Agenda Interview With Alexander Downer - May 15

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PART 1

SIMON: The big story in New Zealand today will be the first Australian New Zealand Leadership Forum in Wellington, brainchild of Australian Foreign Minister Alexander Downer. Mr Downer's also been a forceful advocate for New Zealand's continued presence in Iraq, and he joins us now from Government House in Wellington.

Mr Downer Australia's been one of the US's closest allies in the Iraq conflict but recently we've seen sustain bombings and abuse scandal, a beheading, how much is the ongoing uncertainty affecting public support back in Australia.

MR DOWNER: Well obviously people have differences of view in a democracy but our overwhelming view as a government is that we've got to make the Iraq thing work, if we were to cut and run from Iraq well we'd leave the country in a state of anarchy and it would of course be a haven for terrorists, so the main thing is to get the interim government in place from the 1st of July and then the interim government which has been put together by Mr Brahemi from the United Nations will see government through until around January 2005, so for six or seven months when hopefully it'll be possible for the Iraqis to have their own elections and elect their own National Assembly then, so difficult as the situation is and you pointed to some problems there are, of course there are problems but we've gotta see it through and I think we can make it work and at least one of the Arab states can have a reasonably democratic and liberal government.

SIMON: So does that mean indefinitely, Mark Latham said they’ll be out by Christmas if he was in power.

MR DOWNER: Well of course not indefinitely because as I just explained there's a road map and the road map includes the transfer of formal power on the 1st of July this year and then beyond the 1st of July elections in January 2005, so the new more liberal more open institutions in Iraq are gradually emerging. I mean the alternative is to leave the country in the hands of people like those who executed Mr Berg the American, cut his head the other day. I don’t want to leave a country in the hands of people like that.

SIMON: That is indefinite then because there are all sorts of conditions applied.

MR DOWNER: Well I've just explained to you there's a road map, so during that period ….

SIMON: The road map's predicating peace and if peace is not obtained….

MR DOWNER: Well it's not predicated on perfect peace it's predicated on responsibility for security gradually being transferred to the Iraqis themselves. Now what we're doing at the moment is training up the new Iraqi army it already has four battalions, it's not many but I mean it's getting there, there are about 200,000 Iraqi Security Officers now, about 70,000 of those are Iraqi Police, further Police are being trained, so we're gradually getting there but you can't expect a country which has been brutalised by a dictator for the last three and a half decades to move seamlessly into a lezian democracy, it's obviously gonna take a bit of time.

SIMON: Well never mind the extremes but can we realistically expect a degree of acceptable peace given the history of conflicts within Islam itself particularly the Suni Shiite division.

MR DOWNER: Yes, I mean look it's a fair question, I mean Iraq was an artificial creation of the British in 1922 coming out of the collapse of the Ottoman Empire and they’ve welded together a Shier majority with a Suni minority and with the Kurds and of course others as well but I think the challenge there is to make it work, I mean the argument if you like the contrary argument is that the only sort of government that'll ever work in Iraq and it's good for the Iraqi people is a brutal dictatorship of the sort we saw of Saddam Hussein's well I mean you know people like Australians and New Zealanders could never accept that as an argument, so I think they can do it, I think the Iraqi Governing Council that has worked alongside the coalition provisional authorities actually worked quite well, and that brings together a mix of the different religious and ethnic groups and the interim government will have to do the same.

SIMON: The Islamic question though also applies of course to regional security, how much of a threat do you see Indonesia as with all it's bashiers and bombings.

MR DOWNER: Well I don’t see Indonesia, you know the Republic of Indonesia is remotely a threat to Australia, if do see Jamar Islamir and one or two other groups in Indonesia as a threat not only to foreigners, westerners as we saw in Bali but as a threat to the Indonesians themselves, to the Indonesian government. Remember what these fanatical, Islamic fanatical groups want is to establish a kind of Taliban style regime through Islamic South East Asia, and so President Megawati is as much an enemy of Jamar Islamir as John Howard or Helen Clark.

