LEIGH SALES, PRESENTER: As Queensland tries to get back to surplus, the Federal Government's trying to do the same. For both states, the health of China's economy is critical. China's economic growth has slowed recently and that's sent jitters around Australia. The former Prime Minister, Kevin Rudd, is currently in China at the World Economic Forum. After discussions with 7.30 last week, today Mr Rudd agreed to join the program to discuss China and other issues.
Mr Rudd, what a lot of Australians want to know about China is whether its economy is fizzling or not. In a nutshell, what's the view on that there where you are?
KEVIN RUDD, LABOR MP: The virtue of being here at the World Economic Forum is being able to talk to not just Chinese officials and Chinese ministers about this subject, but also those who study professionally the Chinese economy. I think the overall conclusion is this: there is some modest slowing in the Chinese economy, but this is not a disastrous slowing. Furthermore, in the debate which now surrounds whether there's gonna be a hard landing on a soft landing, I'm firmly of the view that it's going to be a soft landing. We're still likely to see growth north of 7.5 per cent for the year. That's good, that's strong, with further stimulus measures from the Chinese Government kicking in in the third and fourth quarters. Overall therefore, good for Australia and good for the world.
LEIGH SALES: Well we have had some debate here in Australia within the Government about whether the mining boom is over or not. It sounds like you would think that it's not over.
KEVIN RUDD: I think it's - it gets pointless sort of throwing words around about boom, bust, somewhere in between. Any student of the history of commodity prices know that it's much more complex than that. What's the reality? For us, this market's very important, number one trading partner. But also, when you look at the structure of Australia's exports more generally, about 15 or 16 per cent of our GDP comes out of the resources sector. It represents some 60 per cent of exports and then you look at 20 per cent of our exports coming out of iron ore and the largest customer, China. So what happens here is important. Prices have come off. Martin Ferguson's absolutely right to point that fact out. And because prices are now at their lowest that they've been since 2009 - 30 per cent off in the last short few months - but medium term, long term, frankly, there is robust demand here still. It's a country with a huge population, growing domestic demand, a rising middle class and frankly, there is, I think, great opportunity still for us here in the resources sector and beyond into the future.
LEIGH SALES: As a Queenslander, let me ask you about what's going on there. The Premier Campbell Newman has announced plans to increase coal mining royalties and to slash public sector jobs. Given the dire state your Labor colleagues left the Queensland budget in, he doesn't really have any other option, does he?
KEVIN RUDD: Well that's if you accept the frame which everyone seems to have uncritically accepted. Put it this way: the nature of Queensland public sector debt is currently defined in the public debate on the basis of a so-called independent commission of audit commissioned by someone called Peter Costello. That's about as objective, Leigh, as me appointing Paul Keating to conduct an independent audit of the Brisbane City Council public debt during the time Campbell Newman was mayor. In fact, if I was to use the measure which Peter Costello now recommends for the State Government of Queensland, Mr Newman's period as mayor of Brisbane - which is a large municipality, larger budget than Tasmania - it would be running a debt-to-revenue ratio of about 114 per cent.
The bottom line is this: because we've had the Global Financial Crisis, it's affected government revenues. Because we've had Cyclone Yasi, it's affected government revenues. Because we've also had the Queensland floods, it's affected government revenues. As the private economy recovers nationally and in Queensland, then it's time to bring the fiscal situation, the state budget, back to balance over time. That's the right course of action. But Mr Newman has no mandate at all to go round and sack 20,000 public servants who he said their jobs were safe prior to the election.
LEIGH SALES: He does have a mandate though because he was elected with an absolutely enormous majority, so therefore the Queensland public trusts him to do what he thinks is in the state's best interests in terms of its budget.
KEVIN RUDD: Yeah, but he's just taken a stick are gelignite to the public trust in him entirely. Because he said quite clearly to the Public Service Union in Queensland prior to the election: your jobs were safe. After the election, he then went on to say, by the way, frontline service jobs are safe, and then he's gone on to redefine what a frontline service is. The bottom line here is you can't simply mislead the good people of Queensland like that. You're absolutely right, Leigh: the guy was elected with the biggest electoral majority in Queensland's history. But he's now taking a meat axe to Queensland Health services, and he's doing so based on the false premise contained in the redefinition of debt contained in Peter Costello's non-independent report contained in the commission of audit.
KEVIN RUDD: Mr Rudd, on another matter, this week the first lot of asylum seekers will arrive in Nauru under Labor's new offshore processing policy. You're the person who abolished the Pacific Solution. Are you comfortable with this policy?
KEVIN RUDD: As I've said before, Leigh, I respect very much the judgment of the minister, Chris Bowen. He's a good man, he applies a good conscience and good mind to what is a difficult issue not just for Australia, but for the rest of the world as well. In fact I was just having a discussion of that matter here at the World Economic Forum in China with former British Prime Minister Gordon Brown, who as far as the Europeans are concerned, wrestle with exactly the same dilemma. So, I support the judgment of the minister Chris Bowen. It's a complex and difficult task. I believe he's doing it well.
LEIGH SALES: So, when you say you support his judgment, does that mean you're comfortable with the policy, yes or no?
KEVIN RUDD: Well, I'm a member of the Government; I support the Government's policy. I don't think I could be clearer than that.
LEIGH SALES: It is completely at odds though with what you were saying and the motives you had when you abolished the Pacific Solution.
KEVIN RUDD: Well, as you know, in 2007 the Government was elected on the basis of a clear mandate to head in the direction that you've just described. We implemented that mandate. We've also had to deal with a complex set of situations since then to do with push and pull factors right across the world. Push factors including what we have had in terms of major strife in countries like Sri Lanka, we've had enormous outflow of people. But therefore, given the changing circumstances with push and pull factors, frankly, the Government has undertaken a policy review. Minister Bowen has led that. I support the minister.
