The Rudd Government has bowed to pressure from the Greens and Independent Senator Nick Xenophon and slashed the proposed income thresholds for the Medicare surcharge to $75,000 for singles, although Health Minister Nicola Roxon wants to leave the proposed new threshold for couples unchanged at $150,000.

A Melbourne jury had that morning acquitted four people of terrorism charges but convicted six others after a trial spread over seven months. Now the Attorney-General was calling the Canberra press gallery together to crow about the convictions. They were, he said, “the most successful terrorist prosecution this country has seen”.

Barnaby Joyce, the maverick elected leader of the Nationals in the upper house this week, says he is unable to provide Mr Turnbull with a commitment to hold the Coalition line on all issues. “At times there will be issues that there will, possibly, be a difference on, so on this occasion I humbly decline,” Senator Joyce said today.

Senator Joyce, who has crossed the floor to vote against the Coalition more than 20 times since he entered the Senate in 2005, said his new position as the Nationals’ Senate leader would not alter his ways. “I am who I am by the grace of God, and I’m not going to change,” he said.

The vote for the leadership was held among Senator Scullion and the four Nationals Senators. The nine lower house MPs did not vote. Federal Nationals leader Warren Truss was informed of the planned change only last night. It was unclear today whether he supported the move.

Insisting he was not pushed, Senator Eliision said he had received assurances from new Liberal leader Malcolm Turnbull as recently as this morning that he could continue in his current portfolio. But he said the demands posed by constant travel across the country and having a young family had prompted him to consider retirement.

Opening question time today, Opposition Leader Malcolm Turnbull challenged the Prime Minister to explain what he was doing to fireproof the economy in the wake of the crash of Wall Street giant Lehman Brothers. But Treasurer Wayne Swan accused Mr Turnbull of vandalising the surplus by blocking budget measures in the Senate.

The surreal is everywhere. Witness Alan Carpenter, failed Premier from the rivers of gold state Western Australian telling the ABC’s The 7.30 Report on Monday that he wants to start “a completely new era in Western Australian governance” by teaming up with the Nationals. No, it wasn’t Clarke and Dawe. Don’t check your sets, this is supposed to be serious.

Amid the train wreck that the Senate became last week there was one consistency - everybody concerned claimed they had a mandate. The highlight was when the Coalition and Family First’s Steve Fielding knocked off the increase to the luxury car tax, worth $555 million over four years.

This week saw big problems emerge for the Labor Party in New South Wales and Western Australia, while federally the Nationals shrank even further with the loss of Lyne. In the Senate, Steve Fielding voted down the luxury car tax increase, while in the United States, Sarah Palin has garnered an immediate and positive reaction.