Will the PM find a friend in China?

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The red carpet has been rolled out for the Prime Minister in China.

And while he's managing love bombs being lobbed at him from our biggest trading partner, our most powerful ally, the United States, demands truth bombs from us.

So, with more meetings to go, will the diplomatic exercise help or hurt the government standing on the world stage and at home?

And an ABC freedom of information request has revealed a little more than Treasury or the government hoped for.

But Jim Chalmers swears he's feeling totally relaxed about it all.

Welcome to Politics Now.

Hi, I'm Patricia Carvellis.

And I'm Jacob Greber.

Jacob, the Anthony Albanese tour of China continues.

This is his second visit, of course, as Prime Minister, the first since he's been re-elected, and he's walking the proverbial tightrope of diplomacy and the timing.

Oh, the timing!

The US demanding in private meetings that the Australian government makes clear how we will behave if China takes over Taiwan or tries to at the same time as the Prime Minister's six-day trip.

I mean, you couldn't write this stuff, honestly.

So it's all unfolding simultaneously.

And at the same time, we've got the war games going on, which, you know, are sort of Talisman Sabre.

It happens.

They're a kind of standard thing.

But, you know, we've got the war games.

The Chinese are kind of likely to spy on our war games as they whine and dine and love the Prime Minister.

He's with his business delegation.

How does this tightrope get walked?

So far, so good?

It's a pretty, it's the definition of what they call in Washington a split screen.

You've got, you've got this, you've got, as you said, you've got all the sort of ceremony, the hugging,

the displays of closeness.

And then you've got on the other screen,

you know, warships going around the place,

Chinese ships monitoring that, us monitoring the Chinese monitoring us, monitoring them, that kind of thing.

And as you said, in the backdrop is this White House that's sitting there asking questions about how committed we are to some of the key issues in the alliance around our defense ability, capacity, preparedness.

And we all know ultimately that's a question about Taiwan.

And that's one of the most sensitive imaginable subjects when it comes to China, but also particularly the current president of China, Xi Jinping, who

has a view that Taiwan really does belong to China.

Yeah, he's made that crystal clear.

We know that this is a looming future issue, a future problem, but that you have to usually prepare for future problems now.

The reason it's all become an issue, though, is this Financial Times report with this

Elbridge Colby.

Now this man, let's talk about this man because he's the Under Secretary of Defense for Policy and he's been pushing these issues.

He's also the America first guy in terms of defence and he's very skeptical about AUKUS and in fact he's pretty key in the whole AUKUS reconsideration.

So what does he want from us?

Like what what is this dude?

What is he playing at?

And how much influence does he have over Trump?

And how worried should we be?

Like, that's really, they're the key questions, right?

Right.

And

what he's doing and who he is, obviously he's inside the Defence Department.

His job is to

look at the preparedness of allies, including Australia, and he's doing a review.

of AUKUS.

So he's putting a lot of pressure on Australia about how we would fare in a conflict.

Would we be able to look after ourselves?

Could we protect our northern bases, which the Americans use and see as an asset?

Would we be able to protect all the listening that we do in the region through things like Pine Gap?

The Americans are concerned.

Albert Colbich, he wrote a book a couple of years ago where he talked about the preparedness of allies, and his main concern...

is that America doesn't want to be looking over its shoulder to make sure countries like Japan, South Korea and us can, I guess, carry the can, carry the water while they're in a fight.

So that's what he's up to.

He's, by all accounts, I've talked to people who've met him very recently, engaged with him very recently, very, very smart person.

He's not a,

you know, sort of an unhinged character.

He's very thoughtful.

And he is part of this administration putting pressure on Australia.

But I think the last thing to note about him, he's not the only part of the administration.

There are other actors in this debate about AUKUS and Australia and the alliance.

Yeah, you're right.

It's much more complex than just him.

He's not the commander-in-chief.

