Subjects: meeting with US Treasury Secretary; visit to New York; visit to Indonesia; asylum seekers; trade; economy
E&OE...........
Well ladies and gentlemen the New York phase of my visit is coming to an end. I';ll be going to Singapore and then of course on to Jakarta leaving tomorrow evening. Some of you will be coming with me. Today I saw the US Treasury Secretary Paul O';Neill and we had a lengthy talk about prospects for economic recovery in the United States. We talked a lot about the relative strengths of different economies around the world. He';s aware of the underlying strengths of the Australian economy.
I also raised the issue of steel with him and explained how the Australian steel industry had undertaken the adjustment that some steel industries around the world hadn';t, it was completely unsubsidised, and how the imposition of a 40% tariff would be very damaging to our steel export business. It would also in my submission be detrimental to the position of the new steel mills on the West Coast of the United States which rely very heavily on Australian imports for feed stock. I thought he understood the argument that I put and we';ll continue to pursue in different ways our case with the administration on that issue. I also discussed the free trade proposal. He of course as a former managing director of Alcoa is very familiar with the complementarities of the two economies and he has very extensive business links in the past and had had extensive business links in the past with Australia and is very familiar with many people in the business Australian community.
It was a very friendly and productive discussion and a good opportunity to hear first hand from the head of the US Treasury. He';s very optimistic about the future of the American economy and he was but the latest in quite a number of people who';ve spoken positively about prospects for perhaps a modest but nonetheless a noticeable recovery in the US economy this year. That will be very important to Australia. We';re still growing very strongly but the growth in the housing sector will inevitably even out as the year goes on, as the impact of the phase down of the extra stimulus for new home buyers of new homes comes into effect and we';ll naturally welcome any positive impetus and stimulus in the US economy.
It';s been a very valuable few days in New York. It';s been an opportunity to get a first hand assessment of the future of the US economy and also views on the economies of other countries that are important to Australia. You';ll be aware of the number of meetings I';ve had including the one yesterday with Shimon Peres the Foreign Minister of Israel, and the discussions with the Untied Nations as well as of course the very important meeting with the provisional Prime Minister of Afghanistan, and of course participation in the WEF. It';s been a very valuable few days and I';m naturally now looking forward to the next phase of the visit.
JOURNALIST:
…..Prime Minister, did Mr O';Neill give you any encouragement in relation to Australia';s position on steel and or free trade….?
PRIME MINISTER:
Well he listened very carefully to what I had to say. He understood the economic import of what I was saying on steel, very much so. He certainly didn';t dispute what I was putting to him in relation to the economics of it. The economics of it are that a large part of the American steel industry is still in need of restructuring. A lot of the things that need to be done in the United States have in fact already occurred in Australia. We have restructured and the closing down of steel production by BHP in Newcastle which was a seminal event, very significant event rather, in the life of the steel industry in our country represented the restructuring that inevitably has to happen in other parts of the world.
JOURNALIST:
Did Mr O';Neill give you any hint that he thought that similar sort of thing might take place in this country?
PRIME MINISTER:
Mr O';Neill';s a senior member of the Administration and he was a little guarded on that. But I thought he understood fully. I mean he is a very skillful businessmen and he understands the economics of this and as the former boss of Alcoa he';s been involved in a lot of restructuring and he understands the pressures for modernisation in so many industries around the world. But I did point out to him that we don';t subsidise our steel industry and we';ve already extensively restructured so if you look at the merits of it we have a very strong argument when the proposition is that there should be a 40% tariff. I mean a 40% tariff put on an industry exports when that industry is not subsidised, has undertaken significant restructuring, has seen significant job losses over the last few years, it';s a very strong argument on the merits. I can';t think of a stronger argument.
JOURNALIST:
Do you feel after the meeting that you do have an advocate though in….FTA plans?
PRIME MINISTER:
It';s quite counter productive of me whether I may or may not think I have an advocate, or to sort of start expressing views about that. That doesn';t achieve anything. I do know this – that I was talking to a man who understands business, who has involved himself very heavily in restructuring in his own business career understands the relevance of globalisation, understands the complementarities between our two economies. But I wouldn';t say that I have or I haven';t got an advocate. He';s part of the Administration, I';m the Prime Minister of Australia. I';m putting a case to him, he listened to it very carefully, he understood it and he';s a very charming person to talk to.
