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Transcript of doorstop interview: Brisbane: 1 July 2012: Carbon pricing and tax reform; Origin Energy price increases and Campbell Newman’s broken election promise to freeze electricity prices for Queenslanders; MRRT starting today and Mr Abbott’s tax cuts for billionaires; the importance of long-term reform; welfare trial; Private Health Insurance rebate; Clive Palmer and Lilley

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Deputy Prime Minister




1 July 2012


SUBJECTS: Carbon pricing and tax reform, Origin Energy price increases and Campbell Newman’s broken election promise to freeze electricity prices for Queenslanders, MRRT starting today and Mr Abbott’s tax cuts for billionaires, the importance of long-term reform, welfare trial, Private Health Insurance rebate, Clive Palmer and Lilley

TREASURER: Today we’re going to turn 20 years of debate about climate change into action. Australia emits more carbon pollution per person than any other developed economy, so it’s absolutely essential for our long-term economic prosperity and environmental sustainability that we do something about reducing carbon pollution. We must do this to secure economic prosperity and our environmental future.

Now pricing carbon is a long-term reform, a long-term reform like the introduction of Medicare, a long-term reform like the introduction of national superannuation. It’s a price which directly hits less than 500 large emitters. But it does have a modest impact on prices overall - 0.7 per cent, less than one cent in the dollar on average.

It is accompanied by substantial tax reform. Instead of paying tax after earning $6,000, you can have tax-free the first $18,200 before you pay tax. And there are of course increases in pensions, increases in family allowances and so on.

Today I think is the day that Tony Abbott’s scare campaign is revealed as the lie that it has always been. Mr Abbott said price rises would be unimaginable, they’d simply go through the roof.

Here we are today at a supermarket just to see what has happened. We purchased on Friday eleven items from Woolies behind us there and we’ve been back today to purchase those items. For

example, I think Mr Abbott said at some stage that the price of Weetbix would go through the roof, that we wouldn't be able to afford to have breakfast. Well the price of Weetbix is $4.19 and it hasn't changed over the weekend.

I think it was Barnaby Joyce that said the cost of a lamb roast would go to $100. Well it’s the same price today as it was last Friday here at the supermarket - $20.

I think we can all assume the lies that keep coming from Mr Abbott they’ll go on and on, but their credibility will get less and less. Today is the day that Tony Abbott is going to be mugged by the truth. The truth is here in terms of these products that have been purchased here at Woolies behind us.

Today’s the day when Australians can know that we have made a very important step towards pricing carbon pollution by putting that price directly on less than 500 very large emitters. Yes, it will have a modest impact on prices overall, but all of the scaremongering from Mr Abbott and the Liberals is disproven here today by the items that we’re looking at before you.

I’m happy to take questions.

JOURNALIST: To be fair though, that’s just within twelve hours of the carbon tax coming in. What about a month?

TREASURER: I’ve made the point and the Government has always said whilst a price on carbon which directly impacts less than 500 of the largest polluters in our economy, it does have a flow-through price effect. We said that from the beginning. That is why we are putting in place additional household assistance - on average per household $10.10.

Yes there will be a price impact, it will flow through. It is 0.7 per cent, less than 1 cent in the dollar on average. But of course there is that price impact, there is additional assistance to families and to households to make sure that that is covered.

But what we have from Mr Abbott and the Liberals is a scare campaign that has been nothing but a lie. The truth is here today. The statement Mr Abbott made is simply not true. But there is an impact overall, it’s contained in the modelling that we published a long time ago, it is there for everybody to see.

JOURNALIST: When do you think the full impact will take effect on prices? There is always a lag.

TREASURER: 0.7 per cent is the average impact. The point that I make is that Mr Abbott has been [telling] an enormous amount of fibs about the impact here. The price of weetbix is there. He said the price rises are going to be unimaginable - the fact is that overall it’s 0.7 per cent.

JOURNALIST: What’s your message tonight to (inaudible)?

