The Oakes Interview: Kevin Rudd

Nine political editor Laurie Oakes presents his weekly political interview on TODAY on Sunday every Sunday from 7am -10am on the Nine Network.

PRIME MINISTER KEVIN RUDD AND LAURIE OAKES

LAURIE OAKES: Mr Rudd, welcome to the program.

KEVIN RUDD: Good to be on the program Laurie.

LAURIE OAKES: There was good news for you from the Queensland election yesterday, were you relieved and surprised by the result?

KEVIN RUDD: I think this goes down to a gutsy performance by a very gutsy leader Anna Bligh. It's full marks to her, I mean she was up against a cyclone, an oil slick, a Conservative billionaire throwing millions at the Liberals and Nationals campaign; but she came through. And I think it is a great day for Queensland women and Australian women. This is the first elected woman premier in the country's history and I think that point needs to be marked in history as well.

LAURIE OAKES: Were there federal implications, Federal factors in this result?

KEVIN RUDD: In the period I've been Prime Minister we've had I think four state and territory elections. Labor party has won three, we’ve lost one, and each of those, I've said, these have been overwhelmingly determined on the basis of state and territory issues. And I think that is my view of this one as well.

LAURIE OAKES: And this is in your state, your state of Queensland.

KEVIN RUDD: It is a good state.

LAURIE OAKES: Yes, pamphlets were issued in which you personally endorsed the Labor candidates. So how much of this is Kevin Rudd popularity, your high opinion poll rating?

KEVIN RUDD: This is - I have got to say, this is Anna Bligh's strength of leadership. I mean I've known Anna her for 20 years, and obviously I've been talking to her during the last week and she's been out there powering along. I think though, there is something in this for us to reflect on, it's in the midst of a global economic recession, people don't like politicians just playing politics out of the recession, they want instead head down, tail up, getting on the hard work of reducing the impact of the recession, I think that's what Anna with on about.

LAURIE OAKES: How much of it, though, was in a crisis, when you're worried about the economy, you stick with the devil you know, was that a factor?

KEVIN RUDD: I think it's more like this, Laurie. It's about everyone knows that this global recession is serious, because it affects people personally. That's why they don't like politicians who just talk and play politics about it, they want their politicians to be head down, tail up, practical work, how do I cushion the impact of this recession on the people in my area? And that's what Anna is on about.

LAURIE OAKES: And what does it mean for the merged Liberal-National Party in Queensland and what does it mean for the proposals to have a merged coalition party federally?

KEVIN RUDD: I think obviously that's a matter for the Liberals and Nationals to sort out. I have enough challenges on my plate in terms of steering Australia through the current global recession. But I think what it does mean underneath it all, is you have got to stand for something. People want consistency of leadership through these things and you can't have political leaders at the national level or state level running around and saying that the recession is peripheral, that is has been hyped up, that it has been manufactured, which is what the liberals and nationals have been saying. People expect consistency of approach not just opportunism. And I think that is the message for all political parties.

LAURIE OAKES: Now you're heading off tomorrow morning for your first meeting with Barack Obama. What kind of relationship do you want to develop with him, do you want the kind of relationship that John Howard had with George Bush?

KEVIN RUDD: Look Laurie, I want a good relationship with President Obama, and we've been chatting a bit on the phone both before his election and since. And I think we've struck up a good rapport. The key thing, though, is to work with America on the big problems which confront us all. I'd much rather be working with America on how we deal with the big challenges of security in Afghanistan; working with the Americans on the huge challenge to the global economy right now and at the G20 and on the big ones of climate change and the future of our region and China within it. And I'd much rather be working practically on each of those. Doesn't say we are going to agree on everything, as I said before. I mean our job is to look at everything in terms of Australia's national interest. But I think I am going to have a good relationship with President Obama and I will be working practically in that direction.

LAURIE OAKES: Are you going to have the guts, I suppose to tell him when you think he's wrong?

KEVIN RUDD: Absolutely. I mean that’s, I mean none of us have perfect wisdom. I expect some of my friends around the world would pick up the phone and say "I think you got this one wrong, mate". So if that happens, and I see no evidence of it yet, my responsibility as Prime Minister of Australia is to say, ‘we're with you on this, we’re with you on that, but actually we part company on this’. And that's the approach I think the Australian people would expect of me. But we're dealing with a President with a new mandate and a President who gets the challenge of the global economic recession. One of the big things coming out of the global Finance Ministers meeting, G20 finance meeting just a week or so ago, which treasurer Wayne Swan attended on Australias behalf, was America is back in the game of providing global economic leadership. That is so important given what we all face and the implications back home in Australia for jobs and the economy.

LAURIE OAKES: So what's the main thing you want to achieve in your meeting with President Obama?

KEVIN RUDD: The global recession has global causes and the core part of those global causes are the problems we still have in the big global banks, American and European. Now, what we've achieved so far is a framework for dealing with problems on those big banks' balance sheets - in order to fix those banks, to get private credit flowing again. But we still need further action within those countries and on a global level. So that's number one for America and number two is working to make sure that the International Monetary Fund has enough resources itself to deal with any second wave crisis around the world, because we don't want that to become second wave toxic assets or second wave subprime.

