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Wong and Hunt debate carbon pricing -

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Wong and Hunt debate carbon pricing

Broadcast: 25/02/2011

Reporter: Ali Moore

Finance Minister Penny Wong and Opposition environment spokesman Greg Hunt join Lateline to discuss
the proposed new carbon pricing scheme.


ALI MOORE, PRESENTER: Well, as we've just seen, Julia Gillard's proposed new tax on carbon
dominated political debate today.

To discuss the issue I was joined a short time ago by the Finance Minister and former minister for
climate change, Penny Wong, from our Canberra studio.

And from Melbourne, Greg Hunt, the Opposition Spokesman for Climate Action and the Environment.

Penny Wong and Greg Hunt, welcome to Lateline.

PENNY WONG, FINANCE MINISTER: Good to be with you.


ALI MOORE: Penny Wong, have you got a problem selling this carbon tax? You start behind the
eight-ball because of a promise your Prime Minister made on the eve of the last election.

PENNY WONG: Julia Gillard and the Labor Party went to the last election being very clear about our
view on climate change. We believe it's real and we believe human beings are contributing to it.

And we said, we have said for a number of years, that the most efficient way to deal with climate
change is to price carbon, through a market mechanism. What did Julia announce this week? A market
mechanism to price carbon.

ALI MOORE: But you can't get much clearer than 'there'll be no carbon tax under a government that I

PENNY WONG: And Julia did make very clear her view on climate change, which is as I've outlined.
Climate change is real, human beings are contributing to it and we need to price carbon, and that's
what we've announced.

But can I say, look there is a, I don't think anybody who went through the last parliament could
doubt Labor's intention to action on climate change.

We have a Parliament now that is willing to act on climate change, that's what the Australian
people voted for. And most of all it's what's in Australia's national interests and we do ...

ALI MOORE: But it is just ...

PENNY WONG: ... actually have to look ...

ALI MOORE: ... literally on ...

PENNY WONG: ... to this issue.

ALI MOORE: ... literally on that statement, it is a broken promise isn't it? Is that so hard to
come to? It's a very clear statement. There was not qualification, she didn't say 'unless there's a
hung parliament, unless the Greens have got the balance of power.'

PENNY WONG: Well, look you know, there's going to be a lot of debate about a lot of things about
this issue. But you know what is the most important thing? And that is that this nation does
something about this enormous policy problem. And we are saying, we are saying, as Government, we
are not going to walk away from this.

This is, as you started off with, a very tough debate for the Government, and a tough debate for
the nation. Particularly when we're faced with an Opposition that's simply going to seek, again, to
wreck action on climate change. But it is the right thing to do for the future of the country.

ALI MOORE: Greg Hunt, tough debate for the Opposition. But how many people in the Liberal Party
actually want a price on carbon, because of course your former leader actually negotiated just such
a thing?

GREG HUNT: There is extraordinary strength in the position which will have us fight against this

And the reason we want to fight against it is because, firstly, an election is about a mandate,
and, as you've just said, the Prime Minister expressly ruled out this policy of a carbon tax on the
eve of the election.

And expressly said that no government, that she would lead, would have a carbon tax, in the week of
the election. She thought this was of sufficient magnitude and importance to expressly rule it out,
so we are very unified.

But let me make this point, the reason beyond the mandate why this is important is because it will
have a real and profound human impact of $300 per household immediately per annum, in terms of
electricity, 6.5 cents per litre in terms of petrol and all when there's a much better, cheaper

ALI MOORE: I want to ask you what you're basing your numbers on in a minute. But just to go back to
that point of expressly ruling out such a policy, Penny Wong a very, again a very simple question,
I go back to it, the Prime Minister did expressly rule out a tax, did she not?

PENNY WONG: Oh well ...

ALI MOORE: I'm I getting it wrong? Did I hear it wrong?

PENNY WONG: ... and we can get into a semantic debate about that ...

ALI MOORE: But it's actually, it's not what's semantics, there's no semantics: 'there'll be no
carbon tax under a government I lead.'


