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This is PM Agenda with David Speers.

I am David Speers, welcome to PM Agenda. Our top stories this hour - the Afghan government says now is the right time for Australian troops to leave the country. We will be discussing this with the Afghan ambassador here in Canberra shortly. Labor standing firm on keeping a price on carbon, despite reports of a back-flip. And the Reserve Bank Governor nor Glenn Stevens gives his take on the economy as the ANZ announces another record profit.

Welcome to the program. After 12 years of war the Prime Minister and the Opposition Leader in a bipartisan effort, have been in Afghanistan to mark the eventual withdrawal of Australian troops. The bulk of which will leave in about two months. Some will stay beyond that in a more limited training capacity, but this does largely bring to an end 12 years, mostly on but some off and on, involvement in Afghanistan. During na time 40 Australian soldiers have died, some 126 have been wounded, and as Tony Abbott acknowledged, many more have suffered psychological scars that will remain for quite some time. The Prime Minister quite deliberately did not declare victory during this visit to mark the withdrawal, as he acknowledged there remains a lot of danger. This is still a dangerous place, Afghanistan, but gains have been made. Some are quite sceptical though about the ability of Afghanistan to eventually achieve peace, they fear that warlord also resume control and even the Taliban will resume some control in Afghanistan. Or at least in some parts of Afghanistan. Coming up we will be talking to the ambassador for Afghanistan, here in Australia, shortly. First though here was a little of the Prime Minister's remarks at that ceremony at Tarin Kowt.There are now 26 girl schools out of 200 schools in Uruzgan, that's a 20-fold increase since 2001. Up to 80% of expected mothers receive at least some pre-natal care, care that was almost non- existent a decade ago. And 200 kilometres of roads and bridges have been upgraded. This is still a poor and a difficult province, even by Afghan standards. But it is richer and better governed than it was. Thanks to Australia and thanks to our allies. Afghanistan is a better place for our presence here. Australia is better too, the threat of global terrorism is reduced. Our reliability as an ally is confirmed. And our commitment to the universal decencies of humanity we fought for here is made obvious. This is a bitter-sweet moment for Australia. Sweet because hundreds of soldiers will be home by Christmas, bitter because not all Australian families have had their sons, fathers and partners return. Sweet because our soldiers have given a magnificent account of themselves, bitter because Afghanistan remains a dangerous place despite all that has been done. Our armed forces and our officials have done their duty. That duty never ends, although our duty here has. Now the future of Oruzgan is in the hands of its own people. We hope they will remember us with pride as we remember our work here with pride.This was the first time an Opposition Leader had accompanied the Prime Minister on a visit like this, Bill Shorten and Tony Abbott laid a wreath at the stone where the names of the 40 Australian dead are written, along with the many other international forces who lost their lives in the Oruzgan province. That stone by the way will apparently be broken up and buried in the soil there in Afghanistan, the two also received a memento from the troops that will be returned to the Australian War Memorial and they spoke to a more informal gathering of the troops inside.It is an uncertain place, you almost take a vow of absence from your families being here. I don't think saying thank you is quite enough. But it's the words that we can find. You should rest assured that in Australia no-one is against our military, everyone supports our armed forces. And supports what you're doing here. You should be reassured that when your tour ends and you happen to tell people where you have been you can be assured that every Australian knows of this and appreciates it and honours it. Afghanistan's interior minister was also there for the ceremony and had very high praise indeed for the role Australia played.Let me add to the one thing to the people of Australia, that your troops have been the best. Your troops are the best. And whatever they have been doing here in the past few years they have always put the Afghan people first.As I say coming up shortly we will be talking to Afghanistan's ambassador to Australia about what is going to be left in Afghanistan as Australian forces exit, is this the right time for them to go? And what further support will they need from Australia. And similar countries into the future. Meanwhile back home, the debate today has once again centred on the carbon tax and will Labor stand in the way of Tony