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Transcript of joint press conference: 20 August 2009: visit by New Zealand PM; trade ties; Bledisloe Cup; streamlined travel; John Grant; relationship with China; CPRS.

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20 August 2009

Joint press conference with New Zealand Prime Minister John Key

Subject(s): Visit by New Zealand PM; Trade ties; Bledisloe Cup; Streamlined travel; John

Grant; Relationship with China; CPRS

PM: It's good to welcome to my good friend, John Key, back to Canberra and back to

Australia on this, a state visit. And the reason that this relationship is so important to Australia

is because it is our closest relationship. It's forged not just in history in terms of our common

defeats at ANZAC; it is also forged in the strengths of our economic ties, the commonality of so

much of our foreign purpose, most particularly but not exclusively in the Pacific; and of course

the extraordinary people to people links which exist between our two countries.

When we gather together tomorrow in Sydney for the first time in the history of our

relationship, we will be meeting as a joint cabinet, Australia and New Zealand ministers

together. And we'll use that opportunity not just to deal with the challenges we face right now,

but to scope also where we'd like to take our relationship, our economies and our future

dealings with each other, five, ten, fifteen, twenty years hence. And I think that's the good

thing about this relationship is that we feel sufficiently comfortable in each other's presence,

other than on a rugby field, to do that with a degree of comfort. I'll return to matters

concerning rugby union in a minute.

Can I say that one of the decisions we're pleased to announce today is that we've agreed to

increase the screening thresholds for trans-Tasman investment as part of a new investment

protocol between our two countries.This has been battered around across the Tasman for quite

a while, I think, John, and we've come to an agreement. And in the case of New Zealand, that

will be NZ$477 million and in the case of Australia, $953 million.And this is important because

of the depth and intensity of the investment relationship between our two economies. And the

more seamless we can make that over time, we believe it's in the common interests of both our

peoples and both our business communities and both of our economies.

This is actually an important breakthrough to agree on this investment protocol; it will be finalised later this year but the threshold for screening purposes has been an obstacle and


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we've now overcome that obstacle. I'm also pleased to announce that we have an outcomes

agreement to lift the single economic market agenda to a more ambitious level, and we will

therefore be accelerating our work on harmonising accounting standards and business reporting

requirements. The idea of a single economic market is one to which we're both committed and

we think it's in the interests of our combined business communities to work that way; achieving

regulatory harmony across the Tasman is in our collective interest.

And as we've both discovered as Prime Ministers, it's easier to say than to do but we are

moving in one direction because we believe that is right. As you know, within Australia, we

have taken steps with the states and territories to move to what we describe here as a seamless national economy, given the conflicting regulation which exists between the various

states and territories of Australia. And we believe this is a logical extension of that in terms of

our economic engagement with New Zealand. A third area of agreement is the Australia-New

Zealand Partnership for Development Cooperation in the Pacific. This is really important for both

of us because we are both members of the Pacific Island Forum, and I would express publicly

my appreciation for the New Zealand Prime Minister's support during our recent hosting of the

Pacific Island Forum meeting in Cairns.

In Cairns we agreed on a new development called a Development Coordination Compact, a

Cairns Compact, on development coordination for the South Pacific involving our forum partners

right across the world. The logical extension of that is we, Australia and New Zealand,

coordinate effectively our own aid delivery, and that's where this agreement is today very

important. One further area of agreement has been of course the practical measures that we

are taking to streamline border processes for airline travel between Australia and New Zealand.

This will include SmartGate in New Zealand, improvements in processing low risk passengers,

trials of direct exit paths and the transfer of checked baggage x-ray images.

This is complex security and immigration related work; we've achieved a large slab of progress,

there's more to be done yet. The objective is to make it easier for both people on - both

peoples on both sides of the Tasman to travel to each other's countries, and that is of particular

benefit to our business communities as well. We also discussed future security cooperation.

Australia and New Zealand, we both agreed to explore the possibility of forming over time an

ANZAC contingent. This is something which I think is near and dear to the Prime Minister's

heart and mine, which is how do we, over time, form an ANZAC contingent which we might be

able to commonly deploy to various security environments in the future.

