 Ladies and gentlemen, the Institute is Australia's leading think tank. Independent and non-partisan, our role is to generate and disseminate high quality research and perspectives on the trends shaping Australia and the world. Our job is to deepen Australia's national conversation with the world. In that context, I was delighted to announce this morning that former US Assistant Secretary of State Kurt Campbell will be joining the Institute later this year as our inaugural Distinguished International Fellow. Another way we can contribute to the national conversation is by hosting this evening's debate. Ladies and gentlemen, a couple of introductory remarks. Australia is now a member of the world's two most important economic and political forums, the G20 and the Security Council. This gives Australia a new prominence in global affairs and new opportunities to realise our prosperity and our security. But membership of these institutions will also test us as a country. Our political and our business leaders and our government officials will need to engage on a much broader range of global issues at a higher level and at a faster pace than they have ever done before. Above all, to justify our place at the top table, Australia will need big ideas. And tonight, we hope to hear some of those big ideas. Let me introduce our speakers and panelists before explaining the rules of the debate. Senator the Honourable Bob Carr is the Minister for Foreign Affairs, a position to which he was appointed in March 2012. From 1995 to 2005 he was the Premier of New South Wales. The Honourable Julie Bishop MP is the Deputy Leader of the Opposition and the Shadow Minister for Foreign Affairs. She was formerly a Cabinet Minister in the Howard Government. We also have three distinguished panellists with us this evening to pose the questions to our two speakers. Jane Hutchin is the host of the interview program One Plus One on ABC News 24. Jane was a long-standing ABC foreign correspondent reporting from China, the Middle East and the United Kingdom. Paul Kelly is the Editor-at-Large of The Australian. Paul was previously Editor-in-Chief of The Australian and a visiting fellow at the Lowy Institute. Finally, Rory Medcalf is the Director of the International Security Programme here at the Institute. He is a former Australian diplomat and journalist. Thank you to both our debaters and our panellists for joining us. Ladies and gentlemen, the evening's debate will run according to the following rules to which both sides have agreed. Just before we came out we flipped a coin to determine the speaking order. Ms Bishop won the toss, she will speak first and Senator Carr will speak last in the debate. Both speakers will begin with five minutes of introductory remarks before we turn to questions from the panel. Neither the speakers nor their advisors have seen the questions in advance. There will be a total of six questions. The debate will close with three minutes of concluding remarks from each speaker. Let me say that strict time limits have been set for each answer. For each question from the panel, the speaker will have a three-minute response to be followed by a rebuttal of three minutes from the other speaker and then a further one-minute reply from the original speaker. Ms Bishop, Senator Carr, with 15 seconds to go, there will be a chime to alert you that your time is nearly up, and that's the chime. Isn't it great when the technology works? Thank you, Kate. When you hear that chime, please wrap up within 10 or 15 seconds. If you speak beyond 15 seconds, a long hook will emerge from the curtains and pull you offstage. And so to begin, I would like to ask Ms Bishop to make her opening remarks. Ms Bishop, what are the three things that you would like to achieve as Foreign Minister in the next term of the parliament should the Coalition win office? You have five minutes. The Coalition's foreign policy is designed to project and protect our reputation as a strong and stable and prosperous nation and our values as an open liberal democracy. Our strategy will be based on economic diplomacy, a practical approach to align our foreign policy with our national economic interests. This will mean harnessing our foreign policy assets and our presence overseas to enhance our trade and our investment opportunities to grow our economy. We will seek to draw all arms of government wherever possible to a single focus on promoting Australia's strategic interests. The Department of Foreign Affairs and Trade will be the lead agency in coordinating our international engagement across all levels and all departments so that our efforts in trade, investment, immigration, tourism, education, foreign aid, for example, will all be consistent and aligned to our strategic goals. Ideally, Australia's overseas representation in all of these areas will be consolidated into one location, a Team Australia approach, if you like. And that will be a hallmark of our presence overseas. This will include reviewing our diplomatic footprint to ensure that it reflects the shifts in global strategic and economic weight. And as the Lowy Institute itself points out, Australia has the smallest diplomatic network of the G20 nations. Australia will be placed on developing economic skills and experience amongst the relevant Department of Foreign Affairs and Trade staff. And we will look for measured outcomes, rewarding performance in pursuit of our foreign policy and economic goals. And this strategy will be in partnership with Australian businesses and with foreign investors. We are a global nation with global interests, but increasingly our focus will be on our region, the Indian Ocean, the Asia Pacific. For Australia standing in the world is at its highest when our influence in our region is at its strongest. Our enduring alliance with the United States will be and continue to be the bedrock of our defence and strategic framework. And our significant economic relationship with the United States is underpinned by the Australia-U.S. free trade agreement signed by the Howard government. However, our economic interests are increasingly focused on the growing economies to our West and North, the Indian Ocean, Asia Pacific. And it will be a first order priority of a coalition government to conclude free trade agreements with China, South Korea, Japan, India, Indonesia, amongst others. We will establish a network of bilateral and regional free trade agreements to establish new markets and enhance existing markets for our producers, our exporters and manufacturers. We are currently losing market share to our competitors who have been very active in signing up free trade agreements with our major trading partners. We are aware of the need to broaden and deepen and diversify our engagement in the region and we will build on existing relationships. But I know as a managing partner in the 1990s of a law firm that sought to work with law firms across the Asia Pacific to assist our clients do business in the region. I know how important long lasting relationships are and that they must be built on mutual respect. As a cabinet minister with the education portfolio, when international education became our third largest export item, I'm deeply aware that our relationships in the region have to have mutual benefits. That's why under a coalition government, we will establish a signature initiative. We've dubbed it the new Colombo Plan, which will be an opportunity for young Australians