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Sky News Australian Agenda Interview with Greg Hunt 1 July 2012

Interview with Greg Hunt, Shadow Climate Change Spokesperson Australian Agenda program, 1/7/12

Peter van Onselen: Boat people were certainly the issue of the week, and it will continue to be a standoff, but the issue of the month is the introduction of the carbon tax, and with that, I guess, as well the introduction of the mining tax, which has been somewhat forgotten in the debate. But we're joined to talk primarily about the introduction of the carbon price by the Shadow Climate Change Spokesperson, Greg Hunt, who joins us out of our Melbourne studio. Mr Hunt, thanks for your company. Greg Hunt: Good morning, Peter. Peter van Onselen: Should I be saying congratulations to you? You did your honours dissertation making the point that taxing the big polluters was a good thing, Now you're on the other side of the political debate, but it's not often that political leaders in this country can see their honours dissertation implemented years later. Greg Hunt: Well, actually, with great respect, you're wrong. The answer is very simple. My work was all about the right and the wrong economic instruments for dealing with pollution - in fact, it was trade waste at the time - and it's precisely because of that work that taxing electricity is a fundamentally ineffective mechanism as well as a fundamentally economically destructive mechanism. So, for me, that work confirms that an electricity tax is not only a betrayal of the
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Prime Minister's pre-election promise, but it's also fundamentally ineffective. It hurts Australia's economy, but it doesn't help global emissions. So that's the enormous issue here, this tax is a breach of the election promise. Prices will go up. It won't help reduce emissions. Today, of all days, the Prime Minister should use 1 July to apologise to the Australian people for breaching her preelection iron-clad promise. Paul Kelly: On that point, Mr Hunt, the Coalition has pledged to repeal the tax. How many days will it take you from the time Parliament sits - how many days will it take you to repeal the tax? Greg Hunt: Sure. Well, we will write to the secretary of the Prime Minister's Department on day one, if we're elected. We will seek the department and the bureaucracy to begin the process of drafting the legislation. We will introduce legislation in week one as the first legislative item. And we have said previously, and I have said previously, we expect that we can do this within six months, and we'll do it with or without the Labor Party. If they don't respect the mandate from what will be absolutely a referendum on the carbon tax, then we'll go immediately to a double dissolution and joint sitting, but we expect that they will be mugged by political reality and they will have to listen to the Australian people. Paul Kelly: Will that bill also abolish the compensation? Greg Hunt: We'll make a detailed statement after the next budget or before the election, if that occurs before the next budget, on a process of tax cuts --

Paul Kelly:

