 This conference, the theme of this conference, global realities and domestic choices. The sub theme is around much of, is it around much of the developed world. Governments are finding it more difficult to build political and community consensus around good policy. They're having trouble making good policy equal good politics. Here to discuss this over the next 50 minutes or so, we have of course Malcolm Turnbull, who to Australian audience needs little introduction. To many of the international audience needs little introduction, but of course, deserves an introduction. Malcolm Turnbull, former journalist, barrister, internet entrepreneur, investment banker, Republican movement leader, minister for the environment and water policy under the opposition, under the Howard government, opposition leader, and now member, minister for communications in the Abbott government. As Gareth alluded to, someone when we're talking about good policy and good politics has been really at the crucible of politics in Australia over the past decade, being opposition leader in a very difficult time for an opposition leader in the high watermark of the Rudd Labor years, experiencing what it's like to have public opinion polls for an opposition leader, very difficult, lost to Tony Abbott and the leadership stakes by one vote that must be excruciating. And now is in the interesting position of finding himself one of the most scores very highly, perhaps most highly of any political leader in Australia in terms of who would you like to lead the country, where as Gareth pointed out, it's in the unusual, unusual situation that most of that support comes from the Labor Party rather than the Liberal Party, which now Malcolm, if we can start off with that one with the theme of this of this conference and the session, the terrific session we had first thing this morning, that one of the global realities for Australia is that our really unique circumstance that the driving source of our material prosperity is due to is also the new strategic rival to our defence ally and protector. We had this morning what could be called the Kurt Wu and Hushou, where a few whites suggested that the US is in denial over its challenged primacy, and that this denial could be itself a source of conflict. We had Wu Xin Bao suggest that there are limits to Australia's how far Australia can seek to deepen its already deeper strategic alliance with the United States, if it wants to get the full benefits of the economic relationship with China. And then Kurt Campbell forcefully denied that Washington was like some sort of heroin addict hooked on the primacy, primacy of maintaining primacy in the region, and that much of the problem is that getting is getting in China to engage outside Chinese version of a zero sum game, where the parable is always one of American weakness, decline and retreat. This tension seems to be rising amid territorial maritime disputes in the region. How do you judge the risk of serious miscalculation here, which could lead to some sort of serious conflict in our region? Well, I think the first the first thing I'd say is that China's foreign policy in recent years has been singularly counter productive. If China's objective was to persuade the United States to pull back from this side of the Pacific, from the Western Pacific, or to play a less forceful role to manifest its, its latent and and active power less, obviously, then what it would need to do is to create the highest level of trust and confidence among its neighbors. And if you look at the way as a good example of what I'm talking about, if you think about the year, the decades following the declaration of the Monroe Doctrine in, I think 1824, Americans, please correct me if I'm wrong, the, the Americans gently pressured, not always so gently, but gently pressured the United Kingdom to pull out of that Western hemisphere. And the British were happy to do that. Because they saw the United States as being substantially a benign power and the countries in the region, in the, in the Americas saw the United States as essentially a benign power. But, and that's, that's, you know, that's pretty obvious, right? You don't need to be a strategic genius to work that out. What the Chinese policy has been, which I think is curious because it has been so counterproductive, it has been to muscle up to one or other of its neighbors, or all of its neighbors at different times. It has, it has no really no allies in the region, but from North Korea, that sort of ally you need when you run out of enemies, I suppose. And, and the, and the consequences being that these our neighbors, China's neighbors are drawing closer to the United States. And then ever before, well, then, then for a very long time. So I, I think the question is what is the risk of a miscalculation? There's always a risk of a miscalculation. It's not terribly meaningful to express that type of risk as a percentage because the consequences are so gigantic, you know, the, I think it's a lion Hank Polson used the other day when he talked about there being a few potholes, but they are very, very deep. And so, I mean, that's my, that's my overall view. I, I think it's a pity because the, the Chinese policy a decade ago was much more accommodated. I think the, if you look at the way China settled its borders with Russia, for example, in 2004, I think the, as many of you know that there's a big chunk of what is now Siberia was essentially stolen by the Russians during China's weakness in the period of the unequal treaties. There were two in the 1860s, two treaties, one in Peking and one in Aigun, which essentially took the whole Amal Sky, what is now the Amal Sky region. China