PRIME MINISTER CLARK:
Well good afternoon everyone. We've had a very useful morning of discussions on a whole range of issues, from the bilateral across regional and international issues, beginning with following through on the discussion between the Australian Treasurer and the New Zealand Minister for Finance of the single economic market, where there is a big work agenda underway and some more progress was made on that in the meeting late last week. Clearly both our economies are doing very well as compared to other developed economies. We have very low levels of unemployment now, and dealing with a lot of the pressures and challenges that growth presents like upping our skill levels, which is also an issue for Australia. I've also indicated to Mr Howard that we're interested in knowing more about Australia's higher rate of labour productivity than our own. We're focussing very much on productivity issues here and now, and some study by us of what's helped across the Tasman I think would be useful. I have briefed Mr Howard on some of the issues we're tackling in the social security area - the impending announcement this week on a move to a single benefits structure and keeping the focus of our benefits system very clearly on moving people from dependence across to independence.
We've talked about areas of cooperation such as in the science area where tremendous amounts have been happening over the past two years, particularly in biotechnology, culminating in our counties combining efforts at the large bio-fair in the US last year. And also New Zealand is getting involved with the major synchrotron project in Victoria which is very useful to our scientists.
We've discussed the post-tsunami issues. Our two defence forces cooperated very, very closely in getting immediate relief into Banda Aceh. We were pleased to be part of an ANZAC medical team based at the hospital there, and we still have transport assistance ongoing at this time, and it's been a good joint operation. I briefed Mr Howard on our defence deployments - significant deployment that we continue in Afghanistan, in particular.
We've discussed the ASEAN relationship following on from the summit in Vientiane last year, and the talks to begin shortly on scoping how to proceed with the negotiation agreed to on the FTA with ASEAN. Both out countries have been very active on the FTA front in Asia. We're in negotiations with China right now. Australia concluded its FTA with Thailand ahead of us. Ours takes effect on the 1st of July, and we're both in discussions with Malaysia. We still have a study with Malaysia to be released; Australia, I think, has moved beyond that stage. But we're pretty much moving in parallel in a lot of these areas. We've discussed some of the issues in the Pacific - the ongoing close cooperation over the Solomons. I've been briefed on Australia's current progress with enhanced cooperation in Papua New Guinea, and we've discussed some other Pacific issues also.
With respect to Gallipoli, we'll tackle that one over lunch, but I think you'll find that there's not daylight between us in terms of the nature of the commemoration. I've had the opportunity to speak with John Howard many times about such matters, and I think the bottom line for us both is that what we, as the descendants of the ANZAC tradition, do, they will be dignified, it will be appropriate, and I'm very confident we'll have a good outcome on that. John.
PRIME MINISTER HOWARD:
Well, thank you very much Helen. This meeting has once again been very comprehensive, very frank, and very friendly. This is the eighth occasion that I've visited New Zealand in the time that I've been Prime Minister, and it is the fifth formal bilateral discussion between the New Zealand and Australian Prime Ministers over that time. One of the characteristics of the relationship is this ability to compare notes on some of the common economic and social challenges. Our two countries experience many common challenges domestically. There are obviously very strong similarities and many dissimilarities, but an ability to analyse things such as workforce participation, labour productivity, the challenge that both our societies have of moving people from welfare to work. I'm very interested in the New Zealand proposal about a single benefit. That's something that came out of the McClure report into the Australian welfare system. So, it's a reminder once again that we can learn a good deal from each other in relation to these issues. Inevitably, as countries sharing the Asia Pacific region, we have a great interest in the future economic and political development of that region. We did cooperate, as Helen said, very closely in the wake of the tsunami, and I had the opportunity of visiting the hospital in Banda Aceh, which was run very much as an ANZAC operation, and had a chance of meeting a number of New Zealand medical and defence personnel, and it was another good illustration of the capacity and the willingness of our two countries to work very closely together.
