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

1 July 2011

Interview with Madonna King

ABC Radio 612, Brisbane

1 July 2011

SUBJECTS: Carbon price; economic reform; vested interests campaign against climate change action; Julia Gillard; foreign investment; economic outlook

KING:

Wayne Swan, good morning. Welcome to 612 ABC Brisbane.

TREASURER:

Good morning, Madonna. Good to be here, good to be home.

KING:

Has the carbon tax lost Labor the next election and perhaps you your seat?

TREASURER:

Madonna, I think the most important thing about being in politics is to make a difference and to make a difference you've got to put in place the very big reforms for the future. You've got to do the right thing and sometimes when you do that you lose a bit of paint along the way. But I don't get too fazed by opinion polls fortnight to fortnight, month to month, or for that matter year to year. The fact is that we are engaged in a very significant reform here to drive a clean energy future by putting a price on the carbon pollution of the 1,000 largest polluters and of course you tackle a lot of vested interests when you're doing that. And of course we've got the mindless negativity of the Opposition as well. So we've lost a little bit of paint along the way.

KING:

But governments act on a mandate. You haven't got a mandate to do this, have you?

TREASURER:

Madonna, we have been supporting a carbon price, an emissions trading system for a long period of time. We went through the last election campaign and we had a debate about that, and you may well recall the Liberal Party until comparatively recently were supporting an emissions trading scheme.

KING:

But your boss, the Prime Minister, said there will be no carbon tax under a government I lead.

TREASURER:

And what she also said was that we were supporting an emissions trading scheme and we were supporting action on climate change and to take measures to reduce carbon pollution. What we've got here is that we've got a fixed price.

KING:

Which is a carbon tax.

TREASURER:

Yes, some people call that a carbon tax and it can be called a carbon tax, but it's a fixed price moving to a floating price which is an emissions trading scheme and the purpose of that is to reduce carbon pollution in the most cost-efficient way.

KING:

When Julia Gillard said there would be no carbon tax under a Government I lead, did you think you would be here today talking up a carbon tax?

TREASURER:

I certainly thought that I would be here after a period of community consultation arguing the case for an emissions trading scheme, something the Liberal Party used to believe in as well and indeed we got within hours of having an emissions trading scheme, which would have started on the 1 July this year if the Liberal Party leadership had not changed.

KING:

You say after a period of community consultation, do you think the majority of Australians support this and we're hearing from a noisy minority? Or do you think that you haven't sold this and the majority of Australians don't want a carbon tax?

TREASURER:

Well, I certainly think the majority of Australians want some really strong action to reduce carbon pollution. I think they understand the need for that. I think they understand the need to do that, not just for the environment, not just for the Barrier Reef, not just for the Murray Darling, but also for our economy. Now what we have been discussing through the Multi-Party Committee is a period of a fixed price, moving to a floating price. That is a full emissions trading scheme.

KING:

But we're talking semantics. We're talking about a carbon tax. You concede that.

TREASURER:

It can be called a carbon tax. I have called it a carbon tax, the Prime Minister has done the same, but the point is it is a fixed price. And indeed the previous scheme had a fixed price. We are moving to an emissions trading scheme which is the best way, least cost way, of reducing carbon pollution and that's the outcome that Australians want.

KING:

You talked about after a period of community consultation, that was your phrase. Do you believe the community is having a real say in whether we have a carbon tax or not?

TREASURER:

Well, certainly we've been through extensive consultation and we've worked through the Multi-Party Committee. We've been through extensive consultation with the business community. We've been through extensive consultation with community groups, and I believe the community does want action on climate change, does want to reduce carbon pollution.

KING:

So why is this paint, the shine coming off your popularity?

TREASURER:

Well, first of all you've got vested interests out there that don't believe in reform, don't want to reduce carbon pollution and are going to fight against it. The same vested interests that fought against the big reforms of the 1980s and 1990s. They're all out there again.

KING:

But aren't voters, listeners, people calling into talkback, writing letters to the editor, aren't people listening this morning, a lot of those object to a carbon tax. Have they got a vested interest?

TREASURER:

Well, certainly there will be divided opinion but there are vested interests out there who have a lot of money, a lot of power, and they are going to do everything they possibly can to stop essential reform for a clean energy future, and you can see it today - some of those business organisations out there today - are putting their money on the table and they have not even seen the design of the scheme. They're not fair dinkum, Madonna. What they are against is reform, reform which we need to make our economy prosperous, in which we need to ensure our environmental sustainability.

KING:

You could clear this up. You could just go to an election and see what people want.

TREASURER:

Well, I think what we need to do is to put all of the detail out there. That's what we've been working towards. We've been through a period of consultation and we will be publishing the outcome of that consultation in the not too distant future and then we can have a debate about the scheme and its design and those vested interests will be seen for what they are, which is they're not really concerned with reducing carbon pollution, they're just concerned with their own self interest. Now of course there is genuine concern in the community about these issues and we can have a full and informed debate about all of those things when the design is out.

KING:

But is there any use having a debate if you categorically say it is going ahead?

TREASURER:

Well, what we're doing is putting in place an emissions trading scheme. It has been the policy of my Party for a long period of time. It was the policy of the Liberal Party for a long period of time. It was the policy of John Howard.

