E&OE
27 March 2009
Interview with David Speers, Sky News.
Subjects: Joel Fitzgibbon, second Strategic Dialogue, China's role in the IMF, UN Security Council, foreign capital investment in Australia.
DAVID SPEERS: Foreign Minister, thank you for joining SKY News. If I can start actually with your colleague, Joel Fitzgibbon; a lot of focus on him at the moment, of course. You too were the recipient of a trip to China when you were in Opposition, funded by a private Chinese company but you declared this in parliament at the time. Can you understand why Joel Fitzgibbon failed to do that, and why he didn't remember it when asked directly yesterday?
STEPHEN SMITH: Well, I had a trip to China when I was a Member of Parliament, not a minister. At the time I declared that in accordance with the parliamentary requirements.
I was asked about that in the Parliament and I outlined to the Parliament what I'd done and what the details were, and that's perfectly appropriate.
My colleague, Joel Fitzgibbon, on this particular occasion didn't do that. He's apologised for the oversight, as he should.
It's a requirement of all Members of Parliament that if we have sponsored travel that it's declared, and that's a very important part of the conflict of interest measures that the parliament has.
Mr Fitzgibbon has apologised for it, as he should, and we all need to be vigilant to make sure that we take a great deal of care with the detail of these matters and disclose them, as we are required.
DAVID SPEERS: The Opposition is raising concerns about the number of Labor frontbenchers who have been - well, have had trips to China funded by various businessmen and women and Chinese companies. Why do you think the Chinese are so keen to send Labor politicians to China like this?
STEPHEN SMITH: I think you'll find that there are very many Members of Parliament from both sides of the parliament who have accepted trips to China. And the key thing is whether they declare them or disclose them. And that's the mistake that Mr Fitzgibbon has made and he's apologised for that mistake.
China is Australia's second largest trading partner and it competes with Japan for our largest trading partner status, and that varies over time.
Engaging with China is very much in Australia's economic and national interest, and that's the reason I'm here.
I've just conducted the second Strategic Dialogue with my counterpart, Foreign Minister Yang. We spoke about the importance of the economic relationship between Australia and China, how a free trade agreement between Australia and China would advance both Australia and China's economic interests.
I also spent a couple of days in the west in Chongqing and Chengdu, and there are very many economic opportunities there for Australian business.
So I'm in China, Simon Crean will soon be in China, and the Minister for Energy and Resources, Martin Ferguson, will soon be in China because it's unambiguously in Australia's economic and national interest for ministers to be here.
DAVID SPEERS: And the Agriculture Minister is going as well. Now, the Prime Minister wants the - wants China to have a greater say within the IMF, something he's been talking about in Washington and will be next week at the G-20 in London as well. Why is that in Australia's national interest?
STEPHEN SMITH: Because we need very much for the international institutions, whether they're financial institutions or otherwise, to reflect the modern day, to reflect the modern world.
Australia argues very strongly, for example, that the United Nations Security Council should reflect the modern day and not reflect the world as we knew it in the 1940s and the 1950s.
That's why we say, for example, that Japan and India should be permanent members of a new reformed Security Council.
When it comes to the international financial institutions the premier one is the IMF. The IMF also has to reflect the modern day, the modern world, the modern global economy, not the world as we knew it in the 1950s.
China now plays a very, very significant part in the international economy as do other emerging economic giants like India and Brazil.
And it works in Australia's interest, and it works in our regional interest and it works in international community's interest if these very important institutions reflect the world as we know it.
Again, it is in Australia's interest for these institutions to reflect the world as we know it.
DAVID SPEERS: Well, speaking of those institutions, if Australia is supporting China so strongly on having a greater say within the IMF, will China support Australia in getting a seat on the UN Security Council?
STEPHEN SMITH: I raised both issues with Foreign Minister Yang today. I made the point to him that in addition to it being a sensible thing to do for China to play a greater role in the IMF which reflects the status and standing of their economy, China should also commit a greater amount of resources to the IMF.
