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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

16 December 2008

Interview with Ali Moore

ABC Radio 774
Melbourne

16 December 2008

SUBJECTS: Carbon Pollution Reduction Scheme White Paper; Malcolm Turnbull; Barnaby Joyce

MOORE:

Wayne Swan, good morning.

TREASURER:

Good morning, Ali.  How are you going?

MOORE:

I’m well, thank you.  The biggest changes since the Green Paper and the White Paper to the trading scheme appear to be the level of compensation for business.  Is business the winner out of the scheme’s final shape?

TREASURER:

Ali, I think we’ve struck the right balance with the target range we’ve put forward.  As you said before, of a five per cent reduction on 2000 levels at 2020.  That equates to a 34 per cent reduction in per capita terms.  If we were to achieve a 15 per cent [emissions] reduction in that timeframe, that would be a 41 per cent reduction in per capita terms.  In terms of what you’re seeing around the globe, that would be a very substantial contribution from Australia to combating dangerous climate change.  Now of course, this has impacts on business on the one hand, households on the other.  We think we’ve got the balance right, particularly when it comes to those energy-intensive, trade-exposed industries.  There’s simply no gain if they were to pack up and move offshore and continue to emit elsewhere.  We think we have struck the right balance given the nature of our economy and given our responsibilities to the national economic interest and to the global fight against climate change.

MOORE:

Given the level of compensation, the number of free permits, though, and indeed the compensation for many consumers, what is the incentive to change behaviour?

TREASURER:

There is enormous incentive to change behaviour because we are changing the price structure in the economy, and what we will be doing…

MOORE:

But we won’t feel that in our hip pocket.

TREASURER:

Yes, you will.  We will all feel it.  Some people will receive compensation over and above the cost they feel, but the price structure in the economy will change and consumers will have to make choices.  What that price structure change does is that it encourages business to invest in new technology, to become much cleaner in terms of their use of energy.  What it does is it encourages consumers to do the same.  That’s the whole point of an emissions trading system.  You do change the price structure in the economy.  That does have adverse effects on some groups.  We think it is only fair that those on the lowest incomes are, if you like, compensated for those impacts, but they still face the higher prices out there when they make their individual choices when they are consuming.

MOORE:

Will five per cent make any difference to the future of the Great Barrier Reef, of Kakadu, of the Murray-Darling Basin? 

TREASURER:

It will make a very significant contribution but what we need know…

MOORE:

But will that make any difference?

TREASURER:

Well, what we know is that if the world wants to achieve 450 parts per million in terms of CO2, what that requires is global action.  And what the Prime Minister said yesterday is that if we can get a global agreement post-2020 to the sorts of reductions that are required to achieve that aim, we’ll be in the cart with the rest of the world.  But that aim cannot be achieved by Australia acting alone.  It simply can’t be achieved by Australia acting alone.  What we can do here is that we can make a significant start, and that’s what we’ve done with this scheme.  This is one of the most comprehensive in the world.  We think it strikes the right balance.  We think it protects our economy on the one hand, but also sets us up for the future – sets us up for the future in terms of green jobs because an emissions trading scheme such as this begins that gradual adjustment that this country must make and so many other countries around the world must make as well.

MOORE:

What do you say, though, to those who argue that in terms of an international scheme, what Australia has done is open the door to lowest common denominator associations?

TREASURER:

I just completely reject that.  That simply is not based on the factual situation.  People who say that really know that if we’re going to get to that 450 parts per million that does require a global agreement.  Australia can’t do that on its own, but what we can do is we can put in place a comprehensive scheme which is a very good start for this country because we are…

MOORE:

If the rest of the world signs up to five per cent that’s not going to get the world to 450 parts per million, is it?

TREASURER:

No, of course it is not because we need the rest of the world to sign up to more ambitious targets.  But they are not signing up for more ambitious targets.  What we have done here is put in place one of the most comprehensive schemes in the world, and we are commencing that start.  We are looking at reductions per capita here of 34 per cent.  Now, that is higher than what the Europeans are going to achieve.  So, what we have done is we’ve designed a scheme where this country does make a very significant contribution.  We have protected the competitiveness of our energy-intensive, export-orientated industries which are so essential to the wealth creation and capacity of this country and our future prosperity.  And we’ve put in place additional assistance for households, whilst at the same time putting in place the foundations for investment in new technology, preparing this country for a lower carbon future.  That’s the most significant contribution we can make.  And if the world down the track comes to the conclusion that they must move, we will move with them and we will be in a far better position than any other country in the world to handle that adjustment.

MOORE:

Treasurer, I’ve just received a text message from Judy saying that after years of inaction, five per cent is pathetic, I’m very sad and mad today.  I wonder whether you have as many commentators, and indeed the Greens are saying, you’ve adopted the Howard model.

TREASURER:

Well, we most certainly have not.  John Howard could never have been dragged kicking and screaming to this sort of arrangement.  They were the champions of denial on climate change and the Liberal Party today remains the champions of denial on climate change.  The Liberals can’t even express a view.  You’ve got Barnaby Joyce out there saying they’re going to oppose it.  If Malcolm Turnbull had any leadership left in him he would be out there supporting this scheme.  In the past he’s said he has stood for doing something substantial about dangerous climate change.  This is something substantial.  This is a credible and serious target range with a credible economic and environmental approach. 

Now, sadly, there’ll be many people out there who say five per cent isn’t enough.  That’s a 34 per cent reduction per capita – a very big contribution from an economy like ours which is so energy-intensive.  And we’ve said that we are prepared to go further in the future – prepared to go further up to 15 per cent to 2020 if we can get a global agreement.  And beyond that, prepared to go further if we can get further contributions through international agreements.

John Howard could never have ever come that far on this vital question and indeed for 12 years went nowhere and it appears that’s where Malcolm  Turnbull is going now as well, along with the National Party.

MOORE:

Wayne Swan, thank you for joining us this morning.

TREASURER:

Good to be with you.