PM: The government was elected on a platform to build the Australia of the future. And part of our program for building the Australia of the future is to reform the Australian federation. And when we reform the Australian federation, part of that of course is a cooperative relationship with states and territories. But there's another part as well, and that is a new cooperative engagement with local lovernment in Australia.
Today, together with the Minister, Anthony Albanese, and with Paul Bell, the President of the Australian Local Government Association, I'm announcing that on the 28th of November, here in Parliament House in Canberra we'll convene the first meeting of the Australian Council of Local Governments.
That means that we'll be extending a direct invitation for the first time in Australia's history to all 565 councils in Australia, their mayors and/or shire presidents, to come here to Parliament House for this first meeting of the Council.
The purpose of the meeting is as follows. We intend to use this as an opportunity to engage with local government direct on their future partnership with the national government on this government's nation building program for the future. Our infrastructure program for the future. And the reason for that is that local government itself delivers significant infrastructure on the ground. And we wish to be new partners in that with them.
The second, of course, is to tackle the immediate challenges facing our major cities. Our major cities and the local government authorities that administer them have particular challenges in their growth corridors - urban congestion, urban planning, and design. And we believe that we will have a significant new cooperative relationship with local government in our major cities in this area as well.
And the third is this. We committed prior to the election to constitutional recognition of local government. And prior to embarking upon the referendum necessary to do that, we wish to consult directly with the local government authorities of Australia to make sure that we get that absolutely right. And we intend to use the 28 November meeting, this inaugural meeting, of the Australian Council of Local Governments to do that.
And finally, could I simply underline to all of you here the importance of local government itself. Local government across Australia employs some 168,000 people. Combined Budget of some $22 billion. And responsible for some 657,000 kilometres of road. It makes sense, therefore, for this government, the national government, to have a new partnership with local government.
We committed ourselves to this course of action prior to the election. We begin the implementation of that commitment now.
The final thing I would say is that we need to make sure that this third arm of the federation, the national government, state governments and local government, are walking together in building the nation's long term infrastructure needs.
And, specifically, the Minister will be seeking input to his new proposed local government and local communities infrastructure fund.
Over to you, Minister, and then we'll turn to Paul Bell for comment as well.
ALBANESE: Thanks, Prime Minister.
This is indeed a very significant day where we're seeing the forging of a new partnership between the Commonwealth and local government.
Local government is the area of government that is closest to local communities. It delivers basic services to local communities in the form of aged care, child care. It looks after local roads. And it's the missing piece, if you like, in the government's nation building agenda.
We have a plan for nationally significant infrastructure through the Building Australia Fund and through Infrastructure Australia. Today, this announcement represents the next step in making sure that we also remember that locally based infrastructure in local communities where people live and work is significant. And we want to move forward in partnership with local government.
We committed to this new partnership during the election campaign. Since then, I've had numerous meetings, not just with the ALGA, but with capital city lord mayors, with local government around the nation, in cities and in regional communities. And we've worked up what would be the best structure to maximise the input of local government. Hence, we'll have a smaller body of around 25 to 30 in terms of membership to be announced at the inaugural meeting of the Council held on November 28. That will include representatives of the ALGA and also the state based local government associations as well as a number of important industry associations including local government managers as well as the Australian Local Government Women's Association.
That will be the organisation that will have ongoing contact on a day to day basis with the Commonwealth.
But we also thought that it was important that on an annual basis we have a forum in which every single council in the nation, and shire, could participate and have interaction with each and every member of the national Cabinet. This is something that hasn't happened in the past. It has been a missing piece in our federation. And, I believe that the November 28 meeting will be welcomed out there in Shires, in councils and by local communities.
BELL: Thank you Prime Minister and Minister.
Look, today does mark a new era of collaboration within the Australian government with local government. This is a first, and it's part of building a stronger relationship with local government and local communities across Australia.
