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

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

17 July 2011

Interview with Paul Bongiorno

Meet the Press

17 July 2011

SUBJECTS: Clean Energy Future; Carbon Price; Domestic and Global Economic Outlook; Liberals push to bring back WorkChoices

BONGIORNO:

Welcome back to the program this morning, Wayne Swan. Good morning, Treasurer.

TREASURER:

Good morning, Paul.

BONGIORNO:

The advertising program or campaign rather, starts tonight, $25 million all up. Can those TV ads succeed where the Government so far has failed?

TREASURER:

Well, Paul, this is a very big structural reform, a big change to our economy and of course it has big implications for our environment. As I move around the country - and I've been from Perth right through to Cairns in the past week - there's a real hunger out there in the community for more information, for the facts. People want to know why we are doing it, and they also want to know how we are doing it. And of course when it comes to the why it's all about driving the investment into renewable energy, into clean energy technology - whether it is wave technology or whether it's wind power. It is making sure we change the energy mix from the dirty fuels over to the cleaner energy fuels. And also, people want to know how we are going to do it. They want to know what we are doing in terms to assist households and they also want to know what we are doing to assist business. So there's a real hunger for information and that's why there's an advertising campaign.

BONGIORNO:

The fact of the matter is though it's not yet law, so this is basically party political at taxpayers' expense, isn't it?

TREASURER:

No. I completely reject that. The Government has made its policy announcement. There is enormous community interest in this issue. There is a need to get the facts on the table and that's what we are doing. We are going to put the facts on the table. This is so important for the future of our country, so important in terms of future economic growth and so important to reduce carbon pollution and to create that clean energy future.

BONGIORNO:

Labor was highly critical of the Howard Government for doing the same thing.

TREASURER:

The Howard Government spent a lot of money on very blatant party-political advertising. There is always a case for factual advertising and that's what we are doing here. There is a public interest to do this. When I go out and talk to business, when I run into people in the street, they want to know the facts.

BONGIORNO:

Alright. The Government, according to a lot of questions we've got on both Twitter and on Facebook even, is struggling to establish trust on a carbon tax. As I said, we have a number of questions to this point. A couple pointed to what you said just six days before the last election. Here's a reminder:

TREASURER:

Certainly what we rejected is this hysterical allegation that somehow we are moving towards a carbon tax from the Liberals and their advertising. We certainly reject that.

BONGIORNO:

These words keep coming back to haunt you, don't they?

TREASURER:

Yeah I spoke about that on your program, Paul. I think the question I was asked was about a cap on carbon pollution, that is, we have always favoured an emissions trading system. I argued that on your program that morning. We have come to that through a three-year fixed price and that is a carbon tax, that is true, but what we are doing is moving to an emissions trading system. That's what we've always favoured. I've favoured it for years and of course it has been the policy of both sides of politics except for Mr Abbott in the past 12 months.

BONGIORNO:

Do you concede that it looks like you have broken faith with the Australian people?

TREASURER:

We argued during that campaign that we would go towards an emissions trading system. We said we would work with the community to do that and we have worked through the Multi-Party Committee. We've come up with a three-year fixed price that is a tax but we are moving to the position that we argued during the campaign, which was for a floating price and an emissions trading system.

BONGIORNO:

Does Labor bear any responsibility for the fact that Australians don't see this as urgent or as urgently as the Government, the Greens and the Independents seem to, and that is because you yourselves put it on the backburner for about 18 months?

TREASURER:

No, it was put on the backburner by the Liberal Party who defeated it in the Parliament. That's why we are having this debate. We've got to get this done, Paul. The time for action is now. The more we delay, the costlier for the nation. We've got to make this change.

Paul, I was in New Zealand during the week, they've brought in an ETS there. All of the scare campaigns occurred there like they're occurring here. When it was introduced people saw how it was operating and much of that concern went away.

BONGIORNO:

Treasurer, we have a question from Twitter from Leslie. She says or he says: “The Government should call an election for a carbon tax mandate as they have no carbon tax mandate”. This is a call we hear almost daily from the Opposition Leader as well.

TREASURER:

Yes, Mr Abbott is now calling for two elections. He just wants to run around and wreck things. You see, Mr Abbott is out there talking down the economy every day. The fact is what we need is certainty. Our country needs to deal with carbon pricing. That's what we are doing to give some certainty for business to invest.

BONJIORNO:

Then how do you answer...

TREASURER:

Very simply Paul, because we went to the last election arguing for a carbon price. We have come to it through a three-year fixed price. There will be an election in a couple of year's time and people can pass their judgement.

(Break in program)

BONGIORNO:

You're on Meet The Press with Treasurer Wayne Swan. Welcome to the panel, Alison Carabine from ABC National Radio Breakfast and Simon Benson from the Daily Telegraph. Good morning. One of the questions of the week, when is revenue neutral, revenue neutral? The Government itself identified a hit to the Budget as it puts the carbon tax in place. The compensation and exclusions do cost real money.

HOCKEY:

The Government needs to come clean about how they are going to pay for the $4.3 billion black hole they have in the Budget now. They were so concerned a few months ago about a $1.8 billion hole. They imposed a new flood levy. So does this mean that we are going to have a carbon tax levy on top of the carbon tax they announced on Sunday?