We do enjoy, both of us, very high levels of economic growth, and each country has seen a very strong budget position. Each country has seen very significant falls in unemployment. Each country has seen high levels of growth, and each country has seen a maintenance of those levels of economic performance over a considerable period of time, and whilst, as I noted earlier, there are some dissimilarities and some cultural differences in relation to our economic performance, there are a lot of similarities, and a lot that we can learn. These bilateral exchanges are very important to Australia. The relationship between Australia and New Zealand is an old one, it's a close one, it's an indissoluble one, and it's one that is contributed to in a very important way by these discussions.
The economic association has grown ever closer of course through the years of CER, and I welcome the very positive outcome of the discussions between Peter Costello and Dr Cullen, his New Zealand counterpart. They dealt with I think all of the micro issues of the economic relationship very satisfactorily, and it's just another reminder of the value of these very close links. Helen, thank you for your hospitality, and I look forward to its extension over lunch.
PRIME MINISTER CLARK:
Any questions?
JOURNALIST:
Mr Howard, did the issue of a common currency come up in...
PRIME MINISTER HOWARD:
No, no. It's not on the agenda. Look, let's just make a good fist of what we have at the present time and if other things come along in the future, well they will come along but it's not on the agenda.
JOURNALIST:
Miss Clark, with the ... New Zealand and Australia, most New Zealanders struggle to know what a single market would change. What would it look like?
PRIME MINISTER CLARK:
It's a behind the border issue. We've had the Free Trade Agreement since 1983 and with one or two very minor exceptions, all trade issues are resolved. At that point you start to turn your mind to how to make the trans-Tasman business environment a seamless one. And that's why the Treasurer and the Minister for Finance were talking about banking regulation, competition and consumer law, making it as easy as possible for business to occur as if there were no border across the Tasman. So from an economic point of view it is very significant.
JOURNALIST:
Mr Howard, you spoke in the meeting about - you were asked about Australian higher productivity levels. How do you explain what has happened.
PRIME MINISTER HOWARD:
Australia has much higher productivity now because we have deregulated the labour market compared with what it was some years ago. If we can free it even further, which is my government's intention and determination, we can have an even higher productivity level.
JOURNALIST:
That is the main factor for you - industrial relations?
PRIME MINISTER HOWARD:
I think industrial relations form is a significant factor; it's not the only factor. The intelligent utilisation of information technology is an important factor in high productivity generally. This is the view of Alan Greenspan in explaining the surge in productivity in the United States. So there are things that feed into it. But our labour market was more heavily regulated than labour markets in other countries until the mid-1990s and the changes that have occurred since then have helped a lot. But we could do even better if we can change it a bit further.
JOURNALIST:
Have you discussed the idea of a single authority in banking, does single market mean single regulator for banking?
PRIME MINISTER CLARK:
Well, we haven't taken the issue beyond where the Treasurer and the Minister for Finance took it and that was to set up terms of reference for a Trans-Tasman council on banking supervision. As you know, Dr Cullan issued a statement Friday in response to some overheated media headlines here saying that there weren't commitments made to a single Trans Tasman regulator - it fell short of that.
JOURNALIST:
Is it fair to say Mr Howard, would you say that a single regulator (inaudible)?
PRIME MINISTER HOWARD:
Well I think the agreement that Cullen and Costello reached was a good one.
JOURNALIST:
Miss Clark, did you raise the consensus of opinion expressed here that the Australian banks are exploiting the tax (inaudible).
PRIME MINISTER CLARK:
We haven't discussed that today. I am sure that's the bread and butter of what our Finance Ministers talked about.
JOURNALIST:
Can I also ask you - you have been asking Mr Howard about better labour productivity - New Zealand has a more deregulated labour market than Australia...
PRIME MINISTER CLARK:
That's correct.
JOURNALIST:
You haven't delivered your deliberations to the extent that the Prime Minister of Australia has, is that right?
PRIME MINISTER CLARK:
We haven't had the improvements in labour productivity that we'd like to see, so clearly there's a range of things that you have to do. And our focus will be very much on skills. Also on the degree of innovation in our economy. Business investment - I think is a critical area, and probably where there's been the biggest difference between the two countries, that Australia has consistently been getting higher levels of business investment. In addition, there are things that have to be done at the workplace level - improving management capability, relates to workplace organization, health and safety - all the many factors which make workplaces more productive. Suffice it to say, even though we do have a more deregulated labour market we are clearly not doing as well on some of those other factors as Australia does, and we need to analyse the reasons for that.