to undertake study in the region. As the original Colombo Plan brought the best and brightest to Australia to study in the region, we want to give our young people the opportunity to live and work overseas, understand another language, understand the culture and bring back those perspectives to Australia. Thank you, Ms Bishop. And now I invite Senator Carr for his five minute introductory remarks. Senator, I ask you the same question I put to Ms Bishop. What are the three things you'd like to achieve as Foreign Minister in the next term should the Labor government be re-elected? First, Michael, let me congratulate the opposition on giving us bipartisan support on our policy on our piano stand. With 1,550 Australian Defence Force personnel in that country, it has been crucial that their presence is not being subject to partisan dispute back in Canberra. Priority number one, building on our relationships in Asia and with our Pacific Island partners. I was early in my time as Foreign Minister. I was in Naperdor speaking to President Tensane. I said to him, Australia will lift, not simply leave suspended our sanctions on Myanmar. We recognize the transition in that government is proceeding at pace. And I said, I'd like the attitude of our 10 ASEAN neighbors to engagement with Myanmar and we will follow. There's a practical example of Australia working in the spirit of the Asia White Paper. We were, it was appropriate to do so, aligning our foreign policy with the thinking of the 10 increasingly resilient and prosperous nations to our north. With China, I was honoured to be there in April when former Prime Minister Gillard spoke to President Xi and Premier Li and sealed a strategic partnership, which means annual meetings of our leadership, a relationship with China. Fundamentally important to this country is very sound. Indonesia has our biggest concentration of diplomats. It's our biggest aid program. The level of collaboration on counter-terrorism is crucial to this country's security. And we're concentrating our efforts on looking at the political transition that will take place there next year. On India, we've resolved the one big question in the Australia-India relationship, which was Australia being able to sell them uranium. That's what they saw from us. That's what we've delivered. We don't forget our long-term friends, Japan and South Korea, with which our relationship is so robust, our relationship so robust, our understanding running so deep. Australia, in the Asian century, realising the shift of economic gravity to the region to our north is crucial to our future. Second, building on our multi-electrolism. In our boardroom in New York last year, I spoke to 14 nations from the Caribbean, and I asked for the UN Security Council seat. The permanent representative of Grenada said, we like Australia. We like your attitude on protecting the marine environment, which is music to my ears. She said, we like the Australian approach on climate change. We're working with you on that arms trade treaty. And that support you gave us to the monument for the transatlantic slave trade, which you've confirmed in your address, Mr. Foreign Minister. We liked that, but we expected no less from a country with an ethical basis for its policies has confirmed by the apology, capital T, capital A, the apology. That's a Caribbean a long way from Australia. But our character as a nation met a great deal for those 14 island states. Australia on the Security Council has intensified pressure on Iran to abandon its nuclear weapons programme in partnership with our friends, our colleagues on the council. We pressured North Korea to abandon its missile and nuclear programmes. This is all work in the multilateral arena, as it is in Geneva. As it is in Geneva. Tony Abbott says, we'll do less of Geneva. But hang on. It was at Geneva where we worked with other nations to get an international inquiry into human rights in North Korea. And at Geneva, where we persuaded nations to accept Michael Kirby as the head of that inquiry. With a quarter of a million people in concentration camps in North Korea, that's good work, in Geneva, in a multilateral forum. As host of the G20 in 2014, we'll have an opportunity to build on this. And here's my third proposition. That is that we should build deeper and reinforce the habits of consultation both globally and in our region. I mentioned how we consulted ASEAN over attitudes towards Myanmar and aligned Australia's thinking with those of the 10 members of ASEAN. Let me talk about consultation with the U.S., the most important strategic relationship, of course, a fundamental pillar of our national security for a long time. The Osmin consultations with Secretaries Clinton and Panetta in Perth in November last year underscored how deeply the habit of consultation with the U.S. has become ingrained. And how deeply the trust is, how deep the trust is on both sides. And I want to pick up a theme to apply to Australia's relationships. It's this one, and sometimes where Australians fall down on it, we should always aspire to meet it, habits of consultation. With those Asian nations so increasingly important to us, with the nations we work with in multilateral fora, like the Security Council, and of course, with an old friend like the U.S. Thank you for those introductory remarks. And now to the panel. The first question to Ms. Bishop is from Jane Hutchin. The challenges will be economic and strategic. And whenever there is a strategic shift in the weight of global power around the world, tensions arise. And we are aware that many feel that the U.S.-China relationship and managing that will be one of the challenges of the future. The growing economies of Asia have made many countries around the world dependent upon their increased growth. China is now the largest trading partner for about 120 countries around the world, including the United States and Russia and Australia. And so managing the growth of China and managing the U.S.-China relationship, the Russia-U.S. relationship, because Russia is now asserting itself as an Asia-Pacific power. And the tensions that invariably arise between other nations in our region will be one of the major challenges. I believe that China has far too much to lose, far too much at stake to do anything other than to rise peacefully, as it has been doing in the past. And I believe that Australia can continue to be a consultative partner in the region and be an important player in ensuring that the interests of our global friends are aligned and continue to operate in the interests of peace, prosperity and stability in the region. I believe it can and will be achieved. Thank you, Ms Bishop. Senator Carr, you also have three minutes. One, work quietly to manage the territorial disputes in the region to the extent we can. That means encouraging, supporting ASEAN in working towards a code of conduct and to persuade China that a code of conduct is in China's interest. And that's managing the disputes while they exist, while they're unresolved. And two, working on a settlement for the disputes is the approach I like. And that is what Australia should be saying, quietly, not in any bossy intervening fashion, because that's unacceptable to both sides. But saying quietly, there is merit in setting aside the dispute over sovereignty, setting it aside, and striking an agreement to develop the resources in dispute and to split the proceeds. There are three precedents