PM: Well, I am glad to be here in Seoul, too, to have joined you all today, but most particularly, of course, I have had the opportunity to meet the President of Korea. We have discussed the strong friendship between our two countries. We have discussed our mutual desire to rapidly conclude the Free Trade Agreement which has been negotiated between Korea and Australia.
Trade means jobs. The Free Trade Agreement will be good for Australia. It will be good for Korea and we have discussed this afternoon working to bring that Free Trade Agreement to conclusion.
I also congratulated the President of Korea on his leadership in hosting this meeting of the G20. The meeting which will be conducted over the next two days, I believe, is shaping up to be very successful event. Of course, Australia and particularly Kevin Rudd worked hard to ensure that the G20 was created to guide the worlds' response to the global financial crisis and to become a standing part of the way that the world does business and the G20 has already some significant achievements.
When the G20 met as the global financial crisis unfolded, in Washington there was agreement about financial sector reform - so important as the global financial crisis was engulfing the world. In London there was agreement to coordinated stimulate fiscal stimulus: US$5 trillion to support economic activity and to support jobs around the world as the world confronted the global financial crisis. And in Pittsburg the G20 worked to get a response to drive the global recovery.
Here in Seoul we will be building on this earlier work and taking it forward. I am very pleased that here in Seoul we will finalise the reforms to the International Monetary Fund. Australia has worked hard on these reforms. We co-chaired the working group with South Africa and in my discussions with the President of Korea, just a little bit earlier today, he did thank Australia for the work that we have done on IMF reform.
We will also see the delivery of the G20 framework for driving global growth as the global economy recovers. There is a recognition that the global economy is still fragile. As the economists would say, the risks are on the down side, so we need to keep working together to keep driving the global economy, to keep lifting growth and lifting jobs as a result.
Thirdly, this meeting will deliver the Basel III financial stability rules, and once again Australia has worked hard on these rules and making the case about what is different in Australia. Of course, we have a strong banking sector and we have been keen as discussions have unfolded to have the world understand that given the different circumstances in our economy, different circumstances of our banking sector, that Australia did need some special consideration as these rules were being put together.
Because we have worked hard to secure that special consideration, I can confidently say that there is nothing that will happen at the G20 or as a result of these financial rules that justifies an Australian bank putting up interest rates above and beyond movements by the Reserve Bank. There is nothing stemming from the G20 that justifies that.
Can I just say that I look forward to the meetings over the next two days. I did also want to highlight the fact that the leadership of the President of Korea development matters will also be discussed at this G20. I believe that that is significant. The global financial crisis has literally thrown tens of millions of people into poverty. I believe it is appropriate that at this G20, in a country that is so successful in making the journey from being a developing country to a developed country, that we have the matter of development on the agenda and I welcome the fact that the President of Korea has so squarely put it there.
I'm very happy take questions.
Yes, Bonge?
JOURNALIST: Prime Minister, do you believe, in light of the ANZ following the bad example of the Commonwealth that you should continue to argue strongly for Australian banks to receive favourable treatment from the Basel framework?
PM: I think we've got to be very clear here about what we're arguing for. In these Basel III rules and this framework there are suggestions about the amount of government bonds and government debt that banks should hold.
Australia is in a different position to other countries around the world. By comparison with other countries we have low debt, so these rules don't work for us. We've made that case, and we've made that case because we don't want Australian banks to have any excuse from these new financial rules to excuse their arrogant conduct in putting up interest rates above and beyond Reserve Bank movements.
JOURNALIST: Prime Minister, the ANZ scrapped its exit fees, though, so no credit there?
PM: I think, looking at the moves of the ANZ today, the Australian people will be angry. I think the ANZ Bank will experience the same degree of anger that the Commonwealth Bank did as a result of its conduct on Melbourne Cup Day.
The Government has already acted to deliver proposals that will increase competition in our banking sector. We already acted to deliver a crack-down on unfair mortgage exit fees. We've already acted to support second-tier lenders through our Residential Mortgage Backed Securities.
