FAINE: Prime Minister Kevin Rudd, good morning to you
PM: Good morning Jon, thanks for having us on the program.
FAINE: Yesterday you announced an ambitious proposal for an Asia Pacific Community. A push that will involve retired diplomat Richard Woolcott. What's your vision, what does it look like when this is up and running?
PM: Here is the current challenge. Right now we don't have any single regional organisation in the Asia Pacific which deals with economic cooperation, political cooperation and security cooperation.
My concern long term is drift. That is, we don't want to have a drift towards conflict within our region where we still have so many unresolved territorial conflicts.
So what do you do about it? You set an ambition for the future which is about having a regional organisation which we call an Asia Pacific community. Not modelled on the European Union, but which within one body has the capacity for all the states of the region - China, the United States, India, Indonesia, ourselves and others - to work together and cooperate together on how do we effectively bring about a common sense of community, that is -
FAINE: Do you want a unified currency in the end?
PM: Absolutely not. That's not the objective at all. The objective is to have us with a common sense of security. That is, a common sense of how do we work together on common security projects, common political projects and common economic projects.
FAINE: Paul Keating, amongst others, says it won't work and it's not a good idea.
PM: Well that's the great thing about Australia is that it's a free country. People have their say. When Hawkey, Prime Minister Bob Hawke I should say, got this idea for APEC, started back in the late 80s people said it wouldn't add up to anything either.
APEC is about economic cooperation. What I am talking about is extending that to political and security cooperation and basically having a forum whereby you can bring together the various states of the region who represent different languages, different cultures, different religions, different political systems, different economic systems - which is why it's so vastly different to Europe - but get them to cooperate together on common security projects. For example, how do we work more effectively together on common natural disaster challenges across our region. It's that sort of practical stuff we have in mind.
FAINE: How does that improve the lives of ordinary Australians, the people who you dedicated yourself to helping in the election?
PM: Well, let me give you one specific example. One of the things which needs to be advanced across our region at the moment, and President Bush has in fact suggested something like this, is a free trade agreement which cover the Asia Pacific region. If you free up trade within our region completely you open up huge new opportunities for Australian exporters and that means Australian jobs. And not just in the resources sector but in other key sectors like the financial services sector and for our hard working farmers who are currently held out of so many markets.
That could be advanced more effectively if we had an organisation which embraced political security and economic cooperation. But as I said it's an ambitious plan for the future but I believe in planning long term, having an aspiration and an ambition for Australia rather than just allowing things to drift.
FAINE: Is it part of your obsession with China?
PM: I think its part of my concern with having a set of arrangements in our region whereby we don't turn around in a decade's time and say ‘how could we have avoided that, how could we have avoided that particular conflict?' What I'm trying to encourage is a culture of cooperation on security matters, because at present, there is no regional body linking the United States, China, India, ourselves, Japan on the common security questions and that is I think a reasonable ambition.
We're not talking about a European Union. In fact in my speech the other night I said that it's not right to see Europe as some sort of identikit model. But we can do better than we are at the present, and to do that you've got to set an ambition and a timeline.
FAINE: Tying this, eventually I will, to your trip to Japan. The Productivity Commission in a submission yesterday, your appointed inquiry into the Australian car industry, said that $300,000 of taxpayer's money is spent for every job in the Australian car industry and we should lose one car manufacturer. Are they right?
PM: Well, I haven't read to full text of the Productivity Commission report yet. What I would say is that I said explicitly prior to the last election that I didn't want to be Prime Minister of a country where we didn't make things anymore. A core part of that is to ensure that we've got a viable automobile industry.
FAINE: But how many manufacturers do we need?
PM: Well, that ultimately is determined by market factors. But what I am saying is Government also has a role.
The speech I gave in Parliament yesterday is how do we actually engender in this country a new green car industry, a new green car culture, whereby fuel efficiency becomes the new driver for innovation, reform and change across our auto industry. That's why we stand by our half billion dollar green car innovation fund -
FAINE: Even though they say it's a waste of the money, the Productivity Commission?
