The Age Publishes WikiLeaks Cables From US Embassy

The Age newspaper has just published the US embassy cables released to Fairfax by WikiLeaks.

This is the full text:

77562

9/8/2006 6:10
06CANBERRA1366
Embassy Canberra
CONFIDENTIAL//NOFORN

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C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 001366 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 09/07/2016 TAGS: PGOV, PREL, MARR, PARM, AS

SUBJECT: AMBASSADOR’S INTRODUCTORY CALL ON OPPOSITION LEADER KIM BEAZLEY

Classified By: Ambassador Robert McCallum, Reasons 1.4 (b) and (d)

SUMMARY ——-

1. (C/NF) Opposition Leader Kim Beazley told the Ambassador during his September 6 introductory call that the alliance continued to enjoy broad bipartisan support in Australia. The Labor Party, for its part, could be counted on to continue to support the alliance’s core elements of ship visits, the joint facilities, and joint exercises. If elected to replace Prime Minister John Howard, Beazley would maintain Australian forces in Afghanistan, since they represented a key part of the GOA,s response to the 9/11 attacks on the U.S. While he would also leave Australian troops in Baghdad to protect Australian diplomats and Australian naval forces in the Gulf, Beazley would make good on his longstanding pledge to withdraw Australian troops from southern Iraq. In other comments, Beazley urged that the U.S. release David Hicks if he could not be brought before a civil court, since most Australians would never accept his conviction by a military commission, maintained that the Howard government had had full knowledge of the Australian Wheat Board’s violations of the Iraq sanctions regime, and reiterated Labor opposition to any decision by the government to enrich uranium.

BIPARTISAN ALLIANCE SUPPORT —————————

2. (C/NF) The Ambassador began his September 6 introductory call on Labor Party head and Opposition Leader Kim Beazley by noting that he looked forward to remaining in close touch with the opposition during his time in Australia. We greatly valued, he said, the bipartisan underpinnings for the Alliance here, and appreciated that Labor’s continued support for our close ties was of paramount importance. In this connection, the Ambassador recalled he had already met with Shadow Foreign Minister Kevin Rudd, who had observed that the party leadership’s support for the alliance was not cost free, in terms of Labor’s internal dynamics (reported SEPTEL). Rudd had also provided a candid description of where Labor differed from the U.S. approach on certain issues, while reaffirming the leadership’s ironclad commitment to the overall alliance.

LABOR’S HISTORIC BACKING OF U.S. TIES ————————————-

3. (C/NF) Opposition Leader Beazley responded by recalling wryly that the Ambassador’s immediate predecessor, with whom he had enjoyed a very constructive relationship, was not adverse to taking Labor publicly to task on occasion. Although this had prompted criticism, Beazley said the former Ambassador was merely doing his job — and doing it well — of promoting his country’s interests. Australian politicians needed to be mature, and recognize that U.S representatives would react if their country’s policies were attacked. This came with the territory, and Labor officials had to be prepared to wear it.

4. (C/NF) Continuing, Beazley reinforced Rudd’s comments on Labor’s historically strong support for the Alliance, recalling that the immediate post-war Menzies-led Liberal government had real concerns over Washington’s policies at the time, which it believed promoted destabilizing decolonialization in Southeast Asia. Labor, by contrast, was guided by Prime Minister Curtin,s embrace of the United States during World War II as the region,s primary hope for a lasting postwar peace. This said, Beazley recounted that Labor had long recognized the relative power disparity between the United States and Australia on the international scene. The United States is invariably the elephant in the room, he said, and while Australia,s views may not always matter that much in Washington, the reverse was never true. Australians remained obsessed with the United States, and followed Washington,s every move, perhaps to a fault.

HIGH-LEVEL U.S. ATTENTION ————————-

5. (C/NF) The Ambassador, in responding, cautioned Beazley against underestimating the esteem in which Australia was now held at the highest levels of the U.S. Government. The U.S. media too often could ignore Australia, but policy makers were keenly aware of the multifaceted interests that our two nations share, and that were driving our relations ever closer. In the meantime, the Ambassador told Beazley that he was committed to ensuring Washington had a comprehensive picture of Australian views, which meant those of the Opposition and well as those of the Government. At the same time, the Ambassador stressed his understanding of the key personal role Beazley had played as defense minister under the Hawke Government in defending and strengthening the alliance during crucial periods in the 1980s.

SOUTHEAST ASIA/PACIFIC FOCUS —————————-

6. (C/NF) Beazley affirmed that the alliance continued to enjoy broad bipartisan support in Australia. This did not mean, as Kevin Rudd had noted, that the Labor leadership did not have to pay certain costs within the party when it argued the alliance case. Nonetheless, Labor could be counted upon to continue to support the alliance,s core elements, which Beazley described as the joint facilities, ship visits, and joint training exercises. At the same time, Labor and the coalition government had different strategic policy outlooks, with Labor more focused on Southeast Asia and the Pacific region and the government less so, as a result of its preoccupation with the Middle East. The government, and Foreign Minister Downer in particular, had badly misstated the facts, Beazley charged, when Downer claimed in August of 2004 in Beijing that a conflict between the U.S. and China over Taiwan would not necessarily trigger Australia,s ANZUS obligations to aid the U.S. In the event of a war between the United States and China, Australia would have absolutely no alternative but to line up militarily beside the U.S., Beazley said. Otherwise, the alliance would be effectively dead and buried, something Australia could never afford to see happen. It was important for Washington and Canberra to do everything possible to prevent such a catastrophe, but Downer should have known better than to have given Beijing any notion that Canberra would be able to sit out a conflict. (COMMENT: Prime Minister Howard, subsequent to Downer,s Beijing remarks (which he insisted had been taken out of context), made clear Australia,s ANZUS alliance responsibilities would always play a key role in the nation,s decisions, while maintaining it was improper to speculate about hypothetical future situations. END COMMENT.)

REMAIN IN AFGHANISTAN, BUT LEAVE IRAQ ————————————-

7. (C/NF) Beazley continued that Labor also disagreed with important aspects of government policy toward the Middle East. Labor supported Australia,s military contributions in Afghanistan, and would continue to do so until Hell freezes over, since Australia,s actions clearly fell under its ANZUS obligations to respond to the 9/11 attacks on the U.S. Iraq was different, he maintained, and was a terrible mistake because it damaged, rather than strengthened, the overall war on terror. Labor would not commit an act of vandalism, however, if it came to power. Australian troops in Baghdad guarding Australian diplomats would remain, as would Australian naval forces protecting gulf oil terminals against terrorist attacks, although Beazley would make good on his longstanding pledge to withdraw Australian troops presently in southern Iraq.

FREE DAVID HICKS —————-

8. (C/NF) David Hicks was a ratbag who had almost certainly been up to nefarious things, and should probably spend a long time in jail, Beazley said. Still, he predicted most Australians would never accept his conviction by a military commission, even if the Administration manages to structure one acceptable to the Supreme Court. Unless he can be tried by a civil court or by a fully constituted court marshal, it would be better, Beazley argued, to let him go. The British citizens who were released would never pose a threat again, CANBERRA 00001366 003 OF 003 since they were under constant surveillance by the UK authorities. Hicks would be no different, and would quickly fade into well-deserved obscurity.

AUSTRALIAN WHEAT BOARD ———————-

9. (C/NF) Beazley maintained the Howard government had had full knowledgeof the Australian Wheat Board,s appalling bribes that undermined the sanctions regime against Saddam. It had repeatedly turned a blind eye to numerous indications of wrong doing, and had lied about what it had known and when. Not only had it sanctioned blatant wrongdoing, but the government had facilitated the destruction of the one mechanism that might have forced Saddam to satisfy international demands to prove he was not pursuing weapons programs. The U.S. had every reason to be outraged with Howard, and Beazley urged that Washington express disapproval.

NO TO ENRICHMENT ——————

10. (C/NF) Australia should not pursue uranium enrichment, Beazley said, while repeating Labor,s public concerns that such a decision by Canberra would be detrimental to international counter-proliferation efforts. Other nations in Australia,s region would use Canberra,s decision to start programs of their own, and it would be virtually impossible to convince them Australia would not seek at some point to use the technology as the basis for a nuclear weapons program.

COMMENT ——-

11. (C/NF) Beazley’s Chief of Staff David Fredericks and DCM were also present at the meeting, which was very cordial throughout. Beazley, whose own personal support for the alliance has been evident for decades, clearly wanted to make the twin points that he has a deep understanding of its importance and that as Opposition Leader he recognizes most of the Australian electorate are not about to risk the country’s security by choosing a prime minister with suspect credentials in this regard. Although the reasons for Mark Latham’s loss to John Howard in 2004 are legion, Labor recognizes that his multiple, embarrassing pronouncements on issues affecting the alliance represented blunders of the first order. In this same vein, Beazley’s office made a point of issuing a press release on his meeting with the Ambassador shortly after it concluded (which it cleared with us) underscoring Beazley’s strong commitment to the ANZUS alliance. MCCALLUM

80743

10/5/2006 7:28
06CANBERRA1574
Embassy Canberra
CONFIDENTIAL//NOFORN

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C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 001574 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 10/04/2016 TAGS: PGOV, ELAB, ECON, AS

SUBJECT: INTEREST RATES MORE IMPORTANT POLITICALLY THAN LABOR LAW CHANGES

Classified By: Political Counselor James F. Cole, REASONS 1.4 (b) and ( d).

SUMMARY

1. (C/NF) Interest rates will be a key political issue for the 2007 federal elections, according to a number of observers Embassy poloffs met with during a visit to Sydney. The consensus was that changes to the industrial relations laws will be at most a contributing factor. So far, the impact of the labor law changes on workers has been minimal given the strong economy and low unemployment. According to these observers, most Australian voters, thinking about their finances when they vote next year, will likely support the Coalition but they will not want the Government to continue controlling the Senate, as it does now. New South Wales (NSW) Labor Party Secretary Mark Arbib (Protect) noted that left-of-center parties have stressed a “national vision” for the future but security concerns have helped right-wing governments since 9/11.

INTEREST RATES BIGGER ELECTION ISSUE THAN INDUSTRIAL RELATIONS REFORM

2. (C/NF) During a trip to Sydney September 28-29, Embassy poloffs met with Garry Brack (Protect), Chief Executive of Employers First, Mark Lennon (Protect), Assistant Secretary of the Labor Council of New South Wales, Dr. John Buchanan (Protect), Director of the Australian Centre for Industrial Relations Research and Training at the University of Sydney, and Mark Arbib (Protect), General Secretary of the New South Wales Labor Party.

3. (C/NF) Mark Lennon, deputy director for the labor-union umbrella organization in NSW, said that while the changes to the industrial relations laws were a key issue for organized labor, the voters would be focused on the pocketbook when they voted next year — and the key issue for them was interest rates. Given the large mortgages needed to buy the expensive real estate in Sydney, and the fact that most loans had adjustable interest rates, a rise in rates affected most voters’ disposable income. Many voters were chary of Coalition Senate control, Lennon also maintained. With a healthy economy and stable interest rates they would keep the Government in power in the House but were less likely to vote for Coalition senators.

POST-9/11 SECURITY CONCERNS HAVE HELPED RIGHT WING PARTIES

4. (C/NF) Arbib echoed Lennon’s sentiments on interest rates, noting that during the 2004 election campaign, PM Howard’s standing in the polls always increased when he focused on interest rates, and conversely, decreased when he changed the subject. Not only does the strong economy help the Coalition, Arbib said, but post-9/11 security concerns were another factor. Left-of-center governments need to articulate a vision for the future, and unless Australia invests in its future it will only be a “quarry for the Chinese and a tourist destination for the Japanese.” However, Arbib continued, the immediate issues for every voter are the economy and security, and the Howard Government currently holds the advantage on both. It will be a tough struggle for the Labor Party (ALP) to win the federal elections in 2007, Arbib admitted, but the ALP has a stronger team of young leaders coming up through the political system and he was confident for the future.

5. (C/NF) Arbib said Kim Beazley, because he was the opposite of the volatile Mark Latham, was the right man to lead the ALP at the present time. Arbib noted that the March 2007 state elections in NSW would be tough for the ALP. They had been in power for 12 years and were having some problems but the Opposition leader was inexperienced and not yet ready to challenge for the leadership. Coalition control of the Federal Government and ALP control of the states and territories was accentuated by the fact that the best Coalition political operatives gravitated toward Canberra, where they could get better jobs working at the national level. The best jobs for the good ALP politicians and staffers were in the state governments, which the ALP run.

6. (BIO NOTE: Young, dynamic and friendly, Arbib is reputed to be the leader of the right wing of the ALP (traditionally centered in NSW) and the one who chose Beazley to be the ALP CANBERRA 00001574 002 OF 002 leader after Latham. He also told us that he, unlike Beazley, supported Iraq as well as the war on terrorism in general.)

WITH A STRONG ECONOMY, WAGES INCREASE DESPITE NEW LABOR LAWS

7. (C/NF) Employer representative Brack explained that under the old awards system of industrial relations, an “award” issued by the Australian Industrial Relations Commission in response to a labor dispute increased compensation and benefits for a particular industry. That award would then provide the benchmark that would increase wages and benefits in other industries throughout the economy. This made it impossible for businesses to control labor costs and compete internationally, Brack said.

8. (C/NF) While the reforms instituted by the Howard Government in 1996 and amended in 2005 have provided more job-market flexibility and ended the steady increases in wages and benefits, the reforms have had little impact, Brack pointed out. With a growing economy and essentially full employment, the tight job market is continuing to push salaries higher. Employers are most concerned with keeping their skilled employees. In addition, Brack noted, many employees are covered by awards or state compensation laws that pre-dated the 2005 workplace law and have not yet expired.

9. (C/NF) Dr. Buchanan, whose research institute has done a number of studies on the new workplace relations laws, said that strikes were much harder to mount under the new laws and the unions had lost bargaining power. Skilled employees would be less affected by the changes than the 20 percent of workers at the bottom, who would lose many of their protections. Under the old awards system, this 20 percent was paid relatively well, forcing employers to use fewer workers more efficiently. Buchanan noted that New Zealand and the states of Victoria and Western Australia had undertaken similar reforms that dismantled industry-wide guarantees in favor of individual agreements and a few statutory minimum conditions. The result has been the growth of low-paying jobs and greater wage inequality, especially for women, young people and low-skilled employees.

10. (C/NF) The new industrial relations laws — designed to give employers the ability to hire a more flexible workforce to compete internationally — may be partially responsible for the fact that unemployment is at the lowest level in 30 years (4.9 percent). As Buchanan noted, under the old system employers had to pay their less-skilled workers relatively well, so they hired fewer. His fear — and perhaps a fear of many Australians — is that employers may now be able to create a class of so-called Walmart employees in Australia.

COMMENT

11. (C/NF) The economy and security appear to remain the issues over which the elections will be fought next year. The observers we spoke with stressed that PM Howard is a master politician who will lay claim to the country’s current prosperity and keep interest rates lower than a Labor government would be able to do. He will also be a formidable campaigner in the fight to convince the electorate which party can best deliver on national security. OWENS

87931

12/4/2006 5:13
06CANBERRA1933
Embassy Canberra
CONFIDENTIAL//NOFORN

06CANBERRA1393|06CANBERRA1925

VZCZCXRO4930OO RUEHPBDE RUEHBY #1933 3380513ZNY CCCCC ZZHO 040513Z DEC 06FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC IMMEDIATE 6410INFO RUEHPB/AMEMBASSY PORT MORESBY IMMEDIATE 1713RUEHWL/AMEMBASSY WELLINGTON IMMEDIATE 4869RUEHBN/AMCONSUL MELBOURNE IMMEDIATE 3568RUEHBAD/AMCONSUL PERTH IMMEDIATE 2049RUEHDN/AMCONSUL SYDNEY IMMEDIATE 1562RHEHNSC/NSC WASHINGTON DC IMMEDIATERHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATE

C O N F I D E N T I A L CANBERRA 001933 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 12/03/2016 TAGS: PGOV, PREL, AS

SUBJECT: KEVIN RUDD IS NEW OPPOSITION LEADER

REF: A) CANBERRA 1925 B) CANBERRA 1393 Classified By: DCM Michael P. Owens for reasons 1.4 (b) and (d).

1. (C/NF) SUMMARY: Kevin Rudd won the vote in the Labor Party (ALP) caucus on December 4, beating Kim Beazley 49-39 to become the new leader of the Opposition. The press is reporting that the uncommitted caucus members swung to Mr. Rudd over the weekend. Voting for the shadow cabinet and other leadership positions has been postponed until Thursday. As ALP MP Bob McMullen (protect) pointed out to us Friday, Rudd is a strong supporter of the U.S. alliance. At his press conference today, Rudd reiterated that his support for the alliance was rock solid. However, he also backs the current ALP policy calling for a withdrawal of Australian troops from Iraq. Rudd will be the fifth ALP leader since 1996. END SUMMARY.

ALP ELECTS NEW LEADERSHIP

2. (SBU) Shadow Foreign Minister Kevin Rudd became the new Opposition Leader December 4 after winning a caucus vote over Kim Beazley 49-39. Current Shadow Health Minister Julia Gillard became Deputy Leader. The ALP caucus will meet Thursday to elect a new front bench. This will give Rudd and Gillard time to pick a new team that will not face parliamentary question time until next year. Kim Beazley’s position had become increasingly difficult the past two weeks (see ref A), and Rudd and Gillard seized their opportunity. What had appeared on Friday as still a tight contest broke for Rudd over the weekend. In two polls released Monday, the public preferred Rudd-Gillard to Beazley-Macklin by 21 percent. The press was also reporting that Rudd supporters were leaking internal ALP polling over the weekend that mirrored the public polls.

NEW ALP LEADER’S ATTITUDE TOWARDS U.S. ALLIANCE

3.(C/NF) MP McMullen pointed out to poloffs Friday that Rudd and Beazley were both strong supporters of the alliance with the U.S. Rudd had noted to the Ambassador in September (ref B) that while the ALP had specific policy differences on issues like Iraq, it was committed to maintaining a strong alliance relationship. When asked about the U.S. relationship at his press conference today Rudd said his commitment to the alliance was “rock solid.”

GENERATIONAL CHANGE

4. (C) In the end, the Rudd-Beazley contest did not appear to be bitter. The long-standing ALP factions did not vote as blocks in the caucus, and this may reflect the weakening of the factions within the Labor Party as a whole. In press conferences after the voting, both sides praised the other, with Beazley — whose brother unexpectedly died today — giving a warm, heartfelt farewell speech showing more passion than he had in months. The 57 year-old Beazley noted that this caucus election may reflect a generational change, with Rudd and Gillard both in their 40s.

5. (C/NF) COMMENT: Beazley was not connecting with the public. With the polls showing the ALP within striking distance of the Coalition, a switch to Rudd and Gillard made sense to most caucus members. As senior ALP politician Robert Ray (protect) told us last week, the key question in any poll is satisfaction rating, and those polls were showing that Beazley was unelectable despite a range of issues (interest rates, global warming, Iraq) that presumably should have made him competitive with Prime Minister Howard.

6. (C/NF) The ALP caucus also switched leaders several months before the last federal election, bringing in the initially popular but ultimately unstable Mark Latham to replace Simon Creen. Hardworking, smart, and serious, Rudd is no Mark Latham. However, the Mandarin-speaking intellectual Rudd is not an affable politician in the mold of Bob Hawke. His ability to connect with average Australians will be a big question in the lead-up to the 2007 elections. MCCALLUM

131994

11/29/2007 7:42
07CANBERRA1697
Embassy Canberra
CONFIDENTIAL

P 290742Z NOV 07FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 8636INFO AMEMBASSY BEIJING PRIORITY AMEMBASSY JAKARTA PRIORITY AMEMBASSY SEOUL PRIORITY AMEMBASSY SINGAPORE PRIORITY AMEMBASSY TOKYO PRIORITY AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY CDR USPACOM HONOLULU HI PRIORITYSECDEF WASHINGTON DC PRIORITYNSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L CANBERRA 001697 SIPDIS SIPDIS E.O. 12958: DECL: 11/28/2017 TAGS: PGOV, MARR, ECON, ETRD, AS

SUBJECT: RUDD ANNOUNCES NEW CABINET

Classified By: James F. Cole for reasons 1.4 (b) and (d)

1. (C/NF) SUMMARY: Prime Minister-elect Kevin Rudd announced his 20-member Cabinet November 29. It is a talented line-up that strikes a balance between different regions and the Labor Party’s left and right-wing factions. Rudd honored his undertaking to retain his core economic team – Julia Gillard as Employment and Workplace Relations Minister, Wayne Swan as Treasurer and Lindsay Tanner as Finance Minister – in their positions. He surprised many observers by appointing Stephen Smith as Foreign Minister and Gillard as Education Minister on top of Workplace Relations and her position as Deputy Prime Minister. Rudd has appointed Joel Fitzgibbon as Defense Minister and former Australian Labor Party (ALP) Leader Simon Crean as Trade Minister. The other major surprise was the appointment of gaffe-prone shadow minister and former rock star Peter Garrett as Minister for the Environment, Heritage and the Arts while creating a new position of Minister for Climate Change and Water (the two most important components of the Environment Ministry) and giving it to Senator Penny Wong, a rising star who performed well during the election. The Cabinet will be sworn in on Monday December 3. We will report on the cabinet appointments in more detail, and provide a full list, septel. END SUMMARY

FOREIGN AFFAIRS

2. (SBU) Western Australia’s Stephen Smith, currently Shadow Education Minister and close to former Opposition Leader Kim Beazley, will be Minister for Foreign Affairs. A former lawyer, Keating Government adviser, and State Secretary of the Western Australian ALP, Smith has a sharp mind and calm manner, although he has little experience in foreign affairs. In his press conference, Rudd cited Western Australia’s time-zone (it is two hours behind eastern Australia and the same as several Asian countries) as an advantage of having Smith in the portfolio. Former Keating Government Minister Bob McMullan was touted for Foreign Affairs but will be Parliamentary Secretary to the Foreign Affairs Minister — with responsibility for overseas development.

DEFENSE

3. (SBU) In Defense, Fitzgibbon’s appointment is a reward for his solid performance in that portfolio and perhaps gratitude for helping deliver Rudd New South Wales support in his leadership coup 12 months ago. Assisting Fitzgibbon will be two Parliamentary Secretaries Greg Combet and new MP and former Australian Army lawyer, Mike Kelly. Combet is the former secretary of the Australian Council of Trade Unions and has no background in defense procurement, which is his new portfolio.