recognizing that it is getting stronger vis-a-vis Russia every year as Russia's population declines, Siberia depopulates, China gets stronger, could quite easily have just put those issues into the bottom drawer and said, we'll, we'll come back to that in 20 years time consistent with Deng Xiaoping's injunction back in 79. But instead, those borders were settled. They'd been, you know, renegotiated a very small adjustment was made. And I thought that was a, at the time I thought that was a very signal move. But the, the sort of envelope pushing and testing in the South China Sea is, I, well, it, far be it from me to advise Beijing on foreign policy, but I don't think it's calculated to achieve what I assume is the objective, which is to have greater freedom of, to move in their immediate vicinity. But Malcolm, would you accept, which I think probably all the three speakers this morning would have said, except in some way, that the international order and the framework and the institutions needs to work harder to accommodate what is the, the reality and the inevitability of rising a Chinese economic weight and hence strategic, strategic weight in the region and the world. Yeah, but, but it has to be done on a basis that people can live with. I mean, it really is extraordinary to see the Vietnamese being pushed closer and closer to the United States in strategic terms. That is remarkable. That that's quite an achievement. You think of the history. The, you know, you get back to there. There are two great passages and facilities that I often think about. This is his history of the Peloponnesian war. I'm talking about, of course, the relevant to this. You know, one is the one that Hugh White talks about, where he says the, where facilities explaining the causes of the Peloponnesian war says the cause of the war was simply that the trust had broken down. The both sides became anxious about the growing strength of the others. That was the, that so it wasn't so much a single incident. It was a fear of, of the, of the new rival. But there is another bit that I think is, is perhaps more relevant is in book five where the, the Athenians go to the island of Milos, which was a neutral city in the, in the war and demanded that they become allies of Athens. And the, the millions said, no, we just want to be neutral. We just look, you know, we're just doing our own thing here. Give us a break. Fair is fair. And the Athenian ambassadors led by Alkeviades said, look, cut the crap. You know, as well as we do, that in the real world, justice is to be found only as between equals and power. As for the rest, the strong do as they will, and the weak suffer as they must. Now, if that's the message that China is sending to its neighbors, they will say, we a better get closer to the one guy that is as strong, if not stronger than China, and B, we better make sure we're strong ourselves. So my contention is that the Chinese, their current foreign policy as to as distinct from what they were doing over a decade ago, I think is genuinely counterproductive in the sense that it's like the United States, you know, policy towards Cuba, it is counterproductive in the sense it frustrates and makes harder to achieve the goal that one assumes you want to achieve. And would this China's aggressiveness, as you might put it, tempered by what's must be their own realization that it would damage any serious conflict would damage their own their own economy, and presumably hence the control of the of the party, if you like, on the on the country. Well, as we're being, you know, in this the year that Centenary of the First World War, we're reminded of a war that broke out, which was obviously going to damage the economies of all of the participants that still broke out. So, you know, that's, you know, rationality doesn't always prevail. I'd make this observation, though, as between the United States and China. A United States administration, a president may not survive an unsuccessful war. Sometimes they do, sometimes they don't, but let's say they don't. But the United States Constitution would. A war, you have to ask yourself, whether the regime itself, I don't mean the actors, I don't mean the the members of the Politburo or any or any of the individuals, but would the system survive the economic collapse or the economic impact of a serious conflict in the region. And I think that's the the in that sense. China has more to lose from conflict. I mean, everyone's got a lot to lose. But what China has to lose is existential, not in the sense that anyone's going to invade China or anyone saying is going to invade invade China. But given that the primacy of the Communist Party has been based on a bargain. And the bargain is you let us run the country. And we will deliver rising living standards. That's the bargain. And if that bargain were to be broken, those rising living standards were, you know, not to rise, there would be serious economic setbacks. I mean, you look at the way in which Xi Jinping is, you know, is I mean, every he and all his two predecessors have all said China needs to rebalance. They all know that household consumption has to grow at a faster rate than GDP. That is the only way you can get the share of consumption to grow overall, you have to have, you have to have a significant change. And that means pulling resources, pulling all of that free money away from the privileged, you know, Norman Clutura, not sure what the Chinese name for that Wang Yiping helped me out. But the, you know, the, the, the political leaders and business leaders to pull that free money away, because as we know, it's been supported by, you know, negative real interest rates. So there's been this