PM: Well, the Productivity Commission often has a very dry view of these things. What I would say to the Productivity Commission, and to others, is that: when it comes to the future of the Australian automobile industry, let's again have a vision and aspiration for the future that we can manufacture cars in Australia, and secondly, use the challenge and the opportunity represented by climate change and rising fuel prices to get in this country built more fuel efficient cars, including Australian hybrid cars -
FAINE: Even if it's a lot cheaper if we continue to import them rather than making them here. You still want to make them here?
PM: I think there are a couple of challenges here, and probably three.
One is, ensuring that we have a continuing viable manufacturing industry in Australia.
Two, helping motorists with an increasing variety of fuel efficient cars so that consumers can choose.
And three, on the way through, also doing our bit for the environment.
That's what we're talking about yesterday and that's why on World Environment Day, in the Parliament yesterday, I made a statement about our vision for a new car plan for Australia, building on the Button car plan of the 80's and 90's, but where the new driving force, if you'll pardon the appalling pun, the new driving force is both the environmental challenge and the challenge for fuel efficiency to help the family budget.
FAINE: Unless Governments, for instance, take the charge, take the lead: charge: electric car, bad pun again Prime Minister, but unless -
PM: We both need a different job you realise that. In the humour stakes
FAINE: ... unless you commit the Government to acquiring large numbers of hybrid or battery powered cars then there's no hope of the industry getting a toehold. So, when will the Federal Government do what you told us some months ago you personally had done, which was trade in your Four Wheel Drive Ford gas guzzler for a hybrid car. When will the Government do that on a larger scale?
PM: In the speech I gave to Parliament yesterday I said we should have as a goal for ourselves over the next decade to have something like 4,000 Hybrids in the Commonwealth vehicle fleet. That's what I said explicitly, that's where the direction we should head in.
But with the individual auto producers, car manufacturers in Australia right now, the Industry Minister Kim Carr is in deep discussion, deep negotiation. We are determined to develop a new car plan for Australia and the objective again is to help motorists by giving them a greater consumer choice with a greater range of fuel efficient cars. But on the way through, having as many of those as possible made in Australia and not just for sale in Australia but export in Australia too.
The other thing people need to know is that we are currently, through the last car plan, the Button car plan, transformed a domestically protected industry into a major export business for Australia with some $5 billion worth of sales. I think that's a remarkable achievement, lets take it to the next stage.
FAINE: Your about to go to Japan Prime Minister are you going to negotiate with Toyota are you going to meet them while your there?
PM: Well, we've been talking with the motor vehicle companies across the board: Toyota, Ford and General Motors Holden. That's been done through the Industry Minister, we continue to do so.
FAINE: Are you meeting car companies while you're in Japan?
PM: I'm sure I will be. Because that's been part of the, part of the discussions so far.
FAINE: And will you be attempting to negotiate the next step in this hybrid car manufacturing while you're there?
PM: You know, one good thing about having industry ministers is that they do those negotiations for you. But, the Industry Minister Kim Carr, I know has been in active discussion with all the car manufacturers since we came up with this proposal in opposition for a green car innovation fund of half a billion dollars.
And it's given us a great platform to walk in the door of a car manufacturer and say, ‘how can we as a country and as a community work with you, the motor vehicle industry, which employs some 66,000 Australians, highly skilled workers, how can we take you from where you are to the next stage'.
And that next stage is a better export business, but also a better business for Australian consumers by giving them more fuel efficient cars manufactured locally to choose from.
FAINE: There's some inevitability over the course of the last two or three weeks while there has been arguments about fuel prices, FuelWatch, excise, GST, and all the rest of it, Prime Minister, but the inevitable thing is, the absolutely inescapable conclusion you have to draw is, that fuel prices are going to keep going up, are they not? And that's never going to be any different for Australian families?
PM: Well Jon, global fuel prices have been on the march for a long time. They are up, I think, about 400 per cent since the Iraq War. Every Government around the world is under the same pressure that this Australian Government is under at present when it comes to the impact of rising global oil prices on petrol prices and on the family budget.