SIMON: You mentioned President Megawati the Indonesian presidential elections are due in early July, is she the best candidate the best option for stability there?

MR DOWNER: Huh, that is a question that the Indonesians themselves will have to answer not the Australian Foreign Minister but I'd say this to you I think they’ve got a series of good candidates, if public opinion polls are any guide they're focused on continual economic reform and growth on fighting corruption and on providing stability and security in Indonesia. Now I think Indonesia is heading in the right direction, for example you've asked me some questions about terrorism in Indonesia, I think the Indonesian government you know working with countries like Australia and the United States has been very effective in the measures it's taken to counter terrorism, and you know we don’t set ourselves up as commentators the whole time on what they’ve been doing because that will play into their domestic politics more than we might like, nevertheless there's no doubt that they have been effective in some of the steps that they’ve taken.

SIMON: How would you rate its stability currently for security, I mean can we expect to see any more Timors or Arché?

MR DOWNER: Well we have an Arché still and tensions in Papua at the other end of the country and over and above that some difficulties in Ambon and the Malukas area more generally, tensions in the case of Ambon between Muslims and Christians. It's not perfectly stable but it's not unstable to the point where the country's going to disintegrate, I mean the last thing we would want is to see Indonesia disintegrate is to see for example Papua or Archés spin off from Indonesia because that would lead to the beginning of the dissolution of the Republic of Indonesia, we wouldn’t want to see that happen.

SIMON: What would you do if that scenario happened?

MR DOWNER: Well I mean I don’t think it is gonna happen so I can't speculate on the hypothetical.

SIMON: How then would you describe Australia's current relationship with Indonesia?

MR DOWNER: Well we have a good relationship I mean there's no doubt about it there was quite a lot of tension between Australia and Indonesia back in 1999-2000 as a result of our leading the Interfet operation in East Timor which New Zealand very strongly supported we hasten to add. I think an illustration though of how good are relations with Indonesia and other ASEAN countries – a good illustration of that is the way we with New Zealand have now got them to agree that a free trade area between Australia New Zealand on the one hand and ASEAN on the other is a sensible aspiration, we understand that John Howard and Helen Clark are going to be invited to the ASEAN summit at the end of November this year, that is a very important development in our relationship with not just Indonesia which is by far the biggest of the ASEAN countries but with ASEAN as a whole and I think for Australia and New Zealand to focus on continuing to build our relations with South East Asia with ASEAN in that sort of way is very constructive in what we've achieved during the course of this year has been of historic importance.

SIMON: We'll come back to the trade issues in a moment but returning to the security question if the biggest threat to regional security is effectively posed from Indonesia why then should as you've suggested in the past New Zealand be expected to make a greater defence contribution, we're remote we're isolated.

MR DOWNER: Yeah well there are a lot of different threats and putting them in some sort of a batting order doesn’t make a lot of sense I mean I think what we should concentrate on are what are the security issues that Australia and New Zealand together need to address, one of them is what we've been discussing is countering terrorism in particular, of course that’s a global phenomenon and terrorism in South East Asia is linked to terrorism elsewhere to Al Qaeda for example but nevertheless we can make a particular contribution in South East Asia to countering terrorism but also Australia and New Zealand need to continue to work together as we've done I think in an unprecedented way in the last few years in the South Pacific, we've had troops and have troops in Solomon Islands, we've had deployments in Bougainville, those kinds of co-operative efforts which to a greater or lesser extent have involved our defence forces have been enormously important, we don’t want to wait until a security situation develops to the extent that there could be shooting and killing as happened in Bougainville, we want to make sure that we're active and able to stop these situations emerging and I think we sort of got some of the way to doing that in the Solomon Islands. We could have done better I suppose on the Solomon Islands but what we've done on the Solomon Islands has I think been a good illustration of what our combined defence forces can do.

SIMON: Do you believe New Zealand still has to lift its defence contribution?

