AMBASSADOR BLEICH MEETS TREASURER SWAN

C O N F I D E N T I A L CANBERRA 001054 SENSITIVE SIPDIS DEPARTMENT FOR EAP/ANP, EEB/OMA, NSC FOR JIM LOI E.O. 12958: DECL: 10/27/2019 TAGS: EFIN ECON PREL AS SUBJECT: AMBASSADOR BLEICH MEETS TREASURER SWAN Classified By: Political-Economic Counselor Edgard Kagan, Reasons 1.4 ( b)(d). ¶1. (C) SUMMARY: Treasurer Wayne Swan welcomed Ambassador Bleich during an introductory meeting on November 27 and expressed optimism about Australia's economic outlook. Swan was pessimistic about the fate of the emissions bill being hotly debated in Parliament, as well as that of Opposition leader Turnbull. He was appreciative of Treasury Secretary Geithner's frequent consultations with him on many issues, including G20. Swan explained his approach to China, which he described as a "roller coaster" relationship, and his intention to engage regionally as much as with China. End Summary. GFC and Close Coordination with U.S. -------------- ¶2. (SBU) Ambassador Bleich met Treasurer Wayne Swan during an introductory meeting on November 27. Swan commented that Australia did better than he had expected in surviving the GFC. He was appreciative of the degree of consultation and engagement shown by U.S. Treasury Secretary Geithner throughout the crisis and on issues like the G20, saying "I've talked with my fellow Finance Ministers more than members of my own Cabinet in the past six months." He added that Geithner sounded more optimistic about the U.S. economy the last time they spoke a few weeks earlier. China and the Region -------------- ¶3. (C) Swan described the relationship with China as a "roller coaster." He said there have been improvements since he opened an investment dialogue last year with China's National Development and Reform Commission, but that recurring sore points in the relationship require constant attention - such as the arrest of Rio Tinto executive Stern Hu and China's displeasure over Treasury's investment guidelines. ¶4. (C) He explained that central to the guidelines is a determination to prevent any consumer from acquiring one of Australia's major resource companies and becoming a price setter. Even so, Swan emphasized that out of 110 applications by Chinese companies since he has been Treasurer, only 5 have been denied. Furthermore, Swan recounted how G20 colleagues, who had previously "condemned" these guidelines, were now approaching him with interest to learn more about and possibly adopt them. ¶5. (C) Saying that "Asia is not China," Swan explained that Australia is determined to engage with the region holistically, despite the public's "fascination with China." He said that APEC's recent gathering reinforced the importance of Asian countries other than China and he highlighted the great dynamism and potential for growth in countries like Indonesia and Malaysia. Emissions Vote in Jeopardy and Opposition in Disarray -------------- -------------- ¶6. (C) Swan opined to the Ambassador that the long-debated Carbon Pollution Reduction Scheme (CPRS) would not pass, due to the chaotic infighting taking place within the Opposition. Swan's Chief of Staff Chris Barrett told DCM Clune that it was still unclear whether the bill's failure would trigger a double dissolution election. ¶7. (C) With regard to Opposition leader Turnbull, Swan said it "is almost inevitable now that we will see a new opposition leader." He added that the Opposition's meltdown Qopposition leader." He added that the Opposition's meltdown over CPRS was symptomatic of deeper issues and that Turnbull's problems went beyond climate change. BLEICH