Australia's new prime minister, Tony Abbott, spoke with Lally Weymouth this week by phone—and did not mince words when it came to his opinion of the Labor government that preceded him. Excerpts:
Lally Weymouth: Do you plan to strengthen the U.S.-Australia relationship?
Tony Abbott: I will do everything I humanly can to work closely with the government and the people of the United States. Australia will be a good ally of the U.S. and a good friend and partner—strategic and economic—to the United States.
L.W.: Will you continue with the deployment of the U.S. Marines at Darwin?
T.A.: We very much supported the former government's agreement with the United States to have that Marine rotation through Darwin, and we will enthusiastically continue it.
L.W.: Do you plan to come to the U.S. to visit President Obama?
T.A.: He's a very busy man, and I don't want to make his life more complicated by demanding an early meeting. He was good enough to take a phone call from me after the election. I expect to visit the United States sometime next year.
L.W.: Do you feel it will be difficult to balance strong political and security ties with the U.S. against Australia's strong commercial relationship with China?
T.A.: No, I don't. I don't see any difficulties between maintaining the closest possible strategic partnership with the U.S. and developing an ever-closer economic relationship and broader friendship with China.
L.W.: Are you worried the U.S. "rebalancing" or pivot toward Asia has been forgotten? President Obama just canceled his trip to Asia, and he barely mentioned Asia in his U.N. speech.
T.A.: I fully understand why the president was unable to attend the [Asia-Pacific Economic Cooperation meeting] and the Asia summit. He had very pressing domestic issues to deal with.
L.W.: Do you think the government shutdown affected U.S. credibility in the region?
T.A.: Plainly it would be better if these things didn't happen, but we all understand that if you've got a disagreement between parties, sometimes that can play itself out in the legislature in fairly dramatic ways.
L.W.: Your first trip as prime minister was to Indonesia. During your campaign you said that you would be more about Jakarta than Geneva. What did you mean?
T.A.: It was a figure of speech, which was supposed to characterize the fact that we would focus our attention on the areas which were most vital to our interests and where we could make the most difference. The closer to home, the more significant for us. It was my way of attempting a pithy encapsulation of a common-sense approach to Australian foreign policy.
L.W.: Will you pursue a very different foreign policy than your predecessors?
T.A.: I hope that I will be more consistent and predictable than my immediate predecessors. But in terms of the general aspirations—I don't think you will see much difference. Hopefully you will see the whole relationship conducted more steadily, more consistently.
L.W.: The whole relationship with the U.S.? With China?
T.A.: All of our relationships. The difficulty with the former government was that one day they were focused on this, the next day they were focused on that. They found it difficult to consistently follow through on anything. I hope the new government will have fewer initiatives but will calmly and steadily follow through on the things that really matter.
L.W.: You recently met with China's new president.
T.A.: Yes, I had a bilateral meeting with President Xi [Jinping] at APEC. I thought the meeting was warm and constructive, and we both agreed that we would try to re-energize the Australia-China free-trade negotiations, which have been languishing since 2005.
L.W.: Do you see Australia's relationship with China improving under your leadership?
T.A.: It's been a good relationship for many years, and, obviously, the commercial relationship has been getting stronger and stronger. China is now by a long way our biggest trading partner. ... I'd like to see the relationship deepen [and] the trade relationship continue to strengthen. I don't think it is in any way inconsistent to strengthen our relationship with China while at the same time strengthening our relationships with the United States, Japan, and others.
L.W.: Australia has been amazingly dependent on China as an export market. How will the slowdown of China's growth impact your economy?
T.A.: Growth in China has slowed down from 9 percent to 7 percent, but it is still very, very high, and Australia's iron ore exports are going up, not down. Our gas exports are going up, not down. Sure, the resources boom is changing, but it is not ending. The investment side of the resources boom is slowing down, but the production side is cranking up, not down. In the years ahead, we will be needing investment in areas other than resources. Over the next half-decade or decade, we are going to have to invest massively in roads and other infrastructure which have been neglected by Labor governments.
L.W.: During your campaign you called for a repeal of the carbon tax imposed by the Labor Party. Why are you against this tax?
T.A.: The carbon tax is bad for the economy and it doesn't do any good for the environment. Despite a carbon tax of $37 a ton by 2020, Australia's domestic emissions were going up, not down. The carbon tax was basically socialism masquerading as environmentalism, and that's why it's going to get abolished.
L.W.: It will be abolished this year?
T.A.: As soon as possible. If the Labor Party wants to give the people of Australia a Christmas present, they will vote to abolish the carbon tax. It was damaging the economy without helping the environment. It was a stupid tax. A misconceived tax.
L.W.: You said in your victory speech that Australia is once again open for business. Does that mean you believe that the previous government was unfriendly to businesses?
T.A.: I said Australia is under new management and is once again open for business. The previous government would often say the right thing, but it would invariably do the wrong thing when it came to business. ... There was an explosion in red tape and green tape. There was a whole thicket of new restrictions in the labor market. There were big new taxes. It was a government which thought that there was no problem that more public servants, higher taxes, and further regulation couldn't fix.
L.W.: So you're reversing that?
