E&OE

15 January 2008

Doorstop Interview

Subjects: Attack on Serena Hotel in Kabul, Australia-India relations, budget savings measures

STEPHEN SMITH: Thanks very much for coming. I've just come from a meeting with the Indian prime ministerial envoy, Mr Saran, and I'll deal with those matters in a moment.

But could I start just by making some remarks about the appalling attack on the Serena Hotel in Kabul this morning. The Serena Hotel, of course, houses the Australian Embassy in Afghanistan. I, of course, as the Prime Minister has earlier today, absolutely condemn the attack. I'm pleased to again confirm that all Australian embassy officials are safe and they have been relocated to a secure location.

I expressed my condolences and sympathy to the families and the nation states of those who have died in the atrocious attack. I understand the most recent count is eight. So the Australian Government, on behalf of the Australian people, extends its sympathies to those families and those nations.

We have immediately instituted a review of the security arrangements so far as our embassy arrangements in Afghanistan are concerned. This is, of course, a difficult and a dangerous post and that's been underlined by the events of the last 12 hours. That review has been instituted immediately and we're hopeful of having the results of that review over the next two or three weeks.

I spoke to the Prime Minister earlier this morning, reasonably early Western Australian time, and we agreed to institute that review, and that has been effected immediately.

Can I just say I've just come from speaking to the two embassy officials concerned. I'm pleased to confirm that they are both safe and secure. In very, very difficult circumstances they have to be commended for the job that they have done. Whilst in the midst of a very difficult situation, they continue to seek to do their job as consular officers trying to ensure that Australians registered as being in Afghanistan were alerted to the attack upon the embassy and to not make a physical approach to the embassy itself. So those officers are to be commended for their grace under pressure in the last 12 hours, but also generally for a difficult job they do at a dangerous and difficult place.

Could I just make some remarks about my meeting with Mr Saran and then I'll deal with one other matter and then I'm happy to take your questions.

Mr Saran is, of course, the Indian Prime Minister's special envoy. I'd actually invited the Indian Foreign Minister to come to Perth to coincide with the test match. You may be aware that the Indian Prime Minister is just concluding a trip to China, so the Indian Foreign Minister wasn't able to attend. But I was very pleased to earlier this morning have breakfast at the WACA test match breakfast with Mr Saran, the prime ministerial envoy, and also with India's High Commissioner to Australia, to have the meeting today, and we'll both be attending the Sir Donald Bradman Oration tonight and some of the cricket tomorrow.

It was a very good, friendly meeting. Some of you might recall that when I first became Foreign Minister I made the point that we have a very good relationship with India, but we need to take that to the next level. And I also made the point that as a Western Australian, we might have the advantage of being Western Australian to do that. Western Australia has always looked to the west to India as part of our foreign or external relations.

The growth in our trade and commerce with India has been quite exponential in recent times. That includes not just minerals and petroleum resources, but also education. India is now our second largest education export destination.

We, of course, spoke about the cricket. We're very pleased, both of us are pleased that the test match will occur. We're both very pleased that both the cricketing teams have sorted out these issues and are now moving on, and we're both looking forward to a good test match.

Cricket, of course, is one of the things that Australia and India share, but it's not the only thing. But the Australian Government is very much looking forward to taking our relationship with India to an even better level.

One of the issues that Mr Saran raised with me was the United States-India civil nuclear cooperation arrangement, and in the course of Mr Saran outlining that to me, I made the point that the Australian Government came to the election, or went to the election with a strong policy commitment that we would not export uranium to nation states who are not members of the Nuclear Non-Proliferation Treaty. So I underlined that again today to Mr Saran.

Finally, before happily taking your questions, can I just indicate some budget savings measures, which will be detailed in a release that will be put out shortly. Those budget saving measures are in the order of $57 million over the next three-and-a-half years. In part they are satisfying an election commitment made by the Minister for Finance, the then Shadow Minister for Finance, in the course of the election campaign.

Part of the measures are to reverse the funding of the previous government's so-called Australia On The World Stage initiative. Part of the measures are to reduce Australia's overseas representation by 20 positions, and part of the measures are to effect a partial recruitment freeze of Australian-based staff, and those measures will be detailed in a release put to you.