CARABINE:

Well, Treasurer the carbon tax will blow a $4 billion hole in the Budget. Considering the latest round of turmoil sweeping Europe and the US, is there a danger that the hole could be blown even bigger, meaning that sooner rather than later you're going to have to hand down a Budget with some pretty tough spending cuts?

TREASURER:

Mr Hockey gets more bizarre by the week. The only hole around the place is the huge hole in the program he took to the last election, an $11 billion black hole. We will bring our Budget back the surplus in 2012-13. We are operating within our fiscal rules. Yes, there is an up-front cost for this program. No doubt about that, but modest calls on the surplus over the surplus years. It's entirely affordable.

Yes, there are challenges in the global economic outlook. We are seeing uncertainty in Europe and we are seeing weaker growth in the United States but of course our region remains strong. When I brought down the Budget I pointed to the fact there was short-term softness in the Australian economy but medium-term strength. We are seeing out there a cautious consumer but the fundamentals underlying our economy are strong. One of the challenges we have at the moment is the scare mongering from Mr Hockey and some media outlets that are talking our economy down and scaring the pants off consumers.

CARABINE:

Australia is also at the mercy of international conditions and all the reports from overseas are decidedly gloomy. Do you fear that we may be on the brink of a global financial crisis mark II and how therefore can you be so certain that you can deliver that surplus in 2012-13?

TREASURER:

Well, we're not immune from global economic developments that's for sure, but our region remains strong. Chinese growth was strong - there was a figure that came out in the past week. And of course we did come through the global financial crisis in very good shape. Our economic regulators are first-class, our budget position is strong. So we have the strength to withstand adverse international events, although we are not entirely immune from them.

BENSON:

Treasurer, given the global economic uncertainty, are there any circumstances you could foresee under which you might consider delaying the introduction of a carbon tax?

TREASURER:

No, we need to introduce a carbon price because we need to give business certainty so it can drive the investment in renewable energy and particularly in power generation. But if you have a look at the modelling that we have published what it shows is that we can cut carbon pollution and continue to grow strongly. That's what the modelling shows. We have an underlying strength in our economy. We have low unemployment. We have a strong investment pipeline and we have record terms of trade. Now is the time to put in place this fundamental reform because if we delay it gets costlier and costlier by the year.

BONGIORNO:

Treasurer, as you mentioned earlier, consumer confidence has plummeted. In fact back to global financial crisis levels. Tony Abbott says don't blame me.

ABBOTT:

If the Treasurer wants to restore confidence, he could do it at a stroke by saying we have thought again, there will be no carbon tax. Whether people believe him or not will be another story.

BENSON:

Treasurer, you talk about mining boom mark II. There are some people now that are talking about the potential of a GFC mark II. Have you taken your eyes off the ball of the bigger picture here and have you been too focused domestically on the carbon tax?

TREASURER:

We brought down a budget a couple of months ago which was absolutely devoted to lifting the productivity of our economy, to spreading all of the benefits of mining boom mark II. And at the centrepiece of that was a whole package about spreading opportunity through training Australians through lifting work participation.

These things are all very important but when you talk about consumer confidence, we've got another senior Liberal out there today arguing to bring back the worst aspects of WorkChoices. That's what Mr Howard said today. I couldn't think of anything that would be more damaging to the confidence of working Australians than the Liberal Party putting out a policy saying they were going to bring back the worst aspects of WorkChoices.

CARABINE:

But people at the moment are engaged in a carbon tax debate, not over a debate about industrial relations. You are trying to sell a carbon tax on the base of this 27 per cent primary support. Is the problem, Treasurer, the product or is it the sales person? Would you be doing better if it was someone other than Julia Gillard doing the spruiking? Voters do not appear to trust her.

TREASURER:

I reject that completely. She is a leader of courage. She is a leader of conviction and we are together putting forward a reform which will lift our prosperity, which will cut carbon pollution and protect the future for our children and our grandchildren. These reforms are tough and in the past when governments have put forward big reforms like this, they've lost at bit of paint along the way and there's no doubt that has happened in this debate. This reform is right for the country, and this is a reform that the country does accept and will accept as we go through putting all the facts out there, and getting rid of all the garbage and scare campaign that has come from Mr Abbott and some of his allies.

BENSON:

Treasurer, you have to admit though Labor's stocks at the moment are pretty low. Some of your backbench colleagues are even talking about the prospect of even forcing Julia Gillard to resign within six or 12 months if things haven't improved. If things are still the same for Labor in 12 months time, what do you do?

TREASURER:

I just completely reject that entirely. What we're doing here is putting forward a fundamental reform that goes to the core of Labor values: creating prosperity and spreading opportunity. You can't be a first-rate, first-world economy in the 21st century unless you are powered by clean energy and that view, that vision, and that objective is shared by everybody in our caucus. And they understand that it is a tough reform and they understand we've got a lot of hard work to do and we're out there doing it together.

BENSON:

But there is a political reality here for you too, isn't there? In 12 months' time and you're looking at the prospects of going to an election within 12 months of that. If you are on a primary vote of 27 per cent still, what do you do? How do you turn that around? What do you do?

TREASURER:

Simon, I got into politics and Julia Gillard got into politics to make a change and to make a better country and that's why we are here. And of course nothing is more important to our children and our grandchildren than dealing with dangerous climate change. What would we say to them in 10, 20, 30 years time if we squib this in the critical decade because of bad opinion polling?

BONGIORNO:

Thank you very much for being with us this morning, Treasurer Wayne Swan.

TREASURER:

Thank you.