The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 19/11/06

Joint Press Conference with the Hon Trevor Manuel MP
South African Finance Minister

Grand Hyatt Hotel
Melbourne

Sunday, 19 November 2006
1.15 pm

SUBJECTS: G-20 Meeting

TREASURER:

We have just completed an extremely successful meeting of the Finance Ministers and Central Bank Governors of the Group of Twenty, a forum that represents around 85 per cent of global GDP, about two-thirds of the world’s population. It brings together both the developed and developing economies and is in my view the premier forum for discussing global economic issues.

I am pleased to be joined at this media conference today by the South African Finance Minister, Trevor Manuel, who will be chairing the Group of Twenty in 2007.

In the course of our meeting we not only viewed global economic prospects but for the first time we conducted a dialogue on global energy markets. And not only as between Finance Ministers and Central Bankers but we brought in representatives of the private sector, some of the chief executives of the global mining and energy houses to talk about prospects, the effect that prospects will have on prices, the effect that prices will have on inflation and the contribution that resource development can make to developing nations both by increasing incomes, increasing skills, increasing exports and economic growth.

We have achieved a consensus that lasting resource security will be best facilitated by open trade and investment, that we need clear price signals, we need reform of subsidies for those countries that are paying subsidies in relation to fuel and we need increased transparency of inventories, stocks and demands. We affirmed our support for the Joint Oil Data Initiative of the International Energy Forum and we are working towards making these markets more transparent.

The G-20 was acknowledged as the principal forum for advancing reform of the IMF and the World Bank. Australia’s leadership in that was acknowledged, we have delivered a first step of reform and have agreed on principals for a second step of reform and that work will be taken forward to the next meeting of the IMF.

The IMF and the World Bank will only be valuable as institutions if they represent the world as it has become and not the world as it was. And that means bringing key emerging markets with a greater voice and developing countries, particularly in Africa with a greater voice into those institutions.

We discussed demographic issues, we brought forward work on aid effectiveness because not only is it a question of volumes, but importantly effectiveness, of aid and that work will be carried through to the 2007 meeting under the chairmanship of Trevor Manuel, the South African Finance Minister.

Our discussion also touched on the issue of geo-political instability and the recent nuclear tests by North Korea, the DPRK. There was universal condemnation of the actions of the DPRK. However, as this is an economic summit and there are initiatives in relation to that that are underway elsewhere, it was agreed that no explicit condemnation would be made in the Communiqué, but that does not mean for a moment that the delegates took the matter lightly, there was a seriousness about that issue and the threat of that issue to regional and global prospects.

This has been a great event for Australia and for Melbourne. The delegates expressed their thanks for the hospitality and the organisation in relation to this summit and it has been a great honour and a privilege as the Treasurer of Australia to be the global chairman of this group over the last 12 months.

I will invite Trevor Manuel to give some comments and then I will take questions.

MANUEL:

Thank you very much Peter. It is a great privilege to be able to take over from Peter. For those of you who don’t know, we are the last two Finance Ministers standing. I think we have something in the order of 262 months between us both now.

The agenda that we have set for next year builds on the issues we have been doing this year. The first of those issues as the Treasurer mentioned is taking forward the Bretton Woods reform. There were very significant decisions taken at the annual meetings in Singapore this year, they will be taken forward and there is a second wave of reform of the World Bank and IMF to come and so that will top our agenda. We will host a workshop in Brazil. I am told that there is a huge battle to try and get the workshop to coincide with the carnival in March, it is one way of getting people out of Treasuries from around the world to a place like Rio de Janeiro.

The second thing that we will work on builds on the work that had been done and ties together two different sets of issues. It is commodities and fiscal stability or financial stability. I think that it is especially important in the context of countries like Australia and for Africa, commodity dependent economies that have seen very significant changes in financial fortunes when commodity price cycles come off and so we are glad that it is a thing that we can share more generally with the G-20. And the third is something that we are adding to the list and it is a broad set of issues relating to fiscal space.

I think what is important about decision-making now is that it is post-Washington consensus. And so, how do we utilise the space available to Treasuries around the world to impact on social policies to take a longer view of issues and what are the kinds of lessons we can share between ourselves.

