E&OE
24 September 2008
Interview – SBS Dateline
George Negus: Stephen Smith thanks very much for giving us your time because things are a bit hectic where you are at the moment.
Stephen Smith: That’s my pleasure George.
Negus: I was thinking that you and Kevin Rudd must be going a bit cross-eyed at the moment because you must be keeping one eye on the UN and the other eye on Wall St. I mean, what would you say is the gravest situation that you guys are having to deal with at the moment – the money or the UN situation or both?
Smith: Well in some respects it’s both. The immediate crisis if I can put it that way of course is underpinning the international financial system. We welcome very much the United States Government’s intervention, a $700-billion intervention, to underpin the financial services market in the United States. Our own analysis so far as Australia is concerned is that we think not so much that we’re immune but we’re in good shape to absorb any of the difficulties. But the overall problem of course is in the context of declining economic growth internationally – we’re very concerned about the adverse international repercussions of the shock to the financial system. There’s no doubt that’s become the topic of conversation amongst leaders.
Negus: Including at the UN?
Smith: Other ongoing work of the United Nations continues and the key items there are climate change, achieving the Millennium Development Goals and the worries of food and food security. And then of course the new Government’s commitment to a greater enhancement with the United Nations and this is one reflection of it.
Negus: We’ll talk about the UN stuff in a moment but if you could put on your ideological hat for a moment how do you describe the so-called bailout, depending on whether you’re coming at it from either the left or the right, it’s either being called the socialisation of the free market or regulated capitalism. Can they have it both ways? How do you describe what’s going on?
Smith: Well over here some people are describing it in both ways. I think what we have here is a necessary government intervention in a regulated financial market. It’s not every day you see a $700-billion dollar intervention and I think it’s one of those cases where whilst there might be some criticism for or about the action, the consequences of doing nothing were far greater. Far greater not just for the American financial system and market but internationally. And that’s why I think the government here, the Bush Administration, acted and acted quickly and the reason the Australian Government has welcomed it is because the consequences of doing nothing would have been catastrophic.
Negus: But does it bother you that the detail seems to be pretty thin on the ground – exactly what this $700-billion bailout’s going to mean? People are complaining where’s the detail?
Smith: Well I think what’s occurring here, you’ve had both Presidential candidates – Senator Obama and McCain – indicating during the course of today New York time that whilst in general terms they are supportive, they are starting to put some parameters, some requests for detail, concern about whether the bailout of the market also includes a bailout of things like performance bonuses to executives. So there is starting to be scrutiny and in some respects it’s a natural consequence of the package going to the Congress that that will occur. But I think there’s a general appreciation and realisation that this was a necessary step and while some people might regard it as reluctant, as I put it: the consequences of failing to intervene would have been catastrophic for the American market and as a consequence, catastrophic for the international economy and for the international community.
Negus: Now of course Ban Ki Moon himself, the Secretary-General of the UN, is urging the richest nations to spend more money but he’s also saying this credit crisis which is now acknowledged as being global, could actually get in the way of the UN’s Millennium Development Goals to reduce poverty, to increase heath, to improve education, which is aimed at 2015. This could upset that apple cart completely from the UN’s point of view?
Smith: The Secretary-General made his opening address or his report to the beginning of debate in the General Assembly which is an important key-note address every year and he started with the financial services crisis and he did make that point and there’s no doubt that’s a valid point. We have seen in recent years strong international economic growth. In Australia’s case for example we’re now into our 17th year of continuous economic growth and there is that old adage that the best form of development assistance, the best form of aid is economic growth. So if we find a contraction in the international and domestic economies then nation states will find it more difficult to meet their development assistance aspirations and to meet the Millennium Development Goals.
Negus: If I can interrupt you there, we still haven’t met our aid goals at all. We’re still under the mark.
Smith: The Government came to office with a commitment to increase our development assistance to 0.5% of Gross National Income by 2015. We’re on track to do that and we fully intend to meet that.
Negus: Isn’t 0.7 the figure though that we’re supposed to be aiming at?
