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Home / Business / Economy / Official Cash Rate

Mr Rudd goes to Washington, etc

By Stephen Loosley
NZ Herald·
13 Apr, 2008 04:00 PM6 mins to read

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Australia's Prime Minister Kevin Rudd (L) meets Wu Bangguo, chairman of the Standing Committee of the National People's Congress, at the Great Hall of the People in Beijing. Photo / Reuters

Australia's Prime Minister Kevin Rudd (L) meets Wu Bangguo, chairman of the Standing Committee of the National People's Congress, at the Great Hall of the People in Beijing. Photo / Reuters

The Australian Prime Minister's world tour has done him no harm with the voters back home

KEY POINTS:

The contrast could not have been sharper. Prime Minister Kevin Rudd was abroad, meeting President George W. Bush and presidential contenders Hillary Clinton and John McCain, and talking by phone to Barack Obama.

After Washington and New York, the PM moved on to London, to
talk politics and economics with British Prime Minister Gordon Brown and to show Her Majesty The Queen every courtesy and consideration, despite his Republican leanings and the appalling British weather.

China is now the final leg of the prime ministerial odyssey.

At home, Opposition leader Brendan Nelson embarked upon domestic endeavours. He has been engaged on a listening tour, best demonstrated when he endorsed Kevin Rudd's aspiration for an Australian seat on the UN Security Council, but said that where he was on the Gold Coast, in southeastern Queensland, people were talking about issues closer to home.

The contrast was deliberate. The Opposition leader understood that the PM could make the headlines in Washington, London and Beijing. He wanted to be seen out and about in the shopping malls and clubs, surrounded by ordinary people. Did it work?

Early this week, the results came in. By a hefty margin, the Australian electorate endorsed the Rudd tour.

In Tuesday's Australian newspaper, Newspoll reported that the Prime Minister's approval rating as preferred Australian leader was again up around the stratospheric 73 per cent, with Nelson slipping back into single digits at 9 per cent.

Labor support stood at 48 per cent in primary terms and 59 per cent in two-party preferred terms under Australia's exhaustive preferential voting system. The Rudd message of a focus on Australia in the global economy had registered at home.

That's not to say that Nelson had not prompted the PM into action.

Japan was absent from this major itinerary. After Opposition criticism and careful diplomatic calibration, Japan has been added to the prime ministerial itinerary for June.

But the Rudd trip, unlike those of some Australian PMs in years past, appears to have been embraced by the electorate. Even staunchly conservative columnist Janet Albrechtsen, a writer for the Australian who is close to former PM John Howard, appeared to endorse Rudd's efforts abroad.

This prime ministerial visit has been a first in a number of ways. To begin with, national security was not the overwhelming focus.

True, the PM and Defence Minister Joel Fitzgibbon were at the Nato conference in Bucharest, arguing for some of the Nato allies to step up to the crease in Afghanistan, where Australia has 1000 troops deployed.

This pleased Australia's friends in Washington and London, who are already shouldering more than a fair share of the burden of fighting the Taleban.

True as well was that the issue of climate change loomed large in London, with Australia announcing it would join the International Carbon Action Partnership, strongly backed by Gordon Brown. This means that Australia's efforts to introduce an emissions trading regime by 2010 can now be folded into a broader international initiative.

But it was the global economy that dominated this prime ministerial trip.

While national security had priority in discussions in the Bush White House, the meeting with the Chairman of the Federal Reserve, Ben Bernanke, was of real significance. Australians recognise that recession in the US is dismal news Downunder.

But Americans are facing different challenges from the inflationary pressures that are evident in the Australian economy.

The Fed has been endeavouring to inject confidence back into the US banking system. To achieve this, Chairman Bernanke has been cutting interest rates and liberalising credit regimes to keep the financial markets operating in the wake of the US sub-prime meltdown. The fact that Bernanke is expert in the catastrophic US banking failures of the Great Depression of 1929-31, where some 6000 banks folded, and the resulting period of glacial liquidity, is reassuring to the global banking system now.


The prime ministerial office in Canberra has been at pains to emphasise the significance for economic policy-making of the trip to the US, Britain and China. This has been reinforced by a decision of the Treasurer, Wayne Swan, to set aside Budget preparations to travel to Washington for a meeting of the International Monetary Fund (IMF) late this week. This is unusual, given that it is Swan's first Budget for a new Government. But the Budget is being framed against the backdrop of turbulence in global financial markets, so the Treasurer's decision to be in Washington for the IMF meeting appears to be broadly endorsed.

In Sydney, the person taking the flak for Australia's recent hikes in interest rates is the Governor of the Reserve Bank, Glenn Stevens.

The Reserve Bank chief has become vulnerable, to the point where Sydney's Daily Telegraph asked a rhetorical question on its front page: whether Stevens was the most useless man in Australia. Very tough stuff, and perhaps a little unfair. While a Sydney Morning Herald editorial rallied to the Governor's corner, few other voices were raised in his support.

And the Daily Telegraph did not back off from its attack.

Editor David Pemberthy defended the newspaper's position, arguing in favour of the stressed mortgage belts of western Sydney. People are hurting, he argued with some passion, and their plight could simply not be set aside in the interests of broader economic policy.

Over the years, too many Australian prime ministerial visits have assumed the stuff of ritual, with side visits to the cricket at Lord's or a barbecue at the presidential ranch.

Unfortunately, it must be conceded that some Australian leaders have made utter fools of themselves abroad.

The worst example is probably Prime Minister William McMahon in the Nixon White House in 1972, when a written speech prepared for an after-dinner gathering was discarded in favour of some impromptu remarks.

The resulting gibberish embarrassed all concerned.

There was embarrassment, too, when Jimmy Carter failed to recognise that Malcolm Fraser was never addressed by his real first name of John.

A White House visit may be glittering but it does not automatically bestow glamour.

The Rudd visit did not lack glamour, with celebrities routinely seen meeting the Prime Minister. But the trip has really been one of substance.

This is perhaps best measured by the fact that the travelling party had some 200 media requests before arriving in Beijing.

There's a lot of interest in Australian views at the moment on Sino-American relations, just as there's a lot of Australian interest in how the global credit crunch is being addressed in Washington, New York, London and Beijing.

Stephen Loosley, a former federal president of the Labor Party and a senator, chairs the business advocacy group Committee for Sydney

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