JOURNALIST:
Did Mr Peres seek to do any more than update you on the situation. For example did he seek a role for Australia?
PRIME MINISTER:
No he didn';t seek a role for Australia. He understands Australia';s position very well. Australia';s position on the Middle East is as I outlined it at the American Jewish Committee meeting here a few days ago. We remain a very staunch ally and friend of Israel';s but we';re also a very strong advocates of a homeland for the Palestinians and I remain personally immensely disappointed that the courageous and historic offer that Ehud Barak made last year was not picked up and I';m distressed that the whole region has descended into so much violence since. He just really updated me on it.
JOURNALIST:
On the fair trade agreement, did you get their more positive encouragement because a number of figures including Powell yesterday seemed very positive [inaudible]? Does this reassert it….?
PRIME MINISTER:
Look once again I';m not going to sort of raise expectations about this. It';s a long hard dusty road towards getting a free trade agreement but we';ve got a lot of determination, resilience and plenty of water bags.
JOURNALIST:
Just on the steel issue for a moment, could you tell us the kind of thing you told Mr O';Neill about the likely impact on the West Coast, the start up steel mills?
PRIME MINISTER:
Well the start up steel mills on the west coast rely very heavily on the feed stock from Australia which they can get a very competitive price and our argument is that if the tariff goes on they won';t be able to get the steel at such a competitive price and that will have an effect on their viability. It';s a purely cost business argument which I think it';s a very strong one. But I mean that';s a matter they';ve got to make a decision about.
JOURNALIST:
Do you think after this World Economic Forum, after the success of today';s protest, do you think there';ll be a reassessment of holding events around the world like that?
PRIME MINISTER:
I would totally oppose that.
JOURNALIST:
What, holding….
PRIME MINISTER:
No no, I would totally oppose any, how shall I put it, submission to protests. I mean I think that would be ridiculous.
JOURNALIST:
Are you heartened though to see that an event such as the World Economic Forum could take place so successfully without the protestors interfere…..?
PRIME MINISTER:
Well I';m very heartened yes. But I mean I';m sorry, that second question seemed to contradict the first I';m sorry.
JOURNALIST:
There';s been a reluctance since other economic meetings to hold meetings because of the violence.
PRIME MINISTER:
I';m not aware of that. I';m not aware there';s been a reluctance to hold them. I don';t think so. I mean would have thought the decision to hold the World Economic Forum in New York was an indication that people intended to go ahead irrespective of protests. But my position is that it should always be the determination of governments to hold necessary meetings despite protests.
JOURNALIST:
On steel Mr Howard, what would be the consequences to the Australian industry if the American decision goes ahead?
PRIME MINISTER:
Well we have something like a $500 million export and if you put a 40% tariff on all of it that will have a bad effect.
JOURNALIST:
In terms of jobs?
JOURNALIST:
I';m sorry, is that $500 million in to the US?
PRIME MINISTER:
Most of it';s into the US yes. I think almost all of it';s into the US. That';s my understanding. I mean one of my erudite advisers might tell me that';s not correct but my understanding is that it';s very close to 90% goes into….
JOURNALIST:
[inaudible] jobs?
PRIME MINISTER:
I can';t quantify but it would have a bad effect on Port Kembla.
JOURNALIST:
It could cost jobs?
PRIME MINISTER:
It could cost jobs yes, yes. That';s one of the reasons why I';m raising it so strongly because I don';t want Australian jobs in an industry that';s already shed jobs, is not protected, has adjusted, has modernised, has gone through the pain of adjustment. I mean we have a very strong case. But I';ve been given a good hearing and I';m grateful for that and I hope that it will have an effect.
JOURNALIST:
On another issue, the Pope has reportedly expressed deep disquiet over the treatment of asylum seekers in Australia. How morally sustainable is the mandatory detention if the head of the Catholic faith is expressing his concern?
PRIME MINISTER:
Well I';m not a Catholic although I have great respect for the Catholic Church. My understanding is that if the Pope has anything to say in relation to Australian matters he speaks through the nuncio. So I';m not aware that he';s said anything about the issue.