in Southeast Asia for resource sharing agreements and one in Antarctica. I believe that offers an approach that means these intractable disputes, on which we take no side, of course, but these intractable disputes that do threaten, that are a threat to the peace and well-being of the region, can be placed in one corner. Well, to the benefit of the economy of East Asia, you see a development of the resources in dispute. I think a great deal of the region will depend on whether China develops as a nation educated about the rest of the world and quietly confident in its own judgments and working with multilateral institutions or a China that becomes insular and even paranoid and therefore over-assertive. And we've got an interest in continuing and deepening our engagement with China to achieve the extent we can influence it, a happier outcome. Ms Bishop, you have one minute for a reply if you'd like it. Yes, I don't believe that the current tensions between China and Japan over the Sinkaku, Daioa and New Islands will escalate. There is a chance of a miscalculation and that's the kind of scenario that we must be wary of. But I believe that this is why many nations in our region are looking for more United States leadership in the region, not less. And I believe that Australia does have a role to play as a member of the forums, the East Asia forum, the ASEAN forums to ensure that dialogue and diplomacy remains the order of the day. Thank you, Ms Bishop. Back to the panel. The second question to Senator Carr is from Paul Kelly. A question to the Foreign Minister. Australia as a nation seems to be solving its border protection problems by exporting asylum seekers from outside our region to the Pacific states of Papua New Guinea and Nauru to settle on a long-term or permanent basis. How wise, responsible and tenable is it for Australia to financially sponsor the settlement of large numbers of Muslims into these Pacific societies that are so profoundly different with high risk of social troubles, tensions and potential strategic and security problems? Paul, I don't believe it will be large numbers. And I say that because I believe this shock will stop people paying $16,000 to people smugglers based in Tehran because they know they'll no longer be able to get to Australia. I believe the numbers will dry up. It won't happen as the Prime Minister has kept saying, within days might happen within weeks, but it will stop. It might stop in some fits and starts, but it will stop. People simply will not hand over $10,000, $16,000 to a people smuggler if they know they're going to be processed and resettled in Nauru or Manus Island. That's the value of this. And that's why our neighbors in the Pacific, eager to help Australia and alarmed by all the evidence of this human trafficking, have stepped forward and said, it's actually in our interest to do this. And so I don't believe that unattractive scenario you've sketched will emerge. I believe that the terror effect of this will be forceful. And I just say to people who've criticized it, whether from a humanitarian angle or a different angle, just consider what else, what else serves to provide the short, sharp shock to people smuggling activity that this is designed to achieve. Thank you, Ms. Bishop. You have three minutes on that question. This is Labor's greatest policy failing and it is the greatest policy failure in recent memory. In fact, the moment Kevin Rudd unpicked the Howard Government laws that had dismantled the people smuggling trade and had stopped the boats and then cleared the people who'd arrived by boat through our detention networks, we have seen 50,000 people arrive, over 1,000 deaths at sea. And that's just the unofficial figures. We don't know the official figures. And a billion upon billion dollar blowout in our detention network budgets. This is Australia's problem. It took a change of laws in Australia to create the problem. It will take a change of laws in Australia to solve the problem. And Labor have subcontracted out our border protection and our asylum seeker visa framework to other countries. They tried it with East Timor. Embarrassingly didn't contact the appropriate people in the East Timor government. They tried it with the Malaysia solution, which was found to be unconstitutional, illegal by a high court. They've tried it with Manasailan. They try it with Nehru. And as Foreign Minister Kubu Balda of Fiji has said recently, and as the Solomon Islands have made clear, the Pacific Islands do not appreciate this unilateral action that will affect their society, their economic and cultural well-being. And it is a fact that for Labor to demand of P&G and Nehru that they permanently resettle the asylum seekers, then that will cause massive challenges in the Pacific. I do not believe that Labor have even thought through the impact of this policy. The communique that Kevin Rudd signed with Indonesia not so long ago pledged not to take unilateral action. And then two weeks later, he took unilateral action by announcing his P&G proposal, which impacts on Indonesia and other countries in the region. It didn't go through the Bali process. So Australia's reputation is suffering badly under the last six years of Labor's mismanagement and chaotic and dysfunctional approach, and inconsistent approach to border protection and asylum seeker policy. We have promised a no surprises policy. We have promised to reinstate the Howard government laws that worked. And we will bring together all arms of government to ensure that we dismantle the people smuggling trade and we stop the boats so that we don't have to impose upon our friends, our dear friends in the Pacific, in P&G and elsewhere, by forcing them to permanently resettle asylum seekers. Senator Carr, one minute. But of course, Tony Abbott says he won't change the policy. Tony Abbott has said the agreement with P&G stays in place. And two other corrections. One is that P&G and La Rue have opted to be part of the regional resettlement arrangement. It's their choice. And they did so to help Australia and to achieve a regional resolution to a real problem of growth in people smuggling. The second correction is far from disconcerting Indonesia. Indonesia recognises it was entirely legitimate for Australia to seek this understanding. And Indonesia is collaborating with us by hosting a conference on August the 20th, August the 20th in Jakarta, which I'll be present to discuss further regional action on what is a regional problem. Thank you, Senator. Now to the third question from Rory Medkaft to Miss Bishop. It's interesting that the main mention of Indonesia in tonight's debate so far has been about votes, about a, I guess, a short-term transactional challenge in the relationship, if you can put it that way. Now this is a country that is increasingly important in the Asian economic and strategic order, indeed globally important. It's our near neighbor. At the same time, the opinion polling conducted by the Lowe Institute shows a pretty extraordinary, I guess, degree of misapprehension and misunderstanding, misperception about Indonesia in this country. For example, only one in three Australians realise that Indonesia is a democracy, which is a pretty extraordinary result. Do you think that the government has missed an opportunity to build a truly deep and lasting relationship that goes beyond this kind of transactional relationship leaving from one crisis to another? And what can be done to fix