One of the big innovations of this meeting as the Treasurer said, was to bring in representatives of the private sector. This challenges us to innovate for next year and so along the line clearly we would want to build this reservoir of information on best practice. But one of the key challenges that confronts us is how we can deal with the myriad of information out there and then show that it informs that which we do. I know that ahead of this meeting there was, OPEC expressed that we would devote at least a day or so to issues of climate change and I think that we don’t need to be convinced about the importance of an issue like that. But we think that our colleagues dealing with environmental issues are probably better placed to advise us in our on-going work so we don’t want to originate it.

Similarly, demographics has been a very important part of this discussion and a good impact on fiscal choices going forward. Skill and the availability of skills similarly is a big issue but we, our heads of Treasuries, we don’t have all of those skills to be able to originate in those areas so we have to feed and I think it will shape the work going forward so that by the 18th of November next year we can conclude a successful G-20 near Cape Town and we will be able to report on very intensive work done between the organisations and with the World Bank and the IMF and perhaps test these ideas more broadly because one of the other innovations that we will introduce in the course of next year is to liaise more closely with other African countries on the G-20 agenda.

So we would want to report on that on the 18th of November next year and use that as a measure of the growing importance of this very important group of the G-20. Thank you very much.

TREASURER:

Thanks Trevor. Right, we will take questions, if you could please indicate with a hand and indicate whether you want to ask me or Trevor. Laura.

MANUEL:

Would you mind telling us who you are.

JOURNALIST:

Mr Costello, Laura Tingle from the Australian Financial Review. Could you both tell us please what do you think was the biggest breakthrough in your discussions and could you elaborate a little bit on your plans for the liquidity tool that you have foreshadowed for the IMF in terms of emerging countries?

TREASURER:

I think that the biggest breakthrough in relation to this meeting was in relation to energy and minerals markets. The emergence of countries like China and India is going to put immense pressure on energy and minerals and energy and minerals prices. The emergence of countries like that, if they can’t be assured of security could create frictions. If we don’t have market production in a way which can guarantee emerging giant economies access to the energy and minerals that they need, the differences between countries, the friction and the dislocation could be quite severe. Not just to the economy but beyond that.

We made breakthroughs in relation to the Joint Oil Data Initiative which is designed to actually keep these markets clean and transparent. We made breakthroughs in relation to getting consensus around the extractive industries initiative which is designed to make sure that resources are fairly developed and that corruption is kept out of the development process. We made progress in relation to the anticipated production and demand and the likely affect that that will have on prices, global inflation and therefore monetary policy. That would be my first point.

My second point is as I said earlier. This is the institution, the G-20 is the institution that has given momentum for the reform of the IMF and the World Bank. They are two post-war institutions, 184 members. These are hard to reform but the G-20 gave this process momentum, it was instrumental, it was acknowledged as instrumental as delivering the first stage of reform in Singapore and it is acknowledged that unless this group continues to do it we won’t be delivering any further reform. Trevor.

MANUEL:

I would just like to support and amplify the last point. I mean the hard thing about the World Bank and IMF is it was a product of an intense discussion of a time and born of a compromise. Now we are dealing with a globalised world. We are dealing with a set of issues that could not have been anticipated at that conference in New Hampshire in 1944. And so the issues of reform of these institutions is now paramount. If you look at the IMF, one of the key issues was that is was a lender, whether it was, perhaps it still is of last resort or otherwise. But it doesn’t have many clients on its books at the moment. In 2003 it had the largest book and now it has the smallest book in its history. If it is going to live off the margin on lending then it is going to die. I think we accept that we need an institution like the IMF, that its mandate requires a revisitation. But trying to get agreement on this is exceedingly hard. Is it the job of the management? Is it the job of the executive boards? Is it the job of the G-7? And I think that what the Treasurer is saying and what I would like to confirm is that the G-20 was able to prove its mettle in the first round of reforms as agreed to in Singapore. And so we have that mantle of responsibility going forward, to take it through into the second and deeper phase of reform.

TREASURER:

Stick up your hands and I will point to people and then the microphone will get there. You microphone people stay in the corridor there, so we can do this quickly.

JOURNALIST:

Meraiah Foley, can you hear me? I’m with the Associated Press. Wondering if you can tell us a bit more about what was discussed with respect to North Korea and also whether there were any specific discussions about financial ramifications on North Korea and if there was any dissent among the G-20 members about whether it should be mentioned explicitly in the communiqué?

