ABC RN DRIVE
MONDAY, 1 APRIL 2019
SUBJECTS: Labor’s Climate Change Action Plan, the Budget.
PATRICIA KARVELAS: Andrew Leigh is the Shadow Assistant Treasurer and he joins us on Drive. Andrew Leigh, welcome.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks, Patricia. Glad to be with you.
KARVELAS: So the Coalition are already pitching this as a carbon tax. Do you accept that it is a price on carbon?
LEIGH: No, Patricia. I don't. This is extending Malcolm Turnbull's safeguards mechanism, which is a system that sets limits on a range of big industrial polluters. If they satisfy those limits, then that's well and good. They won't hear from the government again. What we're doing though is listening to business and improving that system by allowing firms to meet their targets by buying international permits.
KARVELAS: Ok, I can accept that you won't characterize it as a carbon tax. But it is a price - it is a pricing mechanism for carbon, isn't it?
LEIGH: No. This is simply the safeguards mechanism that the Liberals themselves put in place. We're improving it and those improvements have been welcomed today by the Business Council of Australia. What's extraordinary is that the Liberals would have you believe they’re some free market party. They like companies that engage with the world, but yet they won't let Australian companies engage with the world when it comes to carbon markets. And again it just illustrates the hypocrisy of their policy, their inability to have any ideological clarity. The Liberal Party's had 12 different climate and energy policies since they'd been in office, flip flopping all over the place. The last one they rejected they said on their own modelling would have reduced household power bills by $550. So we'll be reducing household power bills relative to where they would have been otherwise and we'll be making sure that we meet our internationally agreed climate targets, not through accounting trickery but through actually reducing emissions, which is what we did during that last term in office when emissions fell 11 per cent.
KARVELAS: There will be a cap on emissions for the 250 biggest polluters. What kind of penalties will they face if they breach those caps?
LEIGH: Well, it's the same system that's in place at the moment, but with the advantage that they're able to access those into the international markets. So the safeguard system is a Liberal-designed system. There is no more carbon pricing in this than there is under the current system. But we're making that important change that firms can engage with the world in buying carbon permits simply as they do when they're in export markets.
KARVELAS: It's interesting because your side of politics has been critical of the Liberals, saying you know they've done nothing on climate change, but you keep saying this is liberal - this is just a liberal extension, this is just the liberal policy extension. So is that an endorsement of what they've been doing?
LEIGH: Well, you're asking me about just one part of our climate policy, Patricia. I mean, we have a responsible suite of policies designed to reduce emissions and to ensure the Australian economy grows more quickly. We'll be doubling the investment in the Clean Energy Finance Corporation that supports new generation and storage, concessional loans for household purchases of solar and battery systems, we’ll future proof our energy networks, we’ll have a neighbourhood renewables project, at bio energy strategy, we're going to be investing in the hydrogen economy, we're setting a target for electric vehicles - half the new purchases by 2030, because we're at the absolute back of the pack right now for electric vehicle take up. So we've got a comprehensive set of policies, both designed to ensure the economy grows faster and our emissions start to come down rather than rising as they've been doing under the Liberals.
KARVELAS: Labor would introduce fuel efficiency standards for existing vehicles. How would that work for all those cars already on the roads here that don't meet those standards?
LEIGH: Those standards simply apply to new vehicles and we're unusual among the advanced world in not having those standards, Patricia. Again, this is about saving households money. More fuel efficient vehicles are cheaper to run. What's extraordinary about our fleet is that we have relatively few of those affordable electric vehicles and we tend to have too many gas guzzlers. If people choose to buy a petrol vehicle after 2030, they'll still be able to do so. But we believe that we need to encourage the uptake of electric vehicles through investing in the charging stations, through having the government take the lead in its purchases of electric vehicles. This is technology of the future and it's one of the ways we can meet those climate targets. Meeting those climate targets, Patricia, then means we've got a better shot of saving the Great Barrier Reef and reducing the catastrophic cost of extreme weather events, estimated to potentially be some $14,000 per household if we don't meet those international targets.
KARVELAS: If you're just tuning in, this is RN Drive. I’m Patricia Karvelas. It's Budget Eve - a little early, not usually in April, but you know we're doing things differently in 2019. And my guest is Andrew Leigh who's the Shadow Assistant Treasurer. 0418226576 is our text line. What do you make of Labor's climate change policy as described today and announced today? Andrew Leigh, the Government has come out pretty hard as you know against your climate change policy, the articulated policy and they say essentially haven't costly it, you haven’t said how much it will cost the economy. When are you going to provide more details?
