 Today at the National Press Club, the Executive Director of the Lowy Institute, Michael Fulalov. A Rhodes Scholar, a lawyer and a fellow at the Brookings Institution, Dr Fulalov has been writing and thinking on international relations at the Lowy Institute since its foundation. Michael Fulalov will speak on the subject, A Larger Australia, in today's National Press Club address. Ladies and gentlemen, welcome to the National Press Club for today's National Australia Bank address. As we ponder the century ahead of us, the so-called Asian century, one of the key questions we face as a nation is, how does Australia best take advantage of the dramatic economic and other changes underway in our region? In fact, as a nation, are we big enough to take advantage of the opportunities on offer? That's a question our guest today sees as one of critical importance. A former Rhodes Scholar, as you heard, and advisor to former Prime Minister Paul Keating, Dr Michael Fulalov is Executive Director of the Lowy Institute for International Policy. A senior fellow at the Brookings Institution, he is recognised internationally for his views on both Australian foreign policy and broader global issues. Would you please welcome Dr Michael Fulalov. Well, thank you, Laurie, for that very generous introduction. I once saw Henry Kissinger speak in the United States, and I remember on that occasion the Chairman began by saying, no one needs an introduction less than Dr Kissinger. And Kissinger replied, yes, but no one enjoys an introduction more. So thank you, Laurie, it's an honour to address the National Press Club for the first time. Lowy Institute board members, ambassadors and high commissioners, colleagues, ladies and gentlemen. One of the most pernicious cliches in our foreign policy debate is the claim that Australia punches above its weight. This is meant to be a compliment, but in fact, it's inaccurate and demeaning. The truth is that most Australians underestimate our country's weight class. Australia has the twelfth largest economy in the world and the fifth richest people. We have a continent to ourselves. We are the sixth largest country in the world, with responsibility for 10% of the world's surface. We have good diplomats and a capable military. We belong to the world's most effective intelligence network, the Five Eyes community. We are currently the president of the G20 and an elected member of the UN Security Council. Ladies and gentlemen, Australia is not a super heavyweight, but we are certainly not a flyweight. People say we're a middle power, but there's nothing middling about Australia. We are a significant power with regional and global interests. We don't punch above our weight, we punch at our weight. And sometimes, I'm afraid, we punch below our weight. The phrase is not just wrong, however, it's also debilitating. It breeds complacency, because if we're already punching above our weight, then there's no need for us to do anything more. In fact, the reverse is true. We should brace ourselves, because in the next decade we will need to move up a weight division. We are facing unprecedented challenges that will test us as a people. And to pass this test, we need to muscle up. We need to be a larger country with a larger tool chest, a larger debate and a larger foreign policy. In short, a larger Australia. Ladies and gentlemen, for most of our history, the world was run by countries like our own. When the world map was painted pink, we were a member of the British Empire. Throughout the Pax Americana, Australia has been a treaty ally of the United States. The order that has prevailed since the Second World War has served our interests. Western countries ran the international economy. American predominance was embedded in international institutions and reinforced by the US military. But now two things are happening. Our great and powerful friends are becoming, in relative terms, less great and powerful. And wealth and power are moving eastwards towards us. China's economy should be the world's biggest within the next decade. Other rising Asian economies are also powering world growth. The Asian Development Bank predicts that Asia will nearly double its share of global GDP by 2050, thereby regaining the dominant economic position it held 300 years ago before the Industrial Revolution. But if the economic outlook is positive, the security outlook is unpredictable. Economic growth is magnifying interstate competition. A number of regional powers including Japan, South Korea, India, Indonesia and Vietnam are jostling for advantage. There are worrying tensions on the Korean Peninsula and in the East and South China Seas. And the contours of the most important bilateral relationship, that between the United States and China, are unclear. The United States is the world's leading power, the only country capable of projecting military power anywhere on Earth. Our alliance with Washington is overwhelmingly in our national interest. Any argument that we should downgrade the alliance in order to please China is wrong-headed. Let me assure you, unsolicited gifts to rising powers are not reciprocated, they are pocketed. It is true, however, that the challenge posed by China is unlike anything the United States has faced before. And there are worrying signs about America's readiness for the contest. Bloodied by its adventures in Iraq and Afghanistan and hungry for nation-building at home, the United States is turning inward. President Obama has little taste for forceful action, as we've seen in the cases of Syria and Crimea, and neither do most Americans. President Obama's most important foreign policy initiative is the Pivot to Asia, which he outlined here in Canberra up the hill in 2011. The pivot makes powerful strategic sense, but I'm concerned that America's heart isn't in it. The military elements of the pivot are hardly overwhelming, even if they all proceed. Politically, the pivot has gone off the boil. Last year, John Kerry made only four brief trips to Asia and 13 trips to the Middle East. Does that sound like a secretary of state who has pivoted? President Obama, too, has been distracted by troubles abroad and political dysfunction at home. It's very important that his trip to the region next month is not cancelled like the last one. Finally, the economic element of the rebalance is in trouble. Even if Asian states agree on the Trans-Pacific Partnership, the TPP, the Congress may not. And Asia will be watching carefully to see how hard the President fights for TPP, because if TPP fails, it will prove that the pivot has run out of puff. Meanwhile, China has plenty of puff. In the past three decades, China has remade its economy and lifted hundreds of