massive transfer of wealth every year from households to to the banks and then on to business. But he's got a he's he everyone knows that has to be turned back. It's been that's been accepted for years. But the problem is what happens to employment. And so you can see there's a sort of almost a jittering going on in terms of policy at the moment. Now, if that if the if the leadership are anxious about that, what would their level of anxiety be about a conflict? And looking at the US on the other side, the Americans, they're still weighed down economically by the financial and fiscal crisis, still now being drained by these wars in the Middle East. How concerned should Australia be that Washington won't follow through on the pivot to the region? Well, I mean, I'm not sure what you mean by concerned, Michael. I mean, you certainly shouldn't be complacent. We have to look to our own defense. And we, and we, well, we, you know, we, I guess we have to, we have to doubt that the Americans have got to do it with this with the state of the economy. They're still battling that the the wars they're fighting that basically have the resolve and the way with all to to still play that the very strong primacy or primacy minus in the region. Well, what you're, you're sort of posing the question if I can refer to another publication, the economist posed recently was referring to Syria. How can anyone be sure any more that the Americans will turn up? That was the question, you know, question mark. I, I don't have any doubt that if there were a serious a threat to Australia or to any of America's allies in this part of the world that the United States would turn up. And I, I am again getting back to facilities and and the origins of that war. When there's a degree of misunderstanding and and and distrust about the other party's position, then there is a there is greater incentive to test the envelope. Right. And I think that the it may be that the Chinese strategy is to test whether America will react. That again, that is also, I think, a counterproductive strategy. So I'm not do I think Australia is going to be abandoned? No. But having said that, we've got to be able to defend ourselves as as best we can, given our resources. We cannot be complacent about our own security. Now, Hillary Clinton suggested over the weekend that Australia is putting too many of our economic eggs in the China basket, almost like Europe has done with its dependence on Russian gas. Are we overexposed or overweight China? I'm sure that we'd love to export vast quantities of iron ore to the United States. But they've never shown any enthusiasm for buying it. So I look with all due respects to the former Secretary of State, I, I'm not quite sure what she meant. And I suspected that observation wasn't given the deep reflection and consideration that perhaps it should have had. Okay, this is where we segue to everyone may may make the same. I mean, to quote Hillary back at herself, she is the one who referring to how dependent the United States were on China was on Chinese capital to fund the government debt. She said, how can you argue with your own banker? So I think in terms of in terms of dependency, I'm not sure that we're really, you know, we really need to be concerned about that. I again, I suspect that was a an off the cuff line without a lot of reflection. This is where we segue into domestic policy, domestic choices facing that we have to have in response to the global realities. Australia's well into the third decade of unbroken economic growth, as we also heard this morning, we've just been through our biggest investment boom in our history, we're sort of levels of prosperity we've rarely seen, relative to the rest of the world, yet the political system seems incapable of delivering the sort of reforms that we saw in the 80s and 90s. Fundamentally, why do you think that is? Well, I think John, I want to sort of channel John Edwards a little bit on this. And I mean, I see Ross Garneau here and you know, I've I've I've learned a lot from both of them. But I do think that it is a bit, I think you've got to be careful, assuming that the glory days of the reform era, you know, floating the dollar, for example, is something that you can do every 10 years. You know, there are some big changes that were made and it's hard to see what the reforms of that equal would be. I mean, this is Edwards' argument and I think there's some force in that. I do think, however, that there are that you've got to remember, and I just I just make this observation, Michael, you've got to remember that if you want to affect any reform or any change, you know, reform, you know, one person's reform is another's, you know, retrograde backslide, of course, but if you want to affect any change, you've got to persuade people they've got a problem to begin with. And this is why, you know, I think that the path of reform has got to be first explain the problem, and that doesn't just mean put out a report. That means really explain it and expose it and for people in my line of work, repeat yourself again and again and again. And then you've got to outline your solution and why that is the right one. But unless people accept that there is a problem, they won't, you know, they won't act. I mean, and to take a sort of not so controversial one, and I see Jason Clare is here, he's the Shadow Communications Minister, the post office obviously has massive, a massive existential problem, high fixed cost business, letter volumes declining every year at a, you know, just at a rate that will lead to nothing, eventually. So obviously all those profits are going to turn very soon into losses and unless there is change will