Smith: Well 0.7 is an aspiration. The Prime Minister when he was Opposition Leader indicated that was an aspiration that he would set for the long-term but the express election commitment that we gave was 0.5% of GNI and we’re on track to do that.
So far as the Millennium Goals are concerned the timetable for those is also 2015. One of the points that Secretary-General Ban Ki Moon made today was that when you survey the scene there are very many countries falling short of those goals at the moment and he’s indicated that as Secretary-General, he’d like to convene a major United Nations summit in 2010 to essentially do a half-time review of the attainment of those goals but obviously it’s much easier for both developed and developing nations to meet those goals in the context of international economic growth rather than a contraction or a financial services crisis but we fully intend to do our bit.
Negus: Stephen you must be breathing a sigh of relief, you and the Prime Minister at the moment, because you were criticised – or he was, at least – for going to the UN in the first place and now it would appear – fortuitously or otherwise depending upon your point of view – that the world credit crisis and the UN meeting that you’re at have actually come together, they’re now being linked, so you must be heaving a sigh of political relief given the political stick that you got back home.
Smith: Well there was some criticism from the Opposition and I don’t regard that criticism as being valid. There was some attempt to criticise the Prime Minister for attending. They call this week at the United Nations ‘Leaders’ Week’ and that’s because of the 190-odd nation states that are members of the United Nations, I’m told there are anywhere up to 120 Prime Ministers, Presidents, Heads of Government, Heads of State here in the course of this week. And there are a couple of major reasons why it was important in our national interest for the Prime Minister to attend. One is, it shows our commitment to multi-lateral institutions like the United Nations, one of our three pillars of foreign policy approach: our attachment to the alliance with the United States, our engagement in the Asia-Pacific and our engagement with the United Nations, so there’s that general point. But also, some of the key international problems have adverse consequences for Australia if we don’t meet them – climate change is one and financial services is the other.
Negus: I guess what I’m getting at: you’ve got a bit lucky though in the way things have come together.
Smith: Well, the Prime Minister always intended to attend the General Assembly. The fact that there is an international crisis in a particular area which gives good reason for him to be in conversation about that matter with his colleagues, with other leaders of nation-states, just shows the opportune manner and the opportune way in which gathering together at the United Nations for Leaders’ Week, for the General Assembly is a sensible thing to do. Yes there will be conversations about financial services because that is pressing upon us at the moment but there will also be conversations about working together on climate change, working together on food and food security, working together on the Millennium Development Goals. These are all things that advance not just Australia as a good international citizen but also advance our national interest.
Negus: If we had the time – and I’ve scribbled down a list here – we could be talking about Pakistan’s sovereignty and the fight against terrorism and America’s reaction to that; South Africa’s in turmoil – half their cabinet has resigned overnight – Zimbabwe’s still unsettled, Mugabe’s still hanging around; Russia and the US are talking about a new Cold War; China’s economic development let alone Iraq and Iran and as you’ve pointed out climate change.
We live in interesting times to say the least but can I ask you about the upcoming American election because as you said, a cornerstone of Kevin Rudd’s policy – and therefore yours – is the alliance with the US. Are you going to try to tell me that it doesn’t make a scrap of difference to that who’s elected in the first week of November – Barack Obama or John McCain? I know the usual line is we can work with anybody?
Smith: It doesn’t to us because we deal with whoever the United States democratic system throws up and that’s one of the enduring strengths of the alliance between Australia and the United States – that whether it’s Labor or Liberal in Australia or Republican or Democrat here, the alliance continues. You might recall that our political opponents in Australia in the run-up to the last election were saying that if Labor was elected the alliance would be ruined and of course that was never going to occur and hasn’t occurred. So whoever is victorious – whether it’s Obama or McCain – we will deal with that administration just as we continue to work closely with the Bush administration in the final few months of the current administration’s tenure.
Negus: Yeah but in terms of real politics the Labor Government in Australia has much more ideological compatibility with a Democrat like Barack Obama than John McCain I mean that’s the reality of politics. Surely you’d prefer to deal with him?
