MICHELLE GRATTAN:  Hello this is the The Conversation’s politics podcast from Canberra. I’m Michelle Grattan. Tony Abbott has begun his around the world trip to Indonesia, the D-Day commemoration in France and then visits to Canada and the United States where he will meet President Obama for the first time since becoming Prime Minister.

Today we are talking with Foreign Minister Julie Bishop, who is incidentally the first Australian woman to hold that post. Julie Bishop, can we start with the Indonesia relationship which has been quite fraught in the wake of the revelations about Australian spying. Things are now unfreezing, when do you expect the relationship will be completely back to normal?

JULIE BISHOP: Michelle, I am assuming that the relationship will be completely normalised before President Yudhoyono leaves office later this year. That is because we have already seen the return of Indonesia’s Ambassador Najib, he is already back in Canberra and I have already met with him and had a very productive discussion with him.

Foreign Minister Dr Natalygawa and I are meeting shortly for the two plus two meeting that is the Foreign Affairs and Defence Ministers meeting with our counterparts from Indonesia and at that time I expect that we will conclude the detail on a joint understanding between us on allegations involving intelligence matters. And of course the Prime Minister is meeting with the President – at the President’s invitation – and there is a very warm rapport between President Yudhoyono and Prime Minister Abbott and I am sure there will be very positive outcomes from their meeting today.

MICHELLE GRATTAN:  So you think within weeks we will see everything back as it was before the spying allegations came out?

JULIE BISHOP: Already there is a high level of cooperation between the two governments on a range of levels. People might not be aware of the fact that we engage with Indonesia across a broad range of areas. In fact, Dr Natalygawa and I put together a matrix of the areas of cooperation between Australia and Indonesia and I think it was something like 60 different areas involving 22 or more government departments and agencies on either side. There is a lot of ballast to this relationship across this broad array of different topics and subject matters.

I think that the relationship is strong, it is healthy, but like any relationship there are setbacks from time to time. It is how you manage those setbacks that counts and I believe that the Abbott Government will restore the relations to a normal level. We inherited a number of problems, the live cattle trade ban from the previous government still rankles with Indonesia and we still have to prove that we can be a reliable and trusted trading partner for example.

Indonesia is still concerned about our border protection policies, but I think there is an acceptance within Indonesia that if Australia is able to stop the boats coming into Australia that will impact positively in Indonesia. President Yudhoyono described Indonesia as a victim of the people smuggling trade and so we want to work closely with them to ensure we can cooperate on border protection issues that will not only be to Australia’s benefit but also to Indonesia’s.

MICHELLE GRATTAN:  Now can we turn to another critical relationship for Australia and that is with China. Do you think that the Free Trade Agreement which is being negotiated between the two countries will meet the timetable of being finalised by the end of the year?

JULIE BISHOP: I’m very optimistic that we will be able to conclude a Free Trade Agreement with China by the end of the year, hopefully by the time President Xi Jinping visits Australia for the G20 meeting in November. That is a view expressed by both sides – China is also optimistic about it.

I spoke to the Chinese Ambassador yesterday in fact and he expressed a similar view that we are working towards the conclusion of the negotiations in time for, hopefully, President Xi Jinping and Prime Minister Tony Abbott to agree to it in November this year.

Our Trade and Investment Minister Andrew Robb is now very experienced at negotiating Free Trade Agreements, having concluded agreements with both South Korea and Japan, and I believe he is likewise quite optimistic about this.

MICHELLE GRATTAN:  So just technical details now being worked out or are there still some significant outstanding issues?

JULIE BISHOP: I think it is fair to say that there are some hurdles that we will have to overcome and areas where both China and Australia will have to show some flexibility. For example, on the question of state-owned enterprises investing in Australia, Australia may have to show more flexibility. In the case of agricultural products, market access, greater market access into China, I think China will have to show more flexibility.

