If Julia Gillard appoints Kevin Rudd as Foreign Minister it would mean that she had taken two enormous punts in the first week of her government. The first punt was to make Wayne Swan Deputy Prime Minister given his role in promoting the disastrous mining tax which delivered Gillard the top job.
I think Wayne Swan was, in part, the victim of very bad advice from Ken Henry and is smart enough to realise just how big a mistake the government made. The G20 meeting in Toronto this week will broaden his vision, and with the help of Resources Minister Martin Ferguson, I expect he will negotiate a dramatic mining tax backdown, that still delivers healthy revenues to the government. But Swan is nevertheless a Gillard gamble.
The Australian newspaper reports that Rudd will be passed over mainly because it is too soon to have him back in cabinet. But there are also long-term problems. As Prime Minister, Kevin Rudd fell out of favour with the Chinese leadership, and relationships with India and Japan were not as good under Rudd as they were under Howard. Rudd would need to lift his game if he is to be an effective foreign minister. He is capable of doing the job but he would be another Gillard gamble. Defence would be much safer.
But Gillard is already showing the talents that will make her hard to beat in the next election. She has woken up to the fact that the Rudd-Wong emissions trading scheme might have been well-meaning, but was a total disaster. A carbon tax is simpler than an emissions trading scheme and easier to regulate. Additionally, if it is properly devised it will deliver the investment in power generation required to limit future brown-outs. It is also supported by the Greens. My guess (and it is a guess) is that she will try to use some of the carbon tax to cover part of the mining tax shortfall.
In foreign affairs Australia has an enormous task to cover past Rudd mistakes.
When Kevin Rudd became Prime Minister we had expected a deepening of Australia’s relationship with China, given that Rudd is fluent in Mandarin. But Rudd used his ability to speak Mandarin to lecture students at Beijing University on the Australian view of human rights. It really annoyed the Chinese leadership. Then, our defence white paper referred to an unnamed country in Asia which posed a potential threat to our security. The unnamed country had to be China. The Chinese leadership was so furious with these events, as well as a string of other Rudd actions, that China banned senior Chinese officials and business people coming to Australia to speak on panels where Rudd was in attendance. However, this breakdown did not affect trade and commercial relationships.
In fairness to Rudd he moved to repair the China relationship and less than week before his resignation as Prime Minister, China’s heir apparent Vice President Xi Jinping made a successful visit to Australia. Xi and Rudd agreed to set up a forum “to inject new vitality” into the relationship between the countries. The forum, to be a first for China, will include people representing all sectors – business, education, culture and other groups as well politicians and officials.
They also discussed promoting Chinese tourism.
But as I mentioned before, it was just in China that Rudd’s famed diplomacy skills failed him. In the case of India, Rudd also made mistakes and, while strengthening his ties with India was high on his initial agenda, he spent only one day in India during his time in office. By contrast Gillard undertook a five-day state visit when the issue of violence against Indian students in Australia was at its height.
Australia India Business Council vice chairman Ravi Bhatia welcomed the Gillard appointment as Prime Minister saying she is” a true friend of India”.
Gillard might not be an expert on international affairs but she is not tarnished by past mistakes so like John Howard she may be a very effective force. Rudd as foreign minister would make that task much harder. I don’t think she will take the gamble.
This article first appeared on Business Spectator.
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