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Australian Agenda -

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This is PM Agenda - .

Hello welcome to the program. Julia Gillard and

Labor have taken a hit in the

first opinion poll released

since yesterday's carbon tax announcement. Admittedly most

of this survey was carried

out before the details were confirmed by the Prime

Minister around midday

yesterday but a lot of it had been leaked already and

either way this is a shocker

demonstrate the challenge this poll and it does

that the government faces in

trying to turn things around.

We will have the details of

that poll a little later in

the program. First there is a

serious question mark hanging

over the assistance for the

coal and steel sectors that

is supposed to help them deal with this whole carbon tax. Yesterday the government

announced that it wants to

give the coal sector about

$1.3 billion in additional

assistance and steel $300

million on top of the

compensation that the big

emitting trade exposed

industries are going to get.

These were negotiated

separate or these were

announced separate to the

negotiated carbon tax plan

because the Greens didn't

want to sign up to them, they

don't want to give too much

industry assist stance away

as part of this. This morning

Tony Abbott seemed to take

some credit for the extra

assistance for forcing the

government to offer this

extra assistance but this

afternoon he's made it very

clear, the Coalition will not

support the carbon tax or the

assistance measures. What

I'm not going to do is make

it easier for this government

to get its carbon tax passage

through. And we won't be

support ing legislation that

is part of this carbon tax

package because we just think

this is a toxic tax, you

can't fix it, you have just

got to fight it. Coming up

government reaction to this. very shortly - we will get

First a look at the hard sell

today, both Tony Abbott and

Julia Gillard after a stream

of TV and radio interviews

hit the hustles, boast

looking for backdrops to --

hustings, looking for

backdrop s to talk about the

carbon tax. First the Prime

Minister went to Western

Sydney, Tony Abbott went to

the Hunter Valley in NSW to a

coal mine where he spoke with

was concerned about the workers in between shifts and

impact this will have on their jobs.

Let's have a look at how

the day unfolded. A difficult

situation for the Greens

because the steel industry

has not been one of our

biggest supporters. But that

doesn't matter. There are

jobs, we are do... Bob Brown

was also out and about today

as you can see. Here were the

two leaders on the hustings,

have a look. I think it is my

job to keep explaining

it. This is such a good deal

why wasn't she prepared to

talk about it before the

election. If it was such a

good deal why won't she take

it to the next election? We

have got to get this done. I

think there is this

fundamental scepticism about

this Prime Minister's

word. It is good to be here

at the Wombough mine. I have

had the opportunity today to

spend some time with a

family. Instead of seeing

coal as the foundation of a

first world economy, the

authors of the carbon tax

think that it's poisoning the

planet. If we took a family,

85,000 family income, a few

kids, say a couple of kids

that are very young under

five years old, they will

receive $378 more than the

expected average impact on

them. A school teacher

married to a shops is stanlt

will be worse off --

assistant will be worse off.

A policeman married to a

nurse will be worse off. It

is an attack on the

aspirations of decent

Australians. For more now on

how the hard sell is going

and indeed how the assistance

measures are holding up I'm

joined for the government's

perspective by the Minister

for Human Services, Tanya Plibersek, thank you for your time. Tony Abbott saying he will oppose the assistance

for coal and for steel. Where

does that leave these

measures? Well it shows how grossly ir responsible Tony

Abbott is prepared to be. Not

just with our environment but

also with the national

economy. This assistance is

vitally important to help

high emissions trade exposed

industries make a transition

to a clean energy future. We

are talking about $9.2

billion in the first industry

assistance package that is

now at risk because Tony

Abbott just cannot bring

himself to agree with or

support any measure that the

government takes. If Julia

Gillard... Sorry you said

that the whole $- haven't

the Greens signed up to that

$9.2 billion assistance package. I'm not sure which

part of the package Tony

measures for the steel Abbott is opposing. There is

industry, there is measures

there for the coal industry,

there is measures for food

manufacturers, for foundries,

as well. We will have to

clarify which parts Tony

Abbott's opposing. But... You

don't need his support for

the $9.2 billion assistance

package for all industry, the

Greens have agreed to that.