TREASURER:

The subject of the nuclear test by North Korea was discussed, it was universally condemned. All of the countries represented at the G-20 deplore that test and the instability that it threatens on the Korean peninsula. As I said earlier because this was a meeting of economic ministers and central bankers, there was a view that we shouldn’t keep broadening the agenda to issues outside our principal area of work. That is why it is not mentioned in the communiqué and that was the general consensus that notwithstanding the condemnation this was an economic and finance ministers summit. But it was certainly raised, discussed at the forum and there was unanimity of the condemnation and support for the UN Security Council resolutions. Michael.

JOURNALIST:

Michael Gordon for the Age Newspaper, just two quick questions if I could; the Make Poverty History Coalition hoping for some tangible steps out of this meeting to tackle global poverty, wondering what you have to say to them and secondly on a question of economic reform just wondering whether the discussion on that traversed the issue of overcoming narrow self interest whether you are discussing climate change or export trade and whether you came up with any answers on that?

TREASURER:

Well one of the projects that Australia has brought forward is on aid commitments and effectiveness and it is mentioned in the communiqué. Because the important thing is not just volumes of aid the important thing is its effectiveness. There was a feeling in the meeting that this was good work but further work should continue and that will come forward at the summit in South Africa. On the question of climate change, again in the discussion of energy markets, greenhouse gas emissions and climate change came up, of course it would because you have got to get proper pricing in relation to various types of energy and as we say in the communiqué, the G-20 as a group will continue to monitor these developments, we had a useful discussion, we came to an agreement that market based mechanisms are the best way of handling these issues but again as Trevor said this is not a meeting of environment ministers. We are not meeting here to discuss global greenhouse gas emissions. There is a meeting that is in Nairobi, Kenya, it is unlikely that the meeting in Nairobi, Kenya will be discussing world interest rates. They will be probably be saying to you in Nairobi that is a matter to be discussed in Melbourne. So of course all of these issues come up but they come up principally within the focus of the economic and finance ministers’ job.

JOURNALIST:

Mr Manuel, could you tell us if there was some sort of consensus on whether the cost of carbon should be included in the price of energy?

MANUEL:

The cost of…

JOURNALIST:

Carbon emissions?

MANUEL:

I have views about these issues but my views are less important than the fact that we did not discuss the issue, it did not feature on our agenda. I think we all are mindful, we all are mindful of the impact of carbon emissions on present and future generations, I think we all are mindful of the fact that in some or other way fiscal measures will have to be introduced, but I think that one of the most current issues is the report compiled by Sir Nick Stern for the UK Treasury. We clearly have to wrap our brains around it and try and understand the import of that and it is not going to be universal, I think it is going to impact on different countries differently because it is also a function of the level of development. So there is (inaudible) of hard work and I think that we would want to feed off the way in which our colleagues have been looking at this issue in Nairobi and you know try and take it forward. I think that as we develop best practice approaches, we clearly will feed it into the future of the G-20.

TREASURER:

Geoffrey.

JOURNALIST:

Geoff Barker, Australian Financial Review. Treasurer, can I just re-ask Laura’s question, can we have more detail about the new liquidity instrument for the IMF to help developing countries facing crises and secondly I noticed you had a fifth session on the politics of implementation, what decisions can you tell us about what you have taken to turn the intentions that you announced here today into active policy programmes?

TREASURER:

On the first Geoffrey there was a request for a new liquidity instrument which would be available to countries that weren’t necessarily in a crisis situation but may need some liquidity outside that. There has been such an instrument but it has not been used, it has not been successful and so there was a request that the IMF develop one. I can’t tell you what final form it will take, that has got to be negotiated. The politics of reform is very interesting. There was a long discussion about how you garner support for economic reform. We heard for example, from the Indonesians who went through the Asian financial crisis, we heard of their experience in relation to withdrawing subsidies in relation to fuel, which of course has been very difficult in Indonesia. We heard from others on possible ways in which the Doha round could be restarted, I put this on the agenda to share experience about how to energise the public in favour of economic reform. You will notice that one of the things that we say in our communiqué is that it is urgent that the Doha round get restarted. How can we energise our publics in relation to that issue and we shared experiences and I think it is something that not just in the sessions themselves but as between ministers and bilaterals on their mind more that anything else.