JOURNALIST:
But if he has….?
PRIME MINISTER:
Well you know, if I';ve flown to the moon. I mean you say if.
JOURNALIST:
Well [inaudible] by a former liberal speaker….
PRIME MINISTER:
I have read the story and the only comment I have to make is that if his Holiness wishes to say anything about matters Australian it is my understand that he speaks to the nuncio. It';s also my understanding that the Pope does not talk about domestic political matters in individual countries normally and it';s also my understanding that on day to day affairs the official vehicle for expressions of opinion by the Catholic Church in Australia is the Bishops'; conference and the Bishops said something about this last week and I';ve already responded to that. But I don';t regard the policy as being in any way morally indefencible. I';ve thought deeply and carefully as a person of conscience about the policy and I defend it.
JOURNALIST:
Back on the issue of free trade, if the United States does go ahead with quota tariffs on steel would that scuttle the broader free trade agreement?
PRIME MINISTER:
The two issues are separate. I hope that they don';t hurt our steel industry and I hope we get a free trade agreement.
JOURNALIST:
How can the two issues be separate when it';s tariffs on an industry?
PRIME MINISTER:
It can easily be separate.
JOURNALIST:
But in what way then will you have a free trade agreement?
PRIME MINISTER:
It depends what';s in the agreement.
JOURNALIST:
On the question of Woomera, do you think the resettlement package you';ve got will have take a lot of heat out?
PRIME MINISTER:
Well I';m not going to be a commentator Louise, I';ll leave that to others.
JOURNALIST:
Would it dramatically reduce the numbers in Woomera?
PRIME MINISTER:
Look I think it';s too early to start talking about numbers here and there. I mean we have a policy of mandatory detention. We would hope the numbers of people seeking to some to Australia illegally would diminish and certainly they have diminished over the past couple of months. I put certain proposals to the provisional Prime Minister of Afghanistan and I';ve outlined generally what we have in mind and I want to see that progress but I don';t want to underestimate some of the difficulties that still lie ahead. But I think it';s a sensible way of handling a difficult issue.
JOURNALIST:
On the next leg of your trip Mr Howard, can you tell us what you';re hoping to achieve in Indonesia, or are we looking at just sort of an ice-breaking visit….?
PRIME MINISTER:
Well I wouldn';t say we have to “icebreaker”. I mean we had a visit to Australia by the Indonesian Foreign Minister who not only met Mr Downer and other senior ministers but also myself. I think the visit will be a very good opportunity to further the relations and understanding between myself and the President and senior people in her administration. It';s an important relationship to us. It';s had its difficulties in the past and it will have its challenges in the future but it';s always valuable when the Prime Minister of Australia spends time with the President of Indonesia and time with senior ministers. And I';m proposing to spend three days, not only in Jakarta but also Yogyakarta and there is significance in that because of the place in the cultural life in Indonesia is Yogyakarta and I go there with goodwill towards both the government and the people of Indonesia. I';ve always felt goodwill towards the people of Indonesia and I have enjoyed a, despite references on various occasions over the past few months of a particular incidence, I';ve had good dealings thus far with the President and I hope to further improve the relationship.
JOURNALIST:
It';s also significant Yogyakarta too isn';t it because it';s such a traditional centre of Islam?
PRIME MINISTER:
Yes, for all of those reasons. Yes. It';s an important….that part of the visit is important symbolically to the people of Indonesia and I am aware of that and that';s one of the reasons why I decided to include Yogyakarta in the visit.
JOURNALIST:
Mr Howard is one matter that you';d be raising trying to get a better extradition arrangement of people smugglers because that';s a bilateral matter as opposed to….?
PRIME MINISTER:
Well what I said before in relation to our agenda is that I would expect all of things that should be covered in such a meeting to be covered. I';m not going to specify now what they are or what they might include or not include.
JOURNALIST:
Is that important for Australia?
PRIME MINISTER:
What, to have a comprehensive discussion?
JOURNALIST:
No, to have a better extradition arrangement…..?
PRIME MINISTER:
I';ve indicated in the past and I';d indicate again that the greater clarity that we can have in relation to all of those matters the better.
