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Transcript of interview: ABC 891 with Mathew Abraham: 29 August 2012: SA Liberal Leadership; Shorten's salary struggles; carbon tax; education policy

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ABC 891 SA Liberal Leadership; Shorten’s salary struggles; Carbon tax; Education policy

Posted on August 29, 2012

SUBJECTS: SA Liberal Leadership; Shorten’s salary struggles; Carbon tax; Education policy


(Greetings omitted)

Christopher Pyne: Well, Mark Butler of course sits down with Don Farrell and decides all the preselections in the Labor Party in this state.

Matthew Abraham: And you sit down with…

Pyne: It used to be smoke filled rooms.

Abraham: You don’t sit down with anyone. You just decide them.

Pyne: It used to be in smoke filled rooms for Mark Butler and Don Farrell, but I assume both of them have given up smoking.

Mark Butler: Significant ancient history I think Christopher is referring to.

Pyne: So he’s not denying it.

Abraham: Chris Pyne, I notice in Greg Kelton’s piece, he’s done a look at what Isobel Redmond needs to do to win Government. One thing he says she needs to do is stand up to - I assume people like you - Federal MPs, Liberal MPs who are interfering in the party. I wonder if that’s been met with a wry smile because I understand there were several federal Liberal MPs who weren’t too happy about her interfering in a federal Liberal Senate preselection by throwing her weight behind Bev Barber.

Pyne: Well I am a federal Liberal MP, but I don’t interfere in state matters to do with the state Liberal Party.

Butler: I’m sure they weren’t referring to you, Christopher.

David Bevan: Mark Butler, the state Liberal MPs are meeting this evening and they’ll be down in McLaren Vale till Friday and we’ll watch that with interest.

Abraham: Now, Mark Butler, Bill Shorten said yesterday he’s doing it tough. He doesn’t know how he makes ends meet.

Pyne: Can’t be easy for Bill.

Abraham: He ruled out any immediate increase to the $13,000 a year Newstart Allowance yesterday despite declaring he finds it hard to make ends meet on his much larger salary of about $330,000. What planet is Bill Shorten on? Is he spending too much time in the Governor General’s grounds?

Butler: I’ve seen reports of that one sentence. I haven’t seen a full report of what he’s said. I think people who have known or who have watched Bill for years, whether it’s his time as a union official or his time as a new Member of Parliament bringing to the fore the needs of people living with a disability and their families would know Bill’s got great empathy for people doing it tough.

Bevan: Is it hard to survive on a Minister’s wage?

Butler: Are you asking me that? Sorry…

Pyne: How do you do it? How do you do it?

Butler: I’ve always taken the view politicians get paid very well for the job that they do. It’s a tough job, but I think we get paid very well for the work that we do.

Bevan: So you don’t have any trouble making ends meet and Christopher Pyne, you used to be a Minister. You didn’t have any trouble on a Minister’s wage?

Pyne: No, I’ve never complained about how much I get paid. I’m delighted to get paid anything, quite frankly. I always cheer…

Bevan: Are you surprised they pay you?

Pyne: I cheer every time I look in the bank on pay day and see I’ve been paid again.

Bevan: Ok, the carbon price. Yesterday, Greg Combet announced we weren’t going to have a floor price of $15, that was Labor policy for quite a long time. Instead, when the carbon tax finishes we will simply link our price of carbon to Europe. That’s it in a nutshell Mark Butler?

Butler: To be clear the essence of our policy has always been, going back to the time when John Howard was still in Government, our position was always been that there should be a market based mechanism. Companies should be able to buy permits to pollute and be able to trade those permits including trade them internationally with organisations in the EU.

Bevan: But there was going to be a floor price wasn’t there?

Butler: (coughs) I’m just choking on my coffee…

Abraham: I wonder if you’re choking on having to swallow this pill because it’s a big pill.

Butler: It’s not a big pill because we always said we were going to allow companies who had to buy permits to pollute to be able to trade them so the reduction in emissions would happen in the most economically efficient way. This was the core principle of the Kyoto agreement. It’s a principle that we’ve stayed true to and the party of market economics, the Liberal Party throws this idea off that we would link with the EU, the biggest carbon market in the world by a mile because linking with the EU effectively does away with the need for a floor price. So what we’ve been able to do is two things in one fell swoop. One is to link with the biggest carbon market in the world, the EU, but also listen to businesses concerns about a floor price and remove the need for a floor price. We always said we’d consult with business. We’ve done that. We’ve heard their overwhelming view that we should instead link with a market like the EU instead of having a domestic floor price.

Bevan: Isn’t the carbon tax more than just a carbon tax? You’ve based an enormous amount of compensation to people on this money and if you then drop the floor and you just link it to whatever the price in Europe is you’ll have much less revenue come in, but you’ve structured your tax system around a much higher price.

Butler: Let’s be clear. We were always intending after 2015 - the policy we announced some time ago, we always intended to move to a trading mechanism so that for the first three years there’s a fixed price for carbon permits. Its $23 a tonne at the moment, but it was always intended to flow according to the market. Now, whether that was a purely domestic market or as we’ve now indicated a market linked to the European Union…

Abraham: Or you’re just taking heat from the Coalition. Do you welcome this?