Prime Minister Rudd has engaged local government in a way which we have never seen before. We've been a part of COAG for many years as an invited guest. I think today is about taking that further, taking it to a strong partnership with the Australian Government. Local government, local communities, having a chance to help reform and build a stronger federation.
This is about the Australian government being at every local community and at every person's place in building certainly stronger communities, safer communities, and including the much needed infrastructure to build a new economy of the future.
The federal system, we believe, without local government does not reflect what is now in place within our system in the federation. A strong local government has been built over many years that services the places that we are at. And the places that we deliver for our communities need to be recognised, need to be understood, and need to be embraced.
Today the Prime Minister and our Minister have said that we want to embrace local communities, local government, and form a relationship that has never been seen before in this federation.
We congratulate the leadership that has been shown by the Rudd Labor government in this regard, and look forward to building on the meeting of the 28th. Look forward to building on the Council of Australian Governments. And look forward to being able to deliver more efficient and effective services to the community and people of Australia.
Thank you.
JOURNALIST: That's the weekend, the meeting, just after APEC. Will you be back for the meeting or?
PM: Yes, we've worked out the timing of this.
There will be the possibility of a little shuffling around depending on the availability of certain key mayors, but we are pretty confident that the 28th, or thereabouts.
JOURNALIST: Why on earth would you want to give constitutional recognition to local government when state governments have sought to amalgamate councils to save money, reduce duplication and inefficient government?
PM: Because we believe in honouring our pre-election commitments. We said we'd do this before the election, we're getting on with the business of doing it. And we're doing it in a consultative way. The best way to do it consultatively is to invite the mayors and shire presidents of the nation to Canberra, and we'll get their input into what the question should be, and we'll proceed with honouring our pre-election commitment.
JOURNALIST: Why do you need on the provision of infrastructure the input of the councils given that you have undertaken that Infrastructure Australia will choose these big projects without the involvement of politicians? Aren't you just trying to forge political networks with sitting councillors across the country?
PM: Such cynicism from the Oz, I'm surprised and shocked.
Can I say this, that the Building Australia Fund, and Infrastructure Australia, is about nation building projects at a large scale. And we've said, quite explicitly, as has the minister, how they'll be deliberated on and decided.
Ports, rail, major road projects, national broadband network - what we are talking about here are some of the local community infrastructure projects that local government needs to engage in. Right now the Australian government expends something like $2.1 billion a year on local government, correct me if I get some of these figures wrong, $1.9 billion I think in financial assistance grants and on top of that we have $300 million plus in terms of various categories of road programs.
What we need to make sure is that the local infrastructure deficit, local community infrastructure deficit is met and this is not just plucked out of space. PricewaterhouseCoopers as I understand it did a report recently in the last 12 to 18 months for the various local government associations of Australia which identified some critical infrastructure deficits. For example, if you go to the PricewaterhouseCoopers report, it says that in that study's mid case scenario - $1.13 billion per annum annual underspend on infrastructure renewal, $14.5 billion backlog in infrastructure renewal work.
We intend to get that right, and one of the reasons that the Minister has put forward his proposal for a new local infrastructure fund is to respond to objective reports like this and to get the structure right so that we can respond flexibly and rationally to local infrastructure needs, rather than just saying all over to them and all their problem.
Did you want to add to that?
ALBANESE: Just that it's an important distinction between the Building Australia Fund and nationally significant infrastructure and what we are talking about here. Indeed what we are saying to local government and local communities is that we won't leave you behind. That local community-based infrastructure is also important to the living standards and lifestyles of people who live in regional Australia and people who live in our cities.
JOURNALIST: Mr Rudd, the share market has fallen 4% this morning and some Australian bank shares have fallen up to 20%. The result of a fallout in the UK means that BankWest may be subject of takeover speculation. Has Cabinet convened to discuss the growing financial crisis around the world and secondly have you considered any contingency arrangements for expediting bank mergers if they become necessary?
