SUBJECTS: Carbon Trading, Liberal Leadership, Bi-elections, Inflation
STEVE PRICE:
Federal Cabinet is sitting today; they've convened in Arnhem Land I think. Tanya Plibersek's on leave; we're joined this morning by the Assistant Treasurer who is, of course, Chris Bowen; he's on the line here in Sydney. Morning to you Assistant Treasurer
CHRIS BOWEN:
Good morning Steve.
STEVE PRICE:
And Malcolm Turnbull who I understand is currently in Perth. Morning to you Malcolm.
MALCOLM TURNBULL:
Good morning.
STEVE PRICE:
Chris Bowen, to you first. Can I ask you about this suggestion overnight from the Opposition, from the Liberals, that they will not back any carbon trading scheme until at least 2011. Does that mean its dead in the water?
CHRIS BOWEN:
Well this is version, I think, the ninth from the Liberal party on this, over the last few weeks and I suspect we're going to see a few more versions Steve, so it's too early to say.
We've made it clear that we are looking for support to get this through the Senate, the Greens have a more extreme view than us, and we need to have the support of as many people as possible to get this through the Senate. Hopefully the Liberal party will see sense and vote a sensible...;
STEVE PRICE:
Were you surprised to read that this morning?
CHRIS BOWEN:
Not really Steve because, as I say, the Liberal party is all over the shop, walking both sides of the street and down the middle, trying to be all things to all people on this and there appear to be strong policy differences between Malcolm and his leader and Greg Hunt. You put three Liberals in a room on emissions trading and you get five opinions and five positions. We have a plan: a Green Paper, a policy proposal. We'll work through that, we'll consult and we'll take legislation; we'll argue for it vigorously and we'll negotiate on it as best we can.
STEVE PRICE:
And you consider you've got a mandate from the Australian people to push this through by 2010, do you?
CHRIS BOWEN:
Absolutely. We went to the election with a clear policy to deal with climate change, to introduce an emissions trading scheme with a 2010 start date. The Australian people are way ahead of the Liberal Party on this. They know that we need action; we need action sooner rather than later. The Liberal Party position is always to wait for somebody else. In Government it was to wait for the United States to sign Kyoto, now it's to wait for China and India to introduce emissions trading schemes. We regard this as a serious enough problem for Australia to act.
STEVE PRICE:
Malcolm doesn't the Government have a mandate to do this?
MALCOLM TURNBULL:
Well, look I don't think you can say the Government's got a mandate to introduce a flawed emissions trading scheme, which is going to devastate Australian industries and put Australians out of work. I mean, we have already seen in their emissions trading scheme Green Paper a proposal that would penalise Australia's LNG industry, our natural gas industry here in Western Australia which plays a vital role in providing a relatively clean transitional fuel that, when it's exported to China, enables the Chinese to reduce their emissions. Now, of course there are CO2 emissions when LNG is made here, is compressed and transported and those emissions, because they are relative to a relatively clean industry, will not be protected under the Government's emissions trading scheme and you've already talked about splits in the Liberal party; there are no splits in the Liberal party. We are entirely agreed on getting this right.
STEVE PRICE:
Well there are plenty of splits...;
MALCOLM TURNBULL:
What that means is it's got to be done properly.
STEVE PRICE:
You can't say that there aren't plenty of splits, I mean Brendan Nelson and yourself have had disagreements on that. Can we just get it clear - you're saying, are you, as Coalition policy, that you will not vote for - in the Senate - a carbon trading emissions scheme to begin before 2011?
MALCOLM TURNBULL:
Steve, we will not vote for a carbon trading scheme that is poorly designed. Now Kevin Rudd and Chris, this morning said...;
STEVE PRICE:
So if it was well designed you would vote for it and you wouldn't have a problem with it starting in 2010, is that what you're saying?
MALCOLM TURNBULL:
Well I don't think you can get it ready by 2010. In fact, I'm quite positive you can't. We were told when we were in Government that...;
STEVE PRICE:
But you're not in Government. They are and they say they want to do it by 2010.
MALCOLM TURNBULL:
Look Steve. This is too important to mess up. Kevin Rudd is all spin. I mean, we've seen - he said, in Opposition, the emissions trading scheme under Labor would start in 2010. He has no reason for knowing whether that was feasible. We were told by the public service and by industry, that you could not get it ready by 2010. In fact, we were told that the date they could be confident of having it ready by was 2012. We have an enormous climate change meeting in December 2009, which is the meeting in Copenhagen, which will give us the first real insight to whether, and in what form, a global agreement is going to emerge.
STEVE PRICE:
So, Chris Bowen are you going to back off?
MALCOLM TURNBULL:
That is a vital piece of information.
STEVE PRICE:
Yep. Chris, are you going to back off on the dates?
