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Govt emissions trading timetable ambitious: S -

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EMMA ALBERICI: The Federal Treasurer is being questioned on just how committed the Government is to
its emissions trading timetable while the Opposition struggles to come up with a united position on
the timing for any such scheme.

The shadow treasurer Malcolm Turnbull and his leader Brendan Nelson seem to be at odds over the
issue.

Doctor Nelson says big polluters should be on board before Australia begins its carbon trading
scheme while Mr Turnbull believes it should start in 2012, regardless of what other countries are
doing.

Wayne Swan uses the word ambition to describe the Government's stance on a 2010 start.

Mr Swan spoke to our reporter Samantha Hawley about that and the International Monetary Fund's
latest assessment of the Australian economy.

WAYNE SWAN: Well I think the IMF's statement is a strong endorsement of the Rudd Government's first
budget and I think in particular our long-term reform agenda to build productive capacity in the
economy. But most particularly our plans to tackle inflation, to get that downward pressure on
interest rates in the long term.

SAMANTHA HAWLEY: It has found that the cuts in personal income taxes, which of course came into
force about 10 days ago, will support economic activity. Are you concerned at all that those tax
cuts will be inflationary?

WAYNE SWAN: I'm not concerned. Those tax cuts have been earnt by the Australian workforce and many
on low and middle incomes have waited a long time to get some incentive in the tax system.

SAMANTHA HAWLEY: You certainly don't think those tax cuts will lead to an increase in spending?

WAYNE SWAN: Well I don't know what they will do in terms of the individual. The individual make the
choice themselves, but most importantly in terms of our budget, which the IMF has given a very
strong tick to, is they note that we have defined room in the budget to deliver those tax cuts.

SAMANTHA HAWLEY: There has been some suggestion this week that the next move on interest rates by
the Reserve Bank could actually be down. How likely do you think that is?

WAYNE SWAN: Well that's entirely a matter for the Reserve Bank, but what we can see from this IMF
report is that with our budgetary stance it is their view that we are assisting the Reserve Bank in
that fight against inflation.

SAMANTHA HAWLEY: Okay, well can I ask you about the emissions trading scheme? When that's
introduced, will it be inflationary?

WAYNE SWAN: Well the emissions trading scheme will certainly have an impact on prices. There's no
doubt about that. But what we have to do is to put forward a set of responsible approaches to an
emissions trading scheme which deliver for the country...

SAMANTHA HAWLEY: But an emissions trading scheme could be inflationary and could lead to higher
interest rates?

WAYNE SWAN: You know about the whole issue of climate change, is that the cost of inaction is far
greater than the cost of action. That's what we will have as a set of approaches to emissions
trading which will work in a responsible way and minimise those impacts.

SAMANTHA HAWLEY: But should households be prepared for a further rise in interest rates once an
emissions trading scheme is introduced in this country?

WAYNE SWAN: Potential price impacts of an emissions trading scheme flow from the design of the
scheme itself. We can have that debate in full when the green paper is published and we are talking
about the proposals.

SAMANTHA HAWLEY: Brendan Nelson says that the 2010 start date is too rushed. Do you really think
the Government can meet that target?

WAYNE SWAN: Well Brendan Nelson isn't clear about what he's saying. On the one hand he's said that
it might, could start in 2011 or 2012. Mr Turnbull suggests the Liberal Party's position is that it
will start in 2011. There is no coherent position from the Liberal Party when it comes to an
emissions trading scheme.

SAMANTHA HAWLEY: There is some confusion though when it comes to the Government as well, isn't
there, in terms of the start up date? Can you promise that the Government will start this scheme in
2010 as outlined before the next election?

WAYNE SWAN: Sam, the Prime Minister has made it very clear, the Climate Change Minister has made it
very clear, and I'm making it very clear, is that our ambition is to start that scheme in 2010.

SAMANTHA HAWLEY: But using the word ambition seems to give the Government a bit of wriggle room. Is
that what it aims to do?

WAYNE SWAN: No, it's not what it aims to do. It's a practical recognition that we are going to
design a scheme, that we are going to have green paper which is published next week, that we will
consult on that through to the end of the year. We will then produce a white paper and all the
detailed proposals and we have an ambition to start that scheme in 2010. It's as clear as that.

EMMA ALBERICI: And there you go, the Federal Treasurer Wayne Swan speaking to our reporter Samantha
Hawley.