T.A.: We will do our damnedest to shrink the public service and have a bonfire of red tape and unnecessary taxes.
L.W.: So how will you get needed revenue?
T.A.: If you get taxes and regulations down, you will get creativity up, and ultimately that means more growth and more revenues. The best way to get growth is to have a smaller, more effective government. We are doing our best to get government spending down.
L.W.: You have said you will try to raise defense spending?
T.A.: Our objective, as soon as the budget is stronger, is to increase defense spending until we get it up to 2 percent of GDP.
L.W.: You've taken a tough stance against the so-called boat people trying to get into Australia.
T.A.: This is a massive illegal immigration racket, which the former government summoned into existence by changing policies that had been put in place.
L.W.: How did they change the policies?
T.A.: They abolished offshore processing of illegal boat arrivals, and they abolished the temporary-protection visas that illegal boat arrivals were placed on. Their changes meant that if you got here, you could stay here. Traffic, which had been stopped, started up again. ... A trickle became a flow, and a flow became a flood. In July of this year, we had illegal arrivals by boat at an annual rate of 50,000, which is a massive influx. Now the numbers have slowed dramatically, particularly since the election.
L.W.: Is it that Australia can't support a bigger population?
T.A.: Of course we can support a bigger population, but people have to come in the front door, not the back door.
L.W.: If you look at the foreign investment in Australia, the U.S. is No. 1.
T.A.: Yes, total U.S. investment in Australia is over $600 billion. Chinese investment is not much over $20 billion.
L.W.: Hasn't there been controversy about Chinese investment in Australian mines and companies that control strategic assets?
T.A.: There was a Chinese bid to take over a controlling interest in Rio [Tinto, a leading Australian iron ore producer], and that was controversial, and in the end, the Rio board decided they didn't want to sell.
L.W.: Should there be limits on Chinese ownership of key assets?
T.A.: We would never propose singling out a particular country for special treatment.
L.W.: You lost the auto sector last year when Ford announced it was moving out.
T.A.: We haven't lost the auto sector. It has struggled in Australia, particularly in recent years. ... Partly that was because of poor policies put in place by the former government, which [imposed] additional red tape and industrial regulation and made businesses less competitive. Ford announced that it is pulling out as of 2016, but we are very hopeful that we will keep Toyota. We would like to see an ongoing motor industry in this country.
L.W.: That is part of diversifying the economy?
T.A.: We are not in the business of being prescriptive to businesspeople. Governments that go around picking winners usually end up spending a lot of money for no good purpose. If we can get taxes and regulation down and provide an environment that is stable and predictable and benign, we are confident the creativity of Australian entrepreneurs and the excellence of our workers will do the rest.
L.W.: Since you want to abolish the carbon tax—does that mean you are skeptical about climate change?
T.A.: I'm not one of those people who runs around and says every time there's a fire or a flood, that proves climate change is getting worse. Australia has had fires and floods since the beginning of time. We've had much bigger floods and fires than the ones we've recently experienced. You can hardly say they were the result of anthropic global warming.
L.W.: So do you believe in climate change or are you skeptical?
T.A.: This argument has become far too theological for anyone's good. I accept that climate change is a reality. And I support policies that will be effective in reducing emissions, but I do think there is too much climate-change alarmism.
L.W.: What is your most challenging issue right now?
T.A.: Swiftly implementing our election commitments, which were to scrap the carbon tax and the mining tax and get the budget back under control, [get on] a credible path to a strong and sustainable surplus. We've got to stop the boats, because this is an issue of sovereignty for us. And of course we've got to get cracking and build the infrastructure and the roads of the 21st century. We're 50 days after the election on Sunday—I think we have made a good start.
L.W.: What have you actually accomplished?
T.A.: The flow of boats is significantly reduced. We have drafted legislation to repeal the carbon and mining tax. We've just announced a commission to review the size and efficiency of the government on an agency-by-agency basis. We've taken control of the national broadband network, and we will deliver faster broadband much more quickly and less expensively than would have been the case under Labor.
L.W.: Labor wanted a national broadband network?
T.A.: It's a government-owned telecommunications infrastructure monopoly, which was proceeding at a scandalous rate without producing any commensurate outcomes. We are changing the objective from fiber to every premise in the country to fiber to distribution points, and then we will use the existing infrastructure to take the broadband to individual premises.
L.W.: Is that cheaper and more efficient?
L.W.: But Labor wanted to extend fiber to every household?
T.A.: Welcome to the wonderful, wacko world of the former government.
L.W.: So you believe the former government was doing a lot of things that were bad for the country?
T.A.: I thought it was the most incompetent and untrustworthy government in modern Australian history.
L.W.: Be more specific.
T.A.: They made a whole lot of commitments, which they scandalously failed to honor. They did a lot of things that were scandalously wasteful, and the actual conduct of government was a circus. They were untrustworthy in terms of the carbon tax. They were incompetent in terms of the national broadband network. They were a scandal when it came to their own internal disunity. They made a whole lot of grubby deals in order to try and perpetuate themselves in power. It was an embarrassing spectacle, and I think Australians are relieved they are gone.
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