UHLMANN: Julia Gillard, welcome to ABC News 24.
PM: Thank you very much.
UHLMANN: What do you hope to achieve at the East Asia Summit in Hanoi?
PM: This is an important meeting, of course the East Asia Summit is bringing together the right countries, the countries in our region for a comprehensive dialogue across security, economic matters, political matters.
The East Asia Summit is in the process of welcoming into its membership the United States and Russia. They will be there participating in this meeting, their membership will be formalised for the next meeting. So that means its brings together the ASEAN countries, the US and China - sorry the US and Russia - ultimately, as well as China, Korea, Japan, us, New Zealand and India. So it is a comprehensive regional dialogue.
UHLMANN: Are you going there with anything specific in mind that you'd like to achieve?
PM: Well we'll be talking about the role of the East Asia Summit. Obviously this is in development looking forward to its new and expanded membership with the US and Russia. We want to make sure that there's dialogue on the question of a further meeting with finance ministers. We believe that could play a useful role, brining the finance ministers of the same countries together. We also believe there's scope for cooperation on disaster management and we will be talking about that.
UHLMANN: Is the big question though, for Australia, how the relationship with between China and the United States evolves over the course of the next ten, twenty years?
PM: I think there are a set of big questions for us and, of course, that is one and what is very important about this evolving piece of regional architecture is that it will bring, to the same table, China, the US, countries like India, as well as our own, working through defence issues, economic issues and, political issues.
UHLMANN: Do you think the power is shifting in Asia and does that present risks for Australia?
PM: Well certainly the rise of China is something that is on everybody's mind, in terms of global politics it is the phenomenon of our age and the ever strengthening of India too, is also making a very big difference to our world and our region. And this important dialogue at the East Asia summit brings these nations together.
UHLMANN: Do you think there's a concern that it will bring the United States and China into conflict?
PM: I think dialogue always helps manage differences of opinion that's why it's so important to have them at the same table.
UHLMANN: What about the way we deal with our relationship with Japan as well, because there is concern, by the Japanese, that Australia is beginning to ignore Japan because of the rise of China?
PM: I certainly would say our relationship with Japan continues to be a close and strong one, I will look forward to seeing the Prime Minister of Japan for the second time at the East Asia Summit. We are good friends, strong trading partners and work in a very collaborative fashion in the region.
UHLMANN: There are two powers though in East Asia, one's Japan and one's China and they are both in competition for resources so there are really strained ties there and again Australia finds itself in perhaps sometimes an awkward position?
PM: My position and I think the position of this nation over time has been that we can sit around tables, talk to people, maintain good relationships and, encourage people to work through differences of opinion in a peaceful and constructive fashion.
UHLMANN: Now is there some deal with Burma and what's Australia's attitude to that? Is it best to try and include Burma at the table in discussions or to exclude it?
PM: I think our view about the situation in Burma obviously is one of very strong concern on human rights questions and we make that perfectly clear in a wide variety of ways including when we attend multi-national forums like this one.
UHLMANN: You're coming back, now, via Malaysia and Indonesia and will people smuggling be at the top of the list in the sorts of things that you'll be discussing with the Prime Minister and the President?
PM: It certainly will be on the list. I'm looking forward to a visit to Malaysia on the way back and discussions with the Prime Minister there and indeed with the Cabinet.
Then I will be coming back via Indonesia for an official visit at the invitation of the President. Of course, we're sitting here at Parliament House today and people would recall that the President of Indonesia came to Australia earlier this year and addressed the House of Representatives which was quite a special moment for this Parliament, for our nation and for the relationship between our two countries.
I will be looking to talk through a set of issues: economic questions, trade questions, education, people smuggling, counter terrorism, as well as further cooperation on issues like disaster management and relief. We are providing a million dollars to assist after the very recent tsunami and loss of life in Indonesia so I will also certainly be passing the condolences of the Australian people direct to the President of Indonesia.
UHLMANN: Is it your expectation that you may be able to progress your idea for a Regional Processing Centre in East Timor while you're in Indonesia?
PM: Well certainly I will raise the issues of people smuggling and people movement. The dialogue has been continuing. The Minister for Immigration has had discussions in our region, including with Indonesia, and those discussions will continue.
UHLMANN: Do you have any timeframes? Is your expectation that this is something that can be achieved in this term of government?
PM: Well look, I've always said, on this question, that I'm not going to pretend to the Australian people that there's some quick fix here. This will take methodical and patient work. We will be in dialogue with the region about a regional protection framework and in dialogue with East Timor about a Regional Processing Centre. So we're going to continue to work through.
UHLMANN: Will you be raising Shapelle Corby and trying to get her sentence commuted in anyway?
PM: Well I think it's best for me to pursue those questions, issues involving Ms Corby, and of course there are other Australians in Indonesia that we are concerned about, to pursue that directly and privately, I actually think is in the best interests of those individuals.
UHLMANN: Pursuing also the death penalty that's been applied to three members of the Bali Nine?
PM: Well, clearly Australia does not support the death penalty. That is our position as a nation. When it comes to advocacy on behalf of individuals it's certainly in the best interests of those individuals for me to be doing that discussion privately rather than publically and I intend to.
UHLMANN: You've criticised the Opposition in the past for three word slogans on 'stop the boats'. Isn't economic hansonism a two word slogan?