Abbott's efforts to repeal it as the first order of business when parliament resumes. The week after next. The 'Sydney Morning Herald' and the 'The Age', Fairfax papers this morning carried this story, indicating a Labor carbon back-flip. That was the headline at least, the story however does point out that Labor will continue to back some form of carbon pricing. But reserves its right to deliver a policy exact only that closer to the election. Well within Labor the reaction to this story has been a little mixed but most, and particularly at a senior level, insist they will be not be voting for Tony Abbott's repeal legislation because it would repeal not just the carbon tax, which they said they would terminate, but also an emissions trading scheme. A price on carbon. They will continue to support a price on carbon and therefore will not support this repeal legislation. We heard today at the National Press Club from Labor's national secretary, and campaign director at the recent election, George Wright in the traditional post election, post- mortem if you like, this time from the losing side. We heard last week from the Liberals campaign director Brian Laughnane. Today George Wright in a frank assessment was asked about the carbon tax, what Labor should do now on the carbon price in particular. Here was his take.Was able to manage his leader Tony Abbott to the needs of his party's campaign strategy. He was able to stick to his plan of keeping his leader under tight control, and of resisting pressure to release detailed policies and costings until after the voters have made up their minds. The supports an emissions trading scheme. Regardless of what happens in the parliament over the coming weeks or whatever, what I would say about this is we are on the right side of history. We are on the right side of history on this argument, we are on the right side of science on this argument and right side of economics on this argument and we are on the right side of preserving for the long term our environment and living standard s. I think we should stay on the right side of the argument So dealing with the specifics of Tony Abbott's legislation will be a matter for the cabinet but, you know, the Labor Party has bled on this issue, and we are on the right side of it and we should stay there. Some within Labor are keeping options open though to a degree in whether they will actually vote for or against the repeal or maybe just abstain. Here was the shadow Assistant Treasurer Andrew Lee. Politics is you should do after the election what you said you would do in the election. And in that election we said we would scrap the carbon tax, the fixed price peshd and move straight to a -- period and move straight to a floating emissions trading scheme. That's something we will be happy to vote for on the floor of Parliament. Meanwhile today, we will be discussing that carbon tax issue can our panel a little later, but meanwhile the Reserve Bank Governor has London been giving a speech, Glenn Stevens of course doesn't speak terribly often, but this in the wake of a debate that's been raging for the last week or so about Joe Hockey, the Treasurer's decision to pump $8.8 billion into the Reserve Bank's reserve fund. Now, the argument from Joe Hockey has been the Reserve Bank needs this money, that it had effectively requested this money but he hasn't released any of that correspondence. Labor has suggested that this is about so called deficit padding --, there is no real urgency for this money in the Reserve Bank's reserve fund, all the government is doing, it suggests, is trying to make a deeper deficit now blowing out to $40 billion it can blame on Labor and in the future drawdown on the reserve fund to prop up when it gets closer to surplus. This is what Glenn Stevens actually said today about the cash injection. Annual reports have made quite clear over several years now that while this run-down in capital in the face of large valuation losses was exactly what such reserves were designed for we considered it prudent to rebuild the capital at the earliest opportunity. It's been clear that the bank saw a strong case, not to pay a dividend to the Commonwealth during this period, preferring instead to retain earnings so far as possible in order to increase the bank's capital. That rebuilding could have taken quite a few years. At the current low level of earnings.So what does that mean? Well it depends on your interpretation, as is often the case with the Reserve Bank Governor. There is enough wiggle room in there for Labor to say they are backing - he's backing their argument but it does seem pretty clear that Glenn Stevens is making the point they did not believe returning dividends to the government was the right way to go, bearing in mind a couple of years ago then Treasurer Wayne Swan did take a dividend from the Reserve Bank. And it's also pretty clear the Reserve Bank Governor