MR DOWNER: Well look I'm not getting into that debate this morning, I think that’s an old debate between Australian defence ministers and New Zealand defence ministers, I think the fact that we in Australia are substantially increasing our defence budget is an illustration of the fact that we understand we live in a very unstable and insecure world in the post cold war environment, there are threats obviously from terrorism, there are challenges with failing and failed states, we are deeply concerned about the proliferation of weapons of mass destruction though there's been quite a lot of success in countering that in the last year or two, but we just think that as a significant country in the world we've gotta make a contribution to trying to stop those problems. We don’t take the view at least the majority of people in Australia don’t take the view that we should turn our backs on the world and leave others to do all the heavy lifting and hope the problems of the world might go away in the meantime, now I'm not saying by the way that that is the New Zealand view, the New Zealand government does not hold that view, but how much we spend on defence is influenced by those factors, how much New Zealand spends on defence that’s something New Zealand itself has to reflect on.

SIMON: What does New Zealand have to do then to gain Australia's support for getting full membership back in ANZUS?

MR DOWNER: To be frank I mean we have closer defence relations with New Zealand, we have a pretty intimate defence relationship with New Zealand, so I think the challenge if New Zealand wanted to get back into ANZUS is of course in New Zealand's dealings with the United States, there's no doubt that what took New Zealand out of ANZUS was the nuclear ships issue and the sort of socalled nuclear legislation, now but you know I don’t really know the extent to which New Zealanders want to get back into ANZUS, we would obviously – I mean let me make this point, in the time I've been the Foreign Minister New Zealand hasn’t been in ANZUS. For us what we get out of ANZUS is a very intimate relationship with the world's most powerful country, we're able to exercise influence we could never exercise in Washington if we didn’t have that relationship, and the United States provides an enormous and fundamental underwriting of our security, and I don’t just mean security from invasion from someone, I mean in a more sophisticated way the work the United States does with us in South East Asia in helping to counter terrorism, I mean where would we be if the United States decided they didn’t help with countering terrorism in South East Asia and in South East Asia we're all on our own to deal with that problem. I wouldn’t feel comfortable with that, but you know if New Zealand wants to get back into ANZUS well that’s a matter for the New Zealanders I think to address both domestically and to address with the United States.

SIMON: Would you say in essence though New Zealand's nuclear free policy is the reason essentially why Australia enjoys a better relationship with the US?

MR DOWNER: It's not as simple as that, I mean to put it another way, the reason that New Zealand is not in ANZUS is that, because as I was explaining on a New Zealand radio station the other day, from the American perspective they have a global network of alliances in our part of the world with Australia, Japan, South Korea, they have NATO of course in Europe, and they don’t want to see different levels of relationship within those alliances, to have an alliance with the United States and in fact to have an alliance with other countries involves certain obligations, they don’t want to see those obligations in some cases diluted because that will lead to the gradual unravelling of the alliance relationships that they have, so that’s their perspective and that’s why they took the position because it's an old story but that’s why they took the position they took when New Zealand introduced its anti nuclear legislation.

SIMON: As we said earlier your brainchild is on this weekend, that’s why you’re in Wellington, the Trans Tasman Leadership Forum. What would you like to see for Trans Tasman relations?

MR DOWNER: Well again I mean it's not for me to speak for New Zealand but from Australia's perspective I think that we take New Zealand far too much for granted, I don’t think Australians always understand how important New Zealand is to Australia, I mean maybe the perspective of the Trans Tasman relationship is that Australia's economy is six times as large as New Zealand's and Australia' a much bigger country in other respects, and so you know that’s that, whereas it's important I think for me to say this in New Zealand, New Zealand is very important to Australia, we have about 21 billion dollars worth of investment in New Zealand, we have very strong regional security partnerships which I've alluded to in the South Pacific and we have in East Timor and South East Asia more broadly and so for Australia it would be poorer world if we had a bad relationship with New Zealand and if we weren't able to work in the collaborative way we do with New Zealand. I want Australians right across the board, not just the government, but I want our business community, our academic community, our media, to understand this, to understand the importance of New Zealand. I mean our media doesn’t report very much about New Zealand at all and that’s a reflection of the fact that I think far too many people in Australia take New Zealand for granted and I don’t think they should.