The Government is of the view that these budget savings measures will not have an adverse impact on the Government's foreign policy priorities, and the measures are made in part because they are an election commitment, but also because the Government has made it very clear that there is now a need for restraint so far as government spending is concerned, and all departments need to do their bit, and the Department of Foreign Affairs and Trade is doing its bit in the areas that I have outlined. But I'm absolutely confident that none of the reductions will have an adverse impact on the Government's foreign policy priorities.

I'm happy to respond to your questions on those or any other issues.

QUESTION: Will those budget cuts reduce the number of trade negotiators at the time of the [inaudible].

STEPHEN SMITH: Well, of the reduction of the 20 overseas positions, 19 are from overseas missions. One is a reduction of a China Free Trade Agreement negotiator in Beijing. That position is being returned to Australia. The overall effort so far as China Free Trade negotiations will not be in any substantial way reduced, and we are confident that the China Free Trade negotiations will continue in an effective manner.

QUESTION: What about India and Japan, free trade agreements with them, will they be affected?

STEPHEN SMITH: No. We’re not expecting that any of those Free Trade Agreement negotiations will be impacted upon or affected. And we’re certainly not proceeding on the basis that the China Free Trade Agreement negotiations will, in any way, be adversely impacted upon it, so a withdrawal of a Beijing based position effectively to Australia.

QUESTION: Whose advice did you rely on in terms of where the cuts will be made?

STEPHEN SMITH: Well these were matters that obviously I relied on in two areas. Firstly, the implementation of the Government’s election commitment, because as I say some of these areas were indicated by the then Shadow Finance spokesperson, Lindsay Tanner, who is now, of course, the Finance Minister.

One was, as I say, the reversal of the ‘Australia on the World Stage’ previous commitment by the Government.

The second was the introduction of a one off two per cent efficiency dividend.

So it’s a combination of the implementation of those election commitments, plus that I obviously had a conversation with the department about the best way of implementing these budget savings. And as I say, I’m confident that none of these savings will have an adverse impact on the capacity of the Government to deliver upon its foreign policy priorities.

QUESTION: Was there just too much excess under Downer’s leadership?

STEPHEN SMITH: Well I’m not proposing to be drawn on the past, other than to say we very strongly have the view that the strongest and the greatest danger to our economy is inflation.

We think the previous government was very, very complacent when it comes to letting the inflation genie out of the bottle. And the Treasurer and the Government generally have been urging restraint in all areas, and we are effectively leading by example. We made that point clear in the course of the election campaign, and the Treasurer Mr Swan has made that point crystal clear, day in, day out since the election of the Government.

QUESTION: So this won’t have any reduction in the number of services for Australians travelling overseas?

STEPHEN SMITH: Wel,l we believe that the reductions in the overseas postings will be able to be accommodated by those overseas postings. There’s no closure of a post here. It’s what is technically described as a thinning, or a reduction in staff levels at various posts, which will be detailed in the release.

But as we are confident that there won’t be a reduction in the capacity of the Government to deliver upon its foreign policy priorities, equally we believe that the thinning which has occurred, the reduction of staff levels overseas which has occurred, is done in a way which enables those posts to continue to do their core business.

QUESTION: Is there any one post which is most effective in terms of the thinning of numbers.

STEPHEN SMITH: No, no. When you see the list, you’ll see it’s effectively 19 positions from 18 or 19 posts. That will be in the release.

QUESTION: [Indistinct] to ask a question about India and uranium again…

STEPHEN SMITH: Yes.

QUESTION: …[indistinct] Was there any disappointment expressed in the [indistinct]?

STEPHEN SMITH: Look, it’s the Government’s position in terms of export of uranium to other nation states is of longstanding and well known. It’s a longstanding commitment of the Australian Labor Party that we don’t authorise the export of uranium to countries who are not parties to the Nuclear Non-Proliferation Treaty.

India is not a nation state that is a party to the Non-Proliferation Treaty. I don’t think there’s any expectation in this national community that India will become a member. And so I simply underlined and reinforced the Labor Party’s and the Government’s longstanding position. It didn’t come as any surprise to Mr Saran that was our ongoing policy position.

