ABC RN DRIVE
WEDNESDAY, 15 FEBRUARY 2017
SUBJECT: Funding the NDIS; Renewable energy; Emissions intensity scheme.
PATRICIA KARVELAS: Labor has struggled to put a dollar figure on their 50 per cent renewable energy target today. They've also claimed they fully funded the NDIS their 2013 budget. Andrew Leigh is the Shadow Assistant Treasurer. Welcome to the program.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thank you, Patricia. Interesting to be having the questions asked of me rather than ask them of you as we did last time.
KARVELAS: Yes we did. On your podcast. Let's not get into that right now, but yes you’re right I did answer your questions. Labor has suggested the Government drop company tax cuts to fund the NDIS. The Government is not going to budge on that so where should the money come from? Nick Xenophon has suggested defence. Would Labor support that?
LEIGH: As you said Patricia, we identified in our last budget exactly where the money would come from for the NDIS. Through things such as means-testing the private insurance rebate. But if the government's looking for more, we would suggest for example, that they look at a crackdown on multinational tax avoidance. Labor's had a plan on the table for nigh on three years that would return $1.6 billion to the budget over the next four years. Eight times more than they'll get through their paltry "crackdown" on multinational profit-shifting.
KARVELAS: You say Labor fully funded it, but in 2013 your budget said that in part that the NDIS would be funded through other long-term savings. That's rather vague in budget terms. The Government says you are wrong – you haven't fully-funded it.
LEIGH: We set out a range of tough decisions through which we would be able to fund it, Patricia. The means-testing of the private health insurance rebate was strongly opposed by the Coalition at the time, but it was the right decision to make in order to add another pillar to our social security system. I'm with Kurt Fearnley, who says that the approach of the Government – in putting people with disabilities on notice that the NDIS might be in jeopardy – is deeply wrong. People with disabilities have enough to worry about without Scott Morrison going and scaring them with the suggestion that the NDIS might not continue.
KARVELAS: I just spoke to Christopher Pyne. He said tax increases are not on the agenda. That they won't go through with tax increases. What the government has been trying to do is explain that if you're going to outlay more spending, for instance on childcare, you've got to pay for it. Now that's a sensible concept – of course you do have to pay for it. Is Labor holding up the ability for the Government to actually pay for further investments for families that are clearly in need?
LEIGH: Christopher Pyne seems to have forgotten that his government has already increased taxes – for example on fuel and cigarettes. But we believe that what you need to do is to close tax loopholes. What we were talking about with multinationals is them being able to use debt deduction tricks that aren’t available to your typical Australian small business, Patricia. Your local milk bar can't suddenly create complex debt-shifting structures, but some of the world's biggest companies can. Labor doesn't think that's fair.
In the area of negative gearing we've put plans on the table that would not only improve housing affordability, but also return billions to the budget bottom line. Australia's tax breaks through capital gains tax discounts and negative gearing on existing homes are among the most generous in the advanced world. Places like Britain and the United States don't let you take investment losses and deduct them against wage income. That's what Australia does. That's why investors are beating our first home owners at auctions around the country.
KARVELAS: Bill Shorten was asked on AM this morning and wasn't very clear on how much extra it would cost to implement Labor's renewable energy target. Why can't you articulate the cost to tax payers?
LEIGH: Because it's a benefit. If you look at the estimate from Bloomberg New Energy Finance, they say a 50 per cent renewable energy target would generate nearly $50 billion dollars of new investment in renewable energy across the country.
KARVELAS: But I'm talking about the costs to people paying their bills.
LEIGH: Absolutely. What I'm saying is that this is a clear benefit to people. We'll get more investment and that will put downward pressure on power prices.
KARVELAS: So you’re saying power prices will be lower under your 50 per cent scheme?
LEIGH: The government’s own advisers, their Chief Scientist, industry bodies, have come to the government and said very clearly that an emissions intensity scheme manages to put downward pressure on power prices and do something about climate change. So it's doubly harmful that Malcom Turnbull has thrown out the idea of an emissions intensity scheme and is creating enormous uncertainty among renewable investors. There'll be more than $2 trillion in renewable investment around the globe in the coming decades and we want some of that to come to Australia.
