HOST: The Prime Minister Julia Gillard is with us here in our Wellington studio. Welcome.
PM: Good morning.
HOST: Good to see you with us here at Morning Report. First of all Prime Minister, New Zealanders have been voting with their feet and going to Australia for a long time and they continue to do so. If we open up this economic relationship even further, isn't New Zealand going to lose out even more?
PM: I think a strong economic relationship between our two countries benefits both of us. We both get stronger together and that's why across 30 years New Zealand and Australia have pursued greater and greater economic integration and partnership, and I'm here to take another step forward in that.
I will today, with Prime Minister Key, be signing an investment protocol which will make it easier for us to invest in each other's countries and that means greater investment and that means more jobs. So, good for both.
HOST: Politicians here on both sides of the house have been saying we need to catch up with Australia, we're behind and at the moment we're losing our skilled workforce to your country. How can we stop that? Won't this make it worse?
PM: Well, Australia did come out of the global financial crisis strong. We came out with low unemployment, low debt, relatively good growth by world standards. As the world went into recession, Australia did not. So, we have a strong economy which we're very proud of and we're seeking to harness that growth for the future to be even stronger in the future.
But a strong Australia is good for New Zealand. We are so closely tied that the stronger each of us is the better it is for the other. So, I don't think it's about fearing Australia's strength. I think it's about a genuine partnership where Australia and New Zealand work together to give each other economic opportunities, including job opportunities, and there will always be a big two-way exchange of people between our two countries.
HOST: The fear is though if the market takes its course, the bigger partner will inevitably dominate the smaller partner.
PM: I wouldn't have that fear. I think New Zealand has a really strong sense of itself, a really strong sense of its future and how it wants to grow its economy.
There have been some tough times here in New Zealand in economic terms and I know everybody is looking forward to turning the corner but I think there is a lot of self confidence here about the future and you should have that self confidence. So, I don't think it's a question of big dominating small. I think it's a question of partnership and a sense of family and working together that our two countries have.
HOST: So you're looking for a more common approach, but would you object to a New Zealand political leader wanting to put safeguards in to protect New Zealand's economic sovereignty?
PM: If you're going to work together then that's got to have some trust in it and I think there is a good, trusting relationship between our two countries and I think we can point to the benefits that have come from closer economic partnership to date. I mean, we've grown trade between our countries and that has enriched both countries. So, this freer exchange is a good thing.
It obviously makes sense, too, for us to be bringing our regulations closer to each other so you're not reinventing the wheel in both countries but you get the benefit of closer and closer regulatory structures, so that can actually help with some cost savings and that's good for both countries.
HOST: Actually, what is the nuts and bolts of what you want to see this single market look like?
PM: Well, in terms of what I am saying about our close economic relationship, this isn't a new vision in the sense that it's the next step in a vision that has been 30 years in the making, since our two countries first sat down and said let's have closer economic ties, let's work together on a set of agreements to bring our economies closer together, and step by step since the days of Prime Minister Fraser in Australia and Prime Minister Muldoon here, we have worked through a series of changes to get our economies to function together better.
I am here to take the next step and that is freer investment between our two countries, and for the future we'll keep working on it: harmonising regulation, freer flow of people between the two countries. We've got this aim of travel between the two countries feeling like travel between two Australian States that is essentially borderless.
HOST: You actually see a common border as something you'd like to achieve?
PM: Well, we're working on that sense of travel between Australia and New Zealand and we've already made improvements with SmartGate so that it's easier for people to travel between the two countries and we want to keep making further improvements so that there is that sense of, you know, borderless travel between our two nations.
HOST: I don't think the New Zealand Prime Minister was quite so enthusiastic about that yesterday. I think he used the word ‘possible' about the common border.
PM: Well, certainly we are in agreement that our two countries will keep working to make travel easier for both of our peoples, and it's, you know, huge numbers that come each way. Around a million Australians visit New Zealand in any year.
HOST: What about a common currency?
PM: Well-
HOST: -You always get asked that, don't you?
PM: Look, yes, we do, and I don't have any proposals or plans about a common currency. I think there are a lot of things we can do to work together more closely and to harness economic strength together before we would start talking about a common currency.
I don't think that is on the agenda because there are so many more things we would need to do to bring our economies closer together.
HOST: So, today you're signing the investment protocol. What's the next thing you want to tackle after that?
PM: Well, we are then going to keep working on a series of regulatory reforms, and I know this doesn't sound very interesting and people listening would probably have images of, you know, public servants labouring over documents together-
HOST: -So what does it mean to man and woman on the street?
PM: I can understand why people would think ‘what's this got to do with me?', but it's got to do with some very practical things like we've worked on harmonising our patent laws so that if you've got something that you've invented and you want to trade it in both countries you don't have to go through multiple approval processes. It's those practical changes that make a real difference.
HOST: Can we move onto some regional issues now?
PM: Certainly.
HOST: Migration - we've been hearing that Australia and New Zealand are likely to be dealing with more and more migrants leaving countries in the Asia-Pacific because of economic uncertainty, cyclones, climate change. Are going to have to cooperate more and have to find a common policy in dealing with migrants?
