HAIDI LUN:
Prime Minister I know you’re off to Singapore soon to deliver this keynote address at the Shangri-La Dialogue, its widely expected to be your most substantial remarks when it comes to geopolitics and foreign policy, defence and security to date. I want to start with Senator John McCain’s comments, his, sort of, call for the US and it’s allies to do more when it comes to countering China in the South China Sea. He’s said specifically there should be patrols within 12 nautical miles. Is that something Australia would be considering?
PRIME MINISTER:
Well we maintain and exercise our right to freedom of navigation and overflight throughout the region, and of course over the South China Sea. We repeat the calls that we’ve made and the solidarity we’ve shown with other nations in the region including the ASEAN nations to ensure that the rule of law is completed with, that no unilateral actions are taken in the South China Sea, which would exacerbate tensions, and that any territorial disputes are resolved in accordance with the international law.
HAIDI LUN:
China has continued to aggressively build out in the area though. Does that put Australia in a difficult situation given how reliant we are economically and strategically when it comes to our relationship with China?
PRIME MINISTER:
We have a very strong relationship with China. We have a very strong, rock-solid alliance with the United States, that’s the bedrock of our whole national security. May I just say this to you? That we will continue to maintain and exercise freedom of navigation and overflight.
HAIDI LUN:
Do you agree with Senator McCain’s comments that China is acting more and more like a bully?
PRIME MINISTER:
Senator McCain can speak, and very eloquently, for himself. He had a very good visit here in Australia and we were very honoured to receive him as a very good friend of Australia. He’s a wonderful advocate for ANZUS, the Australia-US Alliance. He is and has always been a great friend of Australia.
As far as the relationship with China is concerned, it is important that as China rises, as its economic power grows, as its influence grows, that it does so peacefully and in a manner that respects the rights of all the countries. It’s vitally important.
President Xi has spoken of making sure to avoid the Thucydides trap, referring back to the great history of the war between Athens and Sparta. The historian and general Thucydides said that the real cause of the war, was anxiety created by the rise of Athens. President Xi is very aware of this. It’s very important that China - which has been such an enormous beneficiary, none bigger - of the peace and stability in the Asia Pacific region, which has seen harmony over many decades, it is vitally important that China respect that; respects the rule of law, respects the principle that might is not right.
HAIDI LUN:
That sort of leads me to wanting to know more about these comments that your Foreign Minister made, saying that essentially China cannot continue to thrive or reach its full potential as a global player, if it doesn’t embrace a rules-based level of democracy. Do you think democratisation is necessary?
PRIME MINISTER:
Well I won’t comment on your characterisation. I just say this to you; that respecting the rule of law and respecting the rights of other countries, their sovereign rights, in accordance with international law, is absolutely critical. We all have a vested interest in the maintenance of the rule of law in our region. All of us have to work hard together to maintain it. What Australia takes, the message I take to the Shangri-La Dialogue, is the commitment and the leadership - not as a superpower, as a middle power, as a regional power – to work with our partners in the region. The largest powers, the middle powers, everybody. In Lee Kuan Yew’s words, ‘the big fish, the small fish and the shrimps’, to work with everybody to ensure that we maintain that harmony that has been the foundation of so much prosperity and human advancement over these past four decades and more.
HAIDI LUN:
Lee Kuan Yew had less of a challenge than the Presidency does when it comes to China, but as you hinted to earlier, the rhetoric coming from Beijing, from President Xi has been, he’s been kind of, a champion of free trade, of the you know, ‘new international liberal order’. Is there a sense that there’s a vacuum being made by the US becoming more inward looking, retreating essentially? Leaving the gap open for Beijing to take its place?
PRIME MINISTER:
Well I’ll leave the commentary to you and your colleagues at Bloomberg. From our point of view, we believe –and we know – that free trade and open markets has delivered enormous prosperity to our region. Billions of people have been lifted out of poverty by the peace, the stability and the free trade, the open markets that have depended on that stability. You see, that’s the foundation, that is the absolute essential. Put that at risk, then everything else is put at risk. The economic growth is put at risk, your stability is put at risk, the chances of young people to get ahead and get an education is put at risk.
So that peace, that stability which has been the foundation of our prosperity in the region, that is what we must work hard to maintain. That’s why it’s important that all of the nations, particularly those in the region, come together at the Shangri-La Dialogue, recognise that; understand each other, understand their perspectives and work more closely together.
HEIDI LUN:
Do you support Beijing becoming a greater international power? Do you think China is ready?
PRIME MINISTER:
Well China is already a great power. China is a quarter of the world’s population. It is the second largest economy by most measures and will shortly be the largest. By some measures, it already is the largest. China’s rise has been extraordinarily rapid. I mean, it is one of the elements, one of the biggest elements in the nature of the times in which we live.