JOURNALIST:
Mr Howard, did it surprise you to hear a request on this sort of advice coming from a Leader on the left of the Labor Party?
PRIME MINISTER HOWARD:
I, in my dealings with the New Zealand Prime Minister, as in my dealings with the Prime Minister of the United Kingdom and other leaders, I do not get into party political comparisons. I look to areas of agreement. My job is to enhance relations between New Zealand and Australia, irrespective of who happens to be the Prime Minister of New Zealand and I've enjoyed a good working relationship with Helen Clarke, as I did with her predecessors and I think we will leave it at that.
PRIME MINISTER CLARK:
I think it's fair to say on those issues, I mean both John and I meet with many Heads of Government, whether you are meeting with centre right Heads of Government, as John Howard is, or the Dutch Prime Minister, or the Norwegian Prime Minister, or whether you're meeting with Tony Blair or Paul Martin or the Prime Minister of Sweden, as we both did last week, actually all progressive Western economies are looking at very much the same set of issues and strategies for modernising and transforming in the 21st century. They are looking at skills, they are looking at productivity, they're looking at how to get business investment up, they're looking at innovation. There is actually very little ideology about this; it's about what are the steps you take to get competitive advantage for your economy in a globalised world.
JOURNALIST:
Prime Minister, how would you respond to the comments by the Governor of the Reserve Bank on Friday and suggestions on what Australia's Goldilocks economy is doing to trade?
PRIME MINISTER HOWARD:
I read the summary of his address and I didn't find the word "Goldilocks". I think Goldilocks could have been, correct me if I'm wrong and you are in a position to do so, Goldilocks could have been a word generated by the headline writer of your employer newspaper. I actually read what Ian Macfarlane - I mean I know this would be unusual but I have actually read what Ian Macfarlane had to say and there was really nothing in it that I particularly disagreed with, except that we must always in Australia preserve a margin for home ownership. Home ownership is important to the stability of the families, important to the stable nation that we are. And both, if I may so, New Zealand and Australia have had very high levels of home ownership and one of the reasons for that is the way in which we have, tax wise, treated the family home, so I think it's not consonant with the sort of things. But most of the other stuff I read and I couldn't disagree with it. I mean we are in favour of more labour market reform, we are in favour of making sure that supply bottlenecks are eliminated. Peter Costello has had something to say about the ability of the States on this issue recently. We are certainly in favour of tackling skill shortages and we had a lot of measures during the election campaign directed at that, so I saw the Governor's presentation as being very much consistent with the sort of things I have been saying and Peter Costello has been saying.
JOURNALIST:
The report card of 2%, 2 and 3% of growth instead of 3 and 4.
PRIME MINISTER HOWARD:
A report card? David, he didn't use that expression. He was making a point...
JOURNALIST:
He said that he planned to slow (inaudible) inflation.
PRIME MINISTER HOWARD:
It is self-evident that if you develop capacity constraints then that will have an impact. And bearing in mind that economic growth is a relative measurement. It measures your performance from point A to point B. It doesn't keep measuring what went before it and every economy and both Helen and I have agreed on this - in a sense both of our economies are becoming victims of their success. You get to a point where you have very strong growth and you are demanding more and more capacity in order to sustain that and these are issues that have to be faced and these are issues that are being faced.
PRIME MINISTER CLARK:
Radio New Zealand, could I give Radio New Zealand a go now? Thank you.
JOURNALIST: Could we ask you to discuss the immediate situation in Aceh. The talk of terrorist threats to aid workers and the travel warning that we had altered to (inaudible).
PRIME MINISTER CLARK:
Yes we have, and obviously Australia moved on the advice that it had and we move in line with that. I don't know if John would like to comment any further.
