HOST: The Federal Government's Malaysia solution for asylum seekers is facing its first test, with a boat carrying 54 asylum seekers due to arrive at Christmas Island later in the week.The agreement calls for people to be sent to Malaysia within 72 hours of arriving in Australia, but the Government is already saying it could take longer than that to make the arrangements for the first group.The issue will certainly take some attention away from the Government's carbon tax.
To discuss these issues, and the local implications for the US debt crisis, the Prime Minister is in our Canberra studio, and she's speaking to Naomi Woodley.HOST: Prime Minister, good morning. Welcome to AM.PM: Good morning.HOST: How worried should Australians be about the US debt crisis and what special preparations if any have you made to address the possible fallout?PM: This is an important week for the global economy and many Australians of course will be watching with a great deal of interest and concern events in Washington. Whilst of course our economy is not immune to world events, including events in the US economy, the underlying fundamentals of our economy are strong and that should give us confidence.We know that we've got a huge pipeline of investment. We've got low unemployment. We've got strong government finances. We've got world class regulation so those underlying fundamentals of the economy will stand us in very good stead.HOST: But if there is another global financial crisis you don't have a $40 billion surplus to call on this time for an economic stimulus package do you?PM: Well I'm not going to speculate in those kind of terms. What I am going to do is point to the very clear facts about our economy. Of course, we're not immune. We've never been immune from events whether they be in the US or Europe or both of them. They do touch us and touch our shores but our economy has its own strength and that should give us confidence even as we see these events around the world.HOST: The first boat of asylum seekers to be covered by the Malaysia solution is due to arrive on Christmas Island a bit later this week. Can you guarantee that all those onboard will be sent to Malaysia?PM: What I can guarantee is that we will do exactly what we've announced we were going to do, letter by letter, word by word. The Minister for Immigration has been very clear about what will happen here. There will be pre-assessment procedures. Then there will be returns to Malaysia.We are in the first phase of this. This is the first boat so those returns will take some time. When the system is up and in full operation those returns will happen in 72 hours, but the Minister for Immigration has been very clear about exactly how all of this is going to work and occur.HOST: But why is it going to take longer this first time? You've had, been working on this agreement for two months. What more arrangements need to be put in place?PM: Well I think it just stands to common sense that the first time you do something, obviously you learn along the way and there are things that need to be done for that first time that then for the second time are more routine. So it's really nothing more than the simple common sense that applies to any human activity.HOST: But is it realistic for those sorts of security checks that need to be done before it's decided where these people go, is it realistic that that can take 72 hours when we know that processing times in Australia stretch out for months and months?PM: Yes it is and the agreement was struck in full knowledge of the work that would have to be done.HOST: How many children are onboard this boat and are you personally comfortable with the images we might see of AFP officers manhandling them onto a plane to Malaysia?PM: Well I'm not in a position to discuss the caseload on this boat. There are pre-assessment procedures and they'll be gone through properly by the relevant officials. On the question of blanket exemptions, which I believe you are asking me, as the Minister for Immigration has frequently said, there are no blanket exceptions but of course we do have this pre-assessment procedure and we'll go through that.HOST: But what sort of force has been authorised for the AFP to use to send these people to Malaysia? Presumably they are not going to want to go.PM: Well obeying instructions here is not a question of volunteering. We are determined to get this done. The Australian Federal Police can speak on operational matters but we will do what is necessary to ensure that people who should be taken to Malaysia under the agreement are taken.HOST: But what does that mean to take whatever steps are necessary? Precisely what will they be doing?PM: Well it means taking appropriate steps to get people to board the plane and to disembark the plane the other end.HOST: Is that in terms of, we've seen tear gas and so-called beanbag bullets used on Christmas Island, is that the sort of force that is necessary?PM: Well I think we're getting a little bit carried away here. First and foremost people will be given an instruction to board a plane. We will be obviously looking to people to obey that instruction. If it's not obeyed then we have security personnel. We have the Australian Federal Police. We also have counsellors available to talk things through with people but ultimately, obeying that instruction is not a question of volunteering.HOST: On the carbon tax, over the weekend we saw a letter from the UK Prime Minister David Cameron praising the initiative but there was also another anti-carbon tax rally in Sydney. Doesn't this illustrate the problem for you that all the international support in the world is very welcome but it is not winning you votes here on the ground and that's ultimately what you need.PM: Well, ultimately what this nation needs is a clean energy future and that's what pricing carbon is all about. So looking at the letter from the UK Prime Minister, it's another piece of evidence in a mounting pile, a pile as high as Mount Everest, that nations around the world are acting and we can't afford to be left behind. We can't afford to be the nation that hasn't moved to seize a clean energy future with all of the opportunities that that gives us for new investment and new jobs.So for me as Prime Minister this is about leading the nation to get that clean energy future. If we put a price on carbon we will send a signal to domestic capital to invest in clean energy projects. If we put a price on carbon we will send a signal internationally that here in Australia the rules are known, the rules are certain, this is a great place to invest in a clean energy future.And for Australians that means new jobs and new opportunities and I'm determined we get those new jobs and opportunities for Australians.HOST: The South Australian Premier Mike Rann has indicated he'll step down after being told by factional leaders that he'd be dumped if he didn't. What should voters make of the fact that Labor factions have again installed a leadership change without going to voters about it?PM: Well once again, I think we should deal with this a step at a time in view of the known facts and the facts are these; I speak to Mike Rann regularly. I've spoken to him recently, and Mike Rann's focus, as it always is, is on what's best for the future of the great state he leads.When he returns to Australia, he is leading a trade mission to India at the moment, when he returns he's indicated he'll make some statements about his future and obviously decisions will be made by Mike and by the Labor parliamentary team he leads.HOST: But it sounds like decisions are being made by Labor factional bosses again taking it out of the hands of voters.PM: It sounds to me like Mike Rann, who's always been focussed on what's best for South Australia, continues to have that focus and he'll make some statements about his future working with his parliamentary team.HOST: So you don't think he's necessarily stepping down as Premier?PM: I'm not speculating on what Mike Rann is going to say about his future but I am certainly saying this; I know Mike Rann well. I speak to him frequently. The thing that motivates him in public life is the future of South Australia, making sure that that state's got the best of opportunities. That's what will continue to motivate him in any statement he chooses to make.HOST: Prime Minister thanks for your time.PM: Thank you.