We’re living in a time of change unprecedented in its scale and pace. You think about this. 40 years ago, China was barely engaged in the global economy. Then Deng Xiaoping came south and he opened up China to the world. He began that process and remember when he said - the great Chinese navigator Zheng He - when he sailed down through the Pacific and into the Indian Ocean: “In those days, when China was open to the world it was strong. Then when it closed it became weak”, he said. “China must be open to the world again”.
That process has all taken place in the lifetimes of most of us. It has been so rapid. Of course that is why, naturally, it can create tensions and anxieties. This is what President Xi recognises. He recognises the point when he says China must avoid the Thucydides trap. That’s why it’s important for China, as it grow, as its influence grows, as its economic power grows – these are all natural developments – but what it must do is build confidence. Build confidence that as a big neighbour and the bigger neighbour, it will be a good neighbour. That’s why the confidence building, the respect for the rule of law, the respect for the sovereign rights of other countries, large and small, is important.
HAIDI LUN:
Just as an example, with all the same [inaudible] this year, is taking a more assertive stance when it comes to dealing with North Korea, with that special relationship, a timely test of how China can prove itself?
PRIME MINISTER:
Yes well, North Korea’s conduct is reckless, dangerous and becoming more so. It threatens the peace of the region and in fact threatens the peace of the world. China has enormous leverage over North Korea. North Korea is not a client state like East Germany was to the Soviet Union, that’s true. China has had many frustrations in its dealing with Pyongyang. But nonetheless, the fact of the matter remains that China has the greatest leverage over North Korea. With the greatest leverage, comes the greatest responsibility. So we will do our part, sanctions of course. But we look to Beijing to bring the pressure to bear on the regime in Pyongyang, to bring it to its senses. To bring it to its senses so that it ceases threatening the peace of the region with its reckless conduct.
HAIDI LUN:
The recent G7 Prime Minister, seemed to portend something of a seismic shift when it comes to global alliances. Angela Merkel suggesting that Germany cannot continue to rely on the US, on the UK, that Europeans must take charge of their own destiny. If such, you know, an alliance steeped in tradition, in deep friendship, the post-War alliance can be looking so fractured at the moment, what does that mean for Australia? You say that, you know, the US and Australia have these shared values, this special relationship. But do we really?
PRIME MINISTER:
Well of course we do. Our alliance is stronger than ever. The Australia-US Alliance is more important than ever, as President Trump and I demonstrated when we were together on the USS Intrepid in New York a little while ago. Our commitment, the commitment of our two nations, based on our history, based on our shared values, based on our mutual interests, is stronger than ever.
You know, it is 99 years since the first time Australians and Americans went into combat together in the First World War. Since that time, in every major conflict, Australia has stood with the United States. We are the firmest of allies.
Now having said that, everyone has to pull their weight. We understand that and we are doing that. We are bringing our defence expenditure up to two per cent of GDP. Under my Government, we are making the biggest investment in our defence capabilities in peacetime in our history. A massive expansion of our defence capabilities, building a whole sovereign defence industry here in Australia. So we recognise that everyone must play their part and Australia is doing precisely that.
HAIDI LUN:
Is there a concern though that President Trump has proven himself to be irrational at times? Erratic, shall say when it comes to policy decisions and at other times, transactional. Is that level of good faith between Australia and the US something that can still be applied?
PRIME MINISTER:
The relationship is in the very best of health. Look, the relationship between the United States and Australia is as strong as any relationship could be. It is based on history, shared values, common interests, the closest possible engagement at every level. Defence, political, economic, business, people-to-people, family. It is the closest possible relationship and it gets stronger all the time. As a symbol of that, as an example of that, you saw the celebration, the commemoration of the Battle of the Coral Sea on the Intrepid in New York. Of course the President and I both spoke as we honoured those old veterans of that conflict, men in their nineties who turned the hinge of fate, who saved Australia, turned the course of the Second World War when they were teenagers in the Australian and US navies.
HAIDI LUN:
Prime Minister I want to talk about this issue of intelligence sharing. In light of the leaks from Manchester, in light of these reports that President Trump shared confidential information with senior Russian officials, have you sought on behalf of Australia, assurances that intelligence shared will be maintained as being classified?
PRIME MINISTER:
The intelligence relationship, as you know, between Australia and the United States is also intensely close, the Five Eyes arrangements. We have every confidence in the confidentiality of the intelligence we share with our friends in the United States, just as they do in the confidence we give to the intelligence that they share with us. But I want to say to you that intelligence is more important than ever and in particular in the battle against terrorism. It is a global phenomenon. You know, the global threat of Islamist terrorism extends from Europe, to the Middle East, to Asia, to the Americas, to Australia. So the sharing of intelligence, not just between the Five Eyes but between all nations that are committed to defeating this scourge, is more important than ever.