millions of people out of poverty. And increasingly, its economic strength is mirrored in its growing military strength. The US National Intelligence Council argues that the Indo-Pacific will be the dominant international waterway of the 21st century, as the Mediterranean was in the ancient world and the Atlantic was in the 20th century. China wants to win the naval competition in the Indo-Pacific. Just last month, three Chinese warships did a lap of Java. And as one of my colleagues suggested, that voyage will likely be more consequential to Australia's future than any number of asylum-seeker passages over the past decade. Now, China's facade conceals frailties, of course. Still, even if we don't credit straight-line projections, and I don't think we should, it's clear that China has arrived as a global player. And there is an uneven quality to China's international stance. Usually quiet, but occasionally strident. Usually cautious, but occasionally combative. Always prickly, never entirely predictable. Sometimes Beijing's assertiveness spills over into bluster, as with the recent declaration of an air defence identification zone over disputed territory in the East China Sea. Ladies and gentlemen, I hope that the United States recovers its confidence and reaffirms its Pacific presence. I hope that China's foreign policy becomes more measured and predictable. But what if these hope for developments do not occur? What if the two countries face off in a new Cold War? Or, even more alarming, what if America retreats while China advances? What if Australia confronts the worst possible combination, a feckless America and a reckless China? I hope we avoid this outcome. I believe we can. But nation states must follow Disraeli's lead, hoping for the best, but preparing for the worst. And I think events in Crimea, just in the last couple of weeks, show that we can quickly find ourselves in worst-case scenarios. Ladies and gentlemen, for many years, Australians complained about the tyranny of distance. But now the tyranny of distance has been replaced by the predicament of proximity. Our new economic opportunities come with new political risks. We are closer to the world's booming markets and closer to the world's developing crises. We are less isolated and less insulated. Australians understand the predicament of proximity. Let me give you a sneak preview of a couple of results from this year's Lowy Institute poll, which will be released in full in May. On the one hand, this year, sentiments towards China have warmed. They've warmed six points to the equal highest level since 2006. On the other hand, nearly half of Australians, nearly half of Australians, think it's likely that China will be a military threat to Australia in the next 20 years, which is up seven points on last year. So how should we approach the predicament of proximity? How can we maximise our opportunities and minimise our risks? The usual answer to this is that we need to be smarter and shrewder than ever before. And that's true, I agree with that. But we also need to be larger. We need to be a larger country. The single biggest contributor to a nation's power and influence is its economy. Economic success allows us to afford the diplomatic and military capacities we require. It makes us more attractive as a country. It ensures that our leaders are listened to in the councils of the world. I think there are good grounds for optimism about Australia's economic growth in the future so long as we maintain the pace of economic reform. Both our economy and our strategic weight would benefit from a larger population. Managed properly, skilled migration grows our workforce, closes skill gaps, improves our demographics and thickens our connections to the economies around us. It provides a daily infusion of ambition and imagination. And those who say we can't manage the social and environmental consequences of immigration underestimate Australia. In 1945, we established the world's first immigration department. In the 35 years after the Second World War, we doubled our population from seven to 14 million without serious controversy or disharmony. And does anyone think that we are not a stronger, wealthier and more interesting country for it? Ladies and gentlemen, we can grow our population by settling more migrants and by boosting our birth rate. But we can also get larger by embracing the one million strong Australian diaspora. This group is well educated, well connected and well disposed to us. In business, in the academy, in the arts, the Australian diaspora is distinguished. It's a worldwide web of ideas and influence. And it should be a source of strength and confidence for us. Yet sometimes I detect a new strain of the tall poppy syndrome, let's call it the foreign poppy syndrome, in which we bristle whenever expats dare to express an opinion on our country. This is infantile. We should celebrate the successes of Australians wherever they are. We should use our expats as instruments of our soft power. We should draw them more fully into the mainstream of our national life. Creating a global community of Australians would help make us a larger country. Ladies and gentlemen, a large country needs a big tool chest, including an extensive diplomatic network and a capable military. However, Australia suffers from what we at the Institute have called a diplomatic deficit. Over the past two decades, DFAT has been run down and hollowed out. In the late 1980s, the Australian Foreign Service fielded more than 900 highly trained diplomats overseas. Today, the number is one-third less. Now, more than ever, we need a first-rate foreign service. Our economy relies on trade and foreign investment. Our region is changing before our eyes. The demands for consular assistance from Australians travelling abroad are multiplying. All this requires energetic and creative diplomacy. And yet Australia has the smallest diplomatic network of all the G20 nations and close to the smallest in the developed world. Our network of 95 diplomatic posts looks puny, compared with the OECD average of 133 posts. We have fewer missions than Norway, Sweden and Belgium, even though these countries are smaller and located more securely than we are. It is madness to starve our diplomatic service like this. For the last five years, the Lowy Institute's arguments that Australia needs a larger and better resourced foreign service have met with vigorous and bipartisan nodding. Now, we need action from the government. Let me make one suggestion. The government's decision to merge AusAde into DFAT and align our foreign policy and development interests more closely has much to recommend it. The resource split between the two organisations