LEIGH SALES: The night before you lost your prime ministership you said that if you carried on you would not be lurching to the right on the question of asylum seekers. This is undoubtedly a lurch to the right, isn't it?
KEVIN RUDD: Well, Leigh, I don't intend to add to the comments I've just made in relation to the Government's Immigration policy. In our Westminster system of government and in a government where our political party supports the executive, I support the decisions of the Government. I've made that very clear.
LEIGH SALES: Let me ask you about your record in government. In hindsight were you wrong to dump the Pacific Solution?
KEVIN RUDD: The Government in 2007 was elected not just on a clear mandate to do as you've just described, but beyond that to take a whole range of other measures in relation to Immigration policy which the previous Howard Government did not touch - namely, children behind razor wire, namely, the inhuman treatment which many people were suffering in onshore detention centres. There's a whole range of measures which we introduced, in addition to the ones that you've just described. The truth is, Leigh, this is a very difficult area of public policy, not just the Australian Government; all governments in the world are wrestling with this. That's why I've got a respect for Chris Bowen in trying to push forward with this and to deal with the complexities he now faces. It's a very difficult area, it's a very hard area, but he's applying good heart and good mind to it.
LEIGH SALES: Mr Rudd, this is your first interview since the leadership challenge in February. Why are you raising your profile now?
KEVIN RUDD: Well, actually, Leigh, that's quite wrong. Last week or so I've had three general interviews with the media and I think before that I've done a few as well when I've been out and about doing other things. The truth is ...
LEIGH SALES: Do you mean doorstop - doorstop interviews, do ya mean?
KEVIN RUDD: Yeah, but journalists attend those, and guess what, Leigh?, they ask questions.
LEIGH SALES: It's a bit different to sitting down for sustained, scrutinised questioning along one line though.
KEVIN RUDD: Well, you can frame it as you so chose. The bottom line is if I look at the fact that we face the prospect of Mr Abbott as the alternative prime minister of Australia, it's important I lend my shoulder to the wheel as well when it comes to making it clear to the Australian public what they'd be buying on trust with Mr Abbott. Remember what we've had with Queensland, slashing health, NSW, slashing education, not to mention the boost is TAFE fees. But this, frankly, is just the entree. The main course lies with Mr Abbott, and that's why I've got a responsibility, like all members of the parliamentary party, to get out there, put my best foot forward and to argue the case. Also, a lot of these cuts that we've just been talking about occur physically within my electorate in Brisbane, which has seen - which is the home of three major public hospitals and more than 10,000 loyal Queensland public servants.
LEIGH SALES: Does you getting out there though have the effect of reminding people that you're there in the shadows while Julia Gillard continues to struggle in the polls?
KEVIN RUDD: The bottom line, Leigh, is that I got a responsibility to get out there and argue the case, both at home and where it's appropriate and possible, abroad as well, in terms of Australia's overall national interest. Now for goodness sake ...
LEIGH SALES: But I guess I'm asking: is that actually helpful?
KEVIN RUDD: Well, for example I just mentioned before I was in the session just now with Gordon Brown, the previous Prime Minister of Great Britain. Gordon's a member of the House of Commons. He's very active both at home and abroad on a whole range of policy questions, including global education. I am too. I think that's what is expected of us, to lend our contribution to the national political debate. It's the right thing to do because the upcoming elections in Australia are about two contrasting views of the world and Australia's future. The conservatives have a clear roadmap for the future. We've seen it laid out starkly in the states of Queensland and NSW. And I've gotta say, Ted Baillieu's having a strong go in terms of TAFE cuts in Victoria as well. My job, like others, is to make clear the contrast. These guys pull down the house; we build the house - that's what Labor governments do. I intend to support the continued billing of the house. That's what we've done in the past and I'm committed to it.
LEIGH SALES: On that contrast, you recently said in a speech that the next election was winnable for Labor, but afterwards you ducked a question on whether Labor could win with Julia Gillard as the leader. Will you answer that now?
KEVIN RUDD: Of course the Government can prevail against Mr Abbott at the next election. And that's I'm supporting the Government ...
LEIGH SALES: With Julia Gillard as the leader?
KEVIN RUDD: ... under the Prime Minister's leadership to do so.
LEIGH SALES: Under this prime minister's leadership?
KEVIN RUDD: Under the Prime Minister's leadership to do so, under Prime Minister Gillard.
LEIGH SALES: Under Prime Minister Julia Gillard?
KEVIN RUDD: I just said that. Under Prime Minister Gillard's leadership. And so we've all got a job to get out there and argue the case. For goodness sake, this debate occurs at multiple levels right across the nation. Recently I was campaigning for folk running for the Labor team in the Tweed Council elections for the NSW local government elections because local government is such a critical part of the country's overall governance as well. I'm out there arguing the Labor case. I will do it anywhere and everywhere that I can. I do it within various communities across Australia where I am able to make a positive contribution. And let me tell you, my voice won't be silenced in the public debate because the issue at stake for Australia are so stark. I take seriously also Australia's place in the world. And when we have as an alternative prime minister someone like Mr Abbott, who in his book, Battlelines, says, "Let's face it: most of the Western world was invented in English. Forget about China, forget about Japan, forget about India," I think we're looking at an alternative for Australia based in what he describes as the "Anglosphere" of the world, which is completely out of place with Australia's national interest in the 21st Century. So Leigh, that's why I'm in the debate and I intend to remain there.
LEIGH SALES: Mr Rudd, thank you very much for making time to speak to us from China.
KEVIN RUDD: Thanks for having me on the program, Leigh.