this? The coalition has already stated that our foreign policy priorities will include broadening and deepening our relationship with Indonesia. In fact, we believe it is one of our most significant relationships. We are concerned about our trading relationship. A country of 245 million people, yet New Zealand with 4.5 million people has a greater trading relationship with Australia than we have with Indonesia. That's why we want a free trade agreement. The new Colombo Plan, which is a new era of soft diplomacy, soft power diplomacy in our region, will be focused on ensuring that Indonesia is one of the first countries to opt into our plan so that we can encourage young Australians to study at universities in Indonesia. And the partnership with business will ensure that our young students studying in Indonesia will have an opportunity to work with Australian businesses operating in Indonesia. I've had high level discussions with Indonesia about it and I've received overwhelming enthusiasm from them that they see this as a practical way, not just a gesture, a practical way of ensuring that thousands of young Australians have an experience of living and studying in Indonesia, learning the language, understanding the culture, coming back to Australia with greater understanding insights and perspectives about Indonesia. We think that it's got to be at a people-to-people level and initiatives such as the New Colombo Plan, such as greater dialogue between businesses, including the free trade agreement with Indonesia will all help to build a much closer and long-lasting relationship based on mutual respect and trust and understanding. That's why we have guaranteed to the Indonesian government that we will adopt a no-surprises approach to our relationship with Indonesia, which means that we will consult with Indonesia. We don't want to see a repeat of the live cattle ban. We don't want to see a repeat of what's happened in border protection when Labor have announced East Timor solutions, Malaysia solutions, Nauru solutions, all impacting on Indonesia but not consulting with them beforehand. It's all very well for Senator Carr to talk about being consultative. It's what you actually do. And that's why we've given them this guarantee of a no-surprises approach. Senator Carr, 131 senior visits, two ways since 2007. Indonesian leaders coming here, ministers, senior officials, or us going there, an average of one every three weeks. The level of defence cooperation, the police cooperation of counter-terrorism is more advanced than it's ever been. We've never had that level of comfortable cooperation with the Indonesians. Our biggest concentration of diplomats in the world is not in Washington. It's in Jakarta. And our aid program is the biggest and it's relevant. I've been to madrasses that are being built. Mainstream Islam in line with the policy of the government of Indonesia being taught as opposed to Saudi madrasses teaching their version because of thoughtful Australian aid backing the priorities of the President and his government. On my recent visits, I've engaged with people who are the likely presidential candidates in 2014. We've got dialogues going with them. When I spoke to the Foreign Affairs Committee of the Indonesian Parliament, every one of the people at that meeting had a son or daughter studying in Australia and studied in Australia themselves or had a grandson or granddaughter studying in Australia. We've already got, of course, that reverse Colombo plan. It's there, it's existing, and it's funded. It's called Asia Bound. It offers 4,000 grants a year for Australians to study overseas at a cost of 47 million. That exists. You've got Australians to go there along with Australia awards that are bringing students to study their master's or their PhD from Indonesia into Australia like their foreign minister, Martin Atlegawa, who did his PhD at the ANU. Like so many of the people I meet in Indonesian leadership enjoying as they served. A very cooperative relationship with Australia. Our relationship is in good repair. It's robust. The sound it takes into account, Indonesian interests and ours. Ms Bishop, a reply? Our new Colombo plan is designed to be a right of passage for young Australians. The norm, rather than the exception, not a couple of thousand scholarships every now and again, but the norm for young Australians to spend time living in the region. And I hope that Indonesia will be one of the first countries. And Senator Carr talks about what's been achieved. Well, I'm concerned by the results of the low poll and that there is this level of understanding and misunderstanding, should I say, between Australia and Indonesia, particularly at the people to people and business to business level. And we need to adopt what foreign minister, Martin Atlegawa has called his idea for a Treaty of Friendship and Cooperation that he's talked about, based on trust, communications and managing our challenges together. And I believe that Australia and Indonesia have a long way to go, but I'm absolutely convinced that the best days of the Australia-Indonesia relationship lie ahead. Thank you, Jane Hutchins. Your next question is to Senator Carr. Senator Carr, the Australian government spent at least $24 million lobbying to secure a seat on the UN Security Council. But this has barely raised our international profile, nor has the position produced any substantive outcome if we compare our history before the Security Council seat. That's one third of the way into the tenure. Now, our image abroad is about how hard we work at keeping foreigners away from our shores. How would you improve Australia's image as a foreign policy leader, where we punch above our weight in terms of ideas and strategies to solve global issues rather than the reality of being a middle-ranking power happy to participate, but providing no creative leadership? I really got to dispute that interpretation. Australia is seen as a creative middle power. In fact, the consensus in the forums of the world is that we decidedly punch above our weight. Decidedly. I don't know where you got that interpretation, but I went through it. I mean, your election to the Security Council is a rough and ready test. It's not a bad KPI of where you stand. And to have 14 nations of the Caribbean say, hang on, we're a long way from Australia, but we like them. To have every, just about, we find it hard to locate a nation in Africa that didn't support us. And when Kevin Rudd spoke to the African Union, he stood up and he said to them, we're across the Indian Ocean from you, but we're not America, and we're not Europe, we're Australia. And we've got our own perspective. He got rousing applause, and they voted for us because they liked that approach. They liked the character of Australia in World Affairs, and they'd say, you are a creative middle power. You are a creative. The Arms Trade Treaty were one of the seven original sponsors, and it was our ambassador, Peter Wolcott, who in the final negotiations got it up, nailed it down. One of the reasons the Caribbean nations and the African nations like Australia's style in World Affairs. We did that. And in Geneva, they saw Australia say, this is a horror in North Korea. Not only do we lend our support to an inquiry in human rights there, but we're going to lend you a judge to see it through. Now that's the Australian image in World Affairs. And when it comes to immigration, stopping people come to