PM: The central focus of this visit has been the global financial crisis. I have spoken so far to representatives of the US financial community, I have spoken to the President of the World Bank, I have spoken to the Vice Chairman of the Fed. I have spoken to, I will be speaking later today with the President of the New York Federal Reserve as well.
Last night I also spent a lot of time with Prime Minister Brown, with the President of the European Commission and with others on the overall response to the global financial crisis.
What emerges from all this is as follows. One: for the short term what is necessary is for the world community to get in behind the initiative of the Government of the United States in the proposal that is currently before the United States Congress.
Obviously there is a political debate to be had here in Washington, but in terms of the need for this initiative, to stabilise global financial markets, there can be in fact no doubt.
Therefore, for the immediate term, the responsible course of action for the international community is to support this initiative from the Government of the United States. And that was very much the sentiment which emerged from the discussions last night, those with the British and with the Europeans.
Then the challenge is for the medium and the long term. In the medium and the long term, the reform package which is necessary for the regulatory regime for financial markets is relatively clear. Firstly, on transparency: transparency of balance sheets and off balance sheet transactions and across the range of financial institutions which are systemically significant to both the national and international financial system.
Secondly, consistent global credentialed standards for these financial institutions. Also on top of that, to make sure we have appropriate reforms for corporate governance to ensure that the right arrangements are in place through the (inaudible) to ensure that those who run financial institutions have the right incentives to behave appropriately - appropriately for the long term not just a very short term, an often speculative profit cycle.
Of course, underpinning these long term reform measures is the overriding need for global consistency. It is simply no good for one country to have strong regulatory standards against transparency, against credential requirements and against corporate governance, only for those standards not to exist in other significant economies.
Which brings me to my final point. The reform agenda for the regulation of financial markets is relatively clear and it has been developed over some months now through the financial stability forum which Australia is one of the limited number of countries who has played a significant role.
The challenge now is how do we translate that reform agenda into action and that goes to what must now happen in the period ahead. The G 20 is an important gathering of economies and together represents some 85 per cent of the world's banking system.
The G 20 therefore must as a matter of urgency in the period ahead, meet to reach agreement on this reform agenda which has already been in outline there from the financial stability forum. Secondly, the G20 must then present its agreed outcomes to the meeting of the International Monetary Fund.
The International Monetary Fund was established in 1944, the overall purpose is the stability of the global financial system. It is time the IMF had its mandate reinforced and enhanced to achieve that long term goal. And part of that lies in global consistency of the standards I referred to before, and continuing global monitoring of the enforcement of those standards.
These two sets of meetings, that is, of the G20 and of the IMF, are about to happen within the next month or so. The way forward is to use these two sets of meetings, that of the G20, and that of the IMF, to arrive at agreement, and a timetable of agreement for the long term reform agenda.
This, and I will just conclude on this, therefore when I speak to the United Nations General Assembly today, I will be emphasising not just the elements of the necessary reform agenda, the stability of financial markets, but also the practical way ahead to achieve that agreement. That formed very much the substance of late and long conversations with the British Prime Minister last night and further discussions today with the President of the European Commission.
JOURNALIST: Do you think that there is the international will to do this Mr Rudd?
PM: What I have picked up from the British and from the Europeans and also among significant developing economies, including the President of Brazil, who was participating in our discussions last night, there is a strong resolve to act.
And the reason is, the consequences of the global financial crisis, for the real economy both in developed countries but also in emerging economies, is real.
And therefore the resolve to act, I believe is real. But the test, the real test will lie in these two sets of upcoming meetings, G20 and IMF, that is where the test will lie. And what we are calling for as Australia and with our partners in the UK and in Europe, is for decisions to be taken then.
JOURNALIST: Mr Rudd have you received any further updates on the impact of the financial crisis and or the US bailout on Australian institutions, particularly the councils, local shires?
PM: As of this time in New York no I haven't received further advice form Australia. A question better put to the Treasurer back in Canberra.