Our respective chiefs of defence force will be now working on the detail of that and to work out

what the possibilities may be for the long term future. But we believe, given the enormous

bonds which already exist between our two armed forces, their common training, doctrines and

their compatibility of so much of their equipment, that this is actually a useful thing for us to do

together. And I look forward to exploring that finally through our chiefs of defence force and

seeing what final agreements we can reach on that. To conclude where I began, which is the

field of mortal combat which looms again on Saturday night at the next Bledisloe Cup match,

can I say that the Prime Minister, as a further reflection of our abiding affection for one another,

we'll sit together with gritted teeth during that match on Saturday, night and may the best

team win.

But we have a bet; we've decided on a wager. And that is, depending on who wins, the Prime

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Minister of the losing team, I suggest, John, wears the tie, official tie of the winning team the

following Monday. So evidence A is the Wallabies official tie and I'm not quite sure what that is?

Oh, is that an All Black tie is it? And so, I think it would look, it would actually do very nicely

about there.

PM KEY: I like blue and black as a colour for mourning. (laughter) And that may well be the

position come Monday.

PM: Just in preparation, and with no assumption as to who may win on Saturday, I look forward

to the Wallabies doing very well indeed. John, if I invite you to make some remarks then we'll take three questions aside, I think that's the understanding we've reached with the media.

PM KEY: Kevin, thanks very much. Let me just make a few comments, firstly in relation to -

well firstly it's great to be back in Australia and this is the fifth bilateral meeting we've had since

I've been Prime Minister. I think that's a great reflection of the strength of the relationship that

both countries enjoy. In terms of the extension of the investment threshold, I think that's a

very important step in terms of progress for the single economic market from a New Zealand

company's perspective. We now face a threshold of investing in Australia of $953 million; it's a

significant increase from the $100 million that it is today. So for New Zealand companies that's

a big step forward. And I think for Australian companies investing in New Zealand, that's also a

very important step of $477 million.

I think it's worth reflecting that both countries have a two way capital investment of just under

$100 billion only, so they're big, important capital markets on both sides of the Tasman.

Certainly in terms of the border processing agreements that we've reached, I just want to make

a few comments there. Firstly, Australia's a very important market to New Zealand. Over a

million tourists a year now come to New Zealand, so whatever we can do to make that process

less painful, to make it more like a domestic experience and to streamline it, I think is very


The use of SmartGate which is on our side costing us around $40 million as an investment, will

allow people essentially electronically go through customs. Effectively we see the airlines going

to electronic check-in, so there'll be electronic check-in, electronic use of passport and then

straight through potentially out the other side. We are making changes on our biosecurity rules

in New Zealand which will mean that we won't 100 per cent screen passengers when they

transit through our borders. We'll be profiling individuals as they get off the plane and making

an assessment.

From New Zealand's perspective that's actually a very positive step because our intention is to

redeploy those assets that would have been used tying up risk assessment which is of

extremely low risk, and we'll have them prioritising areas where we think there's greater risk.

So from that perspective, I think it'll be very efficient.

And the advice I've had from Auckland Airport is that an Australian tourist coming through to

New Zealand may be able to transit through the entire process within eight minutes. It's worth

putting in perspective Changi is about 12 minutes in Singapore at the moment, so it's

potentially a very efficient operation. In terms of the joint cabinet tomorrow, on our side we're

looking forward to a wide ranging debate. There's a work program that's being established but I

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think this is an opportunity to actually reflect on where New Zealand and Australia can go. In

terms of the ANZAC contingent, I think that's an exciting opportunity for the two CDFs to work

on. Whether that's possible is something that will be determined in the future, but there could

be a long term relationship and one that really builds up great camaraderie between the two

defence forces which already exists. We train together a lot.

New Zealand's undertaking a Defence review at the moment and one of the things we're

looking at is to build greater interoperability with Australia, so I think it makes sense potentially

for that ANZAC contingent. And finally, in terms of the rugby, we look forward to Saturday night

and the return of Dan Carter and an All Black team that will be fired up for a victory on Saturday night.

