HOST: Prime Minister Rudd, thank you so much for speaking to CNN.
PM: Good to be on the program.
HOST: I will start by asking you about climate change negotiations. It's been widely reported that talks have stalled, effectively, ahead of Copenhagen and that big conference, and now, President Obama, the US President, will be giving what's widely regarded as an important speech here in New York on Tuesday. What are your hopes for that speech? What are you looking to hear from him?
PM: Well, the first thing is that - and it's a good thing for the world - is that the United States has re-engaged with the global climate change agenda. America's been missing for too long, but under President Obama's leadership, they're back, so therefore, we have America at the table.
Secondly, what are we wrestling with as the countries of the G20 at the moment, or the wider United Nations family? Targets and commitments from developed and developing countries respectively. How do we finance all this long-term, from carbon markets and from public finance? And on top of that, what technologies do we deploy to make the bringing down of greenhouse gas emissions possible?
The American President has a unique opportunity, and I know President Obama will be stepping up to the plate to push the agenda forward both at the UN, and at Pittsburgh at the G20 summit, and we still only have 80 days to go to Copenhagen, so I'm confident he'll provide additional momentum.
HOST: The question though, many see the US as being weakened because climate change legislation is effectively stalled in the Senate, and some are questioning, basically, how much legitimacy they now have to drive negotiations ahead of Copenhagen. Do you feel they've been weakened, that, you know, their legitimacy hangs in the balance now, because they can't even get the legislation passed at home?
PM: Well, let me give you a parallel. Australia is very active in climate change. The Government that I lead was only elected 18 months or so ago. We ratified the Kyoto Protocol immediately, and we are into these negotiations big time. But you know something? Our domestic Emissions Trading Scheme was also voted down by our Senate a very short time ago. That doesn't impede me from being active in these negotiations, and my observation of President Obama is that it doesn't impede him, either.
I was discussing this this morning with one of President Obama's illustrious predecessors, Bill Clinton, about the momentum we need globally for climate change. The great thing is that America is back in the game. You cannot conceive of the possibility of a Copenhagen outcome if America was outside the game.
What we need, of course, is American leadership, and we've seen that through President Obama. But we also need to see the emerging economies, including China, step up to the plate as well. That's where the critical nature of an agreement will lie.
HOST: The bottom line is China says the developed world has a historical responsibility to basically step up and take a greater share of the cuts, of the carbon emissions cuts. You know, the argument, the industrial revolution, they've been burning fossil fuels for as long as they have - where do you see Copenhagen going? Is it time to basically re-align our expectations of that conference? Because the bottom line is, it's hard to see how all parties are going to meet.
PM: Well, it is 80 days or so to go. The clock is ticking. There's not much time left. But this is a time for political leadership, and for global political leadership, and not just from America, but from all of us. At the G8 and Major Economies Forum meeting in L'Aquila in Italy in July, what I said to my colleagues in the G20 was our technical negotiators need a fresh mandate from us at the political level.
That's what needs to be communicated to the larger economies around the world, developed and developing, to make it happen. Our technical negotiators can only go so far, and that's where the G8 - the G20, I should say - meeting in Pittsburgh also has a role to play. Time is running out, but I believe if we see action from the developed and the developing, we can get there.
My position has also been we can't allow this to degenerate into a debate between history and the future. Historical responsibility for the developed world - yes, tick the box, that's true. The future, absent any policy change, and the largest contribution to future greenhouse gas emissions will come out of China and India. We have both a historical and a future set of responsibilities. It's time for political leadership to come over the top of that and just forge an outcome.
I believe we can get there, but it's going to take every bit of effort to get there, and right now it's looking troubled, but I've got to say, when there's hope, we should all keep trying, and try we will.
HOST: Okay, we'll be off in a sec. Next we want to talk about Afghanistan - recent elections held in that country, elections mired in allegations of electoral fraud, all sorts of things. They've thrown out some of the ballots. You know the situation. Where does that leave the legitimacy of the vote and, ultimately, the result, in your view?
PM: Well there are two things we should be a given here, and perhaps a third. Let's always remember why we are in Afghanistan in the first place. We're doing this interview in New York City. The reason we are all in Afghanistan is because of the murderous attacks which occurred here eight years ago.
That is as real today as it was back then, because why was that possible? Terrorists were enabled to train without interference in Afghanistan, which became like a free-range training farm for terrorists from all over the world. Let's never forget that point.
But going to the present, of course we're dealing with this challenge from the electoral process, which has been fraught. And secondly, but also, an underpinning political and military strategy for the long term to assist the Afghan Government and armed forces to take control, fully, of the security and political destiny of their own country.
HOST: But if they have no legitimacy in the eyes of the domestic electorate, then what?
PM: Let's wait for this electoral process to reach its proper conclusion. Of course, we are not in the business of establishing a perfect Jeffersonian democracy in Afghanistan. Anyone who is objective in their analysis of where Afghanistan has been for the last several decades, let alone the last several centuries, will understand you can't go from here to here in one simple step.
