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Greg Combet MP joins 7.30 -

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The Climate Change Minister talks with Leigh Sales about the new report on the carbon tax.


LEIGH SALES, PRESENTER: A short time ago I was joined from Newcastle by the Climate Change Minister
Greg Combet.

Minister, the Productivity Commission report finds that carbon pricing in Germany and the UK
boosted electricity prices by 12 per cent and 17 per cent respectively. Is that what Australians
have to look forward to?

GREG COMBET, CLIMATE CHANGE MINISTER: Well, no, what - the two key things out of the report are
that there is a lot of action going on in the economies of seven of our major trading partners to
reduce pollution. That's the first point. In fact, over a thousand different policies were
identified. But the second important point that relates to your question is that of course the cost
of those policies can vary very significantly, and in particular the Productivity Commission has
made absolutely clear that the cheapest way in an economy to cut your carbon pollution so that it
has the least impact on electricity prices, for example, is through a market mechanism like an
emissions trading scheme. Now that's a very important finding from this report today.

LEIGH SALES: So does that mean that under your scheme you can rule out that we would see
electricity price rises of that magnitude?

GREG COMBET: Well when we produce the final modelling and the whole of the package, the electricity
price impacts will be there for everyone to see, as well as what the Government plans to assist
households meet any price impacts. And we've been very clear that at least half of the revenue from
the carbon price will be used to assist households and particularly pensioners and low and middle
income households.

LEIGH SALES: The report examined only eight countries. What point is there in using the actions of
those eight countries to justify action in Australia when their economies are so different to ours?

GREG COMBET: Well our economy is certainly different and we've gotta design a carbon price
mechanism of course that suits our particular circumstances. But, nonetheless, I think you'd agree
that it's important in the public policy debate that we're having that we've got some more facts on
the table, and here we have the Productivity Commission, an independent body, has had a look over
the last six or seven months at the economies of seven of our major trading partners to identify
what policies they have embraced to reduce carbon pollution as part of their efforts to tackle
climate change. And of course they've identified ...

LEIGH SALES: But I just wonder, minister, if ...

GREG COMBET: But it's very important, this point: including Australia's policies, there's a
thousand policies that have been identified in the economies of our major trading partners, and
this is in an environment where of course other people, such as Tony Abbott, are running around
saying nothing's going on. In fact a lot is going on.

LEIGH SALES: But I just wonder, minister, if people - I just wonder if people are sitting around
their dinner tables tonight going, "Oh, sweetheart, oh my goodness, we're falling behind Germany.
Guess we'd better get behind this carbon price."

GREG COMBET: I think that's rather silly, actually. I mean, I think it's valid ...

LEIGH SALES: Well, but, what I'm saying is do you think it's really a persuasive argument that's
going to change Australians' minds about whether or not they support a carbon price?

GREG COMBET: Well that's one of the issues that's been in debate and now we've got some facts on
the table. I think that should be respected. The Productivity Commission's an independent body. It
was asked to go and have a look at what carbon pricing methods there are in the economies of our
trading partners. It's gone and done that, it's catalogued a thousand different policies. Many of
them are more effective and less effective than others. Also more are costly and less costly than

LEIGH SALES: Australia is heavily dependent on coal production. The Australian Coal Association
released research yesterday showing that none of our competitors in coal production are applying
carbon taxes or emissions reduction schemes. So, is a carbon price going to put Australia at a
competitive disadvantage?

GREG COMBET: No, it will not. And you just made the point to me a moment ago that of course you've
gotta take into account our particular circumstances in Australia. And one of our circumstances in
Australia is that the coal industry and the LNG industry are contributing the fastest growing
category of greenhouse gases in our economy. And it is not credible for us not to include those
important sectors within a carbon pricing scheme. If you didn't, what you'd be doing is asking
other sectors of the economy like the manufacturing industry to bear the cost of the pollution
reductions, and to achieve it at least cost we need to include the major sectors of our economy.

On the coal industry specifically, at an example of a $20-per-tonne carbon price, the average
liability for each tonne of coal mined in our economy for its methane emissions would be about
$1.60 per tonne, and that's in a context where steaming coal's selling for more than $120 a tonne
and coking coal in particular's selling for more than $320 a tonne.

You know, people like Tony Abbott are running round saying it's gonna be the end of the coal
industry, the sky is gonna fall in. I mean, he's the best Chicken Little you've ever seen. But in
fact this is a manageable economic and environmental reform and we predict that the costs will be

LEIGH SALES: Minister, on another matter, as a member of the Labor left, how comfortable are you
with children being put in detention in Malaysia?

GREG COMBET: Well, I support the Government's policy and I'm looking forward to the conclusion of
the agreement with Malaysia because I think it'll be an important step in us dealing with what is a
very complex and difficult problem. And I know that my colleague, the Minister for Immigration,
Chris Bowen, is working extremely hard on that and it shouldn't be assumed that Chris Bowen doesn't
have the same concerns as other members of the community on this issue. He does.

LEIGH SALES: Do you have concerns about children being in detention in Malaysia?

GREG COMBET: I've got complete confidence in what the Prime Minister and Chris Bowen are doing in
negotiating with Malaysia and I think we should wait to see the outcome of those discussions.

LEIGH SALES: You gave a speech last year in which you said Labor needed to return to its core
values of social justice, compassion and equity. In what way is sending asylum seeker children to
an uncertain future in Malaysia compatible with those core values?

GREG COMBET: Oh, well, Labor is doing its best to represent those values by trying to avoid people
getting on a boat and coming across the ocean, and we've seen what tragic consequences can result.
So I've got complete confidence in our policy position, and as I said, in the Prime Minister and
the Minister for Immigration in pursuing this policy. And on the broader point that you're making,
I think Labor is doing a lot to demonstrate its commitment to social justice and equity. And in my
own portfolio area, one of the most important issues of equity for future generations is that we
tackle this problem. People running around saying we don't have to tackle climate change, there's
nothing we have to do, are leaving a huge risk for future generations. And what we've gotta be
attending to is our responsibility to play a part internationally to tackle climate change by
reducing pollution and exercise our responsibility for future generations in our own country.
Australia's got a lot to lose if we don't tackle climate change. We're talking about
intergenerational equity here, and it's why I think that Labor should be proud of what is
endeavouring to achieve.

LEIGH SALES: Greg Combet, thankyou very much for making time to speak to us tonight.

GREG COMBET: Pleasure, Leigh.