had become unbalanced. Now the government should preserve some of those savings generated by the merger and also by the reduction in aid and preserve those in the foreign affairs portfolio so that it makes our diplomatic tool chest larger, not smaller. Ladies and gentlemen, we also need a more capable military. Australian defence spending is too low given our strategic circumstances. Indeed, our defence spending has scaled down at exactly the moment when other countries in the region are scaling up. In the past few years, defence expenditures slipped way below 2% of GDP, reaching a level not seen since before the Second World War. Now, it's important to recognise this. That didn't reflect a view in Canberra that the neighbourhood is getting any safer. It was not accompanied by a reduction in the expectations that we place on our defence force. Quite the opposite. Both the 2009 and 2013 defence white papers sketched out ambitious goals for the ADF. But as the government reduced spending and deferred acquisitions, a gap opened up between our ambitions as a country and our capacities. And this signals a lack of seriousness, which is a very dangerous signal for a country to send. A more capable defence force would better enable us to protect our territory and our citizens and hedge against the alarming scenarios I mentioned earlier. It would lend us weight in the eyes of potential adversaries and earn us influence in the minds of friends and allies. It would allow us to contribute effectively to the stability of the South Pacific. Now, I acknowledge that 2% is not a magic number. Apart from anything else, the money needs to be well spent. Outputs matter as well as inputs. But the point is this, both political parties and almost all experts in the field recognise that the current inputs are too low. And both political parties promised at the last election to increase spending to the 2% mark. What matters here is numbers, not words. If the Abbott government is to live up to its promise of achieving 2% within a decade, it will have to make hard choices. And the sooner the journey back to 2% begins, the more likely it is that we'll reach our destination. If the government starts to bend the trendline upwards now, then the slope of that trendline will be realistic. If it waits for more propitious financial circumstances a few years down the track, then that trendline back to 2% will look unrealistic and unbelievable. Ladies and gentlemen, in addition to a larger tool chest, we also need a larger debate about our country's role in the world. And as I'm speaking to the press club, let me start with the media. The coming changes will affect all Australians. They're not just for policy wonks. And yet the quality of Australian media coverage of international issues is drooping. Just as it is important for Australia to have a voice in world affairs, it is important for us to have Australian eyes on the world. Unfortunately, Australian eyes are closing. Australian news organisations are shutting foreign bureaus, including in Asia. The number of Australian foreign correspondents is small and shrinking. I noticed that all the commercial TV networks cover the British royal family slavishly, but none of them has a full-time correspondent in Beijing. And if foreign coverage is getting thinner, the debate at home is getting flatter. Much of our international debate is deeply unserious. For example, the routine criticism of overseas travel by senior ministers, let's call it the Kevin 747 phenomenon, is ridiculous. It's an epic example of small country thinking. I accept that some politicians have poisoned the well with pleasure trips. But it's a sign of our immaturity that we would assume that senior ministers travelling abroad are either bignotes or rotas. It reveals a depressingly shrunken opinion of Australia's possibilities. And let me assure you, other countries don't distract themselves with this kind of nonsense. Hillary Clinton was celebrated for the fact that she travelled a million miles as Secretary of State. Ladies and gentlemen, if this remains the standard of our debate, then we are in trouble as a country. But we can do better. In the 1980s, Australians conducted a lively and intelligent debate on economic reform. We can have a similar conversation this decade on Australia's place in the world. As a small contribution to this debate, the Lowy Institute established a new media award last year to recognise excellence in Australian coverage of international affairs. It is time to put aside childish things. Let's focus Australians' minds on the world and tilt the national mood towards a larger foreign policy. Let me finish on that concept of a larger foreign policy. To me, a larger foreign policy is one that combines ambition and coherence. Ambition indicates a willingness to see ourselves as players, not commentators, to take aim at the really big issues. Coherence indicates an ability to match ends and means, to use our limited resources in ways that can really make a difference. Ambition is about imagination. Coherence is about execution. Now, I acknowledge that achieving both ambition and coherence at the same time is difficult. There have been hyperactive periods when Australian foreign policy was ambitious but incoherent, when we had big ideas but little ability to bring them off. And during these periods, I noticed we were quick to urge countries to do things that we were unprepared to do ourselves. You remember Teddy Roosevelt spoke softly and carried a big stick. We spoke loudly and carried a small stick. But perhaps the default mode of Australian foreign policy is the opposite. Periods characterised by policy laziness in which we rested on our laurels, fell back on old relationships and old slogans and pursued a small target strategy. There are, of course, outstanding examples of ambition meeting coherence. The initiatives of Bob Hawke and Paul Keating to stand up APEC and then upgrade it to a leaders summit. John Howard's crucial intervention to help East Timor on the path to independence. Kevin Rudd's contribution to the G20 during the global financial crisis and the new ballast that Julia Gillard brought to the China relationship. These initiatives were both creative and credible. They required policy creativity and flair on the one hand, along with hard work, persistence, focus, pragmatism, and attention to detail. Most importantly, they took leadership. In foreign policy, as in life, the tone is set at the top. Prime Minister Tony Abbott and Foreign Minister Julie Bishop have established between themselves an effective working rhythm. The PM is fortunate to have a foreign minister who is hardworking and energetic and prepared to depart