MANUEL:

I mean the financial instrument was not clear for all of the reasons that that Treasurer had raised, but there was certainly a call for consideration of issues that have not featured on the agenda yet including the idea of some insurance for catastrophes. I think the experience shared with us was that the hurricane that hit Honduras, wiped out the equivalent of 40 per cent of their GDP. Now for a country to try and get catastrophe insurance of that order of magnitude is just impossible. Tsunamis, the impact of hurricanes all of those, and seismic movements all of these are likely to be features going forward, what can countries be offered and so there is a whole new set of issues that the Bretton Woods institutions have been asked to consider. Further to the issues of the politics of reform I think that the Russian experience is also important. I mean here they are oil producing country, building up a stabilisation fund going forward but stabilisation funds don’t always lead to the political approval of the election that people want to know why you aren’t spending now. Similarly Brazil, they have just come through their presidential elections but the expectations of people about why there shouldn’t just be much higher levels of spending, why the Government led by President Lula da Silva would want to place such an emphasis on macroeconomic stability as a necessary set of conditions for dealing with a series of social reforms, all of these are important insights that we shared here in Melbourne.

TREASURER:

Thank you, yes.

JOURNALIST:

To both gentlemen, what commitments did you receive if any from nations within the G-20 to give ground in ways that would facilitate the Doha round?

TREASURER:

Do you want to start Trevor?

MANUEL:

Hospital pass.

TREASURER:

Look, here’s I think the general assessment - the general assessment is that to restart the Doha round agriculture has got to come on the agenda, agriculture was the issue that has been left off previous rounds. To break the impasse in relation to agriculture will require new concessions in Europe and counter balancing concessions from America, I think there was a plea from agricultural producers who are developing nations that the two developed blocks of the world come forward with new offers so that this can progress. The point was made in the summit and it is made over and over and over again, if you lock developing countries out of the world trade system then you are locking them out of economic opportunity and they want to get into the world trade system and to get into the world trade system they have got to have access to developed markets because agriculture in particular, to a lesser degree manufactures, low value add manufactures are what they do and if they can’t sell them to the developed world then they don’t have the opportunity to earn income.

MANUEL:

I mean, we are the good guys, we are members of the Cairns Group, and so we can badger and bicker, but at the end of day the curiosity is that I think that none of the Financial Ministers, Treasurers or the Central Bank Governor’s gathered in that room, have immediate responsibility for trade policy. We can reach agreement here and send them off, to say now go talk to your Cabinets about what we are doing.

JOURNALIST:

And yet some people said that this meeting would be perhaps the last chance to kick start Doha, I was given great billing as an attempt to do that. Were there any concrete concessions, or even signs of a willingness to make concessions, on the part of the EU and the United States?

MANUEL:

I do not think that those who joined us here were empowered to make concessions. You see if you raise expectations about this then you set yourself up for failure. We can not really get into the nitty gritty, you have got a whole organisation, the WTO, led by Pascale Lamy, who has to work through and arrive at a set of compromises. If you believe that you can squeeze it in between lunch and afternoon tea you are going to set yourself up for failure and I do not think that we would really articulate a set of views like that about what could attain (inaudible).

JOURNALIST:

(inaudible) from Radio Australia. To the Treasurer, two questions if I may – can you elaborate a little on your bilateral discussions with China, and you raised concerns in an earlier press conference about high demand resource countries trying to lock in supply and the potential for instability that that might create, and whether you raised that with your Chinese counterpart; secondly, given the importance of the G-20 economic forum gives to a geographical spread, the inclusion of all the major population groups, do you see that there will be a time when the G-7, G-8 should be as inclusive, and take in as many countries at the Heads of State – that political level?

TREASURER:

These matters were raised in my bilateral with my Chinese counterpart. Australia is a very important trading partner with China, and what we trade principally with China is energy and minerals – that is, gas, iron ore, coal. One of the issues that came up in that bilateral was the trade of uranium because Australia has large uranium stocks. I indicated that Australia wants to build an energy freeway, by which we can help countries in our region with their energy demands and that an open market with good investment will be the way to build that energy freeway and it will be necessary to power the emerging economies of the world. That they have long term security. In relation to the second point – will the G-8 ever expand to bring the developing world in – well, really, that is what the G-20 is. The G-20 is the expansion. The G-20 is essentially the G-8 plus the emerging countries. Plus countries like South Africa which represent the African continent. This is where the G-8 meets the rest of the world. The G-8 is where the industrialised economies meet themselves. The G-8 is where the industrialised economies meet the rest of the world. That is what this is all about. So, will these countries ever be invited to a G-8 summit – well if they are it will be a G-20 summit.