TRADE AND AGRICULTURE

4. (SBU) Former ALP leader Simon Crean, a minister in the last ALP Government, retains the Trade portfolio he held when Labor was in opposition. Former ALP spokesperson for Immigration, Tony Burke, is the new Minister for Agriculture. Having just finished his first term in Parliament, this is a significant appointment for someone Rudd called a “rising star” in his press conference. An accomplished politician who increased his margin of victory in the recent election in Qwho increased his margin of victory in the recent election in what was already a safe Labor seat, he is from Southwestern Sydney and is not likely to have much of a background in agriculture.

CLIMATE CHANGE

5. (SBU) Former Labor Environment and Water Spokesperson Peter Garrett has lost the climate change portfolio but will be Minister for the Environment, Heritage and the Arts. The Cabinet Ministry of Climate Change and Water will be held by South Australian Senator Penny Wong who performed very well during the recent election. (Wong visited the United States on an IVG earlier this year.) The former Foreign Affairs Spokesman Robert McClelland will be Attorney-General. Nicola Roxon continues her role in health for the ALP as the new Health Minister. She will have the unenviable task of trying to improve quality and control expenses in Australia’a state-run public hospitals. Martin Ferguson is new Minister for Resources, Energy and Tourism. His expertise is in transport and regional services. Senator Chris Evans, the former Labor spokesperson for resources from Western Australia, is Minister for Immigration and Citizenship.

A TOUGH LOAD FOR GILLARD

6. (C/NF) COMMENT: In September, Rudd broke ALP tradition by declaring that he would name the Ministry rather than cater to the demands of the various factions within the party. He appears to have chosen a capable team that contains a good mixture of youth and experience while also maintaining the balance between the factions. Gillard has a monumental task as the Minister responsible for overseeing the winding back of WorkChoices and implementing Rudd’s “Education Revolution.” Its unclear why she would take on two difficult portfolios and now that the Liberal Party has named the capable and high-profile Julie Bishop as its spokesperson on industrial relations (see septel), Gillard will have her hands full. While Smith may have little experience in foreign affairs, it is probable that the real foreign minister will be Kevin Rudd himself, a micromanager and former diplomat who was Labor’s spokesperson for foreign policy. MCCALLUM

58001

6/13/2008 2:13
08CANBERRA609
Embassy Canberra
CONFIDENTIAL//NOFORN

06CANBERRA1943

P 130213Z JUN 08 ZDKFM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 9716INFO AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY THE WHITE HOUSE WASHINGTON DC PRIORITYNSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L CANBERRA 000609 NOFORN SIPDIS E.O. 12958: DECL: 06/12/2018 TAGS: PGOV, PINR, AS

SUBJECT: DEPUTY PM JULIA GILLARD STAR IN RUDD GOVERNMENT

REF: 06 CANBERRA 1943 Classified By: DCM Daniel A. Clune for reasons 1.4 (b) and (d).

1. (C/NF) SUMMARY: Two stars have emerged in the government of Prime Minister Kevin Rudd: Rudd himself and Deputy Prime Minister Julia Gillard (who will be Washington for the June 23-25 American Australian Leadership Dialogue). Gillard became Deputy Leader of the Australian Labor Party (ALP) after she and Rudd deposed Kim Beazley in December 2006. In the run-up to the November 24 election, and during the campaign itself, Gillard was a loyal and competent deputy, so much so that Rudd went out of his way in his election victory speech to thank her. While she was not given the traditional number two job of Treasurer in the new government, Gillard was handed two important portfolios: industrial relations and education. Gillard, unlike Treasurer Wayne Swan or any other minister (except Finance Minister Lindsay Tanner), has increased her prominence and power since she became deputy prime minister and is now the clear number two (with a big gap before number three) in the Rudd Government. At this point, Gillard would have to be considered the front-runner to succeed Kevin Rudd as Prime Minister, which would make her Australia’s first female Prime Minister. Several contacts caution, however, that Rudd is ambivalent about Gillard, who is not from Labor’s Right Wing like he is, and he will avoid creating a potential rival. By the time Labor is thinking beyond Rudd, Gillard may well face more serious competition. END SUMMARY.

RUDD AND GILLARD ABOVE THE REST

2. (C/NF) Through the first seven months of the Rudd Government, Gillard is the only ALP politician who has approached PM Rudd in national prominence. She is the second most important person in the Government, with the rest of the ministers trailing far behind, and Australia’s highest ranking woman. Gillard, who stumbled a bit when she announced Labor’s industrial relations policy at the ALP national conference in April 2007, has since performed well, supporting Rudd during the election, running her ministry competently, and demonstrating a flair for showmanship and public speaking during Parliament’s Question Time. Traditionally, the Treasurer, the second most important cabinet position, comes from the Right Faction of the Party in an ALP government. This practice partly explains why Wayne Swan received the position. To compensate, Gillard received two portfolios, education and industrial relations. Since the election, however, it is Gillard who has made the most of her position while Swan, uncomfortable on his feet and with economics, has struggled at times. After Rudd, she is now the most prominent minister in the government.

GILLARD THE PRAGMATIST

3. (C/NF) Many key ALP insiders have told poloffs that Gillard, who joined the ALP as a member of the Victorian branch’s Socialist Left faction, is at heart a pragmatist. New South Wales Right powerbroker Mark Arbib (protect) described her as one of the most pragmatic politicians in the ALP. Michael Cooney (protect), from the ALP Right and a former senior adviser to ALP leaders Mark Latham and Kim Beazley, said she has been very impressive as a minister: knowledgeable on the issues, listens to advice from subordinates and civil servants and is not afraid to delegate responsibility. When we reminded Paul Howes (protect), head of the right-wing Australian Workers Union, that ALP Qof the right-wing Australian Workers Union, that ALP politicians from the Left, no matter how capable, do not become party leader, he said immediately: “but she votes with the Right.” In 2002, when she was Shadow Immigration Minister, Gillard presented to the ALP National Conference a draft policy supporting the continuation of the Howard Government’s policy of mandatory detention of unauthorized arrivals (of refugees like those on the “Tampa”). This upset the Left, but reflected the views of mainstream Australia.

GILLARD THE PRO-AMERICAN

4. (C/NF) Although long appearing ambivalent about the Australia-US Alliance, Gillard’s actions since she became the Labor Party number two indicate an understanding of its importance. Poloffs had little contact with her when she was in opposition but since the election, Gillard has gone out of her way to assist the Embassy. She attended a breakfast hosted by the Ambassador for U/S Nick Burns who visited Canberra just days after the election. At our request, she agreed to meet a visiting member of the National Labor Relations Board, after prior entreaties by the board member’s Australian hosts had been rebuffed. Gillard is now a regular attendee at the American Australian Leadership Dialogues (AALD), and will be the principal government representative to the AALD meeting in Washington at the end of June. (COMMENT: Although warm and engaging in her dealings with American diplomats, it’s unclear whether this change in attitude reflects a mellowing of her views or an understanding of what she needs to do to become leader of the ALP. It is likely a combination of the two. Labor Party officials have told us that one lesson Gillard took from the 2004 elections was that Australians will not elect a PM who is perceived to be anti-American. END COMMENT)

GILLARD THE SOCIALIST

5. (SBU) In the late 1970s, Gillard joined the Socialist Left faction of the Victorian ALP. In the mid 1980s, she helped form “Socialist Forum” which contained disaffected members of the Socialist Left and former Communists. This group proposed ending the Australia-US Alliance, and introducing radical tax policies. In a Socialist Forum Pamphlet from the mid-1980s, Gillard describes herself as a “socialist and feminist.” By the late 1980s, however, her involvement in Socialist Forum had significantly declined, although she remained a member until it dissolved in 2002. Gillard now downplays her involvement in Socialist Forum and describes the group as a “sort of a debating society.” Indeed she good-humoredly waves away press attempts to raise the subject of her early political leanings.

THE RIGHT HELPS GILLARD

6. (SBU) In the early 1990s, Gillard and her supporters formed a group within the Socialist Left called the “Pledge Group.” To the consternation of the Socialist Left leadership, it formed an alliance with the Right, and Gillard became Chief of Staff to then Victorian Opposition Leader (now Premier) John Brumby, who is from the Victorian Right of the ALP. In 1998, with the Right’s support, she gained preselection for the federal parliamentary seat of Lalor, in Melbourne’s western suburbs. Subsequently, the Socialist Left split and the Gillard group, part of the “Soft Left” faction, has remained outside the Socialist Left since. In March 2006, Gillard described factions as “a cancer eating away at the very fabric of the Labor Party.” She called on ALP leadership figures to quit factions and for the ALP leader to have the power to directly appoint his/her front bench Indeed, Gillard has not attended faction meetings since she became Deputy ALP leader. After the election, Rudd broke ALP tradition and appointed his Ministry (apparently) without the approval of the factions. Since 2003, Gillard has been on good terms with a large number of Right Faction MPs – such as Simon Crean and Joel Fitzgibbon – whom she worked with to oppose Kim Beazley in leadership ballots.

COMMENT: SORRY, NO LEFTY ALP LEADERS

7. (C/NF) The ALP traditionally does not produce leaders from the Left of the party, but Gillard is a pragmatist who has appeal across factional lines. Conventional wisdom is that Rudd will be Prime Minister for eight or nine years and then hand over the leadership 12-18 months out from an election. Gillard twice seriously considered running for the ALP leadership. In January 2005, following Mark Latham’s resignation, she pulled out when she realized Kim Beazley had the numbers. And in late 2006, she threw her support behind Rudd because she knew Beazley would have won a three-way QRudd because she knew Beazley would have won a three-way contest (notwithstanding the fact that Gillard would have received more votes than Rudd) and he would have defeated Gillard one-on-one. Gillard the pragmatist knew only Rudd was capable of receiving the necessary support to defeat Beazley.

8. (C/NF) Some Coalition MPs believed before the last election that Gillard was a weakness for Rudd. They thought she was too left-wing for mainstream voters, and her childlessness and unmarried status would hurt her with “working families.” The Coalition targeted her during the election campaign but the down to earth Gillard is popular with ordinary Australians. An obstacle to Gillard assuming the leadership may be some key right-wing ALP MPs and union officials. Powerful, socially conservative union leaders such as Joe De Bruyn (head of the shopworkers union, the largest in the Australian Council of Trade Unions), Bill Ludwig (head of the Australian Workers Union), and Don Farrell (powerbroker and shopworkers union leader in South Australia and incoming senator) may attempt to thwart her. So could the head of the Victorian Right, Senator Stephen Conroy (who was a strong supporter of Kim Beazley and cannot stand Gillard), and the ambitious MP and former unionist Bill Shorten (also a strong supporter of Beazley who has Prime Ministerial ambitions). Much internal hostility towards Gillard can be traced back to her support of Mark Latham and her undermining of Kim Beazley’s leadership. Last year, some ALP MPs were critical of the industrial relations policy she drafted for the ALP conference – a policy which alienated business and had to be re-drafted by Rudd.

9. (C/NF) Perhaps the biggest determinant in whether she becomes leader will be her performance as a Minister. Gillard has a huge workload as Minister for Education and Workplace Relations. She is responsible for implementing two of Rudd’s key election promises – the “Education Revolution,” and industrial relations changes, including the creation of a national industrial relations system. This will require her to deal with recalcitrant ALP state governments and unions that would like the ALP to stop their declining memberships by going further than Rudd promised. One contact who used to work for Rudd suggested that he gave Gillard the education reform portfolio to weaken her within the ALP, as any serious reform will antagonize the education unions and the state governments. A less credible education reform package will cement the notion that Gillard is captive of the traditional Labor Left, which would torpedo her viabilitiy as PM. John Howard’s former chief of staff told us that with two portfolios, Gillard would be “too busy” to worry about anything other than her job. But Gillard is tough and highly intelligent. If she comes through this relatively unscathed, it will go a long way to ensuring she succeeds Rudd. In the public’s eyes at present, Gillard, as the number two figure in the ALP, is Rudd’s heir apparent. If this is the case when Rudd goes, it will be extremely hard for ALP MPs to deny her the leadership. It is unlikely the ALP would miss the opportunity to produce Australia’s first female Prime Minister. MCCALLUM

193682

2/25/2009 7:23
09CANBERRA188
Embassy Canberra
CONFIDENTIAL//NOFORN

P 250723Z FEB 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1080INFO AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY

C O N F I D E N T I A L CANBERRA 000188 NOFORN SIPDIS E.O. 12958: DECL: 02/24/2019 TAGS: PGOV, ELAB, AS

SUBJECT: ALP FACTIONS BIDE THEIR TIME

Classified By: Political Counselor James F. Cole for reasons 1.4 (b) and (d).

1. (SBU) SUMMARY: Despite the apparent desire of Australian Labor Party (ALP) leader and Prime Minister Kevin Rudd to end the power of ALP factions, the January outbreak of a dispute between members of the Right faction in Victoria is a reminder that they still control politics at the local level. Nationally, the factions have lost much of their relevance. Rudd ignored the factions in picking his cabinet ministers after the 2007 election. It is virtually impossible, however, to rise in the ALP without the patronage of a faction – the Prime Minister being a notable exception. Rudd, popular with the voters and the man who led the ALP to its first victory in 11 years, currently dominates ALP politics but once his popularity with the voters wanes, faction leaders believe their national influence will return. END SUMMARY.

VICTORIAN RIGHT SPLITS AFTER DEAL ON PARLIAMENTARY SEATS 2. (U) In January, a dispute broke out among members of Labor Unity, the principal right-wing faction in the state of Victoria. Labor Unity, which includes Premier John Brumby, Federal MP and former trade unionist Bill Shorten and Communications Minister Stephen Conroy, made a deal with the ALP Left in the state to protect sitting state and federal MPs from a nomination challenge. The reason for the agreement was to shut out a dissident element in Labor Unity that had defeated Shorten’s and Conroy’s preferred candidate in a nomination for a state seat, and had then attempted to oust ALP state secretary Stephen Newnham, an ally of Brumby’s.

THE POWER IS IN THE PRESELECTION

3. (SBU) In Australia, nominations for state and federal parliamentary seats are called “pre-selections.” Meetings are held at the district branches of each party and the members choose a candidate. Because this is a small-scale, parochial exercise, ALP pre-selections are controlled by those who can bring the most local ALP members to a meeting. The factions, and the unions which back each faction, can always ensure that enough members turn up to a branch meeting to determine the outcome (sometimes known as “branch stacking”). For this reason, even though the unions are now less than 20 percent of the workforce in Australia, they retain a disproportionate share of political power within the ALP.

UNIONS UNDERPIN FACTIONS

4. (U) Fundamentally, the power of the factions resides in the membership of their affiliated unions. The Australian Workers Union (AWU), the Shop Distributive and Allied Employees Association (SDA), and the Transport Workers Union (TWU) are major unions affiliated with the Right, while the Construction Forestry Mining and Energy Union (CFMEU), the Australian Manufacturing Workers Union (AMWU), and the Liquor Hospitality and Miscellaneous Workers Union (LHMU) are major unions affiliated with the Left.

5. (C/NF) The downfall of New South Wales (NSW) Premier Morris Iemma in 2008 illustrates the sway a union can have within a faction. The Iemma Government proposed to privatize the state’s electricity system so that the sector could be modernized and the sales proceeds used to fund pressing infrastructure projects. The unions in NSW, which are in the NSW Right faction with Iemma, balked at the sale, knowing privatization would mean job cuts. When Iemma refused to back down, the unions forced the Right faction to withdraw its support for the Premier and he had to resign. Interestingly, AWU President Bill Ludwig, a Right faction QInterestingly, AWU President Bill Ludwig, a Right faction powerbroker in Queensland and one of the most powerful union leaders in the country, confided to us that he opposed the NSW unions’ tactics with Iemma. He said that ALP governments have obligations to the general community, not just the unions, and voters turn on governments that appear beholden to unions.

GROWING CRITICISM

6. (SBU) During the ALP’s years in Opposition (1996-2007), a growing number of MPs expressed concern that the factional system, based on power and personalities, was rewarding political hacks at the expense of talented candidates from the broader community. In early 2006, in a well publicized speech, Gillard claimed that factionalism was a “cancer eating away at the very fabric of the Labor party,” and that it was about “who wins, not what they win for.” She called for the ALP leader to have the prerogative to choose the cabinet. Before the election, Rudd declared he – not the Caucus – would choose the ALP ministry. Caucus approved this in March 2008, overturning more than 100 years of ALP tradition. Rudd and Gillard no longer attend faction meetings. (NOTE: Ironically, even though Rudd claimed he would pick his ministers without regard for the factions, his cabinet reflects the factional balance within the ALP: 11 from the Right and nine from the Left. End Note)

END OF COLD WAR BLURS DIFFERENCES

7. (C/NF) Over the last two decades, the ideological differences between the Left and Right have blurred, largely due to the collapse of Communism, and a recognition by the Left that a market economy, with appropriate safeguards, is the best way to raise living standards. For decades, foreign policy, particularly the American Alliance, was a key point of difference between the factions, but today key figures in the Left like Gillard are as supportive of the Alliance as the Right. According to ALP Senator Dave Feeney, a central figure in the Victorian factional dispute, there is no longer any intellectual integrity in the factions and he describes the current system as unpredictable and “byzantine.” Feeney points out, for example, that there is no major policy issue on which he, a Right factional leader, differs from Gillard.

FACTIONS MAKE RUDD LEADER

8. (SBU) Ironically for Rudd, who won a seat in federal parliament without the support of a faction or the unions, he and Gillard would not have won the ALP leadership in December 2006 without the backing of some of the factions. Gillard was supported by the Left but she knew she would never get enough support from the Right to win so she backed Rudd as Leader. Meanwhile, most of the traditional union bosses from the Right, unhappy with Gillard and knowing Rudd was not a union man, supported Beazley. However, the head of the Right in New South Wales (NSW), State Secretary Mark Arbib, backed Rudd. Arbib is now the most powerful figure in the national Right. Rudd has taken him into his inner circle and on February 18 appointed him as a Parliamentary Secretary.

COMMENT: FACTIONS COULD KEEP GILLARD FROM LEADERSHIP

9. (C/NF) Two ALP Right factional leaders we have spoken to, AWU President Joe Ludwig and Senator Don Farrell, former head of the SDA in South Australia and the most influential powerbroker in that state, both agreed that Rudd’s political power in the ALP is now unchallenged, but they opined that the factions would reassert themselves once Rudd’s popularity declines. Although Gillard is currently Rudd’s heir apparent, factional maneuvering could ultimately deprive her of the leadership. Right-wing powerbrokers, the key to winning the leadership, are likely to prefer one of their own – such as the leader of the Victorian Right, Bill Shorten – for the job. CLUNE

180418

12/16/2008 6:17
08CANBERRA1281
Embassy Canberra
CONFIDENTIAL

P 280111Z NOV 08FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 0583INFO AMEMBASSY WELLINGTON PRIORITY AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY THE WHITE HOUSE WASHINGTON DC PRIORITYSECDEF WASHINGTON DC PRIORITYCIA WASHINGTON DC PRIORITYNSC WASHINGTON DC PRIORITYCDR USPACOM HONOLULU HI PRIORITY

C O N F I D E N T I A L CANBERRA 001196 NOFORN SIPDIS STATE FOR EAP AND P E.O. 12958: DECL: 11/20/2018 TAGS: PREL, PINR, PGOV, ECON, AS

SUBJECT: RUDD GOVERNMENT – ONE YEAR REPORT

Classified By: Ambassador Robert D. McCallum for reasons 1.4 (b) and (d).

SUMMARY ——- 1. (C/NF) The Rudd government has generally been competent and centrist during its first 12 months, notwithstanding some significant foreign policy blunders, and criticism over Rudd’s media-focused management style. The Government is unified, has avoided scandal, kept its major election promises and has generally placated the unions and the factions with the Australian Labor Party (ALP). While it has held a consistent and comfortable lead over the Opposition in opinion polls, the Government’s greatest first-term challenges are likely in front of it. It has to reconcile a slowing economy and rising unemployment with its commitment to addressing climate change. So far, the public appears well-satisfied with Rudd’s handling of the global economic crisis, as evidenced by his near-record approval ratings. Due to his popularity, Rudd currently has immense authority within the ALP. Rudd is focused on developing good relations with the incoming U.S. Administration, and is eager to be seen as a major global player. END SUMMARY

RUDD KEEPS HIS PROMISES ———————–

2. (SBU) Rudd has paid careful attention to delivering on his election promises. He signed the Kyoto protocol, withdrew combat troops from Iraq, delivered tax cuts, apologized to indigenous Australians, wound back the previous government’s labor laws, initiated his “education revolution” and health reform, and has committed to implementing an emissions trading scheme in 2010. One blemish on his record is that while Rudd went to the election empathizing with the cost of living pressures facing “working families,” his “Fuelwatch” and “Grocerywatch” price-monitoring initiatives have been widely ridiculed as ineffective.

NO SCANDAL, NO SACKINGS ———————–

3. (C/NF) Unlike former PM John Howard’s first term, in which five ministers and three parliamentary secretaries were sacked (as well as Howard’s Chief of Staff), there have been no changes to Rudd’s cabinet and ministry since it was sworn in almost one year ago. Even Opposition contacts have admitted surprise that a new government with largely inexperienced ministers has avoided scandals. After an unconvincing start, Treasurer Wayne Swan has improved. Deputy Prime Minister Julia Gillard, Finance Minister Lindsay Tanner and Climate Change Minister Penny Wong have been the star performers. ALP contacts often boast about the Government’s depth, with ministers-in-waiting like Parliamentary Secretaries Bill Shorten, Maxine McKew and Greg Combet, and backbenchers like Mark Dreyfus and Mark Butler.

