HOST: The Prime Minister Kevin Rudd is on the line and he is speaking with Chief political correspondent Chris Ulhmann.
ULHMANN: Prime Minister Good Morning
PM: Good Morning Chris
ULHMANN: Were you involved in the launch of a Beijing retail development in 2006?
PM: There was a development in Beijing which was I think canvassed in the Australian-China chamber of commerce bulletin of mid 2006. Which I together with I think others from Austrade and the Australian Embassy attended, yes that's correct.
ULHMANN: Did you speak?
PM: I believe so, I speak at many Chinese functions whether I'm in Beijing, Shanghai or elsewhere in the country. It's difficult not to given my 25 year long association with various aspects of the Australia- China commercial relationship.
ULHMANN: But why did you do that was it a favour to Mr Ian Tang of AustChina Investment and Development?
PM: I was invited as I recall to attend this function together with a whole range of other functions. It had as I recall it a proposal to redevelop the Friendship Super store site in Beijing and within that for it to contain some centre for the promotion of Australia-China commercial relations.
I also confirmed that the Australian embassy would be represented at the function and the Australian Trade Commission as well which they were.
ULHMANN: But were you doing it as a favour for Mr Ian Tang, because it did come off the back of some quite extensive travel that you were doing that he was paying for?
PM: Certainly the invitation would have come from that company, but as I said we confirmed also prior to attending, that this would be supported by the Australian embassy and by the Australian Trade Commission.
ULHMANN: Did you feel indebted to him because he was paying for so much travel for you?
PM: Not at all if there was a project which was designed to in part promote the Australia-China commercial relationship and together with requests you receive from the business community at home and abroad you attend those things.
Also having taken the added precaution of confirming the then Australian Governments official representatives through the Embassy and through the Australian Trade Commission would be present as they were.
ULHMANN: When private companies pay for you or any other MP to travel overseas do you think it's reasonable that they surely are expecting something in return?
PM: Which goes to the whole question of the future of political donations on the one hand and on the other hand sponsored travel.
Political donations this company in question has been declared by the Australian Labor Party already on the public register has donated to the Australian Labor Party. It's also donated $150,000 to the National Party at a time when the National Party was in Government. With Ministers presumably meeting from time to time with representatives of this company. I'm not sure of the details.
The second thing on supported travel is that any political Opposition particularly in the positions of Shadow Minister for Trade and the Shadow Minister for Foreign Affairs are not given an allocated budget from the Parliament and as a consequence, they travel as much as they can on the basis of supported travel.
The key thing in both cases is are political donations declared. In this case absolutely yes on our part. And on the question of supported travel is that all declared at the time, yes it is.
ULHMANN: Do you think that it's a good system that our MP's need to rely on the largess of private companies and doesn't it always open the possibility that, that's influence peddling?
PM: Well I notice the question was put before to the current Shadow Foreign Minister as to whether the current Opposition would walk away from the possibility of supported travel through private sponsorship; he declined to give that undertaking.
That's the circumstance in which we found ourselves in. It's just a reality, if you are trying to do these jobs from Opposition then you are relying upon private sponsorships whether it's by companies with interests in the resources sector, the commercial sector, the financial services community or wherever to make sure that that travel is possible.
The key thing is transparency and declaration.
ULHMANN: The key thing surely Prime Minister is the question to you. Do you think this is a good system? Doesn't it open itself to influence peddling?
PM: Well that's why I've put the whole question of political donations onto the agenda some time ago. On the question of should there be a change to the current disclosure limit, remember the previous Howard Government increased the disclosure limit to $10,000. We brought it down to $1,000, is our proposal.
Secondly we've already proposed to put a ban on foreign donations to Australian political parties. The simple reason is that we've got to not go down the road where we have such large amounts of money with no ultimate ceiling being placed on what's spent on election campaigns. And on the question about sponsored travel I'm all for as I indicated I think in passing yesterday, I'm all for having these things looked at into the future. What we dealt with in Opposition were the cards that we were dealt by the then Government. Which was no support what so ever for us discharging our responsibilities as either the alternative Foreign Minister or alternative Trade Minister of the country.
ULHMANN: Prime Minister would you urge China to allow international observers into Tibet so that the world can see that they are showing restraint which is what you were calling for?
PM: I think it's important and I've said this to Chinese leaders over many, many years that while we respect China's sovereignty over Tibet there are many, many problems when it comes to Human rights abuses.
We have constantly urged restraint as the effectiveness of the mechanism that you propose; I'm not advised as to what currently on the table or whether that would work. I think the important thing for the international community with our friends in Beijing to put clearly on the table the fact that we believe that restraint is to be demonstrated. And also for Human rights standards to be observed.
ULHMANN: How can it be demonstrated if you can't see it Prime Minister?
PM: Well my understanding is and I'm not fully up to date on current domestic travel arrangements within China but foreign missions resident in Beijing and elsewhere are entitled to travel to Tibet.
There may be and I stand to be corrected in terms of any recent restrictions, an ability to travel reasonably extensively in Tibet and to make there own reports on that. I think it's important for all Governments to indicate that when it comes to the Tibetan people that appropriate levels of restraint are demonstrated by the Chinese authorities.
That's why I have made the statements I've made during the course of this week.
UHLMANN: Prime Minister, will your first Budget be aimed at helping the Reserve Bank slow down the Australian economy?
PM: Our intention with our first Budget, Chris, is to produce a responsible budget. That means, as I indicated in January, setting our target based on the state of the global economy at the time, of delivering a surplus of 1.5 per cent of GDP, that's the target. And we believe that's important to take pressure of public demand, therefore take pressure off demand, and assist in the overall inflation challenge that the Reserve Bank has to contend with.
UHLMANN: So, you are trying to slow the economy down?
PM: We believe that it's a question of getting the balance right between the contributors to overall demand, which is private demand, and public demand. Remember, private demand is going to be assisted by the tax cuts which are coming in to assist working families. It will be assisted by also the increase in the childcare tax rebate. On those questions, we believe that given we are proceeding with those pre-election commitments, that on the public demand side we therefore for this and other reasons, need to show restraint.
UHLMANN: So, you are trying to slow the Australian economy down in concert with the Reserve Bank, is that what you're trying to achieve?
PM: We're trying to achieve a balanced outcome. As I said, if you look at the total inflation equation, what's it consist of? Demand side factors and supply side factors. Two elements to demand - public demand and private demand - we control public demand, we have some influence on private demand, and therefore we've got to get the balance right. And therefore, because we're proceeding, as we believe we must with the pre-election commitment we made to provide tax cuts to working families, that on the public demand side we need to show appropriate restraint and not least because the government which preceded us allowed government spending to simply balloon out of control - running at 4.5 per cent real as of when the Government took over and interest rates running at the second highest rates in the developed world and inflation at a 16-year high.
UHLMANN: Prime Minister, thank you.
PM: Thanks very much.
ENDS