LAURIE OAKES: Now my impression is that Washington talks to you all about lobbying and preparation for the G20 meeting in London a week or so later. I understand you've put together a document on how the IMF should be reformed, or reforms the G20 should agree to. Can you tell me in simple terms the kind of reforms you're proposing, simple and brief terms?

KEVIN RUDD: No, no, no. I understand Laurie, and this is important stuff, as I said we don't want a second wave subprime crisis. How could that occur? It could occur if you have got a huge implosion in the economy, say in central and Eastern Europe, or elsewhere in the developing world, which then washes back into the world's major banks again, and that affects all of us, quite apart from those countries themselves. So what do you do about it? The International Monetary Fund set up at the end of the Second World War, needs to have more resources that it has currently got, more flexibility than it has currently got to intervene early with those emerging crises. So one of the reforms that we've been talking with other governments about around the world is providing more resources for the IMF, but greater flexibility, and here is the key bit: It means a greater role for China. Everyone is expecting China to put its money on the table. That’s fine. But you know in the IMF, China's voting rights are currently same as those of Belgium and the Netherlands. Now let's just get up with reality of the 21st Century. So what are we going to be trying to fashioning a greater role for new countries like China in the decision-making powers of the IMF.

LAURIE OAKES: Now as I understand it you have sent your reform plan to all the G20 leaders. Are we over reaching? I mean why would big economies listen to a little country like Australia about a global crisis?

KEVIN RUDD: Well, Laurie, Australia is a member of the G20, and the G20 made up of the larger economies in the world, everyone has a voice. This country Australia is the number 14 – number 15 economy in the world. Therefore we can be listened to with respect, so long as we have content to our ideas. Take for example what we've just been talking about, how do you fix up the major banks? Several weeks ago I circulated a paper to, a working paper - always subject to change, on how to fix up these bad assets on bank balance sheets around the world. In the work which was agreed to by the G20 Finance Ministers meeting, that incorporates a large slab of Australian ideas, and it incorporates other ideas as well. So that's work we've done. On the IMF working paper, that we've put around and I’m sure it will be subject to further change, is just to push ideas, try and shape a consensus. What's my mission for Australia in this? I said before the election want to see Australia acting with creative middle power diplomacy, trying to fashion a consensus around the world where we can help. But the alternative is just walk away, all too hard, hope it gets better one day, that's not my approach.

LAURIE OAKES: What do you say to President Obama in the Oval office if he asks for a larger Australian military commitment in Afghanistan?

KEVIN RUDD: Well, what President Obama has already said is that the current military strategy and broader political strategy for Afghanistan is not working.

LAURIE OAKES: Yes, he thinks that we are not winning.

KEVIN RUDD: Yes that’s right, and let's just be blunt about it. I think people need to just be up front about the reality. Secondly, the Americans are right now engaged in a root and branch review of their over all strategy. So what's my mission statement in Washington? It's to go through that review with the President and with his advisers, work out where the Americans will be going to in the future. Now they may put to me a request for further Australian commitment and I'll, together with my colleagues, consider those things on their merits; doesn't mean you say yes or no, may mean some change in the current configuration of what we do, but this all has to be taken one step at a time.

LAURIE OAKES: Australia has lost ten brave soldiers in Afghanistan so far. If we're not winning, the President admits it, is this sacrifice justified?

KEVIN RUDD: The core mission we have got to remind ourselves of Laurie is the twin-towers coming down with September 11. We can never forget that, we can't forget the fact that there were many Australians killed that day as well, we can't forget the fact that we have lost nearly 100 Australians to various terrorist attacks since and those terrorists who did that were by and large trained in Afghanistan. So what's the mission? To deny al-Qa'ida from having Afghanistan again as its strategic operating and training base for the future. This mission of strategic denial is core to what we're on about. But let me tell you, it's very hard. And for our brave men and women in uniform there, this is a difficult and dangerous and bloody work. And I've been speaking to parents and loved ones recently of those who have lost their lives, this is awful stuff, but if we are to take the mission seriously and partnership with the Americans and others to continue to deny al-Qa'ida these sorts of free-range operating bases, that it is a mission that we must support.

LAURIE OAKES: We’ve also got to look after our diggers. The latest digger to die was killed while trying to diffuse a road side bomb. Are you certain that the people doing this, the Australian troops doing this have got the best possible equipment?

KEVIN RUDD: Laurie, with each of these deaths of our Australian troops the right and proper procedure with each of them, undertaken by the Chief of Defence Force, is for a proper military investigation of each of the circumstances. And that is underway in relation to the case that you have just referred to.

LAURIE OAKES: The reason I ask that it is that 15 months ago another digger was badly wounded diffusing one of these devices and there was concern expressed that, questions asked about why Australian troops there have to diffuse these things manually, when other NATO countries do it all by robotics?

KEVIN RUDD: Laurie, what we will do with the investigation of this brave soldier's death is go to all the circumstances surrounding it and if there are implications flowing from it in terms of operations on the ground, equipment, or any other matter, I'm confident the chief of defence force will let us know, because we want to make sure that our men and women at the front line have what they need.