JOURNALIST:

(inaudible).

TREASURER:

Sure, look, there have been proposals from time to time to have a L-20 – a leaders summit of the
G-20. And I think that was pushed by Canada some years ago. Personally I think a forum like this is which is a terribly representative forum, would have much to gain. But there are different views on that and I do not believe that a consensus has developed around that. Yes?

JOURNALIST:

Alan Wood, The Australian, Treasurer. Of course this meeting also brings together some of the worlds top central bankers – what was the view on how the world will emerge from a period of very high liquidity growth and compressed risk margins, and can it avoid the sort of painful adjustment that has always previously marked these episodes?

TREASURER:

I think, Alan, there was a lot of concern about the fact that risk premia are so low. That was certainly mentioned by a number of central bankers and by the IMF and the point was made that sometimes it needs a crisis to get risk priced properly. My own experience that I can share with you is that last the time I saw general euphoria in the global economic community was in 1997 – three months before the Asian financial collapse – and one has to be wary of general euphoria because it can end badly. Now, we do not want it to end badly. This is the first time at a summit that I have heard it said that the three principal industrialised areas of the world are growing simultaneously. That is, Europe, Japan and North America. That is quite unusual. Add to that the emergence of China and India. You have got many engines of growth going on in the world economy at the moment. And that is one of the reasons why global inflation is ticking up. But just as global inflation ticks up and people get confident is the time to get wary.

MANUEL:

I just want to add something, I mean, all of that is happening in the environment where you have got global imbalances in the order of magnitude that could not have been anticipated. The difference between oil importing and oil exporting countries are manifested quite frequently on the current accounts and balance of payments. It is one of those issues and you know, in a different time and different circumstance I think there would have been much greater concern about this. It is not there at the moment. But I think the risk is that we could become too comfortable with the current economy.

JOURNALIST:

Treasurer, I on a more domestic and less fiscal issue, have the Victorian police been too soft in not arresting more protestors?

TREASURER:

What was done by a small group of anti-social people yesterday in the streets of Melbourne was a thorough disgrace. They organised themselves for violence, they prepared themselves for violence, they unleashed violence, they attacked property, they attacked the police, they tried to trash Australia’s reputation. These people do not represent anybody except their own anti-social views. And I just want to say to the Australian people that we will not be giving over the streets of our cities to criminals. Because that is what they are. They like to dress this up in political terms but they are criminals who want to smash property and injure people. Everybody in this city has the right to go about their business peacefully. We have had 20 of the most senior economic leaders of the world here in Melbourne, and as I said to them, Australia is generous, open-hearted and warm. That is the real Australia. That is the Australia I know. Not the thugs and the criminals on the streets.

JOURNALIST:

Mr Manuel, David Uren from The Australian newspaper. You mentioned there would be innovation next year in the discussion around fiscal space. Can I take that to mean that there will be invitation to organisations of civil society to (inaudible) in a similar way to the private sector here in Melbourne? And may I also while I’ve got the microphone, ask the Treasurer a question, if you could expand a little on whether there was consensus as to what the principles governing energy and mineral security would entail, what would that comprise?

MANUEL:

You know the hard issue about civil society is that it is non-descript. I think both the Treasurer and I know that for the decisions we take we are directly accountable to an electorate. If we fail they put us out of office. NGO’s do not have that level of accountability. Now, what we are saying is that in the course of our work we (inaudible) there are many countries that are poor and under-represented. I mean, I do not want to assume that I have an automatic right to be the sole representative of the African continent. But, in the course of our work, next year every time the deputies meet in South Africa we will bring in representatives of the African continent. We are one of 53 countries on the continent. We like to ensure there is very resonance between the needs and the policy direction that we take. Now, we are not even through those kinds of decisions yet and so I do not want to make any promise about bringing in NGOs into the discussion next year. But I know that we have to innovate to ensure that we can – we can broaden the experience, broaden the information base and write an agenda for an better world for the poor.

TREASURER:

I do no think I can add anything what I have said in the Communiqué so I will keep on going if I may?

MANUEL:

Yes.

JOURNALIST:

Two questions – firstly, in your statement you say … maintain strong world growth requires ensuring appropriate exchange rate flexibility, that is somewhat different from the G-7 statement that you issued in September that said ‘greater exchange rate flexibility is desirable’. Why the change in language? Are you a little more satisfied with progress that has been made on that front. If I can have a follow up question after that?