Australia, every country in the world has got a concern with people smuggling a regular immigration, human trafficking. So when I phoned foreign ministers to say, my prime minister thinks we ought to have a conference to look at how the UN Convention on Refugees works in practice, there was support from Asian and European foreign ministers, not resistance, not resistance. Australia is soon as a creative middle power. I'm not going to reflect on other nations and their foreign policy. But I tell you what, there are nations that are emerging powers or pivotal powers or middle powers that are not seen as creative, as forceful as Australia. Winning that debate to get the G20, lending its weight to getting the expansion in the membership of the East Asia Summit. In all those forums, we're seen as a serious contributor. It doesn't mean you always win, I wanted a medical pact on Syria. There's reluctance, you know, how deadlocked the international community is, the leadership of the international community is tragically on the subject of Syria. But it doesn't mean you don't fight. And when we had meetings of the friends of Syria, there was Australia in the front line saying, let's get medicine for these wretched people and let's protect the doctors and nurses and the hospitals in this war-torn, devastated country. Ms Bishop. I believe that Australia's image overseas is positive. I think that we are considered a constructive middle power and our image is of course dependent on our ability to maintain a strong and stable and prosperous economy. It's dependent upon the quality of our engagement and how we use our membership of fora at a global level and how we live up to our values that we espouse, our commitment to our values of freedom and democracy and the rule of law. If we were elected to government and I were honoured to be appointed the Foreign Minister of Australia, I would use our position on the United Nations Security Council to pursue our strategic goals, which include ensuring that our neighbourhood and by our neighbourhood in this context, I mean the Pacific is secure and prosperous. And I would use our position there to focus the Security Council's attention on the Pacific to show leadership and vision in the Pacific, to ensure that we don't have failed states in our neighbourhood. And as I've said, our standing in the world is at its highest when our influence in our region is at its strongest. And I fear that in the Pacific, our place is being taken by others. And I believe that with the focus from the UN Security Council, as well as our own far deeper engagement in the Pacific, then we will be achieving what the world expects of us to support our region, our neighbourhood. Senator Carr, one more minute on the Security Council. I just caution on that last concept. The role of the Security Council, of course, is to work on peace and security. It's a big step to say you'd take matters out of the Pacific and lodge them in the Security Council. I don't think our neighbours in the Pacific, Fiji, Vanuatu, Solomons, P&G, would respond happily to an Australian Foreign Minister saying we've got these issues. We're going to lodge them as disputes in the Security Council. Well, I didn't say that. Well, they gave strongly the hint that you thought matters out of the Pacific, should go to the Security Council. That's not what the Security Council is there for. It's there for threats, to handle threats to peace and security. Send a message to our neighbours in the Pacific that somehow behaviour or conditions there warrant reference to the Security Council is a big concern. Ms Bishop, maybe you can respond to that in the next question, which has some similarities. Let me go to Paul Kelly, if I can, to ask the next question to Ms Bishop. My question to the Shadow Foreign Minister, it's about China and the United States. And I might begin by saying that I don't think it's good enough for us to say that we think everything will be OK. My question is whether we have the sophistication in our foreign policy to manage future ties with both China and the United States. I ask, is it your view that Australia's prosperity will become more dependent on China in the future? And that Australia will also become even closer to the United States in strategic and military terms. If these are both your views and calculations, can you explain in credible terms a policy framework that makes this viable for Australia? And secondly, how should we prepare for tensions between the United States and China that might lead to conflict? Once more, there's an assumption here that the United States and China will at some point end up in military conflict and I do not subscribe to that theory. I believe that the United States and China are now so interdependent that there is far too much to lose for them to engage militarily. This is not the Cold War. This is a completely different scenario where it's a multi-polar world where the United States and China have such economic integration that the likelihood of them engaging militarily is in fact, subsiding. The engagement between the US and China on military exercises is increasing. The United States and China have a strategic and economic dialogue, which they both take seriously. There are more people in the United States State Department focused on the China relationship than we've probably got in all of the Department of Foreign Affairs and Trade. So I believe that the United States has a very sophisticated approach to its engagement with China. I believe that China has a very sophisticated approach to its engagement with the United States. And of course, there will be tensions, but I do not believe that Australia will be asked to choose between our growing economic reliance on China and our increasing defence ties with the United States. I know you have a view on this, Paul. I read your article in American Interest recently. But I do put it in this context. There are other issues where the United States and China must work together. Tensions on the Korean Peninsula, for example, concerns over the Middle East, for example. And while they might take different positions at present, ultimately, I believe that we'll find a greater level of cooperation between the United States and China than your question would suggest. I do believe, as John Howard said yesterday, that Australia can, sensibly, maturely, in a sophisticated way, manage its relationship with China and its relationship with the United States. But as I indicated earlier, we should not be putting all our eggs in one basket, economically speaking. We should be diversifying our trading relationships beyond just China. Nobody's mentioned India. Well, I did about the free trade agreement. But India is another player in the global scene, an emerging global economic powerhouse where Australia must deepen our connection there. So we need to have a much more diversified approach to our economic underpinnings, as well as ensuring that we engage in the increasing cooperation between the United States and China, for example, in military and strategic exercises. And another player in all of this is Russia. As Russia is asserting itself as a Pacific power, that also must be fed into this equation. But I'm convinced that the United States and China, being so interdependent, will not gamble losing it all. Senator Karam, I'm going to give you a few extra seconds if you want to take them to even it out. How China expresses its greatness, its