Federal Politics

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Malcolm Turnbull signals Australia won't follow Donald Trump's lead on Taiwan, free trade

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Prime Minister Malcolm Turnbull has signalled Australia is prepared to go its own way on foreign policy and will refuse to follow US President-elect Donald Trump's strategic approach on Taiwan or free trade.

And he expects a refugee deal, struck with current US President Barack Obama, to hold despite growing signs from the United States the incoming Trump administration will junk it.

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In an exclusive interview with Fairfax Media to mark the end of 2016, his first full year as prime minister, Mr Turnbull nominated the $50 billion business tax cuts package and the "critically important" $3.2 billion Jobs for Families childcare package, which will "do more for middle income and lower middle income families", as his top two priorities in the new year.

Mr Turnbull vowed to keep negotiating behind closed doors in 2017 with the Senate crossbench to deliver on that political agenda, as he successfully did to re-establish the building construction watchdog, and on the backpacker and superannuation tax changes.

The Prime Minister also delivered a reminder to restive backbenchers hoping for promotion in the next reshuffle that "opportunities always arise in politics, often when you least expect them".

That reminder can also be read as a warning after a week in which a backbench revolt over a climate change policy review prompted a humiliating backdown within 48 hours.

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But it is Mr Turnbull's comments on Taiwan - which will please China - and his forceful defence of free trade that are most significant, marking a willingness for Australia to differentiate itself from the US on foreign policy and take a different stance to the incoming leader of Australia's most important strategic ally.

Mr Trump shocked the foreign policy establishment when he spoke to Taiwanese President Tsai Ing-wen, the first phone call between leaders of the two nations since 1979. The move signalled a potential shift in US strategy and prompted China to lodge a diplomatic protest.

Mr Turnbull had not commented on the matter to date but he told Fairfax Media that Australia would not re-think its approach to Taiwan or adherence to the One China policy, which recognises Beijing as the sole legitimate government of China.

"Our position on Taiwan has been consistent for decades and there will be no change in that."

On free trade, which Mr Trump has repeatedly criticised for causing the loss of American jobs and the decline of the manufacturing sector in that country - a situation arguably replicated in Australia - Mr Turnbull said his government would not retreat.

"You make the case for free trade by just pointing to the jobs it creates, the opportunities it creates. You can obviously point to the benefits we have in terms of free trade, in terms of all the things we can buy that are much less expensive than they used to be, so are many household goods, electronics," he said.

Mr Turnbull conceded Australians who had lost their jobs in manufacturing, such as workers at Holden and Ford, had not necessarily seen the benefits of free trade.

"You are right, in the sense that benefits of globalisation, free trade open markets have got to be inclusive. What you need to do is to ensure that you do have strong economic growth so that as a business closes, for example, other opportunities arise."

And the refugee deal struck with the Obama administration, which will give asylum seekers on Manus Island and Nauru asylum in the United States, had been "secured", he said.

This insistence the deal will go ahead comes despite signals from Trump officials that a re-think could be in the offing, and after senior US Republicans this week demanded the Obama administration make public information about the "secret" deal with the Turnbull government.

Mr Turnbull said Wednesday's national accounts, which saw a 0.5 per cent slump in real GDP, were a wake-up call that underscored the need to pass the company tax cut plan in full.

"It's what New Zealand is doing, it's what the UK is doing, it's what Donald Trump is promising to do in the US, so we will continue to seek the support of the Senate for that," Mr Turnbull said.

He refused to say at what rate the government could compromise, but with Labor only willing to cut for businesses turning over $2 million, the Xenophon party at $10 million and the Hanson party at $50 million, another compromise is all-but certain.

"The key to this is negotiating with the crossbenches, doing so in good faith, and if you are going to have some give and take, doing so privately," he said.

The jobs-for-families package, stalled for more than a year, would make the system of government payments more sustainable and fairer, Mr Turnbull said.

As 2016 winds down, and despite just scraping home at the July 2 poll and falling behind Labor and Bill Shorten in opinion polls, a defiant Mr Turnbull said he had delivered more than people realised in his first 15 months in the job.

"If you look at what I undertook to do, in the budget and the government undertook to do in the budget, and what we took to the election, we haven't delivered all of it yet, but we have delivered a lot more than many pundits and experts believed we could," he said.

"We are the first government since 1951 to take legislation to a double dissolution election and get it carried through the Senate without going to a joint sitting. That was Menzies in '51. That's no mean feat. The superannuation changes were very substantial. There are over $6 billion of savings over the forwards [estimates]."

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