SIMON: On a more specific level how would New Zealand benefit from a single Australasian market?

MR DOWNER: Well it gives New Zealand access to a market of 24 million people rather than four million so a free access to a market of 24 million, I mean you obviously get enormous economies of scale. I don’t think there's any doubt in all those years now 20 years that we've had CER closer economic relations, we've had free trade across the Tasman, that Australia but certainly New Zealand has benefited enormously from that, that’s been a wonderful thing for New Zealand it's been one of the things that’s driven in recent times the growing prosperity of New Zealand and it's relatively high economic growth rates. Now my own view is that we've gotta keep building on that, we shouldn’t be complacent we should look to creating a single market.

SIMON: A single currency?

MR DOWNER: Well understand this with a single currency, this is where the fact that Australia's economically is six times as large as New Zealand's comes into play. If New Zealand decided to opt for a single currency it wouldn’t matter what you called the currency the dollar the Anzac the Kiwi, it wouldn’t matter what you called it, you could call it the All Blacks

SIMON: Yes please.

MR DOWNER: And it would still essentially – yes, although if you wanted to give it a winning name you'd call it the Wallabies, but look overall…

SIMON: They got second, they got second, we'd have to call it the England Football Team and that wouldn’t be acceptable to either of us.

MR DOWNER: Well that’s right, but overall the Australian economy would dominate to such an extent through the currency that it would in effect be the Australian dollar, you would in effect be Australian dollarising New Zealand. Now I'm not sure whether in the end that would be such a great advantage for New Zealand, because New Zealand's trade patterns are very different from Australia's they're surprisingly different, the structure of New Zealand's economy is quite different in many respect is quite different from the structure of the Australian economy, so it's not entirely obvious to us that it would be in New Zealand's interests. From Australia's point of view I don’t think it would be too much of a problem at all and of course a lot of our businesses would argue that it would facilitate trade and investment with New Zealand. We would still completely dominate fiscal and monetary policy in Australasia, New Zealand would in effect lose control of its own autonomous fiscal and monetary policy, that would be dominated you know by Canberra.

SIMON: The Qantas Chair who's the Chair of the Forum Margaret Jackson has promoted measures such as a single competition regime saying big opportunities are going to waste. What sort of specific opportunities is she referring to?

MR DOWNER: Well she might be referring to the merger or part merger between Qantas and Air New Zealand.

SIMON: And isn't the forum at risk of being hijacked by these single interests?

MR DOWNER: Oh no, I think these are all important issues, there is of course the current range of issues, the fact that Telstra wants Australia's telecommunications company, or main telecommunications company wants better access to the New Zealand market, freer access to the New Zealand market, there are all sorts of trade gripes and things which it's fine they can be discussed. I think what Margaret Jackson as the Chairman of Qantas what she says is very sensible, we need to think of this relationship not just in terms of the here and now but in terms of the next 50 or so years, where are we going to be by 2050, are we going by 2050 to have a single market, are we going to have one common immigration policy, so that there is free movement.

SIMON: Let's explore that briefly, I mean CER that you mentioned, we've had that for 20 years now, where do you see us in another 20 or 50 years, where would you like to see the relationship?

MR DOWNER: Well I think the idea of a - more broadly of a common market and things like a single competition policy, things like harmonising our taxation regimes much more effectively than they currently are, particularly our corporate tax regimes. I think these are very sensible proposals they're not without their difficulties. I think even the idea one day of having if you like a single immigration policy so that you have a single market in people, of course you can move freely between Australia and New Zealand but to get into Australia and New Zealand you know there are different rules and regulations, so they could be harmonised, they could become common. You could have if you like a Customs union, just one level of tariffs, I'm not a great believer in tariffs but one regime for Australia and New Zealand instead of the different regimes we currently have, and these things are not gonna happen in the short term, there are all sorts of reasons for that, but over the next 50 years these things could happen and I think that is a reasonable aspiration for people to set themselves.

SIMON: Mr Downer, thank you very very much for your time this morning, much appreciated.

ENDS

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