PRIME MINISTER HOWARD:
Well, we did receive advice and as a result of that the travel advisory has been altered. The Foreign Minister has made a statement. Essentially what we're saying is that if you belong to an aid group you should have an established security plan or understanding with the local authorities. If you don't, you should look to whether you should remain. It is immensely distressing that at a time like this people should be threatening violence and terrorism. It is a reminder of who we are dealing with. They are beyond the pale in every sense of the word. Given the absolute horror that the people of Aceh have been through, the idea, the very thought, that terrorists would be flexing their muscles at a time like this is just a reminder of the depraved human beings that they are.
JOURNALIST:
Mr Howard, was that a specific threat against Australia and New Zealand or was it a general
threat in the area?
PRIME MINISTER HOWARD:
A sort of a general kind, but self-evidently because of the presence of Australians and New Zealanders it is of direct concern to us. It is not only of concern to Australians and New Zealanders it is concern to Indonesians. I mean you should never lose sight of the fact that when the terrorists strike they normally take out more non-Westerners than they do Westerners and they normally kill more Muslims than they do people of any other faith, so they are not in any way discriminatory.
JOURNALIST:
Have there been discussions with the Indonesians? I believe there was confusion on why (inaudible) Indonesia wasn't aware of this threat.
PRIME MINISTER HOWARD:
I think you should talk to Alexander Downer about that. I was advised before I left Australia that the normal discussions took place.
JOURNALIST:
Have they given either of you second thoughts about the presence of military forces over there at the moment?
PRIME MINISTER HOWARD:
No, our military forces, speaking for Australia and Helen will speak for New Zealand, our military forces are there for a very limited period of time. I indicated after I visited Aceh that they would begin to come home soon. Some of the helicopters have already been brought back. And that will occur progressively over the weeks ahead. Because it is not the role of the military to provide emergency aid except for a limited period. That is not their job, their job is to provide it in the emergency period and then when a civilian capacity has arrived and been properly established, they hand it over and they go home.
JOURNALIST:
Can I just ask you whether there is a change (inaudible) involvement in Aceh?
PRIME MINISTER CLARK:
No, absolutely not. We went, as Australia did, for a purpose and that was to bring immediate relief. We have done a fantastic job through the ANZAC medical contingent and the work of the transport and logistics people, but as Mr Howard said there comes a time when you start to phase down when you move beyond the immediate relief phase and we are not too far off that point.
JOURNALIST:
Can I just make (inaudible) about the Israeli situation as far as (inaudible).
PRIME MINISTER CLARK:
I can confirm that the Israeli government has made an approach at diplomatic level through our Ambassador in Ankara and that's being dealt with at a diplomatic level at the moment.
JOURNALIST:
Is that the same for Australia, Mr Howard?
PRIME MINISTER HOWARD:
Well Miss Clark can speak for New Zealand, the situations are separate. As far as Australia is concerned, a person was asked to leave and he's left. Relations between Australia and Israel are very close and very friendly. They have not been affected by this incident and we continue to be a good friend and a good supporter of Israel.
JOURNALIST:
(inaudible).
PRIME MINISTER HOWARD:
Look, that assumes a lot of things, which I neither confirm nor deny. I simply repeat the man has gone and we remain very good friends and I, as you know, and my Government is a very strong and unapologetic supporter of the State of Israel.
JOURNALIST:
Mr Howard, John Faulkner has said that it's a bit rich that ...
PRIME MINISTER HOWARD:
John Faulkner?
JOURNALIST:
...that Australians are asked to put up $1 million for Prince Charles to come to Australia. What's your....
PRIME MINISTER HOWARD:
Well, I don't agree with that. I think this is the sort of, how shall I put it, an ill mannered cheap shot. It is normal, and has been, that when somebody has been invited, particularly in his position, to come to Australia. He comes to our country as a guest, that certain expenses are met. There are some expenses that aren't met there are some are and the normal procedures are being followed. I suppose if you want to take a cheap shot you can but if you applied that kind of approach it would be a lot of visits and people would have different views about different visits. But all we are doing is applying the normal approach and I regard that sort of thing as an ill-mannered cheap shot.
Thank you.
[ends]