CURTIS: Mr Rudd, welcome to AM.
PM: Good morning.
CURTIS: How are you going to respond to Fiji's decision?
PM: Well, first of all I'll be speaking with the Australian Foreign Minister this morning about an appropriate response to developments by the Fijian regime, but let's put this into its context. The Fijian regime, led by Commodore Bainimarama has conducted the military coup, he has violated the constitution, he has refused to hold elections, and he's suspended the judiciary, and so therefore we have taken a deliberately hardline approach to this regime because we do not want this coup culture to spread elsewhere in the Pacific. That's our position. We will continue to maintain that position, and we'll consider an appropriate response to these actions taken by Bainimarama in the last 24 hours.
CURTIS: But that hardline response hasn't moved Fiji any closer to a return to democracy. Do you need to toughen your stance even further?
PM: Well, do you there are something like 15 island states in the Pacific Islands Forum? My concern, fundamentally, as Prime Minister of Australia and as chairman of the Pacific Island Forum, is to ensure that we do not see a spread of coup culture to the rest of the Pacific. That's the bottom line here.
Secondly, how do we actually succeed in ultimately obtaining a return to democracy in Fiji? That is very difficult when you have the attitude taken by Bainimarama, who constantly puts off the possibility of holding elections. That does not mean, however, that you should therefore soften your approach.
We belong to a family of democracies in the South Pacific. We, the Australian Government, are engaged in active development programs with our partners in the South Pacific. We want to see stability in the South Pacific, and we're not about to simply allow a coup culture to spread. That's why we'll maintain a hard line in relation to this regime.
CURTIS: What then, are your options? What things could you consider?
PM: Well, we will discuss that appropriately, calmly, methodically today, as the Australian Government does in response to one challenge or another. This is another one. Obviously, there is a menu of possibilities, but I should emphasis the nature of the sanctions regime we already have imposed, which has, of course, caused the Fijian regime to react with some anger towards Australian actions. We have travel sanctions that apply to the coup leader himself, his supporters, his family, to interim government ministers and their families, ranking members of the Fijian military, and interim government appointees, including judicial appointees - because we are not about to legitimise what is a regime which has obtained power through military force, and we do not want that culture to spread anywhere else in the South Pacific.
CURTIS: On the issue of asylum seekers, the survivors of the Cocos Islands boat sinking are being taken to Christmas Island, and the Western Australian Premier says you should take the asylum seekers onboard the Oceanic Viking there too. Why is that not an option?
PM: Well, first of all, can I say in relation to Cocos Island, this particular vessel in distress was identified as being in distress in the Australian search and rescue area. We had no vessels available in the area at the time, foreign vessels assisted, that is normal procedure. What is equally normal procedure and consistent with our international obligations is then to take a distressed vessel or its passengers to the nearest location, and that, in this case, is going to be Christmas Island. That's consistent with international obligations and practice.
You ask the question about the other vessel, the Oceanic Viking, and those who were rescued at sea from the vessel which was located in Indonesia's search and rescue area. Once those individuals had been transferred to an Australian vessel at Indonesia's request because there was no Indonesian vessel nearby, again the normal procedure is to head to the nearest available port, in this case, an Indonesian port, and the Indonesian search and rescue authority invited the Australian vessel to go ashore. That is why these circumstances are different.
I've just got to say, we adhere to normal processes and procedures when it comes to such matters. It's the right and consistent approach to act in accordance with the principles of international maritime law and international maritime safety law.
CURTIS: You said before the Newspoll yesterday that your stance on border protection and asylum seekers wouldn't be popular, and that seems to have been borne out, but what were you trying to say about the Australian people through that, that they don't want asylum seekers brought to Australia, or that they do and don't believe you're doing the right thing?
PM: As Prime Minister of Australia, my responsibility is not to act as a commentator. I'm engaged as Prime Minister of Australia by the Australian people to take decisions in the national interest, and I-
CURTIS: But they were your comments, saying that your stance wouldn't be popular.
PM: I was about to go on to that point, is that, as I said, my responsibility is to take decisions in the national interest, whether they are popular or not, because if you are taking difficult decisions, hard decisions, on questions of asylum seekers, it follows that there are going to be reactions against those decisions from people from the Right of Australian politics, people to the Left of Australian politics. My job is to get on with the business of implementing a tough, responsible, fair policy on border protection - the one we took to the last election, the one we've implemented since then, hardline on people smugglers, humane in dealing with asylum seekers.
CURTIS: Is there a prospect, though, that people are responding to confusion in your message, to a failure of the tough but humane message, to really explain what you're doing. Perhaps the sight of a leader who's portrayed himself as decisive not acting as they might expect.
PM: The challenges of dealing with border protection are common challenges faced by so many governments around the world. If you were to speak to my counterparts, for example, in Europe, who are dealing with challenges across the Mediterranean, people who are dealing with challenges of people smuggling in various parts of Asia, these are common, difficult challenges for those in government.
Bear in mind what we are dealing with here: around the world, 42 million people displaced. 250,000 Sri Lankans displaced in the final stages of a conflict only several months ago. Tens of thousands of people moving into Europe and in to North America, and so far we've had something like 1,800 or so arrive in Australian waters. These are global challenges, they are regional challenges. Our response, again, is to implement, and to continue to implement, a hardline policy against people smugglers and a humane approach to asylum seekers.
That's what we were elected to do. That's the policy we took to the Australian people. My job is to act in the national interest, whether it happens to be popular or not.
CURTIS: You rejected calls to revise your economic stimulus package in the wake of a stronger economic outlook, but the way the package withdraws was designed at a time when you expected the economy to be far worse. Given the Reserve Bank said yesterday that the economy will grow close to trend over the next year, isn't there a case for speeding up that withdrawal?
PM: The Australian Government has intervened with early decisive action to deal with the worst global economic crisis in three quarters of a century. Let's go to the RBA. The RBA's policy and its monetary policy is still expansionary. The RBA's policy was to bring down interest rates by 425 basis points to what the Governor has rightly called extraordinary and emergency measures and emergency levels.
What has occurred since then is a change back by 50 basis points, which means that against the pre-existing rate, we are still three and three quarters of a percent lower. That is still an expansionary monetary policy.
CURTIS: But the outlook for the economy is getting better and better, isn't it?
PM: Can I say that the view on the part of Treasury advisers is that we continue to have uncertainties in the global economy. That is why we believe the prudent approach is to adhere to the in-built drawdown of the stimulus strategy which the Government implemented, starting from October last year. That is, an effective stimulus strategy is timely, targeted, and temporary. Ours was that. It peaked in the second quarter of 2009. It is already coming off.
That is the way we designed it, but the impact is this - Australia is doing better than practically every other advanced economy in the world. We are the only economy to grown positively in the last 12 months, of the advanced economies. We are the second-lowest unemployment of the major advanced economies, the lowest debt, the lowest deficit, and the only one not to have gone into recession.
I think our economic policy settings have been right so far, but managing the recovery will be a challenging task for policy makers in Australia. Managing the crisis has been a challenging task as well.
CURTIS: Prime Minister, thank you very much.
PM: Thanks for having me on the program.