HOST: Prime Minister welcome to the program.
PM: Thank you Laurie.
HOST: Why did you allow Joe Hockey to steal a political march on you over the banks?
PM: I'm not necessarily going to accept that analysis Laurie, but what I would say is this. The Government, for a number of months, has been working on a further package about banking, indeed this was made public I think in early October by the Treasurer Wayne Swan. This comes on top of our package from the middle of the year and ASIC this week will make some announcements about how that will come into force, and that package is about cracking down on unfair mortgage exit fees, the things that keep people bound into their banks even though they want to change, because they want to shop around and get a better deal.
Wayne is working on a further package, we're doing that in a methodical way, obviously we want to get this right across for banking and for measures that affect the economy generally, they have to be right.
HOST: But the perception is that Joe Hockey's forced you to act; I mean have you blown the politics of this?
PM: There's a difference between being in Government and being in Opposition. In Government Laurie, we are going to work carefully, methodically, get things done, get things right, and make a difference for Australians. Joe Hockey, in Opposition, is jumping up and down on the one spot shouting 'look at me, look at me, everybody pay attention to me.' These are different tasks, so Wayne-
HOST: But he is going to introduce a Bill to give the ACCC power to deal with collusive price signalling, will the Government vote for that or consider voting for it?
PM: It's been no mystery Laurie that for a number of months Wayne Swan has been working on precisely that measure, but we're going to get it right, we've been working with the regulators, we've been consulting, this is an economy wide measure. Yes it will have impact on the banks, but it will also have impact on businesses in other sectors and we are not going to risk an unintended consequence for a struggling small business somewhere in Australia. So Joe Hockey might be typing something up and cobbling it together, but we will bring forward to the Parliament, and to the public, a package of measures that are well thought through and carefully done.
HOST: Now when will we see that, and how extensive will it be?
PM: Well Wayne Swan's made it clear that we will see that next month and Wayne Swan has also made clear that he's working on a number of measures.
HOST: He's calling it a wave; I mean that sounds very big and very dramatic.
PM: Well Laurie it will be a number of measures that Wayne will be bringing forward. We are about facilitating greater competition in banking. We want consumers to be able to put pressure on the banks by saying to them 'look, I'm a person, I can take my business elsewhere, I can shop around, I can get a better deal.' There are various ways that banks hold consumers in, there are various ways that competition is not easily facilitated in the current market, so Wayne is working through measures to do just that.
HOST: But once you promise a wave of reform, you raise expectations, risk disappointing the punters don't you?
PM: I would say to Australians the measures that we will bring forward will add to competition in the banking sector. We've already brought forward some measures and people will see that, they will see this week the operationalising of the measure to crack down on unfair mortgage exit fees, which keep people tied into banking products they no longer want and they can get a better deal elsewhere.
So Wayne is working carefully on these measures and he will bring them forward, that is the right thing to do, rather than the sort of Joe Hockey 'everybody pay attention to Joe Hockey' kind of conduct that we've seen.
HOST: Well Ralph Norris, the amazingly well paid head of the Commonwealth Bank, claims that short-term populism is damaging Australia's reputation among foreign investors. Is he right?
PM: I'm not going to agree with Ralph Norris on any critiques about banking, I believe that Australians are sending the banks a message loud and clear and I hope Ralph Norris and other banking CEOs listen to that message.
HOST: Another quick economic issue, the appreciation of the dollar has caused a big drop in Government revenue, do you still absolutely guarantee that the Budget will be back in the black in 2013.
PM: The Budget will be back in the black, back in surplus, in 2012-13-
HOST: Guaranteed?
PM: Yes, the Budget is coming back to surplus Laurie in 2012-13 as promised. You are right, the high Australian dollar has had an impact on revenues and there is consequently revisions that will be seen in the upcoming Mid-Year Economic and Fiscal Outlook, they particularly affect the Minerals Resource Rent Tax, and all of that will be in front of peoples' eyes in the updated figures. But we are determined to drive the biggest fiscal consolidation since the 1960s, we're a Government with a track record of savings, we've saved more than $80 billion over our Budgets, we are going to keep up the discipline and we will bring the Budget back to surplus as promised.