JOURNALIST: When you hear President Bush saying our entire economy is in danger and talking of the risk of a painful recession, do you think you have underplayed the potential ripple on effects from all of this on the Australian economy - notwithstanding the fact that the banks are strong?
PM: If you have been attending the House of Representatives in recent months in Australia, the number of times I have said from the dispatch box that the global financial crisis is real and Australia is not immune from its effect, goes back a long, long time. And that is because through our regulators in Australia we have been monitoring and measuring the impact of this crisis as it reverberates across the world, including to developing economies, including to those like China, which purchase of course, so much of Australia's exports.
We are alert to this, but I say again, the key difference between Australia and the United States lies in the strength of our regulatory environment and lies also, lies also in the strength of the balance sheets of our commercial banks. And that was underlined again in the IMF report, to which I referred a day or two ago.
JOURNALIST: Mr Rudd when you were originally coming here it was understood you were going to be using this meeting and presumably your speech to talk about Australia's pushing, the climate change agenda and clean coal and so forth, you are now using this speech tonight (inaudible) you are using it to push what seems to be this agenda about economic reform and reform to the financial system. Is that a change of plans?
PM: No, you will find in my speech to the United Nations General Assembly I will emphasise one: the fact that we are now in an age of interdependency across the board. Whether it is on the global financial system, whether it is on the global environment, climate change or whether it is also on other challenges which need to be dealt with globally, including long term, those of nuclear proliferation and disarmament.
And I will be addressing these various challenges that we face. Can I just add on climate change, since I have been here, the global carbon capture and storage institute has been the focus of so many of my engagements here in New York.
I have met also with the Climate Group here in New York, which represents so many of the larger American companies in the energy sector where there is a universally positive response to this initiative , filling a gap which is currently out there in the world.
Similarly, a positive response just now in my discussions with the President of the European Commission. There is a general recognition for example, that across the world, as I said in a briefing in Canberra last Friday, that we don't have enough at-scale projects around the world.
Also, the Memorandum of Understanding I have just reached with the Clinton Foundation, with President Clinton, a very significant non-government organisation which helps marshal corporate interest around the world in investing in projects like this, CCS projects, carbon capture and storage, solar projects and energy efficiency projects.
So can I say, in the range of other engagements I have had, including in the address to the United Nations General Assembly, CCS, carbon capture and storage, part of our climate change agenda has been front and centre.
JOURNALIST: Prime Minister you said (inaudible) may make it harder or exacerbate introducing and ETS (inaudible)?
PM: No, as I said I think in response to the question from Dennis, I think the day before yesterday, our plans remain on track. This is going to be hard, it is going to be difficult, and because it is complex, and I have just spoken with the President of the European Commission about complexity there as they move towards the Copenhagen conference on the, the totality of the Climate Change agenda.
But you know something, a lot of people have said the great virtue of our global carbon capture and storage Institute is this: that when it comes to the impact of carbon pollution reduction scheme on strongly effected industries like electricity generators, this potentially represents significant assistance, significant support, significant adjustment for what for us is a critical sector in Australia.
We are 80 per cent coal dependant, this economy is 80 per cent coal dependent, the Chinese are going to be significantly coal dependent for a long time to come. So it actually, this initiative dovetails entirely with our global carbon capture and storage, our global carbon pollution reduction scheme.
JOURNALIST: Do you concede however that it is going to be very difficult to get this through 2010 without the Opposition support given that relatively minor measures, budget measures for example have stumbled on just one man, Steve Fielding?
PM: Well I would draw attention to the Liberals.. The Liberals under their new leader have again voted for a tax cut for big oil companies in Australia and voted against a tax cut for working families. I don't understand how they could do that. Senate responsibility I think is something the Liberals should reflect on long and hard.
JOURNALIST: Is the CCS Institute a reassurance for Australia's coal industry?
PM: It is a, can I say that the response so far from not just the coal sector but the oil and gas sector has been very positive. It wasn't just the gathering of heads last Friday in Canberra where we had the principals from so many Australian resource companies, but the private consultations I have had with many of them before, and our advisers have been working with each of them and their parent companies around the world.