PM: Firstly, Cabinet when it met on Monday was extensively briefed on developments as of then by the Treasurer, based on briefings he'd obtained as of that time from the Treasury and from the other financial and economic regulators.
Secondly, since then and I've got to say on a daily basis the Treasurer and myself have been in active conversation with both the Secretary of the Treasury, the Governor of the Reserve Bank, and in the case of yesterday the head of APRA. That close collaboration continues.
Our overall concern has been to ensure not just the liquidity of the Australian financial system, but to make sure that our regulators are in close operational contact with their international counterparts. The advice of the regulators is still that Australia's financial institutions are in sound shape, that the order of their balance sheets is strong and therefore as the Governor himself said today there is a world of difference between the circumstances facing Australia's financial institutions and those which face financial institutions abroad. We are not immune to those difficulties but we are in a strong position to see Australia through.
I wish to add one further point on that. You raise the question of global financial crisis. I notice today comments by the Leader of the Opposition in response to questions about the words of the Governor of the Reserve Bank on this the other day.
The Leader of the Opposition was asked, do you take comfort from the words of the Reserve Bank Governor yesterday that conditions in Australian banks are light years away from what is happening in other banking systems around the world.
Mr Turnbull said, ‘yes I do take comfort from that, I don't know that I would use the word light-years. I would express it differently”. He goes on to say: ‘It's just a question of language. To say that Australia is light years away from the economic crisis in the United States suggests that you know well, light years suggests millions of miles away'.
Can I say this, when we are in the midst of a global financial crisis, when there is significant stress on global financial institutions, and because of the interconnectedness of those institutions with Australian financial institutions, it is of absolute importance that our national political leaders speak responsibly.
I therefore would strongly suggest to Mr Turnbull that in making comments about the position, the considered position taken by the Governor of the Reserve Bank about our position relative to those in other in countries, that he should think twice before making comments which separate him in any way from what the Governor is saying.
This is a very difficult and challenging set of global economic circumstances we face and I would strongly caution him against language along those lines.
JOURNALIST: Given the importance of economic commentary that you underlined, would you welcome the appointment of Julie Bishop as Shadow Treasurer and what do you think that would say about the priority the opposition claims to be putting on economic issues at the moment?
PM: Well the matter of personnel within the Liberal Party is a matter for them. Our engagement with them, particularly through the Senate, is the content of their economic policy. And can I say this: when you have the Leader of the Opposition say, as he has in recent times that inflation is a fairytale, that is an economic policy position we disagree with.
When you have had the Leader of the Opposition say in recent times that a 25 basis point cut in interest rates is nothing, or 25 per cent basis increase in interest rates, as it was a couple of years ago, is nothing too dramatic, that's an economic policy position I disagree with.
When you go to the content of economic policy, whereby in the second or third day since the change in leadership of the Liberal party, we have simply had tick, tick, tick, to each of the economic policy positions adopted by Mr Nelson, including the $6 billion raid in the Senate on the budget, I would say that on the content of each element of economic policy - inflation, interest rates and the budget surplus - I don't see any evidence of economic policy responsibility. That's what I am concerned about and it is not just an idle remark because it translates into concrete action in the Senate.
JOURNALIST: To go back to Laura's question about Australian companies, we have seen the value of Macquarie Bank, our largest investment bank, drop by about 50 per cent in the last month. Are you as Prime Minister concerned that Australian companies and financial institutions could become subject of takeovers, offshore takeovers, as a result of this global financial rout?
PM: Well the global financial crisis is deep, it has continued now for 12 months and as we have seen by developments in the last several days in the United States, it has become worse.
When you have these moves against the largest American investment banks as we have seen, obviously the implications worldwide are significant. When you have seen the injection of the action by the Federal Reserve, the United States Treasury in relation to AIG, the world's largest insurer, this obviously has global implications. We are not immune from that.
But I say again, one: the balance sheets of Australia's financial institutions, we are advised, are in sound shape. Furthermore, the regulatory arrangements in this country are the best in the world.