is pretty keen on propping up that reserve fund at the moment with this cash injection. Although not definitively saying they need that amount right now. More on this coming up as well. We will have plenty to discuss on the program. Let's check some of the other top stories with Helen Dalley.Thanks. Russia has formally charged Australian activist Colin Russell with hooliganism. Greenpeace claims the government has turned its back on the Tasmanian, but authorities say consular officials have been regularly checking on his welfare. The Department of Foreign Affairs and Trade has confirmed Russian authorities have formally downgraded piracy charges for the Arctic 30, to a charge of high school cannism. Colin Russell along with Australian -- Harris were arrested at gun point, along with all 30 crew members of Greenpeace Arctic Sunrise after two activists attempted to scale a platform in the Arctic. Greenpeace says the charge carries a maximum of 7 years jail and calls on the government to step in. Conlar officials have visited Colin Russell on three occasions to check on his welfare and ensure conditions at the detention centre are adequate, stating the department is in ongoing dialogue with Russian authorities. Mr Russell is represented by a Greenpeace appointed lawyer, he along with 30 other crew members are being held in prison pending trial. Police say a man shot dead in Sydney's south- west was affiliate ed with the notorious Brothers for Life crime gang. The victim and another man who suffered mull imbullet wounds were well-known to -- bullet wounds were well noun to police.Police confirmed the overnight shooting in south-western Sydney that left one man dead and another fighting for life is linked to the notorious Brothers for Life gang. Homicide detectives today admitted they have been monitoring the two men that were found at the scene and loosely associated brothers gang that has been linked with a number of violent crimes across Sydney, including extortion.They are a group that Daweses us a great deal of -- causes us a great deal of concern, simply because of the numbers and sorts of activity they are ukt caning at the moment. Paramedics were called to the Reevesby home in the early hours of the morning after reports of gun shots. They found a 25-year-old deceased and 24-year-old with multiple gun shot wounds who remains in hospital in a serious condition. Detectives believe three men using two handguns were involved in the incident and have set up strike force Roxana to investigate.While this is a very distressing and dreadful incident it's also worth noting that over the last two months gun crime and drive-by shootings in particular have been less than halved. More than halved rather.Authorities say they are concerned about the potential for reprisal attacks.

A woman has been struck by lightening as wild weather lashes NSW. The 46-year-old was hit on the arm outside her home at Kinkumber on the state's central coast but she was unharmed. Another woman was injured when a large Cabbage Tree came down at Engerdeen in Sydney as south bringing down power lines. Winds up to 100 km/h have been recorded, and a large hail storm has hit at Lake Macquarie on the state's mid north coast. Sydney woke to a blanket of thick fog this morning which was later replaced by a smoke haze from bushfires in the blunts and Hawkesbury areas. Health authorities warned air quality has been affectedWe have poor to has dus air quality around Muswellbrook today. Older people, people with cardiovascular respiratory disease, avoid outdoor activity if at all possible.ANZ shares have leapt to record highs after the bank posted a $6.5 billion profit. The bank's net profit is up 11% from 5.6 billion last year. ANZ chief executive Mike Smith says the RBA should leave interest rates on hold ahead of next Tuesday's rates decision. Arguing a recent surge in house prices is just part of the normal price cycle.I think it is a cyclical pick-up. We had an adjustment down, but people - and I have to say, you know, you guys in the media, you like words like 'bubble' or 'resuggestion'. Most of the time it is in -- recession. Most of the time it is in between. That's where we are at at the moment. We are adjusting. It's a cyclical adjustment. And I think it is probably appropriate that prices are rising and bits at the moment. I think it was -- a little bit at the moment. It was needed. Do I think it is getting out of hand, no, not yet but we will continue to watch it Tomorrow's forecast around the nation:

That's it from the news room. Back to you.Thank you. We will catch up with you again shortly. After the break we will turn to Afghanistan, as we saw today that ceremony with the Prime Minister and Opposition Leader to mark the withdrawal of Australian troops there. What sort of country will they be leaving behind? We will be talking to the Afghanistan ambassador to Australia. Stay with us.