require very big government subsidies to keep afloat. So the first thing to do when after the election, the first thing I did regarding post was to say to the management and the chairman, you've got to explain your position, be totally transparent about it, spell it all out. We've got some good third party verification so that people knew they weren't just talking their own book and I think we now have, there may be disagreements about precisely what measures should be taken, but at least everybody agrees there is a problem. And we did a similar, similar thing with the NBN, you know, it was important to explain, you know, why the, why the project was failing, how, you know, how much it was failing by and then lay out a solution. So I think that's the, you know, perhaps if reform is getting more difficult, perhaps it's because we're not doing a good enough job at explaining the circumstances that give rise to the need for it. So some of the big policy areas of our times, do you think the Australian people, and this is a, this is a discussed this morning as well, do you think the electorate agrees or understands right now that there is a serious budget problem confronting us now? I think increasingly they do, but it takes time, you know, we just have to keep on getting, you know, that, look, the numbers are very clear. If you, business as usual trajectory leads you to $667 billion of debt within the decade, we are, you know, prior to the budget, prior to our budget, assuming our budget gets passed, prior to our budget we were spending significantly more than we were receiving an income. And my, you know, my point to our friends in the Labor Party and our critics elsewhere is very simple. Do you think this is tenable? Hardly anybody says yes, you know, so okay, so that's not tenable, we've got to do something about it. All right, the only way to fix it is to spend less or, and or raise more taxes and you can do that in any number of ways. There's an almost infinite range of possibilities there. We have set out some changes, spending cuts, revenue increases, if you don't like that, that particular mix, what is your alternative? And I, I mean I, and that was my criticism of Bill Shorten's budget and reply and, you know, I was opposition leader for one budget and reply and at the time in 2009, at the time we were very concerned that nothing we said could be accused of making the budget outcome worse and we did object to the removal of the private health insurance rebate and so we proposed an alternative measure, slugging the poor old smokers again, it's always a good one to have, but Ken Henry knows that's a good one, you can always pull out of the top drawer when you want to raise some more money and so at least we had it, so people could say you don't like that, what are you going to do about it? Well here's an alternative, it'll raise the same amount of money and you get the same bottom line. I think that's what Labor should have done. But getting away from Labor versus Liberal and so forth. Sorry it's hard. You've said that, you know, the real precondition for getting changes to explain to people the reason for change and they understand it and then suggesting that people are now starting to understand the problem, you know, weeks after the budget was brought down, isn't it the fact that at the last election, you know, neither side of politics was really up front with the electorate to say, you know, we didn't really need to go through a my-ifo exercise and all that sort of thing to know that we did have a big budget issue and that they both agreed that in a sense that the Australian public didn't want to hear that message or that neither side could break ranks and say, you know, we're going to have to some takes things away from you and money's been falling from the sky for 10 years and it's been great but now we're going to take some of that back. Well look, we've been hammering debt and deficit for a long, new themes of debt and deficit for a long time and you remember during the GFC we opposed part of the, the second and larger part of the Rudd government stimulus, which was very unpopular. So I think our credentials on that are good. If what you're saying Michael is that people have not not enough people are aware of the scale of the problem, then clearly we have not done a good enough job. I mean, you know, in terms of getting that message across. I think the, when my, you know, my experience is that when, once people accept that we are in a very structural way, spending more than we're receiving, they recognize that something has to be done. Now as to what, look, I, I send out to my, some of, I'm sure many of you are on my email list. So you know how I persecute my constituents and supporters and friends. So I send out about 60,000 emails in my budget e-letter. 3,000 of those recipients responded to me. Most of them at some length, when I say at some length, you know, two or three or more paragraphs. So it wasn't, it was a, it was a huge labor reading them all and replying to them all, which I've now done. So if you've got my e-letter lying in your inbox and you haven't replied to it yet, it's, it's old news, don't bother. It moved on. But anyway, what was, what was interesting was the number of people that wrote to me and said, I agree with you that we've got to do something about it, but I don't think you should have done this. I think you should have done something about negative gearing. I think you should have done something about superannuation. And you know, there was a, and that's the sort of debate that we should be having. I was having a better quality debate in my email correspondence than we're having in the House of Representatives. Because