RUDD’S FOREIGN POLICY MISTAKES ——————————

4. (C/NF) Rudd, a former foreign service officer, has made a number of missteps on foreign policy. Repeatedly, Rudd has made snap announcements without consulting other countries or within the Australian government. Though these missteps loom large within the Canberra policy community, they have had little impact on Rudd’s popularity with the Australian public. Significant blunders have have included: — Foreign Minister Stephen Smith’s February announcement that Australia would not support possible quadrilateral discussions between Australia, the United States, Japan and India out of deference to China. This was done without advance consultation and at a joint press availability with visiting Chinese Foreign Minister Yang Jiechi. — Rudd’s June speech announcing that he would push for the creation of an “Asia-Pacific Community” loosely based on the EU. This was done without advance consultation with either other countries (including Southeast Asian nations, leading Singaporean officials to label the idea dead on arrival) or within the the Australian Government (including with his proposed special envoy to promote the concept, veteran diplomat Richard Woolcott.) — The PM’s June announcement that Australia would set up an international commission on nuclear nonproliferation and disarmament intended to influence the Nuclear Nonproliferation Treaty (NPT) Review Conference. Rudd rolled out this proposal in Hiroshima during a photo-op heavy trip to Japan. His Japanese hosts were given insufficient advance notice and refused a request for a joint announcement. He did not consult in advance with any of the P5 countries. (An adviser gave Embassy Canberra a few hours advance notice of the announcement but without details.) Russia formally protested the lack of advance consultation. — In September, the PM’s Office asked for a meeting with the President while Rudd was in the United States for the UN General Assembly. After making an aggressive and ultimately successful push for a meeting, the PM’s Office abruptly cancelled the meeting course two days later, saying that Rudd could not come to Washington. — In October, the self-serving and inaccurate leaking of details of a phone call between the President and Rudd cast further doubt on Rudd’s foreign policy judgment. Rudd’s refusal to deny that his office was the source of the leak has confirmed to most Canberra observers that he showed exceptionally poor judgment in trying to aggrandize himself at the expense of Australia’s most important relationship.

RUDD THE CONTROL FREAK ———————-

5. (C/NF) There has been persistent criticism from senior civil servants, journalists and parliamentarians that Rudd is a micro-manager obsessed with managing the media cycle rather than engaging in collaborative decision-making. Rudd has centralized decision making on many key issues in his office, contributing to “policy paralysis.” A recent press report referred to jokes that “ministers rush to get a Gillard signature on proposals when Rudd is overseas so they can avoid delay.” Former ALP Prime Minister Bob Hawke told the press recently that Rudd needed to give his ministers more freedom, and an ALP insider told us that he expected ministers to try to create some “elbow room” in the next year. Some ministerial staff and public servants have complained about the workload and hours expected by Rudd and there has been substantial turnover in Rudd’s office (including his Chief of Staff, David Epstein.) We have heard recurring complaints from contacts through the GOA that Rudd’s office is disorganized and inexperienced — his Chief of Staff and Press Secretary both in their late 20s — with few willing to disagree with their boss. Centralized control and long working hours, however, are not uncommon in even the best run prime ministerial offices, and the fact remains that the Government appears to be functioning effectively, at least in the eyes of the electorate.

AN “ECONOMIC CONSERVATIVE” ————————–

6. (C/NF) During the election campaign, Rudd managed to convince voters they could switch leaders despite the incumbent’s strong record of economic growth because Rudd was an “economic conservative.” For the first half of the year, Rudd defined the government’s core economic challenge as fighting inflation. Since the global financial meltdown, it Qfighting inflation. Since the global financial meltdown, it has been the “war on unemployment.” Calling the financial crisis the “economic equivalent of a rolling national security crisis,” Rudd announced an economic stimulus package which will bring forward infrastructure spending, boost grants to first-time homebuyers, and provide one-off payments to families and pensioners. Due to the slowing economy, the Reserve Bank has lowered its cash rate 2 percent since September. Unemployment, virtually unchanged from a year ago, is projected to increase. His claims to being an “economic conservative” have not prevented Rudd from supporting an interventionist “industry policy” to prop up Australian manufacturers, particularly the automotive sector. This tendency was foreshadowed in Rudd’s first press conference after unseating Kim Beazley as Opposition Leader in December 2006, when he said he “didn’t want to be the prime minister of a country that didn’t make things.”

CLIMATE CHANGE ————–

7. (C/NF) One of Rudd’s central campaign strategies was to tap the growing public concern about climate change and perception that the Howard government was not serious about the threat. Rudd gained an important electoral advantage by promising rapid action to sign the Kyoto Protocol, the creation of a national emissions trading scheme with a target of reducing Australia’s 2050 emissions by 60 percent over 2000 levels, and the development of clean coal and greater renewable energy sources. In the first year, Rudd has kept to the form, if not the substance, of his promises. While the overwhelming majority of Australians still view Rudd and the ALP as the best party to deal with climate change, he has quietly broadened the decision-making process in Canberra and backed away from the most aggressive steps some have recommended on climate change. Where the debate was dominated early in the year by calls for tough action by Climate Minister Penny Wong and ANU economist Ross Garnaut, Rudd has listened to concerns from industry and economic modelers and relied increasingly on Industry Minister Carr, Energy Minister Ferguson, and Treasurer Swan to moderate cabinet policy debate. Rudd has lost some shine with the Australian climate lobby by heavily investing in support for the coal industry through clean coal research, and tacked to the middle on including high emissions intensity (and export earning) industries like LNG in support programs to soften the blow of the emissions trading regime. He has resisted, however, the urge to back down on the timeline for emissions trading and will introduce a less-costly emissions trading system next year.

UNIONS BEHAVING —————

8. (SBU) Despite the absence of an agreement with the unions on restraining wage growth (the last ALP Government under Bob Hawke and Paul Keating had used a national “Accord” to promote stability), there have been no major strikes and wages growth has remained moderate. Unions are pleased the Rudd Government abolished new statutory individual contracts, but they believe other aspects of its workplace reforms do not go far enough. Rudd is retaining secret ballots for strikes, tough penalties for illegal industrial action, keeping the building industry watchdog, not fully restoring unfair dismissal rights for small business employees, and is only re-establishing compulsory arbitration in rare cases. It appears the Australian Council of Trade Unions and most union leaders, despite not getting everything they want, will not disrupt the economy to achieve their aims, but rather work behind the scenes with Gillard to make changes at the margins. ALP and union contacts believe Rudd has unprecedented authority for an ALP leader and only when his popularity declines will the unions and the factions within the ALP be able to assert themselves.

RUDD MAINTAINS BIG POLL LEAD DESPITE NEW LIBERAL LEADERSHIP ——————————————— ————–

9. (SBU) In the 2007 election, the ALP won 52.7 percent of the vote to the ruling Coalitions’s 47.3 percent. Since then, Newspoll, the most influential and regularly conducted Qthen, Newspoll, the most influential and regularly conducted opinion poll, has consistently shown the Rudd Government with a large lead. Only once has the ALP’s lead fallen below 55-45 (54-46 in October). When Malcolm Turnbull deposed Brendan Nelson as Coalition leader in September, the ALP still led 55-45. Despite Turnbull slightly closing Rudd’s huge lead as preferred Prime Minister, the latest Newspoll has the ALP continuing to hold a 10 point lead. Rudd’s satisfaction rating is an extremely high 65 percent.

COMMENT ——-

10. (C/NF) Overall, the Rudd government has made a solid start, particularly on its domestic agenda, but its first term will largely be defined by its response to the global economic crisis. PM Rudd’s foreign policy miscues should not obscure his strong interest in maintaining excellent relations with the United States and promoting a strong U.S. role in Asia. Before the financial meltdown, the Rudd Government had been criticized for lacking a central message, but the economic crisis has given the government a sense of direction. Rudd reacted swiftly to the start of the financial crisis in Australia with a widely-praised $A10.4 billion stimulus package. The danger for the PM is that the political debate has shifted to what traditionally has been the Coalition’s strong suit – the economy. Although Australia’s economy is largely at the mercy of international forces, the Coalition will ruthlessly exploit every piece of bad economic news while claiming the Howard government steered Australia through similar economic challenges. Rudd’s standing in the polls reflects the Australian public’s view that he is reasonable, diligent and acting in the national interest. While the Rudd government is on track to win a second term, ALP strategists are keenly aware that the ALP’s margin of victory last year was only 2.7 percent and that there has been a voting swing against almost every first term government in Australia. MCCALLUM

191447

2/11/2009 7:28
09CANBERRA138
Embassy Canberra
SECRET//NOFORN

08CANBERRA1230|09CANBERRA1196|09CANBERRA34

VZCZCXRO8126PP RUEHPBDE RUEHBY #0138/01 0420728ZNY SSSSS ZZHP 110728Z FEB 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC PRIORITY 0975INFO RUEHJA/AMEMBASSY JAKARTA PRIORITY 5362RUEHPB/AMEMBASSY PORT MORESBY PRIORITY 1964RUEHSV/AMEMBASSY SUVA PRIORITY 1515RUEHWL/AMEMBASSY WELLINGTON PRIORITY 5627RUEHBN/AMCONSUL MELBOURNE PRIORITY 5996RUEHBAD/AMCONSUL PERTH PRIORITY 4260RUEHDN/AMCONSUL SYDNEY PRIORITY 4206RUEKJCS/SECDEF WASHINGTON DC PRIORITYRHEHNSC/NSC WASHINGTON DC PRIORITYRHHMUNA/CDR USPACOM HONOLULU HI PRIORITY

S E C R E T SECTION 01 OF 04 CANBERRA 000138 NOFORN SIPDIS E.O. 12958: DECL: 02/10/2024 TAGS: PREL, PGOV, AS

SUBJECT: PRIME MINISTER REIGNS OVER FOREIGN AFFAIRS

REF: A) CANBERRA 34 B) 08 CANBERRA 1230 C) 08 CANBERRA 1196 Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d)

1. (S/NF) SUMMARY: Since becoming Prime Minister in December 2007, Kevin Rudd has appropriated control of foreign-policy formulation and decision-making, leaving his Foreign Minister to perform mundane, ceremonial duties and relegating the Department of Foreign Affairs and Trade (DFAT) to a backwater. This shift has been reinforced bureaucratically by the creation of the Office of National Security Adviser in the Department of Prime Minister and Cabinet (PM&C), though PM&C as an institution is also playing a smaller role in foreign policy decision-making because it is fully occupied supporting Rudd’s day-to-day demands. Foreign policy is now run from the Prime Minister’s Office, with its two full-time foreign policy advisors. Key Australian Ambassadors, including Dennis Richardson in Washington, are also playing a larger role as they work more directly with the PM’s Office. Rudd, who likes to centralize decision-making in any event, undoubtedly believes that with his intellect, his six years as a diplomat in the 1980s and his five years as shadow foreign minister, he has the background and the ability to direct Australia’s foreign policy. His performance so far, however, demonstrates that he does not have the staff or the experience to do the job properly. END SUMMARY

KEVIN 747

2. (C/NF) Most observers expected Kevin Rudd to play an active role on foreign policy as Prime Minister. He was a former diplomat who served as the Opposition Spokesperson for Foreign Affairs and Trade for five years. In addition, his foreign minister, Stephen Smith, a career Australian Labor Party (ALP) politician, had no background in foreign affairs. In his 14 months in power, however, Rudd has done more than play an active role — he has taken over the formulation and conduct of foreign policy on all major issues. Major policy initiatives, such as the proposals for an Asia-Pacific Community and International Commission on Nuclear Nonproliferation and Disarmament, were conceived and announced by him without consultation or advance notice to the foreign affairs bureaucracy. Since the Rudd Government took office, Rudd has been to China twice; Smith has not visited. Rudd traveled overseas so much during 2008 – more often than not without FM Smith – that his new nickname in the media is “Kevin 747″ (a takeoff on his “Kevin 07″ campaign slogan and later, the “Kevin 24/7″ moniker reflecting his workaholic style).

DFAT BYPASSED

3. (C/NF) A senior foreign diplomat, quoted in the media last October, noted that under the former Foreign Minister Alexander Downer, it was important to know the FM’s staff, now the diplomat said, all one needed was Gary Quinlan’s (Rudd’s foreign policy adviser) phone number. Other foreign diplomats, in private conversations with us, have noted how much DFAT seemed to be out of the loop. The Israeli Ambassador told us that senior DFAT officials are frank in asking him what PM Rudd is up to and admit that they are out of the loop. DFAT morale has plummeted, according to our Qof the loop. DFAT morale has plummeted, according to our contacts inside as well as outside the Department. Downer’s former chief of staff, Chris Kenney, told poloffs recently that FM Smith has been relegated to doing things that Downer used to pass to his parliamentary secretaries.

THE FOREIGN MINISTER ON VACATION

4. (S/NF) Some view FM Stephen Smith, in particular, as being partially responsible for his Department’s decline. Surprised by his appointment as Foreign Minister, Smith has been very tentative in asserting himself within the Government. DFAT contacts lamented that Smith took a very legalistic approach to making decisions, demanding very detailed and time-consuming analysis by the Department and using the quest for more information to defer making decisions. BHP Billiton VP for Government Relations Bernie Delaney, a long-time friend of Smith’s, told us that Smith suffered from not having a strong chief of staff to force him to prioritize and make decisions. Delaney recently told us CANBERRA 00000138 002 OF 004 that he expects Smith’s performance to improve now that he has a permanent chief of staff, Frances Adamson, the former Deputy High Commissioner in London and an experienced DFAT official. David Pearl, a Treasury official who served briefly as Smith’s advisor in 2004, told us that Smith is very smart, but intimidated both by the foreign policy issues themselves and the knowledge that PM Rudd is following them so closely. Former DFAT First Assistant Secretary for North Asia Peter Baxter once lamented to us that Smith’s desire to avoid overruling DFAT recommendations meant that he often delayed decisions to the point that the PM’s Office stepped in and took over.

5. (C/NF) After Israel initiated its Gaza operation on December 27, Israeli Ambassador Yuval Rotem contacted FM Smith at his home in Perth, Western Australia, to ask for Australia’s public support (ref A). Rotem told us that Smith’s response was that he was on vacation, and that the Ambassador needed to contact Deputy Prime Minister Gillard, who was acting prime minister and foreign minister at the time. (NOTE: The Israel-Palestine issue is a very sensitive one for the Rudd Government. An ALP senator told us that a number of MPs had a meeting with Smith in December asking that Australia be more supportive of Israel, and there are a number of left-wing ALP politicians and unions who are strong supporters of the Palestinians. End note.)

WHAT’S A DEMARCHE?

6. (S/NF) Last December, Smith called in the Ambassador to register his and the Prime Minister’s disapproval of the fact that the United States had demarched Australia on the negotiation of a SOFA with Iraq. Smith somewhat indignantly told the Ambassador that allies should not have to demarche each other on an issue such as this. The Embassy thought that the GOA was upset because the lengthy negotiation of our SOFA left very little time for Australia to conduct its own negotiations. This was undoubtedly part of the motivation for the meeting but later, at a meeting at DFAT, an Assistant Secretary confided to the DCM that Smith did not fully understand what a demarche was, and thought that it was only used on special occasions to convey an official rebuke.

NATIONAL SECURITY ADVISER APPOINTED

7. (C/NF) On December 4, Rudd announced the appointment of Duncan Lewis, a 30-year veteran of the Australian Defence Force, to the newly-created position of National Security Adviser (ref B). He is officially an Associate Secretary of PM&C and will be responsible for advising the Prime Minister on all policy matters relating to Australia’s security. Lewis will also chair a new National Intelligence Coordinating Committee. The breadth of his duties is illustrated by the fact that, when former Ambassador McCallum met with Rudd November 20 to convey a request that Australia accept some of the Chinese Uighers currently detained in Guantanamo, Lewis and Quinlan were the only staff with Rudd and Lewis conveyed Rudd’s decision to the Embassy. He also accompanied the Prime Minister to the scene of the recent bushfires in Victoria and helped coordinate the federal response.

8. (S/NF) Several DFAT officials have commented that despite Q8. (S/NF) Several DFAT officials have commented that despite Lewis’ personal exposure to the PM, PM&C has not filled the vacuum caused by DFAT’s marginalization. One DFAT Assistant Secretary told us that PM&C has much less of a role in formulating policy than it did under the Howard Government, when PM&C moved from a “policy coordination” role to a “policy development” role by its final years. This DFAT official stated that PM&C’s comparatively small foreign policy staff is overwhelmed supporting Rudd’s foreign policy activities, particularly his travel, which has reduced its ability to push its own agenda. PM&C Coordinator for Economic Affairs Gordon Debrouwer has indirectly confirmed this on several occasions, telling us that PM&C foreign policy staff have been run ragged answering the PM’s queries and supporting his interaction with foreign officials. Senator Mark Arbib, a Labor heavyweight who is widely seen as being a voice Rudd listens to, told us that he has been surprised by the amount of reading material the PM demands from PM&C to prepare for conversations with foreign leaders. He said that Rudd’s staff would like to get their boss to CANBERRA 00000138 003 OF 004 spend less time on foreign policy and delegate more, but that they recognize that this is a hopeless task.

LARGER ROLE FOR KEY AMBASSADORS

9. (S/NF) Several contacts tell us that DFAT and PM&C’s relative decline have been counterbalanced by a larger (albeit informal) role for key Australian Ambassadors. In particular, they note that Ambassador Richardson in Washington has developed a strong personal relationship with Rudd and that he works directly with Gary Quinlan, the former DCM in Washington, to keep the PM informed as well as carry out the PM’s orders. Former DFAT First Assistant Secretary for North Asia Peter Baxter told us that Australia’s Ambassador in Beijing, Geoff Raby, has also developed a strong relationship with the PM’s Office, as has his counterpart in Indonesia. BHP Billiton’s well-plugged-in VP Bernie Delaney told us that Rudd’s relationships with Australian Ambassadors drive FM Smith to distraction, but that he believes there is nothing he can do about it and accepts not being fully in the loop as “inevitable.”

FOREIGN POLICY ON THE RUN?

10. (C/NF) Rudd’s governing style has been to centralize decision-making in his office and rely on a small group of advisers. Quinlan is an experienced DFAT veteran (who served as DCM at the Australian Embassy in Washington from 2005-08). He is assisted by Scott Dewar, another DFAT official who has served in China, Korea and Japan, as well as having been former FM Downer’s speechwriter. However, Rudd’s 29-year old chief of staff is a domestic political operative and none of his key ministerial advisers – Deputy PM Julia Gillard, Treasurer Wayne Swan, and Finance Minister Lindsay Tanner – have any foreign policy experience. Duncan Lewis is a retired general, though with considerable experience dealing with DFAT and the intelligence community. The PM’s office tends to respond to the media cycle and the next event on the schedule and cannot focus on longer-term policy development. PM&C, which is meant to provide the policy coordination, is tied up responding to current events. As a result, according to a senior government official who was quoted in the press, the Rudd Government “is not getting well-thought-out policy advice; it is all policy on the run, but neither the ministers nor their advisers can tell the difference.”

11. (S/NF) Policy on the run and the lack of consultation within the Government may help explain what were considered to be the foreign policy mistakes of Rudd’s first 14 months in office (ref C): — Foreign Minister Stephen Smith’s announced in February, without any prior consultation with its allies, and at a joint press availability with visiting Chinese Foreign Minister Yang Jiechi, that Australia would not support possible quadrilateral discussions between Australia, the United States, Japan and India. — The itinerary for Rudd’s first overseas trip in March 2007 included the U.S., Europe and China but bypassed Japan. — Rudd’s June speech announcing that he would push for the creation of an “Asia-Pacific Community” was done without advance consultation with either other countries or within the Australian Government. Even the distinguished former Qthe Australian Government. Even the distinguished former diplomat Rudd chose to spearhead the effort was not told of it until a few hours before the public announcement. — Rudd rolled out a proposal that Australia would set up an international commission on nuclear nonproliferation and disarmament in Hiroshima during a photo-op heavy trip to Japan in June. His Japanese hosts were given insufficient advance notice and refused a request for a joint announcement. He did not consult in advance with any of the P5 countries. — In September, the PM’s Office asked for a meeting with President Bush while Rudd was in the United States for the UN General Assembly. After making an aggressive and ultimately successful push for a meeting, the PM’s Office abruptly canceled the meeting two days later. CANBERRA 00000138 004 OF 004 — In October, Rudd’s self-serving and inaccurate leaking of details of a phone call between President Bush and him cast further doubt on his foreign policy judgment. — In January, after the press published a story that the U.S. had asked Australia to accept some Guantanamo detainees, the Government responded to the story by issuing a statement publicly acknowledging our confidential request and stating that they were not likely to accept the detainees.

COMMENT: DECISION-MAKING WILL IMPROVE BUT REMAIN IN RUDD’S HANDS

12. (S/NF) To some extent, the missteps of the Rudd Government can be attributed to their inexperience. The ALP had been out of power for almost 12 years and is still learning how to run a Government. U.S. interlocutors have noticed, for example, that FM Smith has grown in ability and stature as he gains more confidence in his job. He has also recently hired the former DCM at the Australian High Commission in London as his chief of staff. On the other hand, mistakes that have occurred because of a haphazard, overly-secretive decision-making process are likely to continue. Rudd is a centralizer by nature who will only grudgingly share the decision-making on foreign policy. A strong signal of this is the fact that Rudd has just reappointed Michael L’Estrange as DFAT Secretary. L’Estrange is from the opposition Liberal Party and was first appointed by John Howard. If Rudd had any plans for DFAT, he would have likely appointed one of his own people. CLUNE

210090

6/4/2009 7:27
09CANBERRA524
Embassy Canberra
CONFIDENTIAL//NOFORN

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C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000524 NOFORN SIPDIS E.O. 12958: DECL: 06/04/2019 TAGS: PREL, PINS, PINR, AS

SUBJECT: AUSTRALIAN DEFENCE MINISTER FITZGIBBON RESIGNS

CANBERRA 00000524 001.4 OF 002 Classified By: Charge d’Affaires Daniel A. Clune. Reasons: 1.4 (b)(c).

SUMMARY ——- 1. (C/NF) Defence Minister Joel Fitzgibbon resigned June 4 over an apparent conflict of interest involving his brother’s private health insurance company. The embattled minister had been under pressure following earlier revelations of undeclared gifts from a Chinese businesswoman and free accommodation provided by his brother’s company. PM Rudd accepted the resignation, noting the importance of maintaining the highest standards of government accountability, and pledged to have a new defense minister in place quickly. Depending on who might be tapped to take up the complex portfolio, a larger cabinet reshuffle may be in the offing. End summary.

2. (SBU) Prime Minister Rudd called a news conference just before Parliamentary question time June 4 to announce he had accepted the resignation of Defence Minister Joel Fitzgibbon. In a written letter to the PM, Fitzgibbon acknowledged he may have violated the Rudd government’s Code of Conduct for ministers following the disclosure by the Shadow Defence Minister David Johnston in Parliament the previous evening that Fitzgibbon had permitted his brother, Mark Fitzgibbon, who heads private health insurance company NIB, along with a representative of the U.S. health company Humana, to meet Minister for Veterans’ Affairs Alan Griffin and Minister for Defence Science and Personnel Warren Snowden in Fitzgibbon’s ministerial office with Fitzgibbon’s staff members to pursue an Australian Department of Defence contract. Fitzgibbon had initially denied the claim.

