PM: Today is Remembrance Day, it's the day when we remember and honour Australian war dead, Australians who served in so many conflicts and lost their lives. Today I've had the opportunity to lay a wreath here in Korea, accompanied by a Korean war veteran, Jack. We've had an opportunity to mark Remembrance Day and particularly to honour the service of the more than 17,000 Australians who fought for democracy here in Korea. We lost 340. 281 of our Korean war dead are buried in Korea.
It's been a very special way of marking Remembrance Day and to each of the veterans who has made the journey and joined us today, I say a big thank you for sharing your morning tea with me, for sharing an insight into their lives and an insight into their war stories.
From marking Remembrance Day I will now move to two bilateral discussions, I will be meeting with the Prime Minister of Canada, I will be meeting with the President of Russia and I will also be addressing the G20 Business Summit. And of course I want to take this opportunity as I move to those bilateral discussions and discussions with members of the business community to remind why the G20 is important and why we are here.
It's about strengthening global growth, it's about lifting the number of jobs, it's about making sure our financial institutions and financial markets are strong and open and can meet the test. That is what is under discussion here at the G20. We know that the consequences of high rates of unemployment, weak global growth, risks in financial markets end up hurting people around the world. It tells in joblessness, which ultimately tells in the loss of homes, in often the loss of families, because of family break ups. It tells as people are thrown into poverty around the world. That is what we are here working through at the G20.
In the course of those discussions we will be talking about currency questions and Australia believes that currency should be market based, that is our position, that is what our economy has and it has served our economy well. So the agenda will include discussion on currency questions, but it is broader than that, currency is one part of a broader agenda about how we ensure that we move beyond today's stage for the global economy to a stage of greater growth, more jobs, healthier financial markets around the world. I'll turn now to the Treasurer for some comments and we'll take questions.
TREASURER: Thanks very much Prime Minister. It was also a privilege to meet with our veterans today on Remembrance Day, to be with them and to share with them their memories about this country, and to talk with them about why they fought.
It's also an important day when we're looking at the G20 agenda. There's two years of pretty solid work which is coming to fruition in this meeting over the next 24 - 36 hours. There's fundamental reform as the Prime Minister said, of the global economy. We need structural reforms to lift growth, not to shift growth - fundamental reform of the International Monetary Fund. And also fundamental reform of the international financial system to prevent financial crises in the future, which have caused so much damage and such high unemployment, particularly in developed economies around the world.
Today we've had the unemployment figures out at home. There have been 375,000 jobs created in Australia in the last year and over 600,000 jobs created since the Government was first elected. That is a remarkable performance for a developed economy, given that we've just been through a global financial crisis and a global recession.
What that reminds us of as we go through discussions in the next 24 hours, 36 hours, is the importance of continuing to grow the economy because if we can keep people in work everybody benefits, and that's why it's important we put in place the sort of reforms that have been talked about at the G20.
I'd also like to say in terms of the reform of the financial system, that there will be absolutely no fig leaf or no excuse for any domestic bank to blame any interest-rate rises on the decisions that are taken here. The decisions that are taken here will be decision which will safeguard customers, which will safeguard deposits, which will make sure our banking system is in good nick both globally and domestically. Because what we learnt in the global financial crisis is that no country is immune when we have a global financial crisis and a global recession.
JOURNALIST: Prime Minister if I could ask you a question. Is the asylum seeker decision by the High Court a victory for human rights in Australia?
PM: I have been advised of the decision of the High Court today, I haven't had the opportunity to study it in detail. The Minister for Immigration has of course responded to this in Australia and indicated that the government will take legal advice on the implications of the decision and respond in due course. We process asylum seeker claims in order to do the right thing, to ascertain who is a refugee to whom we have an obligation under the Refugee Convention and as a matter of opening our hearts to people in real need and who does not have a valid claim and should be returned to their own country. But we'll study the decision, get appropriate legal advice, the Minister for Immigration has indicated that in his press conference in Australia today, he's meeting with the Solicitor-General this afternoon and will be able to make a full statement.
JOURNALIST: So is it advice to get around the decision?
PM: When you get a High Court decision you would anticipate the government would meet with its legal advisers to fully understand all of its implications. Absolutely standard, due process and we'll do it.
JOURNALIST: Would you legislate if necessary to preserve the status quo?
PM: Well, let's not get ahead of ourselves, we've got a High Court decision, the government will take legal advice on it, the Minister will meet with the Solicitor-General and when we understand all of its implications we'll respond in full.
JOURNALIST: Can I ask about banks Ms Gillard.
PM: Yes.
