GILBERT: You're heading off to New York this afternoon. You're going to miss the rest of the week in parliament. Why do you need to go?
PM: Well, this week in New York the annual meeting of the UN General Assembly will have heads of government from 122 countries around the world including the heads of government from 13 of the world's 15 major economies.
There'll be one subject, one core subject on people's mind, and that is the global response to the global financial crisis.
And there are two schools of thought here. Either you can go down the populist road, the opportunistic populist road, which is what various people in politics are championing at the moment and not go, or you can act in the national interest. My judgment is that my responsibility as Prime Minister is to act in the national interest, which means working through with other heads of government the best response to this global financial crisis.
Australia has to have a seat at the table, not just sort of hang out to one side an expect everyone else to kind of solve it. That's not how it works.
GILBERT: But that reason was given later. The primary reason was to address the UN General Assembly. Are you too focussed, too obsessed, with foreign affairs?
PM: Well Kieran, you know, Australia is part of a global order - a global security order, a global economic order and a global order when it comes to climate change. And Australia must have its voice heard. That's my job - I'm the Prime Minister of the country. Mr Howard in the past, and I've supported him for doing this, addressed the UN General Assembly to make Australia's case known.
I do the same - on our response to the global economy, on our response to the great challenge of climate change as well as the enduring challenges of security. You can either be Australia with its voice at the table and at the UN General Assembly this week, where, as I said, 13 out of 15 heads of government from the 15 largest economies in the world. Or you can ‘that's not our business.
Well you know something, the national interest, I believe, is served by Australia's Prime Minister being there arguing our case, and I intend to do so.
GILBERT: Have you got the balance right? After this trip you would have met Ban Ki-moon three times. You haven't met Nick Xenophon once. Yet you've got problems getting your legislation through the upper house. Is your balance right?
PM: You know something Kieran, I have a very competent team in the Senate who deal with a whole bunch of Senators, independents, from the Greens, from the National Party, and that's their job, to assist in steering our legislation through the Senate.
But you know what the nature of our challenges today are, they are fundamentally dealing with how we build a strong economy in Australia for the long term, and to see Australia through this financial crisis. That means ensuring that we have a strong surplus at home through the Budget. But secondly, it means that our actions as Australia are properly coordinated abroad with the other international financial institutions and other national governments. And that's why my responsibility as the head of government is to be there participating actively on Australia's behalf.
GILBERT: Malcolm Turnbull says he would like to sit down with you to talk to you about what you can do to take the pressure off the banks. Why is that such a bad idea?
PM: Well can I just say, I saw Mr Turnbull the other day talk about bipartisanship. Well, bipartisanship would begin with unblocking the Government's Budget measures in the Senate. If I look across the world today at this time of global financial crisis, and I look at the major economies grappling with this crisis, we in Australia are running a strong Budget surplus, some $22 billion, 1.8 per cent of GDP. And I look across most of the others, they're all in deficit.
Now, the reason we've managed to generate a surplus as a buffer for the future is we've taken strong, and sometimes unpopular, actions in the Budget. For politically opportunistic reasons the Liberals are now trying to block those in the Senate - $6 billion worth, which the Liberal Party have described as a bit of loose change. That's not my approach. So on bipartisanship, it begins at home, it begins in the Senate. I'd like to see some concrete action on behalf the Liberals there. It's in Australia's national economic interests that they do so.
GILBERT: What about the Opposition Leader raising the prospect of providing greater support to our banking institutions? Why not at least discuss that?
PM: Can I say, governments are elected to govern, and what we've been doing since we have been in office is on a regular basis work through with the Australian financial regulatory authorities, the Australian Prudential Regulatory Authority, the Reserve Bank of Australia, as well as the Australian Securities and Investment Commission, on a weekly-monthly basis about the regulatory and liquidity needs of the Australian economy and the financial system. That is part of a core continuing work of government. And we've been doing so from day one.
Secondly, looking to the future, there are, I see a couple of approaches which people seem to be recommending. There is one I have heard in the last few days which says that Australia needs to adopt the US model of providing an Australian equivalent I assume of a $700 billion bailout of bad debt.
Well can I just say the circumstances in Australia's financial system are radically different from those in the Unites States. First and foremost, subprime which lies at the core of the US financial crisis, represents some 15 per cent of total US mortgages and by and large they are bad debt, in Australia less than 1 per cent. In the United States we have high levels of arrears on payments for mortgages, In Australia it is 0.55 per cent.
So we can have one populist school of economic thought which says you can mouth off about these things, you can motor mouth your way through these things and talk about them as if there is no difference between Australia and the United States when objectively there is. Or the alternative approach and that's our approach, a responsible course of economic action, dealing in a practical daily, weekly response to the advice of the regulators to make sure that our institutions remain in good order.
GILBERT: But your Assistant Treasurer introduced legislation in June to broaden the investment mandate of the Office of Financial Management. Why would you do that if you wouldn't at least consider the possibility?
PM: But what I am saying Kieran is that the Government has been active across a range of fronts all year.
GILBERT: So what's Malcolm Turnbull done wrong then in raising this as a prospect?
PM: Can I say to use language which says that Australia needs to adopt American style practices, referring to what has occurred over the weekend, is of itself irresponsible language. Because it suggests that the nature of the problems in mortgage markets in the United States are similar to those in Australia. They are not and for the figures I gave out before.
Therefore the responsible course of action is to work calmly and methodically through these challenges as we have done all year with the regulators in ensuring that liquidity levels are kept up within the Australian financial markets through the actions of the Reserve Bank. Through taking other measures in the debt market which we took months ago, to do other measures like the proposal we have for a financial claims scheme for Australian depositors and policy holders and through a range of other measures as well. We have been doing this from the beginning.
That's the responsible course of action, calmly, methodically. As opposed to sounding off in a press conference.
GILBERT: Just another couple of quick questions to finish up. The polls show an immediate bounce for Malcolm Turnbull and the Coalition. Can you beat this guy?
PM: Well you know something, when there is a change of political leader in Australia there is always a poll bounce. It's been that way since time immemorial and will be into the future as well.
The challenge for us for the future as the Government is to implement our plan for Australia's long-term future. Building an Australia for the future, a strong economy, investing in education, investing in health care and doing the right thing on climate change and water. And we will be judged, Kieran, at the end of the day on whether our plans have been implemented or not.
GILBERT: I noticed you didn't say you could beat him though?
PM: You know something I think people are sick and tired of personality politics and therefore it's going to go down to the content of our policies and whether we implement them or not. And I am very cautious about that, very considered, very methodical, and we will work our way through this agenda. And we will be implementing our plan for the country's future.
And at the end of the day people will make a judgement on the success or otherwise of what we have done and I am quite prepared to have my reputation staked on that rather than personality politics.
GILBERT: Julie Bishop is about to be appointed the first female shadow Treasurer, the first woman to take a treasury portfolio either in Government or Opposition. Do you welcome that, do you congratulate her?
PM: I haven't seen that report, so that's an internal matter for the Liberals.
I would say one thing though to the Liberals, the test for the Liberals is the importance which they now attach to pensions given that their spokesman for pensions Tony Abbott, the shadow Minister for families which is responsible for pensions says, this is not an important portfolio and certainly not important enough for him.
So on the one hand we have all this carry on by the Liberals in their new found doctrine of compassion and then in a moment of political honesty we have Mr Abbott, the shadow Minister for pensions, saying that portfolio is not important enough for him.
The test for Mr Turnbull is what is he going to do about that.
GILBERT: Prime Minister thanks for your time
PM: Good to be with you