from outdated policy as she did on Fiji. It remains for Mr Abbott to decide on the couple of issues or countries that he wishes to focus on himself, in particular, as Prime Minister. My suggestion to the Prime Minister is that one of these, although certainly not the only one, should be Indonesia. Our relationship with Indonesia will always be difficult. We are so close and yet so different. Often, it seems transactional and fragile, hostage, unfortunately, even to the whims of the Corby family. In recent months, it has founded under the weight of spies and people smugglers. Yet both nations have an interest in refloating the relationship. And Mr Abbott has a few advantages on this score. In opposition, he put Jakarta at the centre of his foreign policies. In office, it was his first port of call. If his government can stop the boats, it will earn him credibility in Indonesia. And focusing on Jakarta, rather than the anglospheric capitals of Washington or London, would give the PM the advantage of surprise. Two of Mr Abbott's recent predecessors, Paul Keating and John Howard, thickened the relationship with Jakarta by building personal relationships with Indonesian presidents. Who knows what opportunities this year's elections in Indonesia will create. As Bismarck observed, leaders must listen for the rustle of God's mantle through history and try to catch his hymn for a few steps. The PM should listen for the rustle. Ladies and gentlemen, Australia has a choice. Do we want to be a little nation with a small population, a restricted diplomatic network, a modest defence force and a cramped vision of our future? Or do we want to be larger, a big confident country with an ability to influence the balance of power in Asia with a constructive public debate and a foreign policy that is both ambitious and coherent? Are we content to languish in the lower divisions or do we want to move up in weight? We need a national conversation about this choice and I hope we decide to think big. Thank you. Michael Fuller-Love, thank you very much for your comments today. Certainly we'll generate some interesting discussion, I would think, and also some interesting questions, hopefully. And our first one today is from Malcolm Farr. Malcolm Farr from news.com.au. Dr Fuller-Love, thank you for your address. In a matter related to the various global movements you were pointing out, there are a lot of major international institutions which still have that Anglosphere stamp and also an old Cold War stamp. If I can go to the G8, is it time for a change of its membership as in the removal of Russia? For two reasons. One, Russia hasn't been a very pleasant country of late in Ukraine and also Syria, but also the G8 is a group of economies and Russia is no longer qualified to be a member. It's GDP is lower than that of Brazil and probably lower than that of India, has it outlived its role in some of these major institutions? Thank you, Malcolm. Look, I think it's an understatement to say that Russia hasn't been behaving well. It's quite sinister, isn't it, to see Russian soldiers in unmarked uniforms on the streets of Crimea? To me, it emphasises that even though we've worried a lot about non-state actors in the decades since 9-11, there is nothing as dangerous and as destabilising as state-on-state conflict, especially conflicts between big states. And I think the centre of those sorts of conflicts are moving in our direction. So when I thought about Crimea in the lead-up to this debate, I decided, perhaps not coincidentally, that it reinforced my themes. Because history is moving towards us and we need to be ready for it. In terms of the G8, I think more important than that is the G20. In the middle of the global financial crisis, the G20 was awarded a battlefield promotion, if you like, and the G20 became the Premier Forum for International Economic Collaboration. It was a good example of Australia punching at its weight. We can have debates about whether Russia should be de-invited from the G8. I suspect they won't attend. But for me, the G20 should really be the focus for Australian policymakers, especially this year. Mr Rabbit has a wonderful opportunity with the G20. Imagine the opportunity to introduce yourself to the world's leaders and to host them all in your own country in your first year as Prime Minister. To me, that's an opportunity worth grabbing. A question now from David Denham. David Denham from Preview Magazine. You certainly can't say that you didn't avoid the big pictures and I think it's very good that these big issues are being discussed. I think they've been too often pushed under the carpet. Thank you. I've got a couple of questions. We might take one at a time, but we'll come back for a second. Oh, all right. We'll do all that. All right, well, I'll ask the first one then. How big should we grow as a nation? What modelling have you done on this? Because even if we grow to double our size, we're still going to be minute in terms of China and Indonesia. And we need to maintain our prosperity. And what modelling have you done? Say, look at water supply, congestion in the cities. Where's the extra taxation coming from? Could you give us an indication of what you think the optimum population should be and why? I think nominating a number is a mugs game and I don't think it's necessary. I think it's about having confidence in our ability to deal with these problems. I think we should have confidence. We have the pragmatism. We have the common sense to deal with these issues. We have shown in our history that we're able to deal with it. Of course there are limits that are imposed by the environment, by various issues. But to me, the benefits of immigration are that they bring imagination and ambition to our country. I mean, my Chairman, for example, is a story of immigration and I assure you I feel his ambition and energy every day. But many of us have an immigration story. My father actually was a British immigrant and he immigrated to Australia and he was in the film business and he started work on a little Australian production called Skippy, The Bush Kangaroo. So this iconic TV series was directed, at least in part, by a POM. And so I think we can come up with numbers and I've seen numbers from IAG and others that I think are pretty persuasive. But the point is that I would say we can do this. We can expand the numbers a little from where they are at the moment, 130,000 skilled migrants. We can do it, we can grow our economy and we can become a larger country. No, we haven't done modelling on it. Thank you. David, would you like a second question now? Okay, fine. Nick Stewart. We can come back to David. I'll stay here all day. Can I, Nick Stewart, from