So there are some issues, but I think that the negotiations are very advanced. As you know, the negotiations commenced under the Howard Government, went nowhere under the previous government, but we have the political will to conclude this Free Trade Agreement because they are undoubtedly in Australia’s interests – enhancing existing markets for our goods, great opportunity for enhancing our export of services and also new capital for our businesses in Australia.

MICHELLE GRATTAN:  The Lowy Poll came out overnight on Australians’ attitudes to various issues and one interesting finding I thought was that nearly half of those questioned thought China would become a military threat to Australia in the next 20 years. Are you surprised by that level of suspicion in the Australian community?

JULIE BISHOP: I think you have to take it in the context of the overall poll. I also noted that the poll found that both China and Japan were essentially equally seen as our best friend in Asia – I thought that was an interesting finding. But in terms of China being a military threat, their thinking may well be coloured by the current tensions over the East China Sea and the South China Sea – the territorial disputes, the maritime disputes – and that may well colour people’s thinking.

I am convinced that China will be a positive force for good that we will see a peaceful rise as China has claimed it will be. I am optimistic that it will be a peaceful rise but that is not to say there won’t be challenges in the meantime. The tensions between China and Japan for example must be de-escalated and I believe that the ASEAN countries, Australia, the United States, a number of us, have a role to play in seeking to de-escalate the tensions between China and Japan for example and China and other countries with whom it has a dispute over territorial boundaries.

MICHELLE GRATTAN:  What sort of role do you see, what mechanism can help with that?

JULIE BISHOP: The East Asia Summit is a significant forum for discussions on these kinds of issues, China does not necessarily want these disputes to be on the agenda, but I think it is helpful given that this is the forum that has the right membership, the right mandate and the ability to resolve these issues.

That is why Australia was so keen to see the United States come into the East Asia Summit and why we promote the East Asia Summit as the most important regional forum for the resolution of such disputes and the discussion of such disputes.

MICHELLE GRATTAN:  Now Tony Abbott is on his way to the US, former Liberal Prime Minister Malcolm Fraser has suggested in his new book that the alliance no longer serves Australian purposes. In fact, he said we should actually get out of it, do you think there is clearly still more benefit than cost to Australia in the alliance?

JULIE BISHOP: Absolutely, I would never underestimate the benefits of the strategic alliance we have with the United States. In terms of our security, it is essential, it is the bedrock and I have explained this to our friends in China. Just as China is increasing its military presence, it is increasing its expenditure on its military as one would expect with a country and an economic growth the size of China’s. So China should recognise that part of our military history and our current military requirements is our strategic alliance with the United States.

This is an alliance that was born out of the Second World War, it has been a part of our strategic thinking, part of our strategic capability and capacity and our defence capability ever since the Second World War. I see no reason to downgrade, I certainly would not be walking away from it.

MICHELLE GRATTAN:  Nevertheless it has got us into a number of conflicts, we have just fought a very long war alongside the Americans and other countries in Afghanistan. Are you confident that that country won’t just revert to the old ways, the old violence, the suppression of women?

JULIE BISHOP: It is very difficult to predict what will happen in Afghanistan. What Australia can do is make a contribution to ensure that Afghanistan is able to be in charge of its own affairs, that is why we have worked so hard in capacity building for their defence forces, their security forces and that is why we are continuing to fund programs for the empowerment of women. I have recently provided over $3 million in funding for the Afghan Women’s Network which assists in empowering women.

So we have to remain there in providing support for nation-building so that the Afghan people can be in control of their own country. I don’t know how long that will take but Australia is determined to do what we can to support the Afghan people. Your point about the women so many gains have been made for women and girls in Afghanistan, it would be a tragedy if that were to be lost because of the withdrawal of the ISAF forces. I want to continue to support the women and girls in Afghanistan.

Our Ambassador for Women and Girls Natasha Stott-Despoja is currently on her way to London, or will be in London shortly, to attend a Global Summit on ending sexual violence against women in conflict situations. This is an initiative of Foreign Secretary William Hague and I am a champion of this initiative. So there is a lot of work we want to do with women in Afghanistan about being part of the peace building. Women have got to be part of building the peace, post-conflict.