people were proposing alternative, you know, they were saying, you know, we think your measures are too tough on, on people on low incomes. Why don't you, you know, tax the rich more or hit super more or, you know, and there were all sorts of, you know, there are any range of, of proposals. But that was, that's the sort of policy. See, again, I don't, I don't want to make, turn this into partisan rant. So I'll just make this one observation. That is what a responsible opposition would have done. A Labor Party that was responsible would have said, yes, we've got to do something about this, but you know, this deficit, I might have said it wasn't reframed it slightly, but said, we have got a different set of measures and proposed a set of measures that, that from, that they thought would be more defensible, more popular, perhaps that would have been a smarter thing to do. But instead, there was basically no alternative. You just promised you weren't going to go. The member for Fraser, the member for Fraser would have done it when he showed our treasure. But are we in danger now? I promote him, you know, we, we're all promoted. Are we in danger? Because we all know, you know, Gareth, you know why we, people think we promote Andrew Lee to make him uncomfortable on the opposition benches. That is not true. It's not true. It's because all of us know that at some point, the political cycle will turn and there'll be a Labor government again, hopefully a very long way off. So we just like there to be someone that's highly numerous and economically responsible, somewhere near the top of the tree, you know, and he's a young man, he can wait till he's in his early 60s until that occurs. Stop it, stop it, stop it. Are we, are we in danger of really now going backwards? You know, we, policy tried to get industrial relations reform up and it not only did it collapse, it went backwards. Tax reform under Labor was, was botched, quite frankly. Carbon pricing is now sort of looks like the great Australian experiment of a carbon price is going to collapse. The budget is having trouble being sold. And for one, one point that strikes me is, you know, Australia's now got a top marginal income tax rate. Just got to have one from, you know, tomorrow, basically 49%. New Zealand is 33%. Wow. Like are we just in some key areas, are we seriously going backwards? Well, I, I, there is no, one of my, one of the great mistakes that was made was when Ken Henry produced his fine tax review, ably assisted by a number of people in this room, including Heather Ridout, who I see over there, it should have been released immediately. This prop, you know, governments might be your commission. You may very well say that, but I couldn't possibly comment. But the, but the, but you see the, you see that there is, there's a lot to be said for getting reports out quickly. I mean, you see with the, again, I'll just speak for myself, for the strategic review and the NBN, which is quite a controversial document, that lingered on my desk for days, literally for days. And then it was out. We got it out as quickly as possible. And we'll do the same thing with the report from the Vertigan panel. Because the, you know, often when you, if you, particularly if you want to promote discussion, you want to get it out. And then if you publish your reports, if, if Ken's report had been published at the time it was given, and every journalist said, rule this in, rule that out. What about this? What about that? The treasurer could have said, look, I've only just got it. It's, you know, it's thick as a phone book. I'll give me a break. I'm going to take it off and read it over the summer. And, and then you could have had a, a much better debate. And I don't think the RSPT would have, I think the flaws in that, you know, Thea was one of those things that works in theory, but not in practice. I don't think that would have seen the light of day had there been a proper debate. So, yes, I think you do need to get that stuff out there and debate it early. But there's always reasons to sit on this kind of, but they should be avoided. Really, the question is, are you yourself sort of feel uncomfortable with having, you know, top marginal tax rate going back up to like 49%, basically 50% while our close competitor, New Zealand has got 33% a third rather than a half. Well, there's no, there is no question that we are, we are far too dependent on personal income tax. And, and, you know, we are in a competitive world. I, I'm not suggesting that the, look, here's, let me, let me make this observation and see, see if in the discussion people agree with me. And I'm looking at this and I'm not a tax expert at all, but looking at it from sort of 60,000 feet, that's looking at Australia's tax raise, I assume you'd say that it is too tough on people earning income, i.e., the entrepreneurs, the people who are growing and driving, younger people in jobs, working hard, making money in their businesses, it's too tough on them, but is incredibly concessional to older people who have made their money. All right. And so that is the, now, you know, all of these areas are very hard to, very hard to deal with because any change invariably when people receive advantages from changes in government policy, they are sometimes grateful, sometimes regarded as insufficient acknowledgement of their worth, a slight change to their detriment and they become very angry. So that's why, you know, reform is very difficult. But I mean, that's, that, you know, we are too dependent on income tax, plainly. Thank you, Malcolm. Before we start to turn to the, to the floor, can I just ask you, I do have to ask you, I wonder what came into your mind