Pyne: No we don’t welcome it. The truth is… Mark I listened to you very patiently and in fact offered you water to try and save your life. The truth is that the carbon tax is a chaotic mess. It’s an incompetent government. There are so many things we could say about this fiasco. Last week they absolutely ruled it out, they ruled it out about 11 times in the last 2 months. The truth is they’ve fallen for pea and thimble trick from the Greens. Christine Milne could hardly hide her delight last night on television; in fact she had a broad smile on her face because her view is the carbon tax in Europe will rise to $50 by 2015-

Abraham: But it’s about $9.50 at the moment.

Pyne: That’s right it’s about $10 Australian -

Abraham: Isn’t that going to be good for companies?

Pyne: No, but hang on. The only way to solve this morass is to get rid of the carbon tax, that’s what ACCI called for this morning. Greg Evans from ACCI said what business wants is to scrap this disastrous carbon tax. Even if this was a good idea apparently it’s going to start in 2015. So the Government has admitted that the current carbon tax mess is hurting the economy but they’re not going to fix it for 3 years, till 2015. Now what ACCI have said is that if it’s such a good idea, why don’t we do it immediately. There’s only two ways this can go, either the carbon tax will rise to $50 which will have a devastating impact on electricity

prices, or it will drop to $9.50, as you pointed out in which case the government has a massive deficit on its hands because it hasn’t said anything about cutting spending.

Butler: We said very clearly that we want to consult with business about the idea of a floor price and business overwhelmingly has told us that they prefer not to have a floor price until the price of carbon permits, once it starts to flow after 2015 to move according to the market, now that is what we’ve done.

Bevan: What will happen to your budget if it collapses?

Butler: Well we’ll wait and see whether that’s the case, but let’s be clear the Treasury forecasts are based in part on their long term forecasts on what’s going to happen in the international carbon market. It’s always a very high possibility that we would be linking with a set of countries like the EU and they built that into the long term forecasts.

Abraham: Is it a problem that you will have a floating price, but a fixed set of compensation? So you’ve got a fixed set of compensation for polluters and others and you’ve permanently changed the tax system so its L-A-W law to have compensation to households. But it’s meant to be revenue neutral. It’s funded by the carbon tax is it not?

Butler: Yes but that was always going to be the case with a taxation and transfer system. So our taxation system goes up and down depending on what commodity prices might be, or what superannuation returns might be that’s always been the case… We’ve had $130 billion of revenue write downs because of the impact of the global financial crisis and still we’ve been able to deliver the biggest ever increases to the pension system, the biggest mental health reform package ever, significant additional funding of schools and the health system. Let’s be clear, the economic stimulus package is not part of the policies I have just talked about. They’re locked in to their spending commitments along with the economic stimulus that kept this country out of recession.

Pyne: The government’s budget is in tatters and I predict there will be an election in spring, because the government cannot allow the country to go to the end of the year and discover in the mid year economic forecasts which come out in December that they actually have a massive deficit and no surplus at all.

Butler: Well there’s just no basis for that -

Pyne: You’ve had a massive blowout in boat arrivals. You forecast 450 boat arrivals a month. You’ve had twice that since May, twice that since May. You’re promising NDIS, Gonski Reviews, mental health packages. Your revenues are shot, profits are down, and you’ve just destroyed your carbon tax forecast. Your budget is in tatters.

Abraham: So Chris Pyne, do you have to pick that up? You have to pick this up. Is it right that Tony Abbott’s budget razor gang is considering plans to charge students more for university degrees and introduce a new cap on university places, as Samantha Maiden reported across News Ltd papers on the weekend?

Pyne: No.

Abraham: Is that absolutely not, at all?

Pyne: It’s absolutely not. I put a statement out on Sunday ruling it out.

Abraham: A lot of people don’t seem to believe you.

Pyne: Well people sometimes don’t believe politicians - it has always shocked me - but after Julia Gillard’s lie before the last election, “there will be no carbon tax under a government I lead”, I’m not surprised that the value of politicians promises have been diminished and of course last week she said there would be no changes to the carbon tax so I can understand people’s concerns, but I ruled it out, it’s not being considered I don’t know where the story came from and it’s not happening.

Abraham: Mark Butler, you accept that now do you?

Butler: Well Christopher has said that and I’m happy to take him at his word on that. I mean I haven’t seen the full statement and the degree in which he’s leaving himself some wriggle room, but the broader problem that Joe Hockey particularly has is that there are more than $70 billion of unfunded promises that the Coalition has made-

Pyne: Rubbish. It’s not true.

Butler: Well Joe Hockey used those words himself on television, he used those words himself. Here is a significant black hole that the Coalition has to start to explain to the country how they’re going to explain it before the next election.

Pyne: People don’t believe you.

Abraham: Okay Chris Pyne, the Member for Sturt and Mark Butler, the Labor MP for Port Adelaide