SUBJECTS: Emissions trading, the global economy, the Greens, asylum seekers.
DAVID SPEERS:
Chris Bowen, thank you for your time.
BOWEN:
Pleasure David, good morning.
SPEERS:
Labor has had many different positions on carbon price during its two terms in office. Explain to me why you now want a floating price that's set by Europe from next year?
BOWEN:
We think this is the right response to the economic developments of recent times. We think this is the right part of our plan for the economic transition that Australia is facing and we think this is the appropriate thing to do in the face of cost of living pressures for the Australian people.
SPEERS:
So you feel that the fixed price that was set under Julia Gillard and Greg Combet was too high and the compensation was not enough?
BOWEN:
This is our response to developments and we think it's the right…
SPEERS:
What developments are they?
BOWEN:
The right adjustment. The developments are that the carbon price around the world has fallen, that the mining boom is coming to an end, our terms of trade are falling and we need to spur investment in the non-mining sector as well.
SPEERS:
Okay, but part of that as he said is global action on climate change hasn't kept pace with what Labor thought it would a couple of years ago.
BOWEN:
We think - we've always believed in an emissions trading scheme. There's been different models about how you get there, but we've always believed in an emissions trading scheme. We've been consistent unlike others in this debate, we have been consistent in support for our market mechanism to set a price for carbon. Now, this Cabinet, this Prime Minister and this Climate Change Minister, myself and other members of the Cabinet have taken the view that the appropriate way to get there now in light of these developments is an earlier floating price.
SPEERS:
Because the rest of the world hasn't acted as quickly as you hoped?
BOWEN:
Because the price around the world is lower than might have otherwise been envisaged, because of these other economic headwinds that the nation's facing.
SPEERS:
And the household compensation hasn't kept up so that the cost of living…
BOWEN:
No, I don't agree with that but what we've…
SPEERS:
Well if the household compensation's been alright, then why do you need to do anything?
BOWEN:
Because, as I say, this is both a cost of living measure and an economic measure to spur investment in industry, in manufacturing and services. This will be of benefit for industry generally. I think you've seen that in some of the responses so far.
SPEERS:
So do you expect then that the price will - well the carbon price will no doubt fall, will the electricity price also fall? Is that something you can guarantee?
BOWEN:
Look we've always said that the carbon price was only a small element of the increase in electricity prices. We've been clear about that. Others have made other allegations…
SPEERS:
So this may not make much difference to electricity prices?
BOWEN:
We've never gone out there and said we have the magic solution which will see electricity prices fall. It's Mr Hockey and Mr Abbott as late as Friday were saying we'll make electricity prices fall. I think people see through that.
But what you ask is a valid question. But it's valid for me to point out that we've never made that claim. What we do say is this will help with cost of living, it will make an impact, it's not the be all and end all. It makes - it is of assistance to people.
SPEERS:
It will bring down the electricity price?
BOWEN:
Well if you look at the impact for people. So say a family, say a one income family with an eight-year-old and a three-year-old on average sort of spending patterns, you're looking at an improvement of about $380 this year and assistance for cost of living. That's worth doing.
SPEERS:
Obviously - sorry the following year…
BOWEN:
Yeah that's right, the year that's coming, when this change makes effect.
SPEERS:
How can you guarantee that?
BOWEN:
Well that's the modelling.
SPEERS:
How do you know this electricity price reduction will be passed…
BOWEN:
Well that's the modelling that we've done, that the Government and the Treasury have done, so it takes into account a whole range of factors. Obviously, there's variables. It depends on how much electricity you use, it depends on what the carbon price is across the market, but on the best evidence available that's the sort of impact we're talking about.
SPEERS:
Because Labor's always scoffed at Tony Abbott's suggestion that getting rid of the carbon price will bring down prices.
BOWEN:
Well we've scoffed at his suggestion that it's all down to the carbon price and, you know, regulation doesn't matter and poles and wires and gold plates doesn't matter…
SPEERS:
But now you reckon this will bring down prices by…
BOWEN:
But to be very clear David we have always accepted and said that there is an impact on energy prices. Of course we have. We've pointed out though that it's a small impact compared to all the other things.
Electricity prices didn't start going up when the carbon price came in. I think the Australian people see through that sort of nonsense. Electricity prices have been going up for a long time. They've gone up a lot over the past five years. We haven't had a carbon price for five years. People understand that.
SPEERS:
You've said household assistance will stay even though the carbon price comes down. Why does it need to stay the same? Surely that's economically irresponsible.
BOWEN:
No. When you see our package, David, I think you will recognise that we've taken responsible decisions. It will be paid for. There are tough decisions the Government's had to make, but it will be paid for, but it'll be paid for in a responsible way. Now, families have factored in their payments, their tax cuts, the household assistance package that was delivered into their budget. We are still having a carbon price. Yes, it's…
SPEERS:
And they've factored a carbon price in there as well, and now that's coming down…
BOWEN:
We're still having a carbon price, but it is lower, but that's the right thing to do.
SPEERS:
[Indistinct] the household assistance?
BOWEN:
Well, when you see our package, David, I think you'll see, objectively in my view, I'm biased, but objectively, I think you'll say that it's a sensible package which takes the right savings steps.
SPEERS:
What about industry assistance? Can you guarantee that will stay?
BOWEN:
I'll be making further announcements in the next day or so, David.