MICHELLE GRATTAN:  Have the aid programs to Afghanistan suffered at all in the general cutback of aid?

JULIE BISHOP: We have maintained a very substantial program into Afghanistan. The reduction in the growth of spending in the aid budget has come in other areas, most particularly in Latin America where the previous government was unashamedly buying votes for its bid for a seat on the UN Security Council so we are scaling back aid funding into Latin American countries.

Quite frankly, when you look at the United Nations Human Development Index the majority if not all of countries in Latin America are way ahead of the Pacific in terms of every indicator on human development so that is why I am focussing our aid on our region where there is a significant need, it is an area where we can make the biggest difference, it is our neighbourhood.

MICHELLE GRATTAN:  So Afghanistan has been quarantined?

JULIE BISHOP: There is still a very substantial aid budget to Afghanistan.

MICHELLE GRATTAN:  Now in the talks that the Prime Minister will have in America, climate change is likely to be one topic that comes up obviously in the Obama meeting. The Government is arguing that its Direct Action Policy is on the same page as the American new regulations that have been announced this week, but isn’t that a bit of a stretch?

JULIE BISHOP: Well no I don’t believe it is at all. President Obama is not introducing a carbon tax, he is not introducing an emissions trading scheme. His proposals are what I would call direct action, cleaning up the power stations, precisely what we are seeking to do with our funding. Our climate change plan is not to have a carbon tax and not to have an emissions trading scheme but to have funding to directly, for example, clean up the power stations that are causing the emissions, so it is very similar.

Now the scale might be different, but it is a different economy, it is a different situation. The President has announced a different target but that’s the debate for 2015. We are part of the negotiations for the 2015 review of climate change targets, now. I expect between now and the middle of next year, a number of countries will put forward what they propose to do and as the Abbott Government has said when we are in a position to see what other countries are seeking to do, then we can determine our position. 

MICHELLE GRATTAN:  Of course, the President would like an ETS if he could have got it through congress?

JULIE BISHOP: Well he hasn’t put forward an ETS. He may well want an emissions trading scheme, it is what the United States does, and as far as I can see the United States will not be having a carbon tax and will not be having an emissions trading scheme and they are the largest economy in the world. So to have an emissions trade scheme without the United States doesn’t seem to make much sense to me. So if the United States aren’t in an emissions trading scheme I see very little reason why Australia would be.

MICHELLE GRATTAN:  Could we just come back to this question about aid – can you explain your new aid paradigm and also in terms of the regional focus, while this is very understandable, doesn’t it mean that some areas that are really in need, for example some parts of Africa, get downgraded?

JULIE BISHOP: Michelle, let me start with what I inherited. The previous Labor government announced increases to the aid budget to meet this formula of 0.5 per cent of gross national income. Yet at no point did they ever seriously come near that target and in fact they would make announcements of massive increases in the aid budget and then push the funding beyond the forward estimates.

In the last 15 months of the Labor Government, they withdrew $5.7 billion out of the aid budget and then they starting diverting funds from the aid budget to other areas of their budget, for example, $740 million out of the aid budget into onshore processing for the border protection budget. I said at the time $740 million made Labor one of the largest recipients of Australian foreign aid – they made the government itself the largest recipient, or one of the largest recipients.

So what I had to do was first stabilise the aid budget and we determined at $5 billion, which was around what Labor had delivered in 2012-13, would stabilise it at that and then we would grow it by CPI, which we have announced we will do from 2016. This means no longer will we be shuffling money out the door into multi-lateral organisations because Labor had to meet this formula.

We are now targeting our aid in our region, not exclusively, over 90 per cent of our aid will be targeted at the Indian Ocean Asia-Pacific. It is where there is an enormous need and where we have expertise and where we can have the most effective outcomes. We are also engaging the private sector because that is the new aid paradigm – the private sector is involved to a very great degree in delivering development assistance and I want to work in partnership with the private sector to leverage their capacity, harness their funding so we can get better outcomes.