3. (SBU) In his press remarks, Rudd praised Fitzgibbon as a “first-class defense minister,” citing his accomplishments in withdrawing combat forces from Iraq, addressing the new strategic challenges in the Afghanistan-Pakistan theater, and overseeing the Defence White Paper. At the same time, however, Rudd stressed that his government expected the highest standards of conduct and accountability. He promised to name a new defense minister before the next Afghanistan Regional Command – South (RC-South) meeting, but gave no hint when an announcement could be expected.

4. (SBU) Fitzgibbon had been under pressure, not only from the Opposition bench but also from the Prime Minister himself, over earlier conduct involving undeclared gifts. On June 2, just two days earlier, for example, Fitzgibbon had been forced to issue a public apology over having failed to declare free accommodation provided by his brother’s company. In March, he was forced to acknowledge having received free air tickets to China and other gifts from Sydney-based businesswoman Helen Liu. The latter incident, involving media claims — emphatically denied by the GOA — that Qmedia claims — emphatically denied by the GOA — that Fitzgibbon’s relationship with Liu was the subject of a secret internal ADOD probe, had continued to fuel controversy over Fitzgibbon’s ethics and judgement.

COMMENT ——- 5. (C/NF) While PM Rudd insisted that the decision to resign was Fitzgibbon’s alone, it is telling that he dispatched his chief aide, Alistair Jordan, and Senator Faulker, Special Minister of State and Cabinet Secretary, to meet with Fitzgibbon early on the morning of June 4, prior to production of the resignation letter.

6. (C/NF) Given the complexity and size of the Defence portfolio, and the critical importance of managing its transformation along the lines set out in the recent Defence White Paper, PM Rudd may well call on an experienced front bencher to fill the Defence Minister role. This would inevitably lead to a reshuffle, giving Rudd a chance to CANBERRA 00000524 002.6 OF 002 replace some of the weaker performers and reward promising up-and-comers, possibly including perhaps Assistant Treasurer Chris Bowen or back-bencher Mark Arbib. Possible candidates to succeed Fitzgibbon include Greg Combet, who was Parliamentary Secretary for Defence Procurement until recently when he was moved to the Water portfolio; Mike Kelly, currently Parliamentary Secretary for Defence Support; Robert McClelland, currently Attorney-General but previously Shadow Defence Minister; and Senator John Faulkner. We do not expect to see any diminution of the close mil-mil relationship or impact on the alliance as a result of the Defence Minister’s resignation. CLUNE

1074

6/10/2009 22:19
09CANBERRA545
Embassy Canberra
CONFIDENTIAL//NOFORN

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C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000545 NOFORN SIPDIS E.O. 12958: DECL: 05/31/2019 TAGS: PGOV, ELAB, AS

SUBJECT: GILLARD: ON TRACK TO BECOME AUSTRALIA’S NEXT PRIME MINISTER

REF: A) 08 CANBERRA 609 B) CANBERRA 167 C) CANBERRA 305 Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d).

1. (C/NF) SUMMARY: Described by her many supporters as “smart, tough, loyal, and the best parliamentary performer in the Australian Labor Party (ALP),” Deputy Prime Minister Julia Gillard – who visits Washington later this month – has positioned herself as the heir apparent to Prime Minister Kevin Rudd as ALP leader (ref A). Part of Rudd’s inner circle, she has handled a combined workplace relations and education portfolio with confidence and ability. Gillard has had a good year. She successfully shepherded through Parliament the Government’s key workplace relations reform bill in March and she is overseeing the Government’s investment in every school in Australia. Gillard, a product of the ALP Left in the state of Victoria, has shifted towards the political center since Rudd became ALP leader and is now a strong supporter of the Australia-US Alliance and Israel. Although she is still seen as a leftist by key right-wing union powerbrokers, that is not likely to stop her from succeeding Rudd as the next leader of the ALP. END SUMMARY

THE GANG OF FOUR

2. (C/NF) With Treasurer Wayne Swan and Finance Minister Lindsay Tanner, Gillard is part of Rudd’s inner circle, a group collectively known as “the gang of four.” She is a member of the National Security Committee of Cabinet and when Rudd is out of the country, or on leave, Gillard is Acting Prime Minister. Labor insiders speak admiringly of her ability to understand issues quickly and of her negotiating toughness. Unlike Rudd, however, whose brittle temperament and micromanagement have come under fire, Gillard is seen by most we’ve spoken with as a good manager. She oversees one of the better-managed offices in the Government and her staff seem very loyal. Conservative columnist Janet Albrechtson – no friend of the ALP – says of Gillard: “most people I’ve spoken to are of a firm view that Gillard is far more engaging and impressive than the dour Prime Minister.”

A GOOD LISTENER WITH AN EVEN DISPOSITION

3. (C/NF) Gillard listens carefully to advice. Kim Beazley, the former Defence Minister and Leader of the Labor Party, told Charge that Gillard listened intently when she met with him to learn his views on national security policy and the alliance with the U.S. The next day, Beazley recounted, he was startled to hear her in a radio interview repeating many of the things he had told her the day before. Unlike the Prime Minister and many other members of the Government, who have been criticized for occasional emotional outbursts, Gillard’s demeanor is always controlled. A member of her protective detail told Charge that he was with her constantly for several months and never saw her mistreat staff or even raise her voice, rare behavior for ministers, he commented.

A STAR AT QUESTION TIME

4. (C/NF) Gillard is almost unanimously viewed as the Government’s best parliamentary performer. She is a superior debater to Rudd, who gets bogged down in bureaucratic jargon and tends to speak for too long. In Parliamentary Question Time, it is evident that ALP MPs enjoy hearing Gillard more than Rudd. She enjoys taunting the Opposition but, as one Qthan Rudd. She enjoys taunting the Opposition but, as one journalist noted, “the only problem is getting her off the corpse.” Late last year, in a widely publicized exchange, Gillard pummeled Deputy Opposition Leader Julie Bishop (who was under pressure in a Treasury portfolio she has since relinquished). Opposition Leader Malcolm Turnbull later described Gillard as “very nasty” and “vicious.” A visiting U.S. political scientist noted after watching Question Time that the Opposition normally heckled Government speakers but in stark contrast, they were completely silent when Gillard was on her feet.

A LEFT-WINGER NOW A PRAGMATIST

5. (C/NF) Many believe that Rudd, after he became ALP leader in December 2006, did not give Gillard the Treasury portfolio (the normal portfolio for a deputy leader) because she was from the Victorian Socialist Left faction – traditionally the most radical faction in the ALP. Gillard recognizes that to become Prime Minister, she must move to the Center, and show her support for the Alliance with the United States. Albrechtson, who attended the June 2008 Australian-American Leadership Dialogue in Washington with Gillard, wrote that Gillard’s speech “could have been given by the Howard Government.” Last week, in a speech to the Australian Council of Trade Unions (ACTU) national conference, Gillard defended the Government’s workplace relations reforms and splashed cold water on union demands for further changes. Although she was heckled by some of the attendees and publicly chided by union leaders, two former leaders of the ACTU defended Gillard’s in the press and her public stance against “union radicalism” is likely to be popular with the Australian public.

6. (C/NF) The ALP Right in Gillard’s home state of Victoria are not convinced that she is a transformed moderate. Some Victorian right faction members tell us they are looking for a Gillard alternative – although they admit there is no one at present. Beyond Victoria, Gillard has earned the high regard of the powerful right faction within the New South Wales ALP. ALP state secretary Matt Thistlethwaite, a key right faction powerbroker, told us June 3 that Gillard’s remarkable message discipline and shrewd management of key portfolios has earned her the respect of virtually all NSW ALP members. We heard a similar message from NSW labor union contacts, who told ConGen Sydney over lunch May 20 that Gillard appears to be Rudd’s heir apparent. Thistlethwaite said the NSW right faction would probably challenge Gillard if they had someone of her “caliber,” but he admitted they did not. Ambitious young MPs and former Union leaders Bill Shorten and Greg Combet are routinely mentioned as possible future prime ministers, but Thistlethwaite said that neither one is in any real position to challenge Gillard. More focused on the next election, party powerbrokers have not had any serious conversations about a Rudd successor, according to Thistlethwaite.

PRO-ISRAEL

7. (C/NF) Gillard has thrown off the baggage of being from what one analyst called the “notoriously anti-Israel faction” of the ALP. As Acting Prime Minister in late December 2008, Gillard was responsible for negotiating the Government’s position on Israel’s incursion into Gaza. Left-wing ALP MPs, a group to which Gillard used to belong, wanted her to take a harder line against Israel. Instead, she said Hamas had broken the ceasefire first by attacking Israel – a stance welcomed by Israel’s supporters in Australia. MP Michael Danby, one of two Jewish members of Parliament and a strong supporter of Israel, told us that after the Gaza statement he had a new appreciation of Gillard’s leadership within the ALP (ref B). Israeli Ambassador Yuval Rotem told us that Gillard has gone out of her way to build a relationship with Israel and that she asked him to arrange an early opportunity to visit. He will accompany Gillard and a delegation of Australian officials (including newly-appointed Minister Mark Arbib and Liberal Party heavyweights former Treasurer Peter Costello and Chris Pyne, Manager of Opposition Business in the House) to a meeting of the Australia-Israel Leadership Forum later this month.

LABOR REFORM PASSES

8. (C/NF) On March 20, the ALP’s reform of Australia’s Q8. (C/NF) On March 20, the ALP’s reform of Australia’s workplace relations laws passed (ref C). Gillard consulted broadly with business and the unions in drafting the legislation so that when the new law was finally introduced in Parliament, there was little left for either side to criticize. When independent senators in Parliament tried to soften a pro-labor provision in the legislation, Gillard stood her ground, and forced them to back down. Her tenacity in defense of workers’ rights did not go unnoticed. Right-wing ALP MP Richard Marles, a former official with the ACTU, told us recently that Gillard “hasn’t put a foot wrong” since becoming Deputy Prime Minister.

9. (C/NF) Gillard also managed to win the admiration of big business in the workplace relations consultation process. Katie Lahey, CEO of the Business Council of Australia (an umbrella organization representing Australia’s 100 largest firms) told Charge in March that Gillard was well respected by executives thanks to remarkable outreach and a “genuine” willingness to listen. While making her rounds with executives in the lead-up to the workplace relations law, Lahey said Gillard made you feel “as if there were nobody else in the room.” Executives unsurprisingly found items in the law with which they disagreed, but broadly say that they were adequately consulted.

THE EDUCATION REVOLUTION

10. (SBU) In his election campaign, Rudd promised an “education revolution,” to improve education and boost productivity and international competitiveness. Despite the opposition of the teachers’ unions and elements within the ALP Left, Gillard has supported a voucher system for vocational education and performance pay for teachers. She has also invited New York Education Chancellor Joel Klein to Australia. The Rudd Government’s second big economic stimulus package, passed in February, provided money for infrastructure upgrades for every school, public and private, in Australia. While this funding may improve educational outcomes, the political benefit for ALP politicians will be immediate: in the next twelve months, each school will have a ceremony celebrating the investment, presided over by the local ALP politician.

THE FRONT RUNNER

11. (C/NF) COMMENT: All the ALP MPs we have spoken to have enormous respect for Gillard. However, as one ALP Right MP told us, choosing a leader from the Left would be a massive cultural change for the ALP. Don Farrell, the right-wing union powerbroker from South Australia told us Gillard is “campaigning for the leadership” and at this point is the front-runner to succeed Rudd, conceding that the Right did not yet have an alternative. Agriculture Minister Tony Burke, one of the early NSW Right backers of the Rudd-Gillard team, confided that Gillard is the clear front runner to succeed Rudd and in the end, the ALP caucus will follow the opinion polls if she is the one the public wants. Two keenly anticipated books on Gillard are expected to be released within the next 12 months (one of them authored by the wife of Beazley’s former Chief of Staff). At present, the question of a successor to Rudd is probably two elections away. Several Rudd confidantes have told us that Rudd appreciates Gillard and sees her as a possible PM, but that he wants to avoid anointing her to head off a possible leadership challenge when his poll numbers inevitably sag. The PM’s brother Greg told us in April that Rudd wants to ensure that there are viable alternatives to Gillard within the Labor Party to forestall a challenge. Mark Arbib once told us a similar story, though he stressed that Rudd appreciates Gillard’s strengths. However, another Rudd advisor told us that while the PM respects Gillard, his reluctance to share power will eventually lead to a falling out, while Gillard will not want to acquiesce in creating potential rivals. In the meantime, Gillard has proven her value to the Prime Minister and we expect her to remain the most important member of the Rudd Government, after the Prime Minister himself. CLUNE

213442

6/23/2009 6:50
09CANBERRA584
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA542

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C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000584 NOFORN SIPDIS STATE FOR INR, PM, AND EAP E.O. 12958: DECL: 06/18/2019 TAGS: AS, PGOV, PINR, MASS

SUBJECT: GREG COMBET: NEW JUNIOR DEFENSE MINISTER

REF: CANBERRA 542 Classified By: POLCOUNS JAMES F. COLE: REASON: 1.4 (B)

Summary ———

1. (C/NF) Politician and trade unionist Greg Combet has risen quickly in Australia’s parliament. First elected to Parliament in the 2007 election that swept the Australian Labor Party (ALP) to victory, he is said to have performed superbly as Parliamentary Secretary for Defense Procurement. In the June 6 cabinet reshuffle (reftel), Prime Minister Kevin Rudd named Combet Minister for Defense Personnel, Materiel and Science and Minister Assisting the Minister for Climate Change. A quiet achiever, Combet looks set to rise still further. While we know little about his views on policy, judging from his previous service on his defense portfolio and Rudd,s tendency to promote individuals he trusts, Combet is certain to religiously and effectively implement Rudd,s defense policies. End summary.

Defense Friendly —————–

2. (C/NF) Rudd appointed Combet to serve as Parliamentary Secretary for Defense Procurement from December 2007 to February 2009. In this role, Combet developed a strong grasp of the defense portfolio, and he worked well with defense technicians, possibly due to his engineering background and attention to details. After his recent appointment, Combet said that his and new Defense Minister John Faulkner’s first priority was building confidence between the government and defense leadership, in part to support the Australian Defense Force (ADF) members in Afghanistan. Dual Portfolios Strengthen Position with Constituents ——————————————— ——–

3. (C/NF) In February 2009, Combet was appointed Parliamentary Secretary for Climate Change with a focus on emissions trading, to assist Climate Change Minister Penny Wong, and was involved in negotiations with the coal industry and the unions. In June, Combet publicly noted that his defense and climate change portfolios are important to his constituents. The Hunter region in New South Wales holds military bases and defense industries, is one of Australia’s most famous wine-growing areas and is the coal heartland of the state. New South Wales produces around 80 percent of the region’s mined coal, providing significant employment in Combet’s electorate. Prominent Trade Union Leader —————————–

4. (C/NF) Hailing from Labor’s left and former head of the Australian Council of Trade Unions (ACTU), Combet was the mastermind of the Labor Party’s campaign against Work Choices, an industrial relations act that was a prominent factor in the Howard government’s defeat in the 2007 federal election. Combet, previously from Victoria, campaigned in New South Wales for the 2007 Australia federal election and was voted into the House of Representatives for Charlton, as part of the Australian Labor Party’s (ALP) 2007 election victory. Combet joined the ACTU in 1993 and served as union Secretary from 1999 to 2007. An effective spokesperson and leader, he coordinated numerous national wage cases to secure pay increases for low-paid Australian workers. Combet rose to prominence in 1998 when he led the union movement in the high profile waterfront dispute. He also championed union Qhigh profile waterfront dispute. He also championed union campaigns that secured employee entitlements for 16,000 workers after the collapse of Ansett airlines, and obtained a multi-billion dollar settlement from the James Hardie company for Australian asbestos victims. He relinquished the ACTU Secretary position to campaign full time in Charlton in the lead up to the federal election. Many Australian observers of labor politics think that the ACTU has lost influence with the Government since Combet left.

Personal Information ——————–

5. (U) Combet was born on April 28, 1958 in Sydney. He earned a bachelors degree (with honors) in engineering from the University of New South Wales and a bachelors degree in CANBERRA 00000584 002 OF 002 economics and graduate diploma of labor relations and law from the University of Sydney. Early in his career, Combet worked as a coal mining trade assistant and in a range of community organizations. He is a former director of Members Equity Bank (an ACTU backed initiative designed to offer Australian workers low cost loans) and the $30 billion retirement fund Australian Super. Combet is married to Petra Hilsen and has one daughter, one stepdaughter and one stepson.

Comment ——–

6. (C/NF) Combet is likely to be welcomed by defense insiders and industry experts given his strong performance on defense procurement and his ability to grasp and manage details of complicated programs. Early on, Combet had the reputation as a union guy, but he quickly proved to be sharp and industry-oriented, proving to his defense colleagues that he was the right guy, for the job. We have been impressed with his intellect and grasp of defense issues. While he was Parliamentary Secretary for Defense Procurement, Combet had a clear direction of his priorities and of which programs should be canceled. He successfully handled a number of controversial issues, including the cancellation of the problematic Seasprite Helicopter program that resulted in the loss of over AUD $1.4 billion (US $1.21 billion) and the well-publicized concerns surrounding the purchase of six Wedgetails, an early warning and control aircraft.

Comment Continued ——————

7. (C/NF) One of Combet,s colleagues told us that Combet is a straight-forward operator who sometimes is frustrated by daily political machinations. In our interactions, we have found him well-informed and articulate. Although intense and serious in his approach to the issues, he has personal warmth and charm that stand him in good stead with colleagues. Among Australian political insiders, Combet has long been touted as one of the Labor Party,s stars whose ultimate promotion to the Ministry was inevitable. We have found him well-disposed to U.S. visitors, and Combet has indicated he knows the U.S. is Australia’s primary partner when it comes to defense. Defense and climate change are two of the most demanding portfolios and require significant attention and intellect. The question remains whether Combet can manage both of them for a sustained period of time or if one portfolio will be handed to someone else. CLUNE

217245

7/20/2009 2:12
09CANBERRA665
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA542

VZCZCXRO4213RR RUEHPTDE RUEHBY #0665/01 2010212ZNY CCCCC ZZHR 200212Z JUL 09 ZDKFM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC 1798INFO RUEHBN/AMCONSUL MELBOURNE 6523RUEHPT/AMCONSUL PERTH 4788RUEHDN/AMCONSUL SYDNEY 4761

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000665 NOFORN SIPDIS STATE FOR INR, PM, AND EAP E.O. 12958: DECL: 06/01/2019 TAGS: AS, PGOV, PINR

SUBJECT: MARK ARBIB: CLOUT-WIELDING ASCENDING LEADER

REF: CANBERRA 542 CANBERRA 00000665 001.2 OF 002 Classified By: POLCOUNS JAMES F. COLE: REASON 1.4 (B)

Summary ——–

1. (C/NF) Labor right-wing powerbroker and political rising star Mark Arbib has made a quick transition from the parliamentary backrooms into the Ministry. In Prime Minister Kevin Rudd’s June 6 ministerial reshuffle (reftel), Arbib was promoted to Minister for Employment Participation and the Minister Assisting the Prime Minister on Government Service Delivery. Arbib, the New South Wales (NSW) Labor party’s kingmaker, was integral in raising the numbers for Rudd to overthrow Kim Beazley as Australian Labor Party (ALP) leader in 2006. Arbib is a close adviser to Rudd and is his key conduit to the ALP factions. End summary.

Rising Star in the New-Look Rudd Ministry —————————————–

2. (C/NF) Arbib, new to parliament, entered the Senate in July 2008 representing New South Wales. In February 2009, the former NSW ALP Secretary was appointed Parliamentary Secretary for Government Service Delivery, a position within the Department of the Prime Minister and Cabinet. He was promoted to Minister for Employment Participation and the Minister Assisting the Prime Minister on Government Service Delivery in Rudd’s June 6 cabinet shake-up. Arbib’s role includes assisting with the roll out of the government’s infrastructure program and reforming the contracting of employment services. Before being elected, Arbib was the ALP State Secretary of the NSW branch from 2004-2007. He served as Assistant Secretary from 1999-2004, and was the ALP state organizer between 1996-99. Arbib was Acting Employment and Workplace Relations Minister when Deputy Prime Minister Julia Gillard was recently overseas.

Powerbroker and Adviser ———————–

3. (C/NF) Widely noted as possessing influence far beyond the ALP Right, Arbib successfully delivered crucial votes in Rudd’s December 2006 defeat of Kim Beazley for the ALP leadership. Arbib was a key figure in the ALP’s 2007 election campaign, and Rudd thanked Arbib in his victory speech on election night. Arbib had a similar relationship with former NSW Premier Bob Carr who in 2007 described Arbib as “one of the best campaigners in the business”. Arbib is said to be loyal to, but frank, with Rudd, and is one of Rudd’s closest advisers. Yet, publicly, Arbib has denied being part of Rudd’s inner circle. Personal Information ———————

4. (C/NF) Arbib was born November 9, 1971 in Sydney. His father was of Libyan heritage and spoke Italian. The elder Arbib moved to Australia in the 1960s and became a property developer. Mark Arbib’s mother was born in Sydney, and raised Mark and his brother after their father’s death when they were young. Arbib has a Master of Arts in political science and economic history from the University of New South Wales. He is married to Kelli Field. The couple has two daughters, Alexandria, age three, and Charlotte, age one. Arbib is devoted to his children and sensitive that his wife, formerly the chief of staff for a NSW minister, is taking time off her career while their children are young. Arbib and his family live in Sydney.

Comment ——-

5. (C/NF) Arbib is an influential factional operator who has forged strong political connections with Rudd. We have been told that Rudd respects Arbib’s political expertise, and a contact noted that Arbib is brought into Rudd’s inner circle when politically important decisions are made. It has been Qwhen politically important decisions are made. It has been reported in the media that Arbib was involved in meetings which led to changes to the emissions trading scheme and Rudd’s decision to embrace a budget deficit. The press has also said that Arbib is the only minister with a close ally as his Parliamentary Secretary, which could enable Arbib and Jason Clare, another newcomer, to make progress on getting public sector projects approved and built. Although Arbib has been in elected office only briefly, his meteoric rise has attracted only minor grumbling in Caucus since he has the talent to back it up. It seems only a matter of time before he moves into the cabinet.

6. (C/NF) Arbib is a tough political operator and CANBERRA 00000665 002.2 OF 002 evidence-based strategic thinker. He understands the mechanics of politics and how the factional system works. He can adeptly frame an issue the public cares about and knows the threshold he needs to hit to get a reaction. In the upcoming ALP national conference, Arbib will be instrumental in keeping factions working constructively together.