re-emergence as a dominant economy in the world is, of course, the question here. Will it be an engine anxious over assertive China, or will it be a China comfortable about its power, working in all sorts of multilateral fora and engaged and educated about the rest of the world, understanding the rest of the world and understanding America most of all? I veer to Miss Bishop's optimism rather than to the implied pessimism of your question. I believe, as Miss Bishop says, that both sides have got a big stake in making this relationship work. And when there's been a slide to what might have been a misunderstanding between China and the US, for example, during the economic and strategic dialogue, both sides did the right thing. I think we've got to work with ASEAN. We've got to work on a piece. We've got to work in a spirit of seeking a peaceful resolution of the disputes that exist, the territorial disputes that I referred to earlier in South China and East China Sea. Resource sharing is a positive contribution that Australia is sponsoring work on that. Encouraging the military-to-military cooperation which reduces the risk of an accidental conflict by local commandants and, of course, continuing to engage China so that those pockets of paranoia or nationalism that exist in the Chinese commentary can be tested and teased out by the Chinese talking in forums like this, getting to understand us and our instincts as our knowledge of them deepens. Thank you, Miss Bishop for reply. I believe that the Australia-China dialogue, which has now been formalised between our governments, is a great opportunity for Australia and China to discuss these issues. We have a similar dialogue with the United States commencing this weekend. Again, Australia plays a useful part in being part of the dialogue. I think an example of how the United States and China have managed their relationship has been the tensions that could have arisen over some diplomatic issues involving asylum. You recall Boji Lai's police chief, the blind activist, Mr Snowden recently. And in all those instances, both the United States and China handled the potential for miscalculation or for misjudgment, deathly, maturely, and with a high regard for each other's position. And those examples are just one amongst many of how the United States and China have managed their differences. And long may that continue to be the case. Thank you. The next question from Rory Medkaft to Senator Carr. Thank you, Senator Carr. We've heard some words tonight about resourcing Australian diplomacy, about providing the diplomacy we need for all these future challenges. Now as a country, we seem to be spending more and more taxpayers' money and diplomats' time and energies on consular cases. On Australians, who've gotten themselves into trouble overseas, sometimes through their own fault, sometimes not. We've heard cases of Australians getting in trouble overseas, having to be evacuated on emergency flights and then asking for frequent fly points to the experience. Now at the same time, our diplomatic service as it can be argued, been starved of resources over the years. It's been stretched and it faces huge challenges in meeting the kind of agenda we've heard about tonight in advancing Australia's interests in the world. Will you commit here and now tonight to increasing the resources of the Australian Department of Foreign Affairs and Trade and providing it with what it needs for the challenges that lie ahead? And what in your view is a sensible limit to the consular assistance that we provide Australians overseas? I'm going to announce shortly a, shall I call it a refinement, in the level of consular service that Australians are able to seek from overseas posts. I think they're sensible reforms. They respond to the concern reflected in your question that we've got too much diplomats, too much diplomatic time being taken up looking after Australians who in many cases should be taking responsibility for their own safety in regard. But that, their own safety and their well-being. But there are cases, there are cases where an Australian in trouble has got a reasonable expectation that we will insist on them being treated with due process. And we will look after their welfare should they be one of the 600 Australians who were arrested last year overseas. It's a reasonable expectation I think. What's striking is that not every Australian calls for that assistance. The last time I was briefed about 55 Australians in jail in China, I think we've only heard of three cases that have punched their way into the media. Three cases where families have been concerned or disaffected with the level of assistance they've received. There are a lot of Australians in trouble with the law overseas who take it as it comes. But you're certainly right, when people were evacuated from Lebanon, it struck me as being the height of unreasonable expectation calling out for the nanny state that they turned around and said to a hardworking Australian diplomat with his sleeves rolled up trying to bundle them onto a plane, will I get frequent fire points from this rescue mission? That's not the sort of country we imagine ourselves to be. I think we can lower expectations just a bit. And Senator Carr on the first part of Rory's question about the resources. Yeah, look, I'm a spending minister and I will fight hard to increase the share that my department gets. In the circumstances we've faced in recent years, it is being tough. The revenues are down. There's pressure on any department. We've feared well in the last budget. We're expanding diplomatic missions. I'd like to expand faster. But expanding in Africa and I was up there opening a new Australian consulate general in Chengdu, giving us a base in Western China. I'm deeply appreciated by the Chinese. It's going to be a practical assistance to Australians doing business. I want to see more of that. And I will be enlisted for battle with the treasurer should we be re-elected to get the resources I need for a department with the aspirations and the qualities and the talents that DFAT has. Spaceship. I think it's hard to make generalizations about how consular cases should be handled overseas. Clearly, on a case-by-case basis, they differ dramatically. But we do need to manage expectations of Australians travelling overseas. Many more Australians are travelling overseas to many more countries. And there are now airline services to places unimagined in the past. And so Australians are an adventurous lot. They like to be travelling the world. But then when they get into travel, they want to have Qantas fly them home. And we have to manage those expectations about travel insurance, about reading the travel advisories from the Department of Foreign Affairs and Trade, having a realistic expectation of what your government can do for you when you're overseas. And particularly some of these cases where Australians have broken the law according to another country. There is only so much the Australian government can do if you have broken the law according to the laws of that country. And so managing expectations is a challenge for any government. I don't think it is helpful for consular cases to be managed at ministerial level through the media. There may be some instances where media pressure by a minister is appropriate, but I can't think of too many. And so I think we should be leaving it to our experts those trained in this to do the best they can