Thirdly, the Government is in active daily contact with each of the regulators and fourthly, those regulators are in active daily, collaborative action with their counterparts around the world.
We operate in an international economy where you have a range of decisions on mergers and acquisitions which occur globally. Each of those would be subject, of course, in their application to the criteria applied by the Foreign Investment Review Board and therefore we would simply adhere to normal procedures should any such future action occur in relation to any Australian company.
And of course you are familiar with our particular policy when it relates to Australia's principal financial institutions, the banks.
JOURNALIST: Prime Minister, do your assurances go to the thousands of customers of BankWest given that its parent company is in considerable difficulty?
PM: Obviously the Australian financial regulators are in close contact with their British counterparts, the Bank of England, in terms of the most recent actions in relation to HBOS. And we are advised that all those procedures are well in hand, that this is being handled in the most regular and orderly fashion and as a consequence, the government is confident that the regulatory arrangements we have in place provide certainty for all Australians who are concerned about the state of their financial institutions.
These are difficult times, I accept that. The government accepts that, the government recognises that. But the government intends to apply all the pre-existing, well established regulatory arrangements to each of these challenges as they arise and that applies to BankWest as well.
JOURNALIST: Prime Minister, earlier this year you talked about the need for greater transparency in the markets. We have had months of turmoil since then, do the events suggest that there is probably a need for some heightened regulation of the markets?
PM: Well the Australian government has been active in the Financial Stability Forum since the beginning of this year on the questions which have been unfolding for markets since August of last year and they go to a range of different measures, one of which is transparency measures, particularly in relation to these particular financial instruments.
These are matters that I discussed with US financial regulators when I was in the United States in March. I met the chairman of the Fed, I met the Secretary of the Treasury, I met the Chairman of the Securities and Exchange Commission, and others on this very question. The need for transparency in relation to various of these instruments is now greater than it was even then.
It is important that all participating governments, coordinated appropriately by the International Monetary Fund, act on this.
There's a further measure as well. It goes to the question of the financial claims scheme which the government has been implementing in the period that we have been in office, and
that I say is one which was recommended first in Australia, following the HIH Royal Commission back in 2003, five years ago.
We have prosecuted that, our proposal is out there with the financial community. It will be legislated on soon.
And we are doing that in direct response to the calls for the Financial Stability Forum for all its member and participating states to have similar, appropriate financial claim schemes in place for depositors across the economies of the developed world. We have done that, we are getting on with it, but your question about the need for global action on transparency in other areas, which is coordinated, we are doing our part in Australia, we need to see much more of that internationally.
JOURNALIST: Ahead of your attendance at next week's United Nations Millennium Development Goal meeting, the co-chairs of the Make Poverty History Coalition, Tim Costello and Andrew Hewitt have called on you to increase our aid commitment to 0.7 per cent of gross national income up from 0.5, of which there is bipartisan support. Do you heed their call? Will you increase our aid commitment to 0.7 and why?
PM: Our position is to aim to, by 2015 to reach 0.5 and we have made no commitment beyond that. Secondly, we have many other huge competing priorities for, on the Australian budget. And those will take priority.
We believe that in the actions we have taken so far, particularly in the South Pacific, where we have direct security concerns and long term concerns about economic and other refugees, this is the right course of action, both for Australia's national interest and other interests as well.
Also, to build on an answer I gave before, in New York I will be seeing on this occasion, the Chairman of the New York Federal Reserve. I will be meeting also with the President of the World Bank. I will be also having meetings with other representatives of the Fed and the Treasury, while I am in the United States. The reason for that is that we are in the midst of a significant global financial crisis. That is the truth.
Everything is connected to everything else. That's the truth.
We are in daily contact with our friends in the United States and it has been useful to have built on the relationships which I was able to establish in March myself with the heads of those various agencies and elsewhere and I will be sustaining that when I re-engage with a number of them in the United States next week.