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But surely you've thought this through. But just wait a minute, this is fundamental to the carbon tax. Are you saying that you haven't sorted out yet when you'll abolish the compensation? I mean, presumably you will abolish that at the same time as you abolish the tax. Greg Hunt: No, our first order of business is to deal directly with the tax itself, and prior to the election, once the final budget position is clear, we know what we'll do, but we will make our position crystal clear. Paul Kelly: So you have no timetable for the compensation? Greg Hunt: Our position is tax cuts without a carbon tax. Paul Kelly: So you have no timetable for the abolition of the compensation? Greg Hunt: Well, what we will do is we will set out exactly the circumstances of the tax cuts without a carbon tax. But I think it's important to make this point: our guarantee is that families will be better off, not worse off, that seniors will be better off, not worse off, because the tax which comes in today is not just a once-off, flat-rate electricity tax, it goes up and up and up and it's going to hit everything you do, whether it's turning on the lights, turning on the heating, in summer using the cooling. Matthew Franklin: Minister, if I could just interrupt, surely the compensation and the repeal of the tax are linked, but if we could just move on to the politics of what's happening today, of course Craig Emerson will be in Whyalla today saying that the town is still on the face of the map. Labor will run hard for the next week about the exaggerations that they say that Tony Abbott has made about the impact of the tax. Do you acknowledge that your leader went too far and do you think that that is damaging to your argument?
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Greg Hunt: With respect, no. The $64 million question for the ALP is why they agreed with Mr Abbott about Whyalla. They gave a $64 million bailout to OneSteel, which owns the Whyalla SteelWorks. That's just over three years of the tax, so they've had to wipe the tax out for OneSteel, and therefore the Whyalla SteelWorks, precisely because they recognised that it would have effectively shut down the steelworks. Matthew Franklin: It wouldn't have wiped the town off the face of the map, though, would it? Greg Hunt: The real question for the Prime Minister and for Craig Emerson is why would you have given OneSteel and the Whyalla SteelWorks, through them, $64 million or more than three years worth of OneSteel's carbon tax if you didn't think that the carbon tax was going to have a completely destructive effect on that steelworks? Matthew Franklin: But on my question, sir, what I'm asking is is the Labor Party's suggestion that you guys have been exaggerating actually going to devalue your arguments this week, or is it your view that the Prime Minister's - what you describe as the breach of her pre-election promise is the key thing in voters' minds, so it doesn't matter what Labor says this week? Greg Hunt: I think there are two things. Firstly, there is a deep profound sense that the Prime Minister's broken promise was a betrayal of the high office of Prime Minister and a breach of the democratic process. The second thing is Australians know they're the ones that pay. They pay in two ways. They pay through higher electricity and gas prices; they also pay through the lost opportunity in terms of jobs in manufacturing, in value adding, because we have a reverse tariff. We've had to see a bailout on Friday of Geelong in terms of two years of carbon tax payments for two years of carbon tax bills, a $40 million bailout of Geelong; a $50 million bailout on Friday of the La Trobe Valley, where Energy Bricks was given a number of years worth of
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carbon tax payments as a second bailout in a month for Energy Bricks, and we've already had a bailout of Whyalla. And so you've got to ask what's the point if we're seeing bailouts of the very people they're taxing? The Government knows that if they don't offer these bailouts, the tax will do enormous, profound, permanent industrial damage. Matthew Franklin: Mr Hunt, let's just get down to the point that the Coalition have been making about this all along, the doomsday scenario that the Coalition have been trying to paint in people's minds about the carbon tax. It's now been in operation, I'm assuming, if it came in at midnight, for eight and a half hours. What's the impact been so far? Greg Hunt: Well, for anybody who's watching this program, they will have paid the tax already when they turned on the heating in the morning. They will have paid the tax when they opened the fridge door. They'll be paying the tax to watch this television program, unless they've got a pedal TV. So it's absolutely clear that the tax is an electricity tax, and it starts today, not finishes today. Mr Combet this morning tried to say that the sun had come up. Well, it has come up, but everything has come up in price. That's what the tax does. It starts today, and today is the beginning of the rest of your life in terms of the carbon tax. It starts at $23, it hits $37, and, on the Government's own modelling, it climbs by 2050 to $350. It keeps going up and, therefore, it's a massive reverse tariff on Australia's manufacturing and a massive impost on Australian families that will increase each year, every year, forever.