TREASURER: Well, six in ten households are going to have very substantial assistance. There will be some that will have less. But the great bulk of people will be more than compensated for the impact of this price.

JOURNALIST: Tony Abbott talked about taking out the carbon price. How possible is that. Is it possible?

TREASURER: Well Mr Abbott’s said a couple of things. He said he’s going to get rid of the increase to the tax-free threshold. That would have a very big impact on a lot of people who are getting a tax cut as of today. He’s also said that he wouldn't necessarily be committed to the pension increases and the family allowance increases.

But at the same time, I think Australians really know that for Mr Abbott to rip this out would be extremely difficult. So the fact of the matter is that Mr Abbott hasn't been telling the truth about what he is going to do in the future. The truth is that Mr Abbott will either rip away all of the assistance that would put really big impacts on the cost of living for many people when he takes away their pension increase and the tax-free threshold, or he’ll leave [the carbon price] in place.

JOURNALIST: But it’s not impossible. He’s saying it’s not impossible, he’s committed to it, it’s his election promise.

TREASURER: I don't think anyone can believe anything Mr Abbott says. He said the impact on items like this would be unimaginable. Nothing’s happened.

JOURNALIST: Nothing’s happened yet though?

TREASURER: No, does anyone seriously think that this [lamb roast] is going to go to $100 anytime in the next month, two months, three months? Does anyone think that the price of Weetbix is suddenly going to double and triple like Mr Abbott and all the Liberals claim? Do you seriously believe that kind of rhetoric?

JOURNALIST: Last week Origin Energy put out increased prices and they was a considerable hike, blamed almost entirely on the carbon tax. What do you say to that?

TREASURER: Well that’s simply not true. Not even Origin Energy said that. You should go and have a look at the letter from Origin Energy.

If you want to look at the facts here, the Queensland Competition Authority, an advisory body to Mr Newman, has said that the impact of the carbon price on electricity bills in Queensland is $3.34. The rest of the price rises that come through from Origin Energy have nothing to do with the carbon price overall, over and above that impact.

So Mr Newman has broken his word to the people of Queensland. He said he would freeze electricity prices, he has not. In fact, Origin Energy has proceeded with massive price rises, over and above the impacts of the carbon price, and that is entirely a matter for Mr Newman to explain. The Queensland Competition Authority that advises Mr Newman says the impact of the carbon price is $3.34 a week. By the way, that is precisely the figure that we forecast for the impact of the carbon price in Queensland.

JOURNALIST: What do you make of him pulling the plug on $27 million worth of government contracts?

TREASURER: I’m having a lot of difficulty understanding what Mr Newman has done compared to what he promised prior to the election. Mr Newman said he would freeze electricity prices, he clearly hasn't done that. He said there wouldn't be any sackings of public servants and last Friday literally thousands of public servants were sacked, effectively. He hasn't given any explanation for that, other than to somehow claim that the finances of Queensland changed overnight after he was elected, which they clearly didn't.

He had an Audit Commission come through and change the definition of how they were working out overall surpluses and so on, but there was no fundamental change. Mr Newman has misled the Queensland people on electricity prices and the employment of public servants and a whole range of other issues.

JOURNALIST: ..status quo from politicians given that Julia Gillard said there’d be no carbon tax at the last election?

TREASURER: Very, very good question. We said prior to the last election that we were putting in place an Emissions Trading Scheme. We’ve done that - by the way that was Mr Abbott and the Liberals’ position at the last election. The difference is that we move to an Emissions Trading Scheme through a fixed price for three years.

JOURNALIST: [Inaudible] … regards to carbon tax and mining tax?

TREASURER: Well not at all. In fact, thanks for raising the very important question of the Minerals Resource Rent Tax. Today is the day that the Minerals Resource Rent Tax, or the mining tax, starts. This is going to be a very important tax to make sure that Australians and Queenslanders get their fair share of the mining boom so we can spread the opportunities from that right around our community.