TREASURER:

Well, ask the follow up question.

JOURNALIST:

The follow up one is regarding the nuclear test in North Korea – did you also discuss the appropriateness of expanding civilian use of nuclear power and what steps you might take for all to prevent military usage?

TREASURER:

Well, on the first, you have to bear this in mind, this is not a G-7 Communiqué. This is a G-20 Communiqué. When the G-7 meets, of course there are a lot of countries that are not there, but they might be talking about. There will be at a G-20 summit and these are always consensus documents. But, I think there is agreement amongst all of the countries of the G-20 that the need for increased flexibility. It is a question of timing. Our country for example has a completely flexible exchange rate but we only adopted it about 20 years ago. And there are other countries that are in the process of moving towards that and they would say that they need time, others say do it faster. I think we are all agreed on where we are going but it is a question of getting there. In relation to DPRK I have told you about the reaction to the nuclear test so leave that all aside. On something completely different, nothing to do with the testing of the DPRK was there a discussion of nuclear energy – yes. A number of countries both developed and developing said that they thought nuclear energy could well be an important substitute for carbon energy. And some of them were big countries – I think China for example talked about the need if it’s going to substitute out of carbon energy to have nuclear energy available and that is certainly something that I discussed with the Chinese Minister in my bilateral.

JOURNALIST:

Gemma Daley from Bloomberg. On the theme of China I am wondering if the Chinese Yuan was discussed, what was the nature of those discussions and what was the signal from the Chinese Finance Minister and Central Bank Governor about its intention on the valuation?

TREASURER:

Gemma, these things are not discussed necessarily by name but certainly the issue of exchange rate flexibility was discussed. And around a table like that it is well known who has a floating exchange rate and who doesn’t. And so without getting too personal when you talk about flexibility in exchange rates it is well known what is meant and as I said, there was encouragement towards more flexibility and I think you would find all of the countries would agree with that – it is just a question of timing.

MANUEL:

Let me just add that what doesn’t happen in the G-20 is a Monty Pythonesque beating up of countries. I think that we largely have to be able to see that there are difficulties in a number of countries so whether you are talking energy or exchange rates there is nothing to suggest that we convened in order to beat up on China. Why would they want energy now? Why don’t they float the exchange rate? I mean, it hasn’t happened like that. I want to give you the assurance.

JOURNALIST:

Eeva Palojärvi, Channel 4 TV News, Helsinki, Finland. Just two questions – one thing to be clarified have I understood right that this conference in a way failed to reform IMF at that speed which was planned ahead and the second concern in the host nations own nuclear power plant, are you going to build nuclear power energy in your own country?

TREASURER:

On the first question the answer is no. G-20 was instrumental in securing the first stage of reform in Singapore. We met today to keep the momentum going for a second stage and I believe that if the G-20 doesn’t keep that going it won’t happen. And everybody from the Managing Director of the IMF down thanked the G-20 for its efforts. On nuclear power Australia has no nuclear power. We have large reserves of uranium. We have commissioned a report into the feasibility of nuclear power and once that report is out we will make a decision in relation to that. Yes Tim.

JOURNALIST:

Tim Colebatch of the Melbourne Age. One quick question if I can to each of you. Mr Manuel you refer to the question of the IMF finances and the fact that their lending base has shrunk and therefore their revenue has shrunk – did you discuss future sources of revenue for the IMF at this meeting and can you give us an update if so? And Treasurer in your answer to Scott Murdoch’s question about the police handling, I appreciate that you said things you want to say, but are you happy with the police handling of the demonstrations?

MANUEL:

On the announcing the IMF going forward there is in fact a different group of people – I think it is Chaired by Andrew Crockett former DG of the BIS and the number of people who participated in this meeting, some of whom are Finance Ministers others are Central Bank Governors who are looking at the issue and they have been doing so for the past 5 months. They are drilling down into the detail of it and I think that they will hand over a report in January. So it is not something that we could deal with as fleetingly and there are specialists looking at this now.

