Keeping a carbon price is the best way to fight climate change - Sky AM Agenda

This morning I joined Sky AM Agenda host Kieran Gilbert and Parliamentary Secretary for Defence Darren Chester to discuss the repeal of the carbon tax and the importance of negotiation in the Senate. Here's the transcript:




MONDAY, 14 JULY 2014

SUBJECT/S:         Climate change; the new Senate; federal budget

KIERAN GILBERT: Thanks for your company on AM Agenda. With me now, the Parliamentary Secretary for Defence, Darren Chester, and also the Shadow Assistant Treasurer Andrew Leigh. Before we get into our discussion I just want to play you a little bit of what the Environment Minister, Greg Hunt, had to say to the media here in Canberra ahead of the introduction of the repeal again of the carbon tax to Parliament at midday today:

GREG HUNT, MINISTER FOR THE ENVIRONMENT: The government will be reintroducing the legislation to repeal the carbon tax today. We are determined that the will of the people will be honoured, that the result of the election will be implemented, and that the carbon tax will be repealed. 

GILBERT: Darren Chester – it looked like the government was going to get this done last week, a bit of déjà vu, but today you’re feeling confident?

DARREN CHESTER, PARLIAMENTARY SECRETARY FOR DEFENCE: Well we’re confident, we’re hopeful, we’re optimistic, but we’re not taking anything for granted. It’s one of those things with a Senate where you don’t control the numbers on the floor, you have to negotiate in an appropriate and respectful manner. I was speaking with the Environment Minister this morning and I understand he’s had productive conversations over the weekend. He’s confident and I share his confidence, and I think in the interest of the Australian people it’s time that the carbon tax was repealed. Of course, Labor could help us out; there’s 25 Labor Senators in the Senate as well, they could help us out and work with the government to repeal the carbon tax, as the Australian people so clearly voted for at the election last year.

GILBERT: Andrew Leigh, is it time? There was a poll today, 53 per cent of people say it’s time to get rid of it, and then you can recalibrate, work on what’s next?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, the carbon price is already working to reduce emissions. We’ve just had the biggest reduction in emissions in a quarter of a century in Australia, and that’s in a period where we’ve just had the hottest summer and the hottest year on record. So we’ve got climate records being broken, and we’ve got a mechanism that is already working to reduce Australia’s carbon emissions. Why would you throw that out the window for Direct Action, an approach which no serious economist thinks is up to the job?

GILBERT: But ours is disproportionate, isn’t it? Compared with the rest of the world at the moment? You wanted to get rid of it during the election campaign. 

LEIGH: We wanted to move from the fixed price to the floating price a year earlier. But a market-based mechanism makes sense – that’s why John Howard took one to the 2007 federal election, and it’s why all former Liberal leaders except for Tony Abbott have supported carbon pricing. Australia’s carbon price covers about two-thirds of the economy, and it’s similar in structure to the Californian approach…

GILBERT: Yes, but theirs is an ETS, ours is a fixed price. So why not get rid of the fixed price?

LEIGH: I’m completely supportive of that, and in fact that’s what the Labor amendments in the Senate will do. They will move us to an ETS, like the ETS that covers 200 million Chinese in seven provinces; like the emissions trading scheme that applies in 30 countries around the world. We have to get serious about this…

GILBERT: Well, but this government does have a mandate to get rid of the carbon tax, you must concede that?

LEIGH: This government won 53 per cent of the two-party vote. That doesn’t make them the dictators in charge of the country. Labor, having got 47 per cent of the two-party vote, is entitled to stand up for the policies we took to the election.

GILBERT: Alright, Darren Chester - is that fair enough? That’s certainly the argument the Coalition made when in opposition.

CHESTER: Andrew and the Labor Party seem to be caught in some kind of time warp. The Australian people spoke very clearly on this last year at the election. The Labor Party continually calls on Tony Abbott and his senior ministers to keep their promises. Well, our promise to the Australian people was to repeal the carbon tax. We’ve got a clear mandate for that. The Australian people want us to repeal this tax because it has a big impact on their cost of living, it has a direct impact on small businesses, it makes our exports less competitive on world markets; it makes no sense to keep it. Last year, the Labor Party agreed with us, now they’re just doing this for political purposes to try and cause disruption in the Senate.