KING:

But if it was the policy, was it a bit tricky of the Prime Minister to say there will be no carbon tax?

TREASURER:

What the Prime Minister also said was that in this term she would work for community involvement in a process towards an emissions trading scheme. That is precisely what we have done.

KING:

Is there, you say governments have to make the hard decisions. Is there any use in making that hard decision and being tossed out on the back of it and it being repealed later?

TREASURER:

Madonna I believe that the community will support our scheme but I also believe that we have a responsibility and the Government has a responsibility to lead. Madonna, what would we say to our grandchildren in 30 years time if we squibbed this challenge in what is the critical decade?

KING:

Alright. Is part of your unpopularity in Queensland, I mean Labor's unpopularity in Queensland, how people perceive Kevin Rudd has been treated, do you think?

TREASURER:

Madonna I don't get into the ins and outs of opinion polls. I believe that we have been through a period where we have put forward a series of proposals. There's been a really negative campaign from some vested interests and particularly from the Opposition. We've lost a bit of paint, but I don't judge our political progress on an opinion poll fortnightly, monthly, six monthly, or yearly for that matter. What we've got to do is the right thing by the country. That's what the Prime Minister is doing. That's what the Government is doing and that is what we will be judged on when the election comes around. If I was just focusing on opinion polls, I wouldn't be doing my job, Madonna.

KING:

Alright, let's move on from the opinion poll. Any chance of having Kevin Rudd ever having the party support to come back as leader?

TREASURER:

Madonna, I don't talk about or speculate about those things. Julia Gillard has very strong support in our Party.

KING:

Is she a better leader than Kevin Rudd?

TREASURER:

Julia Gillard is a terrific leader.

KING:

Is she a better leader than Kevin Rudd?

TREASURER:

I don't go into those sorts of comparisons. She's the leader. She's a terrific leader. She's got the strong support of our Caucus.

KING:

But as Deputy shouldn't you think she's a better leader than Kevin Rudd?

TREASURER:

Well, I don't only think it Madonna, I know it.

KING:

Okay. Do you ever talk to Kevin Rudd now? You were once good friends.

TREASURER:

Well, he's a Cabinet colleague and I certainly do talk to him from time to time. I talk to all my Cabinet colleagues, Madonna.

KING:

Does he need to be a bigger team player?

TREASURER:

No, we're all working to the one goal and Kevin, like everybody else, is a very strong supporter of an emissions trading scheme.

KING:

I quickly want to touch on foreign investment, but Robyn from Jindalee said is there any other country who has this type of carbon tax?

TREASURER:

Well, there are emissions trading schemes elsewhere in the world. There are 30 other countries that have variants of this.

KING:

Is there one just like this though that we could go and have a look at?

TREASURER:

There's an emissions trading scheme operating in Europe. There are emissions trading schemes about to operate in other parts of the world as well. If Robyn is looking for some objective analysis of all this I recommend she goes away and has a look at the Productivity Commission Report that we produced on these issues only a couple of weeks ago. What it shows is that in terms of initiatives an emissions trading scheme, a market-based mechanism is the cheapest, most efficient way of going. And that's one of the reasons we're going down this road.

KING:

I know you're under a tight schedule. I just want to touch on foreign investment. Bob Brown says 83 per cent of our mining industry is foreign owned. Does that figure shock you?

TREASURER:

Well, I think that's a bit high. It's hard to get an accurate figure, so I wouldn't think that it is that high. But it is high and it always has been because we as a country have required large amounts of foreign capital to develop our resources. That's why we have a national interest test in our foreign investment regime, to make sure that when the foreign investment comes, it is in the national interest and it delivers for our country.

KING:

The Foreign Investment Review Board answers to you. When it determines what is in the national interest, how do you define? How do you work out whether something is in the national interest?

TREASURER:

Well, I make that determination. I make that determination on a number of grounds; that the investment delivers for local communities; that there is an appropriate revenue stream to the country; that it is competitive; that it's harmonious with our communities. There's a whole series of criteria, but the most important thing here is to make sure that it delivers for the Australians who own those resources 100 per cent and those resources can only ever be mined once.

KING:

Do you think the public has a greater right to know what land and what interest in what company foreign bodies own?

TREASURER:

Well, we have a pretty good handle in terms of companies and resources. The area of rural land is not an area where we have enough information, and that is why the Government is putting in place a process now to get more accurate information in that area and we should have that in a few months time.

KING:

Last question before I let you go. Data out yesterday points to a lending slowing, house prices falling, jobs shrinking or available jobs. Yesterday a meatworks here on the Darling Downs stood 1,100 workers down for two weeks. Is there a mining construction boom happening in part of the country, and as Treasurer you have strong concerns about the rest?

TREASURER:

Well, I talked about all of this extensively in our Budget, Madonna, because there is short-term softness in the economy but medium-term strength. And of course one of the factors leading to that short term softness has been the dramatic impact on our economy of the floods and Cyclone Yasi which you could see in the National Accounts which came out in March. So there is short-term softness but there's strong investment coming through and the fundamentals of our economy do remain strong.

KING:

Wayne Swan, thank you.

TREASURER:

Thank you.