Ambassador

Australia.

Stay

Us.

Welcome back to the program. The Prime Minister was quite deliberate in his comments at the ser menno in Afghanistan to mark the width -- ceremony in Afghanistan to mark the withdrawal of Australian troops there not to claim any sort of victory. He did however point to the achievements that have been gained over the last 12 years of Australian presence there, including the building of schools, amongst them 26 schools for girls that never existed in the Oruzgan province prior to that, and also more freedoms genre for the people of Afghanistan. -- generally for the people of Afghanistan. Some however fear how long the freedoms will stay in place once Coalition forces leave or the vast bulk of them at the end of the year. Will the country return to control by warlords, will there be some level of Taliban involvement at a political level under any peace settlement? These are all real concerns along with the ongoing concerns about a high level of corruption in Afghanistan. But Afghanistan's ambassador to Australia argues that there is the prospect for peace eventually in Afghanistan, and prosperity. He also welcomes Australia's contribution over the last 12 years but argues it shouldn't necessarily end here. I spoke with ambassador Nasi Ahmed Adisma at the Afghan embassy here in Canberra earlier this afternoon.Mr Ambassador thank you for your time. Is now the right time for Australian forces to be leaving Afghanistan?I think it is because Australians withdrawal from or US began is marks -- Oruzgan marks successful completion of the transition process which began in 2012. So based part of the process, part of the process by Afghanistan, by Australia and by the ISAF itself so yes I think it is the right time. Has enough been done by Australia and by ISAF in Afghanistan to leave it in a secure state?It depends how you define 'enough' but I think a lot has been done there. And a lot of efforts, sacrifice both in terms of treasury and blood has been invested in Afghanistan and I think Afghanistan is a completely different place. A transformed place than what it was when the Australian forces went in in 2001. Completely different place yes, but there still remain s the threat from the Taliban in many parts of Afghanistan?Yes, of course, the end of the official end of the Australian forces in Oruzgan doesn't mean the end of war in Afghanistan. And the lowering of the flag in Oruzgan is not the end of war. I wish it could be, it was the end of war, but it is not because the war in that part of the world is a greater war. It's a war of ideas. And a struggle or a war, a conflict, you may call it of ideas, of citizenship, and freedom. Versus the ideas of sujugation and tyranny. So the difference is that now the Afghans we are the front line of that so we own this war, but let's make no mistake, it's not only the Afghan's war, it's the joint responsibility, it is a shared responsibility and it's very important that the support of the international community, including Australia, should remain and they should keep supporting the forces and the people and who are standing up and they want to carry out this. You describe this as the bigger war, will it ever be won?Of course it will. It depends of, you know, how resilient we are. It depends how much of support, real support we are going to get beyond 2014 because you know that we are calling decade beyond 2014 the decade of transformation. If the international communities are standing by the Afghan people, the way they have promised and in Chicago or in Tokyo and also in a number of strategic partners we have signed, including the one we have signed with Australia, if our international partners stay resolved and supporting to Afghanistan or keep supporting Afghanistan, I'm sure this war will be won but this is - this war is generational war. It is not - it won't finish in a matter of five years or 10 years. So we need a come pleat generation change -- complete generation change of this war of ideas to slowly be won.We did hear recently from President Hamid Karzai criticism of the way the ISAF forces have carried out this war, in particular the ex-fasy of fighting in villages -- emphasis of fighting in vil Taliban safe havens caused Afghanistan a lot of suffering and a lot of life. No gains because the country is not secure. Do you share those concerns. There is frustration, of course, if you look what is happening in parts of the country, villages and still some of this war is continuing in remote parts of the country of course it frustrates us that after even 12 years we haven't been able to bring the peace of the Afghan people deserve. But that again is also a joint responsibility, not only a responsibility of NATO to come and to secure Afghanistan, and I have never been the responsibility of NATO, it is our own responsibility, but together with ISAF and native forces, I think it is part of the frustration, even President Karzai understands that for Afghanistan to see peace and stability it will take more than decades that we have just had behind us.To