But look,

no, he's not the commander-in-chief, but he's, I mean, he was on

social media in the last sort of 24-odd hours saying,

you know, we're doing the president's work here in ensuring that this stuff all adds up and that allies step up their defence spending and other efforts related to our, as he says, collective defence.

So he's he's

doubling down.

He's doubling down.

And that will force the Australian government to explain itself.

It'll force the Prime Minister to

describe why, in his view, he's already doing enough.

And maybe there needs to be a bit more.

And so this brings us to the Prime Minister's visit to China.

Pretty long trip to China, six days in full.

That includes travel to be fair, but a long trip.

And it is all about taking us to the next level.

So they've done stabilization, they say.

Now they want to basically work on the relationship, take it to the next step.

And it is very economically focused, to be fair.

It is, you know,

that is the whole thing.

He's turned up the prime minister with a whole bunch of captains of industry, people with incredible power over big companies that do big business with China.

And he's already spoken.

We're recording this on a Monday.

His message has very much been focused on those economic issues.

We've seen some pretty prominent people speak, including, you know, Fortescue Metals boss, Andrew Twiggy Forest.

He spoke and he said something really unusual, actually, that I just still can't quite work out, that he's asked for a bilateral agreement with China on threats from AI.

Did you work out what he was on about?

China is pressing Australia to work with it on adoption of Chinese AI in Australia, in Australian businesses, consumers, what have you.

And

there's a lot of resistance to that because of security concerns and the way that information is stored, used,

accessed by...

for instance, the Chinese government.

So that's an awkward conversation.

I think you put that in the awkward conversation category.

Oh, big time.

So all of this will certainly end in agreements and promises for an escalation in business.

And it doesn't, you know, it feels only yesterday like we're in the deep freeze.

Remember the previous government couldn't get a phone call with any Chinese minister.

So, you know, we've come a long way, baby, to this next phase.

So I think the PM wants to come away from this with perhaps more tourism from China and more commitments about, I I don't know, wine and lobsters and iron ore and other things.

He'll want something like that to show for it.

It feels to me very 2000s.

Doesn't it?

Yeah, well,

maybe this is where the cycle has turned and these other sectors like green steel, and that's why they're emphasizing it because that's sort of the next thing.

Is that going to be the next wave where we work together with China in an economic sense?

Yeah, he wants to come home with wins.

He wants to say to Australians, trust me, I will do deals.

This is almost Trump-esque.

It's deals, deals, deals.

It's not in terms of his language.

He uses a very different style, but it's jobs, jobs, jobs.

Can he pull that off?

Is that a worthy goal, Jacob?

Oh, absolutely.

That has to be the goal.

That's why Prime Ministers go on these trips.

The trickiness of this trip or the challenge of this trip is that

we're all sort of wondering what the Americans are going to make of it.

But I think this is Albanese trying to forge his own path through here of balancing these two big powers, which are doing things to us that are uncomfortable, albeit from different directions.

The Chinese

have sent ships around our continent.

That has made people uneasy.

The Americans are threatening 200% tariffs on pharmaceuticals.

That is also

an act that unsettles people, that makes you wonder, are these our friends.

And so

we have to come up with our own line and I think the Prime Minister is doing that he's demonstrating that with this trip and I think also with the opposition you can see they're not they're not going for what once might have been a cheap shot a year ago they're holding back they are niggling that he hasn't had that meeting with with Donald Trump but I don't get the impression you you you tell me that they're really going all that hard on that side of it They're not really hammering that side because I think there is a bit of an unease

in the opposition about being perhaps seen too as too quickly as anti-China.

That has them in the election campaign.

Yes, yes.

They are trying to rebuild relationships.

They know business.

Remember, they want to take a more pro-business position too.

One of their issues is that they dropped the ball when it came to big business and they had a lot of policies which were hostile in some ways, according to big business, to those priorities.

So they're trying to reimagine themselves there and at the same time, of course, fix their relationship with Chinese people in Australia.