GILBERT: But they’ve also said throughout that debate that they want an emissions trading scheme to replace it.

CHESTER: They’ve said a lot of things. They said they were going to terminate the carbon tax. Well, help us. Help us terminate the carbon tax, we’re ready to do it today.

GILBERT: They might if there was a viable alternative policy in place, which they don’t think Direct Action is.  

CHESTER: Well, the Australian people voted for our policy. They voted for that viable policy. I believe we have the right, as the elected government, to try and pursue that agenda, to reduce the costs on households, reduce their energy bills. I think the Australian people want us to get on with that business this week in the parliament.

GILBERT: Andrew, do you think this might turn out to be counter-productive for Labor, once again, if you stick to this position of not relenting? I guess in the end it won’t matter because it looks as though Palmer has done a deal with the government this time. But are you worried this will be counter-productive for the government given that they have that very clear mandate that we’ve been discussing?

LEIGH: Kieran, I’m only worried about getting the right outcome for my kids. Of the 20 hottest years on record, all of them have been since 1990, and 13 of the 14 hottest years on record have been since the year 2000. Climate change is real, it’s happening, and Australia has the biggest emissions of any developed country per head. Now the Coalition wants to move us, as Joe Hockey might put it, from being a ‘lifter’ to being a ‘leaner’. From being a country that does something about reducing its carbon emissions, to being a country that doesn’t act on reducing emissions for now. Of course, that means down the track we’ll have to do much more. Furthermore, for every ton of carbon you take out of the atmosphere, Direct Action is many time more expensive than a carbon price. That’s the great beauty of a carbon price – it’s cheap to get the abatement that everyone knows we need.

GILBERT: Darren Chester - are you worried that Australia is going to be caught on the hop if there is international action next year – as many people believe there will be – in the lead up to the Paris Summit? A lot of countries like the US and China are taking action.  

CHESTER: I’m concerned that we’re ahead of the world, in the sense that we’re putting this onerous penalty on our own producers, costing us jobs in Australia right now. Just like Andrew, I’m concerned about my kids, but I want my kids to have a job. I want Australia to be able to compete on world markets in an increasingly competitive environment. I think we’ve made a huge mistake in the past few years with this carbon tax and the impost it put on Australian industries, and I’m surprised that the Labor Party is still clinging to it. Throughout that whole campaign I was amazed that the Labor Party would vilify workers in the coal sector, blue collar workers like those in my electorate. Those workers are flocking to me in my electorate because they don’t trust the Labor Party and the Greens, they don’t trust the unions to stand up for their jobs.

GILBERT: In terms of the Senate and its unpredictability, do you think your government needs to heed the advice of Ron Boswell, who warned against doing deals with Palmer?

CHESTER: Well Ron is obviously a very experienced Senator. He was here for 30 years and he saw Australia through some very difficult times both in government and in opposition.  I think we need to deal with the new Senate in a very moderate and respectful manner, and give the new Senators a chance to learn the ropes if you like. I’m not trying to be condescending at all; it’s a tough job to come in here and start dealing with very serious issues straight away. But I’d have to say that all of the Senators need to recognise that they have certain responsibilities to the Australian people as well. They need to act in the nation’s interests, just as members on our side in the Coalition and in the Labor Party aim to act in the nation’s interests at all times. All of those crossbench  Senators have a responsibility not to get involved in gimmicks or stunts and charades, but to actually focus on what’s in the nation’s best interests.

GILBERT: Are you suggesting that’s what Palmer did last week?

CHESTER: No, I’m not saying that at all. The responsibility, when you take a job in this place, is to act in the nation’s best interest. It doesn’t bode well if members choose to involve themselves in stunts rather than focus on what the Australian people really want them to do.

GILBERT: Andrew Leigh, is that a fair enough message?

LEIGH: I certainly share Darren’s view about the responsibilities of parliamentarians. But I think it is absolutely vital that the government gives crossbench Senators time to consider things. What they’ve clearly wanted to do is ram this legislation through as quickly as possible after 1 July. The government is concerned that if the legislation stays in place as it is, we go to a floating price from 1 July 2015, and that covers two-thirds of the price drop that the government is looking for. Then Tony Abbott would be left looking pretty strange arguing for the repeal of the entire scheme.  An emissions trading scheme is not having a big impact on the economy at the moment, and it will have an even smaller impact once we move to a floating carbon price.