ALI MOORE: I'm just trying to understand why it's so hard to recognise she said that she that and
now, why there's been a change of plan.

PENNY WONG: Well, and we, we have said, all along, we want a price on carbon through a market
mechanism. We have announced a price on carbon through a market mechanism. And it is true, the
Prime Minister has acknowledged this, that for the first number of years she has said we proposed
that it will be a fixed price. She has said this would operate like a tax.

But let's, let's, let's think about what kind of debate we want in this country. Are we really
going to have that argument? Or are we going to have the argument about what's right for the
nation, at time when there is a Parliament, which was voted for by the Australian people, which is
going to, wants to act on climate change. Which was voted for by the Australian people.

And can I say, on Greg Hunt, I mean for Greg to lecture us about inconsistency on this is rather
extraordinary. I mean this is a man who wrote his thesis entitled: 'A Tax to Make the Polluter
Pay.' A man who supported Malcolm Turnball, supported John Howard's plan, for an Emissions Trading
Scheme and price on carbon and now, all of a sudden, is running around saying the sky will fall in
if we put a price on carbon.

ALI MOORE: Greg Hunt?

GREG HUNT: Right. The answer is very clear here, which is that we have set out an opinion that
there is a better way, using a market mechanism, which is the same way that we buy back water.

We would buy back pollution, we would buy back carbon, and that would cost dramatically less than
the Government. But much more importantly, we went to the election...

PENNY WONG: But that won't work Greg, it won't work.

GREG HUNT: ... went to the election on that policy. Not on a grand deception. And what is I think
critical here Ali, is that this was so significant that the Prime Minister had to rule it out as
her last pitch to the Australian public, and that's why there's a grand deception, and that's why
there's public anger, coupled with the concern about $300 of electricity prices ...

ALI MOORE: Well let me ask you where ...

GREG HUNT: ... So I'm not going to be lectured by Penny Wong.

ALI MOORE: Let me ask you where that $300 came from, what price are you working on?

GREG HUNT: That's a price of $26 per tonne, as was set out in the Australian Industry Group report
this week.

But it's also very similar to the figures which were set out by the, by then prime minister, Kevin
Rudd, on the 3rd of February, in the Parliament last year, by the New South Wales Independent
Regulator in the final report on pricing of electricity if there's an increase because of carbon
price or carbon tax of March of last year.

The Business Council said the same thing. So there are absolutely clear statistics here that $26,
which is what you'll need at if you're going to use their mechanism, at the very least will have a
$300 price impact on ...

ALI MOORE: Penny Wong ... well let me interrupt ...

GREG HUNT: ... electricity, 6.5 cents on petrol.

ALI MOORE: ... let me interrupt you there. $26 a tonne, anything less would you actually be able to
make the change that this is designed to do?

PENNY WONG: Well I do want to answer that. I do want to respond to one thing Greg said first, he
talks about his policy, the advice was released in the Incoming Government Brief. The advice has
been released previously, it's not a policy that works. So let's make that clear.

In terms of the carbon price, what we say again from Mr Hunt tonight is the same old, same old.
He's making figures up in terms of, and trying to assert those as Government policy. We've not yet
announced the carbon price. You know that, he knows that and I think your viewers know that.

We will have to ...

ALI MOORE: But do you need $26 a tonne, as most in business do say?

PENNY WONG: We will have to announce that. But what we will have to do first is work through this
process of dialogue within the Parliament, through the multi-party committee, and within the
community. And so we have been clear about the fact that what we have announced is only the first
part in a range of decisions the Government has to make.

The price is one of those. As is assistance to households. That is the thing in this attempt of a
scare campaign that the Opposition is running that they never speak of. That ...

ALI MOORE: Well let me clarify ...

PENNY WONG: ... a Labor Government would ...

ALI MOORE: ... on issue on that. Is petrol part of this scheme?

PENNY WONG: Look, we've announced a broad mechanism. We've talked about different sectors that
could be covered. But, yes, those are decisions that still have to be made.