JOURNALIST: It's not a a little bit ironic that you're here with Mr Swan arguing the case for our banks to not be included in Basel III measures, whilst they're at home sticking you in the back with interest rates?
PM: I answered this question yesterday and I'll turn to Wayne for a comment as well. I answered this question yesterday and let me say again, we need to be very clear about what we are doing here at the G20, we're talking about a framework to lift global growth, that's good for Australia, it's good for working Australians, it's good for their families.
We're talking about a framework here that through lifting global growth, continues to create jobs around the world. We are seeing strong employment growth at home, but there are many millions of people around the world desperate for work who do not have it now, with all the potential long term social consequences that that spells out. We're here making sure that there is a strength in our financial system which means we do not see a global financial crisis occur again.
That's good for Australians, good for their jobs, good for our economy because our economy was not immune when the world went through a global financial crisis. That's what we're doing here, good for Australians, good for the global economy, good for trade, good for jobs. I'll turn to Wayne for a direct comment as well.
TREASURER: Yes, the Basel III arrangements aren't just about banks. They're about securing future prosperity. They're about a sound financial system. They are about making sure we have a flow of credit in our economy. So it's not about the banks.
These arrangements are put in place to secure the safety and the security of our national and international financial system and, of course the banks are not being exempted. But what we have secured is a recognition that there are differences in the Australian banking system and one size doesn't always fit all. So there will be some differences in the application of those rules in Australia which recognise unique features of the Australian system.
So they're not being exempted, but also it is very clear that these new rules will work for people because they all work to protect the security of the financial system, because when it was threatened, the flow of credit to Australia two years ago was in doubt. That's why the Government moved to put in place the bank guarantees, not for the banks, for the Australian people. And because we did that we've had the economic growth that you've seen in Australia, which is unique in the developed world. We wouldn't be talking about 375,000 jobs in Australia in the past year if we hadn't made those moves to secure our financial system.
PM: We'll take two at the front then we'll have to go, going to be quick.
JOURNALIST: Mr Swan, in the Wall Street Journal you had an article with Timothy Geithner and Tharman Shanmugaratnam, and you said that the cost of borrowing for banks will be higher for a time. Aren't you agreeing with what the banks have argued about their own circumstances?
TREASURER: No I'm not. The fact is this; our banks are achieving record profitability. It is true that in some sections of their business they are facing increased costs, but their attempt to put up rates over and above the cash rate is not justified because their net interest margins are back to what they were pre-crisis.
Yes, there will be swings and roundabouts in funding costs, but the fact is the Reserve Bank data is in, it rejects completely the claim by the banks that their funding costs should be passed through in addition to Reserve Bank rises because their net interest margins are back to pre-crisis levels. Within that, of course there will be changes in the cost of funding, but overall their net interest margins are back to pre-crisis levels, thereby rejecting the central premise of the claim that they have made.
PM: Ok, last question quickly, I don't want to keep the Canadian Prime Minister waiting.
JOURNALIST: What does Australia see as the markers of success from this G20 meeting? What decisions have to be made to ensure this meeting is a success and on currency particularly?
PM: Well, I'll answer that and then turn to Wayne as well. First and foremost we want to see the endorsement of the new global framework to drive growth, not just the endorsement of the words, but the determination to deliver the framework to drive growth. Growth equals jobs, it's good for Australia, it's good for the world.
Second, we want to see the absolute delivery of the IMF reforms, which we have worked on so long and so hard co-chairing the working group with South Africa, these are very important changes to rebalance voting shares in the IMF between the developed and developing world.
Third, we want to see the adoption of the new financial rules that Wayne has just been talking about, they are important for global financial stability, so we do not find ourselves in the future back in a global financial crisis. Yes, in the course if that we've got to make a case for some things that are different about the Australian economy and we will do so.
Finally, can I say I think it's important that at this G20 we've got development on the agenda, that's been put there by the President of Korea and as I said yesterday I believe that that is important for the G20 agenda and for G20 work going forward. So, when you work through the list, we've all got a shared interest in global growth, in jobs, in financial stability.
I think it's important that development has come on the agenda and finally we do want to see new impetus for the urgency and level of ambition in the Doha round. Trade is good for jobs, trade is good for Australia and that's what we're here doing at the G20. I'll turn to Wayne for a comment.
TREASURER: Well, just in addition to that, reducing global financial imbalances is very important to the framework for strong balanced and sustained growth and therefore, I think, a re-affirming if you like of the commitment that was made at the Finance Ministers' Meetings that countries not engage in competitive devaluations, for countries to work on structural reform including currency reform. The overall commitment to market-based exchange rate regimes. That's important, and I think that's what the Finance Ministers have put forward for the Leaders to consider this weekend.