LEIGH: We've got estimates from Warwick McKibbin who has looked at the impact of getting 26 per cent reductions versus getting a 45 per cent emissions reduction by 2030. And he says under either scenario, you get about 23 per cent growth through the 2020s. So that's very clear costing from a respected economist. We're confident that the economy will do well under Labor's plan and indeed the catastrophic impact on the economy of not dealing with climate is something that's often understated. We've got natural disasters costing the economy $18 billion a year at the moment, but that could increase to $39 billion by 2050. I mean, just the Townsville floods alone were a $1 billion dollar event for the insurance industry. The Reserve Bank was warning recently about the impact of inaction on climate change and the importance for financial stability terms of tackling climate change. Serious investors are concerned about climate change and in fact a survey of a thousand global business leaders found that climate change was the number one risk they identified.
KARVELAS: Let's just talk about something else, because obviously it's not - this is not the only thing people are talking about. There’s a budget tomorrow and we know that there is this $285 million in cash handouts that were announced on the weekend. It's been reported that Labor won't seek to block this, but how about people on Newstart? They won't get the payment despite the fact that they live below the poverty line. Is that fair?
LEIGH: I'm certainly concerned about people on Newstart and I think it's a surprising omission from the government not to have included people on Newstart there. We'll have more to say on that issue and of course we're going to be reviewing the Newstart payment if we win government with a view to increasing it in the future.
KARVELAS: So, you say you’ll have more to say, because you're not going to block it. So clearly you endorse this this one off policy of payments. Does that mean you may extend it if you're elected to also people on Newstart?
LEIGH: We’re working through that at the moment. But let's not over-egg the pudding here, Patricia-
KARVELAS: I know, I just want to know what you might do. I'm not over-egging anything.
LEIGH: In terms of this new proposed payment, we're talking about a payment which is one-off 20 cents a day from a government which when it came to office attempted to change indexation of pensions for everyone from wages to prices, attempted to raise the pension age so it was the highest in the advanced world, has attempted to cut the energy supplement for recent years. So don't just look at what they're saying on the eve of the election - look at their track record for older Australians. It's an appalling one.
KARVELAS: Okay. So you are actively considering a one off payment for people on Newstart to help with their energy bills as well?
LEIGH: Look, we're certainly open to that. We were surprised to see people with Newstart being left out on this particular decision. But it can't replace what the government has been doing, ripping the guts out of the social safety net. It's a bit like that moment in the Peanuts cartoon where Lucy kept on saying that Charlie Brown ‘I’ll hold the ball out there, I'll hold the ball out there’ but you just know every time she's going to pull the ball away at the last minute. And that's how low income Australians feel under this government.
KARVELAS: So on the broader Newstart question, you just mentioned the review. Why do you even need to review it? I mean, you know that Newstart is too low. The business lobby even agrees with that. Wall to wall agreement that Newstart is too low. Isn't this just a delaying tactic?
LEIGH: No. Look, it's a good question. With Newstart, you do need to consider the interaction with the rest of the Social Security system and with the minimum wage. And as you know, Patricia, we've got a strong agenda to raise the minimum wage and to ensure that we get wages going in Australia. We did this with the pension in 2007. We didn't say before we came to office in 2007 what the particular increase would be, we said we would review the pension. We did and then in 2009 delivered the biggest increase to the pension in its 100 year history, taking a million pensioners out of poverty. So as I'm saying the Liberals should be judged on their record in office, so too should thepast Labor government be judged on its record in office. We’re doing with Newstart what we did with the pension.
KARVELAS: Is it something that you would like to deliver in a first term of a potential Shorten Government?
LEIGH: I'd certainly be keen to do that, yes.
KARVELAS: OK, so first term. So what does that make it, perhaps possibly your second budget that would be delivered? So that would be next year's budget.
LEIGH: It would depend on how the review’s set up. We want to get it right. But we also want to make sure that we raise Newstart. It's too low at the moment. And it's been - because it's indexed to prices, it's been falling well behind the pensions which are indexed to wages.
KARVELAS: Just another issue before budget night, it's widely expected the Federal Government will announce new tax cuts in the budget. Will Labor support them?
LEIGH: Well, again, let's judge them on their record. We said last night-
KARVELAS: I want to know if you're going to support them, not their record. I mean, they'll go to the electorate with their record and people will make a judgment. But people want to know do you also want to deliver tax cuts.
LEIGH: We do. And at the last Budget Reply, Bill Shorten said we would deliver bigger, better and fairer tax cuts than the Liberals. Not off in the never-never, but coming from the first of July this year. So for every one of your listeners earning less than $125,000, Labor will deliver tax cuts which are more than twice the size of the Coalition's. We can do that because we've cracked down on multinational tax loopholes and we've ensured that we're making responsible budget savings to deliver better tax cuts for middle Australia. Let's see what the Liberals can do. But when we brought our package into the Parliament, they voted against it. So they've already voted against tax cuts for middle Australia in favour of their mates at the top end of town.
KARVELAS: Andrew Leigh, I'm heading to Canberra tomorrow so see you in Parliament House.
LEIGH: Look forward to catching up, Patricia.
KARVELAS: That's Andrew Leigh. He's the Shadow Assistant Treasurer.
Authorised by Noah Carroll ALP Canberra.