PM: Thanks very much, John, and we'll turn to questions. We might take a New Zealand

question first and then ...

JOURNALIST: Was passport-free travel ever considered between two countries? And if

not, or if so, can you see a day when it may get to that point between the two countries given

our closeness?

PM: Can I just back what the Prime Minister said before. We're trying to bring about

arrangements in both countries which make it as easy as physically possible for our peoples to

travel to each other's countries. It's very good for tourism in both directions. It's also good for

our business communities. This will be a steady process over time. The progress which has

already made between officials at the immigration level I think is good. In terms of end points,

and you go to the question of passports, I think it's important for us all first to just cross each

hurdle one at a time and if we can get to a stage whereby, as John's explained to you before,

you'll whip your existing passport through and use the checking systems which come off the

back of that. It's pretty quick and pretty efficient. So let's just take this one step at a time.

JOURNALIST: Mr Rudd, I've just got a question about your friend, the Ipswich car dealer,

John Grant. He recently obtained the right to sell motor cars out of his Ipswich car yard from

Great Wall Motors in China. And I would like to know whether you or your department made

any representations on his behalf using your contacts in China to enable him to get that.

PM: First of all I'm not familiar with the points that you make in terms of what may or may

not be his business operations in China. Secondly, I've got no recollection of having made any

such representations myself more broadly across the public service and, of course, we'll make

checks through the normal Austrade officials.

PM KEY: Can I just make one comment in relation to the passports. One of the reasons

why that's - it's not possible easily to get rid of passports immediately is because on any one

given trans-Tasman flight around about 30 per cent of people are not Australian or New

Zealand passport holders so they will need to show their passports. So there'd have to be some

way of effectively customs being able to understand who's from New Zealand and Australia,

who's not.The advantage of SmartGate, because it's biometrics, is it's a very fast process so

effectively you would have to hold up a passport anyway and this system allows both countries

to understand exactly who's going across their borders.

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The other important point is that we've agreed to work together and to invest together in I

think ground breaking technology for biosecurity where we'll be examining bags. We'll send the

x-ray images of those bags across the Tasman. So instead of again biosecurity having one

minute to look at a bag as it goes through an X-ray, in fact they'll have three hours to look at

those bags from a biosecurity risk perspective. And given New Zealand and Australia share

often very much joint concerns in that area, I think it's quite important.

PM: Now I think we're back to a New Zealand journalist.

JOURNALIST: Prime Minister Rudd, does Australia have any concerns about the robustness of New Zealand's immigration system? And, if so, was that part of any of these

discussions over a common boarder? And is it an impediment to passport-free travel?

PM: No, we don't have any concerns that I've been apprised of concerning the robustness of

the New Zealand immigration system. I think it's fair to say that all of our immigration systems

are under pressure. And that's because there are a large and growing number of international

people movements. And the range of challenges we are now dealing with from public health

challenges through to those more immediately connected with physical security are vast, and

therefore it puts a lot of pressure on our respective services and the technologies which support

them, and the international co-operation fabric which makes it all possible.In terms of our work

together in making it easier to travel between our two countries, we just regard this as a

technical challenge that we've got to work through.

We've made actually good progress so far. The officials have advised us this morning that

there's another slab of work to be done. We'll work out way through that, but the end point is,

as John's just described, to make it as physically easy as possible to travel in both

directions.But we have no concerns about the integrity of the New Zealand immigration system.

An Australian journalist now.

JOURNALIST: Did the two of you discuss carbon trading? And do you see a position where

the two carbon emissions schemes will come together and there'll be a unified system? And do

you think there's a case, given that both countries rely on livestock so much, that there's a case

to exempt farmers from carbon trading systems?