LAURIE OAKES: Okay. Back to the economy. There's been a lot of bad news lately, the IMF is getting more pessimistic. Where do you now think the Australian economy is headed, how band will it get?

KEVIN RUDD: I think the global economic recession is getting worse before it gets better. And it's clear that the impact of a worsening global economic recession will make it virtually impossible for Australia to sustain a positive economic growth for the period ahead with impacts of course for budget and employment, which underlines the importance of global action in response to the global recession.

LAURIE OAKES: Now, Wayne Swan's already admitting that the latest unemployment forecast of 7%, it’s too conservative, it will go beyond that. What's your worst fear? How high could unemployment go?

KEVIN RUDD: Laurie, I had a look at the report for the International Monetary Fund during the last few days. The revision down for growth for the global economy for the period ahead is a big one, and therefore it does have direct role on consequences for Australian growth, employment, and the budget. That is just as night follows day. This economy of ours, this trillion dollar plus economy, a huge slice of our economic activity comes through the trader sector of the economy. If the global economy therefore is shrinking and global trade is shrinking for the first time in a quarter of a century, than it its going to have roll-on consequences for our growth, our jobs and our budget. And therefore the need to do everything we responsibly can to support jobs and activity on the way through, until we get through global recovery for the sorts of measures we're talking about earlier in the interview.

LAURIE OAKES: Will we need more stimulus packages and can we afford them?

KEVIN RUDD: Laurie, we have taken this one step at a time. The government's economic stimulus strategy is based on firstly stabilizing our own financial markets through the bank guarantees, secondly - short term stimulus, pension payments and others to support the one and a half million Australians working in retail, longer term stimulus, the biggest school modernisation program in the country's history, but beyond that we reserve the right to take whatever further action is necessary to continue to support the economy and jobs. One of the things I’ll be discussing with my counter parts in London in a week or so is what they will be doing for the period ahead. The International Monetary Fund has been reporting on the need for stimulus, not just for 09 but for 2010 as well, therefore, are there further measures that globally we need to take, what would Australia need to do in that context as well, this is one of the things also on the agenda for London.

LAURIE OAKES: How tough is the budget going to be? How tough does it need to be?

KEVIN RUDD: Really tough because what you have got on the one side of it, is a collapsing government revenues coming straight off the back of the global economic recession, happening with every other budget around the world. Chinese budget has gone into deficit unadvised. Therefore on the revenue side we have got a huge challenge and on the expenditure side we need to do whatever we can to support the sort of investments we have just been talking about to cushion the impact of the recession. So Wayne Swan's hair will be getting greyer and greyer and greyer as we prepare the budget over the next month or so.

LAURIE OAKES: We're obviously already seeing job losses in government departments. The Australian Bureau of Statistics is putting off people. I mean won't that affect the quality of data you are getting on the economy, can you afford that kind of thing?

KEVIN RUDD: The data from the ABS is really important and we will be looking carefully at their future resourcing needs. We need to make sure that we're providing proper job opportunities for people in the Australian public service and in addition through the stimulus measures, turning every school, primary school in the country, into a construction site to provide jobs for local tradies as well.

LAURIE OAKES: And what about pensioners, are they going to get their rise despite the tough budget, or are you having to look at that again?

KEVIN RUDD: Laurie, our view is that we need to deliver on pension reform. Our pensioners have been doing it really tough and we believe that in the midst of a recession globally that you need to support our pensioners, our veterans and our carers. It is not just the right thing for them, but it also pumps through to the retail sector and it is one and a half million people out there working in retail. Look at the number of … look at the impact on retail sales in Australia through the economic stimulus strategy we’ve provided against the absolute devastation you see in retail in so many other western countries.

LAURIE OAKES: All right. But it is going to be a tough budget, can you even contemplate spending half a billion dollars to build a bigger performance theatre in the Opera House?

KEVIN RUDD: Well I know there's been a fair bit of lobbying on that, I have got to say personally I'm pretty sceptical. We will go through it, but I am primarily focused on the infrastructure front, with what do we need to do to invest in our hospitals, in our roads, in our rail, and also in the telecommunications infrastructure of the future.

LAURIE OAKES: I think everyone would say they’re more important, so how could a cash-strapped government like the Nathan Rees New South Wales Labour Government say it wants to spend half a billion dollars on the Opera House when it can't pay hospital bills, it’s cancelling rail projects. That's mad, isn’t it?

KEVIN RUDD: Well that's a priority decision for them to sort through and I haven’t had that direct conversation with them on this particular project.

LAURIE OAKES: Will you tell them it's a dopey?

KEVIN RUDD: I'm not a big fan of this one, that's in terms of the Commonwealth dollar. Now I remain open to be persuaded by those who can tell me to the contrary, vis-a-vis jobs regeneration, but when I look at the 15 billion dollars or so we are about to pump into about seven and a half thousand primary schools across Australia, and a large number of secondary schools, my overwhelming priority is to build those schools and provide those jobs for tradies right across the country.

LAURIE OAKES: Prime Minister, we thank you. END