So this is not going to be a perfect outcome, let's just all accept that for reality, rather than pretend that it's something other than it could ever have been. But on top of that, whoever emerges as the legitimate government of Afghanistan through this process, we need to work with our friends in Kabul, and our friends and partners in Europe and the United States, and in Australia, to ensure that we are prosecuting the same military strategy, and political strategy, and development strategy, which enables us to ensure that the Afghans can take responsibility for their own destiny.
We're not there yet. It's going to take a while yet. But we must remain committed.
HOST: The expectation is that President Obama will make a positive address to the General Assembly, he will make a plea to world leaders to support the mission in Afghanistan. Is Australia prepared to increase its troop presence there, in Afghanistan?
PM: Well since President Obama came to office, I think we are one of the few Governments of the world who have increased our troop presence-
HOST: -Will you go beyond that?
PM: By almost 50 percent. We already are among the top 10 military contributors to Afghanistan. We are, I think, after the United States, the largest contributors to the Afghan National Army training trust fund, which provides additional financial assistance to raise the Afghan National Army. What's our principal mission? In the province we have shared responsibility, Oruzgan province, in the south of the country, and it's a violent part of the country, is to raise up sufficient Afghan National Army battalions to transfer responsibility to them.
It's a difficult training task. We've begun it. We intend to complete it. That's our contribution to this overall effort.
HOST: So you will not increase troops?
PM: We believe that our current commitment's about right, and I note again for the record that in the six or nine months since President Obama has been in office, we've already increased our contribution by about 50 percent. It is important that all countries put their shoulder to the wheel.
Let's be honest about this, this is a difficult, hard, and bloody war. No one should pretend that it's not. And it's going to get harder. But that should not weaken our resolve or dim our vision as to why we are there in the first place.
Let us never return to a day when we think that, somehow, the natural state of things is for a country like Afghanistan to be an open training ground for the terrorists of the future.
HOST: What is your vision of success in Afghanistan?
PM: Well, can I say this: my vision of success in Afghanistan is not the creation of a Jeffersonian democracy. Let us be clear about that. I think there's been a bit of misty-eyedness about this from time to time. Remember, this country has essentially come from a feudal past, and having been there a number of times myself, I understand something, at least, of the conditions on the ground.
So what we need is political stability, what we need is an effective set of security forces, both police and army, and what we also need on top of that is the prospect for development through reasonable government at the provincial level. And again, our province where we share responsibility, Oruzgan, that is what we're seeking to do, at those three levels.
HOST: My understanding of it is that the Netherlands will be pulling out their troops from that province sometime next year. What will that mean for the Australian mission there?
PM: Well, as I said, we believe we have our current commitment about right. Of course, we'll be looking to our friends and partners in the United States to assist us with other burdens which may arise should the Netherlands proceed to withdraw their forces, as they've indicated they will. I think, however, this is a time for all countries of good will, all countries of strong resolve, to keep their shoulder to the wheel. It's tough, it's hard, it's difficult, but you know, the hardest decisions in global politics always are.
HOST: Australian troops are in there for the long haul, is that what you're saying?
PM: Absolutely. I've said this before. I said that before I became Prime Minister of Australia, I've said it repeatedly since I have become Prime Minister of Australia - our commitment, in partnership with our American allies, is to be there for the long haul. Our mission, within the province where we share responsibility, is as I've already described.
HOST: Let's talk about the G20, because you have a very busy week, so many subjects to get through. Let's talk about Pittsburgh. One of the things that has emerged and is being reported is that the French President, Nicolas Sarkozy, has said if there isn't an agreement on strict limits for all financial executive compensation, he will walk out of the gathering, and we already know that this is certainly a move that the US and the UK is against. What is your view on executive compensation and putting caps on that?
PM: Well, let me step back for one minute, and then come specifically to executive remuneration. The G20, this gathering of economies, the largest economies in the world, by and large, has achieved significant success in its meetings in Washington and London, if you remember back to April, the global economy seemed to be in freefall.
The IMF, through its own studies, concluded that through our collective actions as economies through stimulus and through the review of financial regulation, the re-resourcing if the International Monetary Fund, we have seen a turnaround in the global confidence indicators.
Of course, we're not out of the woods yet, and there's much to be done, and one of those regulatory matters to be done, of course, is the one you raised, about executive remuneration. I'm confident that at Pittsburgh we can find the right way through, of course to make sure there is a proper calibration of risk and reward within the financial services industry.
In Australia we currently have this matter a subject of immediate and intense review through a body which we call the Productivity Commission. That is, how should it be framed for the future to get the balance right between flexibility and incentives which we need in a market economy, which we all support, on the one hand, but with appropriate national, international corporate and community responsibility interspersed as well.
I think we can get that balance right, and I believe the mood of the G20 is to get it right as well.
HOST: Australia has been praised by the OECD for the steps taken by your Government to counter the economic crisis. What lessons do you think the rest of the world could take from the way you handled the global economic downturn? What are the lessons, in your view?
PM: I'm never in the business of preaching to anybody. I'd much rather attend to what I need to do at home. If people wish to observe how we've done things and reach their own conclusions, that's a matter for them.