Comment Continued ——————

7. (C/NF) We have found that Arbib is an astute observer and able conversant in the nuts and bolts of U.S. politics. He understands the importance of supporting a vibrant relationship with the U.S. while not being too deferential. We have found him personable, confident and articulate. A strong supporter of the alliance, he has met with us repeatedly throughout his political rise.

219319

8/4/2009 6:07
09CANBERRA709
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA673

VZCZCXRO3896PP RUEHPTDE RUEHBY #0709/01 2160607ZNY CCCCC ZZHP 040607Z AUG 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC PRIORITY 1857INFO RUEHBN/AMCONSUL MELBOURNE 6567RUEHPT/AMCONSUL PERTH 4832RUEHDN/AMCONSUL SYDNEY 4811RHHMUNA/CDR USPACOM HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000709 NOFORN SIPDIS E.O. 12958: DECL: 08/04/2019 TAGS: AS, PGOV, PREL

SUBJECT: SUBJECT: RUDD RULES AT LABOR NATIONAL CONFERENCE

REF: CANBERRA 673 Classified By: POLITICAL COUNSELOR JAMES F. COLE. REASON: 1.4 (C)

1. (SBU) SUMMARY The ruling Australian Labor Party’s (ALP) National Conference displayed unprecedented cohesion and provided further evidence of Prime Minister Rudd’s authority over the party. Although journalists derided it as boring, party officials believe the conference gave the public what it wanted: the image of a united party focused on steering Australia through economic challenges. Gay marriage and industrial relations caused some tensions, but these were worked out behind the scenes. Significantly, not one issue required a formal vote. The conference affirmed the ALP’s strong support for the Australia/US Alliance. The Defense Minister successfully moved a resolution pledging the party to continue support for the fight in Afghanistan. On the debit side, the ALP platform projected a very negative position on national missile defense (MD). A setback for the ALP was Employment Participation Minister Mark Arbib’s embarrassing inability to explain the details of Rudd’s “Green Jobs” announcement. End summary.

MEDIA FRUSTRATED BY SERENE GATHERING

2. (SBU) The 45th ALP National Conference was held in Sydney July 30 – August 1. Prior to the conference, a draft 2009 platform was circulated (reftel). Amendments were proposed and “debated” but these were agreed behind the scenes by the factions. No formal vote was required on any issue. Increasingly, ALP National Conferences are stage-managed showpieces for party unity and the party leader. Journalists were frustrated that there was little controversy; some even questioned the point of the conference. However, ALP insiders maintained to us the public wants a united party that is focused on solving the nation’s problems. Deputy Prime Minister Julia Gillard said: “I know it wasn’t all that much fun for the media but we’re not entertainers, we’re a political party in government.”

FACTIONS WORKING WELL TOGETHER

3. (SBU) One senior figure told us the factions have “never worked as well together”. He opined that the end of the Cold War had played a big part in blurring the ideological divide between the Left and Right, pointing out that the Defense and Finance Ministers are notionally from the Left. It was generally accepted that Rudd government Ministers and power brokers Mark Arbib (Right) and Anthony Albanese (Left) were Rudd’s key conduits to the factions.

RUDD TRIES TO INSPIRE RANK AND FILE

4. (SBU) Rudd’s speech to the conference appeared designed to appeal to ALP “true believers” and the Left – possibly because he is an “outsider” in the ALP (e.g. he is not close to the unions). Rudd praised the achievements of past ALP governments and derided the “free market fundamentalism” of the Right. The Rudd government had apologized to indigenous Australians; ratified Kyoto; abolished WorkChoices; softened immigration policy; and withdrawn combat forces from Iraq. Rudd declared Labor was a “nation building” party which believes “unapologetically in the role of government”. He urged delegates to commit to a “long term reformist government,” reminding them that the ALP had only been in power one third of the time since federation.

ARBIB FUMBLES

5. (SBU) In a major announcement, Rudd unveiled an initiative for “50,000 new green jobs” – traineeships and apprenticeships targeted at young Australians. However, in a television interview, Employment participation Minister Mark Qtelevision interview, Employment participation Minister Mark Arbib stumbled, admitting he didn’t have the details of the proposal. The media and Opposition jumped on this. The next day, Rudd conceded that Arbib “didn’t have the best of days”. Arbib’s career has flourished under Rudd so it was not surprising that some of his detractors in the party took pleasure in his embarrassing performance.

SOME TENSIONS OVER INDUSTRIAL RELATIONS & GAY MARRIAGE

6. (SBU As predicted, there were tensions over the Rudd government’s retention of the building industry watchdog; Left-leaning unions marched in protest outside the conference. Union powerbrokers and the government reached a compromise which essentially means the government will seek to reduce specialist oversight of the industry, but in keeping with Labor’s 2007 election commitment. The issue which caused most tension at the conference was the push from the Left, including Albanese, for legalized gay marriage (the Marriage Act only applies to heterosexual couples). At one point, a Right Ministerial adviser – in contact with the Christian Lobby – told us he feared Rudd would be “rolled” over on this issue (Rudd undertook not to support gay marriage before he was elected). However, Rudd and the Right won. One MP told us the lack of debate on trade – usually a big issue for the unions – was an example of how well managed the conference was.

STRONG SUPPORT FOR US AND WAR IN AFGHANISTAN

7. (SBU) The Foreign and Defense chapter of the platform was approved without controversy. There were no amendments moved in relation to the draft platform’s strong support for the US Alliance (reftel). Defense Minister Faulkner moved a resolution, seconded by Foreign Minister Smith, pledging the party’s support for the war in Afghanistan. In a passionate speech, Faulkner said it was in Australia’s interests to ensure Afghanistan is no longer a terrorist training ground. He said 100 Australians had died in terrorist attacks which made it incumbent on the government to ensure success in Afghanistan. Furthermore, he said abandoning the Afghan people would go against Labor tradition. Australia “can’t ignore the strategic reality”. Some ALP figures told us there was a push from a small group in the Left for a withdrawal of troops, but that this was quelled.

BUT NEGATIVE WORDS ON NATIONAL BALLISTIC MISSILE DEFENSE

8. (C/NF) In contrast to the strong support for the Australia – U.S Alliance voiced by the ALP leaders and set down in the platform, on national ballistic missile defense (MD) the platform adopted by the Conference was not positive. It declared that MD “is disproportionate, technically questionable, costly and likely to be counterproductive. It also has the potential to undermine non-proliferation and derail world progress towards nuclear disarmament.” The MD issue has long been a focus of ALP left-wing ire, stretching from an anti – “Star Wars” movement in the 1980s to present. (Note: The U.S. and Australia signed a 2004 MOU on MD cooperation, mainly in exercises and information sharing. The GOA is still considering its long-term position. When the Charge expressed to Defense Minister Faulkner on the eve of the Conference our disappointment with the strong draft language and contrasted it with assurances given earlier that the issue would be worked out within the party, Faulkner responded that the MD draft language had “dropped through the cracks” during the transition following former Defense Minister Fitzgibbon’s resignation several months ago.)

WIN FOR RUDD

9. (SBU) Comment: Though he received polite applause, there was not an overwhelming display of affection for Kevin Rudd displayed by the delegates – in contrast to traditional outpourings from the party faithful at these conventions. To many observers Mr. Rudd’s speech was regarded as boring, and his reaching out to the party faithful appeared contrived. There was far greater warmth for former Prime Minister Bob Hawke – a charismatic former union official – who delivered a strong and entertaining speech with little reference to notes. Yet Rudd, to the bewilderment of many observers, remains highly popular with voters across the political spectrum. This is the bedrock of Rudd’s unchallenged authority over the party. Rudd went to the conference wanting a united party and backing for his agenda – he got that. It invites a contrast between the cohesion of Rudd’s team and the division in Malcolm Turnbull’s Opposition. END COMMENT.

241344

12/23/2009 6:11
09CANBERRA1123
Embassy Canberra
CONFIDENTIAL

VZCZCXRO3612PP RUEHPTDE RUEHBY #1123/01 3570611ZNY CCCCC ZZHP 230611Z DEC 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC PRIORITY 2460INFO RUEHBN/AMCONSUL MELBOURNE PRIORITY 6860RUEHPT/AMCONSUL PERTH PRIORITY 5124RUEHDN/AMCONSUL SYDNEY PRIORITY 5129

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 001123 SIPDIS E.O. 12958: DECL: 12/23/2019 TAGS: PGOV, AS

SUBJECT: RUDD GOVERNMENT REPORT CARD 2009

Classified By: Acting Political/Economic Counselor Forest Yang. Reason s 1.4 (b/d)

1. (C) SUMMARY: The Rudd government remained politically dominant in 2009, largely on the back of better than expected economic conditions, Rudd’s enduring high popularity, government unity, and a dysfunctional opposition. Foreign Minister Smith stepped out of Rudd’s shadow and the resignation of Joel Fitzgibbon as Defense Minister proved to be a blessing for the government. Support for the U.S. Alliance, and the mission in Afghanistan, remained strong. The relationship with China is recovering from tensions present earlier in the year. Rudd continued his enthusiastic approach to “middle power diplomacy;” possibly his proudest achievement was the elevation of the role of the G20. However, Rudd’s big first term reform – legislating for an Emissions Trading Scheme (ETS) – is in trouble. END SUMMARY.

“IT’S THE ECONOMY, STUPID” ————————–

2. (C) Underpinning the government’s popularity was the resilience of the economy due to continuing global demand for Australian resources and expansionary fiscal and monetary policies. Inheriting a strong fiscal position, the Rudd government in 2009 continued its “stimulus” to firewall the economy against the global recession. The Opposition was scathing of the government’s second stimulus package, announced in February, pointing to rising government debt and questioning whether it would work. The government’s disciplined messaging focused on jobs and nation building. In June, the government could barely contain its glee when the March quarter National Accounts showed Australia had avoided a technical recession. The Australian Labour Party (ALP)’s most senior strategist – ALP national Secretary Karl Bitar – told us this was extremely significant given the political importance of economic management; he said it was a devastating blow to the Opposition’s critique.

TREASURER SWAN’S STOCKS RISE —————————-

3. (C) Sidestepping a recession was a triumph for Treasurer Wayne Swan, who strongly argued for the stimulus in Cabinet. Throughout 2008, Swan appeared uncertain in his portfolio, was ridiculed by the Opposition and labeled a weak link by much of the press gallery. He was unfavorably compared to Deputy Prime Minister Julia Gillard and Finance Minister Lindsay Tanner. However, Swan,s confidence and performance improved in 2009, largely due to better than expected key economic indicators. Of the “gang of four” – Rudd, Gillard, Tanner and Swan – involved in major economic decision making, Rudd has the most affinity with Swan.

SMITH THE QUIET ACHIEVER ————————

4. (C) Foreign Minister Stephen Smith in 2008 was widely regarded as having little power because of Rudd’s interest in the portfolio and centralizing style. However, Smith has carefully avoided mistakes and has gradually stepped out of Rudd’s shadow, indicating Rudd’s growing confidence in his judgment. Arguably, the defining point of Smith’s year was on August 19 when he counter-attacked Opposition claims the Rudd government had bungled the China relationship. This followed China’s failed bid to increase its stake in mining giant Rio Tinto; the detention of an Australian mining executive; the Defense White Paper that took a hawkish approach to China; the granting of a visa to a Uighur activist; and China pulling out of the Pacific Islands Forum.

5. (C) Armed with the massive Gorgon LNG deal signed with Q5. (C) Armed with the massive Gorgon LNG deal signed with China the previous day, the phlegmatic Smith strongly debunked the Opposition’s arguments, undermining the credibility of the Shadow Foreign Minister Julie Bishop, who was leading the charge against him. Since then Australia’s relationship with China has improved, in no small part due to Smith’s quiet, patient style. Similarly, in October, Smith effectively defended the government’s border protection changes during the stand-off with Indonesia over 78 asylum seekers. On both issues, Smith made more coherent and persuasive cases than the Prime Minister.

FITZGIBBON DUMPED —————–

6. (SBU) The Rudd government’s first ministerial casualty occurred on June 4, when Defence Minister Joel Fitzgibbon resigned for breaching the Prime Minister’s code of conduct. This turned out to be a blessing for the government as the experienced John Faulkner – who Rudd persuaded to take the CANBERRA 00001123 002 OF 003 portfolio – has mended fences with the Defense Department and is generally regarded as more competent than Fitzgibbon. The Fitzgibbon “scandal” had no impact the government’s popularity. Government contacts are pleasantly surprised at the lack of Ministerial sackings, comparing this to the first term of the Howard government when several ministers were forced to resign.

RISING STARS ————

7. (C) Fitzgibbon’s departure enabled Rudd to appoint rising stars Mark Butler, Richard Marles and Jason Clare as parliamentary secretaries. Another rising star, Chris Bowen, was promoted into the Cabinet despite overseeing the much-ridiculed “Fuelwatch” and “Grocerywatch” schemes. Labor Right factional powerbroker Mark Arbib – close to the Prime Minister – was rewarded with a ministry despite his inexperience. Government contacts told us Faulkner made taking the job conditional on the impressive Greg Combet being appointed his junior minister.

GILLARD’S STAR FALLS SLIGHTLY —————————–

8. (C) Deputy Prime Minister Julia Gillard was a media darling in 2008, however the rose-colored glasses were lowered in 2009. Gillard was under increasing scrutiny in her mega-portfolio which includes employment, workplace relations and education. There was a budget blowout in the cost of the school infrastructure funding, and some unions are using her industrial relations changes to pursue excessive demands. Nevertheless, she remains Rudd’s clear heir apparent. Colleagues continue to be in awe of her mastery of detail and confident performances.

RUDD POWERFUL, BUT COURTS FACTIONS ———————————-

9. (C) Rudd has unprecedented power for a Labor leader; one MP told us he had never seen a Labor Caucus as subservient to its leader, noting Rudd’s control over promotions. Another told us she was surprised at marginal seat holders’ acquiescence on the ETS. However, powerbrokers confide the factions will assert themselves when Rudd’s popularity wanes. Possibly aware of this, Rudd in 2009 further courted New South Wales factional heavyweights Anthony Albanese (New South Wales Left) and Mark Arbib (New South Wales Right) and elevated Senator Joe Ludwig (Queensland Right – Swan’s faction) to a more senior position in Cabinet. Ludwig is the son of powerful Queensland Right union official Bill Ludwig. One theory is that Rudd is developing a “praetorian guard” based on the historically powerful New South Wales Right to head off any challenge from Gillard; that it was no accident that Rudd promoted Arbib, Bowen and Clare (all from the New South Wales Right). Bitar, who is close to Arbib and succeeded him as New South Wales General Secretary, became ALP National Secretary in late 2008.

RISE OF ABBOTT; RUDD’S MAJOR REFORMS STALLED ——————————————-

10. (C) Tony Abbott’s victory over Malcolm Turnbull for the Liberal leadership on December 1 shattered the likelihood of an emissions trading scheme being legislated by the end of the year, and probably for the remainder of this parliament. Prior to the coup against Turnbull, conventional wisdom was that Turnbull would survive long enough to ensure sufficient Liberal support for the passage of Rudd’s signature first term reform. Turnbull believed in an ETS and warned his colleagues an early election trigger on this issue would be “catastrophic.” The media’s focus over the year on dissent in Coalition ranks, and widespread confidence the ETS would Qin Coalition ranks, and widespread confidence the ETS would pass, took pressure off Rudd to sell the scheme to the public. With Abbott intent on running a scare campaign on the issue, Rudd now has go back to the public to build support for a renewed ETS early in 2010. Rudd will seriously contemplate calling a Double Dissolution election (for only the seventh time in Australia’s history) if the deal he offered Turnbull on emissions trading is rejected in February and possibly again in May. (Note: a Double Dissolution election can be held as late as October and a “normal election” is expected September-November 2010.) 11. (C) Another area Abbott, a former health minister, will push the government on is the Rudd,s perceived lack of progress in reforming state-run hospitals. Rudd pledged during the last election that the “buck will stop with me” and threatened a federal take over of hospitals if the states did not upgrade their performance. Abbott, who is sympathetic to greater federal control, is portraying Rudd as obsessed with bureaucracy and process, and lacking the will to confront state Labor governments.

SUPPORT FOR U.S. REMAINS STRONG ——————————-

12. (C) Support for U.S. foreign policy, including the mission in Afghanistan, remained strong within the Labor caucus. Historically, foreign policy symbolized the divide between Labor’s Left and Right factions. However, since the end of the Cold War distinctions have blurred, evidenced by the right leaning Rudd’s cultivation of Faulkner and Combet, both from the Left. There were no grumblings in Caucus over the decision in April to boost the number of troops in Afghanistan by 40 percent. The unanimous view is that the U.S. Alliance remains the foundation of Australia’s security.

RUDD THE FOREIGN POLICY WONK —————————-

13. (C) In 2009, Rudd zealously pursued his “creative middle power diplomacy,” assiduously engaging with international leaders in pursuit of new global architectures. Possibly his proudest moment as Prime Minister came in September when the role the G20 was elevated. Rudd devoted significant energy to this, particularly in getting the United States on board. Ironically, the former diplomat Rudd has not boosted resources for the Department of Foreign Affairs and Trade (despite complaining while in Opposition) and has downgraded its influence in decision making. Former Ambassador to the U.S. Dennis Richardson has returned to take up leadership of DFAT, and is expected to push strongly for more resources.

14. (C) COMMENT: After two years in office, questions are being asked about the Rudd government’s appetite for making tough decisions. Rudd will be scrutinized in 2010, accused by some of over-promising and under-delivering, particularly on health care issues. The Opposition will highlight Rudd’s penchant for lengthy reviews and overseas trips and portray the election as a contest between “process man” Rudd versus “act))ylain the ETS and undermine Abbott’s credibility on several fronts, while reducing voter backlash over an “early election.” END COMMENT.

194833

3/3/2009 5:41
09CANBERRA213
Embassy Canberra
CONFIDENTIAL//NOFORN

P 030541Z MAR 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1137INFO AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY CIA WASHINGTON DC PRIORITYCDR USPACOM HONOLULU HI PRIORITYDIA WASHINGTON DC PRIORITYSECDEF WASHINGTON DC PRIORITYNSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L CANBERRA 000213 NOFORN SIPDIS E.O. 12958: DECL: 03/01/2019 TAGS: PGOV, PREL, MARR, AS

SUBJECT: FITZGIBBON AND DEFENCE UNDER FIRE OVER SAS PAY Classified By: Political Counselor James F. Cole, for reasons 1.4 (b) and (d). 1. (C/NF) SUMMARY: Defence Minister Joel Fitzgibbon and senior Defence officials have come under intense pressure over bungled handling of salary payments to Special Air Service (SAS) troops, the elite special forces who are doing the bulk of Australia’s fighting in Afghanistan. In Parliament last week, Fitzgibbon was unable to give a coherent answer when asked why some SAS soldiers on the front lines had their pay reduced to zero, later acknowledging he had ordered the problem fixed four months earlier. The Prime Minister is reportedly furious over this latest embarrassment to his government, with the Opposition and some in the media calling for Fitzgibbon’s head. Fitzgibbon’s weak parliamentary performance and his inability to obtain information from ADOD have highlighted tensions between the Minister and the Defence bureaucracy. Fitzgibbon, an early supporter of Prime Minister Kevin Rudd and close to Deputy Prime Minister Julia Gillard, will likely survive this incident, however, at least through the delivery of the Defense white paper and the AUSMIN consultations, both scheduled for April. END SUMMARY

SAS PAY PACKETS REDUCED TO ZERO

2. (SBU) During Parliamentary Question Time on February 24, 25, and 26, Fitzgibbon was questioned repeatedly about a salary mixup in which ADOD apparently deducted the entire net pay of SAS soldiers fighting in Afghanistan. The situation began in 2007 when a Defence Tribunal found that some SAS personnel had received extra allowances to which they were not entitled. ADOD began recouping the allowances through payroll deductions that the Opposition claimed reduced some salary payments to zero. Responding in Parliament, Fitzgibbon looked uncomfortable and defensive, spending most of his time criticizing his own department for failing to respond to his requests. Opposition Leader Malcolm Turnbull called for his sacking and initiated a censure motion (handily defeated by the governing majority.) On February 27, Fitzgibbon claimed the Opposition had misread the payslips central to its claims of zero payment. When asked specifically how many SAS were affected by the allowance deduction and how much money had been deducted from their pay, Fitzgibbon replied: “I can’t give that figure because Defence can’t give it to me.”

3. (U) Outside of Parliament, Fitzgibbon told the media he had learned of the situation in October 2008, and had ordered ADOD to cease all debt recovery action. Last week, however, when some SAS families came forward to complain that the allowances were still being deducted from their pay packets, Fitzgibbon admitted that he could not give absolute assurance that all debt recovery action had ceased. On Sunday, March 1, the Minister announced that he had directed ADOD to hire an independent auditing firm to examine salary payment to all special forces so that he could “finally determine once and for all what’s going on.”

WHO RUNS DEFENCE?

4. (U) Fitzgibbon’s lament that he could not get any action or answers from ADOD is not the first complaint from a defense minister about the bureaucracy his is charged with overseeing. Former Howard Defence Minister Brendan Nelson Qoverseeing. Former Howard Defence Minister Brendan Nelson was reported only last month as saying that “I think its fair to say that at times the uniformed side of Defence finds it difficult to respond to directives that come from civilians in the form of the government and minister of the day.” Since becoming Defence Minister in December 2007, Fitzgibbon has clashed with Defence over the timetable for release of the White Paper and the embedding of journalists with Australian troops in Afghanistan. Apparently, Defence has refused to give the Minister’s office the raw responses of journalists who responded to a survey of ADOD’s media policy. Last September, Fitzgibbon defended Australian troops over allegations that Taliban prisoners had been kept in “dog pens.” Days later it emerged that a “dog pen” was the soldiers’ nickname for makeshift enclosures.

WHERE IS THE CIVILIAN DEFENCE SECRETARY?

5. (U) Like the U.S. Department of Defense, ADOD has a civilian bureaucracy, headed by Secretary Nick Warner, an appointee of former Prime Minister John Howard. Warner, a former diplomat with limited defense experience, is viewed as a weak actor in ADOD and was nowhere to be seen during the payroll controversy. Ideally, ADOD is run by two CEOs: the Secretary and the Chief of the Defence Force (CDF). In recent years, according to the media, the CDF has become the stronger voice within Defence and the civilian side has withered. This has remained true under current CDF Air Chief Marshal Angus Houston, a Howard appointee who was extended for another three-year term after Rudd came into office. Former Defence Minister and former Australian Labor Party (ALP) Leader Kim Beazley recently noted “the downgrade of the policy-making capacity of civilians in Defence is crippling.”