We are focussing on the empowerment of women and girls, specifically in the Pacific, because if 50 per cent of your population or more is not able to engage in the formal labour markets and the formal economy then countries are certainly missing out. We are focussing on economic development as a way of alleviating poverty and lifting people out of poverty and lifting standards of living so economic development, Aid for Trade, these will underpin the aid program. And on the 18th of June I will be going through the policy in some detail plus the new benchmarks we will be applying to the aid program and I will be doing that at the National Press Club.

MICHELLE GRATTAN:  Now Australia is now well into its time, in fact in the latter stages of its time, as a temporary member of the Security Council. What has been its general approach there and what do you think its achievements have been so far?

JULIE BISHOP: Most certainly our focus has been on global security and much of the debate has been dominated by Syria in our time there and I believe we have made a substantial contribution on the humanitarian side of the Syrian conflict. I was in the United Nations in September last year when Australia successfully negotiated a Presidential statement about humanitarian support into Syria by bringing both the United States and Russia together so that there was a unanimous vote.

This was at a time when the United States and Russia were in strong disagreement over how to resolve the Syrian conflict. So I think Australia has proven itself to be a very flexible and very competent in bringing together the various nations of the UN Security Council to get outcomes, particularly in humanitarian areas. We’ve also focussed on the illicit trade of small arms and I led a debate on that last year.

We’ve just ratified the Arms Trade Treaty as well, which was an initiative that Alexander Downer commenced back in 2006, where we co-authored an Arms Trade Treaty and now on the 3 June we were able to ratify that treaty – one of the first countries to ratify it and once 50 nations have ratified it that will come into force. That’s the first time that there’s been a legal instrument to control and set common standards for the international transfer of conventional weapons. Now that’s not directly a Security Council issue, it’s a General Assembly issue, but it supports the work that we were doing on small arms and also our work on the Women, Peace and Security Initiative, which feeds into the William Hague initiative on ending sexual violence in conflict.

So I think we’ve been a very useful member in the UN Security Council, I think we’ve acted with distinction. Our Ambassador Garry Quinlan has done an outstanding job and our team at the UN have every reason to be very proud of the effort that they’ve put in over the last 18 months, coming up to two years.

MICHELLE GRATTAN: Now we’ve just had Bob Carr’s rather entertaining account of being a Foreign Minister. How different have you found the job from your expectations?

JULIE BISHOP: It might be an entertaining account if I can say, but it’s also caused some very difficult situations where when I go in to meet with a Foreign Minister. It would be normally taken for granted that the conversation would be confidential. I am now confronted with the request that I not write a diary about this conversation, so it’s been rather embarrassing in a number of instances!

MICHELLE GRATTAN: Do you keep a diary?

JULIE BISHOP: No I don’t. So there won’t be a tell-all book that I release six months after my time as Foreign Minister which makes some rather disparaging and unfortunate remarks. I can’t believe Bob Carr would do this about current serving Foreign Ministers and Secretaries of State and the like, I thought it was a very unnecessary attempt at humour if that’s what it was meant to be. Anyway, no, I ‘m not keeping a diary, but of course there are very detailed notes taken by the Department of Foreign Affairs and Trade of all my meetings.

MICHELLE GRATTAN: So how have you found the job different from what you thought it might be?

JULIE BISHOP: Michelle, I was fortunate in one sense, I had been the Shadow Minister for Foreign Affairs for four years prior to taking on the role as Minister. In fact, I was Shadow Minister for Foreign Affairs and Trade, and as the Government’s approach to our foreign policy is one of economic diplomacy - just as traditional diplomacy’s aims were peace, economic diplomacy’s aims are prosperity - I’ve found that my time in Opposition was a very good grounding for the role now.

So there are no surprises in that sense and I’m pleased to be able to meet people as Foreign Minister whom I had met in Opposition. So I’m meeting them as a friend, not as Australia’s new Foreign Minister, particularly with countries like Japan and Indonesia and the United States, and Britain and Malaysia, other countries, I had already made contact with the relevant counterparts in those countries, so that’s been very useful.

