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Transcript of doorstop interview: accelerated depreciation for energy efficient buildings; employment; economic stimulus; bank guarantee; Rudd bank.



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Wed, 28th January 2009

TURNBULL DOORSTOP - ACCELERATED DEPRECIATION FOR ENERGY EFFICIENT BUILDINGS, EMPLOYMENT, ECONOMIC STIMULUS, BANK DEPOSIT GUARANTEE. RUDD BANK...

The Hon Malcolm Turnbull MP Leader of the Opposition

E&OE

MALCOLM TURNBULL:

Firstly congratulations to Leightons for this magnificent building. This building we’ve just had a look through has a carbon footprint less than 25 per cent of an equivalent modern building which doesn’t have all of the smart technology, the energy efficiency measures and the water efficiency measures that this building has.

Now we need to see more of that in Australia. We need policies that will deliver more jobs - remember the top three priorities for this year are jobs, jobs, jobs - more efficient buildings, a greener environment. And that’s why we’re proposing today, committing today to doubling the depreciation, accelerating the depreciation for energy efficiency measures, green measures in Australian buildings. And what that will deliver is greener buildings, more jobs, a better environment - win, win, win.

That’s what Australia needs, imaginative proposals, imaginative policies that deliver jobs, a greener environment, more efficient buildings.

That’s what we’re proposing today, we’ll do that, we’ll put that in place when we’re elected to government and we would encourage Mr Rudd to get on with it and put it into action right now. Because we need a cleaner environment, more efficient buildings, but above all we need jobs, jobs, jobs. We need practical measures that will work, practical measures that we know will get people to work, investing, creating the employment that we need, that Australia needs in these challenging times.

QUESTION:

With more people losing their jobs and the latest inflation and CPI figures out today do you think the Rudd Government should bring forward tax cuts and if so who should they be targeted to?

MALCOLM TURNBULL:

Tax cuts should be targeted, like these ones that we’re proposing today. Tax cuts should be targeted where they can have the greatest effect on jobs and also achieve the other important objectives that we have. So accelerated depreciation or green measures for green buildings clearly will deliver more jobs. It gives the building owner an incentive to get on with it today, to call up his contractors and get them to work. So it will deliver jobs, and will also deliver a better environmental outcome.

Overall we need to bring forward tax cuts, we proposed that last year, to bring forward the July 1 tax cuts to give Australians and businesses right across the country, large and small, but particularly small businesses, give them the incentives and the confidence to hire people, to keep their employees on the payroll, to keep investing.

QUESTION:

So more targeted towards business rather than your mums and dads at home? And do you think that’s more important?

MALCOLM TURNBULL:

So many businesses, you know every business is run by and owned by, ultimately, mums and dads. So tax cuts and fiscal incentives should go across the economy, but wherever possible we should target them in a way that we know we will get a solid, positive employment outcome. And that’s what we’re proposing today.

Mr Rudd has got his own proposal which is designed to hold up commercial property values and support the big banks. It’s got nothing to do with employment, nothing at all to do with employment.

What we’re talking about today will support the construction sector, support the building industry, but above all it will deliver jobs. Jobs, jobs, jobs.

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QUESTION:

Should there be anything special for Queensland with 1,300 mining jobs lost last week and the prospect of more to come? Should there be anything targeted towards Queensland?

MALCOLM TURNBULL:

Well the Federal Government has to focus its policies across the nation. But plainly if we lift the tax burden off businesses, if we encourage businesses to invest, to invest in energy efficiency measures, and there is plenty of potential to do that in the mining industry too I should add. It’s not just office buildings like this behind us. If we target those tax breaks across the economy in a way that will encourage employment then it will benefit every industry.

QUESTION:

[inaudible] accelerating depreciation, can you give us an example of how small businesses could [inaudible]

MALCOLM TURNBULL:

Well a small business which might own a building, it might be a very small building, may choose to invest in measures that deliver it more efficient lighting for example, so energy efficient lighting. It may invest in a co-generation plant such as we’ve seen here that will enable you to generate electricity and cool your building, save money, save energy - all of that is beneficial. It may invest in other more physical designs which improve the heat, the thermal efficiency of the building such as the windows we saw upstairs that are very efficient.