Matthew Franklin: Mr Hunt, Can I just ask you about the political rhetoric here, though, because it strikes me that, you know, your average punter is looking at this and you're on a winner - they don't like the fact that the Prime Minister broke her word, they don't like the fact that there is a carbon tax at all - but the one thing that you can do is overegg the pudding by making out like it's just going to - as the rhetoric has said, the sky will fall in, Whyalla will be wiped off the map, it's a massive tax that's going to affect everything you do in a massive,
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profound, significant way. Like, at the end of the day, if people don't like it, you win almost no matter what with the introduction of this. Why overcook it? Greg Hunt: Well, I don't think we are. What we're saying is that it begins today, it squeezes tighter and tighter. And there are really three ways to it: firstly, electricity prices on day one; secondly, the industrial impact, which gets tighter and tighter, and that's obviously why the Government is engaged in bailouts of Whyalla, of Geelong, of the La Trobe Valley; and then, thirdly, there's an impact on investment. So it goes through all of these different phases, and it progressively builds up. I think it's important to understand that, on the Government's own analysis, by 2050 each year we'll not only have a carbon tax which is about 1.5% of the economy, we'll have another 1.5% being purchased in foreign carbon credits, and that's just shy of Australia's defence budget at the moment. So we'll be spending almost two defence budgets, one on the carbon tax, one on buying foreign carbon credits, and that's a model which anybody would look at and say it's not real-world, it's not sustainable and it's not going to happen. Paul Kelly: Let's just go to the question of industry compensation, Mr Hunt. How much money will the Coalition save by abolishing industry compensation for carbon pricing? Greg Hunt: Well, we think that, straight up, there's about $9.5 billion in what they call the Jobs and Competitiveness Package, which everybody else knows is a bailout package. So that's an enormous amount of saving straight up. There's another $10 billion off budget in terms of not proceeding with the Clean Energy Finance Corporation, which is tasked to invest in those renewable energy projects which the market has rejected, and so that is - that's an investment mandate which not even Warren Buffett could make work. And our approach is to say that not only is it dangerous, but the ludicrous element is we have a 20% renewable energy target before those $10 billion and a 20% renewable energy target after those $10 billion, and that's a lot of money for no impact. Paul Kelly:
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Okay. Now, what's your timetable for the abolition of industry compensation, because presumably this must be tied to the repeal of the tax? Greg Hunt: Well, absolutely. Paul Kelly: So the two do go together, do they? Greg Hunt: The industry compensation and the tax are linked. Now, moneys that have been paid are moneys that have been paid, we're not going to try and claw back cash. But what we are saying is this, that if you are removing the tax liability, you are certainly in a position where you don't have to pay the compensation to industry, which is part of that process. Matthew Franklin: Aren't you just creating a bigger headache for businesses and industry that have made investment decisions based around the introduction of the carbon tax? By the time that you end up being able to repeal this tax, we probably will be in the position of going to a floating price anyway, where you presume it would go down. What do you say to businesses and industry who've made investment decisions based on the Government's current policy, the one that you plan to repeal in 18 months time? Greg Hunt: Well, with respect, I think we have been absolutely clear for well over two years as to exactly what we'll do. Now, what does that mean in practice? It means the next election gives the Australian people a chance to decide for what I believe will be the next 20 years as to Australia's approach. My view - and, again, it's only my view - is that the next election will be absolutely determinative of carbon tax or no carbon tax, and that is the real certainty which we will give business. And as one senior leader said to me, "I would much prefer waiting until the next election to know whether I have to pay the carbon tax than to know
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I've got a life sentence of carbon tax from this moment going forwards". Matthew Franklin: Mr Hunt, can I just take you briefly to the issue of asylum seeker boats? Greg Hunt: Sure, of course. Matthew Franklin: Do you think that the parliament's failure to be able to get an outcome, to get any forward progress is - what does it say about the utility of minority government and the situation that we've got in Australia at the moment and what do you say to your electors who pull you up on the street and say, "Can't you guys just work something out?" Greg Hunt: Well, firstly, I think, to take Paul's opening remarks, the Prime Minister has lost control of the borders, she's lost control of the Parliament, and now she's even lost control of the policy process. So the minority government is clearly not working. The Government seems to claim it's working. Well, the Prime Minister has a chance. This is a critical, important issue. We are where we are precisely because they dismantled policies which worked. So, going forwards, the Prime Minister has often said, "I work with the Parliament I've got". Well, our message to the Prime Minister is just that, "Work with the parliament you've got. If you're willing to make changes and do things in order to accommodate other items, work now with the Parliament you've got." We have moved an enormous way this week to make real and critical changes, and I want a solution which is going to, firstly, stop the terrible trade in people and therefore the drownings at sea, of which we warned for so long, and, secondly, provide genuine protection for those who are in our care and custody, and what we're worried about is that Malaysia will do neither, but we believe that, with the compromises we've proposed, we can do both. Peter van Onselen:

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All right, Greg Hunt, Shadow Climate Change Spokesperson, as always, we appreciate you joining us on this episode of Australian Agenda. Thank you. .

Greg Hunt: Thanks very much, guys.

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