PM: Well it's a description of the conduct I believe we are increasingly seeing from the Opposition. And that is conduct that looks for a popular slogan, something that sounds goods, sounds appealing. But when you actually think about it, would be to the long term detriment of the nation. We are a country that has engaged in twenty five, thirty years of economic reform.
Yes, there have been some things that have been contested between the political parties but there's been a lot about modernising our economy that has been worked on with a broad political consensus and I have just sounded a warning bell that we are seeing that political consensus break down and the Opposition prepared to sloganise and seek to wreck the necessary reform programs for the nation's future.
UHLMANN: Well, the Labor Party opposed the GST, couldn't the Coalition say opposing the NBN is in the same sort of class?
PM: And of course there have been contests. Contests about things like workplace relations. The Coalition for Work Choices, the Labor Party decidedly against it. So yes, we've seen those contests. But broadly, when it comes to an open trading economy, to having a modernised economy, interest rates set independently, a floating currency, turning our face to the world, engaging in trade, understanding that we've always got to be working on productivity in our global competitiveness - these things have been shared economic space and we've seen in this Parliament that the Liberal Party, once a great advocate of economic reform, walking away.
UHLMANN: But contested, they've always been contested. The Labor Party has reserved it's right to contest some areas and the Coalition's reserving its right to contest its areas of interest.
PM: Look, I understand of course we're always going to have economic debates. But I didn't expect, in this Parliament, in the 21st century to have a shadow treasurer flirting with re-regulating interest rates.
UHLMANN: It was a flirt, though.
PM: This is what I mean by economic hansonism. It's the indicating of something that sounds simple and, you know, seductive, oh why couldn't the government just fix interest rates, and of course, those of us who have lived long enough and remember when interest rates where fixed. What is meant was young couples couldn't get a mortgage. It meant they went outside that sort of regulated interest rate system and used to get cocktail loans with extraordinarily high interest rates. So it's flirting with a return to the economy of thirty years ago. And everybody knows that to try and run our modern economy that way would spell economic doom.
UHLMANN: At the heart of it though is a concern about banks lifting interest rates out of cycle and we've seen two thumping profits from the ANZ and the NAB in the last two days. Do the banks not owe something to the government and the people that supported them during the global financial crisis?
PM: Certainly the banks owe it to the Australian people to offer them the best possible deals and I've got no tolerance for the banks increasing interest rates beyond official interest rate movements. The Treasurer's made that clear. I'm happy to make that clear and of course, the Reserve Bank has said that there is no excuse for it, in terms of the cost of money to them lending it to the banks. So, we're making that position clear -
UHLMANN: You can't stop them though, can you? There is nothing really that you can do beyond warning them at the moment?
PM: Well the best thing you can do is give people a choice. And so, in our banking sector we want to see competition, we want to see people able to move with their feet if they're getting a bad deal from their bank and we've made that easier. So if an individual bank moves with an interest rate increase then people can, go and shop around and get a better deal.
UHLMANN: The Treasurer pointed out yesterday that almost no one has used that facility.
PM: Well, let's be clear about the economic circumstances we were dealing with. It's in everyone's interests that we bring competition into the banking system and we did bring more competition in by making it easier to switch your mortgage.
Now, of course, then we had economic circumstances in which people saw the global financial crisis, felt very concerned. There was a flight to stability, people, many of them wanted to see their loans with big banks, they wanted to sit where they were, they wanted to assess what was going to happen next. As our economy has come strongly through the global financial crisis I anticipate that people will start saying 'Well, am I getting the best deal' and using that new competitive system.
UHLMANN: A couple of other quick things. Power prices, you've said that one of the reasons power prices are on the rise is because there has not been enough investment in power. But isn't it also because the governments are making new choices now. New, more expensive choices. Renewable energy is more expensive. Connecting solar power to the grid is more expensive. Having feed-in tariffs is more expensive. Isn't it time to tell the Australian people that we will face a much more expensive future when it comes to power prices?
PM: Well, I am trying to be honest with people and I've spoken as recently as this week, at the start of the week, at the Australian Industry Group dinner here in Canberra, about the problems we've got in electricity generation.
We've has a decade of under-investment, people are paying for that now through increased prices. I don't want to see the story of the next decade being another decade of under-investment and the industry is saying to us, look you know, to get the long term certainty we need to invest in electricity generation that costs literally billions and billions of dollars we need to know what's happening with carbon pricing, we need to know what it's going to be, how it's going to work.
So, you know, my challenge here, in the Parliament, to the Opposition, I think really to people broadly, is yes, this is a difficult debate and I'm not going to sit in this chair and pretend to Australians that we can tackle climate change, that we can price carbon and not one thing they do today will change.
Yes, our economy will change, the way we live will change but let's work through it. So I'm not, you know, accepting the invitation of the Opposition to once again sloganise about these things. I'm inviting people to work through the deeper debate.
UHLMANN: Prime Minister, finally, are you determined to put a price on carbon in this term of government?
PM: I'm determined to work in good faith at the Multi-Party Climate Change Committee and to explore whether this new Parliament has given us an opportunity to deal with the complex issue of pricing carbon in a new environment. That's what we're doing.
UHLMANN: Prime Minister, thank you.
PM: Thank you.