E&OE
12 October 2008
Interview, Meet the Press
PAUL BONGIORNO: Well, despite the Reserve Bank finding accumulating evidence of a slowdown among our Asian trading partners, the Chinese Premier was able to assure our Prime Minister Beijing still wanted to do big business with us, and the Foreign Minister got a first-hand look at the region during the week and welcome back to the program, Stephen Smith.
STEPHEN SMITH: Pleasure, Paul. Good morning.
BONGIORNO: Well just going to the international meeting in Washington today, the G20, where our Treasurer, Wayne Swan, is attending. Can anything really come out of these meetings?
SMITH: Well, they have to. I just spoke to the Treasurer this morning. He was out of the final of the IMF meetings. He's got the G20 meeting this afternoon, Australia time. He made the point, which I picked up in the Philippines last week, which is a growing realisation that this crisis is much worse than people originally expected.
In that context, Australia is better placed than most to take advantage of it. Our regulatory and prudential arrangements has been sound for many years. The old adage was that if the United States sneezed, Australia got a cold, we're now much more buttress by our trade to China, our expanding trade to India and also trade with the ASEAN economies combined. There is positive economic growth. We are better placed than most for a range of reasons but this is a very, very serious and grave international economic crisis and the response has to be an international community response, it has to be a global response.
BONGIORNO: That response seemed to be to stabilise everybody's banks. We got that report today where, um, the Rudd Government is expected to announce that it will guarantee people's savings beyond the $20,000, maybe up to $100,000, as, indeed, the Opposition has been suggesting.
SMITH: Well, the key thing here is to bring stability to the financial system internationally to make sure there's not a drastic or dramatic credit crunch. And so, quite correctly, quite responsibly, our Budget Cabinet Committee met yesterday. They'll have a further meeting today and they'll get further advice from the Treasurer as a result of his IMF and G20 meetings. We'll do what is required to keep our own system safe and secure and what is required to assist internationally.
BONGIORNO: Well, I guess the point is that if Europe and the United States, indeed, comes to give these guarantees for deposits, Australia can't really afford to keep out of that, can they?
SMITH: Well, as I was saying, as the Treasurer says, this is a global crisis and requires a global response. So one of the reasons why we've been so careful to not just speak to our own regulators, financial service and prudential regulators, but also speaking internationally. That's why the Prime Minister's been on the phone to his counter-parts and why we've been speaking to the international regulator. So there is a sense here that this is a crisis that international community has got to meet together. So we're obviously in close contact with what other countries are contemplating and we'll obviously bear that in mind as we make our decisions in the course of the day and in the course of the week.
BONGIORNO: What about a health check on our region? You've been up in Asia as you said. The Nikkei fell 9% in one day during the week and of course growth in China is coming off. Are you still fairly confident, though, that our trading partners will keep their heads above water?
SMITH: I think the remarks of the Governor of the Chinese central bank overnight were very positive, which was, China continues to want to expand domestically. That obviously helps us with our exports.
But we saw the Asian financial crisis, you know, a decade and a half or so ago. They made a range of structural changes which I think is helping now. They will be the subject of reduced economic growth and that will have an adverse impact, just as we will be on the receiving end of lower economic growth. But because we trade into Asia, there'll still be positive economic growth there.
I think even though we're going through a financial crisis the order of which we haven't seen for very, very many years, Australia is much better placed than other nations to cope with that and to cope with it in the context of slower but still positive economic growth.
BONGIORNO: Just going to the tragic Lapthorne case, are there any lessons for the Australian Government out of that sad case?
SMITH: We believe we did everything possible to render assistance to the family, and we will continue to do that. It's, of the course, a terrible tragedy and it's just a terrible, worst nightmare for the family. We've indicated that we will provide every assistance to return Mr Lapthorne and his son to Australia, together with Britt. And there's always a chance to review these things when the dust settles. We do that in the normal course of events.