when you heard that Clive Palmer was about to hold a press conference with Al Gore. Well, that was, it was not a lot. I mean, you, I think it's, I think it's better I think I think so as, you know, not to be subject to, to any more surprises than you otherwise would be, it's better to keep the mind clear when you hear about Clive being about to make a pronouncement. But it certainly was a, it certainly was a very effective PR start. I don't know, I would have loved to have had a penny, I'd give, I'd give a penny, I'd give more than a penny to know what was going through the Vice President's mind as he was standing there. Listening to Clive. But I, I thought, you know, Kevin Rudd patented that I've got a zip as a rather daggy way of ending a press conference. I thought Palmer's, I have an urgent dinner to attend. It's really trumps that. I mean, I mean, I think we should, I think we should all use that in future. Well, is this a sign that after we had, we've had several years of leadership turmoil in the Labor government, minority government, everything that went with this, that now under the new Senate, controlled by the Palmer Party, that the government is now going to be really hostage to populist whims of Mr. Palmer and his, and his groups and, and his group, and that this is a real challenge for the sort of rational policy making that this conference is really wanting to promote. Well, look, you know, there are not many governments that have enjoyed a majority in the Senate, number one. So having to wheel and deal with cross benches in the Senate is situation normal. The difference between our relationship with, say, Palmer and the other independence and the previous government's relationship with the Greens and the cross benches and the House is that they needed their support in the House to survive as a government. When we, you know, we have a very substantial majority in the House of Representatives. The only question is how much of our agenda can we get through the Senate? But that, that was, you know, that's been a problem for every government. It's a problem for John Howard in all but one term of his government. So I'm, the cross benches are broadly speaking from the center right. So I'm confident that we'll be able to achieve I'm confident we'll get the budget through the Senate. And I'm not, perhaps not every item precisely in the form it's been presented. But I don't see, I don't see it as being, you know, saying the Senate's and the, you know, the Senate's in control of Clive, Palmer or the nations being held hostage by Clive, Palmer or we're all sort of, you know, little dinosaurs in his dinosaur park. I mean it's just, that's getting too carried away. Okay. Okay, well, we'll turn for, if people catch my eye and there is a microphone coming around here and just identify yourself even though you might be very well known to people if you could identify yourself and your affiliation. Wuxin Bo from Fudan University of China. I enjoyed very much the conversation and getting back to the question about China's relations with the neighbors. I agree with you that China should manage carefully its relations with its neighbors when its capabilities are growing and China has been a major beneficiary of peaceful development of the last several decades and it should stick to the pace of peaceful development. However, bearing in mind that China has roughly about 20 neighbors land and maritime and they are issues left by the past between China and some of these neighbors. So I guess sometimes it's difficult for other countries including, you know, countries like Australia who has so few neighbors to appreciate the complexity and the challenges in managing relations with our neighbors. And also, you know, if we look at the maritime disputes, we have disputes now with several of our neighbors but for the relations with most of our neighbors, they are fine. They are normal. So I think we should not exaggerate the tension between China and its neighbors. It's true we do not have many allies but that's our policy. That's our choice. Our policy is not to forge allies with other countries. I think a right policy is to not to forge so much alliance but rather to, you know, have the minimum of enemies. So even though the U.S. has so many allies, it also has so many enemies in the world. That's not a good choice for China. And finally, when, you know, thinking about, you know, China's relations within our states, let's be careful not to put everything in the context of China-U.S. relations. I mean, the disputes between China and the neighbors, they have been there for decades. They are not necessarily a test of the U.S. policy or strategy. When the U.S., you know, pursue its rebellious to Asia strategy, it has its own global strategic thinking, not necessarily because of China. So it's very important for U.S. allies to bear in mind that U.S. has its own interests in pursuing its strategy in this region, not necessarily being, you know, challenged by China. So that's my comment. Thank you. Thank you. Well, in the words of Tony Jones, we should take that as a comment, but that's a good I think it would be fair to say though, I don't want to respond at length, but be fair to say though, notwithstanding your remarks, and I don't disagree with them materially, but there's no, I don't think there's any question that relations with a number of important neighbors have deteriorated in recent years because of these maritime disputes. And they're all readily resolvable. You know, as, and I mean, my question, I guess to you would be to say, why are they, why has China not been able to resolve them in the same manner that was able to resolve what I would have thought was