COMMENT 6. (C/NF) One media report described Fitzgibbon as being “helpless” in dealing with the situation, and many thought his performance in Parliament was inadequate, including some of his fellow ALP MPs. It is widely assumed that Fitzgibbon, a former auto repair shop owner with only a brief stint as Shadow Defence Minister before assuming his present role, got his job because he was one of Rudd’s early supporters in the ALP leadership contest with Kim Beazley. While he has proven himself able to master the external elements of his job, he appears to have little appetite for detail, and he may be somewhat out of his depth in this job. Fitzgibbon’s combative, partisan political style and frequent criticism of the previous administration’s conduct of defense matters have rankled the ADOD establishment, and doubtless have contributed to his communications problem within the Defence establishment. Another problem for Fitzgibbon may be the inexperience of his ministerial staff. After the departure of his respected first chief of staff, Dan Cotterill, late last year, Fitzgibbon elevated 30-year-old Deputy COS Davina Langton to replace Cotterill. Langton came to the job with no prior experience working in Parliament or on defense issues.

7. (C/NF) Fitzgibbon’s job is likely safe for now. He still appears to have the backing of the Prime Minister and the support of Deputy Prime Minister Julia Gillard. Rudd would be unlikely to sack Fitzgibbon before the upcoming release of the Defence White Paper and the AUSMIN consultations in Washington. Importantly for Rudd, no doubt, Fitzgibbon has been able to engage with his U.S. counterpart, Secretary Gates, in support of his administration’s number one priority: the U.S. Alliance. Rudd is said to be “livid” with the military chiefs over this issue, however, and if any heads roll, it will likely be from within ADOD. Nevertheless, Fitzgibbon is not out of the woods yet; Rudd’s decision last week to add to Fitzgibbon’s responsibility the complex defense acquisition portfolio previously managed by Parliamentary Secretary Greg Combet opens up new opportunities for Fitzgibbon to make a costly, high-profile mistake that may again call into question his fitness for the job. CLUNE

199114

3/26/2009 21:18
09CANBERRA312
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA213|09SYDNEY60

P 262118Z MAR 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1277INFO AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY SECDEF WASHINGTON DC PRIORITYCDR USPACOM HONOLULU HI PRIORITY

C O N F I D E N T I A L CANBERRA 000312 SIPDIS NOFORN E.O. 12958: DECL: 03/25/2019 TAGS: PGOV, MARR, AS

SUBJECT: DEFENSE MINISTER ANGERED BY REPORTS OF PROBE

REF: A) CANBERRA 213 B) SYDNEY 60 Classified By: Political Counselor James F. Cole for reasons 1.4 (b) an d (d).

1. (C/NF) SUMMARY: Defense Minister Joel Fitzgibbon reportedly has reacted angrily to press reports that Australian Defense Department (ADOD) officials have conducted a secret investigation into Fitzgibbon’s relationship with a Chinese-born, Sydney-based businesswoman, Helen Liu. According to March 26 Australian press articles, DOD officials apparently leaked the details of the investigation, which revealed that Fitzgibbon stays in a Canberra residence he sublets from Liu, who has been a generous supporter of the New South Wales (NSW) Australian Labor Party (ALP) over the past decade. Allegedly, ADOD security personnel advised senior defense officials of their concern about Fitzgibbon’s relationship with Liu. Fitzgibbon’s office categorically denied that any security concerns had been raised with him, and it asserted that his 16-year friendship with the Liu family is well-known. The media has interpreted the leak of this investigation to be the result of Fitzgibbon’s harsh criticism of ADOD in the wake of an SAS payroll snafu (reftel A). The growing acrimony between ADOD and its Minister lends further weight to suggestions that Mr. Fitzgibbon could be relieved of this portfolio in the next cabinet reshuffle. END SUMMARY

DEFENSE LEAKS PROBE OF DEFENSE MINISTER

2. (U) The Sydney Morning Herald reported March 26 that officials in ADOD had leaked details of a secret investigation into their own minister’s 16-year friendship with wealthy Chinese-born businesswoman, Helen Liu. Liu first met Fitzgibbon’s father, Labor MP Eric Fitzgibbon, when the MP visited China on behalf of then Prime Minister Paul Keating. The ADOD investigation, which accessed Fitzgibbon’s personal computer records, discovered that Fitzgibbon rents his Canberra residence from Liu and her family and there were allegations that Fitzgibbon had received expensive gifts from Liu. Liu’s companies have been generous supporters of the NSW ALP over the past decade, contributing about $90,000 AUD.

FITZGIBBON DENIES RELATIONSHIP QUESTIONED BY ADOD

3. (U) Fitzgibbon has fired back, intimating that the leaks reflected resistance from entrenched interests in the Defense Department to accept broad reforms contained in Fitzgibbon’s forthcoming Defense White Paper. He categorically denied that ADOD had raised any security concerns over his relationship with Liu. A spokesman for Fitzgibbon said he and his family had known Liu and her family since 1992 or 1993 and regarded them as personal friends. The Minister stated he had exchanged only “small” gifts with the Liu family and had received no gifts that required public declaration under parliamentary disclosure laws. A source close to Fitzgibbon said it appeared he was “at war” with his department after the bruising battle over responsibility for bungled payments to SAS soldiers.

PRIME MINISTER “UNIMPRESSED” BY REPORTS

4. (U) Responding to reporters’ questions during his visit to Washington, Prime Minister Rudd said that he was “unimpressed” with the covert inquiries into Fitzgibbon’s relationship, and would await the findings of a Defense investigation into claims departmental officials conducted covert inquiries into their minister. He said neither the Department of Defense secretary nor the Chief of Defense QDepartment of Defense secretary nor the Chief of Defense Force staff had received any reports of covert investigations by the department. “I’m further advised,” he stated, “that the secretary of the Defense Department is conducting a further investigation into this matter. Therefore, I’ll await the outcome of that investigation.”

5. (C/NF) COMMENT: The source and veracity of the reports aside, what is apparent is continued tension between Mr. Fitzgibbon and elements within the ADOD. As we have noted in earlier reporting (ref B), some observers here have expressed misgivings with Fitzgibbon’s performance as defense minister and speculate that the outspoken Fitzgibbon’s days in this post may be numbered. Fitzgibbon, an early supporter of Kevin Rudd while in opposition, has enjoyed the Prime Minister’s support in his defense role. While Rudd is withholding judgment until the inquiry into the leak of the probe is concluded, Fitzgibbon’s image as a competent manager of his large and complex portfolio has not been helped by this latest indication of a bad relationship between the Defense Minister and the military. RICHE

200482

4/3/2009 0:41
09CANBERRA335
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA312

P 030041Z APR 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1308INFO AMEMBASSY WELLINGTON PRIORITY AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY CDR USPACOM HONOLULU HI PRIORITYSECDEF WASHINGTON DC PRIORITY

C O N F I D E N T I A L CANBERRA 000335 NOFORN SIPDIS E.O. 12958: DECL: 04/01/2019 TAGS: PGOV, MARR, AS

SUBJECT: DEFENSE MINISTER LIKELY TO SURVIVE – FOR NOW REF: CANBERRA 312 Classified By: Political Counselor James F. Cole, for reasons 1.4 (b) and (d).

1. (C/NF) SUMMARY: Defense Minister Joel Fitzgibbon appears safe in his portfolio in the short-term, as the media hype surrounding his link with Chinese-born businesswoman, Helen Liu, subsides (reftel). Prime Minister Rudd has publicly backed him, an independent audit of a payroll bungle affecting the Special Air Services Regiment (SAS) has apparently absolved him of responsibility, and the media is not calling for his removal. Those still out for Fitzgibbon’s scalp are the Opposition Liberal Party desperate for a political victory, and, according to Fitzgibbon, some disgruntled members of the military and defense bureaucracy who are unhappy with Fitzgibbon’s reform agenda. An internal inquiry by the Australian Department of Defence (ADOD) has found no evidence so far of any officially sanctioned investigation targeting Fitzgibbon or his relationship with Liu, and Australia’s counter-espionage agency declared that it has no security concerns regarding the Chinese businesswoman. With the release of the Defense White Paper still pending, Fitzgibbon’s short-term future is likely secure, assuming no other shoe drops. However, it is difficult to see how a minister with a poisoned relationship with his department, and who has not distinguished himself in Parliament, will survive a cabinet reshuffle, which is likely before the end of the year. END SUMMARY

NO EVIDENCE ADOD SPIED ON FITZGIBBON 2. (U) ADOD’s Defence Security Authority’s initial assessment, provided March 27, was that contrary to information in the original media story, no element of Defence had investigated Fitzgibbon’s relationship with Liu, no Defence investigative authority had been aware of the Chinese-Australian businesswoman, and no part of Defence accessed personal information in Fitzgibbon’s office. The same day, the Attorney-General announced that the Australian Security Intelligence Organization (ASIO) had no information relating to Liu which would have given rise to any security concern.

3. (C/NF) Australian Deputy Secretary of Defense for Intelligence and Security, Steve Merchant, told us on March 31 that the Australian Department of Defense (ADoD) has “turned the place upside down” since the press reported unauthorized defense signals directorate (DSD) spying against Fitzgibbon. Mr. Merchant said it was important for the United States to know unequivocally that there was nothing to the allegations, and that DSD had not used any of its capabilities to spy on the Minister (see septel.)

FITZGIBBON BACKED BY POPULAR SYDNEY PAPER – AND RUDD

4. (SBU) The Murdoch-owned tabloid, “The Daily Telegraph”, Sydney’s largest selling newspaper (and often an accurate gauge of what Labor’s core working-class voters are thinking), strongly backed Fitzgibbon in an editorial, asserting that Fitzgibbon had been betrayed by ADOD as a result of his “tough minded” approach to cleaning up a “massive funding black hole.” The Telegraph urged Prime Minister Rudd to “back his minister and put the generals and bureaucrats back in their box.” On April 2, the respected foreign editor of The Australian, Greg Sheridan, also came out in Fitzgibbon’s defense. After Fitzgibbon disclosed the China trips, Rudd said he “expected better” of his Defence QChina trips, Rudd said he “expected better” of his Defence Minister but added that he “is doing a good job.” There has been no media push for Fitzgibbon’s ouster, and the story, while still appearing in the press, is no longer dominating the political debate, notwithstanding the Opposition’s continued calls for Fitzgibbon’s head.

FITZGIBBON COULD GO IN NEXT RE-SHUFFLE

5. (C/NF)) COMMENT: Fitzgibbon’s determination to clean up Defence, his unwillingness to defer to sacred cows in the Defence establishment, and his public admonishment of his department, have created enemies in ADOD and the military. Fitzgibbon’s indiscretions do not seem to warrant dismissal, and Rudd and Deputy Prime Minister Julia Gillard (who is close to Fitzgibbon) continue to show confidence in his performance. Provided there are no further controversies, Rudd is unlikely to fire Fitzgibbon in the short term. Doing so could damage the credibility of the defense white paper, which we are hearing could be delayed until the end of May, and could be interpreted as a win for his detractors. It is more likely that Fitzgibbon will be permitted a more dignified exit in the next ministerial re-shuffle, which could occur at the end of the year as the Government prepares for the 2010 election. A minister cannot be effective if he is constantly at war with his department, and there are several talented alternatives waiting in the wings. We cannot rule out the possibility that PM Rudd will retain Fitzgibbon remaining in the post beyond the next re-shuffle, given the loyalty between the two. After Rudd won the election, he kept Fitzgibbon on in the Defence portfolio, despite the predictions of most experts that the portfolio would go to a more substantial political figure. RICHE

201052

4/7/2009 6:19
09CANBERRA352
Embassy Canberra
UNCLASSIFIED//FOR OFFICIAL USE ONLY

09CANBERRA335|09CANBERRA349

VZCZCXRO1157PP RUEHPTDE RUEHBY #0352 0970619ZNR UUUUU ZZHP 070619Z APR 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC PRIORITY 1335INFO RUEHBN/AMCONSUL MELBOURNE PRIORITY 6231RUEHPT/AMCONSUL PERTH PRIORITY 4494RUEHDN/AMCONSUL SYDNEY PRIORITY 4450RHHMUNA/CDR USPACOM HONOLULU HI PRIORITYRUEKJCS/SECDEF WASHINGTON DC PRIORITY

UNCLAS CANBERRA 000352 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV, AS

SUBJECT: POLL BOOST FOR RUDD DESPITE FITZGIBBON CONTROVERSY

REF: A) CANBERRA 335 B) CANBERRA 349 1. (SBU)

SUMMARY: The Rudd Government’s lead in the latest Newspoll has increased, despite controversy over his Defense Minister’s relationship with a Chinese-born business woman, Opposition accusations that Rudd is a “roving ambassador for China,” and press reports that Rudd verbally abused a flight attendant. For the first time, Opposition Leader Malcolm Turnbull’s satisfaction rating has moved into negative territory, putting further pressure on him as speculation builds about the intentions of former Treasurer Peter Costello. The poll suggests that the economy is the main issue in voters’ minds, and that they back Rudd’s handling of it, including his participation at the G20 Summit. END SUMMARY.

RECENT CONTROVERSIES

2. (U) Since the previous Newspoll two weeks ago, Defense Minister Joel Fitzgibbon has been under pressure due to the “Helen Liu affair” (ref A). This generated wider debate about the Rudd Government’s relationship with China, with the Opposition claiming the “Sinophile” Rudd was a “roving Ambassador for China.” (ref B). On April 3, the Murdoch-owned tabloids in Sydney and Melbourne, the largest-selling newspapers in Australia, carried front page stories that Rudd had reduced a flight attendant on his RAAF VIP flight to tears because he didn’t get his “special” meal. Rudd’s office had initially denied the story, but once it became public Rudd apologized, conceding that “I’m not perfect.”

BUT RUDD’S POPULARITY INCREASES

3. (U) The Newspoll, conducted April 3-5, has the Australian Labor Party (ALP) increasing its lead over the Liberal-National Party Coalition to 58-42, from 56-44 two weeks ago. Rudd’s satisfaction rating rose five points to 68 percent, and his lead as preferred Prime Minister jumped four points to 67-18. For the first time, Turnbull’s satisfaction-dissatisfaction rating has moved into negative territory (39-42). The Coalition is now in a worse position in the polls than it was in September, when Turnbull took over. Interpreting the numbers, the chief executive of Newspoll said “it is very difficult for an Opposition leader to break through, given Mr. Rudd is enjoying people rallying behind him in a crisis, the impact of the stimulus package payments and the profile he has had in recent days on the world stage.”

COSTELLO LOOKING BETTER

4. (SBU) COMMENT: The Coalition is putting a brave face on the Newspoll, largely attributing it to Rudd’s stimulus package. It has fired many bullets during the past fortnight – and hit nothing. Liberal Party MPs in marginal seats will be worried and this will only increase the attractiveness of former treasurer Peter Costello as a leadership option. The middle class families in Australia who decide elections, fearful of being thrown out of work, are focused almost exclusively on the economy and they believe Rudd is doing the best he can. An ALP official told us today that their tactic has been to remind the public that the financial crisis started in the United States, and the Government is reacting the best it can. RICHE

210090

6/4/2009 7:27
09CANBERRA524
Embassy Canberra
CONFIDENTIAL//NOFORN

VZCZCXRO5793OO RUEHBC RUEHDBU RUEHDE RUEHDH RUEHDT RUEHIHL RUEHKUK RUEHPB RUEHPWDE RUEHBY #0524/01 1550727ZNY CCCCC ZZHO 040727Z JUN 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC IMMEDIATE 1573INFO RUCNAFG/AFGHANISTAN COLLECTIVE IMMEDIATERUCNARF/ASEAN REGIONAL FORUM COLLECTIVE IMMEDIATERUCNRAQ/IRAQ COLLECTIVE IMMEDIATERUEHBN/AMCONSUL MELBOURNE IMMEDIATE 6392RUEHPT/AMCONSUL PERTH IMMEDIATE 4656RUEHDN/AMCONSUL SYDNEY IMMEDIATE 4617RUEHIN/AIT TAIPEI IMMEDIATE 1211RHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATERUEAIIA/CIA WASHINGTON DC IMMEDIATERUEKJCS/CJCS WASHINGTON DC IMMEDIATERUEKDIA/DIA WASHINGTON DC IMMEDIATERHMFISS/HQ USCENTCOM MACDILL AFB FL IMMEDIATERUEKJCS/JOINT STAFF WASHINGTON DC IMMEDIATERHEHNSC/NSC WASHINGTON DC IMMEDIATERUEKJCS/SECDEF WASHINGTON DC IMMEDIATERHEHAAA/THE WHITE HOUSE WASHINGTON DC IMMEDIATERUEHNO/USMISSION USNATO IMMEDIATE 0868RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 0811

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000524 NOFORN SIPDIS E.O. 12958: DECL: 06/04/2019 TAGS: PREL, PINS, PINR, AS

SUBJECT: AUSTRALIAN DEFENCE MINISTER FITZGIBBON RESIGNS

CANBERRA 00000524 001.4 OF 002 Classified By: Charge d’Affaires Daniel A. Clune. Reasons: 1.4 (b)(c).

SUMMARY ——- 1. (C/NF) Defence Minister Joel Fitzgibbon resigned June 4 over an apparent conflict of interest involving his brother’s private health insurance company. The embattled minister had been under pressure following earlier revelations of undeclared gifts from a Chinese businesswoman and free accommodation provided by his brother’s company. PM Rudd accepted the resignation, noting the importance of maintaining the highest standards of government accountability, and pledged to have a new defense minister in place quickly. Depending on who might be tapped to take up the complex portfolio, a larger cabinet reshuffle may be in the offing. End summary.

2. (SBU) Prime Minister Rudd called a news conference just before Parliamentary question time June 4 to announce he had accepted the resignation of Defence Minister Joel Fitzgibbon. In a written letter to the PM, Fitzgibbon acknowledged he may have violated the Rudd government’s Code of Conduct for ministers following the disclosure by the Shadow Defence Minister David Johnston in Parliament the previous evening that Fitzgibbon had permitted his brother, Mark Fitzgibbon, who heads private health insurance company NIB, along with a representative of the U.S. health company Humana, to meet Minister for Veterans’ Affairs Alan Griffin and Minister for Defence Science and Personnel Warren Snowden in Fitzgibbon’s ministerial office with Fitzgibbon’s staff members to pursue an Australian Department of Defence contract. Fitzgibbon had initially denied the claim.

3. (SBU) In his press remarks, Rudd praised Fitzgibbon as a “first-class defense minister,” citing his accomplishments in withdrawing combat forces from Iraq, addressing the new strategic challenges in the Afghanistan-Pakistan theater, and overseeing the Defence White Paper. At the same time, however, Rudd stressed that his government expected the highest standards of conduct and accountability. He promised to name a new defense minister before the next Afghanistan Regional Command – South (RC-South) meeting, but gave no hint when an announcement could be expected.

4. (SBU) Fitzgibbon had been under pressure, not only from the Opposition bench but also from the Prime Minister himself, over earlier conduct involving undeclared gifts. On June 2, just two days earlier, for example, Fitzgibbon had been forced to issue a public apology over having failed to declare free accommodation provided by his brother’s company. In March, he was forced to acknowledge having received free air tickets to China and other gifts from Sydney-based businesswoman Helen Liu. The latter incident, involving media claims — emphatically denied by the GOA — that Qmedia claims — emphatically denied by the GOA — that Fitzgibbon’s relationship with Liu was the subject of a secret internal ADOD probe, had continued to fuel controversy over Fitzgibbon’s ethics and judgement.

COMMENT ——-

5. (C/NF) While PM Rudd insisted that the decision to resign was Fitzgibbon’s alone, it is telling that he dispatched his chief aide, Alistair Jordan, and Senator Faulker, Special Minister of State and Cabinet Secretary, to meet with Fitzgibbon early on the morning of June 4, prior to production of the resignation letter. 6. (C/NF) Given the complexity and size of the Defence portfolio, and the critical importance of managing its transformation along the lines set out in the recent Defence White Paper, PM Rudd may well call on an experienced front bencher to fill the Defence Minister role. This would inevitably lead to a reshuffle, giving Rudd a chance to replace some of the weaker performers and reward promising up-and-comers, possibly including perhaps Assistant Treasurer Chris Bowen or back-bencher Mark Arbib. Possible candidates to succeed Fitzgibbon include Greg Combet, who was Parliamentary Secretary for Defence Procurement until recently when he was moved to the Water portfolio; Mike Kelly, currently Parliamentary Secretary for Defence Support; Robert McClelland, currently Attorney-General but previously Shadow Defence Minister; and Senator John Faulkner. We do not expect to see any diminution of the close mil-mil relationship or impact on the alliance as a result of the Defence Minister’s resignation. CLUNE

210359

6/5/2009 8:26
09CANBERRA535
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA524

VZCZCXRO1283OO RUEHBC RUEHDBU RUEHDE RUEHDH RUEHDT RUEHIHL RUEHKUK RUEHPB RUEHPWDE RUEHBY #0535/01 1560826ZNY CCCCC ZZHO 050826Z JUN 09FM AMEMBASSY CANBERRATO RUEHC/SECSTATE WASHDC IMMEDIATE 1587INFO RUCNAFG/AFGHANISTAN COLLECTIVE IMMEDIATERUCNARF/ASEAN REGIONAL FORUM COLLECTIVE IMMEDIATERUCNRAQ/IRAQ COLLECTIVE IMMEDIATERUEHBN/AMCONSUL MELBOURNE IMMEDIATE 6404RUEHPT/AMCONSUL PERTH IMMEDIATE 4668RUEHDN/AMCONSUL SYDNEY IMMEDIATE 4630RUEHIN/AIT TAIPEI IMMEDIATE 1213RHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATERUEAIIA/CIA WASHINGTON DC IMMEDIATERUEKJCS/CJCS WASHINGTON DC IMMEDIATERUEKDIA/DIA WASHINGTON DC IMMEDIATERHMFISS/HQ USCENTCOM MACDILL AFB FL IMMEDIATERUEKJCS/JOINT STAFF WASHINGTON DC IMMEDIATERHEHNSC/NSC WASHINGTON DC IMMEDIATERUEKJCS/SECDEF WASHINGTON DC IMMEDIATERHEHAAA/THE WHITE HOUSE WASHINGTON DC IMMEDIATERUEHNO/USMISSION USNATO IMMEDIATE 0870RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 0813

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000535 NOFORN SIPDIS E.O. 12958: DECL: 06/05/2019 TAGS: PREL, MARR, PGOV, PINS, PINR, AS

SUBJECT: PM RUDD NAMES JOHN FAULKNER NEW DEFENSE MINISTER

REF: CANBERRA 524 CANBERRA 00000535 001.2 OF 003 Classified By: Political Counselor James F. Cole. Reasons: 1.4 (b)(d).