CHRIS BOWEN:
No. Look 2010 is ambitious, but it's workable and we're working towards doing it. We just don't think we've got time to waste on this. This is a very important initiative for the Government and we are determined to do it, as soon as it's practical. We believe 2010 is that date.
STEVE PRICE:
So do you not accept what Malcolm Turnbull is saying, given that he was the former Environment Minister, he says the public service - the experts in this area - is saying it's too soon, too quick.
CHRIS BOWEN:
Well of course, if the previous Government has accepted the original advice, they would've done it way back in 2005; the original submission to Cabinet to do emissions trading. But look, we acknowledge that 2010 is ambitious, but we are ambitious about doing this. It's our ambition to do it by 2010.
STEVE PRICE:
There's a roundtable meeting you might both be aware of in Sydney this morning, headed up by Paul Howse from the Australian Workers Union and a number of prominent Australian businesses who are concerned about this. They are basically saying to you, Chris Bowen, that you need to back off because you're going to wreck the Australian economy. Does that concern you; that you've got a leading union figure, in Paul Howse, and business getting together on this?
CHRIS BOWEN:
I'm not sure they are saying that, and it doesn't concern us at all. That's what the Green Paper process is all about. I know Paul Howse quite well, he's a very intelligent fellow and we welcome his input and the input of those he is getting together, because there are issues to be worked through on the Green Paper. We are determined to work those issues through in consultation with all the effective people. That includes unions and business and the fact that they're talking is a good thing, not a negative development: a good thing.
STEVE PRICE:
Malcolm, does it surprise you that big business and the unions have gotten together to tell the Government to back off?
MALCOLM TURNBULL:
No, not at all because what business and the unions recognise is that a rushed scheme, and when Chris calls 2010 'ambitious', we know 'ambitious' is code for rushed. Chris knows in his past, this was political spin last year because Labor wanted to be able to say they could start an emissions trading scheme sooner than the Coalition Government had said it would. It is rushed. Business is saying it is, the unions are saying it is. It is very, very complex and you've got to get it right. We have to recognise, there is no point, absolutely no point in shutting down Australian industries which are export industries, by imposing a carbon price on them; if the countries with which they compete do not have that carbon price.
Now, I've been saying this for years, you cannot get into a situation where you end up exporting the jobs and exporting the emissions, because you lose out economically and you lose out environmentally. There is also this - you've got to ask yourself this question: let's say we make a lot of alumina and aluminium in Australia; it is very energy intensive and there are a lot of emissions. But most of it, almost all of it, is exported. Now, the fact is, that we take the credit, if you like or the discredit from the emissions, as opposed to the people that buy the aluminium. But it's an internationally traded good and what that means is you've got to have, for those internationally trading sectors, an international solution.
If you impose a heavy local carbon price on those industries and make them uncompetitive, you gain nothing. You will just see those industries move off shore. Now, this is why we've got to get an emissions trading scheme right; it's got to be very, very carefully designed and it's got to take into account the international ramifications.
Now, going back to Chris' view, I can tell you over here in Western Australia, talking to industry, there is a big frustration, here in the engine room of Australia's industry. Here in Western Australia, a big frustration that the Government is not listening to them because they've put in thousands of pages of submissions, lots of numbers and then the report's come out as though they haven't put anything in. The industry feels they're being ignored.
STEVE PRICE:
Interestingly a Sky News poll this morning is running 65/35 in the affirmative to the question 'should we stall a carbon trading emissions scheme?' We'll get back to that in a minute with Chris Bowen and Malcolm Turnbull.
Malcolm, continued debate over Peter Costello and the Liberal leadership - do you see Peter Costello as your main threat?
MALCOLM TURNBULL:
(Pause) Oh look...; no. I don't see Peter Costello as a threat to anyone other than the Labor Party.
STEVE PRICE:
There was a long pause there.
MALCOLM TURNBULL:
(Laughs) Well you've got to think carefully about these questions that you ask Steve. You're a very good cross-examiner. But, let's get a couple of things clear. Peter Costello is the member for Higgins. He's been an outstanding Parliamentarian, an outstanding Minister, an outstanding Treasurer. It is up to him and his family what decision he takes about whether he stays in Parliament for the long-term or whether he retires. That's entirely up to him. I'm not going to control him or hector him. It's his decision and he will make it in his own time and he's entitled to that.
STEVE PRICE:
Would you like him back on the frontbench? Brendan Nelson said yesterday he'd be back there with a bullet. Maybe he might want your job.
MALCOLM TURNBULL:
(Laughs) Well I'm not going to take it any further than that Steve. I think, really Peter's got to make his own decision; we're just going 'round and 'round with hypothetical questions here. Peter will make up his own mind in his own good time.
STEVE PRICE:
Chris Bowen would you prefer to go to an election again Nelson, Costello or Malcolm.
CHRIS BOWEN:
Oh look I think the important point here Steve, is that the Liberal Party, in my view, does not have a Brendan Nelson problem. Brendan Nelson is not responsible for the troubles the Liberal Party is in.