And there is a huge Chinese diaspora and when they hear some of these messages, they think, hang on a minute, are you talking about me?

And they have not made those things clear.

But there are still a lot of China hawks in the coalition.

Absolutely.

And they will be...

micro-managing, micro-reading all of the words from the Prime Minister, including, you know, how he's talked about the circumnavigation of Australia.

Let's see what the images look like this week.

What is the nature of the meetings with Xi Jinping and how much pomp is there?

How intimate is it

between

the two men?

That's going to be fascinating to watch.

Well, and it will be, I suspect.

I mean, it hasn't happened yet, that one, but you know, there will be some intimacy and friendliness.

That is the whole vibe of this thing.

That is potentially, though, optically also a problem,

unless, goes back to the first point I was making, unless the Prime Minister could come back and materially say to Australians, this has advanced your interests.

And look at the public polling.

I mean, Xi Jinping, it's only by a whisker, but is, I think, more popular in Australia on the last poll than bloody Donald Trump.

Like, to be fair, they're both very unpopular.

There's still a gap, but it ain't as big a gap as it was a year ago or so.

No.

So you're right.

Washington will be watching this closely.

I don't feel like the Prime Minister's overly concerned about that.

Oh, look,

it's a problem, it's an issue, it's definitely an unresolved element, this lack of a meeting.

But I think the Prime Minister's view is probably that he's had a crack at trying to be there to meet the guy.

It didn't happen.

So it's going to have to happen later in the year.

He has had a crack.

I mean, you know, it's hard to crack.

He went all the way to Canada.

Oh, hello.

Hello.

In place, well dressed up, ready to go.

Ready.

And then you get stood up.

I mean, who hasn't been stood up?

have you been stood up Jacob it's annoying

no comment I just was so ready for a reveal there and you didn't give it to me okay the other big thing that's happening and the treasurer has just addressed this Jacob this story this okay so let's let's just build up this story it starts as a freedom of information request Jacob what's that so that's when journalists

researchers, anybody, a citizen asks the government to release documents that are prepared by the government

and the government then usually goes off and collects all the documents you've requested and then redacts anything that's too sensitive usually or compromise national security or what have you.

You get it back and often

there's big black slabs all over the document.

And you're finding this one.

This one had

a little table of contents in the electronic sort of PDF version.

When you clicked on that, it would open up the contents and then in those contents were all the subheads, some of which were quite explicit.

The one that's got everyone's attention, of course, is on housing, the government's plan to build 1.2 million houses by the end of the decade.

The subhead says that will not happen.

About as blunt as it gets.

It also said there was another subhead that talked about how the budget is not sustainable, taxes need to go up and and slash or spending needs to be cut.

That one, if you're a budget watcher and you've spoken to a lot of economists, is not that surprising, quite frankly.

We know that.

The Treasurer actually said as much, well, quite literally, at his press club address last month.

But the housing one is one of those ones where, yeah, it was highly contested during the election campaign.

The coalition had its version of how it was going to solve the housing problem.

Labor's now put a target up there, a big fat target, and its own department saying, you ain't getting there.

Now, the Treasurer had an interesting response on that, PK.

What I heard was, relax.

That sort of thing happens from time to time.

I'm pretty relaxed about it, to be honest,

because of course, Treasury provides advice for incoming governments and no government typically goes into the detail of that.

The other reason I'm pretty relaxed about it is we've already made it.

He's very relaxed about this one, he says.

I love the word relaxed.

And he's also.

You've come as loves the word relaxed.

He likes that.

He's also saying, saying, look,

we need to have ambition and we've got more to do on housing.

He's not shying away from that.

In fact, at his press conference this morning, he said government needs to do more.

It won't get there on the current trajectory.

I think he conceded the point.

He did.

He said, look,

he wasn't arguing with the Treasury.

conclusion.

He was actually saying, look, more needs to be done,

but we're ambitious.

