You can have your cake and eat it
Well, the most heartening thing for me is that the Liberal Party coalition under Tony Abbott has done so well. I'm disappointed that they did not win, but nobody really expected them to after Labor has had only one term and it's remarkable that they were so close. We now have a minority government for the first time in 70 years.
It's too hard to predict because it's so close and there are so many variables: there could be a by-election, a seat could change hands and make it 75-all, in which case they would almost certainly have to have another election. From the country's point of view, I don't think much is going to happen because the government doesn't have the capacity and is so dependent on the Greens, which is anti-economic reform.
Economically, it needs to continue the path that it's been on for a long time - that is, reform, remain competitive, understand the challenges of the global financial environment and stick to market capitalism.
It's more difficult now. Under the Labor governments of Kevin Rudd and Julia Gillard, we've already seen a reversal of my government's labour market reforms. That reversal will take a while to work its way through the system but when it does, it will be quite costly for businesses.
Well, any reform can be undone.
Let me amend that. Some reforms can't be undone because once some of the egg is scrambled, you can't unscramble it. For example, we're not going to regulate our exchange rate again, re-erect a tariff wall or reverse the Goods and Services Tax and go back to taxing income more steeply. But we needed another three years to entrench labour market changes.
The terrorist threat's not gone, but Indonesia's done very well in being very vigilant and quite effective in removing a lot of the incentive for extremism... One of the big success stories in our region in the last 13 years has been Indonesia's transition from a military dictatorship to the world's third-largest democracy - and I don't think Indonesia receives as much credit for that as it deserves from the rest of the world, particularly from the Europeans and Americans.
We're a Western culture with close links with Asia. People shouldn't get hung up about it.
Yeah, well, I thought that was a waste of effort.
He should have endeavoured to make the existing institutions - including Asean, the Asia-Pacific Economic Cooperation (Apec) and the East Asia Summit - work more effectively. The idea that every new president or prime minister has to create a new structure with his name on it is silly.
I went to 12 Apec meetings and they were valuable because they brought together all the countries of our region plus the United States, Russia and some countries in South America. The key thing about making Apec work is keeping the Americans fully engaged; if you burden the region with yet another structure, Apec may wither on the vine. What also makes Apec valuable is that Asia is where the centre of economic gravity is shifting.
Yes, but you see what defines a leading role is not an international bureaucratic structure, but how you interact with countries in the region. Look at our relationship with China: it's our best export destination and we are still the most favoured overseas destination for Chinese students. That to me is far more valuable than some fanciful whizbang, grand slam international arrangement that will never deliver.
Let me give you an example: the biggest single difficulty with the United Nations is that its Security Council has five veto-wielding countries, which reflects the power realities of 1945. The five countries with that authority are not going to give it up... But we've just got to work around that.
Concentrate on things we share in common. With China, we have a great complementarity of economic interests but not a common philosophy. It's just a fact of life.
Well, there are Chinese and there are Chinese...and I recognise that, over time, values in countries can change too. Japan was once very militaristic but is now a mature democracy.
That assumes that there is a natural antagonism between the two. I don't think that's true... We should build on what is common but, equally, we should not apologise for who we are.
I spent my whole prime ministership arguing that Australia did not have to choose between her history and her geography. We can be faithful to both because there's no inevitable conflict. Take India, which is culturally so very different from Australia but we have a common British legacy, like the English language, our legal system and cricket.
Well, you can. And we have. We've this magnificent trading relationship with China but haven't compromised our democratic system... As the old saying goes, 'You do not have permanent friends, you have permanent interests.'
If you are prime minister of a democracy and with 24/7 news coverage, eventually people get tired of the government and they want a change. That happens in every society. It happened in Britain in 1997, when its economy was in very good shape but they wanted somebody new.
Well, as Winston Churchill famously said: 'Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.'
'Well, in any democracy, people want change. But they do not necessarily change for the better. It's change for the worse!'
'How can you talk about disadvantages when there would be hundreds of millions of people in Asia poorer now than they are if they had not embraced market capitalism and globalisation. That's lesson No. 1.'
'Don't go backwards and seek salvation in a whole lot of new international rules and regulations.'
'I'd never be so presumptuous as to give a piece of universal advice, but the observation I'd make is that we still live in a world of nation states and whilst we should collaborate, we should never believe that an international institution that's going to solve all our problems is just around the corner.'
'It hasn't happened and it won't. It will always be very powerful because it's big, very free, very innovative and it's not ageing the way European countries - or China - are.'
'Do you think it's reasonable that a country like India or Japan doesn't have a veto? That there's no Islamic country that's got a veto?'