We are talking here about the

steel and coal additional

assistance packages. Now, if

Tony Abbott is not supporting

the carbon tax why should

support the assistance

measures, the carbon tax will go through. compensation? Because this

We have got the support we

Representatives and the need in both the House of

Senate. This passage as it

multi-party climate change -- has been nepgted by the

negotiated by the multi-party

climate change committee will

go through and Tony Abbott

can be productive. He can

sign on for this extra

support for industry or he

can block it. He has got a

choice and he will have to go

out and explain to those

industries why he is prepared

to stop them receiving extra

assistance to make the

transition to a clean energy

future. But hang on he's not

the one imposing a tax on them. He's not the one putting them in this

situation. You are and the

Greens are. Surely it's up to you and the Greens to

negotiate assistance? And

indeed we have as you have

pointed out there is a very substantial industry

assistance package in there

to help high emissions trade

exposed industries make that

transition. If Tony Abbott

wants to be productive he

should sign on for the extra

support, for these affected

industries and the really

disappointing thing about

this is that every time there

is a change that you would

think Tony Abbott would

welcome, things like leaving

domestic vehicles out of the

scheme, something that he has

called for in the past, as

soon as it's done, as soon

ass it it's proposed he will

turn around and oppose that

and he has done that with

industry assistance as well.

If he is prepared to say he

is concerned about jobs in

these industries then he has

to put his money where his

mouth is and back support for

those industries so they can

transition to a clean energy

future. Why aren't you directing this criticism at

the Greens? You could get

their support as well. They

haven't agreed to these extra

assistance measures. So why

do you -- why aren't you as

critical of the Greens? Think

it will be ideal if we can

get cross party support on

all these measures. There has

been some - a long period of negotiation and the Greens

have not been prepared to

sign on to this extra

assistance for these

industries. And with the help

of the Liberal Party, and you

would think that given the campaign that Tony Abbott has

been running about job losses

he would be prepared to give

that support, that we could

get these extra measures

through. We can get this

extra assistance through. If

you don't - you don't need

the assistance if you don't

have a carbon tax is his

point. We need a carbon tax.

We need a carbon tax for the

environment, Australia's

environment but also we need

this carbon tax for

Australia's economy. This is

a price signal that effects

the 500 largest polluters in

Australia to encourage them

and to offer them support

also to transition to a clean

energy future. On... For

many years they have been

polluting for free by putting

a $23 a tonne carbon price on

their pollution these industries will transition

over time to be cleaner and

more energy efficient and reducing the pollution that

they put into our atmosphere.

On the household assistance,

as Tony Abbott also also

pointed out a single income

family on only $65,000 a year

will be worse off. How is

that fair? David, nine out of

10 families benefit through

either tax cuts or through

family tax benefit or

pensions or other payment

increases. But some of those nine will be worse off,

including these single income

families on $65,000 a year.

They might get some compensation, they will still

be worse off. 6 million

families will be fully

compensated. 4 million -

households, 4 million

households will be over

compensated. They will in

fact get more than the expect

-- expected average price

increase and you know that

families who take greater measures to reduce their

energy consumption at home

can be even further ahead

than we have calculated here

and I will give you some

examples that. If you dry one

load of washing less each

week you can save $55 a year.

If you change from an old

fashioned electricity hot

water system to a new er gas

solar you can save around

$550 a year. People will make

changes in the way

they... But that costs money

and in the meantime you have

still got, sure nine out of

10 might be better off and 6

million might be fully

compensate ed but you will

have 3 million households

that won't be fully compensated. Why doesn't the government talk about

that? Because the majority,

the vast majority of those

people are on higher incomes.

And we make no a apologies

for concentrating our

assistance to families at the

lower and middle income levels. We make no a

apologies for that. A final question. Buried in the

figures released yesterday a

new estimate from Treasury on China's emissions growth.

Treasury has revised up how

much it expects China to pump

into the atmosphere by $1.8

-- 1.8 billion tonnes of CO2

by 2020, that is as much as

three times as what we emit

in Australia this year. It

gets back to this question,

why should we both er with

this if China's emissions will keep growing and it

seems according to trishry growing by even motor it

Treasury growing by even

motor we -- more than we

thought. We are the highest e

mitt -- emitters of car bol

pollution in the -- carbon

pollution in the world. We

are - we need to make this change because our economy in

the future depends on it. As

other countries change and

China is really embrace ing

low emissions technologies as

China and India and our top

five trading partners all

embrace new low emissions technologies we need to be

part of that. We need to be

tooled up to produce those low emissions technologies of

the future. And because our

environment as well as our

economy, our environment,

beautiful Kakadu National

Park, the great Barrier Reef,

the farming lands, the Murray

Darling Basin, the food basin

of auction will all be

affected if we -- all be

affected if we don't take

action. Because taking action

now is much cheaper than delaying and delaying and taking action in

the future. These are all the reasons that we need to take

action now. We need to make

this change. It will be a

very modest change for most

families. It's only a third

of the price impact this they

saw when the GST was

introduced. A very modest

price impact now with very

substantial household

compensation and this change

that's so important for the

future of our kids and grand kids. Human services minister

Tanya Plibersek we will leave

it there. Thank you. Has the government got it right with the compensation that it's

