Sky News PM Agenda

DAVID LIPSONThe Australian Foreign Minister Julie Bishop joins me now here in the studio. Thank you so much for your time this afternoon.

JULIE BISHOPIt's my pleasure.

DAVID LIPSONThailand's military insists that this is not a coup. On the advice that you have received and that you can reveal to us, what do you think?

JULIE BISHOPI have spoken to our Ambassador James Wise in Bangkok today and he has confirmed that the Royal Thai Army has declared martial law, but that the public pronouncements are that it is not a coup. What the Army has done is take over the police functions and the caretaker government remains in place.

So at this stage we are monitoring events very closely, we are looking to see the role that the army does play in terms of another election. Ever since the Constitutional Court removed the Prime Minister from office, there has been a caretaker government, so we are monitoring it very carefully to see what role the Royal Thai Army does take, now that martial law has been announced.

DAVID LIPSONThe military has taken control not just of the streets but also of the media there, several television stations, are you concerned this could escalate into a coup?

JULIE BISHOPWell there have been pro-government rallies, there have been anti-government protests, what we are doing is monitoring the situation on the ground. We are ensuring that Australians are aware of the situation. The Department of Foreign Affairs and Trade has re-issued a travel warning today calling on anyone travelling to Thailand to exercise a very high degree of caution. But we are watching, monitoring very closely to see what happens over the next few days.

DAVID LIPSONWill you be seeking any further advice from the Thai Embassy here in Canberra?

JULIE BISHOPYes, the Department of Foreign Affairs and Trade as a matter of course would be in contact with the Thai Embassy. I've contacted our Embassy in Bangkok and spoken to our Ambassador, who is obviously monitoring the situation very closely.

DAVID LIPSONBecause it is not the government that is actually conducting this, it is separate to that. It's the military.

JULIE BISHOPThere is a caretaker government in place. There are hopefully plans for an election, but now it is the Royal Thai Army that has declared martial law, which is effectively giving it the control over the country, particularly in terms of the powers that the police previously had. So it is not only military, it is also a policing function that they've taken.

DAVID LIPSONAnd so you have mentioned the advice to Australians, what should they do if they are over in Thailand on holidays?

JULIE BISHOPClearly read the Smartraveller advice on the DFAT website – www.smartraveller.gov.au - and that calls on people to exercise a high degree of caution. We have been providing advice for some time about the situation in Thailand, it's been volatile, it's been fluid and in the hope that there would be an election and return to democratic processes as soon as possible, we ask Australians to be very careful if they are travelling in Thailand.

DAVID LIPSONSpeaking of democratic processes, the world's biggest election has put in place Narendra Modi as Prime Minister-designate of India. Prime Minister Julia Gillard, when she was in power, and Prime Minister Singh signed an agreement for closer ties, the sale of uranium and the like – do all of those arrangements still stand or would they have to be re-negotiated?

JULIE BISHOPWell first the Australian Government congratulates the Indian Prime Minister-elect and BJP for their stunning victory and the National Alliance partnership that is being set up and we certainly look forward to welcoming the Prime Minister, when he is the Prime Minister, to the G20. I know that Prime Minister Abbott telephoned the Prime Minister-elect and had a conversation a few days ago about that.

The Australia-India relationship is strong, there is a Strategic Partnership in place. You will recall that the Howard Government had agreed in principle to sell Australian uranium to India that was then broken by the Rudd Government but then reinstated by the Gillard Government. We are working closely with India for a nuclear cooperation agreement.

We are also very keen to build on the already strong relationship with India and of course with the new Government this is an opportunity to support their proposed economic reforms and good governance policies that were part of the election campaign.

DAVID LIPSONAnd Modi would be welcome in Australia because for a time he was banned from the United States, he could not get a visa because of what was seen to be at the time violating religious freedoms.

JULIE BISHOPPrime Minister-elect Modi has not been banned from Australia at any time and of course he would be welcomed. As I said the Prime Minister rang him, I think on the 16th of May, spoke to him and invited him to Australia prior to the G20 meeting. It would be the first visit by an Indian Prime Minister since about 1986, so we would be very keen to have the Prime Minister, Prime Minister Modi, visit Australia not only as part of the G20 but as a symbol of the strong and growing ties between Australia and India.

DAVID LIPSONOver to Cambodia and the Prime Minister there has declared that he will accept refugees that were processed by Australia. I know that you are not about to announce that an agreement has been brokered here, but how close are we to singing something, because Cambodia is already saying they are ready to go.

JULIE BISHOPI was there in February and I spoke with the Prime Minister, Foreign Minister and others about the Bali Process - because Cambodia is part of the Bali Process -and the membership of the Bali Process is determined to find solutions to the issue of people smuggling in our region and Cambodia is one of the members of the Bali Process.

So we had a discussion about how they could assist Australia. Scott Morrison, our Minister for Immigration, has also been to Cambodia and had discussions with them about what they propose to do as one of the regional partners in the Bali Process. I haven't seen the detail of any agreement, I haven't seen any offer from the Cambodian Government, so until such time as they put something to us I am not in a position to comment.

DAVID LIPSONMoving on to the Budget, Joe Hockey and Prime Minister Tony Abbott today said that Labor was putting the Triple A credit rating at risk because of blockages in the Senate. But the analyst that was quoted this morning in the Financial Review has since told The Australian newspaper that there is no immediate risk to the Triple A rating. Has the Government spoken out of step?

JULIE BISHOPWell I read that article in the Financial Review this morning and there was a very clear message that our credit rating would be at risk if there was not a planned reduction in the debt and deficit that Australia was currently facing. Now what the analyst means by immediate risk is obviously something he's going to have to explain because he has given statements to both the Fairfax Media and News Limited.

But it is quite clear and quite evident that your credit rating would be at risk if you did not have a plan to pay down the massive debt trajectory that Labor had us on. The whole point is that had we not been elected and changed course, Australia was on track to have a debt of some $667 billion. We are borrowing $1 billion every month to pay the interest on the borrowings of $667 billion.

Given that it only took Labor one term to trash the budget, the surplus they inherited, the zero government debt position, it only took them one term to do it, it is obviously going to take us some time to pay down that debt.

DAVID LIPSONIf you look at the quote from the analyst though, he doesn't ever mention a Triple A credit rating, he says they may have to reassess the government commitment and also potentially the trajectory for public sector debt – there is no particular reference to the Triple A rating.

JULIE BISHOPCommon sense would show that a Triple A rating or a rating would be re-considered if the Government kept spending at the rate that Labor spent. Our spending trajectory was outpacing European economies.

We were elected to fix the Budget, to stop the wasteful spending, to stop the incompetent implementation of programs such as the pink batts program, to stop the $900 cheque giveaways to people that lived overseas or the dead budgie or whoever Labor were handing money to and to put in place sensible fiscal constraints and that included stopping wasteful spending, putting the Budget back into surplus over time and paying down that debt. That was what we were elected to do and that's what we are determined to do. We were not elected to continue with Labor's economic mess.

DAVID LIPSONForeign Minister Julie Bishop, we will have to leave it there, we appreciate you making time for us this afternoon. Thank you.

JULIE BISHOPIt has been my pleasure.