the camera time? So I think that's a bit of a cop-out saying you won't actually say how many Australians you reckon there should be. It's a pretty... You must have some sort of idea. I reckon most people would be able to say, well, it's about right at the moment or well, you know, maybe a million more maybe 10 million more maybe 50 million, which is it? I'm not... You know, like most of that speech, actually, it didn't convince me at all. But what I want to actually say more particularly, you talk about rating the DEFAT... Sorry, rating the AusAid budget for DEFAT, that's perfectly okay. How much more would you like us all to pay in tax to boost defence back to 2% of GDP or where are you going to cut it from the Disability Network or from where? Well, thank you very much. I'm sorry I haven't persuaded you so far. Let's see how I go. Look, the Productivity Commission says that if we maintained our current migration rates then we'd be at 42 million in 2060. I think we could look easily to increase that by 10 or 20%. So there's a number. We could easily increase our migration numbers from where they are at the moment, about 210,000 in total, of which about 130,000 are skilled. We could easily increase that by 10 or 20%. And if anyone really thinks that is beyond our capacities as a country, then they have a very low opinion, indeed, of Australia. In terms of the Defence Budget, let me just say this. This is a matter of choice. This is a matter of political choice. This is a matter of political priorities. The numbers that I've suggested of 2% of GDP is not unachievable. It's completely within the historical range. You're probably unaware of it, but between 1939 and 1992, that is between the start of the Second World War and the end of the Cold War, we were always at 2% of GDP. We've got close to 2% under Mr Howard. In fact, just a couple of years ago, we nearly hit 2%. So although it's not a magical number, it's completely achievable if politicians make the choices if they prioritise it. Of course, they're going to have to make decisions that other things are less important than this. But I hope that the arguments that I've made will persuade them, even if they didn't, you that this is important enough to prioritise. So where do you cut first? I have read Mark Thompson's figures from ASPE about the amount of money we spent on defence. Where do you cut? Where are you going to take National Disability Network? Which particular area? Well, no. We're the Institute for Domestic Policy. We're the Lower Institute for International Policy. And I've come here to make a strong argument that Australia has hollowed out its international capacities. No, no, let me finish. Well, let me finish. I assure you that in a 350... What's the federal budget? About $350 billion, is that right? The defence budget is what? $26 or $27 billion. I think we can increase that a little. I think the government can square that circle. Okay, the next question now from Simon Cullen. Mr Fuller Love, Simon Cullen from ABC News. You spoke about expanding the DFAT presence overseas, and you say that it's been met with vigorous and bipartisan head nodding. I guess it's also been met with vigorous and bipartisan pursuits of budget surpluses, which hasn't been met as yet. Overnight we've had the Foreign Minister, Julie Bishop, say or announce that Australia will share some foreign resources with the UK. Do you think that's a happy compromise given the budget situation? I think it's fine to be flexible in how we manage our representation. Absolutely fine. I'm not here to say that every Australian embassy needs to be a big, fancy building right in the middle of the capital with lots of well-padded diplomats and well-clothed diplomats, perhaps. I'm not talking about super-sizing the Australian diplomatic corps. I'm talking about building muscle mass. So if that means working with like-minded countries, that's fine. But I just pivot back, if I can, to the bigger point. Talk is cheap. Compared to defence, which the previous questioner was concerned about in terms of the dollars, talk is cheap. Diplomacy is not expensive. It's madness. Not to save the sense here and not see the bigger picture. That in a region that is changing, where the issues are coming at us faster and faster, when there are more Australians speaking to the media every day and demanding assistance for their relatives abroad, to short-change the diplomatic service is crazy. Look, on that point, how far would you see the savings through the re-merger, if you like, of AusAID with DFAT going towards what's needed? Is it a major contribution or not? We don't know all the numbers about how much aid will be reduced by. We'll find out more in the budget, I'm sure. I imagine that the merger of DFAT and AusAID would, I don't know, but I imagine it would save in the vicinity of $100 million. That would make a pretty significant addition, actually, to the DFAT budget. Let me give you another couple of examples, if I can. One-third of Australia's posts are what are categorised as small posts, which means there are three or fewer Australian-based diplomats. I'd like to see us have some larger posts that have some ballast that can do some real, energetic, creativity diplomacy on the ground. I'd like to see increased representation in North Asia, in Eastern Indonesia. I'd like to have a ban, if you like, on closing embassies. I don't want to see any more embassies closed. I think we can open embassies. This is not being profligate. This is what a country of our weight can afford. This is what a country of our weight should do. Do you want to ask the whole question? Are there any perceived risks, do you think, in Australia's foreign policy independence does merge some resources with the UK? I think those things can be managed very effectively. The UK and Australia are like-minded countries. I think that we would be unlikely to merge those facilities. I mean, we are probably likely to use those merged facilities as force multipliers, if you like. I'm sure we're going to maintain missions in countries that are absolutely critical to us. But if you look at something like Crimea, I think it was last year that we closed a post in Budapest, if I'm not wrong. We are practically unrepresented across much of Central Europe. And yet, what is happening in Crimea has obviously massive implications, not just for the world order, but for our ally, the United States. I mean, does anyone think that the events in Crimea are not going to further distract the United States government from the pivot to which they've committed? I would like to think that we had diplomatic representation across Europe. And so we shouldn't be closing future embassies. We should be