But today Mr Abbott wants to abolish that and give a huge tax cut to some of the most profitable miners in the world, including Mr Palmer and Gina Rinehart.

Today’s the day that Tony Abbott is going to give Gina Rinehart, Mr Palmer, some of the most profitable miners in the world a very big tax cut. To do that he’s going to have to rip away benefits paid to ordinary Australian families, such as the SchoolKids Bonus, which are paying for Australian families as we speak.

JOURNALIST: [Inaudible]?

TREASURER: I think that’s a good question as well. I got into politics to make a difference. To put in place the big reforms which will lock in our prosperity for the future. Frankly, if we didn't put a price on carbon I don't know how I’d look my children or my grandchildren in the eye in five or 10 years’ time.

This is an essential reform to secure our prosperity and our environment for the future. Yes, it’s stripped a fair bit of political paint off the Government for putting this in place. That’s always been the case in Australia when you put in place very big reforms. I can remember the introduction of national superannuation. I can remember the introduction of Medibank and then Medicare. I can

remember the very big economic reforms which caused a lot of problems for the government that did them.

Of course many of those big reforms were actually opposed by the Liberal Party in much the same way we’ve seen the opposition to carbon pricing. So putting these things in place is what politics is all about. Yes, it does strip political paint off you, but at the end of the day I think the Australian people will pay on the results.

We’ve got a world-beating economy, our economy walks tall in world, our economy is resilient and that is one of the reasons we’ve done so well during the global financial crisis and global recession. One of the reasons we are so resilient is because we have put in place over a long period of time - 20 or 30 years - the fundamental reforms that has made us stronger as a country.

This is one such reform. You cannot have, in the 21st century, a prosperous economy unless you are substantially powered by renewable energy and by energy efficient practices, and that’s what carbon pricing is all about.

JOURNALIST: …on the nose, particularly in Queensland?

TREASURER: That’s your assertion Michael. I move around my electorate all the time and I’m happy to explain to residents that live here why we are taking some of these difficult steps to..

JOURNALIST: Why is Labor … [inaudible]?

TREASURER: I don't accept the premise of your question. Unlike you, obviously I don't spend all my time looking at opinion polling or giving it a high degree of credibility that it sometimes has in discussions like this.

What I do is concentrate on, that’s why in political life, putting in place the reforms I know are very good for people in the longer term. Sometimes that is difficult in the shorter term. That’s why we run for politics, that’s why we run for Parliament - to make a difference.

JOURNALIST: [inaudible]?

TREASURER: I think this is another fundamental long term reform like we were just talking about then. We’ve taken some very big steps in welfare reform to break the cycle of welfare dependency. The early roll-out of this program in some Indigenous communities has proved very effective and now it is rolling our more broadly in the pilot sites and trial sites around the state.

I hope it is effective in these sites as it’s proven in the past. Because when your economy is strong that is precisely the time to deal with these entrenched problems such as long-term welfare dependency, that’s what this is all about. Breaking that cycle of poverty and making sure more Australians share in the benefits of a strongly growing economy. That’s what it’s all about and I’m optimistic about it.

JOURNALIST: [Inaudible]?

TREASURER: I can’t give you the exact terms of the trial but I’m happy to get back to you on that.

JOURNALIST: Do you reckon you can hold your seat of Lilley?

TREASURER: Holding the seat is not what it’s all about for me. Getting the right thing done for Australia is what it’s all about. I’ll leave that judgment up to the electors of Lilley. I’m very comfortable about the election, I don't spend my time worrying about opinion polls. As I said before, I believe Australians and the electors of Lilley will pay on results.

JOURNALIST: [inaudible]?

TREASURER: I don't think it will have any impact on queues in public hospitals. That’s just another one of the scare campaigns run by some industry groups and the Liberals.

JOURNALIST: What do you make of Clive Palmer’s announcement, Mr Swan?

TREASURER: That’s a matter for Clive Palmer. We’ll see if he’s got the guts to front up and run.


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