offered to households? And

to industry. How does this

carbon tax stack up in the

eyes of one of the nation's

leading economists. Saul Eslake from the Grattan

Institute I spoke to him a little earlier.

Saul Eslake thank you for

your time. You were amongst those who supported the idea

of a carbon price, now you

have seen the detail of this package unveiled yesterday, what do you think? How does

it stack up? I think the

carbon price element is very

good, in particular I applaud

the proposition of a floor

price as well as a ceiling

price once the transition to

a fully fledged emissions

trading system takes place in

2015. But there are a lot of

aspects of the compensation

package that I don't really

like and I think do detract

overall from its appeal. Is

there too much assistance for

industry and for households

in this package? I think in

some ways there is and in

others there is arguably not enough. For example I don't

see a compelling reason as to

why some people should be

over comb pen stated by 20%

-- compensated by 20%, I

didn't support that for

pensioners in the GST package

and I didn't support it in

this one. I don't see why

senior s earning investment

income of $80,000 per annum

should be among the biggest

winners in dollar terms for the compensation arrangements

while a single income family

with one child of 65,000 ends

up being a net loser, that is

hard to explain and seems

unfair on the surface and the

changes to the income tax

system go against one of the fundamental principles of

good tax reform design which

is that a good tax reform involves broadening the base

of taxation and lowering the

rate, the changes which the

government is making as part

of these arrangements involve

narrowing the base of income

tax and increasing the rates

in ways that I think may well

compound the Zap advantages

facing people -- zad

advantages of people re-enter

ing the workforce after for example caring for children. What about

industry, do you think there

will be job losses as the

opposition suggests? I suspect there probably will

be. But I doubt that those

job losses will be any

greater than those that would have occurred anyway, for example as the result of the

strength of the exchange rate

or have resulted from

previous major economic

reform proposals such as

competition policy, privatisation, and the

dismantling of Australia's high tariff regime in the

late 80s and through the

1990s and I think the

important thing is that there

there appropriate transitional arrangements put

in place to assist

in place to assist those

displaced by the introduction

of a carbon tax regime or the

closure of heavily polluting

power station as has been proposed to assist those

folks in finding new and

worthwhile jobs. We were told

this was going to be a budget neutral package. In the end

it is going to cost the

budget bomb line some $4.3 --

bottom line some $4.3 billion. Is that a concern? It's not a huge concern but it is an issue that will attract some

attention. First of all I

don't see any clear path by

which the whole package

eventually gets back to being

budget neutral unless one

assumes that further

increases in the rate of

carbon tax beyond the period

of the current forward

estimates are not fully

compensated for after that

period. One wonderers what

might happen for example if

when the carbon tax

transitions to an emissions

trading scheme were the carbon price to fall to the

floor of $15 rather than

continue to rise beyond 2015

as the government assumes,

that might actually make it

worse for the budget than has

currently been project ed but the other things that stands

out is the gymnastics through

which the government has gone

to ensure that its commitment

to having a budget surplus in

2012-13 is maintained. I have

always said that that was a

commitment that was far more

political in its nature than

it was a definitive aspect of good economic management and the government looks as