JOURNALIST:
Prime Minster, in terms of your meeting with Mr O';Neill, did you discuss the ongoing campaign against terrorism, and I guess specifically given his portfolio, the issue of controls on financial matters if you like and whether there was a need to do anything further to what';s already….?
PRIME MINISTER:
Well the answer to the first part of the question is yes. Is the answer to the second part of the question is no. I';m not sure that there are further things that need to be done but if there are then they';ll be raised. But we didn';t discuss that second part no.
JOURNALIST:
During your talks with Mr O';Neill, and possibly with Mr Powell on terrorism, did you get any feeling of the update on the prospects for sooner rather than later action by the United States to broaden military action…..?
PRIME MINISTER:
I think everything they said was consistent with what the President said in his State of the Union address.
JOURNALIST:
….information on terrorist activities in say Indonesia or the Philippines?
PRIME MINISTER:
No because I mean Mr O';Neill would not be….
JOURNALIST:
[inaudible]
PRIME MINISTER:
No we didn';t discuss that no.
JOURNALIST:
Did you have a separate meeting with Mr Powell?
PRIME MINISTER:
No no. I didn';t seek any, I mean I had a bilateral meeting with the President when I was here in September and I had of course bilateral meetings with Donald Rumsfield and the Secretary of State and the National Security Advisor and then of course again in Shanghai, although it wasn';t a formal meeting it ended up a series of discussions which were quite productive. I didn';t seek any bilateral meetings on this occasion. I naturally chatted to the Secretary of State before our panel discussion. I did ask to see Mr O';Neill and he happened to be at the Waldorf today and it was an opportunity for us to talk. But I haven';t seek this as a government to government visit. This was really a visit by me to New York to coincide with the World Economic Forum and it';s been fortuitous that as well as being able to participate in that I';ve been able to talk to so many senior people. It';s been a bonus.
JOURNALIST:
There';s been some speculation about a West Pacific Forum…
PRIME MINISTER:
A West Pacific Forum? A WEF specific, no, or a West.
JOURNALIST:
West Pacific.
PRIME MINISTER:
West Pacific, as in the name of Westpac.
JOURNALIST:
Is this something that';s likely to be raised in the Indonesian…..
PRIME MINISTER:
You';re talking about the Indonesia – this was a proposal of think of Dr Wahid';s, you have Australia and Papua New Guinea and Indonesia and Timor and some others? Well, it was raised by Dr Wahid. It';s not been to my recollection on the agenda since. I mean we do have the Pacific Islands Forum and then there are some dialogue arrangements in relation to that with other countries.
JOURNALIST:
With Timor, though, emerging into independence, do you think such a ……
PRIME MINISTER:
Well, I would have a positively open mind on that.
JOURNALIST:
Will you be discussing that in Indonesia?
PRIME MINISTER:
I think that could - but anyway if it';s the sort of thing that comes up I';d be positively disposed to it. I don';t have it specifically on the agenda. I mean we already have a proposed trilateral meeting between East Timor, Indonesia and Australia in February is it? Coming up. So ..
JOURNALIST:
This would obviously be an ongoing body?
PRIME MINISTER:
Look, I';m not against it, but of course there';s a limit to how many bodies you can usefully service by your attendance during the course of a year.
JOURNALIST:
Prime Minister, after your visit to Ground Zero, do you think, or are there any plans or working plans for some form of memorial, specifically the 17 Australians who were killed down there, either there or back home?
PRIME MINISTER:
Well, I think it';s important to see what the thinking of the American people is about a memorial at Ground Zero. Whilst we won';t be governed by that I would hope that the American memorial would appropriately acknowledge the people from other countries who died there. My initial reaction to that question would be that I would hope that whatever form of memorial the American people decide upon includes reference to the hundreds of people from other countries including Australia who also died.
JOURNALIST:
Just given ….and I could be wrong …but that is the most amount of people outside wartime Australians killed overseas and you don';t see any kind of memorial dedicated specifically to them…
PRIME MINISTER:
Well, I think it depends…the reason why I';m not against that just want to see what form the American memorial – I don';t know. It might have a specific reference to each country.
JOURNALIST:
On a different subject. David Hicks – has he been raised at all – I know this has been a business trip not government to government. Has his fate been raised with you by any authorities during the trip.
