The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

30 June 2011

Interview with Kim Kleidon

ABC Radio, Tropical Far North Queensland

30 June 2011

SUBJECTS: Carbon Price; Household Assistance; Renewable Energy

KLEIDON:

The latest news on the carbon tax is that the Greens who are demanding higher targets may compromise to finalise the deal. Whilst the Government seems prepared to move on support for renewable energy and energy-efficient measures, there will be no compromise on its promise to compensate emissions-intensive trade-exposed industries and coal-fired power generators. I caught up with Deputy Prime Minister and Treasurer Wayne Swan earlier this morning.

TREASURER:

We are still in discussions through the Multi-Party Committee in terms of a price on carbon. We've made very good progress. We hope to be able to conclude those discussions in the near future.

KLEIDON:

What are some of the issues and why is it taking so long?

TREASURER:

Well, this is a very significant issue. It's very important that we price carbon so we can drive investment in cleaner energy and also to give certainty so we can get the investment flowing. That's pretty important for the future. We've been out there consulting with industry, consulting with community groups, doing all of those things and we want to bring that to a conclusion as soon as we possibly can.

KLEIDON:

So what are the sticking points for the other parties who seem to be holding this up?

TREASURER:

I don't think it's being necessarily held up. I mean, it's very important that we make sure that when we put a price on carbon we provide assistance to households. It's very important also that we make sure we get the arrangements with industry in the best possible position to ensure that those industries, for example, that are energy intensive and trade exposed get the support that they need.

Pricing carbon is really important for our future prosperity, really important for a region like Mackay, which is so dependent upon our exports of coal. It's really important that we show to the world that we can bring down carbon pollution in this country, reduce carbon pollution, so a great trading nation like ours can continue to export commodities like coal.

KLEIDON:

Just on the compensation issue; what economic impact is the compensation of those trade-exposed industries, and of course individuals, likely to have on the Government maintaining that goal of a surplus?

TREASURER:

Look, we expect that all of the arrangements here will be consistent with all of our fiscal rules, including keeping the Budget, and bringing it back to surplus in 2012-13. We see this as a reform which will drive economic growth into the future for all Queenslanders who are particularly dramatically affected by dangerous climate change. They've all got a stake in ensuring that we deal effectively with this issue. Whether it's the Barrier Reef or whether it's weather patterns or rainfall in particular parts of the state, making sure we deal with dangerous climate change is something that every Queenslander has got a stake in.

KLEIDON:

Considering that goal is to reduce some of the carbon and the greenhouse effects that follow from that, why is Government intent on actually compensating the industries who they're taxing?

TREASURER:

No, what we've got to do is put a price on carbon pollution and what that means in practice is that that is a price on the 1,000 largest polluters. That then flows through to consumers and what we will do is with those households that are affected, we will provide tax cuts or additional family payment assistance or pension increases. And to those industries which are trade exposed and which can't pass on the cost, there will also be assistance. In that way, we make sure that we drive the investment in renewable energy in particular and in more energy-efficient practices.

KLEIDON:

Considering there are people now saying that there are those clean energies available to us that Spain is using and many other countries are adopting already, how much money will this be generating for renewable energies and when do you plan on implementing some?

TREASURER:

Well, that will drive the investment in innovation in new technology which will drive renewable energy. For example, when you look at North Queensland in particular, there are some of the most prospective areas for renewable energy in the world in North Queensland, particularly for solar and geothermal. By putting an overall price on carbon that drives the investment into renewable energy like solar and geothermal. That's the whole point of having a price on carbon. You reduce carbon pollution and you put the investment into renewable energy.

KLEIDON:

Given that coal and coal seam gas are expected to be industries that will be generating income for Governments for the next 20 to 50 years, when are we likely to make the transition?

TREASURER:

Well, it will take a long time to make the transition. What we have to do is to move to more energy-efficient forms of energy. That's why coal seam gas for example is very attractive but there will still be a fundamental role for coal for many years to come. What we do need to do is to drive the investment in cleaner coal technologies. That's all part of it. So into the future we reduce carbon pollution. We drive investment in cleaner energy, particular renewable energy, but there's still a strong role for coal and all of that. And as we do that we do provide assistance to households, assistance through tax cuts, assistance through increased family payments or pensions and we do work with those industries that are trade exposed. In that way, we achieve the goal of cleaner energy outcomes and we ensure our future prosperity in a world where other countries are moving to reduce their carbon pollution.

KLEIDON:

When speaking on things like coal seam gas, which is an exploding industry at the moment throughout Queensland, the Director of Beyond Zero Emissions says that the fact that it's a clean technology is a furphy considering that it is almost as carbon intensive. Has the Government looked into that?

TREASURER:

Absolutely. Gas is a much cleaner fuel than coal. That is why people are investing in it now and that is why it has such a very bright and important future, but also it will be there alongside the development of renewable energy such as solar, wind and other renewable energies.

KLEIDON:

When you say cleaner are you referring to the emissions it produces as far as the particles or are you referring to its production because it's almost as carbon intensive to produce as coal?

TREASURER:

Well, it is certainly a much cleaner fuel in terms of its emissions and there is a very big role for gas in global energy supply including in this country for a long time to come because what we will need – and you can see this in reports as far back as Stern – we do need to move to cleaner fuels. We also need to move to renewables but what we have to do is to do all of those things at once and over time. To get the investment in renewable energy, to get it producing base-load power is still a long way off. That's why we need the price on carbon now to provide the incentives to the investment in renewable energy and other forms of energy efficiency.

KLEIDON:

At the cost of the environment?

TREASURER:

Not at the cost of the environment. The whole point of this is to reduce carbon pollution emissions. That's why we're putting a price on carbon. That is why gas in the interim is much more attractive for example than coal. But for Australia we are very fortunate because in terms of our coal reserves they are cleaner than any other reserves elsewhere in the world.

KLEIDON:

The extraction of that gas though can also lead to pollution of water as we've seen in the United States.

TREASURER:

Well, there is a whole series of issues to do with the regulation of gas and those issues are dealt with through the environmental authorities. I'm very confident that the regulatory systems that we've got in place are ones that we require.

KLEIDON:

Just finally when are you likely to have a resolution on a carbon tax price?

TREASURER:

Well, we're working through the Multi-Party Committee. We've made very good progress and I expect to see it in the not too distant future.

KLEIDON:

We thank you for your time this morning.

TREASURER:

Okay thank you.