that end what do you need beyond this year from countries like Australia?You see these things have been very clear, in the past two major international conferences vshtion Chicago in terms of security, and Tokyo in terms of development and financial assistance for the Afghan economy and the good government democracy and all the other elements. So if we, if the international community keep the pledges and their promises that they have made, in Chicago and also in Tokyo, I think we are on the right track. For example Australia promised an increase of its development aid, almost to $250,000 a year for the next three or four years. The same Australia's pledged $100 million support for the Afghan national security forces for support, Chicago conference and we have a bilateral strategic agreement based on the number of areas that Australia and Afghanistan should cooperate and this is the only one I am talking with Australia, we have a similar arrangement with a number of other countries and I'm pretty confident that if this arrangement we have, the pledges which have been made are they should not be re-negged upon, I'm sure Afghanistan will be a better place and we will have stability and peace in years to come.Because Julia Gillard did commit as you say, I think it was all up around $300 million over the coming three years for Afghanistan. Tony Abbott has announced he will be cutting the foreign aid budget. What will that mean if it does mean cuts to that funding for Afghanistan?I hope that's not the case. At least when it comes to the development in Afghanistan. Development aid in Afghanistan, because we understand that with the withdrawal of the Australian forces in Afghanistan we have to really enhance the other aspect of Australia's presence in Afghanistan, which is development activity, political support, support for the institution as a rule of law and support for the projects that Australia did an amazing job in the past four or five years. Development, agriculture, health, education, mining. So I think even I wish that they should be more support, because when you are withdrawing the forces I think there have been some sort of saving, you know, for the Australian - for the Australian Government. Afghanistan's ambassador to Australia. Talking to me a little earlier this afternoon. After the break we will be talking to the Australians editor at large, Paul Kellie. Stay with us.

You are watching PM Agenda thanks for your company. Time to check the news headlines here is Helen Dalley. Thanks. Tony Abbott has made a brief trip to Afghanistan to mark the symbolic end of Australia's mission there. The surprise visit by the Prime Minister and Opposition Leader Shorten was to say thank you to our serving personnel and to honour the 40 diggers who died there. Up to 1,000 troops will be pulled out by Christmas, but about 400 will stay on in mentoring and training roles with the Afghan Army. NSW police have confirmed gang violence is to blame for a double shooting in Sydney's west. That killed one man and injured a second. Police said the shooting involved the loosely associated gang known as Brothers for Life. Which has been linked with a number of violent crimes, including extortion. They say the double shooting was a targeted attack, and police say the community should have nothing to fear from it, but they are also worried about the possibility of a reprice attack. -- reprize attack. Russia has formally charged Australian activist Colin Russell with hooliganism. He and #23e8o Australian Alex an ra har ris were arrested at -- Harris were arrested at gun point when they were attempting to scale an oil rig more than a month ago. Australian authorities say consular officials have been regularly checking on his welfare. However, Greenpeace says the government has turned its back on the Tasmanian. Two men have been rescued from freezing waters after their ultra-light plane crashed in the Bass Strait. They were flying from Tasmania's north to Flinders Island when it is believed engine trouble forced them to ditch into the sea. Where they plane flipped on to its roof and exploded into pieces. The men said they were forced to cling to air mattresses to keep from drowning. ANZ shares have leapt to record highs after the bank posted a $6.5 billion profit. The bank's net profit is up 11% from $5.6 billion last year.. Chief executive Mike Smith urged the Reserve Bank to leave interest rates on hold ahead of next Tuesday's rates decision, arguing a recent surge in house prices is just part of the normal price cycle. And tomorrow's forecast:

Now back to you David.Thanks very much. We will see you again soon. For more now on the visit to Afghanistan by Prime Minister Tony Abbott and Opposition Leader Bill Shorten, marking the withdrawal in just a couple of months time now of Australian troops from the Oruzgon province, Paul Kelly the editor at large of the 'The Australian' is with us to look at this and a couple of issues as well. On Afghanistan, the big question so many people have is this was a very long-running war, Australia's longest war, involved at the lead of it the most powerful military in the world, the US, and yet a Taliban hasn't been defeated. What really went wrong with this war?I think the essential problem is that you can only win this sort of conflict if the side you're supporting has got strength, integrity, has got its own capability, has got the support of its own people. And the Karzai Government always had a lot of question marks about it it. The political system in Afghanistan is a very, very fragmented system, the Taliban has always been strong and intense, a formidable military force. In addition to that of course you have got the political and structural difficulties in a wider sense in Afghanistan. In many ways it is not a 20th century country. So it's hard to imagine a more difficult country for the US to have picked to have waged this sort of campaign. And I think in that sense... I think in that sense Tony Abbott got the words exactly right when he said "Well, we are leaving, we are leaving not in victory but also not in defeat". That is very equivocal but I think he's right to say that. Of course the other point to make is while we are leaving the war is not over, the war continues to go on.He is absolutely right, there has been no victory per se, but it's not an easy message to deliver I suppose for a prime minister, particularly when we have lost so much, 40 Australian lives as well as billions of dollars in Afghanistan. But it hasn't all been for nought has it. What do you think are the legacies of Australia's role there? Well, in Oruzgon province where we were based, I think the achievements have been substantial. In terms of first of all the military campaign against the Taliban and secondly in terms of a civil and public works. In particular progress there on the ground in terms of education, schooling and health. Now you can only do what you can do at the time. Now of course there is a question mark about what happens in the future. Well we can't control the future, we were one of about 30 or 40 Coalition countries making a contribution, although outside NATO we made I think the most significant contribution. So there is no doubt we leave a beneficial legacy. There is a question mark of course in terms of the bigger question, what happens to the country, the Taliban is stronger than the US would like to see at this point in time, one of the fundamental questions is the except to which the US Congress continues to fund the ongoing war.Well indeed. And what role the Taliban may play beyond that. I want to turn to some domestic politics, Paul. Questions continue over what Labor will do on the carbon tax repeal legislation. Now Labor made it clear before the election they want to terminate, was their word, the carbon tax, they agree the price was too high. They finally agreed that. But they are saying publicly and privately as well they want to keep a price on carbon. So if they agree to repeal this - well under this legislation, this repeal legislation, not only repeals the carbon tax but a price on carbon. So where does that, do you think, leave Labor?Look I think it's in Labor's interest to achieve two things here. Labor certainly wants to get this legislation repealed. This is a winning political issue for Tony Abbott. He was elected on the idea of repealing the carbon tax, repealing carbon pricing. As long as this remains the issue it is a political winner for Tony Abbott and a loser for the Labor Party. So Labor certainly wants one way or another to ensure that the tax is repealed, carbon pricing is repealed and Abbott can get on with his own agenda. And the second thing that Labor wants to do is it wants to see Tony Abbott's own policy in operation, his direct action policy, Labor and many people are highly sceptical about Abbott's capacity to actually make this policy work. Now that means that Labor can go into the next election and the contest being Labor's commitment on the one hand to support carbon pricing and an ETS, presumably at a fairly modest level, versus Tony Abbott direct action program on the other, presumably with Labor hoping to argue that direction action is not working. So I think in terms of the framework over the next three years that's what Labor wants to achieve, the question is what does Labor do immediately in terms of the tax. And I think frankly regardless of what it does there is going to be a down-side for it. But clearly it needs to get to this second stage as soon as possible.And Tony Abbott seems intent on denying them that second stage, the debate over the direct action plan for as long as possible it. It may not even be made final until the budget, and it may not even be in legislation, it may be in regulation. Is it a fair point do you think Labor is making there needs to be a debate about both the carbon pricing scheme and direct action at the same time?I think that general argument is correct. And I think Labor can pursue that argument with a great sense of justification. Because Abbott has got the target, he's got the 5% emissions reduction target to reach by 2020, so he's got