a much bigger deal being the border with Russia? Because, you know, there you were talking about large chunks of Chinese territory that were, that were taken, you know, during the, you know, like, you know, the same way the Russians took part of the Liaoning peninsula, for example. Grant. Malcolm Graham Samuel. And let me just make a one quick comment about Clive Palmer. I think he's probably a better spinner than Shane Warren, but ably assisted by a fairly gullible media with the exception, exception Michael, of the paper with which you're currently associated and that that you used to be associated with just a couple of years ago. But that brings me to the media and you've been reported as saying that the media deregulation that you've been contemplating it's the subject of an excellent paper put out by the department by your department is subject to getting an agreement from all the major media proprietors. I'm sure that's a misreporting of the position I'm misstating of it. Is there a prospect that the public interest will be placed in ascendancy to that of the strong, powerful, private interests of the existing media? Yeah, definitely. Well, you know, our job is to serve the people as you know, as the government. Way Ren Menfu. And that is, that is our responsibility. We represent the people. Where we are the only point I made about getting some degree of unanimity was that particularly in, in, you know, the reality is this, that we have a big reform agenda on our plate. And I've got a big, you know, I've got, you know, the NBN to deal with, we've got some big issues, the public broadcasters, we've got post, we've got a massive deregulation agenda in terms of the telecom sector. And so media, the media ownership regulations are 1990s regulations. There's no question about that. They are pre, they're from a pre-internet era. But it's obviously a lot easier. And my only point was to say to the various entities and stakeholders was that if you, it's a lot easier for us to achieve change if there is a degree of unanimity. You know, if there is a pitch battle, that makes it hard. It was just a simple, practical point, Graham. And you know, you've made your compliment about the financial review and I obviously echo that and I just say that the real, probably the real reason why reform is so difficult is that not enough people read the financial review. We're working on that. Could I just quickly follow that one Graham's point Malcolm, that the media industry is probably the industry where the sector itself and all the incredible dynamism and the technology of the sector has outgrown the regulatory framework more than any other industry. So what are the barriers to basically having a fairly sweeping deregulation of all those rules on who can own what's in the internet world of whether you own a newspaper or radio station and these sort of, these sort of regulations. Well, look, I think there is a very, I mean I think it's pretty clear where my sympathies lie. I think it is very clear, very, it's quite clear that the media is more competitive now than it has been at any time in any of our lifetimes. The internet, okay, the media regulation was based on the concept of having a number of platforms which were limited. Newspapers, anyone could start a newspaper, of course, but the economies of scale made the barriers to competition impossible to climb. Television stations were licensed, radio stations were licensed. Then came along this Uber platform of the internet to which everybody has access and it has revolutionized and in some areas devastated media businesses. And so what you now have is much more competition than you ever had before. It's a completely different world and so the argument is, and this is really the point, Graham, that we're seeking views on and debate on, here is the proposition. Given the fact that this Uber platform, the internet is available to everybody and given the fact that there is more competition and diversity than there has ever been, say in our lifetimes at least, possibly ever, why should there be ownership and control provisions relating to the media that are other than those that are industry specific? In other words, let the ACCC deal. That may do. I mean, when Graham was running the ACCC, they stopped Stokes buying more of Foxtel, I think it was, yes, Foxtel. A lot of people say, oh, Malcolm, if you change the rules, it'll mean News Limited could buy Channel 10, News Limited can buy Channel 10 now under the broadcasting legislation. It's nothing to stop news buying 10. The thing that would stop them would be potentially the ACCC. That's the issue. So do you really need more than the general competition laws? That's the proposition. Then there's the perennial argument about anti-siphoning, which is to arcane to arcane to... No, no, that's where, that is where, can I tell you, I don't want you to think I'm very old, but I first represented a television network to a federal government on media policy in 1977. So I've sort of seen this film before quite a few times. Okay, quickly, Andrew Lee will try to get a few more questions in quickly. Thanks Malcolm, Andrew Lee. Look, I was tempted to mount a spirited defence of all the positive ideas Labor has put forward or to ask you something cheeky about your views on the loss of emissions trading, but exactly, and in view of your generous flattery, I thought I'd go to an issue that you've been thinking and writing about a little bit lately, which is the dearth of entrepreneurship in Australia. There's some good little bright sparks, but in general, fewer triadic patents than the typical developed country. And I wanted to know to what extent you think that's got to do with