QUESTION: Okay. Was there any discussions about how [indistinct] could be resolved… [indistinct]

STEPHEN SMITH: Mr Saran underlined the Indian Government’s view about India’s role in the nuclear cycle. And India’s view that, despite not having been a member of the Non-Proliferation Treaty, that there has been no proliferation of nuclear expertise or materials from India to other third parties. That was the view put to me by the Indian Government and I responded in what I think is best described as our traditional response and our traditional approach.

QUESTION: [Indistinct] … the security review…? [indistinct]

STEPHEN SMITH: In the first instance that will be done by the Department of Foreign Affairs and Trade. Once I’ve seen a preliminary assessment, if I think there’s a need to go beyond that, then I’ll let that be known at the time. But my instinct there is that it’s best done by the Department. And I don’t see any reason why the Department, in consultation with other agencies, can’t affect a serious and a sober review.

I should make the point that in recent times, the security arrangements so far as the embassy and the officials in Kabul is concerned, has been upgraded. And the initial or preliminary assessment is that the upgrade of security, both in terms of the embassy and officials, was beneficial in helping to ensure that there was neither loss of life nor injury. But…

QUESTION: Really… [indistinct]...

STEPHEN SMITH: Those recently upgraded security arrangements, just as arrangements generally will, of course, be the subject of the review.

I think you were going to ask where are they now.

QUESTION: [indistinct]

STEPHEN SMITH: All I can say, all that is appropriate for me to say, is that currently they are in a very secure location and they are continuing quite commendably to do their consular and other work.

QUESTION: Some have suggested that moving them could increase the risk and it’s better to keep them around where they were, because it’s unlikely that there will be another strike in the same place?

STEPHEN SMITH: The only appropriate thing I can say is that I’m satisfied that they are safe and I’m satisfied that they are in a secure location.

I’ve just spoken to the two officers concerned. They regard themselves as being in very good hands and again I, on behalf of the Government and the Australian people, commend them for their efforts in what has been a very, very difficult 12 hours. But also more generally, in what is a difficult post for any overseas officer.

The two officers concerned have spoken to their families and assured their families that they are safe and secure. So having just got off the phone to them, I’m satisfied that they are in a secure location and it would be inappropriate and inadvisable for me to detail any more in that respect.

QUESTION: Is there any where really safe in Kabul? I mean is Australia losing the fight in Afghanistan?

STEPHEN SMITH: Well we’ve made the point that Afghanistan requires a long-term commitment from the international community. And that is not just a long-term commitment so far as military or security matters are concerned, but a long-term commitment from the international community to help to build or rebuild the Afghan nation.

And Pakistan, Afghanistan were two of the countries that Mr Saran and I spoke about. And we agreed on the point that what is now required is not just security measures, but also aid measures, training and the sorts of government measures which can help the Afghan people in government rebuild their own nation state.

So no one underappreciates, or underestimates the difficulty or the dangers in Kabul or Afghanistan. No one underestimates or underappreciates the need for a long term international community commitment to Afghanistan.

QUESTION: [Indistinct] … these savings? ... [indistinct]

STEPHEN SMITH: Yes, I’m absolutely confident that they won’t have an adverse impact on the capacity for the Government to implement its foreign policy priorities.

QUESTION: There’s just been some breaking news I understand. The Federal Court ruling on the Japanese whaling fleet… that they are contravening Australian law. Will you be seeking more information about that in terms of the implications?

STEPHEN SMITH: Yes, well I’m not aware of the actual decision. I was, of course, aware that the Federal Court was due to make its decision today.

In the first instance that will be a matter for Robert McClelland, the Attorney-General, so he will obviously be considering the detail of that. I wasn’t aware that the court had brought it’s decision down. Obviously, in due course I’ll have a careful look at the judgement and simply remind people that one of the things that the Government has done in terms of its efforts to bring about an end to Japanese whaling in the Southern Ocean, was to – as the Attorney-General did before Christmas – to formally withdraw the previous Government’s advice to the Federal Court in respect of the Humane Society International case.

But in the first instance, I’ll leave that to my colleague Robert McClelland, the Attorney-General.

QUESTION: Just under that first bunch though, would there be any concerns about the relationship with Japan?

STEPHEN SMITH: Well I’ve long been a lapsed lawyer, but even now I remember that the best first blush response to a decision that you haven’t read, is to read the decision. And I’m sure Robert will do that assiduously, and let you know his view in the course of the day.

Thanks very much.

Ends

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