As is very publically known, the Government is working on a further package of reforms and no-one should doubt our resolve to deliver those reforms, and deliver increased competition in the banking sector.
Michelle?
JOURNALIST: Ms Gillard, do you think that further package, though, will prevent the sort of action we've from the ANZ today and the Commonwealth before, or will the Government still be relatively powerless when it comes to the crunch?
PM: The purpose of competition reforms is to empower consumers to walk away from their bank and go and get a better deal.
Mark?
JOURNALIST: Isn't the problem, Ms Gillard, though, exemplified by the ANZ today, that now you have two of the big four essentially acting in the same way, so that if you move from one bank, you go to another, it does the same thing? How are you as Prime Minister and how is the Government going to encourage people to use the other players in the market, the smaller players, and to assure them that they're as safe as the big four?
PM: Bit of history, and a bit of the future - the history, obviously, is we moved when the global financial crisis threatened to guarantee bank deposits. We did that in the interests of Australians. It was them that we were concerned about. We also have supported second-tier lenders with our Residential Mortgage Backed Securities arrangements, but you are right - the impact of the global financial crisis has been that there has tended to be a move from second-tier lenders to the big four. We want, as the global economy recovers, and certainly as our economy recovers, to foster increased competition in the mortgage market.
Now, before the global financial crisis we were seeing more competition in the mortgage market. There were lenders, for example, like Wizard, that were out there pushing hard in the mortgage market. We want to see increased competition. Therefore, reforms that enable increased competition - good for consumers - enable them to shop around.
Yep, Phil?
JOURNALIST: Ms Gillard, do you consider ANZ's action of raising the rates by 39 basis points then abolishing their exit fees, do you consider it a sign they're not scared to see customers walking away?
PM: I believe Australians are angry. I believe that Australians are angry enough that they will be looking again at the conduct of their own bank and judging what they should do next based on that conduct.
Mal Farr?
JOURNALIST: Prime Minister, just to Devil's advocate a bit, how can you turn up at a conference which is going to deal with extraordinary economic features and yet say that the banks are not justified in taking extraordinary steps themselves?
PM: Once again, bit of history, bit of the future - we need to remember that when the global financial crisis swept the world, of course there was a contagion running through global markets that we feared the impact on Australia, but we also came to that global financial crisis with good regulation and with the big four banks in a strong position. Out of the world's top 100 banks, our four banks are in the top 10.
In those circumstances, even as the global financial crisis has unfolded and thanks in part to the decisive action taken by the Australian Government to keep our economy going, the banks have emerged from this difficult period still profitable, still strong, so in those circumstances I am entirely justified to say to the banks that there is no excuse for the sorts of interest rates movements we've now seen from the Commonwealth Bank and the ANZ Bank.
The solution is to keep fostering competition. We have already acted and we will continue to act and no-one should doubt our resolve to act.
Dennis?
JOURNALIST: Prime Minister, does your anger and thirst for competition extend to looking at the four pillars?
PM: The issue here is where do consumers go? People with mortgages, how do they get a loan? On what terms and conditions do they get a loan? How do they end up locked in to that loan? That's what the exit fees debate is about, locking you in so you can't go and shop around.
We want to foster competition. Fostering competition gives people choice of lenders, so I don't really think the dialogue or terminology of the four pillars helps this debate. We are talking about people having choice. When there are active second-tier lenders, people have choice.
Yes?
JOURNALIST: Prime Minister, on G20, the comments this week of the German Finance Minister attacking the Fed and their movements on quantitative easing, China, Brazil, Russia - what do you believe? Do you agree with what the Fed has done? Is that part of deliberately devaluing their currency, and how will that play into what you've got ahead over the next two days?
PM: I think there will be a great deal of discussion about currency questions. There will be a great deal of discussion about competitive currency devaluations as a new form of protectionism. I believe that that will be something that's very much on the agenda at this G20.