PM: I've certainly got a vision of the region cooperating more on unauthorised people movement, of when people move between countries without authority, without proper papers. From the Australian perspective that means we see arrivals in boats and we have seen a number of those. So, I've got a perspective about the region working together with a regional protection framework to try and undercut the business model of people smugglers. To do that we would need to say, well, if people do keep moving then effectively they are returned to a processing centre and their claims are all treated the same to undercut the incentive to get in a boat.
And that's important because it means people smugglers don't profit, but it's also important because, tragically, on our shores we've seen people die because they have risked journeys in boats, and as recently as yesterday in Australia there were funerals for people who lost their lives on the rocky shoreline of Christmas Island.
HOST: I think Australia has something like 5,000 or 6,000 asylum seekers in detention. Would you be looking for New Zealand to take some of these people off your hands?
PM: No, we wouldn't but I have spoken in the past with Prime Minister Key about cooperating in generating a regional protection framework and a regional view about how we deal with people movement.
HOST: And what's been the response to that, because many New Zealanders might think that Indonesia is just a little bit too far away from us.
PM: I don't think from the New Zealand perspective that there's any room for complacency and I don't get the feeling from Prime Minister Key that there is.
Yes, of course, New Zealand is geographically further away but I think for all of us the issue of irregular people movement and people smuggling worries us in the region. I don't think anybody wants to see evil people profit from what is a trans-national crime, so there is good reason for taking a regional approach here.
HOST: And what direction are we heading in with the two defence forces? There's been some extra cooperation of late. What sort of shape do you see the two forces being in in time to come?
PM: I think we will continue to see very close cooperation, and of course we are with each other in Afghanistan, working together in Uruzgan province, and we are very grateful for the New Zealand contribution there and we know it hasn't been without sacrifice and without heartache for the New Zealand people, but it's a very important mission and we are looking forward to continuing it together and our defence forces regularly collaborate and exchange and we will continue to see that [indistinct] in the future-
HOST: -You're happy with that? Because often New Zealand has been portrayed as not pulling its weight in defence exercises with Australia?
PM: Look, we're happy with the cooperation we're seeing and we always believe we can keep building for the future.
HOST: You want more though?
PM: Well, it's a question of partnership. It's a question of both of us seeking to grow the kind of benefits that come when your defence forces are familiar with working with each other.
HOST: You mentioned Afghanistan. More and more Australian soldiers are losing their lives, and other coalition forces soldiers and civilians are continuing to lose their lives. Isn't it time to pull the plug on that?
PM: As recent as Monday this week I attended the funeral of Corporal Atkinson, who is our most recent soldier lost in Afghanistan, so the Australian people have had a great deal to grieve about. But I have said to the Australian nation that whilst there will be hard days ahead, we need to see this mission through. We went to Afghanistan to deny terrorists the ability to train people who would then come and wreak violence against the citizens of Australia and the citizens of New Zealand.
Both of our countries have seen losses in the World Trade Centre, in the Bali bombing and in other terrorist incidents overseas, and of course they've got a connection with training in Afghanistan. So, we're there to engage in that strategic denial of Afghanistan as a training place for terrorists and we need to see that mission through.
HOST: Isn't the point though - is this the best way to do it? And isn't the evidence from the increasing casualty rate that perhaps this isn't the best way to go?
PM: Well, I think this is the only way to do it, that we need to engage in the security, in the actual fighting, that is necessary to secure Afghanistan. We then need to transition to security leadership by local Afghan forces and of course our people, they're in Uruzgan province with some New Zealand friends training the Afghan National Army so over time they can take responsibility for the security that the Afghan people need.
HOST: Can I come back to a domestic issue we've been reporting on this program earlier, and you were at a New Zealand school yesterday.
PM: Yes, I was.
HOST: The Government here is promoting a National Standards format. It's been very controversial here. You've been an Education Minister. You pushed through national standards in Australia. Schools here, not all of them are very happy with it. Any advice for the Prime Minister?
PM: Well, I don't think it's appropriate for me to venture onto domestic policies considerations for New Zealand, so I think New Zealand will work out what it wants to do with its education system. But for me, as Prime Minister of Australia and a former Education Minister, I am driven by a passion to see that every child in Australia gets a great education; that wherever kids come from, whatever school their parents choose, it's a great school. And for me that does mean you've got to have national standards and you've got to be saying to schools keep improving every day - get up every morning and work out how you can do it better.
Kids only get one chance at education and we've got an obligation as adults to make sure they get a great education.
HOST: One final question just to throw at you-
PM: -Yes, this is sounding terrifying now.
HOST: Under your watch, are we going to get into a debate again about Australia becoming a republic?
PM: There is a live debate in Australia about becoming a republic-
HOST: -As there is here.
PM: It continues to be a community debate. There is no immediate decision point on the horizon. There's no fixed date for a referendum or anything like that but it will continue to be-
HOST: -Would you favour it?
PM: Oh, look, I'm certainly in favour of a republic and Australians around their, you know, coffee tables when they're having a cup of coffee would often muse on it and I think it is important that that debate continues and I'm sure it will.
HOST: Thank you very, very much indeed for joining us this morning. That's the Australian Prime Minister, Julia Gillard. Thank you for coming into Radio New Zealand this morning.
PM: Thank you.