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MICHAEL ROWLAND: The Prime Minister Julia Gillard headed off speculation she'd give Foreign Affairs to Kevin Rudd, saying he'd be offered a Cabinet position if Labor won the next election. For more, the new Foreign Affairs and Trade Minister, Stephen Smith, joins us now from Canberra and, Minister, it's a bit of a natural fit, isn't it?

STEPHEN SMITH: It is a very natural fit. There's a good symmetry between foreign affairs and trade. We've of course had one department servicing two Ministers since the 1980s, but a lot of the work is complementary and so I'm very much looking forward to doing the trade job in addition to foreign affairs.

MICHAEL ROWLAND: Are you concerned, given Julia Gillard's invitation to Kevin Rudd yesterday, that you may only be Foreign Minister now for two months if Labor is re-elected?

STEPHEN SMITH: I take these things step by step. Firstly, of course, there's an election to get through. So in the first instance, it's entirely a matter for the Australian people. But, secondly, as I've said in recent days, I'm old-fashioned about these matters. The allocation of portfolios is entirely a matter for the Prime Minister of the day. Whatever portfolio you are in, particularly if you're doing foreign affairs and trade, which go directly to our national interests, our national security interests, which go directly to peace and security but also prosperity, you have to proceed on the basis of making judgments and making decisions which are beneficial to Australia over the long term.

That's what I've done from day one and that's what I'll continue to do. And in the trade area we have become a successful and prosperous nation economically because we've been a great trading nation. So you have to take a long term view of these things, you can't take a short term view of them, or put any timelines on them.

MICHAEL ROWLAND: Are you feeling slightly liberated this week? As we all know, Kevin Rudd took a deep and abiding interest in all matters foreign policy.

STEPHEN SMITH: All Prime Ministers have — this is one of the, in a sense, bemusing or amusing things about such commentary — all Prime Ministers have to take an interest in foreign affairs. It goes directly to advancing our national security interests.

Mr Rudd was unique in that he was a Prime Minister who had previously been a professional diplomat. But all Prime Ministers of Australia, if they are doing their job and doing it well — and Julia Gillard will do her job properly and will do it well — take an intense interest in foreign affairs.

That's because how we handle ourselves internationally, how we handle ourselves regionally and how we handle ourselves in our important bilateral relations goes directly to our national interest, both our national security interests but also our economic and trade interests.

MICHAEL ROWLAND: Okay, looking now at some of the challenges in the foreign affairs portfolio, Fiji's military government, as you know, has moved summarily to end foreign ownership of local media and is threatening now to jail journalists. News Limited is describing this as an assault on democracy and free speech. What's the federal Government's view?

STEPHEN SMITH: We condemn it absolutely. It's another example of the interim Fiji government, the military-dominated government censoring freedom of speech; impinging upon democratic rights. But the difficulty for the Fiji people as well as an imposition on their human rights and their democratic entitlements is that we very strongly believe that this will have a significant adverse influence on Fiji's economy. It will be a significant deterrence to investment in Fiji and that will have very substantial and serious deleterious effects on Fiji's economy and adversely affect the prosperity of their people.

MICHAEL ROWLAND: Well, it's an expropriation of foreign investment, nothing short of that. What advice do you now have for Australian businesses either on the ground in Fiji or considering investing in that country?

STEPHEN SMITH: As is always the case, whether it's News Limited, in terms of its operations in Fiji, or any other Australian company, it's a matter for those individual companies to make investment decisions.

We don't want to see the people of Fiji suffer economically, but the regrettable fact is, since the coup, since Commodore Bainimarama took over undemocratically the governance of Fiji, we have seen a deterioration in Fiji's social and economic circumstances. And we worry very much that this arbitrary move sends a very bad signal so far as future investment in Fiji is concerned, let alone the very bad signal it sends in terms of freedom of expression, freedom of speech and democratic rights.

MICHAEL ROWLAND: John Hartigan, News Limited's local chief, obviously is very angry this morning. In fact, so angry he's taken a swipe at both the Howard and Rudd Governments saying they both did little to pressure the military government to hold elections and restore democracy to this country.

Are you now going to step up pressure on that front? And what action is available to the Gillard Government?

STEPHEN SMITH: I can understand Mr Hartigan's disappointment. I must say, I was slightly surprised by his comments, given that Australia has been at the forefront — and that is under both the Rudd-Gillard governments and also under the Howard Government — Australia has been at the forefront of putting regional and international pressure on Fiji to return to democracy.

We've been at the forefront of Fiji's suspension from the Pacific Islands Forum, we've been at the forefront of Fiji's suspension from the Commonwealth and we imposed travel restrictions on them, but what we don't want to do is to put across-the-board restrictions which will have further adverse impacts on the people of Fiji themselves.

It is a great tragedy that Fiji is not a premier nation economically in the Pacific and that has been the outcome so far as Commodore Bainimarama's time in office in Fiji has been concerned.

MICHAEL ROWLAND: Do you see this as something of a test by Fiji's government for the new Australian Prime Minister?

STEPHEN SMITH: Regrettably, this is a consistent course of conduct from Commodore Bainimarama. We have seen decisions like this occurring over a period of time. It's not the first occasion we've seen imposition of restrictions on publications, imposition of restriction on newspapers or media outlets or, indeed, journalists in Fiji. So it's a consistent course of conduct. I don't see it in any way as directed to any arrangements here. It is a regrettable, consistent course of conduct. It continues to take Fiji backwards.

MICHAEL ROWLAND: If I could just ask you about Afghanistan. We all know the Australian Government is lock-step behind the Obama Administration and NATO countries in the military strategy, but do you have full confidence in the ability of the Karzai Government to bring political stability and corruption-free governance to that country Australia troops are helping to stabilise?

STEPHEN SMITH: Well, the Karzai Government is the Government that the people of Afghanistan have elected and I said both before and after that election that Australia looked to the Afghanistan Government to make progress on a whole range of matters. In particular and importantly, making progress on governance and corruption, making progress on anti-narcotics, making progress on electoral reform and making progress on the rights of women and girls.

So we expect the Karzai Government to make progress in all of these areas otherwise…

MICHAEL ROWLAND: But are you happy with the progress to date?

STEPHEN SMITH: Afghanistan is a difficult environment both on the social, economic and political front and particularly on the security front.

We do believe progress is being made but that progress must continue both on the social and political front but also on the security front. And this goes to the heart of our very strong view that our objectives in Afghanistan can only be met not just by pursuing a military or security strategy, but also by pursuing a civilian and political strategy. And that is why in recent times I have announced an enhancement of our civilian development assistance and diplomatic presence in Afghanistan because we need to make progress both on the civilian reconstruction front as well as on the security front.

MICHAEL ROWLAND: Finally, Stephen Smith, in the now infamous Rolling Stone article that precipitated the downfall of Stanley McChrystal as the US commander in Afghanistan, Hamid Karzai is quoted as telling General McChrystal that he didn't know coalition troops were fighting in Oruzgan Province where of course Australian troops are based.

As the Foreign Minister of a country where 1500 troops are fighting in that province, how would you react to that sort of comment?

STEPHEN SMITH: I, of course, know from my own discussions with President Karzai that he is well aware of the contribution that Australia makes and very appreciative of it.

The Rolling Stone article was of course very regrettable and, as a consequence of that, President Obama has appointed General Petraeus as the overall commander of the International Security Assistance Forces in Afghanistan.

We know General Petraeus well. We've worked closely with him in the past and we look forward to working closely with him.

MICHAEL ROWLAND: Stephen Smith, thanks for your time this morning.

STEPHEN SMITH: Thanks, Michael, thanks very much.

END

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