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ABC News Breakfast -

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(generated from captions) was next door to the Ibrahims

was peppered with bullets. The

head of the Federal treasure i,

a fresh wave of economic Martin Parkinson is calling for

reforms. He's warning

Australians will have to work

harder if they want to maintain

their living standards.

Assistant Treasurer Bill

Shorten is in Melbourne for the

economic and social outlook

forum where Mr Parkinson

himself spoke last night and

he's in the studio with us.

Many thanks for your time.

Would you agree with him that

the political debate has been

sidetracked? We're determined

to get our price on carbon. I

think the contribution of the

opposition is a distraction in

that it is just relentlessly

negative. I think that

Australians shouldn't be afraid

of the future. We're on the

fringe of the fastest growing

economic region in the world.

Our farms are the best in the

world. Our mining companies

are doing well. Our services

sector is as good as anywhere

in the world, so I am upbeat

about the future, but of course

as the Treasury Secretary said

last night, we need to keep relentlessly focusing on

productivity. There's been a

bit of a backlash from our

viewers this morning put out by

this call to work harder. As

Loy are working very hard

simply to make ends meet on a

day by day basis. Do you think

that message isn't going to

public? When we talk about play too well with the broader

productivity it is not just a

question of someone running

faster on the spot to keep up.

I don't think Australians are

lazy at all. I think

Australians are very hard

working. If you look at the

history of productivity over

the last few decades, we had a

spurt in the 1990s which was

very good, but really in the

long sleep of the Howard

Government, the productivity

fell off. Productivity doesn't

just mean working more

physically harder or working

longer hours. What I think it

means and what I believe the

Treasury Secretary was getting

at we need to look at the

intersection of a range of factors, the investment of

capital, the take up of new

technology, how do we do what

we do and get more out what we

do for the same amount of

sense of false security. There effort. Have been lulled into a

are people working incredibly

hard. The people in WA work

very hard in the mining boom

they're benefiting from t but

there's this other part of the

economy which is not keeping

pace because distraction of the

mining boom, is not developing

properly and will be left

caught short if we don't pay

attention to that side of the

economy. Fur a teacher or

public servant or someone

working in tourism or the

financial services do you work

as hard as someone working in mining. They

mining. They work as hard but

the structure of it, they do

work as hard. You're quite

right to identify this mining

boom is different to previous

mining booms. There's no doubt

that the dirt we digs up, the

iron ore is worth more than it

was overseas. We're also

seeing a very high dollar. If

you've got a very high

Australian dollar that's great

if you're going to lie on a

beach in Bali or you're going

overseas further, but the

problem is that if you are a manufacturing company in

Melbourne or Sydney and you're

making components which someone

else could import much more

cheaply because your dollar is

more expensive, then it becomes

a lot more problematic. If you're running a tourism operation in Queensland and it

is costing foreign tourists

more to stay each night in

Australia, that's a problem.

That's why the Gillard

Governments want to share the

prosperity of the mining boom.

Let's be clear about this

mining tax, there are some who

say we should take it all off

the companies. I think that's

not a smart economic idea in

any fashion, but then you've

got the coalition who say the

mining tax is bad. Our view is

these are finite resources, the

minerals, and if we've got an

uneven economy, what we should

do is take a fraction of the

big profits and make sure we

can pass on the company tax

reductions to all those other businesses, better superannuation, people don't

have enough to retire on, we

want to spread the prosperity

of the mining boom. You

mentioned the carbon price.

Why the Prime Minister playing

centimetre nan ticks to

describe what is going to

happen before the emissions

trading scheme scoms comes in. The Treasury Secretary says that some of the political

debate is getting in the way of

over what the Prime Minister reform. Can I say quibbling

has said in my opinion is a

distraction. What she has said

consistently she wants a price

on carbon. We've got to

decouple economic growth from

reliance on high carbon

pollution. What we're going to

do is in the short-term, three

to five years, have a tax on

carbon, but that is a

short-term measure. We

ultimately want to have a

traded system whereby people

are encouraged to reduce their

pollution tan they can trade their carbon pollution amongst

each other to encourage a more

efficient, non-carbon polluting

industry. You seem to be

backing away from the words of

yesterday. It will be a

default tax but a default

carbon tax for the next three years. For the next three

years, that's right. You would

think if you listen to the

opposition it was like a Henry

Lawson poem we're all going to

be ruined. We will announce

the price and compensation

mechanism soon. I don't have

any doubt about that. For

millions of Australian

households there will be

compensation. Every dollar

raised by this carbon tax over

the next three years goes

ploughed back into household

compensation, into supporting

industry, it is all going

back. That very point in its

does that not distract you from

reforming other parts of the

economy? The fact that you are

under pressure and constant

pressure by the coalition to

make sure that no-one is worse

off, do you then get the

parts? opportunity for reformer in

parts? We're committed to

level of carbon reforming and reducing the

pollution. Other than carbon

pollution. Yes, that's right.

We are. Carbon pollution, reducing that is important. We

all know if you live near a

busy roadway you get worried

about what the kids are

breathing. We all know

creating new industries creates

jobs. It is remarkable that in

Germany they have three times

the size of our solar industry

yet they've got less sun.

You've got to have some

positive signals to say we're

interested in alternative

energy. Beyond that, this

Government's got on with a big

load of work since 2007.

Income taxes have been reduced

remarkably. If you earn

$50,000 you need every dollar

there's no question. The tax

you're paying now this year

will be $1,750 less than what

you were paying then. This

Government consistently since

2007 is raising less tax as a

proportion of the economy than hour predecessors. It may come as a surprise for viewers,

there is a miths of taxation.

The Liberal Government un-John

Howard, the Commonwealth

Government charges more taxes

as a proportion of the economy than we needed to fight World

War II. The the Heazlewood

power station, Australia's

dirtiest coal-fired power

station will be brought out.

Can you confirm that. Rather

than say something I don't

know, I have to say I don't

know. How do you think as a

former union man how do you

think the worker around that

one and some of the others

might feel about losing that

industry that's been such a big

part of the community? Let's

be clear. Coal still as a role

going into the future. Power

generation still has a role

going into the future. I did organise in the metal trades

down in the Latrobe Valley in

the 90s and I tell will you nothing that's coming along

with the discussion about

reducing carbon pollution will

be as devastating at

privatisation of the SCC was

and thousands and thousands of

jobs went. I just don't know

the detail about Heazlewood but

when we have a discussion about

job losses I see some of the

crocodile tears of Liberal MPs

who have zufrd discovered men

in overalls working. I saw

what happened in privatisation.

Go and ask anyone in the valley, that was what wiped out