Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
ETS critics predict job losses, legal threats -

View in ParlViewView other Segments

ELEANOR HALL: The Federal Government added billions of dollars worth of compensation to its
emissions trading legislation in a bid to cut a political deal.

But Australia's biggest carbon polluters still don't like the sweetened deal on offer.

Despite an extra $3 billion for power generators, one company in the sector says it's considering
launching legal action to recoup the costs of a carbon trading scheme.

And the coal industry says there will still be massive job losses.

In Melbourne, Simon Lauder reports.

SIMON LAUDER: The idea of an emissions trading scheme is to make polluting expensive. The idea of
the compensation the Government is offering the biggest polluters is to make it not so expensive.

The Federal Government's revised plan changes the debate over whether it will still be expensive
enough to truly be a carbon pollution reduction scheme.

Bruce Mountain is the director of consultants, Carbon Market Economics.

BRUCE MOUNTAIN: The compensation schemes generally do weaken the incentive to decrease emissions.
It does essentially help the worst emitters to continue in business.

SIMON LAUDER: In the language of emissions trading diplomacy they're called emissions intensive
trade exposed industries, and Australia's biggest polluters are the biggest winners out of the
Government's revised offer.

The head of the Australian Industry Group, Heather Ridout, says the deal is an improvement but she
can see why some industries are still not happy.

HEATHER RIDOUT: This is going to change the way the economy runs. We're putting a price on
something for the first time. It's like putting a price on the air we breathe and it's very hard to
factor into business models and that whole area is very stressed.

SIMON LAUDER: Ms Ridout says the Government should extend the terms of its offer.

HEATHER RIDOUT: Well I think the Government, from a business perspective, would be regarded as an
Indian giver if they put this deal on the table and then all bets are off and we have to go back
and negotiate again.

SIMON LAUDER: Aid for the coal industry remains one of the most controversial aspects of the
planned Carbon Pollution Reduction Scheme and the amount of aid has been doubled under the
Government's revised plan. The industry that produces 1.4 per cent of global emissions will receive
$1.5 billion in aid over five years.

But the chief executive of the Minerals Council of Australia, Mitch Hooke, says the scheme will
impose $12.5 billion in carbon costs on the sector.

MITCH HOOKE: We did not want to be in the space of arguing about concessions and this mad scramble
for the life boat of concessions and assistance. We want to be in the business where what we're
doing here in Australia was aligned with the European Union, aligned with the United States and
Canada, and they are all on a measured transition to a low emissions economy. We wanted to be on
the same wavelength. This preoccupation with raising revenue is what has undone this scheme in our
view.

SIMON LAUDER: The food processing sector was being offered no compensation for the emissions
trading scheme until yesterday, now it could be given a $150 million cushion.

The deputy chief executive of the Australian Food and Grocery Council, Dr Geoffrey Annison, says
it's not enough to stop food companies passing the cost on to consumers.

GEOFFREY ANNISON: It doesn't remove the global competitive issue for many of Australia's trade
exposed goods and it would possibly still result in goods being more expensive on supermarket
shelves, particularly compared with imported goods that don't have a carbon charge.

SIMON LAUDER: One of the most vocal opponents of the Government's plan is TRUenergy, which operates
the brown-coal fired power station in Victoria's La Trobe Valley.

Electricity generators are by far the biggest winners from the Government's new offer, with
compensation going from less than $4 billion over five years to $7 billion over a decade.

The chief executive of TRUenergy, Richard McIndoe, says that still doesn't come close to covering
the estimated cost to the coal fired power industry of $20 billion.

Mr McIndoe says the Government's offer will keep lenders happy but not shareholders.

RICHARD MCINDOE: It's a good deal for the banks. I think the banks will be a lot more comfortable
this morning, but as far as the existing investors in the industry are concerned, we've been told,
sorry there's nothing for you in this.

SIMON LAUDER: Mr McIndoe says TRUenergy's parent company may use lawyers to recover more of the
costs.

RICHARD MCINDOE: Well certainly we are protected by an international trade treaty between Hong Kong
and Australia, which ensures that we will be compensated for any discriminating policy that's put
in place by the Government. So we'll have to look at our legal options there and I'm sure that
across the industry various other people will be looking at similar kind of trade treaties.

I don't think the Government's really assessed the risk of these potential legal actions by people
and we'll have to see how that develops over the next few months.

ELEANOR HALL: That's the chief executive of TRUenergy Richard McIndoe, ending Simon Lauder's
report.