HAIDI LUN:
Have you sought assurances from President Trump?
PRIME MINISTER:
I can assure you, we are assured, always assured of the strongest security and the strongest confidentiality as between our intelligence services. It is a relationship of many decades standing and one which is – again – as rock-solid and part of the Alliance.
HAIDI LUN:
President Trump has suggested that the US may withdraw from the Paris Accord on climate change, what would that mean for US leadership? What would it mean for the Paris accord?
PRIME MINISTER:
Well, the Paris Agreement has been entered into by over 140 countries including Australia. We are committed to it. As I’ve said publically, both recently and since last year, the United States will obviously make its own decision. But Australia will remain committed to the Paris Agreement. When we enter into national agreements, we stick with them. We are on track to meet our emission reduction targets in accordance with the Paris Treaty and we are committed to that.
HAIDI LUN:
There’s [inaudible] Donald Trump [inaudible] special relationship with Australia and the United States, we’ve spoken of that in this conversation. But when you take a look at a President who is against free trade, who is protectionist, who is against refugees, against multiculturalism you could say and against tackling climate change, what are the shared values?
PRIME MINISTER:
Well I don’t agree with all of those premises. I mean you talk about trade for example, President Trump has talked about fair trade. He wants to do more trade agreements, but he wants to do ones on better terms. So he is a businessman, that’s been his whole life’s experience. He wants to engage in trade, he’s been an international businessman. But he wants to do so on the best terms he can negotiate. Well, that’s, he’s entitled to do that. I guess every national leader seeks to do that. But from our part, we have no doubt that free trade, open markets, advancing the economic integration, particularly in our region, has been to the enormous benefit of our region. Plainly so. That is why we all have a vested interest in maintain it.
HAIDI LUN:
Is there an interest or a sense that given the shifting sands of alliances, Australia should be rebalancing it’s ties towards China?
PRIME MINISTER:
We have a very strong relationship, a very good relationship with China, with our largest trading partner in terms of [inaudible]. In terms of our economic relationship, you’d say the United States would be a larger one given the scale of their investment in Australia, but we have strong economic relations with both China and the United States. But we have, with the United States, an alliance. An alliance based on decades of shared values, shared interests, common, mutual service in freedoms cause around the world. So there isn’t a question of choice. We have a very good friend in Beijing and we have a good friend and a steadfast ally in Washington.
HAIDI LUN:
Prime Minister one last word on the domestic policy agenda, you know, it feels that voters perhaps are a little bit confused. Because before you became Prime Minister, you had very clear views when it comes to same sex marriage, when it comes to tackling climate change. Since then you have not really taken a stand on some of these issues. What would you say to voters who might be wondering what your policy platform is right now.
PRIME MINISTER:
Our policy is very clear. I mean you ask about climate change, we are committed to reducing our greenhouse gas emissions in accordance with our commitments under the Paris Treaty. Which is, reducing from 2005 levels by 26 to 28 per cent by 2030. It is one of the highest per capita reduction targets, which is of course, the best comparable measure. So it is a very substantial commitment and we have the measures and policies in place to achieve that. Of course we are making very substantial commitments. Look at the commitment that we’ve made to expand the Snowy Hydro Scheme. This is the largest expansion of pumped hydro storage in Australia and indeed in the Southern Hemisphere. Of course, it is storage that makes renewables reliable. The challenge that as we move to a more distributed model of electricity generation and you have more wind and solar in particular, you know, the costs of those technologies is coming down, that’s been one of the big technological advances, nonetheless they are variable or intermittent sources of generation. So storage is important, batteries are important. Of course, at a large scale, there is no substitute at least currently for pumped hydro. We’re talking about a massive expansion here just in the Snowy scheme alone. There are other projects being worked on in that vein. So my Government is taking the lead and doing the practical things to ensure that we meet our climate change commitments. You asked me about same sex marriage. I support it, but we went to the election, as you know, with a commitment to have a national vote on the matter, a plebiscite. If the Labor Party had not blocked that in the Senate, it would have been held by now, some months ago. It would have been held in February. I’ve no doubt the Australian people would have voted yes. Same sex marriage would now be legal. So the only reason that has not happened is because of the political gaming and tactics of Mr Shorten and the Labor Party. Mr Shorten, who I might add, three years ago, actually said he supported a plebiscite on the issue.
HAIDI LUN:
Prime Minister thank you so much for your time.
PRIME MINISTER:
Thanks Haidi.
[ENDS]