BARRIE CASSIDY: Andrew Robb, good morning. Welcome.

ANDREW ROBB: Good morning Barrie.

BARRIE CASSIDY: Even allowing for the excitement of the moment, how much of what Bill Shorten said is true? Should the Federal Coalition share some of the blame?

ANDREW ROBB: I think Bill's kidding himself. I'm sure he doesn't believe it; I don't accept that we had a big influence.  Of course, we will be realistic; we will have a look at the implications, but clearly, from my experience and observation, this was a state election overwhelmingly fought on state issues.

BARRIE CASSIDY: But if you go back to May, the Geoff Shaw thing hit and there was a sense of a constitutional crisis, but then the Federal budget hit after that, and that double whammy seemed to put the Government in Victoria on the back foot from that moment onwards?

ANDREW ROBB: Well, I'd go back further.  Again, as a former campaign director, my sense always is that the result at the end, is a function of how people have observed - consciously or unconsciously - the actions of both parties through the four years in the case of a state.

Now, you go back three years, the polling difference which has occurred at the end was about identical. There's been a four to six point lead by Labor consistently for three years. And, I found that, when you get a flatline difference that is consistent for a long period of time, usually 12 months, this time we had three years - two years before Tony Abbott even became Prime Minister by the way - when you get that flatline difference, invariably in a campaign it can jump around a bit, but it ends up almost always at that same difference that was there. In other words, there's been a disposition in Victoria for a long time and I'd say the architect of this defeat is clearly Geoff Shaw.

BARRIE CASSIDY: That scenario you just painted though is emerging in Canberra at the federal level?

ANDREW ROBB: What do you mean?

BARRIE CASSIDY: You are behind in the polls and, if that remains the case...

ANDREW ROBB: We've still got two years to go, Barrie. You can be behind in the polls for a long time. If our position is judged to be affected by the time we get towards an election, that's when you'd start to worry about that issue. But the fact is I think, despite all the hysteria you hear and what Bill has to say, this has been a year of a first term Government; for its first year it has been a year of substantial achievement.

And I'd say you'd have to go back 30 years before you found a Government in its first year of a first term that has done so much, and we have achieved already most of the things that we said and the Prime Minister said.

BARRIE CASSIDY: But dismantled things. You haven't actually built anything yet apart from the free trade agreement.

ANDREW ROBB: This is not true. We have stopped the boats. That's a $10 billion cost that was hanging around the neck of the nation and also costing lives, thousands of lives at sea. We've stopped the boats. We've scrapped the carbon tax. That was holding back hundreds of thousands of businesses. Families have seen a 7 per cent - and more - drop in their power bills.

We have scrapped the mining tax. We have got three free trade agreements which are transformational, and also we've made a very serious attempt; we have laid the pathway to get back to surplus. They were the things that we said we would do and we have knocked over a lot of that, and including we have got direct action in place.

BARRIE CASSIDY: Well if that's right and there are no messages, no lessons for the Federal Coalition, what went wrong at the state level?

ANDREW ROBB: I didn't say there were no lessons. I think we have to always look at if there are lessons. We've got to be realistic.  All I'm saying is that, to suggest this was Tony Abbott which is the attempt being made, and I understand the politics of it; if I was on the other foot, I'd probably be doing the same thing.

But Bentleigh is one of those sandbelt seats, marginal seats. I spent a lot of time yesterday going around the booths and further south - there wasn't a word of Abbott, not a word. The place was dominated, as it has been for up to 12 months, with trades hall representatives - through those various unions - they've been on the ground; they've been at the train stations for 12 months and yesterday at the booths, they were at every booth, all the way down to Frankston was dominated by that.

You didn't see it in other booths. In safe seats, in Brighton, which is also in my electorate, none of that stuff - just some plastic. But in those seats that turned this election and determined the result, it's only a modest - it is a good effort by Andrews, by the way; they ran an astute campaign - but it's a three to six seat loss for the Coalition, so we're close enough, if we have the regeneration, to really be competitive at the next election. But the fact is this election on the ground for months has been about local issues: the firies, the paramedics, the nurses and the teachers.

BARRIE CASSIDY: Yes, and is there a message there? Because that tells you people see these teachers as workers, not as trade unionists?

ANDREW ROBB: Well, I must say to you it was a most dishonest, deceitful campaign at that level because, putting all those union people out there, they could say anything and no one could hold them accountable. And some of the stuff they told people that was going to happen or had happened under Napthine, was just total nonsense and highly deceitful. So they've found a technique of telling the electorate real big porkies without being held accountable. That's a real danger in future elections.

But also I do feel that it was overwhelmingly dictated by that. Sure, they're workers but if you are getting told all sorts of nonsense and you see someone dressed up in a nurse's outfit, it's got a plausibility about it and it's quite effective politics, but it doesn't lead to big messages for us.

BARRIE CASSIDY: Well right on the cusp of this election, the Government, the Federal Government, had what a lot of people interpreted this weekend as your worst week since you got elected. Isn't there some overlay from that? For a start, do you know what the health policy is? Do you know what form the co-payment will now take?