ALI MOORE: So you don't ... At this point petrol's up in the air, is that right?

PENNY WONG: At this point, what we have said, is that we want to move to a market mechanism. We
want to start with a fixed price for a period of three to five years. We want to start on July 2012
and these are the range of sets of decisions that we need to make.

Now this is a big ...

GREG HUNT: ...Ali on this point ...

PENNY WONG: ... I know this is a big policy. I spent a number of years working in this area and so
did Greg. But you know...

ALI MOORE: Well let Greg just speak on that point ...

PENNY WONG: ... it's the right thing to do.

ALI MOORE: ... You want to speak about the transport point?

GREG HUNT: Exactly. Firstly, I think we need, all to be honest and just call a carbon tax, a carbon

But secondly, today, Adam Bandt said on Sky Television that he was delighted with the agreement
that transport fuels, which means petrol, are in. And so he regards it as an agreement that petrol
is in.

ALI MOORE: Penny Wong?

PENNY WONG: Well, as I said, the paper speaks for itself. There's a discussion about a range of
sectors that would be covered. It's true that transport is amongst those. But we have also said
these are still decisions yet to be finalised.

I know that Greg wants ...

GREG HUNT: The Triple-A, today ...

PENNY WONG: ... very quickly. Well, I know Greg wants ...

GREG HUNT: The Triple-A said today it was a betrayal.

PENNY WONG: Greg, you know, it really is quite sad that someone like you who used to want to take
action on climate change, who was so strong and supportive of Malcolm Turnbull, now, because Tony
Abbott is your leader, is arguing precisely the opposite of what you've spent most of your life
arguing. Because you do know...

GREG HUNT: Alright, enough...

PENNY WONG: ... this is the right thing to do.

GREG HUNT: Ali may I ...

ALI MOORE: You may.

GREG HUNT: ... intervene here?

Firstly, I think we are very clear that we are passionate about real action. But not through this
mechanism. Everybody knows we've designed an alternative mechanism, which is modelled on the most
successful system in Australia, and arguably the Southern Hemisphere, New South Wales.

It's cheaper, it's more effective, it's more efficient, it's working and it's operating.

ALI MOORE: Well Greg Hunt let me ask you about your ...

GREG HUNT: And secondly, ...

ALI MOORE: ... your alternative, because this, this does go to the heart of what you're saying.
Just this week the Department of Climate Change and Energy Efficiency, in fact not this week, it
was earlier this month, they released a new report that showed that by 2020, emissions are
predicted to be 24 per cent above 2000 levels.

Now you, and the Government, have committed to at least five per cent below 2000 levels. Now, how
do you get to 20, how do you avoid 24 per cent above 2000 levels and get to five per cent below, by
2020 without a price on carbon?

GREG HUNT: Very simply, that's an abatement challenge of 160 million tonnes. What does that mean
for people who aren't familiar with this space?

It means we've got to reduce the amount of emissions by about 160 million tonnes. How do we do
that? We go and do real things and we purchase the lowest cost emissions reduction in the economy.
And we go and do that by creating a market, just as you buy back water, which the Government and
almost everybody supports, you buy back the lowest cost emissions.

And it happens in many places and most significantly it leads to real things. Planting of trees,
capturing of carbon in the soils, cleaning up of power stations, cleaning up of waste coal mine
gas. Real things, where every dollar goes to reducing emissions. And it doesn't involve about $114
billion of tax raising in the form of electricity and ...

PENNY WONG: Well here we go again ...

GREG HUNT: ... petrol prices ...

ALI MOORE: Penny Wong?

PENNY WONG: Well let's just make a figure up. Well he's ...

GREG HUNT: Those are your figure from ...

PENNY WONG: ... he's just made that figure up. Well ..

GREG HUNT: ... your ETS (Emissions Trading Scheme).

PENNY WONG: ... that is a figure you've just again plucked out of the air Greg. Can I say this ...

GREG HUNT: Those are the published Treasury modelling figures.