behind the scenes to assist where appropriate. But Australians should and can expect a level of support from their government should they get into trouble overseas, but we can't solve all problems. As to the second part of your question, I have committed to a review of Australia's diplomatic footprint overseas to better reflect our priorities as a nation in the 21st century. I have spoken also of a realignment of all of our agencies to ensure we have a more efficient and effective focus on our core mission. That will see efficiencies, but I also think it will see DFAT assume its rightful place as the coordinator of our international engagement overseas. It has lost that status for a number of reasons. A lot of power and resources has now been put into Prime Minister and Cabinet. And every department, it seems, across government has an international arm. What I want to see is DFAT become the lead agency once more, a place where our best and brightest want to work and stay in DFAT. Senator Brinkford-Plyer? Yeah, I think we're very well served by DFAT. I don't think there's any doubt that there are sharp vines and serious thinkers in the department. In government, you need coordination. There are other agencies with an interest in the arguments overseas. We've seen that as we've looked at irregular immigration. And one thing that struck me in the short time I've been in this post is the effectiveness of the National Security Committee of Cabinet. I believe under Prime Minister Gillard and under Prime Minister Rudd, it is a rigorous but collegial process. Ethos counts more than structure in politics or in government. And the ethos around that committee table works every time. I think Australia can be proud of that. I think it is effective. We have got through the questions a little quicker than anticipated. And I think we have time to squeeze in one more question to both. So with the permission of the speakers, I'm going to ask Rory to ask one more question to Ms Bishop, and it'll be the same structure as before, first three minutes to Ms Bishop, then three minutes to Senator Carr, and then one more minute to Ms Bishop. Rory Metcalf. Thanks, Michael. And this is, I guess, at one level a philosophical question, but it goes to much that's been said in the debate tonight. I hear the note of, I guess, optimism about Australia's future that I think comes through the remarks of both yourself and Senator Carr. At the same time, if you read the kinds of assessments that are out there in the public domain, for example, the US National Intelligence Council last year put out a report on the world to 2030 or 2035, talking about really major changes ahead in the global order, whether it's economic changes, demographic changes, environmental challenges, the strategic order, new technology, military threats and so on. I guess what I want to put to you is at what point would you have, I guess, a sense of urgency about the challenges ahead for Australia in a sense that we can no longer have a business as usual approach to foreign and external and security policy, and how would you level with the Australian public about that if you reached that point? I think that the indicator would always come back to our economic security and stability. And if I felt that our economic security and stability was threatened by some of the scenarios that you've mentioned, then that would be a time to change tack, to do something different, to respond, react. I hope that the foreign policy direction that I've outlined tonight will ensure that Australia can avoid that kind of scenario by focusing on economic diplomacy in our trade and investment requirements, by focusing on a new region for us, if I call it the Indian Ocean, Asia Pacific or the Indo-Pacific as others call it, or Tony Abbott says more Jakarta, less Geneva by a new era of soft diplomacy that is exemplified by a new Colombo plan. So I hope that we have the ideas and the political will and the political leadership to ensure that Australia continues to be a strong and prosperous nation and therefore continue to be an open and liberal democracy. I think that a very interesting report is the World Bank's report 2030 on China. After all, as I mentioned, China is the largest trading partner for over 120 countries around the world. What happens in China matters globally. And the World Bank says that even with all its challenges, as long as China continues to grow, even a third as fast as it has in the past, let's say at 6.6% over the next 30 years, rather than 9.9% as it's done over the last 30 years, then it will still become an enormous economy that will outstrip the size of the United States by 2030. The World Bank has set up the challenges that China faces in terms of its domestic reforms that will be required, looking at more innovation, more private sector investment, the debt position at all levels of government, the social reforms, the open, more unfettered access to opinion that will be required. So if we look at the challenge from China, for example, even given its challenges that lie ahead, there's optimism about the strength of its economy. The United States that some were writing off recently as being in severe and irreversible economic downturn has bounced back in the last 12 months through its creativity and its innovation with the shale gas revolution, so-called, which has potential to transform the global energy market and rebuild United States manufacturing so that it is a global powerhouse into the future, Australia benefits from both those examples. Senator Carr, small population, vast continent, countries with big populations to our north, no guarantees about their futures. Of course, one's got to dwell as an Australian on the strategic challenges. At the fall of Singapore, February 1942 was the darkest day in Australian history. Every day in this job, I think, is this country, is this people going to be secure as we project into the future? Can we make assumptions about our security? Here are some goals, here are some ideas that I think feed extra security for Australia. One is assisting the emergence of 10 resilient economically successful societies to our north, the nations of ASEAN, the 10 nations of ASEAN. Within ASEAN, for example, seeing the emergence of a zone of prosperity from ASEAN on the border of Myanmar through to Yunnan in southern China, a zone of prosperity interconnected, that connectivity that's the big as again thing. 