ANDREW ROBB: Well, what I do know is that, where you've got policies that you're finding difficult to get through an Upper House, and Dan Andrews is going to have possibly 25 per cent of his Upper House independents, cross-benchers, so we will see. He'll get to experience what we're going through. But where you've got that difficulty, you've got to try and accommodate it. And, I must say, I've learnt through bitter experience that actually, the community I think, like to have the Upper House looking and pushing the Government of the day, to make changes if they see rough edges.

BARRIE CASSIDY: Sure, but they also like the Government to know what's going on; they like their own Government to know what their policy is? Do you know what the co-payment policy will be and what it looks like?

ANDREW ROBB: Our co-payment policy is the $7...

BARRIE CASSIDY: A $7 stance?

ANDREW ROBB: ...but we are looking at options with the Senate. We are looking at options. In the same way as in other things we haven't got through yet, we are looking at options. Now that's...

BARRIE CASSIDY: And will you regulate or legislate?

ANDREW ROBB: Well, again, we are looking at options.

BARRIE CASSIDY: So that hasn't been decided. Will it before or after Christmas?

ANDREW ROBB: Barrie, we're looking at options.  Sometimes, I mean, Peter Costello said to me the other day, he said some of the policies, which people now praise him for, he said took two terms to get through the Senate. And when you've got a Senate, especially at the moment; you know we didn't get one thing through until July because the Labor and the Greens in alliance, even in Opposition, blocked anything of any substance. Now we've made substantial progress with the cross-benchers and we will make more substantial progress.

I kid you not, we are a Government that has achieved a lot in the first year. People have got to stand back and have a look at the hard achievements. We have done this and we've laid the foundations. Next year will be the opportunity to deliver for all with these changes.

BARRIE CASSIDY: Yes, but before then the Prime Minister says he has one or two barnacles to knock off the ship by Christmas. Clearly the co-payment wasn't one of them. Do you know what the barnacles are?

ANDREW ROBB: I give you an example in the Victorian one: if they'd been able to deal with the pay issues for the paramedics and the firies, they were barnacles.

BARRIE CASSIDY: State barnacles, what are your barnacles? What are the federal barnacles?

ANDREW ROBB: What I'm getting at is you've got to deal with these issues. We haven't yet got through the co-payment. We've been negotiating the very significant and important changes in higher education.

BARRIE CASSIDY: And that's going ahead so what is he talking about? What are the barnacles?

ANDREW ROBB: Well, hang on Barrie. We have been in discussion on that issue and hopefully it is going ahead, but we've had to look at and accommodate the sensible suggestions being made by the cross-benchers without compromising the basic policy. That's the same with the co-payment.

BARRIE CASSIDY: So is that what he means when he says he has to get rid of some barnacles? He will now talk to the cross-benches and negotiate his way through legislation?

ANDREW ROBB: That's exactly what he means.

BARRIE CASSIDY: But he won't be dropping anything?

ANDREW ROBB: Well the core policy, but we can knock off some rough edges. We are not arrogant enough to say: whatever we came up with in these areas cannot be improved. We have sat down, the same thing happened with the carbon tax, same thing happened with the mining tax, same thing happened with other pieces of legislation on the saving sides that we have got through since July, so we will do it again.

BARRIE CASSIDY: And you're going off to China I think on Tuesday.

ANDREW ROBB: Tuesday.

BARRIE CASSIDY: Is that to put the finishing touches on the Free Trade Agreement? I understand you're taking Peter Costello, who you've mentioned, with you among others.

ANDREW ROBB: It's an annual get-together between senior people: business, academics and Government, for two days about the whole relationship.

It's just coincidently in a way, a very good opportunity for me to go back and thank a few people, but demonstrate by our presence, that the arrangement we have struck, which is really transformational, is something we're going to very actively push and push and push, because we now need business to take up these opportunities that have been presented by the three of those Free Trade Agreements.

BARRIE CASSIDY: Free Trade Agreements involve give and take on both sides. What did China get out of this? Is there one issue you can identify that will hurt Australians?

ANDREW ROBB: Well, we have given them elimination of all tariffs on everything. Some people would see that as a cost to us. I see, that as long as we do it gradually in some areas - so where people are losing protection - they get the chance to transform their operation, transition to some other related area.

This is, as the Chinese would put - and they love saying - it's a win-win. The big thing I think they wanted, and we were able to convince them in the end they could do it without opening the doors too much to the rest of the world, they have to transform into a service-based economy if they want to soak up the hundreds of millions who are in poverty in China.

And we are a first world; we've got wonderful services in hundreds of areas. These opportunities for Australians to go into China and help them with aged care, with anything to do with health, with anything to do with education, anything to do with construction, anything to do with water management, all of these issues; 20 per cent of the world's population's in China, they've got 7 per cent of the water and most of it's polluted.

We can help a lot with those sorts of issues on the ground and help them get to be a first world economy.

BARRIE CASSIDY: Alright, we are out of time but thanks for your time this morning.

ANDREW ROBB: Thanks very much, Barrie.

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