HOST: Because the obviously alternative to not doing, well the alternative to breaking your promise, is tough cuts and breaking other promises. Are you prepared to break other promises to keep this one?
PM: Laurie I think we've shown an ability to manage the Budget, where we make savings, where we make sure that Budget dollars are doing the work we want them to do, and as a result we're showing the fiscal discipline necessary to bring the Budget back to surplus.
HOST: Ok, you're spending time today with Hillary Clinton. Yesterday in a slip of the tongue she referred to Kevin Rudd as the Prime Minister, is that embarrassing?
PM: I don't think so Laurie, just a slip of the tongue, I mean everybody can make a misstatement can't they?
HOST: I guess so, but I mean it does indicated the rest of the world perhaps still sees Kevin Rudd as the trump?
PM: Not of any interest or consequence to me Laurie, obviously just a slip of the tongue and there we have it.
HOST: What will you and the Secretary of State talk about?
PM: Well the Secretary of State is here for the AUSMIN talks, these are our pivotal security dialogue talks with the United States. We of course have a major, the most major of our defence alliances is with the United States, we are long-term allies, long-term friends, we keep our alliance fresh and contemporary through this kind of dialogue and we will be talking about Afghanistan, we will be talking about security issues in our region. America is further engaging with the Asia-Pacific, for example, joining the East Asia Summit which I have recently attended, so we will be talking about that.
We will be also talking about some of the contemporary challenges, the new challenges: space junk Laurie, in the modern age we have to worry about things like space junk and also we have to worry about things like cyber security and they will all be part of these talks.
HOST: When you're discussing Afghanistan with Secretary Clinton, are you going to talk about an exit strategy. I mean you've said we'll be there for ten years, do you think the Americans will still be there in ten years?
PM: The talk in Afghanistan is all about transition, the way in which transition will occur, the conditions that will lead to transition. I dealt with this matter when I spoke in the Parliamentary debate and I've made it very clear that transition needs to be conditions based, it will happen place by place, individual regions and areas will stabalise more quickly on others. We should transition at a point that we are satisfied that Afghan security forces can take the lead and that that lead can be sustained. I've been very clear, I think it would be a bad error to transition out only to have to transition back in, so the conditions that would lead to transition are the pivotal discussions now, I expect it to be had in part here in Australia during the AUSMIN talks, I then expect it to be had even more comprehensively in the NATO discussions in Lisbon.
HOST: Are you going to that meeting?
PM: I have decided to go to that meeting, I will be accompanied by Stephen Smith, the Minister for Defence, but in my view those talks are absolutely pivotal to the delivery of the agreed strategy in Afghanistan, and to understanding the conditions that enable transition which will guide what our forces do and when our forces can start transitioning out. So I intend to personally participate in those talks in Lisbon.
HOST: And what message will you take?
PM: The message I'll take is the one that I've really just said Laurie. I've got a very firm view that we need to be very clear that when we are transitioning our forces and transitioning leadership to local Afghan forces, that that needs to be irreversible. So there's some intellectual labour that needs to brought to bear when we say we're going to engage in a conditions based transition. How do we define the conditions, how do we know the time is right, how to we know that the Afghan security leadership is sustainable? That's what I anticipate the NATO talks will be focussing on and it's in that discussion that I want to make a contribution.
HOST: Now in these talks with Hillary Clinton and Secretary of State Gates at the AUSMIN talks, we read that this will all lead to an increased US military presence in Australia. What do we need that?
PM: The US is engaged in what it calls a Force Posture Review, so looking at its forces in our region, and working out how they are best deployed for the future. We anticipate that at the AUSMIN talks, part of the discussion will be on that Force Posture Review and implications that it may have for further joint exercises or joint use of Australian facilities. There will then be a process following AUSMIN to work through individual decisions.
