Fran Kelly: Trade Minister Andrew Robb has been one of the strongest advocates for the bank within the Abbott Government; Andrew Robb welcome back to Breakfast.

Andrew Robb: Thanks very much Fran.

Fran Kelly: Andrew Robb if Australia does now sign up to the bank as a founding member, we will be one of the last to do so as the deadline fast approaches. We could have been one of the first if we had taken up China’s invitation in October. Will our late joining diminish our influence?

Andrew Robb: No I don’t think at all. We have been in close contact and consultation from the outset; long before dates were set on who would sign up and who would participate with the Memorandum of Understanding. We have made very good progress with the Chinese on the design and the governance issues and the transparency over the past few months, and I think our position outside of the group, at that stage, did help our leverage and our decision now is that it’s time to get inside the tent and help influence the final shape of the governance and other matters. I think we will be enthusiastically embraced by the Chinese and others who are on the board.

Fran Kelly: One of the other matters that Australia still has concerns about is the question of the board of directors having authority over key investment decisions, to ensure no one country controls the bank. Last week the Chinese official who will head the bank said, I think it was reported in the Fin Review, he wants the bank to have only a non-resident board of directors which would be less day-to-day and hands on than the World Bank board, and he wants management to run the bank and stand and fall on performance. How does that fit with Australia’s concerns?

Andrew Robb: We need to see how this thing is spelt-out; that is the issue. Clearly, even our four major banks for instance, have a board of directors who set the strategy in very clear terms and set the framework for key decisions and they delegate the responsibility for those decisions invariably to the management board or the management itself, and that’s what we’re looking for. It’s not explicit at the moment how that board would work and we need to clarify that and ensure that what is normal practice throughout the banking community is in fact adopted.

Fran Kelly: The bank will have about $100 billion dollars I think to spend on roads, ports, telecommunications infrastructure through the region. How much will Australia be kicking in?

Andrew Robb: Well that depends on the final numbers of course. I mean there’s still opportunities for even the United States and or Japan to join, and there could be other countries also join up in due course. So it does depend on the numbers and it can critically depend on the numbers, but it will be therefore a proportionate amount; it will be a significant amount but we can’t put a figure on it at the moment.

Fran Kelly: The United States is cool on the idea to say the very least, it’s tried to persuade Australia and others to stay out of it. It’s worried about it being used as a vehicle to extend China’s influence through the region. Are those fears by the US groundless in your view?

Andrew Robb: Our sense is that China is re-emerging if you like; if you look at the last 20 centuries, both India and China for 18 of those 20 centuries, were really part of the centre of gravity of economic activity throughout the globe.  In many respects both India and China are re-emerging and heading back towards the centre of gravity with other countries like the United States of course. It’s an inevitable process and we have formed a view – being part of this region in particular – that we need to accommodate the re-emergence of these nations and to play a part in initiatives they’re involved in.

Fran Kelly: Did it take you a long time to persuade your prime minister and your foreign minister of that?

Andrew Robb: No we felt that there were issues and lack of clarity on a number of key principles associated with the governance of the board and that’s what we spent our time on.

Fran Kelly: Andrew Robb you’re a former federal director of the Liberal party; Mike Baird suffered a 9 per cent swing in New South Wales on Saturday, but holds office quite comfortably since. That’s despite pushing a difficult, unpopular policy in electricity privatisation.  Is there an unmistakeable lesson in this for Tony Abbott and for your government, about being upfront with the people about tough decisions – something we didn’t see at the last election?

Andrew Robb: That’s not fair; there were quite a series of major issues – turning back the boats was a very upfront approach.

Fran Kelly: It was a very popular approach, as the polls would show.

Andrew Robb: There were a lot of people in the community who were seeking to misrepresent what the consequences of all that would be.  It’s not an easy process.  The easy process was to scrap the policy and allow 50,000 people into Australia as Kevin Rudd did, in an unmanageable way. 

We were upfront about that policy and a range of other policies and we did say endlessly that our priority was to live within our means as a government, and to make the cuts necessary to do that.  But I do concede that we did come out with surprises and reforms that we perhaps hadn’t tilled the soil with, and we hadn’t alerted the community to the full nature of the problem, and that has cost us politically and I think Mike Baird has laid out a very sensible program – an important economic program – one which we strongly support and he’s been awarded for making the argument as he has.

Fran Kelly: In terms of making the argument what about the government’s tax white paper; it’s out today – a 200 page report, contains no recommendations, no solutions.  It’s being used by the government to lead the conversation about tax reform, but isn’t that the lesson from New South Wales? The government should be leading, not just starting this conversation; it should be leading this conversation.

Andrew Robb: The New South Wales government have spent quite a considerable part of the last four years looking at the options in this area and then they moved to adopting a solution and then they argued for that solution.  So this is a process; we can’t on the one hand be criticised for surprises and then in the next breath, be criticised for laying out a very, very comprehensive taxation discussion paper which will lead to a green paper where we will start to adopt positions, and then we will run to the next election with whatever decisions we take or adopt in the taxation sense.

Fran Kelly: Andrew Robb thanks very much for joining us.

Andrew Robb: Thanks Fran. 

Media enquiries

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