to explain exactly how he does that. Well he's fundamentally changing the policy so therefore I think it is completely appropriate to have a big debate, well if it's not carbon pricing then what is it The government recognises that so we will have a green paper and white paper. The government will have to move on this front, it will have to explain its policy, then demonstrate how its policy actually works. I think overall that framework does make sense for Labor. I think it will be most interesting to see what Bill Shorten does on this front, and if he in fact does move to support Tony Abbott to repeal a carbon pricing then I think that will be a very strong indication that Shorten is prepared to significantly review and revise Labor policies and be very pragmatic about it. That he feels confident to do that. I think that will be a sign of strength in terms of Shorten's leadership.Keeping your thoughts on Huahai, the Chinese telecommunications giant, the Labor government banned its involvement in the rollout of the NBN, now the current Attorney- General George Brandis re-affirmed that ban will remain in place. It is despite some very intense and very expensive lobbying by Huahai, includes on its Australian board the likes of former Foreign Minister Alexander Downer. What do you make of this decision and what impact will it have on the relationship with China?I think on this question of Huahai, David, the view of Tony Abbott is exactly the same as that of the Attorney- General George braidis. And it's a pretty simple view. -- Brandis, and it's a pretty simple view. That is if there are national security concerns, if the intelligence agencies, if ASIO is putting to us there are serious national security concerns then that's it, that's game, set and match. We will listen to that advice and we will act on that advice. Just as the former Government did that I think the Abbott Government is going to be very disciplined and very straight up and down on that principle. Now that's the very clear signal we got from George Brandis over the last couple of days and this is a fascinating issue because there are different views in the Abbott kant on this issue. -- cabinet on this issue and in particular when the former government, the Gillard Government took this decision we know that Malcolm Turnbull was very critical and when ASIO and the intelligence agencies briefed the Opposition Turnbull was very challenging in that briefing in terms of taking on the national security advice. Well I think Tony Abbott is very much of the view "I will accept that advice".And as far as any fallout with China, how sensitive is this issue do you think?Well, I think it is a sensitive issue but the position of the Australian Government was by, under Labor, and I think in that sense it is easier for Abbott to indicate that he is maintaining that particular position. He's got ambitious projects when it comes to China, in particular of course the FTA which will be a very difficult and challenging project for him when it comes to foreign investment. But I think the government is simply prepared to take this position on national security grounds and then put that to one side and work on the relationship to enhance the relationship as best as possible.Just a final question if I can, on the Reserve Bank, the injection of nearly $9 billion into the Reserve Bank's reserve fund, by Joe Hockey, there has been some criticism from Labor of that. Today the Reserve Bank Governor Grand Slam gave comments on that. He -- the Governor Glenn Stevens seemed to argue. He indicated why they needed to hold on to their dividends, not to return them to the government, why they need financial support now from the government. What do you make of all this? It is not a small amount of money that's been put in that of course is added to the deficit. Look, there is no doubt at all that this visit that Joe Hockey made to the US, the briefings he got are the talks he had with the G20 Finance Ministers meeting, the talks he had with the senior US officials with the central bank governors and with the IMF, all this has had a profound impact on Joe Hockey. He's very concerned about global financial instability and very concerned about the situation in the US. He's worried about further upward pressure on the Australian dollar. Which will lead to further manufacturing job losses in this country. He's very concerned about pressure which might be put on the Australian central bank there terms of volatility of the currency, all this is designed to strengthen the central bank to try and give it more capability and more options in what might be a very difficult environment.Always good to talk to you Paul, thanks so much for joining us.Thanks.Now after the break we will turn to one industry in particular, if indeed we are in for some stormy weather on the economic front, one of the sectors that is hoped to help pick up the slack is tourism. There hats been a conference under way here -- has been a conference under way in Canberra today. We will talk to a tourism industry leader right after this.

