Palmer puts single condition for backing carbon tax repeal

Prime Minister Tony Abbott's ''pledge in blood'' to repeal the carbon tax seems all but assured after Clive Palmer put a single condition on his party's support: that all energy savings flow back to consumers.

The government has already tasked the consumer watchdog, with ensuring that energy companies pass on the estimated 9 per cent saving on electricity bills and 7 per cent on gas bills that should result from abolition of the carbon tax.

The Abbott government has promised a $550 a year saving for each household if the Australian Competition and Consumer Commission delivers.

After a tense few weeks in which he has threatened to stymy the government's agenda, Mr Palmer released a statement outlining the price of his party's support.

"If the Palmer United Party senators are to support a repeal of the carbon tax it will be under the proviso that the savings, by law, are transferred into lower energy costs for everyday Australians,'' he said.

"Only on these terms would we support repealing the carbon tax because of the benefits it would offer the people as well as the economy through the abolition of an artificial cost on business which was hampering our international competitiveness."

Mr Palmer's statement made no mention of his previous demand that the carbon tax be repealed retrospectively. Under that scenario, the mining magnate would potentially have been let off the hook for a disputed carbon tax bill of more than $6 million.

The Coalition needs six votes of eight votes from the crossbench to pass legislation through the new Senate from July 1.

Senator-elect Ricky Muir has pledged to vote in tandem with the three members of Palmer United.

NSW senator-elect David Leyonhjelm and Family First's Bob Day are economic dries who have already pledged to back the repeal of the tax, giving the government has the numbers if Mr Palmer is good to his word and satisfied consumers will benefit to the full extent promised.

Environment Minister Greg Hunt welcomed the news saying the government was legislating to guarantee price relief.

A spokesman for Mr Hunt said: ''The independent regulatory authorities are already showing two prices for energy - one with a carbon tax and one without - we know the relief will be there. As [ACCC chairman] Rod Sims said what goes up will come down.''

Greens leader Christine Milne renewed her call for all PUP members to abstain from any vote on the carbon tax due to the potential conflict of interest posed by Mr Palmer's mining riches.

In his statement, Mr Palmer restated his party's opposition to a repeal of the mining tax unless the Abbott government backed down on plans to cut welfare payments to orphans of soldiers killed or badly injured during service.

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Defence seeks to push Japanese submarine deal

A key element in greater defence co-operation between the two countries is the prospect of Australia buying Japanese submarine technology to replace the ageing Collins Class fleet at a cost of up to $40 billion.

A key element in greater defence co-operation between the two countries is the prospect of Australia buying Japanese submarine technology to replace the ageing Collins Class fleet at a cost of up to $40 billion.

Defence Minister David Johnston hopes to advance talks on buying Japanese submarine technology during a visit to Tokyo this week but strenuously denies such co-operation will anger China.

Senator Johnston told Fairfax Media by phone that discussions with his Japanese counterpart Defence Minister Itsunori Onodera will aim at deepening security ties through sharing technology and boosting joint exercises.

He stressed the closer ties were not in any way aimed at Beijing and revealed that Australia had in fact helped pave the way for China to take part - for the first time - in the large-scale "Rim of the Pacific" naval exercises, which start in just over a fortnight.

Foreign Minister Julie Bishop will meet with counterpart Fumio Kishida. The "2+2" talks follow Prime Minister Tony Abbott's recent successful meeting with Japanese Prime Minister Shinzo Abe - as well as Mr Abe's significant speech 10 days ago in which he signalled a stronger security role for Japan in the region.

A key element in greater defence co-operation between the two countries is the prospect of Australia's buying Japanese submarine technology to replace the ageing Collins Class fleet at a cost of up to $40 billion.

Senator Johnston said he would look to cautiously press ahead with talks over submarines.

"The Japanese are very interested in our Wedgetail (airborne radar) and . . . we're interested in some of the technology they've got round the submarine, so it cuts both ways. But there's no formal basis for that exchange and we're looking to put the nuts and bolts of that sort of formal basis together.

"I'm hoping to visit one of the Japanese submarines on Friday. It's on the cards that I'll get to have a look and I'm quite excited about it."

Experts and some Defence insiders say there are still considerable obstacles to Australia's buying Japanese submarine technology, notably Japan's post-World War II pacifist constitution and its strict limits on arms exports. But co-operation is being given impetus by Mr Abbott and Mr Abe's enthusiasm for some kind of deal.

Mr Abe has been making moves to relax arms export rules and his recent speech at the Shangri-La dialogue signalled a strong willingness to work with partner countries in the region on security - widely seen as a way of countering China's recent assertiveness in the East China Sea and South China Sea.

Senator Johnston acknowledged that Prime Minister Abe's enthusiasm could smooth the way for any deal.

"It potentially does, but of course this is a matter for the Japanese. We are very sensitive to those issues, to the constitutional disposition and the domestic political situation. So we're very respectful of that.

"We'll be guided by his enthusiasm as we go forward."

He stressed that Australia was equally looking at French and German diesel-electric submarine technology.

He also swiftly rejected any suggestion that there was a tacit move to pressure Beijing, or that Australia's talks with Japan should be negatively viewed in China.