SUMMARY ——- 1. (C/NF) Prime Minister Rudd named Special Minister of State and Cabinet Secretary Senator John Faulkner as Defence Minister on June 5, replacing Joel Fitzgibbon, who had stepped down the previous day (reftel.) Faulkner, 55, is known for his toughness, integrity and attention to detail. Although from the Left wing of the Australian Labor Party (ALP), Faulkner is a pragmatist who is trusted by Rudd and held in high regard across the ALP. Faulkner was one of only a handful of Labor MPs to have had previous ministerial experience when the ALP returned to power in 2007, having served as Minister for Veterans Affairs and Defense Science and Personnel, and then Minister for the Environment during the Keating government. Former ALP Leader and Defense Minister Kim Beazley phoned Faulkner five times, urging him to put his hand up for the job. Faulkner concedes he has a “steep learning curve” but is widely viewed as more capable than his predecessor. He is expected to attend the NATO Defense Ministerial meeting in Brussels June 11-12. END SUMMARY.

ANNOUNCEMENT ————

2. (SBU) On June 5, the day after Fitzgibbon resigned, Rudd announced Senator John Faulkner as the new Defense Minister. Rudd said Faulkner had “unquestionable integrity and strength of character”. As late as two hours prior to the announcement, there was media speculation Faulkner didn’t want the job. Faulkner revealed at the press conference that former ALP Leader and Defense Minister Kim Beazley had phoned him five times, urging him to throw his hat in the ring, lending credence to the speculation, and that he had phoned Beazley’s successor as Defense Minister, Robert Ray, for advice. Faulkner conceded he had a “steep learning curve,” accepting the job in the wake of a major transformation of the Australian Department of Defence outlined in the Rudd government’s recent Defence White Paper. Prior to the announcement, former Defense analyst Hugh White (a former adviser to Beazley and Prime Minister Bob Hawke, and former senior Defense bureaucrat) declared Faulkner would be “an outstanding defense minister” and that his “manner and style” would suit the role. Faulkner remarked: “I’ll have very high expectations of the Department of Defense as its new minister.” Faulkner is expected to attend a NATO meeting next week which will discuss Australia’s commitment in Afghanistan.

WHO IS FAULKNER? —————-

3. (SBU) Faulkner was among a very few ALP MPs to have had Cabinet experience when the ALP returned to office in November 2007, having served as Minister for Veterans Affairs and Minister for Defense Science and Personnel in 1993, and Qand Minister for Defense Science and Personnel in 1993, and then Minister for the Environment, Sport and Territories in the Keating ALP government (a Cabinet position) in 1994. As Leader of the Opposition ALP in the Senate during 1998-2004, Faulkner was well known for his attention to detail and focus on government accountability, particularly during Senate inquiries. Faulkner is from the New South Wales Left faction of the ALP. In the 1980s, he was arguably its most powerful powerbroker, serving as NSW ALP Assistant General Secretary 1980-89. In 1989, he entered the Senate following the retirement of Arthur Gietzelt. Since then, Faulkner has become more pragmatic and gradually divorced himself from factional warfare. Widely viewed as honest and a straight shooter, he is looked upon by many in the ALP as an elder statesman whose advice is taken very seriously. He has been a key figure in ALP leadership ballots and election campaigns during the last decade. Rudd holds him in the highest CANBERRA 00000535 002.2 OF 003 regard. One powerful figure in the ALP Left told us Faulkner is part of Rudd’s “inner circle” when government political strategy is discussed.

BIOGRAPHIC DETAILS ——————

4. (U) John Philip Faulkner was born in Leeton, New South Wales (NSW), on April 12, 1954, and lived most of his life in Sydney, where he attended public schools and graduated from Macquarie University with an arts degree and education diploma. He joined the Labor Party as a teenager and held various party positions, including member of the NSW Administrative Committee (1978-1989), Assistant General Secretary, NWS Branch of the ALP (1980-1989); delegate, NSW Annual Conference (since 1975); delegate to the national Conference (since 1982); and member of the APL National Executive (since 1989.) For four years, Faulkner worked as a specialist teacher of children with severe disabilities and then worked as a research officer for the NSW Minister for Sport and Recreation. He was appointed to the Australian Senate on April 4, 1989, to fill the vacancy created by the retirement of Senator Arthur Gietzelt, and was elected for further six-year terms in 1993, 1998 and 2004. After the 1996 Federal election, he became Leader of the Opposition in the Senate and Shadow Minister for Social Security (March 1996-March 1997.) He was then appointed Shadow Minister for Public Administration and Government Services (March 1997 – 2001.) Senator Faulkner also became Shadow Minister with responsibility for Territories (i.e., Northern Territory and the Australian Capital Territory) during October 1997 – October 1998.)

5. (U) After the 1998 Federal election, Senator Faulkner remained Leader of the Opposition in the Senate and assumed the portfolios of Shadow Minister for Public Administration and Government Services, and Shadow Minister for Olympic Coordination and the Centenary of the Federation. He remained as Leader of the Opposition in the Senate after the 2001 Federal election. In the 2001-2004 Parliamentary term, Faulkner held several portfolios, including Shadow Minister of State, Shadow Minister for Public Administration and Accountability, and Shadow Minister for Home Affairs. After the 2004 election he stood down as Leader of the Opposition in the Senate, serving as National President of the Australian Labor Party from April 2007 to March 2008. Under the Rudd Government, Faulkner was appointed Special Minister of State, Cabinet Secretary and Vice-President of the Executive Council.

6. (C/NF) Faulkner is reputedly very protective of his home life, and personal details are noticably absent from available official biographic material. The 2002 Australian Political Alamanac notes he “has two teenage children from a former marriage.” A November 7, 2006, Australian newspaper story identified NSW Tourism Minister, Sandra Nori, as Faulkner’s former wife in an article alleging she had had an affair with NSW MP Paul Gibson while she was married.

GOOD CHOICE ———–

7. (C/NF) COMMENT: Faulkner is widely regarded as a safe pair of hands and we anticipate a good working relationship based on our contacts with him. The government remains committed to the Defense reform program driven by Fitzgibbon, which means Faulkner may continue to face resistance from vested interests in the defense bureaucracy. However, given his temperment and reputation, we believe Faulkner will have a greater chance of pushing the reform agenda through would Fitzgibbon. He has better political instincts, superior knowledge of the process of government process and commands more respect. Faulkner’s commitment to probity will lessen the likelihood that he will become embroiled in the controversies that plagued Fitzgibbon’s tenure.

8. (C/NF) During meetings with Ambassador McCallum in 2008, Faulkner seemed disengaged from the central issues facing the government at that time, and instead was more focused on Parliamentary issues. However, we expect him to quickly get up to speed on his new portfolio. CLUNE

178268

11/14/2008 7:03
08CANBERRA1157
Embassy Canberra
SECRET//NOFORN

VZCZCXYZ0000PP RUEHWEBDE RUEHBY #1157/01 3190703ZNY SSSSS ZZHP 140703Z NOV 08FM AMEMBASSY CANBERRATO RUEAIIA/CIA WASHINGTON DC PRIORITYRUEHC/SECSTATE WASHDC PRIORITY 0522

S E C R E T CANBERRA 001159 SENSITIVE NOFORN SIPDIS DEPARTMENT FOR INR AND EAP/ANP E.O. 12958: DECL: 11/16/2018 TAGS: PINR, PREL, AS

SUBJECT: CORRECTED COPY: 2008 ANNUAL INR-ONA INTELLIGENCE EXCHANGE

REF: CANBERRA 1157 Classified By: Political Counselor James F. Cole for reasons 1.4(a), (b ), (c) and (d)

Corrected copy to change classification levels of paragraphs 20 and 21. 1.

(S//NF) Summary: The 2008 intelligence exchange between the Department of State Bureau of Intelligence and Research (INR) and the Australian Office of National Assessments (ONA) was held in Canberra, Australia on Tuesday, 14 October 2008. The ONA-hosted event covered a wide range of countries and themes, including Iran, Pakistan, Afghanistan, Japan, the Koreas, China, Russia, Indonesia and the Philippines. A/S Randall Fort led the INR delegation, with INR analysts providing opening remarks in the discussions of Iran and Russia and responding to ONA presentations on South and Northeast Asia. ———-

Courtesy Call with D/DIO ———-

2. (S//NF) A/S Fort and POLOF on Monday, 13 October, met with Major General Maurie McNarn, Director of the Australian Defence Intelligence Organization (DIO) and his deputy, Mr. Michael Shoebridge at DIO HQ. The group discussed the capabilities of Japanese intelligence service interlocutors, comparing views based on the INR delegation’s recent exchange in Tokyo and those of DIO seniors’ and analysts’ similar interactions. McNarn agreed that there were signs of progress within the senior levels of the Japanese IC regarding trilateral US-AUS-JPN efforts against countries of mutual concern-particularly within the defense intelligence establishment against such themes as North Korean WMD and China’s naval capabilities-but noted that incompatible security standards continued to be a major hindrance precluding more robust collaboration. McNarn and Shoebridge were particularly interested in A/S Fort’s comments on INR’s role in leading US Intelligence Community efforts within the Comprehensive National Cybersecurity Initiative (CNCI), noting that the Australian intelligence community was “hard pressed” to understand the full extent of the threat, let alone serve in a position to lead the coordination of any interagency mitigation efforts. McNarn said the Defense Signals Directorate (DSD) had “the lead” for Australia in tackling the issue but was more focused on traditional intelligence collection/counterintelligence themes, and that Australian intelligence would need to stay engaged with its US counterparts to share lessons learned in the cyber arena. ———-

Courtesy Call with DG/ONA ———-

3. (S//NF) A/S Fort and POLOF on Tuesday, 14 October, met with Peter Varghese, Director General of the Australian Office of National Assessments, in his office prior to the kickoff of the formal intelligence exchange at ONA headquarters. Varghese made comments similar to those of D/DIO regarding the strengths, weaknesses, and personalities of ONA’s Japanese intelligence counterparts. The conversation segued into a discussion of the evolving role of all-source analysis in an environment where senior government officials and other customers had much greater access to information electronically and were increasingly focused on informing, analyzing, and shaping policy options. Varghese asserted that this created an important challenge for ONA and other intelligence services, with relevance in the information age-where “once-secret information was increasingly available through open sources”- determined by the speed and efficiency by which analysts can sift through the volume to highlight “what is important” and put it into context for decision makers. context for decision makers. ———-

Global Overview ———-

4. (S//NF) The official intelligence exchange began with each head of delegation providing general introductions of their respective participants and short opening remarks, followed by a “Global Overview” presentation by DG/ONA of Australia’s perspective of its security situation and the role of intelligence in informing Australian policymakers in the coming years.

5. (S//NF) Varghese said that ONA was outlining to its customers in the Australian policymaking community a world out to 2030 in which the strategic and economic “Balance of power” was shifting, with the US remaining the preeminent global entity, but facing increasing challenges, especially from emerging or reemerging states like China, Russia, and India. Varghese described the rise of China as the most notable development over the last decade, with an economy on track to become the world’s largest by 2020, a rapidly modernizing military that could pose a direct challenge to the US within the region, and an increasingly assertive foreign policy. Varghese described India as “moving from a rhetorical to an interest-based approach” in its international relations-noting that many countries looked to Delhi as the “best option” to serve as a counterweight to Beijing-but cautioned that India’s internal social, political, and economic divisions were the greatest impediments to achieving this strategic potential. Varghese said that ONA viewed the US-Japan-China triangular relationship as paramount to the security of Northeast Asia, both in regard to China’s rise and the dangers posed by North Korea. Varghese described ONA’s “line” on Southeast Asia as “generally doing better than many had expected, but with danger signs in Thailand.” In the Middle East, Iran clearly represented the greatest challenge to regional stability-and ONA was focusing most of its attention on Tehran because of it. Varghese asserted that worldwide “Nonproliferation is under stress,” citing North Korea, Iran, and Syria as the most recent examples, but terrorism was “a good news story that is getting better, with the violent Islamist threat receding.” He concluded with his views on the changing role of international institutions, predicting that as “bilateral approaches reach their limits and multilateralism shows itself unworkable, new institutions that reflect a ‘plurilateral’ approach will emerge.”

6. (S//NF) When pressed on ONA’s assessment of terrorism in the Asia-Pacific region, Varghese answered that the growth of Islamic extremism-based movements is constrained, thanks in part to ongoing successes in combined counterterrorism efforts, but more because of societal factors in Southeast Asia that reject the middle-eastern Jihadist model. Varghese and his analysts assessed that Indonesia Islam was “returning to its main course following a detour” driven by personal linkages to the Global Jihad that were formed in Afghanistan in the 1980s. ONA assessed that al-Qa’ida ultimately has failed to achieve the strategic leadership role it sought within the Islamic world. ———-

Iran ———-

7. (S//NF) ONA analysts thanked the INR Iran analyst for his opening comments, which they described as “unconventional,” “provocative,” and “worthy of further discussion.”

8. (S//NF) ONA analysts assessed that Tehran “knows” about its lack of certain capabilities, but plays “beyond its hand” very skillfully. ONA analysts commented that Iran’s Persian culture was a key factor in understanding its strategic behavior, commenting that a “mixture of hubris and paranoia” pervades Iranian attitudes that in turn shape Tehran’s threat perceptions and policies. ONA judged that Iran’s activities in Iraq – both overt and covert-represented an extreme manifestation of Iranian strategic calculus, designed to “outflank” the US in the region. ONA asserted that-twenty years of hostility and associated rhetoric aside-regime Qyears of hostility and associated rhetoric aside-regime attitudes “have fairly shallow roots,” and the most effective means by which Tehran could ensure its national security would be a strategic relationship with the US via some “grand bargain.” ONA viewed Tehran’s nuclear program within the paradigm of “the laws of deterrence,” noting that Iran’s ability to produce a weapon may be “enough” to meet its security objectives. Nevertheless, Australian intelligence viewed Tehran’s pursuit of full self-sufficiency in the nuclear fuel cycle, long-standing covert weapons program, and continued work on delivery systems as strong indicators that Tehran’s preferred end state included a nuclear arsenal. According to ONA, they are not alone in this assessment, asserting “while China and Russia remain opposed to it, they view Iran’s acquisition of nuclear weapons as inevitable.” Varghese concluded the discussion, commenting ONA is telling its customers “It’s a mistake to think of Iran as a ‘Rogue State’.”

9. (S//NF) ONA seniors and analysts were particularly interested in A/S Fort and INR’s assessments on Israeli “red lines” on Iran’s nuclear program and the likelihood of an Israeli strike against Iranian nuclear facilities. —–

Pakistan-Afghanistan ———-

10. (S//NF) ONA analysts led the discussion of Afghanistan and Pakistan, asserting that Afghan President Karzai’s description of the two countries as “conjoined twins” may be accurate in the fact that “illness in one body affects the other,” but his tendency to blame Pakistan for all of Afghanistan’s problems ignores reality. ONA assesses that the Taliban is not only resilient-but gaining momentum-and “the insurgents think they are winning.” ONA analysts emphasized intelligence trends in cross-border activities, safehavens, and divisions within Pakistani security services that highlight their growing concerns about Pakistan, saying that while it is unlikely to fail, it is becoming more fractured and in danger of breakdowns in central control where the security of Islamabad’s nuclear weapons could come under threat. According to ONA, Pakistan’s economic downturn threatens its ability to focus on counterterrorism, mass unrest, and territorial governance. On a positive note, ONA assessed that “opportunities exist at the tribal level, where the state is unwilling or unable to achieve and/or sustain presence” to engage on common security concerns-noting that while Pakistan’s tribal areas were not directly comparable to those in Iraq, some “lessons learned” could be applied in winning the support of the local populace. ONA concluded its presentation by posing an open question of the degree to which the Taliban will have some role in Afghanistan’s future, given Karzai’s outreach under the rubric of “reconciliation.”

11. (S//NF) Varghese commented that in personal meetings and intelligence exchanges with ONA and other Australian services, Pakistani General Kayani continually comes across as ambivalent on the issues of counterterrorism and counterinsurgency, reiterating that India remains the core mission-and priority-of the Pakistan defense and intelligence establishment. ONA assesses that Pakistan’s military and security elite view this as “an American war,” which combined with a very hard sense of anti-Americanism combines into “a very dangerous cocktail.” ———-

Northeast Asia ———-

12. (S//NF) ONA analysts led the discussion of Northeast Asia during a working lunch, providing a regional overview that included China, Japan, Taiwan, the Koreas, Russia, and India. ONA assessed that China, clearly rising to be the region’s preeminent power, was focused on a perception management campaign to contain any notions of a “China threat,” while Japan was “divided internally” on such basic issues as defining “its own place” in Asia and the modern world-despite its push for a seat on the UN Security Council. ONA viewed the management of the US-Japan alliance as the single most important factor shaping the security of Northeast Asia, whether to balance China, prevent a conflict on the Taiwan Strait, or deter North Korea. ONA viewed the Taiwan Strait situation as “cooling,” but stated that the long-term trajectory was negative-especially as Chinese military capabilities grow rapidly in parallel with unmet expectations for a KMT-led government in Taipei “to deliver” on improved ties to the mainland.

13. (S//NF) ONA highlighted India as the strategic power-once firmly ensconced in the non-aligned movement-being courted by the US and its allies to balance China’s rise, but noted India’s social system and economic disparities posed Qnoted India’s social system and economic disparities posed unaddressed sources of internal instability that ultimately undermined its near-term effectiveness and long-term potential. ONA assessed that Japan would continue to push for increased engagement and investment in India, but asserted that Japanese cultural chauvanism continued to be an underlying issue that hindered improved economic and security ties with India. ONA argued that China’s ability to acquire “strategic depth” was limited by geography, and that this-combined with an export driven economy that demanded access to international energy, resources, and trade networks-constrained its ability to exert an uncontested sphere of influence akin to the US or Soviet Union during the Cold War. ———-

Russia ———-

14. (S//NF) ONA analysts concurred with INR analysts’ comments on Russia, describing Russia as both “A rising power and a declining state,” with a resurgent determination to leverage military force to protect its interests even as demographic trends indicated a diminishing population base from which to support a large-scale military buildup. ONA asserted that demographics were “starting to bite this year,” especially in labor sources, and posited that the negative trends in Russia’s long-term sustainability were exacerbated by its over-reliance on energy exports for revenues and compounded by increasing economic interdependence with the west. ONA acknowledged that much of its analysis of Russian intent was linked to its focus on the accumulation of power of the former President and the “securicrats,” commenting that ONA had “gotten to know Putin very well over the last few years” and that he “set the tone” for Russia’s actions at home and abroad.

15. (S//NF) ONA described the Baltic states and Ukraine as “countries that are in Russia’s sights,” with the dangerous similarities in Moscow’s view of the ethnically Russian population and strategic geography of Crimea to those which motivated its recent actions against Georgia. ———-

Southeast Asia ———-

16. (S//NF) ONA analysts described their outlook for Southeast Asia as “fairly benign,” as the region was generally stable and its states were unlikely to come in to conflict with one another in the near term. ONA flagged Thailand’s ongoing political crisis as the most troublesome development, observing that current events were driving the country to a boiling point and that it would “will have to make a choice” between democracy-warts and all-and a coup culture reliant upon the of an increasingly fragile monarchy for unity and legitimacy. ONA assessed that the PAD’s objectives-to force the government from power via the military and monarchy-are grounded in a widely-shared view that democratically elected officials cannot resist corruption within the current system, suggesting a cycle of dysfunction with no signs of improvement short of royal intervention or revolutionary change. The political climate in Bangkok was a major distraction for Thailand’s military and elites, which bodes poorly for the prospects of containing and defeating the southern insurgency, which was increasingly demonstrating a sophisticated cell structure and lethal, well-coordinated terror tactics.

17. (S//NF) Turning briefly to Malaysia, the Australians said that Singapore’s intelligence services and Lee Kuan Yew have told ONA in their exchanges that opposition leader Anwar “did indeed commit the acts for which he is currently indicted,” citing unshared technical intelligence. ONA assessed, and their Singapore counterparts concurred, “it was a set up job-and he probably knew that, but walked into it anyway.”

18. (S//NF) ONA analysts assess “the tide has turned” on Jemaah Islamiyah in Indonesia, noting that its leadership has been devastated-with most seniors killed, captured, or on the run-and that it has lost its local support networks and funding. ONA judged JI was shifting near term goals to its local, vice global/anti-western, interests while otherwise “creeping back to the shadows” and focusing on survival. JI would endure and regenerate over the long term, albeit as a more localized terrorist threat. ONA and the National Threat Assessment Center (NTAC) of the Australian Security Intelligence Organization (ASIO) agreed that the QSecurity Intelligence Organization (ASIO) agreed that the impending execution of the Bali bombers probably would not precipitate retaliatory terrorist attacks against Western interests, but small scale operations within and against Indonesian government and security were more likely.

19. (S//NF) ONA asserted that the success of CT efforts in Indonesia were a “study in contrast” to the ongoing downward slide in the Philippines, where the collapse of the peace process in the South threatened to make this area “the new regional incubator of terrorist Jihadis.” ONA terrorism specialists noted signals and human intelligence that JI “structuralists” embedded with the Moro Islamic Liberation Front (MILF) were rethinking plans to return to Indonesia, while JI “freelancers” were becoming more active and better linked with Abu Sayyaf Group operatives. ONA judged that the Southern Philippines increasingly contained “all the ingredients of al Qa’ida’s favored tilling ground.” ———-

Dinner ———-

20. (S//NF) ONA hosted an official dinner at the Ottoman Restaurant for A/S Fort and his team of INR analysts. Peter Varghese used the dinner as a chance to prompt further discussions on several themes from the exchange, including the likelihood of an Israeli strike on Iran and the long-term impact of Russia’s recent military action against Georgia.