sort of tax and regulatory structures and the extent to which it's got to do with cultures around business failure and whether there's a role for government in changing that? Yeah, I think there are. I think there are some clear tax changes that have to be made. The changes to the tax law made in 2009 regarding employee share schemes and employee options schemes clearly counterproductive. And just for the visitors here, what these changes meant was that if a company gave its staff shares or options, which obviously startups do, because they've always got plenty of script, they don't necessarily have lots of cash, the employee had to pay tax on them on receipt, even though it was not saleable, it was hard to know what it was worth, etc. It killed that whole type of incentivisation. That that's got to be changed and we'll address that shortly. I think crowdfunding is another area that where we need, and you know there's a lot of work going on with that. There's been a report by KMAC, just an advisory body to government for the visitors on this area and I would hope that we would come close to emulating the President Obama's changes on crowdfunding. More generally, I think there are, it's puzzling, isn't it? I mean, why is a country, highly educated country, with a non-deferential culture, not have a stronger, a larger share of its GDP contributed from its own intellectual property? It really is one of those issues that does keep me and I suspect many of us awake at night and I don't know there's any quick fix with it, but I think a lot of it a lot of it's part of, is the tax issue that I mentioned earlier, but I think also a lot of it's cultural, perhaps something for a longer discussion. Thank you. And could you gamble? Minister, thank you very much. Very provocative, thought-provoking, Ford leaning discussion about the future. I just want to say a word of congratulations to Crawford and A&U. Really a good session, really valuable for us. Tom Pickering and I are here. Our cover is that we're part of this conference. We're actually the leading edge of a giant or iron or mining binge. We each brought extra bags. We're going to be traveling around the region to sustain American hegemony here in Asia as a whole. So thank you for that. I wanted to ask you a question. One of the reasons why Americans like or at least recognize Australian politics is frankly, it's colder here, but it's every bit is bitter in terms of the, in terms of the political dialogue. We ask ourselves a lot of questions in the United States. What has happened to the context of our political discourse? It used to be that we had a saying, a famous saying from the 1940s about certain kind of debates dying at the water's edge in terms we'd unite for common purpose. We see less and less of that in the United States and our politics have gotten more and more bitter. We see some signs of that in Australia. And I'd be curious to hear your views why you think that is and whether this is a temporary phenomenon or whether this is here to stay in Australia. Thank you. Well, I don't know that I don't know that Australian politics has ever been noted for its cheerful bipartisanship. So I'm not sure. I don't know that I could buy into the proposition that it's become worse. You know, perhaps every generation thinks the youth is worse than they were. I think we always think that our politics is deteriorated because we look back at the past through rose-tinted glasses. So I mean, look, what else can we say? I mean, the other thing is that the media environment has changed dramatically. And that is, a lot of people misinterpret this, by the way. They say this has given the media too much power. The media has never had less power. The proprietors have never had less power. You know, the fulminating editor, even a wise one like this, has less impact now than he or she did a generation ago because there are so many more sources of information. You know, in days gone by, I mean, I'll tell a story. You know, this involves a pin review. So don't take offense to this. The financial review some time ago published an article by John Roscombe. He used to work with me once and say, you know, he's a good guy, friend of mine, but he was, you know, scathingly critical of something I was doing. And I read that over my breakfast and quickly pounded out a blog, responding to it and being equally charitable towards his reasoning. Tweeted it, Facebooked it, and of course it started to get a lot of hits, and it was being widely read. By 11 o'clock, one of your editors rang up my staff and said, can we put Malcolm's blog on our website? And we said, sure, that's fine. And there it was. It was all by 11 o'clock. A newspaper that anyone who had read had probably read maybe at 9 o'clock or 8 o'clock. There was the response on the website at 11. Now in the pre-internet era, I would have been groveling and begging, you know, trying to make you feel guilty, then threatening you all. I would have played every, every emotional note, and you would have said one paragraph, that's all you're going to get, if you're lucky, you know. And that's the difference, you see. So I think we've got much more, politicians shouldn't complain, politicians have now got their own megaphones in a way they do not need to be intermediated in the way you used to be. And that is a very significant change. Okay, thank you very much, Malcolm. Thank you. I'll just ask everybody to think about how Malcolm's given us his time here. He's covered an incredible range of subjects. He's spoken very openly and freely. And I think it's very much in keeping with the spirit of this forum. So I could ask you just to put your hands together. And thank you very much.