PRIME MINISTER:
No, not that I can recall, no. Well, Senator Hill discussed his position with Donald Rumsfeld and he said that he was satisfied that he was being treated humanely – he was give information by the Defense Secretary, that';s the appropriate vehicle for that information but it was not raised with me. I wouldn';t have expected it to have been raised with me, not only because of the nature of the subject but also because Senator Hill';s already discussed it with his counterpart.
JOURNALIST:
Mr Hill seemed to express when he was here that Mr Hicks should be dealt with in Australia by Australian authorities. Is that still the government';s case or what?
PRIME MINISTER:
Well, Senator Hill and others have made it clear that the situation is still, the legal position is still being assessed.
JOURNALIST:
Prime Minister, last time the Treasury and the government put out figures for the budget outlook was in October during the election campaign, a month after September 11, and a time when prospects for the Australian economy looked pretty bleak. Given the briefings that you';ve had and your own developed views now about the American economy, how do you see the prospects for the Australian budget in May and I ask the question in the context of the beginning of the ERC preparations very shortly for the budget. How has it affected your views?
PRIME MINISTER:
Well, the budget preparation will still be tough but we';re not facing a 1996 situation. Nothing like it. We had a very big deficit, remember - $2.5 billion and we had a very big cost cutting challenge, we certainly don';t have that.
We';ll be implementing out election undertaking, we won';t be adding to expenditures unnecessarily in other areas, we';ll be seeking to keep a very firm rein on them. I';m not going to speculate about the impact on growth rates. There have been forecasts made in that statement, we won';t be publishing any other forecasts until the budget - or the Treasurer won';t be speculating between now and May – which is only a little over 3 months now before the budget and it would be pointless in either of us or anybody else in the government speculating about growth. Let';s wait and see what';s in the budget.
JOURNALIST:
Mr Howard, did Mr O';Neill give you any more specific details on the prospects of the US economy?
PRIME MINISTER:
Oh, he';s encouraged that there will be growth this year.
JOURNALIST:
Did he give you any figure on growth?
PRIME MINISTER:
I';m not going to get into …..that';s for an American …I don';t express views about figures. If they want to say something – he or any of his colleagues want to say something about growth in the United States that';s a matter for them, not for me.
JOURNALIST:
Mr Howard, last year - I think it was August, just days before the Aston by election, you expressed some hope, possibly confidence, that you could get 4% growth rates, then we had September 11 and saw a revision downwards in those mid year figures. Do you think there will be any prospect for some upward revision in growth …..
PRIME MINISTER:
Didn';t you hear my answer? You thought you';d have a go. It';s 25 to six on Saturday night ….
Any other questions?
JOURNALIST:
Can I just asked you - you';ve met with some very senior business figures over the past couples of days. From that have you picked up their assessment – talking about the US …..- their assessment on the Australian economy and any particular impediments they raised with you in terms of inward capital to Australia. Did they ….
PRIME MINISTER:
Well, the assessment of the Australian economy over here has been uniformly positive. I don';t think I';ve had anybody say otherwise – I think all of them welcomed the fact that we';re carrying out a review of the international aspects of our taxation system. I did in fact specifically ask people whether there were any impediments. There are some international aspects of the tax system that they think might be improved, there was some concerns raised about, because of the federal system and the application of energy policy that because the States have an interest in energy policy, sometimes they pursue contradictory goals – that was raised with me by some – I thought for good reason.
JOURNALIST:
Would you mind sharing more detail with us?
PRIME MINISTER:.
Well, there';s not much more detail than that. The fact is you have six jurisdictions and sometimes they pursue contradictory goals and I think the companies have a point, I really do.
JOURNALIST:
Do you plan to do something through COAG on that?
PRIME MINISTER:
Well, while anything has an impact on me and makes sense I always try and do something about it.
JOURNALIST:
And in terms of the issues they raised about international taxation, is that because we';re yet to see the government';s formal agenda ….
PRIME MINISTER:
Well, we just sort of welcome the fact that we';re having a look at that. You know what investors from other countries want …they always want something better than what now exists, but generally speaking they';re very happy with the investment climate in Australia. We have low inflation, we';re stable, we';re predictable, we';ve got a pro-growth government and they';re pretty happy.
Thank you.
[ends]