opening more. And if that means sometimes opening them in conjunction with like-minded friends, great. A question now from Nick Perry. Nick Perry, Australian ASA State of Press. Thanks, Dr. Fuller for the address. Thank you. In terms of Australia not being a flyweight, how realistically do you think Australia could help manage a potential conflict in the future between two real superweights that China and the US did touch on this during our speech? I was hoping you could elaborate more on that particular point. And also whether you feel there is real political and particularly public appetite for Australia, what some may say, sort of sticking their nose in an affair that is significantly larger than perhaps our cloud would allow. Thank you. I think it's about signalling a presence in our region. It's not about sticking our nose into bilateral disputes that don't involve us, but it's about saying that we have our values and our opinions on the world and we have significant enough capacities that we can influence the balance of power. I mean ultimately we are never going to be anything like obviously the United States or China or even Japan in terms of weight. We're not going to get there. But I think by expanding our weight we can make ourselves more of a force to be reckoned with. As I said, we can earn credit with our allies and friends. We can change the mental perceptions. Now you asked about is there public appetite for this? Is there public appetite for Australia to play a big role on the international stage? Absolutely there is. When we've asked Australians in the past about the value of Australia belonging to organisations like the G20 when we asked them during the campaign for the UN Security Council did they support that? We got strong majorities for that. We asked them in 2013 how important it was to increase the number of Australian embassies and consulates in Asia. And 73% said it was important. So the public I think is on board. I'm afraid it's when it comes down to the media debate that we get lost. Let me give you one example. The weird debate that Australia had over a number of years about whether we should belong to the UN Security Council. This weird debate where we all sat around and chewed our lips and said can we afford a diplomatic campaign? Can we afford to send a few diplomats to meetings? No serious country would question that because although the UN is not the be-all and end-all it is the UN Security Council is the most important effective crisis management forum in the world. And every country would say of course it makes sense for you to be represented on that once every quarter century so that you can influence the debate so that you can be at the table. And yet we had this crazy debate about the cost. Could we afford it? Even though if the campaign cost $25 million as the government said at the time that would be I think 10% of one of the cost of the RAF's globe master transport aircraft. I love the globe masters by the way Angus. But are we really saying in that debate that two years in the thick of the geopolitical action was worth not 10% of one aircraft? Really we need to think big. I think the truth is Australians are up for this. A question now from Zhu Hejing. Dr. Fuli Love Zhu Hejing from Xinhua news agency of China. First a comment about Chinese foreign policy and Chinese Foreign Minister Wang Yi delivered a remark at the press conference last week and I think it offers some clear clue to the Chinese foreign policy and its predictable ability. Sorry. My question is would you mind sharing with us your view on Australia's government's foreign policy especially is handling the obvious relations with China since the government took office last year. Thank you. Well first of all in terms of Chinese foreign policy as I tried to say in my speech I think there's a dualism to Chinese foreign policy. On the one hand it's not expansionist or extreme and in many ways China has been slow to claim the influence it deserves. But on the other hand it is impossible to miss China's influence and ambition. When you say you talk about the predictability of Chinese foreign policy I've been struck that China has been quite silent when it comes to Russian behaviour in Crimea. I know that issues of state sovereignty and non-interference in territorial integrity are crucial to Chinese foreign policy. It's there the pillars underneath Chinese foreign policy and I would have thought that China would speak out on the way Mr Putin is conducting himself. In terms of how Australia has conducted itself with China I think it's entirely creditable. I think we should try to thicken our connections with China we should certainly in no way try to contain China. It's a ridiculous suggestion that a country I mean China is our biggest trading partner. China is much too large to be contained. But having said that I think we also need to state what our positions are what our values are and I think we should stick to that. I think China like most great powers respects consistency and clarity. It respects it when countries, it respects other countries when they say clearly what their positions are on world issues and sticks to those points. I've never heard a sinologist say the one thing the Chinese respect is weakness. I've never heard that. I think the Chinese respect strength and clarity and consistency and I think that's what we should give to China. A question now from Mark Kenny. Mark Kenny, Dr Fully Love from the agent City Morning Herald. If we had the Foreign Minister here or the Prime Minister and I asked this question I imagine I'd get a diplomatic answer but as you pointed out the Lowe Institute is a think tank that looks at foreign policy and can I think speak more frankly about these things. So can I put it? He's building it up here. Indeed I am. Can I put this question to you there's a fair bit of tension between Japan and China the Prime Minister is of course visiting Tokyo, Seoul and Beijing in a matter of weeks what do you think the prospects are for conflict between China and Japan over the islands in the south and east China seas and other issues frankly what do you think the prospects for some sort of conflict are in that region of the world and I suppose hinging off your thesis about the weight that Australia can deploy in the world is there any role for Australia in that relationship? I don't know if this will satisfy you but I think the prospects are hard to quantify and for that reason they're worrying. It's very worrying when you have military vessels and other sorts of vessels involved in clashes in these sorts of areas it's unpredictable and for that unpredictability is always a matter of concern in international relations