21. (S//NF) ONA Attendees/Interlocutors: Peter Varghese DG/ONA Brendon Hammer DDG/ONA Heather Smith DDG/ONA John Besemeres ADG, Americas and Europe Branch Harry Genn ADG, North and South Asia Branch Peter McDonald ADG, Oceana Branch Russ Swinnerton Acting ADG, Southeast Asia Branch Ian Parmeter ADG, Middle East and Africa Branch Ashton Robinson ADG, Transnational Issues Branch Carolyn Patteson ADG, Executive and Foreign Intelligence Coordination Branch Aldo Borgu Senior Analyst, Strategic Issue Branch Neil Hawkins Senior Analyst, Middle East and Africa Branch Jacinta Sanders Senior Analyst, Middle East and Africa Branch Derek Lundy Senior Analyst, Strategic Analysis Branch Bruce Luckham Senior Analyst, International Economy Branch Graehame Carroll Senior Analyst, North and South Asia Branch Mike Hillman Consultant, North and South Asia Branch Julia Dixon Senior Analyst, Transnational Issue Branch Bruce Luckham Senior Analyst, International Economy Branch John Phipps Senior Analyst, North and South Asia Branch Bill Wise Senior Analyst, North and South Asia Branch Roger Hodgkins Senior Analyst, North and South Asia Branch Luke Yeaman Senior Analyst, International Economy Branch Kyle Wilson Senior Analyst, Americas and Europe Branch David Wall Senior Analyst, Americas and Europe Branch Susan Creighton Senior Analyst, International Economy Branch Christopher Collier Senior Analyst, Southeast Asia Branch Marcus Lumb Senior Analyst, Southeast Asia Branch Simone Alesich Senior Analyst, Southeast Asia Branch Kevin Smith Senior Analyst, International Economy Branch MCCALLUM

199457

3/30/2009 5:49
09CANBERRA320
Embassy Canberra
SECRET//NOFORN

09STATE25892

VZCZCXYZ0001PP RUEHWEBDE RUEHBY #0320 0890549ZNY SSSSS ZZHP 300549Z MAR 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1289

S E C R E T CANBERRA 000320 NOFORN SIPDIS PLEASE PASS TO INR/TCA J. BARNES AND INR/TCA K. TELLEEN E.O. 12958: DECL: 03/30/2034 TAGS: AS, PINR, PREL, ZR

SUBJECT: REPORTING ON INTERNATIONAL REACTION TO, AND VIEWS ON, POTENTIAL U.S.-IRAN ENGAGEMENT

REF: STATE 25892 Classified By: POLITICAL COUNSELOR JAMES F. COLE. REASON: 1.4 (c) and (d)

1.(C/NF) Post’s senior USIC Reps discussed Ref message during a 24 March 2009 biweekly meeting. Reps were present from CIA, NSA, NRO, NGA, FBI, DIA, and the State Department. By way of background, the USIC’s primary Australian counterparts on matters involving Iran include the National Security Advisor, Department of Foreign Affairs and Trade (DFAT), Australian Secret Intelligence Service (ASIS), Office of National Assessments (ONA), Defence Intelligence Organization (DIO), Defence Signals Directorate (DSD), Australian Security Intelligence Organization (ASIO), Defence Imagery and Geospatial Organisation (DIGO), Office of the Undersecretary of Defence for Intelligence (aDoD USDI), and the Defence Science and Technology Organisation (DSTO).

2. (C/NF) Following is a summary of USIC observations, based on their regular engagement on Iran: (S/NOFORN) The Australian Intelligence Community (AIC) has increased its collection and analytic efforts on Iran over the past decade, demonstrating Australia’s strategic commitment to engage substantively as a significant US partner on Iran. Given the USIC’s broad engagement across the AIC, we can say with high confidence that the Government of Australia and the AIC will pose no specific objections to efforts by the United States to increase its level of engagement with the Islamic Republic of Iran.

3. (S/NF) While Australian troops remain stationed in Afghanistan and Iraq, we predict the Australians will look to increased US engagement with Iran to improve upon creating a realistic framework for an accelerated reduction and eventual cessation of Iranian support to the Taliban, al-Qa’ida and related groups, and Hizballah. Simultaneously, Australia will look for increased US-Iranian engagement to lead to a more stable governance environment for Afghanistan, Pakistan, Iraq, and the Levant. We assess that the AIC and GOA will have the patience to take a long-view on these hard topics.

4. (S/NF) The AIC’s leading concerns with respect to Iran’s nuclear ambitions center on understanding the time frame of a possible weapons capability, and working with the United States to prevent Israel from independently launching uncoordinated military strikes against Iran. They are immediately concerned that Iran’s pursuit of nuclear capabilities would lead to a conventional war-or even nuclear exchange-in the Middle East involving the United States that would draw Australia into a conflict. Canberra is more broadly concerned about the potential for renewed nuclear proliferation in the Middle East, driving Southeast Asian states to abandon the NPT and pursue their own nuclear capabilities-which could introduce a direct threat to the Australian homeland. RICHE

197176

3/17/2009 6:35
09CANBERRA261
Embassy Canberra
CONFIDENTIAL//NOFORN

P 170635Z MAR 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC PRIORITY 1208INFO AMCONSUL MELBOURNE PRIORITY AMCONSUL PERTH PRIORITY AMCONSUL SYDNEY PRIORITY

C O N F I D E N T I A L CANBERRA 000261 NOFORN SIPDIS E.O. 12958: DECL: 03/16/2019 TAGS: PGOV, SENV, AS

SUBJECT: GREENS’ LEADER WELCOMES OBAMA, PESSIMISTIC ON CLIMATE CHANGE

Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d).

1. (C/NF) SUMMARY: Green Party Leader Senator Bob Brown told Charge that the Greens could not support the Rudd Government’s proposal for a 5-15% reduction in carbon emissions and will continue to press for a 40% reduction from 1990 levels. He said he looked forward to a good relationship with the United States now that Barack Obama was President. Brown also noted that he supported the U.S. reaching out to Iran but his party continues to oppose the presence of Australian troops in Afghanistan. END SUMMARY.

2. (U) The Charge met with Australian Green Party Leader Senator Bob Brown at Parliament House, Canberra on March 17. Brown, from Tasmania, has been leader of the Green Party since his election to the Senate in 1996. Brown was a vehement opponent of the Iraq War and Guantanamo and was ejected from the Australian Parliament when he heckled President George W. Bush during a speech in 2003. Brown said after the election that President Obama “raises the hopes of the world for a fairer, securer, more ecologically sound future.” The Greens are now the third-largest political party in Australia, and although they hold only five seats in the Senate, combined with independent senators Nick Xenophon and Steve Fielding, they form a block that has to be won over in order to pass legislation if the Coalition opposes it.

EMISSIONS TRADING

3. (C/NF) Brown said neither the Coalition nor the Greens would support the Government’s emissions trading scheme (ETS). (NOTE: Opposition Leader Malcolm Turnbull announced March 14 that the Coalition would oppose the ETS “in its present form and on its current timetable.”) The Greens could not in good conscience support the Government’s targets of a 5-15% carbon emission reduction when the global warming situation was so dire. Brown noted that the key to any reduction is the target not the scheme but he did think that the Government’s ETS would be a good fit with any international system. In general, Brown said, he preferred a cap to a carbon tax because it set a limit on emissions.

4. (C/NF) The Greens Leader said the current government in Australia had “lost its way” on combating climate change. Australia had the biggest coal industry in the world and Climate Change Minister Penny Wong had met with every coal and logging company in the country. Brown maintained that if Australia stopped logging that alone would cut carbon emissions by 15-20%. RELATIONSHIP WITH THE UNITED STATES

5. (SBU) The Charge said he hoped that with a new government in the U.S., relations with the Greens could improve. Brown replied that he had great affection for the U.S. and the Greens wanted a good relationship. The Greens disliked the Bush Administration’s policies, not the United States. President Obama was the world’s great hope, Brown said, and he was attuned to what people were thinking.

CHINA, IRAN, AND AFGHANISTAN

6. (C/NF) Brown said China’s treatment of Tibet was wrong, but Australia would not “look China in the eye” on the issue because the Government felt the trade relationship was too important. The Greens leader declared that he approved of President Obama’s willingness to talk to Iran. He also stated that Australia should withdraw its troops from Afghanistan and send an equivalent amount of aid instead. The Charge noted that the U.S. was currently reviewing its policy toward Afghanistan and Pakistan in an effort to Qpolicy toward Afghanistan and Pakistan in an effort to develop a comprehensive strategy. Brown said he would be pleased to receive updates on the situation.

NO CLIMATE LEGISLATION WITHOUT THE GREENS?

7. (C/NF) COMMENT: The Greens telegraphed their opposition to the ETS last weekend, when Deputy Leader Christine Milne told the press that a 5-15% reduction was “wildly inadequate and not even near the ballpark.” The Greens, the Coalition, and independent senator Nick Xenophon have now expressed their opposition to the Government’s proposed legislation, which has been referred to a two-month-long committee of inquiry in the Senate. With the Coalition and the Greens both opposing the ETS, its future seems to be in considerable doubt. Although deeply committed to environmental issues, the Greens stand to gain the most from knocking down the Government’s ETS – any substantial delay is likely to lead to tougher targets, and disaffected Labor voters will most likely turn to the Greens to protest the Government’s having “lost its way.” CLUNE

163151

7/23/2008 7:57
08CANBERRA747
Embassy Canberra
CONFIDENTIAL//NOFORN

07CANBERRA1738|08CANBERRA738

O 230757Z JUL 08FM AMEMBASSY CANBERRATO SECSTATE WASHDC IMMEDIATE 9899INFO AMEMBASSY BEIJING AMEMBASSY BERLIN AMEMBASSY JAKARTA AMEMBASSY LONDON AMEMBASSY MOSCOW AMEMBASSY PARIS AMEMBASSY SEOUL AMEMBASSY SINGAPORE AMEMBASSY TEL AVIV AMEMBASSY TOKYO AMEMBASSY WELLINGTON AMCONSUL JERUSALEM AMCONSUL MELBOURNE AMCONSUL PERTH AMCONSUL SYDNEY USMISSION UNVIE VIENNA USMISSION USUN NEW YORK CDR USPACOM HONOLULU HI

C O N F I D E N T I A L CANBERRA 000747 NOFORN NEA/IPA FOR SHAMPAINE, P FOR TESONE E.O. 12958: DECL: 07/22/2028 TAGS: PREL, KINP, IR, IS, AS

SUBJECT: ISRAELI AMBASSADOR: RUDD FIRM ON IRAN

REF: A. A) 07 CANBERRA 1738 B. B) CANBERRA 738 Classified By: Economic Counselor Edgard Kagan for reasons 1.4 (b/d).

Summary ——- 1. (C/NF) The Israeli Ambassador believes PM Rudd is very concerned about the Iranian nuclear program and firm in his desire to do whatever possible to signal Australia’s opposition to Tehran’s nuclear ambitions. Rudd is worried that the window for a “diplomatic solution” is closing and that lack of progress could lead Israel to feel forced to use “non-diplomatic means,” according to Ambassador Yuval Rotem. Iran has retaliated for perceived Australian slights by taking steps to make the day-to-day functioning of the Australian Embassy in Tehran more difficult, which has constrainted Rudd’s desire for symbolic measures to signal Canberra’s concern about the nuclear program. The Israelis believe Rudd is very firm in his overall support for Israel. End Summary.

2. (C/NF) Australian PM Kevin Rudd remains deeply concerned about the Iranian nuclear program and Iran’s threat to international stability, according to Israeli Ambassador Yuval Rotem. Noting that Rudd had taken a very strong stance on Iran while Opposition Leader, including calling for Iranian President Ahmadinejad to be prosecuted by the International Criminal Court for his calls for the destruction of Israel, Rotem told Econcouns July 21 that he is confident that the PM’s views on Iran remain very firm. Saying he has discussed Iran with Rudd on several occasions in the past few months, Rotem said that the PM is “deeply worried” that Iran’s intransigence means that the window for a diplomatic solution is closing and that Israel may feel forced to use “non-diplomatic” means.

Retaliation Against Australian Embassy in Tehran ——————————————— —-

3. (C/NF)Asked how Rudd’s views on Iran have manifested themselves, Rotem said that Iran has reacted to the PM’s statements by taking “retaliatory measures” against the Australian Embassy in Tehran. These measures make it harder for the Embassy to conduct its day-to-day business, according to Rotem. He said that DFAT Secretary Michael l’Estrange and ONA Director General Peter Varghese had met several times to convince the PM to think through the consequences of his rhetoric on Iran. Though frustrated, Rudd accepts that he must “keep his powder dry” in order to have the maximum flexibility to take “serious steps,” according to Rotem. Israeli Views on Australia’s Global PR Role on Iran ——————————————— ——

4. (C/NF)Rotem said that Israel sees Australia as playing an important role in the “global PR battle” on Iran because PM Rudd is viewed favorably by the “European Left,” many of whom are skeptical about taking a tough line towards Tehran. Rotem said Israeli Embassies in Europe have reported that Rudd’s policies are receiving a surprising amount of QRudd’s policies are receiving a surprising amount of attention, particularly because of his withdrawal of Australian troops from Iraq. The Israelis hope that Rudd’s position on Iran may help persuade skeptical Europeans, as well as help reinforce the need for a tough line on Iran by other countries.

Rudd Continues Strong Support for Israel —————————————-

5. (C/NF) Commenting that Israel had appreciated the very firm support from former PM Howard as well as FM Alexander Downer, Rotem said that Israeli officials would normally have been concerned at the prospect of their defeat by the Labor Party. However, this was not the case because Rudd had long gone out of his way to stress his strong commitment to Israel and its appreciation for its security concerns. Rotem said that he has had excellent access to Rudd and noted that the PM has taken a strong interest in even minor issues involving Israel. In that regard, Rotem noted that this has created a sometimes confusing situation where the PM’s Office gets involved in routine matters that are normally handled at the working level within the Department of Foreign Affairs and Trade (DFAT). He said that calls to DFAT are often returned by the PM’s Foreign Policy Advisor, Gary Quinlan. Commenting that DFAT officials are very frank in expressing their annoyance with the PM’s micromanaging of foreign policy issues, Rotem laughingly said that “while I understand their point of view, how can I complain about having that kind of attention from the PM.”

Comment ——-

6. (C/NF) During his first meeting with the Ambassador immediately after his election, Rudd described Ahmedinejad as a “loathsome individual on every level” and said that the Iranian President’s anti-semitism “turns my stomach.” He noted that he knew enough about the complexities of Iranian politics to understand that it was critical to ensure that any action we take must serve to weaken Ahmedinejad, rather than entrench him (ref A). Australia has also supported U.S. efforts on Iran, most recently on preventing uranium shipments to Iran (ref B).8 Bio Note ——– 7. (C/NF) Having arrived in Australia in July 2007, Rotem has previously served as the Israeli Consul General in Los Angeles as well as Chief of Staff to Foreign Minister David Levy from 1996-1998. Before that, he was foreign policy advisor to Foreign Ministers Shimon Peres and Ehud Barak, after having served at the Israeli UN Mission in New York.

186376

1/9/2009 8:03
09CANBERRA34
Embassy Canberra
CONFIDENTIAL//NOFORN

09CANBERRA13

O 090803Z JAN 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC IMMEDIATE 0805INFO AMEMBASSY TEL AVIV AMEMBASSY CAIRO AMEMBASSY AMMAN AMEMBASSY BEIRUT AMEMBASSY WELLINGTON AMEMBASSY TOKYO AMEMBASSY BAGHDAD AMEMBASSY BEIJING AMEMBASSY SINGAPORE AMEMBASSY JAKARTA AMEMBASSY PORT MORESBY AMEMBASSY OTTAWA AMEMBASSY PARIS AMEMBASSY LONDON AMEMBASSY BERLIN AMEMBASSY ANKARA AMCONSUL JERUSALEM AMCONSUL MELBOURNE AMCONSUL PERTH AMCONSUL SYDNEY NSC WASHINGTON DCUSEU BRUSSELSSECDEF WASHINGTON DCUSMISSION USUN NEW YORK

C O N F I D E N T I A L CANBERRA 000034 NOFORN DEPARTMENT FOR NEA/IPA, EAP, EAP/ANP P FOR TESONE, D FOR LEE E.O. 12958: DECL: 01/09/2019 TAGS: PREL, PGOV, IS, AS

SUBJECT: GAZA: AUSTRALIAN RESPONSE MAKES ISRAELI AMBASSADOR HAPPY

REF: CANBERRA 13 Classified By: Economic Counselor Edgard Kagan. Reasons 1.4 (b/d).

Summary ——- 1. (C/NF) Israeli Ambassador Yuval Rotem is very satisfied with the Australian response to the fighting in Gaza. Australian Government statements, including vacationing PM Kevin Rudd’s January 5 remarks, have emphasized the need for an end to HAMAS rocket attacks on Israel and halting arms shipments into Gaza. Most Australian media reporting has been “surprisingly balanced,” according to Rotem, who commented that Australian protests have been “very limited” in comparison to those during the 2006 fighting in Lebanon and the 2003 operations in Jenin. Rotem said he had been impressed with Acting PM Julia Gillard, who has taken the lead in coordinating the GOA public and private response to the Gaza fighting. Gillard impressed the Israelis with her tough questions and understanding during a January 2 phone conversation with Israeli PM Olmert. Rotem is encouraging the “very pro-Israel” Rudd to visit Israel in March by suggesting that such a visit will increase his ability to be a player on Middle-Eastern issues, particularly Iran. Commenting that FM Stephen Smith has been “surprisingly absent” on Gaza, Rotem said Smith made clear that he did not want to interrupt his vacation to work on the issue. Rotem, who is also accredited to New Zealand, expressed amazement that Wellington has “been so reasonable” on Gaza, saying that this marks a real departure from the era of former PM Helen Clark. End Summary.

2. (C/NF) Israeli Ambassador Yuval Rotem told Econcouns January 9 that he is very satisfied with Australia’s response to the Gaza conflict. Commenting that Australian Government statements have been “very balanced,” Rotem said that he has worked closely with Acting PM Gillard and National Security Advisor Duncan Lewis to keep them informed of Israeli thinking and the latest developments. Rotem said that Gillard and Lewis have been very understanding of Israel’s military action, while stressing the need to minimize civilian casualties and address humanitarian concerns. Rotem said that the Lewis and Office of National Assessments (ONA) Director General Peter Varghese “were nervous” about the possible consequences of the Israeli ground operations in Gaza. Along with Rudd’s Foreign Policy Advisor Gary Quinlan, Lewis and Varghese are very interested in what is happening in the cease-fire talks in Cairo.

Gillard A Surprise ——————

3. (C/NF) Rotem said that Gillard’s public statements surprised many Israeli Embassy contacts as being far more supportive than they had expected. Israeli officials were supportive than they had expected. Israeli officials were impressed with Gillard’s performance during a January 2 call with PM Ehud Olmert, he said, commenting that this was a relief because it had been very difficult to persuade Olmert to make the call. Rotem said that he received a readout highlighting that Gillard had asked tough questions and shown good understanding of the Gaza situation, while reassuring Olmert that Australia understood the reasons for Israel’s actions. During a January 8 interview, Gillard told a reporter: “I did say in the early days and I would happily say it now that obviously there was Hamas shelling (sic) into southern Israel and Israel responded.”

PM’s Statement ————–

4. (C/NF) Rotem praised PM Rudd’s January 5 statement (reftel) as being “very supportive” of Israel because of their emphasis on the need for halting arms shipments into Gaza as well as referring to HAMAS as a terrorist organization. He said that several senior Labor Party contacts have told him privately that the PM has been a bit jealous of the attention garnered by Gillard and that this led him to speak to the issue on January.

Playing to Rudd’s Vanity ————————

5. (C/NF) Rotem said that he is encouraging PM Rudd to travel to Israel in March in order to strengthen his voice on Middle East issues, particularly Iran. Rotem has argued to Rudd and to National Security Advisor Lewis that being one of the first foreign leaders to meet the new Israeli leadership after the upcoming elections will give the PM more credibility with other Western leaders. Commenting that Rudd has a strong affinity for and good understanding of Israel, Rotem said that Israel recognizes that Australia will “never be the United States” but will listen to Canberra “when it is also clear that they are not the Europeans.” Acknowledging that he is acting without instructions from Israel, Rotem said that Rudd is very interested in strengthening his ability to have a voice on Iran with the new U.S. Administration.

Tepid Public Reaction ———————

6. (C/NF) Commenting that the Australian public has shown little reaction to the Gaza fighting because it is happening when many are on vacation, Rotem termed the various demonstrations around Australia as small and ineffective at mobilizing broader public support. He said that they have tended to highlight divisions within the Arab community rather than reach out to the broader Australian public. This low-key public response is a sharp departure from the much more vocal and better-organized protests during the 2006 fighting in Lebanon and the 2003 fighting in Jenin. It has been encouraged by the Australian media’s “even-handedness,” though Rotem complained that “this has started to change since the ground offensive began.”

Where’s FM Smith? —————–

7. (C/NF) FM Stephen Smith has been “surprisingly absent” on Gaza, according to Rotem, who said that he had approached the FM at the beginning of the conflict to suggest that this would be a good opportunity to take advantage of PM Rudd’s Qwould be a good opportunity to take advantage of PM Rudd’s vacation to take the lead on a high profile foreign policy issue. Smith had initially expressed interest, then sent word through an intermediary that he did not want to interrupt his vacation. Rotem noted that on several occasions he has been ordered to pass messages to the FM and that Smith’s office has been unable to get in touch with him for several days.

Kiwi Surprise ————-

8. (C/NF) Also accredited to New Zealand, Rotem said that he was very surprised at the Kiwi response to the Gaza crisis. Saying that Israel had grown used to former PM Helen Clark issuing statements on Middle East issues “that could have been drafted in Damascus,” Rotem said that the new Government has been a very welcome change. He commented that they had avoided making a public statement and then issued one that was “surprisingly balanced.” Rotem said that this was a very welcome change and that it has been noticed in Israel. CLUNE

O 090803Z JAN 09FM AMEMBASSY CANBERRATO SECSTATE WASHDC IMMEDIATE 0805INFO AMEMBASSY TEL AVIV AMEMBASSY CAIRO AMEMBASSY AMMAN AMEMBASSY BEIRUT AMEMBASSY WELLINGTON AMEMBASSY TOKYO AMEMBASSY BAGHDAD AMEMBASSY BEIJING AMEMBASSY SINGAPORE AMEMBASSY JAKARTA AMEMBASSY PORT MORESBY AMEMBASSY OTTAWA AMEMBASSY PARIS AMEMBASSY LONDON AMEMBASSY BERLIN AMEMBASSY ANKARA AMCONSUL JERUSALEM AMCONSUL MELBOURNE AMCONSUL PERTH AMCONSUL SYDNEY NSC WASHINGTON DCUSEU BRUSSELSSECDEF WASHINGTON DCUSMISSION USUN NEW YORK

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