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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