I think part of the reason why they are so positive about our initiative is this: what is happening out there in the investment community at present is a debate about how do you close the gap between the normal commercial price of building a coal fired power station, and the extra price which you have to pay to bulk on CCS systems. And how do you close that gap.
And what they see is a big opportunity for governments around the world to assist in closing that gap and meeting the G8 target of 20 at-scale projects by 2020.
JOURNALIST: Mr Rudd what sort of response have you been getting in your meetings to Australia's bid for the UN Security Council seat and for your disarmament commission?
PM: On the question of our Security Council candidature, it is a competitive race, the vote is not until 2012 and so frankly, every vote counts. It is like one huge global caucus ballot.
JOURNALIST: (inaudible)
PM: This afternoon also with the newly elected Prime Minister of Japan, Prime Minister Aso, and I congratulate him very much on his success, the Prime Minister of Japan and myself will be jointly launching the International commission on nuclear non proliferation and disarmament.
This is important work for both of our countries, but important work for the international community leading up to the NPT review conference. In my discussions for example with Dr Kissinger yesterday, he was strongly supportive of this initiative, because the initiative itself in part is built on clear statements from the likes of himself, Sam Nunne, Bille Perrry, William Cohen - people who have conservative views on national security generally about the need to deal with the non proliferation disarmament agenda long term.
JOURNALIST: (inaudible) the MDG has clearly been (inaudible) would you care to comment in particular on the education aspect and the Chinese Prime Ministers comments earlier today that they are giving a very large number of international scholarships.
PM: I have just spoken to the special session on the Millennium Development Goals and outlined Australia's support for the goals. I have also outlined the Government's commitment to 0.5 per cent of (inaudible) being committed, the implementation for these goals and I have spoken at length about the application of this commitment to the development needs of the Pacific Island countries.
I have outlined just now to the community of nations our redesign of our Pacific Partnerships for Development, around the framework for the Millennium Development Goals: Benchmark analysis against the Millennium Development Goals for all 14 of the Pacific Island countries. Frameworks for delivering education, health, infrastructure, employment, against the Millennium Development Goals and then measuring our performance.
That is what I have just been talking about. More broadly on education, you will see from Australia over time a large expansion in the scholarships we provide around the world. It is necessary, not just for the development of human capital in developing countries, but it is also necessary for us to build on the great legacy of the Colombo plan. And you know something, I intend to be doing that in spades.
JOURNALIST: What is your plan B if you can't get the emissions trading scheme through the Senate?
PM: Oh Michelle, that is very negative of you. Can I just say that -
JOURNALIST: Well you are a long term planner, I am sure there is something there?
PM: Can I say that it is time the Liberals began acting in the national interest in the Senate. On two major challenges: one, responsible handling of the budget surplus in Australia at a time of global financial crisis.
Look again at the OECD comparisons about the strength of our Budget position relative to so many other developed economies at this time of crisis. We are as the IMF said, ‘in an enviable position'. That is the first point. But secondly, on longer term challenges to our economy which is getting climate change right, my appeal to the Liberals would be to embark upon a new period of responsibility rather than a continued program of irresponsibility like we have seen so far.
JOURNALIST: When you meet the New York Governor of the Fed Reserve, you have spoken of the need for the international community to support what is going on, is there anything you will offer in terms of RBA assistance or other Australian support?
PM: The RBA and our regulators, I have got to say, are in daily contact with their counterparts in the United States and elsewhere in the world. I am kept well briefed of those developments, cooperation is good and where cooperation at a material level has been necessary, it has been forthcoming as well.
But on this initiative of the Americans, as Gordon Brown and I discussed and agreed with President Barroso last night, the most important contribution given the debate here in Washington at the moment is to say that the world wants to see a positive outcome from the debate at the US congress on this important initiative to stabilise global financial markets.
JOURNALIST: From what you have said (inaudible) to deal with this crisis?
PM: I believe that the administration has produced a very significant substantial and solid initiative to stabilise the global financial system. It demands the support of the international community. It certainly has my support. Thanks very much.