GILBERT: You say it’s not having a big impact, but it’s still significantly ahead of where the bulk of the world is, we’ve still got a world-leading carbon price with this fixed price, don’t we? Certainly well ahead of Europe.

LEIGH: We’re not world-leading. There are countries that have higher prices than ours, and there are countries whose schemes cover a broader share of total emissions. Ours is a textbook model, and it’s similar to the model that Darren would have supported when he ran for election in 2007…

GILBERT: But similar to economies like ours? Resource-intensive economies like Australia’s?

LEIGH: No economy is precisely like ours, but for Australia’s economy this is the right emissions trading scheme. It didn’t wipe Whyalla off the map, it didn’t give us $100 lamb roasts, and it didn’t lead to the massive job losses that Tony Abbott was running around the country talking about. It’s had a small impact on the economy, and of course, we have to act at some point on carbon pricing. As people would know in their own lives, if you put off a task for a long time, it just gets harder.

GILBERT: Darren Chester, will you respond?

CHESTER: The problem for Andrew and the problem for the Labor Party remains that the first time the Australian people had a chance to vote on a carbon tax, they threw it out. In the previous election, when Julia Gillard went to the election saying: ‘there will be no carbon tax under a government I lead’, people believed her. Then the first chance they had to vote against a carbon tax, they gave us a clear mandate to do it. I’m staggered that lower house members in the Labor Party are still clinging to the carbon tax. The Australian people want it gone, and they want it gone this week. It’s costing them around $11 million a week across the nation’s economy, and they want us to get rid of it.

GILBERT: Well, it’s likely to happen, perhaps tomorrow.  But in terms of the political dynamic, the government has been struggling in the polls in a big way since the budget. Are you hopeful that this might be the starting point for a turnaround?

CHESTER: We’re a new government, we’ve brought in a budget that is regarded as tough but we regard as fair, and the Australian people need to be brought along with us on the journey. So opinion polls will come and go as they have done in the past, but will any one issue like the carbon tax result in a bounce in the polls? I wouldn’t think so. Of course members of parliament look at the polls, we need to know what members of the Australian community are thinking at any given point in time. But we’re more than two years out from an election, we’ve got more than enough time to build the confidence in the Australian people that we’re up to the job.

GILBERT: Are you hoping that the Senate might knock a few of the harder edges off the budget, as one of your colleagues said in the media over the weekend?

CHESTER: Not at all. We’re the only side of the house which has put forward a plan for the future of Australia. We inherited a mess when we came to office. We inherited Labor’s debt and deficit legacy which is going to take us a long time to repair. The Australian people instinctively understand that there’s a mess to clean up. They might not like some of the decisions that we’ve made but they respect the fact that we are trying to clean up a very significant mess. When I meet with people in my electorate that’s the first thing they say to me: ‘we don’t like all your decisions but we understand you’ve got a big job to do, just get on with it.’

GILBERT: Andrew Leigh, in the context of upwards of $40 billion in savings and revenue measures that are going to hit the fence in the Senate on the current trajectory, is Labor going to have to take some responsibility here if the budget remains in an unviable state in the medium to longer term?

LEIGH: Kieran, let’s compare the budget when the Coalition came to office with where it is now. The deficit is bigger, not smaller, than it was under the Pre-Election Economic and Fiscal Outlook – the state of the books when the Coalition took office. Part of the reason for that is this repeal of the carbon price, which will cost the budget between $12 and $20 billion. The carbon price is the most effective way of reducing emissions, but it also adds significantly to the budget bottom line. Labor is going to stand against measures that we regard as unfair, and we will stand up for the independent modelling - like the NATSEM modelling which showed that sole parents would lose a tenth of their income, while those at the top are actually going to have higher incomes in 2017-18 than they would without this budget.   

GILBERT: Just finally, we’re almost out of time, but there was a poll in today’s Sydney Morning Herald showing that out of 25 seats, Darren Chester in Gippsland, you are the most popular MP.

CHESTER: Well sometimes it pays to have a large family! I’m in a regional electorate, I’ve got a lot of cousins. It’s flattering when you get a poll like that, but just like any other poll, they come and go. You do your best.   

GILBERT: Darren Chester, Andrew Leigh – thank you very much.

LEIGH: I don’t trust polls, but congratulations all the same, Darren.



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