PM: I just had a good conversation with the Chinese President Hu Jintao. We spoke for about an hour about the global economic situation and about our bilateral economic relationship.
This was a good meeting, a good discussion. This is the third time I've met with President Hu this year. And of course, I'll be meeting him again at both APEC and at the East Asia Summit before year's end.
This is important given the underlying economic significance of the Australia-China economic relationship.
I said to President Hu that Australia, and I think the rest of the international community, appreciates the stimulus package which the Chinese Government has delivered to its own economy. Obviously China has acted in its national economic interests, but in addition to that, it's been to the advantage of the regional economy and the global economy to add further growth at time of economic downturn.
I also said to the Chinese that we appreciated the fact that China had taken such a positive and constructive role in the conclusion of the communiqué from the G20 Summit.
Obviously, Australia will continue to work closely with China as we work towards the next summit which is to be held by the end of April next year, and we believe that we're in a strong position to do that.
Bilaterally, the Chinese and I discussed the importance of our economic relationship. We discussed also how we could adopt a fresh approach to speeding up the conclusion of the Australia-China Free Trade Agreement, both in order to accommodate the importance of the investment links between our two countries, and of course the trade in goods and services.
China is a major economic partner of Australia's, and it will continue to be so into the future. China's significance will continue to grow and grow. Not just for Australia, but for the wider regional and global economy as well.
This has been a good meeting, and we intend to take these discussions further when we meet again over the course of the next month.
Over to you.
JOURNALIST: Do you have any deadline in mind for the FTA or hope for a deadline? And secondly, what were you told about the latest prospects for Chinese growth?
PM: On the question of the free trade agreement between Australia and China, this is really important for us and for the Chinese long term. China has great interest in the Australian market in terms of long term access to energy and raw materials. We have great interest to greater access to China's market in goods and in services.
On the timetable for it, we agreed when we met in China in April to get our officials working much more intensively than they had been in the past. At an officials level, at a technical level, some progress has been achieve through the course of the last six months.
We've agreed to adopt a fresh approach to speeding up the conclusion of this agreement even more. I can't put a specific timeline on that, but we will be reviewing progress again when next we meet.
The other part of your question goes to Chinese growth levels. The Chinese reiterated their current growth projections for the period ahead. But the Chinese, like the Australian Government, is very mindful of the impact of the global financial crisis over the last couple of months, and into next year as well. We agreed this will be a tough time for all of us, but it therefore means it's an important time for governments like China and Australia to work very closely together. And we intend to do that.
JOURNALIST: Prime Minister, in a speech earlier in the year you raised your concerns about the development of a regional arms race - comments that were widely interpreted as being a reference to the Chinese submarine program. Did you raise that with Mr Hu today or have you previously? If you did, what did he say? And if you didn't, why didn't you?
PM: Well, the content of my discussions with the Chinese in their full breadth and depth will remain between the Chinese and ourselves. What the Chinese and ourselves have agreed to emphasise from our discussions today, are the economic dimensions, in particular the free trade agreement dimensions, as well as the future cooperation which we'll need to undertake the G20 context leading up to the next summit.
On the question of security policy and strategic questions, the bilateral security dialogue between our two countries continues. And all matters relevant to that, in terms of our perceptions and China's perceptions, are canvassed within that forum. That's the natural way in which these things proceed.
In our nearly hour-long conversation today we focussed exclusively on the economic relationship and that is appropriate given the challenges we face today.
JOURNALIST: Did you discuss the election of Barack Obama and what that might mean for the US-China relationship?
PM: We didn't discuss American politics, we discussed the global economic situation, the global financial situation, our bilateral economic relationship, and the challenges we all face.
Right now, China, Australia, the rest of the world, are facing the challenge of slowing growth and unemployment, and the need therefore to work together.
We intend to work very closely with our friends in China given the size and significance of the market.
JOURNALIST: Prime Minister, it's been reported that you will announce a $100 million infrastructure package when you attend the meeting of Australia's Mayors in Canberra. Can you give us some details of that package, how many projects there might be, is that figure correct?
PM: No, I haven't seen that report. The answer to that is 9,861 projects...I wouldn't have a clue (laughter).
Can I just say that I am looking forward to catching up with the Council of Australian Local Governments I think as soon as I get back off the plane in Australia.
This is the first time that the Australian Government will call together representatives of each of Australia's 565 local authorities. Why are we doing that? We wanted to establish a new relationship between the commonwealth and local government, one which has not formally existed in the past.
Secondly, we're of the view of how we can best support local government into the future given that they are the most basic level of delivering services to the Australian community.
And thirdly, we want to get their input in terms of what is a pre-election commitment of ours which is of constitutional recognition of local government.
JOURNALIST: So will you be telling that meeting the specific amount of money that you've got in mind to spend in setting up the criteria for this infrastructure spending?
PM: First of all, we already, with local governments, have financial assistance grants which we the commonwealth provide to local governments.
Secondly, in terms of any longer term enhancement of that, I will consider that with my colleagues over time, not necessarily in advance of this coming meeting.
The purpose of this meeting is to establish a framework for us to deal and work with local government - that hasn't existed in the past.
JOURNALIST: (Inaudible) constitutional recognition in a referendum at the next election?
PM: We said prior to last election that we would honour our pre-election commitment on constitutional recognition. We haven't determined a time line for that and the reason for that is we're spending time with local government to find out the form of that recognition - in other words the language which best suits that objective both from their point of view and from our point of view.
And rather than us simply dictating from on high what that should be, we want to take their views into account.