I think it's important to make this point, though, Paul: we've got nearly a million Australians overseas at any point in time. Currently on our books we have up to 50 people missing. Providing assistance to Australians overseas, particularly in difficult cases where someone's missing, requires a cooperation of the authorities of the nation state where they are. And we worked very closely with the Croatians to make sure that no stone was left unturned to discover Britt and we're confident that that occurred.
BONGIORNO: Couldn't people get the impression that had the Lapthornes not started to jump up and down and go public and critical in the media, then perhaps we wouldn't have acted as we did?
SMITH: I'm absolutely convinced that our officers, from the first moment they were advised she was missing, did everything they possibly could with the Croatian authorities. I'm confident about that.
I've also made this point and I'll make it again, in terrible circumstances like this the family, frankly, is entitled to say whatever they want to say. That's my attitude. They're going through a nightmare. I'm not proposing to quibble with what they're saying publicly but I am confident in this case as many others, that our consular officials did everything possible to render assistance to the family in what was a terrible and tragic circumstance.
BONGIORNO: When we return with the panel we ask has our Afghanistan commitment got a future in light of the US election. And Ebay may be the answer to Peter Costello's flagging book sales. The former Treasurer was drawn into the harsh commercial realities of speculative capitalism as he signed copies of his memoirs.
OK, thank you. Just your name is fine. You don't want me to put "To Jane” on it? No. OK. I want to sell it on Ebay. Good luck. I'm investment-minded. (Laughs) Good on you.
BONGIORNO: You're on Meet the Press with Foreign Minister Stephen Smith and good morning to our panel, Jennifer Hewett from the 'Australian'. Good morning, Jennifer.
JENNIFER HEWETT: Good morning.
BONGIORNO: And Clinton Porteous from the 'Courier-Mail'. Good morning, Clinton.
CLINTON PORTEOUS: Good morning.
BONGIORNO: Much depends on the outcome of the US election for the direction of foreign policy, especially for our troops in Afghanistan. Both candidates believe it's integral to combating terrorism but it's not clear exactly what the future shape of their commitment would be.
Senator McCain: Senator Obama was wrong about Iraq in the surge. He was wrong about Russia when they committed aggression against Georgia and, in his short career, he does not understand our national security challenges.
Senator Obama: It's true. There's some things I don't understand. I don't understand how we ended up invading a country that had nothing to do with 9/11 while Osama bin Laden and Al-Qaeda are Celtic up base camps and safe havens to train terrorists to attack us.
HEWETT: Minister, there are increasing doubts that military victory is at all possible in Afghanistan, and yet Australia is probably going to be asked to increase our troop commitment. How do we handle that?
SMITH: Well, we've made it clear that we're not proposing to increase our current complement of nearly 1,100 officers in Oruzgan province in Afghanistan. I think what is clear, and I won't be drawn on who might win the United States election as we'll deal with who is thrown up, but what is clear is that there will be an increased and renewed and refreshed United States commitment to Afghanistan and Pakistan. That's a good thing because Afghanistan and the Pakistan border areas remain the current hotbed of international terrorism and it has to be met by the international community.
HEWETT: So what do we have? Just 1,100 troops there as a symbol out a commitment to go further?
SMITH: It's not a symbol. We're the largest non-NATO contributor and in addition to our forces we have substantial capacity building humanitarian assistance into Afghanistan. We have to do two things. We have to secure peace and security but we have to try and help build a nation. We have to start making sure there is a joint international community effort on both fronts, which address the terrible drugs problem, which deal with corruption issues, build state institutions. They're the things discussed at the Bucharest conference and the Paris conference earlier this year.
HEWITT: Easy to say but it's obviously not happening.
SMITH: No-one is suggesting that Afghanistan is anything other than difficult and dangerous and a long-term issue and problem. But we believe it's absolutely essential for the international community and also in Australia's national interests, that we're there. There's no doubt that this is the current centre of international terrorism. And if we don't meet it, then what we know about international terrorism in the modern world is it moves quickly, it’s mobile, it moves quickly north to Europe and south to South East Asia. We've already been on the receiving end of terrorism in South East Asia. We don't want to be on the receiving end again.
