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Transcript of interview with Sabra Lane: ABC AM: 20 February 2013: Environment Victoria report; $1 billion Plan for Australian jobs

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THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency Minister for Industry and Innovation


GC 38/13 20 February 2013


SUBJECT: Environment Victoria report; $1 billion Plan for Australian Jobs.


TONY EASTLEY: The Climate Change and Industry Minister, Greg Combet, rejects the analysis. Mr Combet’s been speaking to our chief political correspondent, Sabra Lane.

COMBET: Well we simply don’t agree with this analysis. In fact it’s a partial and incomplete analysis, from the scrutiny we’ve been able to give it so far. We were only provided the report yesterday. But it’s important to make the comment that in the development of the carbon price package and the Energy Security Fund from which payments to the generators are made, that was the result of years of work including very careful modelling, including private sector agencies that are expert in energy market modelling. And indeed some of the wholesale price outcomes that have been witnessed since the carbon price came into place by the Australian Energy Market Operator simply don’t accord with the findings in this particular report. So we think there are errors in it.

LANE: Can you guarantee that the operators haven’t had windfall profits thanks to the Government compensation?

COMBET: Well you have to rely upon all of the data that is available to the experts in the field, who have access to all of the energy market behaviour and access to all of the agencies within it and that’s what the Government does. Just because Environment Victoria, which is opposed to brown coal generation, puts out a report on the same day Senator Milne is at the Press Club doesn’t mean that the Government should be taking full account of a report that appears to be deficient in a number of respects.

LANE: Fairfax reports this morning that your own Industry Department advised against the Industry and Jobs policy that you announced on Sunday. It warned that taking away tax breaks for companies with a turnover of more than $20 billion would prompt those companies to rearrange their affairs to fall below that trigger hold, and therefore deprive the Government of those savings that you’re funding this package from?

COMBET: Well let me make something absolute clear - my Industry Department did not advise against the policy that we announced on Sunday at all. In fact my office, as you would expect with the Minister, worked very closely with my Department in the development of all

the aspects of the policy. All of this report is referring to is, early on in the piece the consideration of one element of the policy - that was the savings that would be able to fund the new measures - the savings relate to the R&D Tax Incentive. This is Cabinet in confidence material which is typically provided to Ministers when considering options about these things. And that’s what that paper is canvassing, the options.

LANE: Did the Tax Office advise your Department though that this was a possibly?

COMBET: Well we considered the options. We considered how to deal with the risks that are identified. As the legislation for that particular change in the R&D Tax Incentive is considered and there is consultation with those in the marketplace, all of those risks are always mitigated. But we’re confident that we can safely implement the policy. Treasury does these costings. Treasury put forward the savings quantum they expect to be achieved.