Welcome back to the program. With all indications pointing to the possibility of slower growth in Australia in the years ahead or in the certainly year or two ahead, one of the great hopes, particularly if the mining boom starts to taper off is townism. It is seen as one of the key -- tourism. It is seen as one of the key growth sectors, particularly with a booming Asian middle class, with China in particular, but are we doing enough with the sector and the government to take advantage of the opportunities there for our marvellous tourism industry. A major courtism conference is under way in Canberra -- tourism conference is under way in Canberra today and I caught up with the managing director of Tourism Australia Andrew McEvoy. Ereleased research today showing the tourism industry around $80 billion at the moment and set to grow by $115 billion by 2020 that's not as much as it should be growing is that right.It should be and it will be I think. When we wrote the 2020 plan in 2010 forecasts suggests the industry will worth $97 billion and we are on track for $115 billion or the bottom end of the goals but there is $25 billion difference and I think we can make it. We have had three years of inbound growth, two years of domestic growth and industry is more positive than it was around the time of the GFC.One big challenge has been the dollar in receipt years, where are we seeing the growth -- in receipt Years, where are we seeing the growth, domestic and international. Domestic is a mature market, 75 million trips taken by Australians, that's grown 3% or 4%. Overnight travel, 51 billion. The fastest growth is growing from international visitation and in that it's a real shift from western markets to eastern markets and first among equals China. China, 700,000 visitors now growing at 20 %, 25% come pround growth worth more than $4.5 billion in spending. Are you getting as much as you can be getting out of this growing Chinese market?We are doing pretty well and holding our own. We get 4% market share of the out of region travel. If you don't count Macaw, Hong Kong and Taiwan we are getting 4% of the rest of the travel. They are spending on average more than $7,000 a head, so the volume is 7 #47bd,000. We expect it will be a 1.3 to 1.4 million market in excess of $10 billion we are how olding our own and doing well. 150 other countries going aft same consumer. What is holding you back, is Australia's visa restrictions an issue?We can get better but I would say visa issues were as good as many in the world. 97% of visas are issued, more than 60% knocked back within five days, only 3%. When Barack Obama said last year he will improve the visa system in China for the US we saw a big spike in US visas and US arrivals. So we can keep doing better. We need to be worlds best visa issue ants to be competitive AreThere are restrictions on visas for Chinese visitors compared to those from the west?There aren't, no and the overstay rate from China is less 0.3%. So I think our immigration guys are doing a great job, it is just a lot of other countries are getting competitive. The Chinese love what we have to offer, the big skies, the great environment, our great cos month poll tan cities, friend -- cosmopolitan cities, welcoming people. One stop flight, aviation growth, competitive fares we are in a good place.What are you asking the government to do to try and allow the sector to grow to its full potential?Some bigger issues discussed at the moment include things like world's best visa issue ants. I think the industry is looking for a second year for working holiday visa makers. At the moment they can do one year in the tourism and hospital ity industry if they want to stay they have to go to horticulture or agriculture.Can anyone get those.Only certain countries, 19 or 20 bilateral arrangements yet but not with China. That's one part of the free tradement agreement the industry trade agreement, industry, English speaking manda rin born people can come and work for us and vice versa. Bi-lateral aviation we are capped out in a number of markets. Philippines, Asia and UAE, close to capped out in China. Capacity leading demand this is the sort of thing the industry is looking for. Thank you.Thanks made.-- thanks David. The managing direct of tourism Australia. In the next hour we are going to be talking to Phil Daledakis and Ross Cameron about a bunch of issue including the withdrawal of Afghanistan, the carbon tax debate for Labor. We also heard today from Labor's campaign director at the recent election, it is national secretary George Wright, his speech to the National Press Club about where things went wrong for Labor in this campaign. Did he get it right? Is stay with us.

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