So there are literally thousands of ideas and measures and technologies that are available today. Water recycling is another good example because water is very heavy, every time you can recycle water in one building you not only save water of course but you save energy because you don’t have to drag that tonne of water from many miles away.

So there is a whole range of these measures, it’s important that we incentivise them. It’s always important to aim for an efficient economy, for a greener economy, but above all now we have got to promote employment and we know this will generate jobs.

QUESTION:

With inflation down again should the reserve Bank lower interest rates next week?

MALCOLM TURNBULL:

I think everyone is expecting the Reserve Bank to do that and certainly lower interest rates are a considerable, a real incentive to economic activity and a support for economic activity right across the board.

But you know a year ago, remember Mr Swan and Mr Rudd were saying that the inflation genie was out of the bottle, inflation was out of control. They talked up inflation; they talked up interest rates. A year ago the Prime Minister and the Treasurer were egging the Reserve Bank on to put up rates and those interest rate rises early last year did a lot of damage to our economy. And you can see now how unwise, how ill-considered, how political those comments were a year ago.

QUESTION:

Just back to the building behind us, do you think that small businesses who say install more energy efficient light bulbs, will they be eligible for the same tax breaks, the same threshold of tax breaks as an enormous building like this that has changed its whole running?

MALCOLM TURNBULL:

Well a light bulb would just be written off when it’s bought of course so it’s in a different category. You’re really talking about a more efficient lighting system, for example it might be motion sensitive lights. So you might reconfigure your lighting system so that it uses less energy and it switches off when there aren’t people in the room. Now that has a capital cost. What we’re proposing is to accelerate the depreciation rate on a measure like that. But there are literally countless measures. If you talk to the gentlemen from Leightons here, they could go on for hours I’m sure with all of the different measures and technologies that are available.

QUESTION:

And how would it be assessed if a building was green enough?

MALCOLM TURNBULL:

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Well again, it’s simply a question of improving its energy efficiency. It’s a question of how much output do you get per unit of electricity, and of course how much output do you get per unit of carbon. So this building behind us, its total emissions, direct and indirect, of CO2 per square metre, are about 25 per cent of a comparable modern building that doesn’t have this technology and these systems. Now this is very smart technology here, it’s very smart investment, it pays for itself. But not enough people are taking it on, so it’s important to provide those incentives and that encouragement. And of course while it costs the Government money in the short term through reduced taxes, longer term, of course, the building has higher income and more taxes paid out of it, and that’s why the Centre for International Economics, which has done a big study on this with the Green Building Council, it has demonstrated that over time the cost to the revenue is neutral.

QUESTION:

The Premier is meeting the Prime Minister in Canberra today [inaudible] economic solutions to the economic problems that we’re facing?

MALCOLM TURNBULL:

Well in some parts of Australia the states have actually contributed to economic problems. In my own state of New South Wales we’ve had a shocking government, state Labor government, which has actually seen the state go further and further behind. Lawrence Springborg is offering here in Queensland to provide new energy, new determination, imaginative policies that will create employment, give Queensland the energy that it deserves.

But above all the responsibility lies with the Federal Government, and Mr Rudd has to present policies that are well thought out and will promote employment. Let’s face it, last year he did not consult the Reserve Bank when he decided to provide an unlimited guarantee on bank deposits. It caused enormous hardship, particularly in Queensland where thousands of Australians, over a quarter of a million Australians in total saw their savings in mortgage funds and cash management trusts frozen; where the motor industry saw the finance companies that support its business unable to raise money because of the bank deposit guarantee. Not thought through, a bad policy done on the run.

We had the big payment, the big fiscal stimulus before Christmas. I’m sure the money overwhelmingly was put to good use by the Australians that received it, but it did not achieve the economic impact Mr Rudd had hoped it would. And yet there are a lot of economists around the world saying that those one-off payments will not provide an effective economic stimulus because they tend to be saved or used to reduce debt.

We now we see with his proposal for a Rudd Bank to support prices or values in the commercial property sector, we see that he hasn’t consulted the Reserve Bank about that, and he hasn’t taken their objections into account when they learned of it. And we read in the papers that David Murray, the former head of the Commonwealth Bank of Australia and the Chairman of the Future Fund, his objections or concerns have been ignored too. So it’s about time Mr Rudd focused on consulting widely and ensuring that every policy that he undertakes is well considered and will deliver jobs, jobs, jobs.

Thanks a lot.

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