HOST:
Hello David.
DAVID BRADBURY:
Good afternoon Howard, how are you?
HOST:
They don't even like this in your own seat. I saw, I listened this morning to national radio and they were polling people in your electorate and bar one person, they all said no they didn't like it. So perhaps you should go there and try and sell them first.
BRADBURY:
We never said that this was going to be the most popular policy that was ever introduced. But, we think it's an important reform and its one that we need to put in place in order to drive investment in clean energy so that we can make our economy stronger in the future…
HOST:
Why is important? Is it to keep the Greens on side? That's the main reason, isn't it?
BRADBURY:
No, it's not. It's important because, I don't think anyone can see the future, 20, 30, 40, 50 years down the track, where as a country we will be able to be as dependent upon fossil fuels as we are today. That's the reality of it. We need to be beginning the process of lessening our dependence on fossil fuels…
HOST:
Hang on, isn't that up to various governments, even state governments, to stop licensing coal-fired power stations. That's still going on.
BRADBURY:
No, it's not. It's about ensuring that we drive investment in those alternatives. And the best way and the most efficient way of doing that is to have a price on carbon pollution, on greenhouse gases…
HOST:
But, David, what incentive is there for those people to stop polluting when you're paying compensation to people who use their goods and services to cover the cost of the increase. All their going to do is increase the prices, knowing their products will be bought using the money that's been paid out in compensation.
BRADBURY:
Well, if you're out there and you're thinking about investing in a new power station today and you were thinking about whether it would be coal-fired power station or it would be a gas-fired power station, bearing in mind that they produce the same amount of electricity, a coal-fired power station will emit three times the greenhouse gases as a gas-fired power station, for the first time you actually have a price incentive to invest in that form of generation that's going to be more favourable to the environment in the longer term…
HOST:
All the government has to say is it won't licence these places.
BRADBURY:
Well, I guess if we wait for state governments to take those sorts of actions we will be waiting for the cows to come home. I know in Western Australia, with electricity prices having increased by 57 per cent in the last three years, but somehow I don't think that any of that was as a result of the carbon price…
HOST:
Well, the next ten per cent will be.
BRADBURY:
Well, less than 10 per cent. And these will be the first increases where there's been any assistance to households, I make that point. Those other 57 per cent increases, I don't remember too many people sticking their hand up at the state government level being prepared to provide assistance to households through the 57 per cent…
HOST:
We have lambasted them for that, don't worry about it.
BRADBURY:
The reality that if we want to try and make sure we play our part, as part of the global effort, to reduce greenhouse gas emissions and to tackle climate change, the cheapest and most efficient, most effective way of reducing greenhouse gas emissions is by putting a market-based price, a price. What that means is that the more you pollute, the more you pay. Now that is the only way you can really drive and put in place an incentive for the big polluters to avoid. Now, I know you said "well, they'll just pay more and they'll pass it on"…
HOST:
[inaudible] people have been compensated by you, billions of dollars' worth.
BRADBURY:
I don't know a business out there, that if they're presented with two options; one option, to lower their costs, or another to absorb higher costs, then I don't know a business that will go down the high cost road. The reality is that many businesses, many of them big polluters, the big generators, they have many opportunities to reduce their emissions, but the reality is that at the moment it costs them something to do that. Now, if you want to retrofit your power station to make it more efficient, well if that just costs you money to do that, there's no benefit in doing that. But if there's a carbon price in place, then there are actually consequences in being inefficient, in [inaudible]…
HOST:
Governments can play a bigger stake here, they could shut all the coal mines down and they could not licence any more coal fired power stations. Wouldn't that have a dramatic effect?
BRADBURY:
It would have a dramatic effect.
HOST:
But you don't want to take on the coal unions.
BRADBURY:
You've also got to manage issues like energy supply, Howard. And that's why…
HOST:
We've got gas coming out our ears here.
BRADBURY:
You've got to make sure that all that energy is coming on line at the appropriate time. The reality is, the best way for this to occur is to put in place a market mechanism. Now, governments can step in and they can start picking winners and say we think gas is better or they can say we think solar's better, or wind is better. But in the end, I'll guarantee you one thing, Howard, that if you leave it up to the ingenuity of the private sector compared to the dead hand of government trying to work out who the best and most efficient proprietor might be, then the private sector has a much better history of allocating resources to the place where it is going to get the best result.
HOST:
David, how do you know, how do you absolutely know and can guarantee that compensation you've offered to middle and low income earners is going to cover the costs, the increased costs. You don't know that yet, do you?
BRADBURY:
Well…
HOST:
You've just taken a punt, haven't you?
BRADBURY:
It's all based on very detailed modelling…
HOST:
By Treasury, they've got it wrong before.
BRADBURY:
Ok, let's have a look at Treasury. Treasury were the same people that costed the impacts of the GST and they actually got it pretty close to the mark. I'll just make this point, Howard, that when that was introduced, the overall impact on prices was 2.5 per cent, it is estimated to be less than 1 per cent with this, 0.7 per cent. Now, we went through the GST, we survived it, there were lots of people unhappy about it. There are still people that are unhappy about it. But when you make difficult reforms, the sorts of the reforms that I tell you, there are plenty of other countries in the world that defer taking hard decisions like this, but you defer taking the hard decisions and they only get harder down the track and the consequences of not acting sooner in a more judicious way end up coming back to bite you.
HOST:
Ok, we've had a lot of television grabs and that sort of thing, Wayne Swan holding cabbages and all that sort of stuff on the weekend, but we will really start to know the impact in about a month or so, do you reckon your polls will have improved by then? Do you reckon people will realise that it is only a damp squid? And that your polls will recover? 'Cause they need to go otherwise you're going to get wiped off the planet, aren't you?
BRADBURY:
The election is due towards the end of next year. The media seem a lot more interested in the polls that most of the members of the Government. [inaudible]…
HOST:
Well you must be interested in the fact of how badly you're going at the moment?
BRADBURY:
Of course, we take a keen interest in [inaudible]…
HOST:
Your own party's do polls. What are they showing?
BRADBURY:
They don't do nearly as much polling as I suspect Newspoll and AC Nielsen do [inaudible]…
HOST:
What I'm saying is you would concede you are way behind at the moment. Would you still be way behind in a month's time?
BRADBURY:
I guess we'll have to wait and see. But what we're now doing is following through a reform that we think is in the best interests of the country. People will judge us based on that.
HOST:
Thank you David.