The travel demands are quite extraordinary, and as Deputy Leader of the Liberal Party I also have responsibilities here in Australia, so time management is a skill that I have acquired and -

MICHELLE GRATTAN: [Interrupting] What tricks of the trade can you share in that regard? How do you manage your time?

JULIE BISHOP: Well I try to be as efficient as possible with the tasks that I have ahead of me and I spend my time on planes reading briefs, getting on top of material. I try to use every moment of the day in a positive and useful way.

I am very proud to have this role, in fact, I can say it now but it was the reason I came into federal politics. I, in fact, thought about joining the Department of Foreign Affairs and Trade in my last year of law school and was so taken with the idea that my mother suggested that I go and meet with that lovely Alexander Downer who is a junior officer at the Department of Foreign Affairs and Trade in Adelaide, and I did. I had an appointment with Alexander Downer - he must have been all of 26 or something and I was about 21 - and I had a meeting with Alexander Downer to talk about joining the foreign service. 

I can’t remember the detail of the conversation, but obviously whatever he said to me put me off it because I continued to complete my law degree. But I’ve always had a deep interest in foreign policy and foreign affairs and through various experiences, I decided when I entered federal politics my secret aim was to be the Foreign Minister and follow Alexander Downer. And from that point of view it’s a fulfilment of a long held dream and ambition so I’m very, very pleased to have the role.

I find that Australia’s standing in the world is very high. In fact our standing in the world is at its highest when our influence in our region is at its strongest and that’s another reason why I’m focussing so heavily on our region. I’m also finding the opportunity to explore areas such as developing new relationships - we have set up a new alliance called MIKTA which is Mexico, Indonesia, Korea, Turkey and Australia. At first glance that might not seem like an obviously grouping, but we are all significant powers in our own region. We are all G20 countries - I think we’re the 12th, 14th, 15th, 16th and 17th largest economies - and we had a meeting - the Foreign Ministers of those five countries - had a meeting in Mexico recently, a two-day retreat, and we found that we had so much in common, so many issues to talk about and I feel that we really will achieve something out of our MIKTA grouping.

Likewise, the New Colombo Plan has been a passion of mine ever since I was the Education Minister and this opportunity to put in place a Government backed scholarship scheme for young Australians to study at universities in the region, I believe is where the Coalition’s foreign policy finds its expression. We talk about being engaged in the Asia-Pacific, but we’re actually going to do it. Generations of young Australians spending time living, studying and working because an internship is part of the scholarship, in our region.

We started the pilot program this year, by the end of the year 1300 young Australians will have studied for short courses or semester long courses or 12 month courses in universities in Singapore, Indonesia, Japan and Hong Kong. From 2015 other countries are getting involved in the New Colombo Plan, including China and South Korea and India, Malaysia and I just think that this will be a signature policy of the Abbott Government in years to come and a real legacy for future generations.

MICHELLE GRATTAN: Now just finally you mentioned that you’re Deputy Leader of the Liberal Party, and we’ve got the Liberal Party’s Federal Council coming up later this month, so I just wanted to ask you one domestic question.

You’re a good friend of Danielle Blain who is a very prominent Western Australian Liberal woman and she looked at one stage to be a big chance to be Federal President. It now appears that she won’t get the job that it will go to Richard Alston. Are you disappointed in that?

JULIE BISHOP: Well the nominations for the position haven’t even opened and when they open for the executive positions I expect there will be a number of people to put their hand up. I believe Danielle has decided that she has other priorities.

She has been on Federal Executive for a long time - I think almost ten years as State President of Western Australia and then as a Vice President of the Federal Liberal Party - so after ten years she has probably decided that’s enough time travelling back and forth to Canberra for Federal Executive meetings!

But I don’t know who’s going to nominate. I hope that women do nominate for the position, because it’s good to promote women with the party and I will wait until Federal Council, which is coming up some time this month, to cast my vote.

MICHELLE GRATTAN: Julie Bishop, thank you so much for talking with us.

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