KARVELAS: That's a big figure to put on it, when you're talking about how households will deal with their bills. You can't put a price on it?
LEIGH: What I've said Patricia, it will downward pressure on house-
KARVELAS: You can promise here that bills will be cheaper under your model?
LEIGH: Bills will absolutely cheaper if we produce our energy using wind and solar, rather than coal.
LEIGH: No bank wants to invest in coal-fired power plants. And yet the Turnbull Government is suggesting using the Clean Energy Finance Corporation – taxpayer money – in order to fund new coal plants, which will be around for the next 50 years. The Melbourne Energy Institute said that will cost $60 billion dollars over the course of the investment. So it makes no sense to be putting money into the technology of last century. Our coal and gas-fired generators are coming to the end of their design life. We've seen that with these recent load-pressures, many of them are unable to operate at full capacity. Three-quarters of them will need to be replaced in the next decade or two. We need to make sure that they're replaced with clean, green energy and that we capture the investment from around the globe, we get those renewables jobs, and we move in a way that takes us with the rest of the world rather than in the opposite direction.
KARVELAS: The government says that we can't rely on that as base-load energy source, that's the argument Christopher Pyne was just making on RN Drive. That's the risk that you take isn't it?
LEIGH: Clearly you need an energy mix but the idea that you should use taxpayer money to build new coal plants is one that's been utterly rejected by the experts. You have the CSIRO, the Energy Markets Commission, the Chief Scientist and basically all of Australian industry telling the Government they need an emissions intensity scheme. And yet Malcolm Turnbull walked away from it. I mean, where is the great champion of climate change who once said that he wouldn't lead a party as committed to climate change as he was. Right now he's running around with stunts like holding up blocks of coal in parliament rather than getting with the future of clean energy and clean energy jobs.
KARVELAS: The Shadow Treasurer Chris Bowen was on Sky this afternoon. He talked about the fifty percent renewable energy target but also a renewable energy objective. What's the difference?
LEIGH: Well our objective is to make sure that we have plenty of renewables investment in Australia.
KARVELAS: So is there two different things here?
LEIGH: No, no. We support an emissions intensity scheme. That's essentially a scheme that operates within the existing generators and which favours clean generation over dirty generation. Then we believe that we as a country need to have a 50 per cent renewable energy target. The Climate Council says that'll create 28,000 new jobs and Patricia, they'll be great jobs. They'll be jobs of the future that ensure that people are able to work with an emerging, new technology. We've got to start de-carbonising our economy. We know that climate change is the principal reason why we're getting these record hot days. The Government is holding up lumps of coal on days in which temperatures are hitting record highs. They don't seem to understand the link between carbon pollution and climate change. But we've had hottest year after hottest year after hottest year. This thing is happening. It's not a hoax and we need to deal with it.
KARVELAS: Energy Minister Josh Frydenburg quoted the figure of $48 billion as the cost of your RET. You say it won't cost this. He says this came from your ALP colleague Dr Anne Aly in the House last night. Is that figure correct?
LEIGH: Poor Josh is desperately trying to confuse people. The figure of $48 billion, as I mentioned earlier in the interview Patricia, is Bloomberg New Energy Finance's estimate of the amount of new investment in renewable energy you will get as a result of the 50 percent renewable energy target. Where does that investment come from? Well principally from the private sector, which won't touch new coal plants, but are delighted to invest in wind and solar because they see that as the future.
The fact that we're having this debate in Australia, rather than just getting on with the business of putting in place more clean green electricity generation tells you the extent to which Malcolm Turnbull has fallen now. He's in hock to the far-right of his party, people who used to be – possibly still are – climate change deniers. He's a leader of the past, not one showing us the way to the future.
KARVELAS: Thank you so much for your time.
LEIGH: It's a pleasure Patricia.
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