SPEERS:
Okay. So it looks like that will…
BOWEN:
I'm not going to…
SPEERS:
Why do you keep household assistance the same, but clearly lower industry assistance?
BOWEN:
I'm more than happy to talk the detail package through with you when it's announced. I'm not going to pre-empt what's in it, what's not in it. Yes, there are industry assistance measures, which are predicated on a certain price, but I'm not pre-empting what we're going to do as part of the package.
SPEERS:
Okay, just in terms of theory here, if we're linked in with the European price, it is low at the moment, but they are trying to get it higher through various means. If they do manage to get it higher, our price would then go back up as well. Does our industry assistance then move with the European price?
BOWEN:
There are elements to the industry assistance which are linked to price and there are elements which are not.
SPEERS:
So down the track it could go up.
BOWEN:
It's a pretty complex formula, but I think if you said to industry, as I have done - you know, a floating price but then you look at the industry assistance packages; most of industry - you'll never please everybody all the time, you'll always get some people in industry who complain about this measure or that measure, but most people would say well, look, we'll take the floating price. The price has fallen around the world. That wasn't necessarily predicted two years ago. We'll take the floating price and we recognise that it means adjustments elsewhere.
SPEERS:
You said you'll have the full package soon. Will the Schoolkids Bonus stay?
BOWEN:
I'm not ruling in or out this package, but I can tell you, David, I can tell you this - the Schoolkids Bonus is a very important measure, it's very important to the Government, and it will remain very important to the Government.
SPEERS:
Alright. What about the $10 billion Clean Energy Finance Corporation?
BOWEN:
I'm not going to rule in today, David.
SPEERS:
Is that important to the Government?
BOWEN:
I didn't come here to make an announcement, with all due respect, I came here to talk you through the policy rationale.
SPEERS:
Alright. What about the impact this is going to have on some renewable energy projects, carbon farming, and the like? They rely on a higher carbon price. When it comes down, do they become a lot more vulnerable, some of these projects and jobs?
BOWEN:
Look, I think industry will adjust and I think the industry generally says a floating price is a good thing. As I said before, we've had various steps as to how we get there, but our response is now that a floating price from 1 July 2014…
SPEERS:
But not everyone will be a winner. There are winners and losers when the carbon price goes up and down.
BOWEN:
Of course, but when you make investment decisions, we're always going to go to a floating price in 2015. We've made the view - taken the view that in light of the economic circumstances, 12 months earlier it would be better.
SPEERS:
The Greens say for this reason, you know, is accusing Labor of being cowards.
BOWEN:
Oh, the Greens, who voted against an emission trading scheme. We could have had an emission trading scheme years ago. They voted against it. We don't take lectures from the Greens.
SPEERS:
Was Julia Gillard too beholden to the Greens in setting this whole thing up?
BOWEN:
Look, I think this is our adjustment to the times, as I say. This is - I've said some things about Coalition agreements with the Greens, and I believe that, but what we're talking about here is our response. New Prime Minister, new Climate Change Minister, new Treasurer, new cabinet, fresh set of eyes looking at these issues, looking at the developments in the economy and saying on all the evidence before us this is the right approach.
SPEERS:
Well, the Greens say if you really have conviction on this you'll bring back Parliament and legislate this change, or are you simply expecting voters to trust you on this?
BOWEN:
When Parliament sits again is a matter for the Prime Minister in terms of when calls the election, but one way or another, we're seeking a mandate for this.
The Greens have their position. That's a position I think is fundamentally wrong and I think their rhetoric yesterday was, you know, very silly when you look at the fact that we are introducing a carbon price. They could have had a carbon price years ago, they chose to play politics with it. We will go to this election, regardless of when the Parliament sits, with this as policy and we'll seek a mandate.
SPEERS:
Are you feeling better about the election looking at the polls?
BOWEN:
Well, of course, I think there's a long way to go, David. Obviously, I think we're very competitive in this election. I think we can win this election, but we have a long way to go.
We are focused on the choice to give to the Australian people. I think the Australian people do want a choice and the choice we're providing them is a positive plan for our economic growth to create good jobs, well-paying jobs, in industries across the board for future generations. We have a positive plan to do that working with industry, working with unions, getting people out of their corners and shouting at each other, working to improve our competitiveness. That is our core task, economically.
We'll be putting that positive plan forward to the people for their decision. The alternative will be some pretty cheap slogans without much substance behind it, a lot of huff and puff and billowing from the Opposition with no concrete plans behind it. They're the choices we'll be putting.
SPEERS:
Well, one plan you still need to put is any change to the asylum seeker issue. We heard this morning from the Customs chief, Michael Pezzullo. He said that border protection resources are stretched at the moment. We have seen another tragedy at sea in recent days. As Treasurer, are you willing to boost resources for border protection?
BOWEN:
They do a very difficult job under very tough circumstances and yes, of course, there's a lot of pressure on them at the moment with all the arrivals that we're seeing. Mike Pezzullo is one of Australia's foremost public servants and a first class officer.
SPEERS:
He knows what he's talking about.
BOWEN:
He knows what he's talking about and anything he says we take seriously, but there's a process, obviously, when an agency says they need more resources, there's a process to go through with their line Minister - Minister Clare - to come forward with a considered plan. That would be the process across the board.
SPEERS:
Treasurer Chris Bowen, we'll leave it there. Thank you.
BOWEN:
Thank you.