To emphasise what I said before, national actions go so far, but the global actions that we've achieved through the G20 - $5 trillion worth of stimulus injected into the economy when it was falling through the floor, $1 trillion worth of resourcing for the International Monetary Fund so that any other implosions in banks in Europe or wider implosions in the financial sectors of Eastern Europe wouldn't have a ricochet effect across the global economy, a moratorium on major outbreaks of protectionism, reforms of financial regulations of the kind we've just been speaking of - these things are necessary to restore global economic stability and global growth and recovery.
Nationally, what we have sought to do in Australia, is take early, decisive action in support of jobs and real economic growth, economic stimulus as we've done with other countries as well, but as a result of that, and our heavy emphasis also on infrastructure investment through that stimulus, we've managed to be the only economy across the OECD in the last 12 months to have generated positive growth, of the major advanced economies, the only one to stay out of recession so far, the second-lowest unemployment, the lowest debt, the lowest deficit.
HOST: But unemployment is rising.
PM: I'll go on to unemployment. Unemployment, for us all, is, because it's a, as the economists would describe, a lagging indicator, will continue to rise. Ours currently sits at 5.8%. It's been that way for a while. We are injecting large amounts of stimulus because we believe the maintenance of jobs and employment is critical, not just to human decency, but critical also in terms of the path to economic recovery.
You've got to have these two things foremost in mind. I think premature calls for the withdrawal stimulus, which you hear elsewhere around the world, I think are misplaced in terms of the challenges which still lie ahead.
But for Pittsburgh, I think there are two other challenges on this as well - to begin among us all to discuss, and to deliberate on, and to agree on, a framework for coordinated withdrawal of these emergency measures, these emergency interventions over time, and secondly, how do we craft the long-term economic growth strategy which is sustainable for the world, no longer dependant on these massive financial imbalances; huge, debt-driven consumption on the one hand out of surplus economies on the other.
We need a new, sustainable growth model for the future. Otherwise we may be looking at the prospect of flat global growth for a while to come.
HOST: How close are we getting to a global deal that all parties can buy into and stick to?
PM: Well, can I say our officials work very closely on this together as the G20. One of the advantages of the G20 is that it's sufficiently small, a group of 20, for efficiency to be possible in decision making, but sufficiently large to have representative legitimacy. We represent 85 percent of global GDP, 80 percent of global trade, I think 90 percent of global stock market capitalisation, and across those economies, the major emerging economies, like China and India, as well as, of course, the United States and economies like ourselves, there is a robust spirit of cooperation.
So on these two questions - a framework for exit in the medium term from these emergency measures, beginning to develop a framework for sustainable, long-term economic growth for the world - I believe we see a positive approach from the Governments of the world, but Pittsburgh is going to be a challenging meeting.
But then again, so was London, and in London we managed to defy expectations. Pittsburgh will be tough, but Pittsburgh will be one further step, together with G20 summits next year, in the direction of global economic recovery.
HOST: I think a lot people are looking at distinctive diplomacy, international diplomacy, multilateral diplomacy, and whether it's just coincided with the arrival of President Barack Obama on the scene. The feel as if there's a renewed interest or a renewed vigour, more buy-in, from all parties around the world.
My question to you, if you look at this big week that you have ahead, will anything concrete really emerge that will change the lives of people, because that's what, you know, people say 'great, world leaders come to New York, they have all these bi-lats and side meetings and receptions and dinners and they speak at the General Assembly, but what concrete do they have to show for it?' What would you say to them?
PM: Let me give you just two examples. And I again I refer to a G20 outcome, but that represents a large slice of the global economy. If you go to the key question of jobs. Take, for example, the possibility that the G20 economies did not agree to put $5 trillion worth of injection into the global economy in the critical events of March and April this year.
Unemployment around the world, and I believe there's something like 12 million jobs that have been lost in developed economies already, would in fact be much, much worse, were it not for the stimulus actions taken.
Where would the global banking system be had governments not acted through the coordinated actions at an executive Government level, but also through central banks? So I can understand people's cynicism about what Governments do, but if you were to ask yourself this question: is my deposit safe in my bank? Do I still have the prospect of a job, or more of a prospect of a job than would otherwise be case?
These critical decisions by Government had a very practical effect when it comes to working families across the world.
I think our challenge for global Governments, always, is to translate these large problems, these large decisions, into things which count for people. Jobs, of course, is immediate, and climate change, energy efficiency, how do we generate through the carbon transformation of our economies? How do we reduce people's power bills by improving energy efficiency in the home? These are as much practical challenges as they are for large policy debates which we are engaged in. We need to do both.
HOST: So what is your message throughout this week in all the meetings you're having, and in your address to the General Assembly?
PM: The core message from the Australian Government's perspective is this- our job is to rebuild jobs in the global economy, and through that in our national economy. It is fundamental to people's wellbeing and fundamental to economic recovery. Our second message is this- the time for procrastinating on climate change has come, and it's gone.
We need political leadership to push the momentum towards Copenhagen to get a positive outcome. No-one else is going to make those decisions for us. But the good news is US global leadership is back, and it's back working through the institutions of the world, not simply standing outside them.
HOST: Kevin Rudd, Prime Minister of Australia, many thanks for speaking to us.
PM: Thanks for having me on the program.