What we need to emerge with is an agreement that helps balance global growth. We are all aware of current imbalances. We have nations that need to save more and nations that need to spend more, and in order, in part, to support that balancing, we need to move over time to market-based mechanisms for currency fluctuations. That's the Australian position. It's the position we took at the G20 Finance Ministers meeting. It's the position we will take at this G20 meeting.
Clearly, questions of currency devaluation and quantitative easing will be on the agenda at this G20 meeting.
Yes, Mark?
JOURNALIST: Prime Minister, you're here, essentially one of the things you're doing is arguing to help the Australian banks in terms of the Basel III, yet the banks, of course, aren't exactly doing you any favours. Will you in all future circumstances put the interests of the Australian banks at the front of the queue in meetings like this, or would you ever have cause to reconsider?
PM: There's only one thing at the front of the queue and that's the interest of the Australian people. It's in the interests of the Australian people to not have rules that don't suit our economy imposed on our economy. That's why we're having the argument - national interest, interest of the Australian people.
Because we will succeed in that argument, there is no reason stemming from the G20 or its financial rules that would help a bank in Australia justify an interest rate movement above and beyond movements by the Reserve Bank, so we've got to be very clear here - actions are in the interests of the Australian people. Guaranteeing deposits in the teeth of the global financial crisis was about Australians and their savings and the things that they rely on to go about their ordinary lives. We did that in the interests of Australians.
Our banks went into the global financial crisis strong, and they've come out strong, and what that means is that there is not a justification for moving interest rates above and beyond Reserve Bank interest rate movements and there's certainly no excuse arising from the G20.
Mark?
JOURNALIST: Is it time to hauls these bankers in for a meeting with you and the Treasurer and to remind them of what you see as their social responsibilities and their responsibilities to ordinary Australians, mortgage holders?
PM: I think the best thing to do is to determine and deliver the package that we are working on. The Treasurer has been working for a number of months to add to the earlier measures we have already delivered to increase completion.
So, we have already acted to increase competition. We will act again. I am very clearly saying no-one should doubt our resolve on the question.
Sorry, Kieran? We don't want to discriminate against Kieran.
JOURNALIST: Are you expecting a negative reaction from the United States after you rejected Tim Geithner's call for indicative guidelines on surpluses to correct the global trade imbalance?
PM: No. Once again, Australia is in a different position. With our current account deficit, obviously it is explained by us being a resource economy enjoying very large capital inflows. We are therefore in a different position from other nations whose current account deficits would be explained by excess consumption and too little savings, so we were right to make that case and we'll continue to make it.
I'm not expecting any reaction to that other than understanding. It's quite a simple proposition.
Dennis?
JOURNALIST: Just on the Korean free trade, would you be encouraged if the US and Korea finally settled their first agreement, and would that give you encouragement for an Australian FTA with Korea?
PM: As I understand it, President Obama is very enthusiastic to conclude the US-Korea free trade agreement. That's good for the US.
We want an agreement that's good for Australia. My mission here and my mission as I travel overseas generally is to say that free trade is good for trading economies like our own. We're competitive, we're a trading economy. Free trade is good for us, it's good for jobs. That's why I'll put the case.
Apart from the Korea-Australia free trade agreement that I do want to see come to conclusion, we should anticipate here at the G20, of course, that there will be broader discussions about trade and particularly putting urgency and ambition into the Doha round.
JOURNALIST: Did you talk about any timing for the Korea-Australia FTA in the talks with the President today?
PM: We talked about our shared desire to bring this to conclusion expeditiously.
JOURNALIST: What are your plans for Remembrance Day tomorrow?
PM: The program will be given to you, but tomorrow I will be laying a wreath in remembrance of fallen soldiers. I will have the opportunity to meet some Australian veterans who are here in Korean who served in Korea, so I'm very much looking forward not only to having the opportunity to lay the wreath as we mark remembrance day, but to also meet those individual Australians and to hear their life stories, which I'm sure are going to be quite remarkable ones.
Thank you very much.