So it'll be that, the constitutional recognition question, secondly looking at their long term provision of services and infrastructure, and how the commonwealth can assist long term. And thirdly, a framework for actually dealing with local government into the future.
This is the first meeting in the history of the commonwealth of the Council of Australian Local Governments whereby we the Commonwealth invite 565 Australian Mayors to Canberra and work with them on the range of challenges they face. They are very important to local communities and it's time, high time, in the history of our nation, that the commonwealth government took local government seriously.
JOURNALIST: So to clarify, you're not going to use that meeting to unveil this infrastructure package and give them more details?
PM: We'll make a decision on what we announce when I get to the conference. And it may not be anything at all.
JOURNALIST: Are us Aussies like to see any dramatic changes do you think as a result of what happened here over the weekend? Australians (inaudible) what's going to happen now? What will we see?
PM: If you look at the impact of the financial crisis on stock markets and on property markets and the real economy and jobs, where does all this affect working families across Australia? Firstly, in terms of people's superannuation funds, that is, the earnings of stocks and shares which have fallen dramatically because of the financial crisis.
Therefore, the interest which working families have, and those approaching retirement age as well, and those who are now living off their superannuation earnings, is to restore the global economy to health as soon as possible so that normal earnings over time can be restored to equity markets.
That's the first thing.
Another, of course, is the availability of finance for the normal operation of businesses and normal extension of credit to people wanting to buy homes. And therefore, the actions, the decisive actions, we have already taken to guarantee bank deposits and to guarantee term wholesale funding for banks has been essential to begin to restore normality to those credit markets.
The importance of this meeting over the weekend, the summit here in Washington, has been it reflects combined action by governments on those questions.
And what's the third one, the third one goes to the important matter, and again I discussed this with President Hu this morning, of us all investing in economic stimulus now to support jobs into 2009.
Jobs, availability of credit for loans, as well as long term earnings on superannuation investment funds from stock markets, these are very basic things for working families across Australia. No single national government action fixes all of those problems, it is only international action that does.
The G20, which Australia attended, represents 85 per cent of the global economy. We have made one step forward on what is going to be a long, long road to economic recovery.
But by virtue of having taken that one step forward, we are that much closer towards getting to a recovery. But it is still a ways off.
The next summit will be important as well on implementation but galvanizing the thoughts of these leaders have been the basic concerns not just of their economies as a whole but their impact on families across the world. Jobs, retirement income, availability of credit for loans. These are very basic things which fuel the thoughts and the policies of the leaders represented around that table.
JOURNALIST: You told the other leaders that you'd fear something worse than a global recession if they didn't get it right. Are you talking about a Great Depression if they don't come up with the fiscal stimulus strategy that you are seeking?
PM: It is a logical point that if the financial crisis has caused global growth projections to be revised down by nearly $2 trillion that that means around the world a loss of jobs. Therefore, the practical question is who fills that gap?
Governments in the mean time through economic policy action, like the decisive action we've taken in Australia, can help fill that gap because private companies, because of problems in credit markets, find it difficult at present.
If governments therefore manage to stabilise credit markets and act themselves through direct fiscal stimulus, it means that the overall impact will be less. If governments fail and if we don't restore health to credit markets than that recession becomes deeper. That's logical.
That's why concerted international action across those measures in necessary. That's why I'm in this business. That's why I'm in Washington. I'm not here for a fun and a frolic. If it was that I'd be back home thank you.
These things are really important because our national actions, our decisive actions taken on the home front on economic stimulus much be matched by parallel actions around the world. That's why we're here in order to lessen the impact of this global recession and to lessen the impact on jobs. This is a long, hard road ahead. We've taken the first step.
JOURNALIST: Mr Rudd, the latest Nielsen poll suggests people are still pretty confident in their spending over the Christmas period. Do you take heart from that for your package and do you think that the full impact of what's happening, is perhaps, still not being fully understood by the electorates?
PM: The purpose of our economic stimulus package is to support domestic consumption. I've said that repeatedly. $10.4 billion, payments heading out the door from the 8th of December, earlier in the case of first home buyers, in terms of the increase of the first home ownership boost to $14,000 for first home buyers and $21,000 for first home buyers of a new home.
That's out there, or it's about to be out there, and there's one clear, stated policy objective - to boost domestic consumption - now. Not in six months time, not in twelve months time, now and we have needed to do that, to take that decisive action, in order to support positive growth into the future.
JOURNALIST: Can, I just have one question?
PM: One, then I've got to go see the Chairman of the Fed.
JOURNALIST: In the trade agreement - just so we understand it. Did you agree with Hu that you should expedite the conclusion of the agreement in light of the global financial crisis? And what were some of the stumbling blocks, if any, that you addressed with him, could you identify and what progress did you make?
PM: That's four questions Tony. First of all, the first part of conversation focused on the global financial crisis and its impact on both of our economies.
Secondly, following on from that, we agreed that we should hasten the conclusion of our Free Trade Agreement while recognising the obstacles which still lie in the path. Progress has been achieved over the last six months. The Trade Minister Simon Crean is hard at work at this, to go to his Chinese counterpart and we are confident that we can get real progress in the period ahead.
I don't wish to mislead people by giving a completion date but there is political will on both of our parts to get this thing done. And we believe it's important to both of our economies, to both of national economic interests, our resources and energy, investment long term for China.
Our access to China's market when it comes to financial services, when it comes to mining services, when it comes to engineering services, education services, agriculture and the rest. Therefore what we're on about is finding a balanced agreement which suits the long term economic interest of both economies.
And I've got to zip because I've got to see the Chairman of the Fed. See you later.