let me say that one positive one little speck of silver lining out of the awful and ongoing tragedy of MH370 the Malaysia Airlines is that the militaries of China and the United States and Australia indeed and other countries in our region are operating together well in the South China Sea and perhaps there are some habits and some behaviours that are developing there that might last beyond this tragedy I think the key to getting predictability into those relationships is for cool heads to prevail it's for people to consult not to act unilaterally and that's why I was disappointed by the declaration of the ADIZ in the East China Sea I thought it was unnecessary and it caused disquiet throughout the region what role should Australia play I think we should state clearly what we think about those issues we are never going to turn the balance of power one way or the other I think it's important that we do state what we think without getting so caught up in it and that our interests are adversely affected Mr. Schubert Mr. Schubert is the director of the National Press Club Dr. Fuller, thanks for your speech and thanks for that excellent anecdote about your father's contribution to Skippy the Bush kangaroo brought back a great memory of my own as a backpacker in Central America many years ago when I presented my passport at a Guatemalan border crossing and the guard actually looked at my Australian passport on the coat of arms and grinned and started singing the theme song to Skippy so there you go, brand recognition you were talking in the latter part of your speech about how your advice to Prime Minister Abbott would be to look to Indonesia as a sort of central signature foreign policy contribution of his own and I wondered if you could unpack that a little further and talk in some slightly greater detail about what you see as the possibilities there for deepening or enhancing that relationship between Indonesia and Australia well thank you very much I've also had that experience of the Skippy theme song being sung to me in Czech and various other countries around the world, my brother and I joke actually that we're the sons of Skippy in terms of Indonesia, I guess what I was trying to do was to make an argument that we can be positive about Indonesia the relationship is in a state of disrepair, let's face it the revelations from Mr Snowden that you all have covered in such great detail have weighed down the relationship Operation Sovereign Borders is fraying the relationship at least in the short term, we know that we hope that in the long term if the problem can be solved then that will take a pebble out of the shoe I think that's what we can hope for but there's no question that the relationship is in some difficulties but I do think underlying it that Indonesia has an interest in getting this relationship back on an even kill just as we do Indonesian presidents tend to want to have a strong relationship with Australia I don't think that President SBY who's been a great friend of Australia will want to leave office with the Indonesia-Australia relationship in the situation that it's in and so I guess when I look at this year and I accept that there is a lot of nationalism abroad in Indonesia I know it's an election year in Indonesia which means that there may be appetite for some populist debates but at the same time I guess I'm saying there are some positive opportunities the other way the idea that SBY will want to leave the relationship in better ways than it is now and I guess the need for flexibility in international relations the idea that there may actually be an opportunity this year that Prime Minister Abbott can grab on let me give you, let me unpack as you say the point I made about Keating and Howard in my speech. Paul Keating built adroitly a very deep personal relationship with Sahato that you remember led to that relatively short-lived security treaty with Indonesia Mr Howard was equally adroit I remember distinctly that he went to the inauguration of SBY even when most of his advisors were saying this is not normally done for heads of government to do that he made the initiative to do that because he thought this is an opportunity to build a relationship and in the aftermath of the boxing day tsunami under Mr Howard's leadership Australia led the world in the aid that we supplied so I don't exactly know what the lever might be this year it depends how events turn out but all I'm saying is sometimes we need to be not in a crouched position worrying constantly about the Indonesia relationship we need to be realistic but also optimistic and hopeful and ready to jump on to anything that we see Catherine Murphy Dr Fuller love Catherine Murphy from Guardian Australia Yes indeed just a specific question about the new government in China given Rudd's branding and Labor's branding over the last term was quite intimately bound up in getting China as it were understanding China having fluency about China how do you rate the new government's China literacy and by that I mean Tony Abbott and Julie Bishop and in terms of your remarks on American isolationism do you see any prospect of a reboot in those circumstances do you see that as a function of President Obama's domestic political trouble might a new president of either Democrat or Republican persuasion reboot that posture Thank you very much I think China literacy is important I don't think you need to be a China wonk to get China and in fact my memory is that under Mr Rudd the China relationship was actually up and down and that the the strategic dialogue with China although I think it had been worked on by officials for a number of years was actually delivered under Prime Minister Gillard so I think China literacy China a focus on China is important I think we should be ambitious on China I think but I do think equally as I said that on issues where we disagree with China we should have the confidence to say that the idea that if we preemptively accommodate everything that China or some other great power wants us to do the idea we should preemptively move towards them is an odd idea it's not one that really has much history in foreign policy Charles de Gaulle said that great powers are cold monsters they don't really remember favours that you do for them they look at the world through the prism of their interests and from an interest base point of view Australia has a lot to offer China just as China has a lot to offer Australia we are a big country we're a successful country we occupy a large landmass we are an influential voice in the world we are a stable and reliable provider of many of the commodities that power the Chinese economy so I think we can be forward leaning we can