major reform, dealing with a major reform, dealing with a major reform agenda for the Government. Of course I would prefer that the only questions I was being asked today were on the Gonski review; of course I would prefer that. But in circumstances where you are inevitably going to ask other questions, I am still focusing on doing the job I need to do to keep delivering the big reforms that matter for the future of our country. And as Prime Minister - if you look across the days in which I've been Prime Minister - I think the track record shows that whenever the public debate has been at that period of time, and I've had a lot of strident criticism over one issue or another from the Opposition to take one example, wherever the national debate has been at that period of time, what I've done as Prime Minister is got on with the job. And so that means that we've been able to do things like deliver carbon pricing, a nation-changing reform delivered in the most difficult circumstances - that I've been able to work with my colleagues like Wayne Swan and deliver the Minerals Resource Rent Tax. Once again, a nation-changing reform and one our economy definitely needs in these days of transition and change. As recently as last week, we delivered the private health insurance rebate changes and we're here today adding the next bit to what has been a profound and continuing agenda of change in Australian schools.

JOURNALIST: Ms Gillard, are you willing to test that strong support by calling a caucus vote, and secondly, I think you've slid around the question of are you willing to discipline or sack Mr Rudd. Could you address that?

PM: I answered particular propositions that were put to me over there. I'm getting on with my job, Kevin Rudd's getting on with his. I'm doing that with the strong support of my caucus colleagues. And as I’ve just indicated I've got the strong support of my caucus colleagues.

JOURNALIST: That's a no to you initiating?

PM: I am focused on the reform agenda and on what I'm doing as Prime Minister and so that's what I'm here doing today. I understand you're interested in other things, but my focus is on doing what I need to do today as Prime Minister to set us up to be the nation we want to be in the future.

JOURNALIST: So Mr Crean also suggested you have a direct conversation with Mr Rudd and ask for a pledge of loyalty from him. What value do you see in that? Will you do that?

PM: I've indicated my approach to you.

JOURNALIST: You say you're getting on with your job and the Foreign Minister is getting on with his job, unless the Foreign Minister's job involves undermining your authority, shouldn't you pull him into line?

PM: Well I’ve dealt with some specific examples over here which have been denied by the Minister for Foreign Affairs.

JOURNALIST: You said yesterday your job is becoming more difficult to do, perhaps today is an example - what are you going to do to make it less difficult to get on with your job?

PM: Well as Prime Minister I will continue to show my, I think, characteristic determination to get the job done.

JOURNALIST: You mentioned the reform agenda and the education matter we're here for today. You predicted the Opposition will mount a fear campaign –

PM: I think I heard it on Sky TV so it wasn't a prediction.

JOURNALIST: Politically what shape is the Government in to prosecute your argument?

PM: On education, I'll have a national debate on education with Mr Abbott and Mr Pyne any day of the week. Because let's be very clear on what they are saying about Australian education. They are saying let's fight yesterday's wars and whilst we do that let's take billions of dollars out of Australian schools and while we do that, let's have Australian kids fall behind the standards of the world. So that means for those children and when they grow up to be tomorrow's adults they won't be able to have the benefit of a high-wage, high-income economy. There's nothing ordained about Australia being a Australia being a high-wage, high-income economy in the region in which we live. There's nothing ordained about that. You only end up continuing to be a continuing to be a high-wage economy with high skills compared to the countries of our region if you work for it and there's no more important way of working for it than making sure our schools are keeping up and indeed winning the education race in our region and in the world. So Mr Abbott’s proposition - cuts today, falling behind the standards of the world and let's all just fight yesterday's wars - well, we'll engage in a debate on that anywhere, any time.

JOURNALIST: What gives you the confidence to believe or trust in Mr Rudd's denials?

PM: Look I’ve indicated that the Minister for Foreign Affairs has denied some of the specific issues.

JOURNALIST: Prime Minister, two things, you keep saying you have the strong support of your caucus colleagues. Have you tested that support among your colleagues to be able to say that? And the second thing is you seem to be wanting to bat this away as if nothing's going on, but Simon Crean who you've expressed a lot of respect for in the past says this nonsense has to end, this is strangling the Labor Party, and he's urging you to have a conversation with the Foreign Minister.

PM: Well I’ve indicated to you my approach and certainly as Prime Minister each and every day I work with my caucus colleagues and am thankful to them for their very strong continuing support. Thank you very much.

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