The important thing is to be realistic about the proposals you put forward for the future. We put forward in the Budget measures to assist the budgets of working families, working Australians and those doing it tough.
But beyond that, to have a plan for the future to deal with more fuel efficient cars, to rise to the challenge of alternative fuels and, in big cities like Melbourne, also, to begin to work with our State Government friends on major infrastructure projects which do something to relieve urban congestion because so much fuel is burnt each week with people sitting in traffic queues.
FAINE: When we talk about fuel for cars, we also should look at fuel for houses, Prime Minister. Do you yet concede that the solar panels policy announced in the Budget to means test solar panels was a mistake and should be reversed?
PM: Well, means testing is a difficult challenge because it means that some people will miss out. We've been through a large part of a means testing debate right across the post-Budget discussion in the nation.
What we have done with means testing of solar panels for roofs, is to bring it in line with what Mr Turnbull, then Environment Minister did in July last year when he brought in a means test of $100,000 for solar hot water systems.
FAINE: But you've killed an industry.
PM: Well, there is can I say, the allocation in this upcoming Budget for this financial year for the solar panels rebate scheme is significantly increased. But the other thing to say is this, there are additional programs of some hundreds of millions of dollars to put solar panels onto all of Australia's secondary schools.
We also have for the first time a green loans fund for individual families to provide low cost, low interest, loans for people seeking to install energy efficiency measures -
FAINE: But low income people can't afford it. The people who could afford it have just basically pulled their orders. You're not listening to the industry if you don't acknowledge that you have killed off their future prospects?
PM: Jon, when you bring in a tough Budget in tough national and global economic circumstances where inflation is on the loose, which is pushing up interest rates and interest rates in turn have a huge effect on small businesses and have a huge effect on families and the ability to pay the mortgage, our first responsibility to the country is to take some tough and unpopular decisions.
FAINE: And that makes sense. But what extra inflationary pressure would there be from solar panel installations, Prime Minister? As one part of it all, it would be absolutely immeasurably small.
PM: Well, again, if you go to, let me answer that in two levels.
On the overall discipline of the Budget, a $22 billion surplus is made up of individual measures, each of which is tough. Many of which are unpopular. I accept that.
FAINE: But this one is economically foolish for the future as well, because it kills off sustainable energy?
PM: If you look at what we are doing more broadly on sustainable energy with a half billion dollar renewable energy innovation fund, on top of that the introduction of a mandatory renewable energy target of 20 per cent by 2020, add to that $400 million plus for the schools solar panels installation fund, together with the additional budget that we allocated for the provision of these low interest loans to families - all these things add up.
This is difficult, I accept. I accept also what you're saying Jon in terms of being unpopular. But tough decisions are made. But if you look overall at what we are doing on clean, green, renewable energy, across the field, including solar, this is light years ahead of where the previous Government was -
FAINE: It may well be, but it was looking even better, and it made commonsense and good economic sense and good environmental policy, and you've killed it.
PM: Well, can I say, if you've got green loans, $300 million over five years, up to 2012 to 2013, up to $10,000 subsidised interest for up to 200,000 existing households, who may not be able to afford the upfront capital cost of even buying a solar panel with an existing rebate - that helps.
When you look at solar schools, $481 million -
FAINE: So the bottom line is, you're not going to review this policy?
PM: I said before Jon that as we approach the finalisation of the emissions trading scheme, which is also part of our core response, our core response to dealing with the challenge of climate change, we will continue to refine and fine tune all of our policy settings at renewable energy, but also the necessary supports also for low and middle income earners.
FAINE: So you're hinting that you might review this particular one measure in the Budget, to means test solar panels?
PM: Jon I am simply re-stating what I've always said, is that as we move towards an emissions trading scheme in response to the Garnaut Report, dealing with the totality of the climate change challenge, then of course we're going to be looking right across all of our measures in support of renewable energies, but also other measures which support the family budget at time of transition.