JOURNALIST: (inaudible) can I just clarify, Prime Minister, the remarks you made about Mr Turnbull's comment. Is your promise to the nation that Australia and its economy and its financial institutions are light years away from the events occurring now in America?
PM: What I am saying to you Mark is that I stand by, unequivocally, the comments of the Governor of the Reserve Bank and I do so as Prime Minister of Australia, because we are in the midst of a global financial crisis.
His analysis of the situation now is correct and should be endorsed, and I do not believe should be the subject of partisan comment, which it was this morning. That is not helpful in a current environment where we must all, as responsible national political leaders, have the overall stability of the financial system as our first and foremost concern and responsibility.
JOURNALIST: (inaudible) how does that match up with what you have just said?
PM: Well the Governor has said elsewhere, on many occasions that obviously Australia is not immune, that is a statement of fact. But when he makes a clear and unequivocal statement about the distinction between the state of Australia's financial institutions and their balance sheets, and those in the United States, that is a comment which should be let stand, unadorned by the political commentary of alternative Prime Ministers of Australia.
This is a very serious time for the nation. It is a very serious time for our national financial institutions. It is not just a political football.
JOURNALIST: Given that the United States is now propping up an enormous number of institutions, that Wall St may affect Main Street, how likely do you think that a United States administration of any colour will introduce an emissions trading system or some kind of cost, impose some kind of cost on business in the next couple of years?
PM: Well the first thing I would say Chris, in response to that is, both the Republicans and the Democrats, as you know, in their commitments leading up to the Presidential election have indicated that they will take action on climate change.
That is the first point.
Secondly in my private discussions with both Senator McCain and Senator Obama, it is quite plain to me that this is not just language from them, that both sides of American politics are serious. The detail of the action that they take and whether that is in full concert with the international community, or separate national action, well that is yet to be seen.
Our job as the Australian government, however, is not just to sit back and kind of wait for things. Our job as the Australian government is to try and influence US and other national behaviours and we are doing that to the best of our ability.
JOURNALIST: Will you be trying, will you be seeking to have further contact with presidential candidates during your trip?
PM: No not on this occasion. I have spoken literally in the last two or three days, with Senator McCain and I have spoken in the last two or three weeks with Senator Obama. And if I know anything about electoral politics, they have probably got a few other things on their mind just now.
JOURNALIST: (inaudible) uranium to Russia, will you now block the sale?
PM: I haven't studied yet their full report. Obviously the global situation in relation to the Russian Federation is now complex, as a result of what we have seen in Georgia and most particularly in Southern Ossetia. We will be working closely with international governments on the best response to the Russians. This is, again, I have got to say, a very difficult challenge for the global order.
If you look back over the last 20 years or so, what has happened in the last couple of months or so in relation to the West's engagement with the Russian Federation, I fear that we are at one of these turning points. And I think it is very important, very important indeed that all governments are fully seized of where all this goes long term. And that is why this government in Australia, is going to spend a lot of time working our way through the question that you have just put, together with others, on the West's long term engagement with Russia.
JOURNALIST: (Inaudible) Brisbane Broncos, you are the patron of the Brisbane Broncos. There has been some serious allegations made against the players. What is your response and concern about discipline within the team, after they were on a weekend bender?
PM: I would say two things, and the first has no reference to the individual events concerning the team, because they are, to the best of my knowledge, still subject to police investigations. So I make no comment on the individual details of what is currently the subject, I am advised, of a police investigation.
On the general question of violence against women and respect for women, I would draw your attention to a speech I gave last night in Sydney for the White Ribbon ambassadors. I would say this unequivocally: there are no circumstances at all which justify any level of violence against any woman at any time.
JOURNALIST: (inaudible) does John Murphy understand the real issues facing working Australians, working families sitting around the kitchen table, I mean does he enjoy your full confidence still?
PM: He has apologised unequivocally for those remarks and so he should.