HOST: Prime Minister welcome, thank you for joining us this morning.
PM: Good morning Linda.
HOST: We've heard the Asian message for more than what, 20 years now. What's new, what makes this paper necessary now?
PM: What makes this paper necessary now is having us appreciate the full scale of the opportunity in front of us.
Yes, Asia has been growing and changing for some time now, and our economy has been opening itself up to the world over the past 30 years.
But it's important we get a sense nationally at every level of our society of the scale of the change now.
You're in the media and you probably think about media penetration as one snapshot of how societies are changing. If you look at India, it went from having two television stations in 1990 to having more than 800 now.
HOST: It's pretty amazing stuff.
PM: It's amazing. And penetration of television is telling you about more than just people watching shows, it's telling you about the changing nature of a society and how it is moving to being a middle class society and a consumer society.
So our image of Asia has been of this low-cost producer we need to worry about. We now need to change that national image into it being the home of the world's biggest middle class, people who will want to buy the things that Australia has got to sell if we lay out a national plan now, which I did yesterday, and if we are clear about the policies and decisions we need to make to seize this opportunity.
HOST: Indeed, I mean three billion middle class Asian citizens by decade's end. But that is a massive internal market that is more than capable of trading with itself, does so very effectively for example in the ASEAN states. Where does Australia fit in that? Doesn't Asia have the capacity to cater for itself?
PM: We are home to things that that Asian middle class will want. We've seen a down-payment in our economy as Asia has said please sell us resources, commodities because we're urbanising and we need all of that to feed our urbanisation.
HOST: We need to go beyond minerals, don't we, and the commodity price shock has certainly underlined that.
PM: I think shock is too big a word.
HOST: Probably.
PM: We've seen commodities come off and we've seen commodity prices start to cycle back up, that will happen. But the focus of the paper is to say what will Asia need next? And what they'll need next is this middle class will want to consume quality food, clean food, safe food, food that has higher protein sources, more meat for example, more dairy.
They will want high quality tourism experiences. They will want a world-class education. They will want access to financial services, to legal services - not to mass-produced commodities - but elaborately transformed manufactures, which are customised.
They will be on the internet; people at around two million a week are joining the internet across the Asia-Pacific. This gives us huge opportunities and that's why we need this national plan to guide the right decisions for the future.
HOST: Prime Minister, education is front and centre here obviously. A lot of people have been talking about this. The Asian Education Foundation estimates it will cost $1 billion to have half of our young people studying Asian languages. Where is that money going to come from?
PM: Instead of rolling out a program on top of everything else that schools do which has been the approach taken in the past language studies, we are going to embed it at the heart of Australian schooling.
We are working on a new system for funding schools; you've talked to me about that on the show in the past. We had David Gonski deliver his review of school funding and since then, we've worked hard to say we will have the national school improvement plan and a new funding system starting in school year 2014.
We are going to make that new funding system contingent on access to languages through the school improvement plan. So it won't be, let's do everything else we do in schooling and then people scurrying around and going oops what about Asian languages.
Asian languages will be at the heart of our expectations.
HOST: What does that mean Prime Minister in a school classroom? What do you envisage that means for a child going into a classroom, what will that look like?
PM: I think for a child going into a classroom it will mean two things. They will have access to studying a language, now that might be not with a teacher who's in the playground and then hanging out in the staff room and then sitting at the desk at the front of the class; our very traditional image of schooling.
It might be that that language specialist is in another school in another part of the country and kids access those lessons through the national broadband network.
And as you and I know, that's not just like watching images flickering on a screen; that can be real time engagement where the kids can talk to the teacher and the teacher can talk to the kids.
HOST: So that's critical but that's just the language. What about beyond language?
PM: Beyond language our national curriculum, our Australian curriculum, the first wholly online curriculum in the world, has embedded in it - as a cross cutting priority - Asia capability. So that means, when we talk about the history of the world, there will be a focus on our region.
People understanding what has shaped our region. People understanding the cultures of the various countries within our region so that there's this deeper literacy about what the region is like as well as the language capability, and then kids being kids they learn as much from each other as they do from adults, parents and teachers.