FAINE: Alright. Well that would be, I'm sure, greeted with some delight within the industry if you were to so announce. Prime Minister Kevin Rudd is my guest, you're on 774 ABC Melbourne, Jon Faine with you through ‘til 12 o'clock.
On other things, Prime Minister, are you a bad boss?
PM: I beg your pardon? Define and quantify.
FAINE: A boss who makes life unsustainable, to use the same language, for your staff?
PM: I would think that I am currently supported by a first class staff here in the Prime Minister's office in Canberra. Many of whom have been with me for a long, long time. Are you talking about the public service more broadly?
FAINE: As well as your own staff, reports from people who, obviously, for self evident reasons, don't want to put their names to anything, say that it's unsustainable. That word comes through, not just in environmental policy, but within your own office?
PM: Again, if you're talking about the work ethic of the Government, or the work ethic of the Prime Minister's staff, or the staff of the Prime Minister's office, Jon, we were elected to govern. We were elected with an ambitious program of responsible economic management, investing in the future, and implementing our pre-election commitments
FAINE: But it doesn't have to be erratic or unfocussed.
PM: That requires a huge amount of effort, a huge amount of work. And it requires a huge amount of dedication. We receive that, all those qualities through the staff who work in the Prime Minister's office and through the Australian Public Service.
FAINE: What sort of decisions though do you and other people make when you have put in unsustainable hours. If you have put in an 18 hour day. What are you like in the 18th hour?
PM: Jon, if you speak to public servants about when, for example the budget is put together. The budget each year is an enormously intense exercise where public servants work very, very long hours. It is a huge policy and public finance document.
And in times past, including the previous government, public servants burn the midnight oil in order to bring that about. Nothing has changed in that respect in terms of this Government. More broadly we have got an ambitious agenda for the 20,900,000 Australians who are not commonwealth public servants who are depending on us to deliver responsible economic management. Get on with the business of Honouring our pre-election commitments and get on with the business of ensuring that we are investing in the long term needs of the nation in infrastructure, health and in schools.
Now that is all tough, and it requires a lot of hard work and that hard work will continue.
FAINE: That sounds tough, it sounds inspirational I am sure to some people and it may even impress people in the business community but for others it is a little chilling, it is a little frightening because there is a certain hypocrisy is there not in saying I believe in work life balance for everybody else and introducing policies that force bosses to look after workers everywhere else but I am going to crack the whip close to home.
PM: I think my engagement with senior public servants is that, and I addressed the entire senior executive of the Canberra based public service probably about a month ago now, is that as reflected to me by the senior managers of the public service, they are enjoying engaging with a Government which is interested in the long term reform of the nation.
For them, this is a professionally rewarding and challenging experience because we are engaged in a policy debate and dialogue with the public service.
If you are trained as a public servant, and years ago in an earlier more gentle life, I was, what most professional public servants want is to be able to engage with the political arm of government on the future policy direction of the country. It is intense; it is sharp, but professionally rewarding.
But you know sometimes you have got to burn the midnight oil. You don't do it all the time, but you know we have big ambitions for the nation. We are going to continue marching in that direction.
FAINE: You are on your way to Gippsland, I will ask you about the by-election in a moment, but Barack Obama is now the democrat candidate in the United States race for the white House.
Did you back the wrong candidate when you were visiting over there and saw Hillary Clinton but not Barrack Obama.
PM: Jon, when I was in the United States, I said to the embassy, I would like to catch up with Senator McCain, Senator Clinton and Barrack Obama, where will they be, when I am in Washington DC?
Senator McCain was in Washington DC, I went and saw him up on Capital Hill. Senator Clinton was in downtown Washington, I saw her I think at Brookings. And Senator Obama was out campaigning somewhere in the Midwest so I had a long conversation with him on the phone. That's just kind of normal.
And they were all terrific conversations, all great friends of Australia.
FAINE: And Barack Obama as the Democrat nominee, how much does he know about this nation, what is his engagement with for instance, ideas like the one you floated, for a Asian Region powerhouse?