PM: On the question of carbon trading, we did discuss our respective emissions trading

schemes. This is difficult and hard work in both of our economies and we understand that and

are trying to get the balance right. Secondly, on the linkage of schemes, I think both the Prime

Minister and I agreed that the importance that we attach to cap and trade schemes because of

a range of factors, one of which is the possibility of international linkage. When the Australian

carbon pollution reduction scheme was first canvassed, we indicated that subsequent to its

implementation would be open to its linkage with other cap and trade schemes around the

world. And that, of course, in time would include New Zealand as well. And so that's a process

which our respective officials could work its way through.

Finally, on the question of agriculture, the Australian position is at this stage agriculture is not

within our scheme. There are complexities which our friends in New Zealand are wrestling with

as well. And we are therefore undertaking a further review in 2013 on the inclusion of

agriculture with a view to the possibility of agriculture's inclusion in 2015. And that's where we

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stand on that. Did you want to add to that, John?

PM KEY: No, I think that summarises it well. I mean, look, one overarching comment I'd

make is that New Zealand has and Australia have, through CER, the most comprehensive trade

agreement between two countries. We're making dramatic progress in terms of single economic

market and it's never made sense to me for the two countries to have climate change policy

that was divergent. I don't think that would make sense. And I think we've got to work as hard

as we practically can to have schemes which are complimentary. Now, we need to work through

those and we're in the process of redesigning our emissions trading scheme at the moment. It's

still early days for us to comment on that over here.

PM: I think we're back on the other side of the ditch.

JOURNALIST: Just interested in the ANZAC contingent idea. Could you outline at all what

you think that might actually physically look like and perhaps any theatres or areas where...

PM: Tall guys, uniforms, a hat like that, a slouch hat, and like the fellas you had out the front

here this morning and good looking New Zealand fellas as well, is that right? Yeah. Look, I think

what we're talking about is this. There are going to be defence and security scenarios in the

future where it's going to make a lot of sense for both of us to quickly and jointly deploy and,

therefore, why not look through the possibility as to how we can institutionalise this between

us.As the Prime Minister has rightly said, we haven't reached a landing point on this; we've

agreed to explore it. But I think it makes sense in terms of what is a good, strong and robust

tradition within the New Zealand armed forces, and certainly within the Australian armed forces

as well, so that we can quickly and rapidly deploy to areas where we may be needed in the


The precise operational scope of any such agreement would be properly crafted by our

respective defence force chiefs. But I think it's a reflection of the fact that we can comfortably

discuss these things in public in a way which probably we wouldn't discuss with practically any

other countries around the world. But we're relaxed about this but we see there may be some

genuine operational potential for this in the future.

JOURNALIST: ...[Inaudible] these couple of days and what do you make of the sort of the

difference in economic and the diplomatic relationship and how would you describe the state of

the diplomatic relationship at the moment?

PM: I think the China-Australia relationship is always full of challenges, and - and can I say it

always has been thus and it will be thus for quite a long time to come. And that is because we

share enormous common interests with our friends in China and we have continuing

differences. They are differences of values and from time to time differences of interests. And

therefore it's important for us to have a calm, measured, proper framework for handling and

balancing all of the above.

Therefore, as the Foreign Minister indicated in parliament just the other day, there could well be

further bumps in the road ahead. Our challenge in managing these relationships is simply to

negotiate those bumps in the road as they occur. I'd also say that China has significant

interests in Australia. China's interests in Australia go to its long term needs for resource

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security. China's needs and interests in Australia go to the role which we have in the wider

deliberations of the Asia Pacific region. And therefore we approach - we approach this

relationship mindful of our interests in China, mindful of China's interests in Australia. On the

question of Ambassador Raby, then I don't think it's scheduled at present but I'll see if we can

sort something out.

Our ambassadors are quite regularly returning from abroad for leave and consultations. I think

the Foreign Minister was saying to me yesterday we've got half a dozen or so due back in

Canberra from various posts around the world in the course of the next month. And I think in

Geoff Raby's case he's back here about every year as well. But obviously it's a good time to take stock of the relationship and how we move forward, and assuming it all works out time-wise then I would hope to spend some time with him as well. I think we're just about done on

that score, so thanks very much folks and let's take our ties.

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