So we will get Australian schools to buddy up with a school in Asia. We already have a program that is doing that now. But we will expand it to all schools. So that means you can be sitting in your classroom in Sydney or country New South Wales talking to your friends in a classroom in Asia. Once you've made those connections through your formal lessons then, once again, kids being kids and the new technology just being innate for them, they'll then Facebook, they'll then Twitter, they'll then make real friendships with the kids in that class and that will guide their knowledge of that nation.
HOST: Well that existing program is actually very successful so it will be interesting to see that expanded.
Just changing tack a little bit Prime Minister, the business council says that you need a national prioritised infrastructure plan. Now infrastructure is an issue that's discussed at length in this paper, tax reform, workplace reforms the business council also wants on the agenda. These are the issues we are already - your government is already grappling with - all governments are grappling with. What specifics will you do on this front? Particularly that call for a national prioritised infrastructure plan?
PM: We've created Infrastructure Australia for the very purpose of creating national priorities for infrastructure. I'm very proud as a government that we've taken to record levels investments in traditional infrastructure in ports, in road and rail. And that we're as well rolling out broadband around the nation which is the infrastructure we need for the future.
So yes, the white paper as a government policy means we will be looking to do more on getting the national priorities right as part of a national infrastructure plan. That's pivotal, getting infrastructure right.
Across a whole suite of areas as a Government we've been working, understanding that we did need to be ready as a nation to seize these opportunities in our region. But the white paper not only brings together what the Government is currently doing, it adds to it with a deep understanding of the changes that will drive this century.
HOST: How does government get involved in getting boardrooms to appoint more Asia-experienced members, that's also in there, isn't it?
PM: Yes it is, and I think we in part lead and that's why we've set a target for the public service leadership as well.
We in part hector, to be frank. We talk to our friends in the business community and say that your business needs to have a full appreciation of the opportunity here. That full appreciation can best be guided by people who have been immersed and bring knowledge of the region. So you should look for those kinds of people in your board appointments.
And then once businesses decide to embrace that, then they'll obviously send a signal out that if you want to be the next board member that will be a capacity looked for, and people will respond to that.
HOST: Prime Minister, there are no downsides examined here and we really don't have time to go into potential downsides but should there be a more robust discussion about the potential pitfalls of Asia's rise, including strategic competition in the region?
PM: The white paper does canvas the strategic outlook for the region and talks about the diplomatic architecture we have in the region, the pivotal importance for Australia of seeing peace and security in the region and how we work with things like the East Asia Summit to develop habits of cooperation; nations talking through issues of dispute.
HOST: That's why they want more ambassadors as well?
PM: Yes we do want, over time to expand our diplomatic footprint. That helps us engage on the strategic security questions. But of course it helps us engage on people-to-people links, cultural links and importantly economic links.
HOST: A lot to examine here and it would be very useful for us I think to come back to some of this at another time Prime Minister.
Can I just ask you finally though, the former Prime Minister Kevin Rudd and his written claims that you and Wayne Swan betrayed him despite what Mr Rudd said was his desire that you be the next and first female Prime Minister. We saw that in the papers on the weekend. Ms Gillard, were you impatient and wrong to seize the leadership?
PM: Look, I've dealt with all of these things on the public record extensively and dealing with all of this just simply isn't my focus.
Yesterday I delivered this plan to make us a winner in this century of change. On Friday I was in South Australia delivering an important announcement for our Murray-Darling Basin's future. Earlier in the week the Government delivered the Mid-Year Economic and Fiscal Outlook, so I'm focused on the things that strengthen and shape us as a nation.
HOST: Did it worry you though that also on the weekend in South Australia your Finance Minister Penny Wong was taken off the first place position on the senate ticket, put into second place in favour of one of those faceless men, Don Farrell?
PM: South Australian state conference had a vote and made a decision that both Penny Wong and Don Farrell will be in positions which mean that they will be returned to the Parliament after the next election.
HOST: But you would have preferred to have Penny Wong at the top of that list, surely?
PM: South Australian state conference had a vote. What I do is I decide who serves in which role and I deliberately promoted Penny Wong into the pivotal position of Finance Minister, putting her at the centre of Government decision making and our economic team because I'm so admiring of her capabilities.
Senator Don Farrell is serving for me as a Parliamentary Secretary in South Australia, focused on this pivotal South Australian issue of water.
HOST: Prime Minister, thanks so much for your time today.
PM: Thank you.