state what our positions are without constantly biting our tongue I think that that's conceivable is a reboot possible a reboot is possible but here I guess here's my point it takes a lot to pivot a country as big as the United States I've just written, I've just published this book in Roosevelt called Rondevue with Destiny which is available at all good book stores near you but that book is basically about how Roosevelt pivoted America in the period between 1939 and 1941 he pivoted it outward so it went from being an inward looking country with a a middling army to an outward looking country and he pivoted it towards Europe because he thought that's where the greatest threat to world civilisation emanated from, from Berlin to do that that took two years of supreme presidential concentration decisions the dispatching of personal envoys, ambassadors leading of public debates massive congressional debates that's what it takes to pivot a country as big and as as the United States and that's the kind of effort that we require that's the kind of effort that if America believes what it says if as President Obama said in Parliament House when it comes to Asia we are all in if America is all in that's what the effort would look like to deliver the kind of pivot not that of course in any way I'm comparing the foreign policy situation in 1939 and the foreign policy situation then I'm not, I'm simply saying that it's hard to move big democracies like the United States and if America is serious about it it needs to get cracking David Spears from Sky News, having read Rondo V with Destiny a very good read, congratulations I like the way this Q&A is going now it's improving I'm sure better than before can I ask you about relationships perhaps not as sexy as the big power relationship with China and the US our own backyard the Pacific the Prime Minister will be visiting P&G next week I think it is a lot of this relationship with P&G is now framed around the asylum seeker the solution there at Manasal, Nauru as well are we getting it right with the Pacific how is the asylum seeker approach impacting on the relationship in Australia standing in this region what would you like to see I think it's having an effect there's no question I mean I said that the debate in Australia is a bit unbalanced I would say the debate in Australia is a bit unbalanced on asylum seekers in the sense that asylum seekers are an important issue an important international issue but not the only international issue you could believe if you read the newspapers that that was almost the only international issue that we should really be concerned about on the front pages of our papers I think it looms even larger in countries like P&G there's no question about that and we need to make sure that the relationship with Papua New Guinea is not transactional is not wholly transactional it's not shrunk to the dimensions of the asylum seeker question because P&G is a big country it's a huge influence in the region it's a country with a lot of frailties with a lot of economic issues and we have a lot of interests with P&G that go way beyond asylum seekers let me say you asked me about Australia's policy towards P&G in the Pacific I think one area where Julie Bishop has done well is that she's somebody with a long interest in Papua New Guinea she spent a lot of time visiting P&G in opposition even though it's probably Port Moresby's not the most exotic capital for Australian politicians to visit but she's got a strong interest in it I think the government got it right on Fiji actually recently we announced our decision to normalise relations with Fiji that's something that my colleague Jenny Hayward Jones at the Lowy Institute has been calling for for a long time I think that policy although it had much to recommend it perhaps when it started wasn't working we had lost our influence in Fiji in the councils of the Pacific and I think by normalising relations and by doing it at the moment we did that is before the elections before the Prime Minister might be re-elected and strengthened that gives us fresh policy levers more ability to influence the events in Fiji and more ability to project our influence in the wider South Pacific we are virtually on time now but I will take one hopefully brief question one more question from Peter Phillips one of the directors of the National Press Club it's been great to have been able to welcome you here in the enduring contest between the Lowy Wednesdays and the Press Club Wednesdays it's good to see that you've yielded than you've come to the basic I pivoted I pivoted towards the press in about four weeks from right now the Prime Minister will be all going to plan addressing the Royal Forum in the province might the context has been economically South Korean free trade agreement looming Japan moving towards a free trade agreement with China the economic context is set but the geostrategic context is a little bit less certain and more ambivalent we've welcomed Japan as Australia's greatest friend in the Asian region we've repeated that the United States is the greatest economic and investment friend and ally of Australia if you were writing the preamble or the keynote theme for the PM's address to the Royal Forum in two sentences because Laurie wants it to be brief in two sentences you've got more than two sentences what would you have in your briefing look I think it is about engagement and ambition and what I've said about hedging against alarming scenarios in no way takes away from the fact that we need to be optimistic about Australia's future in the region that the predicament of proximity has a positive element as well as a negative element we need to prepare for potential risks but at the same time we should steal ourselves to grab the opportunities of course these sorts of relationships between leaders can sometimes be complicated perhaps I can finish with one story of a relationship between two heads of government was that between Prime Minister Churchill and President Roosevelt and in 1941 Churchill went to Washington to meet with President Roosevelt Roosevelt wheeled him, he stayed at the White House Roosevelt wheeled himself into his room in mid one morning and was horrified to find Churchill having a bath in the middle of his room he had unusual personal habits as you know and he directed a bathtub and he was having a bath and what wheeled himself out was very embarrassed and said he'd leave and Winston Churchill stood up and called him back and said come back Mr President the Prime Minister of Great Britain has nothing to conceal from the President of the United States perhaps that would not be the line I recommend to Mr Abbott let's conclude on that