He revealed that Australia had helped pave the way for Beijing to get involved in the RIMPAC exercises. In an historic moment, Chinese navy ships set sail for the exercises this week.

"That's a very significant event and Australia's very pleased to have played a small role in securing their attendance. We encouraged them," he said.

He added that Canberra was balancing its security ties by also engaging Beijing and said he would be visiting China later this year.

But he also said that Japan was a natural fit for Australia's security interests.

"There's a synergy of values and a synergy of interests in security and defence ties being further expanded. I think we both feel very comfortable with each other."

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Tony Abbott considers importing US-style school program with private industry involvement

Tony Abbott is considering an unprecedented Americanisation of the school education system with radical changes that could see HECS-style fees introduced into new continuous school-and post school diplomas, and private industry playing a heavy role in course design and production.

Visiting the P-TECH school in Brooklyn on his final day in New York, the Prime Minister praised the IBM-connected Pathways in Technology Early College high school, which offers a new model of education spanning grades 9 to 14 – that is with an extra two years bolted on in which the students gain a "associate in applied science" degree.

Under the arrangement operating at the Brooklyn school, IBM guarantees graduates at least an entry-level interview, putting them at the head of the line in a competitive labour market. The company and other industry partners can also provide mentors for each student.

"I belive this is is an innovative and valuable education model for us to consider in Australia," Mr Abbott said.

"So many young people get to the end of their time at school wondering what they are going to do for the rest of their lives, what job they are going to do the day after they leave.

"On the other hand, so many people who run businesses complain they can't find people to work in their business.  "These are the sorts of issues we are wrestling with in Australia.''

The P-TECH model is being rolled out across New York's five boroughs.

Under the framework in the US, the government still pays for the education but industry partners provide advice, mentoring, and support.

Mr Abbott conceded details were yet to be finalised but one option would be to charge students delayed fees for their extra education through HECS loans.

The government plans to clarify matters within months.

Mr Abbott said it was not inconsistent to be cutting money to the CSIRO while proposing to spend more money on this form of education and training.

"We can be strongly focused on science without spending more on particular institutions that are this space,' he said.

Mr Abbott arrived in Washington over night before a busy day of meetings with senior congressional leaders, including Democratic minority leader in the House, Nancy Pelosi, Republican majority leader Eric Cantor, and Speaker John Boehner.

He will meet President Barack Obama on Thursday.

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Bruce Wilson handed 'wad of notes' to Julia Gillard, says builder

A builder has told the royal commission into trade unions that former prime minister Julia Gillard paid for renovations at her house by personal cheque, despite allegedly receiving cash for the work from her then boyfriend Bruce Wilson.

Athol James, who completed a series of building jobs at Ms Gillard's Abbotsford house, including the installation of bi-fold doors, said she had told him Mr Wilson was paying for the work.

He told the royal commission on Wednesday that on two occasions he saw Mr Wilson "hand over a wad of notes".

In a sworn statement, Mr James said he was never paid in cash and that Ms Gillard told him that "as Bruce brought her the cash she would pay me by cheque".

"I never was paid in cash and I don't know what happened with the cash Bruce handed her," Mr James said in a sworn statement.

Wayne Hem, a former records keeper for Australian Workers Union, told the royal commission Mr Wilson gave him $5000 in cash and told him to deposit it into Ms Gillard's bank account. He said Mr Wilson gave him a Commonwealth bank account number on a piece of paper.

"I said I need the account name because they wouldn't accept it down at the bank. So it was Julia Gillard and I said OK," Mr Hem said.

Mr Hem said at the time he "did not know if the account was her private account or business account or a Slater&Gordon account".

Mr Hem said he presumed the money was for payment of work done at the Abbotsford house because renovations at Mr Wilson's Kerr Street property in Fitzroy had been completed and he presumed the work had been paid for.

Mr Hem also recalled visiting Ms Gillard's Abbotsford property with Bill Telikostoglou where he saw some painters that he had previously seen working at Mr Wilson's property at Kerr Street. In a sworn statement to the commission, Mr Hem said "I had not seen the painters before".

He said Mr Telikostoglou, known as "Bill the Greek" handed an envelope to one of the painters which he assumed contained money.

"I saw Con the builder in the kitchen and it looked like he had finished doing some tiling work," Mr Hem said it a sworn statement.

Mr Hem said he did not know the builder Con's surname.

Another builder, Konstantinos (Con) Spyridis told the royal commission he and his subcontractors had completed tiling work on Ms Gillard's verandah and her front picket fence, but he had never been inside the house.

He said he invoiced Ms Gillard $3500 for the work and she had paid it in two instalments. He said he went to her home in 1995 and handed her a second invoice.

"Sometime later, I recall receiving one bank cheque in the mail and later a second bank cheque in the mail for the outstanding amount for my work at the Abbotsford property," he said.

Mr Spyridis said he also received a cheque from the Australian Workers Union for $15,000 for work he completed at the union's Carlton office.

Mr Spyridis said he did not do any work at Mr Wilson's Kerr Street property.

Ms Gillard has said she was confident she had paid for the renovations on her house.

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