The Liberal Party's in trouble because they don't stand for anything anymore. They can't reach a single position on anything, whether its emissions trading or other matters, they are all over the shop. Until you actually have a clear narrative, until you actually stand up for something and say 'this is what we believe in and some people will like it and some people wont, but here's what we believe', then the Liberal Party is going to continue to be in trouble. Now you can have Brendan Nelson, you could have Peter Costello, you could put Malcolm in, but until they sort that out, they are going to be in that difficulty.
At the end of the day it's a matter for them, but I can say that - whether it's the Labor Party or the Liberal party - if you're in trouble, changing leaders is not always the answer to your problem. The answer to you problem is having a clear idea of where you want to take the country...;
STEVE PRICE:
You say that with some experience Chris.
CHRIS BOWEN:
There were some difficult times in opposition, absolutely. And changing leaders is not always the answer.
STEVE PRICE:
A question for you both on bi-elections: The Gippsland bi-election, it now appears $180,000 will be dolled out to the parties that got over 4 per cent. That's straight out of the taxpayer's pocket. These bi-elections, is there no better system - maybe start with you Malcolm - post an election, for retaining Members of Parliament who stand during an election which was, for goodness sake only back in November, and ensuring that they stay in their seat for some period of time. I mean, it's ridiculously quick and expensive isn't it?
MALCOLM TURNBULL:
Well you can't force people to stay in Parliament. And you will always have bi-elections because people do, you know, people leave Parliament for all sorts of reasons. Sometimes they die, they get sick, they get appointed to jobs, they might be appointed to the bench or something like that or an ambassador. So people come and go.
I don't think there is a better system of dealing with bi-elections. The only other thing you could do I suppose, but I don't, I wouldn't recommend it at all, but the only alternative is what we do with the Senate, where when a Senator retires, rather than having a whole state-wide Senate election, the party from which that Senator came, is able to nominate a replacement to fill the casual vacancy. But I don't think that would be feasible for the House of Representatives, or appropriate. So I think basically we have got to live with the system that we have got and recognise that bi-elections occur.
STEVE PRICE:
Chris Bowen, should we be dolling out $180,000 to the four parties that got over 4 per cent in the bi-election and then do it again in Mayo and then do it again in Lyne?
CHRIS BOWEN:
Well public funding of election campaigns is an important policy to allow all political parties not just the big two...-
STEVE PRICE:
Well it has allowed Pauline Hanson a very handy income.
CHRIS BOWEN:
Well she has been dealt with under that process. But look; by and large, I agree with Malcolm. I think there is no alternative. You have got to give people their say on who their local member is. I do think we are seeing this rash of bi-elections from former Ministers. You didn't really see that when we lost office in 1996. You saw, of course, Paul Keating go. People accept that Prime Ministers generally don't hang around. But you saw most of our former Minister's serve out their term and then go at the next election. I think we are seeing people who have been in office a long time and don't like being on the backbench in opposition. While I understand that, I do think it is unfortunate; but there is no alternative to the system really.
STEVE PRICE:
Chris Bowen, inflation figures out today; would we expect cost of living to again be up?
CHRIS BOWEN:
Look until the inflation figures are out Steve, I can't comment. The Treasurer is going to hold a press conference in Sydney around lunch time and he will be commenting on the figures as they come out. Obviously we would prefer inflation to be lower rather than higher, but it is all speculation until we see the figures.
STEVE PRICE:
Fuel costs will be in there and Malcolm, you are in Western Australia, do you get a sense being there that we are, as we have been saying, running a double economy - one in the eastern states that are not on fire and one in Queensland and Western Australia that is?
MALCOLM TURNBULL:
Look there is certainly is a very strong sense of that. This state is being pulled along by the phenomenal resources boom here. There is, you know, terrific activity, labour is scarce, enormous investment. And you know, all of that, this is one of the reasons of course why designing an emissions trading scheme, we have to take care not to put that at risk. No, there is no doubt; the economic circumstances in Australia is a very challenging one because we have the - we are being pulled up by resources, by demand for our resources, from Asia in particular; and on the other hand, the global situation following the sub-prime crisis in the US and you know the increase in the cost of funds, the cost of money. The consequence for that is pulling us in the other direction. So it is very, it is certainly a very challenging time.
STEVE PRICE:
Chris Bowen, an historic day, Cabinet sitting in Arnhem Land?
CHRIS BOWEN:
Yeah, Nhulunbuy. It's part of our Community Cabinet process where the Cabinet gets out and opens itself up for scrutiny. It's a very good process. They've been in Western Sydney, in Penrith and Mackay and now Nhulunbuy and of course, Northern Territory and those issues in terms of the intervention are on the national agenda, it is very appropriate that the Cabinet is there, so it is a very good development.
STEVE PRICE:
Appreciate you both joining us on the phone this morning. Thanks a lot.