PM: Well because of where Senator Obama has grown up, he has I think from what I have read and from our discussions, a considerable understanding of our part of the world (inaudible) part of his time growing up in Indonesia.
On his way back to the United States from time to time he would drop off in Sydney. He has many strong and positive memories of our part of the world and therefore because of where he has grown up, I think a pretty acute understanding of some of the challenges here in the Asia pacific region.
But the Republican candidate, Senator McCain, with whom I had a good conversation, he too has an intimate understanding of our part of the world.
Australia's interests would be well served by whether we have a Republican or Democrat. I contrast that by the way with my predecessor Mr Howard, who said if Senator Obama or the Democrats won the next presidential election, it would be a victory for Al Qaeda. I found that remarkable then, I find it remarkable today that even Dr Nelson's liberals haven't said that that was a ridiculous thing to say.
It was then, it is now.
FAINE: Sounding more like election mode, for the by-election which I will come to after a quick question, Kevin Rudd.
PM: No just a bit of foreign policy accountability for those opposite.
FAINE: Kevin Rudd, Prime Minister of Australia, my guest. Jon Faine with you on 774 ABC Melbourne.
Bill Henson's photographs now will not result in a prosecution according to the New South Wales DPP in news that has been announced this morning. It seems that nobody, now not even within the legal establishment, let alone in the arts, censorship or media world agrees with your judgemental stance, if I can call it that, Prime Minister, that those photos were disgusting.
PM: Jon, if I am on national television, I am shown for the first time a couple of those photographs, and I am asked what my view, what my personal view is as a parent, I am as entitled as any other Australian to put my point of view.
And I did. I don't apologise for it. Haven't changed it since. I also said in the same interview, that any legal processes associated with the treatment of these photographs and this material is completely independent of politicians. I have said that consistently since then. As it should be.
FAINE: The resultant lack of any police follow up or court prosecution suggests that this was an inglorious episode in the cultural discussions that this nation occasionally engages in Prime Minister.
PM: Jon -
FAINE: And you added some fuel to that fire.
PM: Well Jon if you are on national television, asked for your view as a parent in response to a particular piece of material, you can express a view or simply waive it through. I expressed a view, don't apologise for it. But if we got to the stage where people can't be asked their views on particular objects.
FAINE: That would be censorship, I am not a fan of that.
PM: What I am about to say is we are all entitled to express our point of view, even Prime Ministers and secondly, to say quite rightly that independent legal processes associated with the treatment of material such as this are completely independent of the individual views of politicians. And I have said that since then too. These two ideas, you know, can coexist.
FAINE: Alright and just finally Prime Minister, what are the Labor party's chances in a by-election that is well, a massive margin in Peter McGauran's old seat down in Gippsland?
PM: (inaudible) really tough. I think this seat is, since the National Party came into being in 1921 or 22 it has been theirs. So it will be really, really difficult for us to prevail but the -
FAINE: A popularity test for Kevin Rudd?
PM: The challenge in Gippsland is to get people a local choice. You can either just walk away from very difficult seats like this and say, ‘it is too hard for Labor because we have never held this seat since the National Party had it from 1922'. Or you can put forward your candidate Darren McCubbin and say ‘he is a local bloke, local mayor and please consider him when you are putting forward your democratic choice'.
But in answer to your first question, tough as hell.
FAINE: It is though, a popularity contest for you.
PM: I think the challenge for the nation Jon is simply to go out there with the business of governing. Every day, every week, every month, there is going to be opinion polls up and down. Including elections, by-elections, state, federal. The key thing is to get on with the business of honouring your commitments to the Australian people on things like Kyoto, honouring your commitments to the Australian people on withdrawing our combat forces from Iraq, honouring your commitment to the Australian people to invest in education and health, in an education revolution.
Get on with the business of doing that, and people will make their judgement in you know, two or three years time, whether that has been sufficient or not. In the mean time, it is just head down, tail up, get on with the job.
FAINE: Thank you for time this morning.
PM: Thanks Jon.