PORTEOUS: On Zimbabwe, there was such hope that Robert Mugabe was going. It's now a power-sharing agreement with Mr Tsvangirai. That looks to be going bad. I think you've talked before that we want to give more money if they move towards democracy. Surely that would be a bad move when power-sharing looks to be coming unstuck.
SMITH: Despite our long-standing criticism of the brutal Mugabe regime, Australia has provided humanitarian assistance, a lot of it for food, to the Zimbabwean people directly. It's about $9 million or $10 million a year. I believe if we see democratic rule of Zimbabwe, a government dealing with serious issues, we will contemplate further humanitarian assistance.
PORTEOUS: Surely that must in doubt now, mustn't it?
SMITH: We urge the parties to come to a resolution. It's a good sign that they've both called on former South African President Mbeki to seek to mediate, but they've got to get on with it. Our starting point, of course, is that Mr Mugabe walks off the stage. He's not proposing to do that. There's a power-sharing agreement. They've got to bring that to fruition. It's been waiting three months. It's six months since we saw Mr Tsvangirai get a majority in the Parliamentary and Presidential election.
PORTEOUS: Before talking about the economic crisis, looking at your portfolio, one of the biggest spends is foreign aid, $3.7 billion I think. The Rudd Government says it will up foreign aid by 0.5% by 2015. Can you meet that still?
SMITH: We're currently on track to do that. It was a clear and strong election commitment we made. The Prime Minister and I are strongly personally committed to it and we think can get there.
PORTEOUS: Is it responsible at a time when pensioners would love more money, working mothers would love paid maternity leave? Can we afford to give $3.7 billion away?
SMITH: We think it's important that Australia is a good international citizen and it's not giving money away. It's giving money for the purpose of developing nation states in our region and the world. That's an unambiguously good thing and in our national interest. Making sure we don't have failed or difficult states in the Pacific is a good thing. Making sure we're doing the right thing in the Asian community also a good thing. It helps our trade, our investment, the standing of Australia both economically and socially in the international community's eyes.
BONGIORNO: The situation in Thailand, one of our key Asian partners, seems to be deteriorating. On Tuesday, two were killed and more than 400 were injured in violent protests against the government in the capital, Bangkok. Similar ugly riots have occurred elsewhere in the country. Minister, the situation does seem to be getting worse. What do you think is going to happen there?
SMITH: There's been a bit of calm in the last couple of days. It was very, very difficult in the course of the last week. We certainly continue to urge Australians not to go anywhere near demonstrations or gatherings. And we certainly, again, urge the Thai political leadership to resolve these issues lawfully and peacefully. And we certainly welcome very much the Chief of the Army indicating that he doesn't see a role for the military in terms of a military coup or military intervention.
HEWETT: Nevertheless, the situation remains very unpredictable and now we're going to have around the region, obviously, much worse economic conditions. Do you think that's really going to increase the threat of instability in the region?
SMITH: Well, so far as Thailand is concerned, I think the Thais themselves have come to appreciate that in the past, military intervention rather than resolving these matters through a parliamentary or political process hasn't actually helped them. And so whilst they're going through a period of political difficulty, we do want them and we're confident they can resolve these issues that parliamentary and political systems. What we want them to do is to meet political instability by respecting the law and by respecting peacefully the democratic institutions.
HEWETT: But Mr Smith, are we going to see a rise of terrorism in the region given the economic problems sweeping through?
SMITH: We'll certainly see a rise of terrorism if Australia and the international community don't do two things; firstly meet that terrorism by force of military arms, and secondly, also address some of the factors which can give rise to support for extreme or ideological views. Not being a good development assistance partner does mean there's a lesser chance for better health or education outcomes in difficult nation states. It's why we also invest a lot in our region in inter-faith dialogue to make sure we preach tolerance and respect for not just religious views but people's views generally.
BONGIORNO: Stephen Smith, thanks for joining us today.
Stephen Smith: Thanks, Paul. Thank you.
[Ends]
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