TREASURER:

Tim, in the lead up to the summit I met with Victoria Police on a number of occasions to review plans. As you know Victoria Police are State Police, they are not Federal Police. The Commanders that I met with were wonderful people, they were exceptional people, they are so important to our community. They will have every support from me and I believe they should have every support from every Victorian, every Australian in doing the difficult job that they do. You don’t expect police who are there to keep order in the streets to have balloons of urine thrown on them as they did, to be attacked in the way that they were. We owe these people a great deal of gratitude and they will have every support from me and I hope that they will have every support from every Victorian in doing the difficult but important work that they do.

JOURNALIST:

Treasurer, Barbara Adams from Dow Jones Newswires. On the issue of energy security and free and open trade – was there any resistance to the concept of free and open trade and can the G-20 bring in this kind of global trading system when the majority of OPEC nations aren’t members of the G-20?

TREASURER:

Well the largest oil producer in the world Saudi Arabia is a member of the G-20. It presented its assessment of the oil market. You see it sees the problem differently to countries like us. It says the problem is it can’t be assured of security of demand. The rest of us think the problem is a security of supply. So it is interesting to get countries around the table and look at these problems from their perspective.

MANUEL:

The term they used was deliverability which is an interesting one.

TREASURER:

So, I think when you get a consensus here about open and transparent markets it means non-cartelisation. And I don’t think you can have cartels operating in a market if you are genuinely interested in open markets. And all of the countries subscribe to that principle. Matt.

JOURNALIST:

Matt Wade from The Sydney Morning Herald newspaper. The statement in the Communiqué on aid effectiveness is relatively short. I was just going to ask was there anything significant actually agreed to on that issue and how much time did you devote to that issue in the course of your discussions?

TREASURER:

Matt, can I tell you that Australia worked this issue up throughout the whole course of the year. Australia put the issue of aid effectiveness before the meeting. The feeling of the meeting was that there needed to be more work done by Deputies before the Ministers would be in any position to take any agreement in relation to effectiveness and so the work that we have done is being passed on to South Africa. It will come with more detail to the Ministerial next year and frankly I think that is probably good too because our colleagues in Africa have probably got as good if not a better handle on what is effective in aid and what is not. Now – yes.

JOURNALIST:

Just on the topic of reforming the IMF and World Bank…

TREASURER:

You have got to identify yourself.

JOURNALIST:

Sorry Marc Moncrief from The Age newspaper. On the topic of reform of the IMF and World Bank you mentioned them as reforms of archaic institutions, post war institutions, I’m sorry you said post war…

TREASURER:

I don’t think I used the expression archaic.

JOURNALIST:

How can this be seen as an impetus for reform of other post war institutions including the UN Security Council?

TREASURER:

I think it is a good point that you make. Look, the great global institutions of today came out of the Second World War. It was out of the Second World War that the UN was set up. The Security Council effectively represented the Allies plus some others. It was the world of the Second World War. The IMF and the World Bank came out of the Second World War when thinking was going on about how to stabilise the post war economy. Now of course global wars make these things easier to manage because supreme allied commands can get together and agree on these things. It is more difficult when you are not in that situation you have got 184 countries to try and negotiate progress is slower. It doesn’t mean I want another cataclysmic event in order to get reform. The key here is to get reform outside of a cataclysmic event and if we can move on these institutions in our area, yes maybe it will prove a good model for other institutions, yes. Last question.

JOURNALIST:

Shane Wright, The West Australian. Treasurer, just in your discussions with China in terms of uranium did you give a view on how quickly Australia might come to a decision on supplying Australian uranium to China and on an unrelated issue on the IMF speech by Mr De Rato last night he suggests that the IMF should look at the cost of climate change in a sort of IMF approach to Stern. Would you be taking him up on that offer?

TREASURER:

I would be very happy for the IMF to do some work on that. We know Nick Stern. Nick used to work for the World Bank, we dealt with him quite a lot and he has now gone back to England and he wrote this report for Her Majesty’s Treasury. And if the IMF which is a sister institution wants to do some work on that of course we would welcome that. There is no harm in doing these assessments, let me tell you, these assessments vary a lot according to the assumptions you feed into them. And having people checking each others work is not a bad thing. You generally find the first slice of these things gets better after you have had a second and third and a fourth slice. In relation to Australian uranium – well, we are prepared to export uranium to those countries that are in the Nuclear Non-Proliferation Treaty subject to all of our safeguards and it may well be that large energy users can profit from that particularly helpful in reducing their increase in greenhouse gas emissions. Now thank you all very much for your time. Trevor and I appreciate you coming and we wish you good day. Thank you.