10 resilient societies, prosperous, stable, a zone of prosperity through Indo-China, from India to southern China, and a shared strategic understanding which we are building specifically with Indonesia. That's important, and that economic growth and political maturity of Indonesia vital as well. China achieving rich world status by 2049, which is their goal, and which they need all the recommendations out of the World Bank report to achieve, is vital as well. But rich China is less likely to take risks and to be subject to desperate nationalistic pressures. Our alliance, our strategic alliance with the US, kept in good repair, a month-by-month proposition, but it's vital to Australians and a secure future, and I don't take any risks with it. Australia awards, by the way, are seven times bigger than the Colombo Plan ever was. They're important, but they're running stronger and far more decisive than the old Colombo Plan, plus its heart, ever did. So let's not look at this with the nostalgic glow. They were good on their day. It says that what we're doing now, called the Australia Awards, is seven times bigger. One minute of reply, Ms Bishop. Economic strength is vital to our future security. That's why we're so critical of the way labour have mishandled our budget and squandered the opportunities over the last six years with record debt and record deficit. How this impacts on our security is evidenced by the fact that we are reliant on the US defense and security umbrella, yet we have been accused of freeloading off the United States because spending on the fence has been cut to the lowest level as a percentage of GDP since 1938, this year, 1937. So we cannot be complacent about the economic challenges that face this country. That's why we need a change of government to put our economic credentials back on track, pay off labour's debt again, pay off the deficits again, and put it back into surplus so that our economy is strong once more, it leads directly into our security requirements. Ladies and gentlemen, we've reached a point of the debate for concluding remarks. Ms Bishop and Senator Carr, you'll have three final minutes each. And for this final part, can I ask you please to highlight the three main areas where your policies on international issues differ most clearly from the other sides? Ms Bishop, you go first, please. In my introduction, I said that I wanted to achieve a focus on economic diplomacy for our trade and investment opportunities, a focus on our region, which I've defined as the Indian Ocean, Asia Pacific, and a focus on a new era of soft diplomacy exemplified by our new Colombo Plan. Three areas where I believe we differ dramatically from the government is our approach to the distribution of foreign aid. We will make aid for trade a cornerstone of our aid policy. We will put in place benchmarks, performance benchmarks against which our aid budget, our aid spending will be judged to ensure that we have the most efficient and the most effective use of our aid budget and the best value for money, not only for our taxpayers, but for the recipients. We believe that we should be promoting sustainable economic growth rather than aid handouts in the region. Secondly, we are committed to concluding free trade agreements. Free trade agreements with our major trading partners. Foreign policy will be trade policy. Trade policy will be foreign policy. We, of course, will be focusing on the Indian Ocean, Asia Pacific. That includes the countries such as India, China, Indonesia, through to the Pacific, including the United States. But I want us to be the partner of choice for countries in the Pacific. With our great friends in New Zealand, I believe it's time for us to change the nature of our engagement in the Pacific, to get away from the stereotypes of aid donor, aid recipients, and have true economic partnerships based on mutual respect and understanding with the nations of the Pacific. With Fiji, we will commence the process of re-establishing the relationship with our wonderful friends, the people of Fiji. We need to have greater recognition in our region of what we actually do. I was at Samoa's 50th independent celebrations recently. And you would have thought that the greatest aid donor to Samoa was the United States, China, followed by Israel. I couldn't see a reference to Australia anywhere. We need to have a much greater effort at promoting our influence, our friendships, and our connections in the Pacific. And if I am known for one thing, should I be the foreign minister, I hope will be that we became the partner of choice for Pacific nations. Thank you, Ms. Bishop. And now, Senator Carr, Ms. Bishop got the first word of the debate, so you will have the last word. Three main differences in three minutes, please. Well, we are the partner of choice because every nation in the Pacific, apart from Fiji, voted for us in that UN Security Council ballot. And because they looked to Australia. And you've got to be careful about linking aid to trade. When we say we'll wipe out malaria in the Solomon Islands by 2020, it's got nothing to do with trade. It's got everything to do with rescuing people from a devastated life. When we say we're going to train midwives in Cambodia as we do on a big scale to drive down the rate of maternal death from 500,000 to 100,000 births to something where it is in a developed country, 20 or 10 per 100,000 births. It's Australia doing the right thing. Australia doing the right thing because we're a decent country with decent values and our behavior overseas reflects that character. Now, the opposition is different from us on Palestine because we voted in the UN proudly, not the bloc enhanced Palestinian status. We're proud of that. And we voted with old friends, like all the Europeans except one, we voted with the UK. And we voted with all the nations of ASEAN, not to see Palestine relegated. Australia would lose a lot in the Arab world where we do dump that commitment to supporting a Palestinian state, providing aid, which the opposition has criticized, aid to Palestine has been criticized, I've been quizzed in the Senate about it and there's no doubt that that would be withdrawn. Another difference is Tony Abbott's constant talk of an Anglo-Sphere. An Anglo-Sphere offers Australia comfort, but if Tony Abbott were to start talking about the Anglo-Sphere as Prime Minister, it would send a message all over the world that somehow we were retreating to the old Australia and our engagement with all parts of the world, Asia especially, but Africa, the Caribbean I spoke about earlier, Latin America, where we've got big interests, big mining interests, was somehow not highly regarded by us. To have another Australian Prime Minister speculate or opine about the Anglo-Sphere is one thing, but coming from Tony's mouth that raises the prospect that you're gonna have a conservative Prime Minister drawing Australia back to the certainties of the 1950s. And I don't think Australians want to be cleaning up that mess. Family planning, I noticed that one big part of our foreign aid program is to rescue women and girls by providing support for family planning. And it was barely there under John Howard because of a deal he struck with Brian Harrodin in the Senate. We've lifted it. I'm proud to say as foreign minister, I've got it up to 50 million, a steep increase to help women and girls in developing countries. And yet we faced a resolution in the Senate where 10 shadow ministers, colleagues, of which Australia should not be supporting family aid programs. That's a big difference. That's a big feature of our foreign aid. Ladies and gentlemen, what a rich and strikingly optimistic discussion we've had tonight. Can I first of all thank our panelists, Jane Hutchin, Paul Kelly, and Rory Medcar for your questions. Thank you most of all to Ms. Bishop and Senator Carr for your participation this evening for doing so in such a good spirit. Ladies and gentlemen, you may recall that in the 2011 Republican presidential debate, Governor Rick Perry pledged to shut down three federal government agencies, Commerce, Education, and OOPS. Ladies and gentlemen, we didn't have any Rick Perry OOPS moments this evening. Quite the contrary. We had two politicians at the top of their games presenting their visions for Australia's relations with the world. So thank you again, Senator Carr and Ms. Bishop and thank you everyone else for joining us this evening for the 2013 foreign policy debate. Good evening.