We actually think having big goals is a good idea because that gives us something to strive for.

The problem politically is that it also gives the opposition a target.

And there was a famous goal in the first term, which technically still stands, I guess, which is that electricity bills were going to fall by an average of $270 or whatever it was.

That was a pre-2022 election.

That got used probably a million times by the opposition, I would say, maybe two million times against the government.

And of course,

this might be sort of a similar type of weapon.

And that was put to the treasurer.

Look, yeah, I thought his answer was pretty honest, actually, where he said, yeah, I mean, you know, on the current trajectory, no, we wouldn't.

But that's why we think we need to change things and do more and be ambitious.

And it's a funny one because Claire O'Neill, who is the housing minister, I actually only interviewed her a week ago, I think it was.

Oh, time flies when you're having so much fun in daily journalism, Mamate.

But like, she said, yeah, it's hard, but we want to stick to this goal so that we can make it happen.

And I kind of get that.

You know, you don't want to sort of wave a flag and give it up.

You want to force your own hand.

Now, that'll be on them if they don't get there.

You've raised the expectations.

You do need to

at least be seen to be really trying to get there.

Otherwise, it hurts you.

People will be disappointed and get cynical about politics.

And we don't want cynicism in politics, Pika.

We don't, but

I'm sort of on the fence on this one because we also don't want politicians to go, yeah, no, we're not going to get there.

Which is not what they're saying.

Which is not what they're saying.

No.

They're not saying that, and I think that's good.

I don't think they should be waving the flag on that.

The other thing is tax.

There was also a sub,

there was a heading, wasn't there, on tax, which got everyone very excited.

Yeah, that overall taxes need to go up.

That's always a fun one for a politician to argue.

People don't necessarily like paying a whole lot more tax, and they'll want to know how it's being spent as well.

So, yeah, Treasury is sort of putting both of those things on the table.

But as I said, I think the Treasurer has already been talking about that to some extent.

He doesn't,

it's not that the problem isn't known or talked about.

It's that the remedies are the tricky part of this equation.

And we've got this reform roundtable summit, whatever you want to call it, next month in Canberra, where the Treasurer is inviting all sorts of ideas from everyone.

And

he indicated this morning that he's, for instance, not that keen on changing anything to do with the GST.

But that's where states get their revenue from.

That's how states pay for the things that they deliver.

So they'll be wanting a discussion around that.

Do we tax wealth more, PK?

Do we need to go into that space?

That's an intergenerational question.

Does the Treasurer want to have that argument,

which will be an argument that you'll have with the opposition on that issue I would guess I don't know I suspect they would come back from the other side and say you need to do more on spending

so yeah and what's the truth you actually have to do both that's actually the truth I mean we don't have to get elected you and I so we can say what what is real and same with treasury actually the reason you know all of this gets redacted is that this is a brief to government with the hard core truth as much as they know it and treasury officials don't have to get elected.

So when they say put your taxes on the...

No, but that's the art of politics, isn't it?

So

there's the high level, what the experts like Treasury officials say, and then there's the people who have to make it happen in the real world.

Over to you, Jim Chalmers.

Over to you, Jim Chalmers.

Well, he was

on the ground providing a pretty,

you know, I think he took a lot of questions.

He was really in charge of that press conference, actually.

He was sort of got his mojo in the press conference.

I love studying press conferences, one of my favorite things to do because you can lose control and he really had control of it.

Jacob, Mondays, favorite day of the week.

Got to hang out with you and doubled it up with my Sunday hosting of Insiders where you're on the couch.

Twice in two days.

Excellent.

Politics now.

We will be back tomorrow with more.

There'll be more tomorrow.

In fact, you know, this China trip is going to be huge all week, so we'll be bringing you more there.

And on Thursday, Fran and I take your questions to thepartyroom at abc.net.au and we will answer them.

See you, Jacob.

Take care.