I also raised with China Australia's bid to become a temporary member of the Security Council for the 2013-14 term. And our rationale and our reason for doing that is while Australia might only be the fiftieth largest country in the world in terms of population, we're in the top 15 when it comes to security, defence and peacekeeping expenditure. We have a longstanding history of security and peacekeeping matters and we think that we've got a valuable role to play. And, again, being on the Security Council for a two year period would be in our best interest.
China, like other permanent members of the Security Council, never indicates publicly or privately what they're proposing to do in ballots.
But I made the point to Foreign Minister Yang that not only were we seeking support from the permanent members of the Security Council, but from all members of the United Nations.
Again, we think Australia can take our values and our virtues, democratic values and virtues, peacekeeping values and virtues to the world and not only do good as a good international citizen, but also advance Australia's national interest.
DAVID SPEERS: Now, there's a great deal of interest Minister, here and in China, in the bid by Chinalco, the Chinese Government-owned miner, to increase its stake in Australia's Rio Tinto. That decision is before the Foreign Investment Review Board.
But late today, the news that a separate Chinese company, China Minmetals has been knocked back in its bid to buy OZ Minerals Limited. The reason cited by the Treasurer is that the Prominent Hill mining operations are in the Woomera weapons testing range and there's a national security issue there, that you don't want a Chinese mining company to be operating in that weapons testing area, according to this statement from the Treasurer.
Will that concern the Chinese, do you think, being rejected on this particular China Minmetals bid?
STEPHEN SMITH: Firstly, in terms of capital investment overseas, or foreign capital investment in Australia, Australia very much welcomes overseas capital investment. It's one of the things that has helped, over the years, make our economy strong.
But we do have rules and regulations, and ultimately the Treasurer makes that judgement, as he has today on one particular matter, makes a judgement about whether an investment is in Australia's national interest. That's the test that he will apply in the Chinalco matter and it's the test that he has applied today with the OZ Minerals matter. And he's made it clear that any minerals development application which is for a site within the Woomera prohibited area, has to be specially considered by the Defence Department, against national security considerations. So he's made his decision today.
But my understanding is that any application from anyone, within that area, is subject to that special defence and national security consideration. So in the course of my conversations with the Chinese Foreign Minister, I laid out the rules and the principles that we apply. They are very transparent. The Treasurer, Mr Swan, published them very early last year.
So they're there for all investors to see.
I think it's very important to understand Australia doesn't have a discriminatory policy here. We make the national interest judgements from wherever the foreign investment is proposed to come.
DAVID SPEERS: What about Chinalco though? This is the big one that everyone's waiting for, their bid for Rio Tinto. Does - do you consider Chinalco to be controlled by the Chinese Government? This is right at the heart of this question?
STEPHEN SMITH: Whether an investment comes from an agency or a company associated with, or controlled by a nation state, is one of the considerations and principles that Mr Swan has made clear he has under consideration. He published that as one of his principles in February of last year. And I've said in the course of my time in China…
DAVID SPEERS: [Indistinct] have you been raising this…
STEPHEN SMITH: I…
DAVID SPEERS: … have you been raising this in China? And what do you think?
Is it controlled by the Chinese Government?
STEPHEN SMITH: I've said in the course of my time in China, publicly, when asked by Chinese and Australian media, that I don't think it's any secret that Chinalco is a company associated with or controlled by the state. That's one of the considerations in hand.
But Mr Swan has published effectively a timetable for his consideration of that matter. It's a complex, difficult and important matter and he is very sensibly been very deliberative and taking his time about making a judgement about that matter.
DAVID SPEERS: All right. Foreign Minister Stephen Smith, we've run out of time. But, look, thank you very much for joining us from Beijing today.
STEPHEN SMITH: No, thank you. Thanks very much.
[Ends]
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