though it's going to be

riding -- writing a lot of

big cheques on 28 and 29 June

2012 in order to ensure that

billions of dollars of

expenditure that really are about compensating people for

the introduction of the

carbon tax regime starting 1

July 2012 actually don't show

up in that financial year but

instead show up in the

2011-12 financial year when

the government is going to be

running a deficit of more

than $20 billion anyway and

they seem to be taking the

view what's another 2 billion

there. So given that, how

confident are you that the

budget will still return to

surplus next year as Treasury

has forecast? I doubt the

carbon tax regime itself will make a big difference to that

given the way in which they

have structured the timing of

the various compensation payment arrangements to front

load some of them into

2011-12 year and I guess what

this package shows as does

the way in which the flood

levy was put together is if

the government has to engage

in some more creative

accounting in order to ensure

the number for 2013 is a positive one that is what

they will do but that under

skills my point the absolutely importance which the government is laying on a

return to surplus by 2012-13

is I think a much more

political matter than it is a determining feature of

whether the government's been

good economic managers. So

just finally then, is this a

good thing for the economy

this package or not? I think

it is on balance a good thing

for the economy. It does en tail costs for the economy

but we were never going to make the trangsition for

being one of the world's most

carbon entersive economy s to

being less carbon entersive

in a way that didn't entail

some cost. I think doing it

by an essentially market

based mechanism is as almost

all economists agree the most efficient and cost effective

way of getting there and

that's what this package

blarg seeks to do. Thanks

very much for that You're welcome. Economist Saul

Eslake from the Grattan

Institute talking to us

earlier. We will take a quick break then back with more. Stay with us.

Welcome back. Let's check

in on the latest news

headlines with Gemma.

Prime Minister Julia

Gillard is travelling around NSW beginning the hard sell

of the newly revealed details

of the government's carbon

tax. Ms Gillard has been spruiking compensation for

families and pensioners,

trying to arrest fears of a

financial burden on the

community. She also responded

to doom and gloom talk from

some in the resources sector

saying the coal industry has

a bright future under carbon

pricing. Meanwhile the

Federal opposition isn't

conceding the carbon pricing

scheme it a done deal.

Visiting the NSW coal mining

seat of Hunter today he said

there is a long way to go to

convince voters of scheme's

merits. He says it is fundamentally wrong to damage

the coal industry, one he's

called vital to Australian

life. The families of the

Pike River miners have been

told their may be tested during the Royal Commission

of enquiry into the tragedy.

29 men were killed in a series explosions at the mine

in the west coast of New Zealand's South Island last November. The Royal

Commission began hearing s in

grey mouth this morning as it

attempts to find out what

went wrong at Pike River.

Christmas Island residents

have begun giving evidence

into an enquiry into the boat

disaster which killed 50 asylum seekers the inquest

moved to the island today to

allow dozens of witnesses to

give tackle. Residents of the

-- to give testimony.

Residents try ed in vein to

save victims after the boat

crashed into the rocks of the Flying Fish Cove in December.

The British government will

face mounting pressure to

freeze Rupert Murdoch's

planned takeover of BSkyB as

the phone hack scandal

threatens to cause a imagine

political skorm. News Corp

aims to take control of the

blauker by acquire s 61% of

BSkyB as it did not already

own. He holds talks in the UK

after arriving on the day the

'News of the World' was shut down to take personal charge

of the crisis. In sport - Gold Coast captain Gary Ablett is hopeful of lining

up in this weekend's clash

with Richmond following

positive news about his knee

injury. And tomorrow's weather:

Thanks Gemma. Welcome

back. Before we get to the

panel Graham Morris and Bruce

Hawker in just a moment I

waptd to look at where the

big est impact of this carbon

tax will be and that will be

on the electricity bill. In the figures released

yesterday the government's

estimating the average impact

for households will be about

$3.30 extra a week. Brad Page

is the head of the

electricity supply

association and joins me now.

Is $3.30 a week accurate in

your view? David, the

Treasury modelling documents

is a very long one and one we

are taking time to have a

look through at the moment. I would say it's at least that

amount. It may well be a bit

more than that yet. And why

would that be? Where will

the discrepancy be do you

think? Is there any area you

can see where treasury have

under estimated the impact?

As I say, we are yet to do

a full and comprehensive

review of it. But we are a little bit concerned that

some of the assumptions that

they are using around fuel

costs, in particular, might

not be quite what we would

expect the prices to be. So

as I say, it may well turn

out to be about the right

number but we certainly don't

think it's going to be less

than that. It may well be

just a touch more yet. There

is plult - a multi-billion dollar compensation package

on the table as part of this

and the government is

offering loan guarantees,

there that be enough to

prevent any shut downs of

power generators? I think

in the short run we are not at great risk of shut downs

of power generators. I don't

think any government will

allow that to happen but I

think beyond about the first

five or six years there are

some serious risks here for

the sector. Now, one of the

big changes over the CPRS for

example is that the sector al

adjustment scheme for the

power generation group has

very much now seen that black

coal generators will receive

nothing in the previous CPRS

scheme somewhere around

20-odd generators in total

would have received some assistance. Under this