I think this is in Australia's national interest Laurie, obviously our defence relationship with the United States is critical to us, it is our foundation stone alliance, in those circumstances the best possible cooperation between our Defence Forces is in Australia's interest. We collaborate, we cooperate well now. If you go and talk to American defence generals, they'll say to you every time they turn around, they meet an embedded Australian who is working alongside them. We are well complimented about the quality of our Defence personnel and troops, but further engagement, further collaboration is in Australia's interests.
HOST: But is the idea of having a lot more Americans here, sharing bases with them, giving them increased access to Australian bases, is that all about the military expansion of China?
PM: The Force Posture Review is obviously an American led process determining how it wants to have its forces work and where it wants them to bring ships in to harbour and refuel and all of those kind of things.
It does give the possibility, of course, for further joint exercises, further collaboration, that's in Australia's interest. I do expect that at the AUSMIN talks we will be talking about stability and security issues in our region. I think we will be talking about the geopolitics of our region, and that means of course we'll be talking about the rise of China and as China rises, what sort of force it is going to be in the world. I believe we have a shared perspective with the United States that we want China to be a force for good, strongly engaged in global and regional architecture, strongly engaged in a rules-based framework. I anticipate that those questions about China's rise and the impact on our region and on our globe will be part of what we discuss at AUSMIN.
HOST: Are you developing a passion for this stuff yet?
PM: Laurie, the thing that brought me into politics of course was my passion for education, and that will always be the thing that is absolutely closest to my heart, creating opportunity for Australian children, making sure every child gets a fair chance. Education has defined my life, it has made me what I am today, I'd like others to enjoy that benefit, that opportunity, that very great privilege, that great start in life, so that will always be closest to my heart. You should expect me on foreign affairs to be a feisty advocate of Australia's national interest. I love this country, I'm proud of it, I'm happy to argue that with anyone, anywhere, anytime including in the councils of the world.
HOST: Will you be a feisty advocate next week at APEC, you will be talking to President Obama there, will you discuss climate change with him? And how do you think his decision to abandon a cap and trade system, emissions trading system, impacts on your policy to introduce a carbon price?
PM: I'm looking forward to meeting President Obama, I will obviously see him at the G20 and then meet directly with him at APEC which immediately follows it in time, though different country, we'll move from Korea to Japan. On climate change, President Obama is obviously defining the strategy for his country, in circumstances where the Congress has been difficult for President Obama to deliver his reform agenda on climate change, and post the mid-term elections Laurie, it is going to be increasingly difficult. So President Obama is defining a strategy to tackle climate change in the political circumstances that America finds itself in. We are great friends and allies of America, but we are not an American State. We are our own country, we will determine our own strategy.
HOST: Is there a point in us going ahead now that America has dumped the idea?
PM: Laurie, emissions trading schemes, prices on carbon, different ways of tackling climate change, are being developed around the world. And yes, different countries are finding different paths, many have gone down the path of pricing carbon.
You are talking now about America; California has had a way of pricing carbon for quite a long period of time now. So we will determine our own national strategy in our own national interest. I believe it's in Australia's interest to tackle climate change, and it's in Australia's interest to make sure we transform our economy to a low pollution, low carbon economy. The world is moving in that direction, it will require it of other economies, it will impact competition, how people trade, what they buy. We can't afford to have our economy fall behind.
HOST: Quick final issue, there's a lot of talk about a lack of vision in Labor, headlines in the weekend, like disquiet on Labor's lack of vision, your own people are being talking about it. Does Labor have a vision, and if you do have, can you tell us what the vision is in words other than 'moving forward'?
PM: Laurie, I do have a vision and of course I will be laying that out increasingly as Prime Minister for the Australian people. My vision is about a country with a strong economy and opportunities for all Australians. We will be laying out our election campaign, and the content of that.
HOST: So Labor doesn't lack a soul, doesn't lack a core?
PM: No, it does not Laurie.
HOST: Prime Minister, we thank you.
PM: Thank you.