PENNY WONG: Do you know what the only ... I listen to you in silence Greg. The only person who
believes his policy will work is Greg.

He's the only person. Treasury doesn't believe it, Department of Climate Change doesn't believe it

GREG HUNT: Well you should speak to some ...

PENNY WONG: ... More importantly ...

GREG HUNT: ... of the officials.

PENNY WONG: Can I finish Greg, please. But more importantly, you know, Tony Abbott doesn't believe
it. Because Tony Abbott doesn't care whether it works or not. He says that 'climate change is
absolute crap.' I apologise, they're the words he used. That's what he thinks, so he doesn't care
if this policy works. The only person who believes this policy will actually work, is Greg Hunt.

No-one else does.

ALI MOORE: Penny Wong, when it comes to compensation, are you going to use the same arrangements as
were proposed under the ETS?

Because of course Bob Brown has described those compensation measures as 'a polluter's payday.' So
how do you find the middle ground, given that the Prime Minister seems fairly in touch and
committed to those previous arrangements. She's said 'it's not my intention to throw all of that
work out the door.'?

PENNY WONG: And that's not her intention. But neither is it our intention to not have the
discussion about how to get this through the Parliament. This is a discussion that has to be had
between the Government, the Independents, and the Greens to try and build this broad consensus on
this, on this issue.

And assistance to industry is one of the issues where there's going to be a very tough discussion.
We're not walking away from that.

ALI MOORE: Greg Hunt, if this gets through Parliament, will the Coalition repeal it if they win

GREG HUNT: Well we don't believe it will. The Government has already expressed their absolute
commitment, and twice walked away. Firstly, the deferred ...

PENNY WONG: It's not a game.

GREG HUNT: ... the absolute fixed 2010 date ...

PENNY WONG: Greg, it's not a game.

GREG HUNT: ... Firstly they deferred the absolute fixed 2010 date and then, secondly, at the end of
April of last year, they dumped the entire system. Then you go onto the fact that there was an
iron-clad pledge of no carbon tax. So we don't think this is ...

ALI MOORE: But let's say it does get through Parliament.

GREG HUNT: ... a done deal.

ALI MOORE: Would you repeal it?

GREG HUNT: We'll deal with those issues if that ever happens. But we don't believe that is very
likely to happen. The history is that the Government makes bold pronouncements and then walks away
from them. I only have to mention ...

PENNY WONG: No, the history is that the Opposition seeks to wreck ...

GREG HUNT: ... home insulation program which was ...

ALI MOORE: Penny Wong ...

GREG HUNT: ... absolutely brilliant, until the day it was junked.

ALI MOORE: Let me ask you Penny Wong, because of course if this is very important, and as
significant a reform as the Government argues it is, if you have trouble getting it through
Parliament, and indeed it has to be said, Tony Windsor has felt compelled to clarify, his comments.
He says 'there is no carbon tax, what you've got basically is a proposal in regard to a framework
that will lead to community debate.'

If you can't get it through, will you go to an election over this?

PENNY WONG: Well, look, we believe we can get it through. And we are willing to have this debate,
we are willing to have these negotiations behind, within the Parliament, and we are willing to have
this debate in the community.

Because, what we know, is we have Mr Abbott, aided by Mr Hunt and others, wanting to wreck this
reform, but we absolutely know this is in the interests of the nation. In terms of, particularly,
the future of this nation.

So, we're going to have this debate. It'll be a tough debate. But we can win this debate.

ALI MOORE: Can they win it Greg Hunt?

GREG HUNT: Well we believe that the Government should chance their hand. They should take this
issue to seek a mandate at an election.

We took the GST to an election, we took that risk. This policy has no mandate because it was
expressly ruled out. And I have a very simple question: will you take it to an election to seek a
mandate, and why was it ruled out prior to the last election?

ALI MOORE: And that's a question that could keep us going for a very long time, and we don't have
that time. So we'll say Penny Wong and Greg Hunt, many thanks for talking to Lateline tonight.

PENNY WONG: Good to be with you.

GREG HUNT: Take care.