Smith: Well we don’t express preferences because our responsibility is to represent the interests of our nation-state and it’s in the interests of Australia to continue the alliance with the United States as I say it’s one of our three fundamental pillars and in the past when Labor’s been in government we’ve dealt with administrations of either political persuasion and the same is true of both Republican and Democratic administrations here. And whilst there’ll always be in the first few months, there’ll be the names to put to faces and people get used to dealing with each other on a personal basis, the strength of the alliance remains an enduring bedrock of our defence, strategic and security arrangements continues.
Negus: OK let me put it this way. John McCain has said that both candidates in this Presidential election have pledged to end the war in Iraq and bring US troops home. Now you and Kevin Rudd would obviously agree with that. But would you agree with the next bit: he said the difference between, the great difference between he and Barack Obama is that he, John McCain, intends to win the war first. Now Kevin Rudd was opposed to the war I presume you were opposed to the war, now this bloke McCain still reckons he’s not going to get out of there until he wins it – whatever that means. That’s why I guess I mean the differences that I’ve been pointing out, you’d have to agree that that’s a hard one for you to swallow?
Smith: Well, I’m not going to agree to any of the suggestions that you’re making to me George because to do that would be to entangle myself into essentially the domestic political environment in the United States and I’m not proposing to do that because we will deal with whoever the American people throw up for us to deal with.
Negus: How’s your blitz going on getting Australia into the UN Security Council because we haven’t been there for 60-odd years – why would people want us to be there now?
Smith: Well, we’re running for 2013-14 with an election in 2012. By the time that period comes up it will have been over a quarter of a century since we last served. We make the point that we think we’ve got a lot to offer on the Security Council. It’s the key peace and security body of the United Nations. Australia’s got a long and proud history of engagement in peacekeeping and we think that from time to time we have the values and the virtues and the characteristics to sit at the Security Council.
I have to say that the initial response to our candidature has been very good. A lot of the feedback that I get from colleague Foreign Ministers is that they see a new government, they’ve been impressed by our commitment to ratify Kyoto, there’s been a lot of commentary about the apology that we made but that good sentiment we have to transfer into votes and that’s a four-year campaign.
A lot of the conversations I have with colleague Foreign Ministers is not just about our candidature. I’ve made the point this week that if you look at Africa for example, we need to substantially increase and enhance our engagement with Africa. I’ve just come from a bilateral meeting with the South African Foreign Minister and made the point we wanted to enhance our engagement not just with South Africa but with Africa generally and there was a warm response to that, as I’ve gotten with a number of other African Foreign Ministers so the potential with Africa for us to enhance our engagement which is the potential for broad and deep engagement – commercial, development assistance – there is a lot of potential there and that’s a very good thing.
In a different part of the world, in south Asia, I’m about to have meetings now with…
Negus: Sorry to interrupt you but unfortunately we’re running out of satellite time but I have to say you’ve confirmed one thing for us: that South Africa still has a Foreign Minister at this point! There was some doubt over whether they might.
Smith: What we want to see in South Africa is, of course, stability and I had a good conversation with the Foreign Minister who is very confident that in the course of the next few days the new President will be confirmed. A number of the ministers that have resigned have resigned on a point of principle, which is that there’s a new President, but more than half of those who have resigned have offered themselves again in a new administration so I’m hopeful and, on the basis of my conversation, confident that in the course of the next few days we’ll see South Africa’s political process and parliamentary and democratic process bring that to a conclusion and we’ll see stability which is of course what we want to see.
It’s very important that there’s a stable government in South Africa but the South African Foreign Minister Dlamini Zumais very confident of that and I share that optimism. We look forward to working very closely with the new President for the duration of former president Mbeki’s term and then we will deal happily with whoever an election throws up as a new President in about nine months time.
Negus: Stephen Smith it’s been good talking to you. As I said, there are so many things we could talk about because it’s almost a case of ‘crisis, what crisis?’ in the world at the moment.
Thank you very much, thanks for your time.
Smith: Thanks very much George, my pleasure.
[Ends]
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