Transcripts

Warren Truss:  Good morning.

 

Peter Van Onselen:  Can I just ask you off the bat, there was an article yesterday in Fairfax Papers where Michael Kiely the chair of the Carbon Farming and Traders Association basically pointed out that he doesn’t think that the modelling by your side of politics for soil carbon has a high enough price attached to it.  You’re expecting the price to between $8 and $10 a tonne.  He’s saying that anything less than $25 a tonne wouldn’t be acceptable.

 

Warren Truss:  Well ours is a market related scheme and so whatever carbon abatement schemes are the lowest cost to deliver the best benefit will be those that we will fund.  So use of carbon in soils is one mechanism we propose to use.  I am sure that it will be one of the measures that will with scientific advances and new technology will be widely accepted, but if it’s not the most economic way of achieving the results well then we’ll use other technologies.

 

Paul Kelly:  If one looks at the Coalition scheme, Mr Truss, there are many people who think that it’s not possible to reach the minus 5% target under the Coalition scheme.  Are you prepared to modify and change your scheme and in fact spend more money on it in order to get to the 5% target?

 

Warren Truss:  Well our scheme is already very flexible.  It doesn’t mandate particular technologies or particular routes to achieving that objective.  We’re indicating there’s a budget available, we’ll be funding, it will not add to the costs of Australian industry, it will not make us uncompetitive with people around the world, it will not put Australians out of work and we will use whatever technologies achieve the best results for the lowest price.  So we’re confident of achieving that objective.

 

Paul Kelly:  But just on that point, is the 5% target a non-negotiable target?  Are you prepared to do whatever’s required to get there?

 

Warren Truss:  Well we’ve committed to achieving that 5% target and we believe we presented a comprehensive plan to the people of Australia at the last election.  We haven’t walked away from our plan.  That’s the plan that we intend to adopt to achieve that objective.

 

Paul Kelly:  What about conditions in the rest of the world?  I mean we see at the moment very substantial economic difficulties in both Europe and the United States.  Will you make your target conditional if in fact we see that there’s trouble in the international economy and global progress is not as strong as anticipated in terms of emissions reductions?

 

Warren Truss:  Well it’s quite clear as you said in the introduction that the rest of the world is not moving towards any kind of carbon tax.  The tax that Julia Gillard has announced is by far the harshest carbon tax anywhere in the world.  It’ll only take three months from the Australian tax to raise the same amount of money as the Europeans have collected since their scheme began 5½ years ago.  The average European is paying $1 per person.  Our scheme’s going to work out at $400 a person when it starts in the first year and of course the numbers keep going up after that.  So certainly there’s no appetite anywhere in the world to take action in relation to implementing taxes or carbon schemes of this nature.  But our scheme will stand on its own and will deliver benefits to our economy irrespective of whether or not there is a global move towards reducing Co2 emissions.  Just by improving the fertility of our soils for instance, by cleaning up power stations, by planting trees in appropriate places, by making our buildings more energy efficient.  All those sort of things have benefits irrespective of what the rest of the world might do.

 

Steve Lewis:  Warren Truss, Tony Abbott has been talking up the so called nervous nellies in the Labor Caucus suggesting that one, two or more might cross the floor and vote with you against the carbon tax.  That’s really a nonsense isn’t it?  Isn’t the reality that this carbon tax will get through the House of Representatives, will get through the Senate and that if the Coalition wins the next election you will inherit the carbon tax?

 

Warren Truss:  Well if we inherit a carbon tax, we’ll repeal it.  We made that absolutely clear.

 

Steve Lewis:  You won’t have the numbers to repeal it.

 

Warren Truss:  We do not support a carbon tax, we do not support imposing these impositions on Australian industry.  We want a competitive country.  We’re prepared to work in concert with the rest of the world to achieve a better environment but we’re not prepared to sacrifice Australian industry to make our factories, our food producers, our industry less competitive with people around the world who are doing absolutely nothing.

 

Steve Lewis:  But by the time of the next election, Warren Truss . . .

 

Warren Truss:   That won’t do anything for the environment either because if in fact no-one else is acting, then our reductions in emissions will simply result in increased emissions in other parts of the world.

 

Steve Lewis:  But by the time of the next election, the carbon tax would have been in place around about 12 months.  Businesses, small businesses, large businesses would have their systems in place to accommodate those carbon reductions.  Reality is you’re not going to be able to repeal it.  You won’t have the numbers in the Senate certainly.

 

Warren Truss:  Well we don’t know when the next election is held.  What is absolutely clear is that the Australian public feel cheated, Julia Gillard does not have a mandate to implement this tax and she ought to have an election now.  Now if in fact you’re right and she runs her full term in spite of the dishonesty, in spite of the deceit, well then in fact we will have ways of unwinding the tax, even if we don’t have the numbers in the Senate.  Tony Abbott has even referred to the possibility of if we can’t do it in more routine and orderly ways, that we might have to have a double dissolution but we will not be supporting a carbon tax, we’re opposed to it and when we come to office it’ll cease to exist.

 

Paul Kelly:  What is the position of the National Party in relation to the Government’s new commitment by 2050 to cut emissions by 80%?

 

Warren Truss:  Well clearly that’s going to have an even greater impact on the Australian economy and everyone who lives and works here.  If we’re the only country in the world that’s adopting targets like that, that just means Australians are out of work. What it does mean is that the cost of doing everything in this country will be higher.  You know for instance under Labor’s tax if you buy an imported car from Europe or Japan or some other place, you won’t be paying the carbon tax, you don’t of course pay their luxuries car tax or their sales tax, but if you buy a Holden or a Falcon or even a hybrid Toyota, you’ll be paying the carbon tax.  That doesn’t make any sense.  If you buy Thai pineapples or New Zealand butter or Brazilian concentrate, you won’t be paying the tax, but if you buy a product of Australia, you will.  Now all of that sort of thing is unfair.  It’s seen by the Australian people to be unfair and it’s a recipe for the destruction of the Australian economy.

 

Paul Kelly:  Well can I assume from that answer then that the National Party would oppose that 80% target?

 

Warren Truss:  We will oppose Australia moving way beyond the pace of the rest of the world.  That just makes no sense, it’ll do nothing for the environment.  We emit after all only 1.4% of global emissions and therefore whatever we do by ourselves will make no difference to the climate.  You know Professor Flannery said that and the Government’s own experts have been telling them that.  We cannot save the polar bears by ourselves.  We will not alter the temperature of the globe one iota by what we do.

 

Peter Van Onselen:  Mr Truss can . . .

 

Warren Truss:  There must be global action, we’re prepared to be a part of global action but to put Australia way out of step with the rest of the world simply hurts Australians and disadvantages us by comparison with other countries.

 

Peter Van Onselen:  In the context of what you’re talking about, 1% of global emissions, we’re talking about a 5% cut by 2020, if it is so small and on the day that the carbon package was released Tony Abbott poked fun at the size of that target which is a bipartisan target, he did poke fun at it in the context of emission increases in places like India and China, if it is such a small goal to achieve, why is the Coalition prepared over the next ten years to spend $10 billion on it?

 

Warren Truss:  Well because we do recognise that we want to be a part of any kind of global plan and we’re prepared to demonstrate leadership but we’re not prepared to be so far out in front of the rest of the world that we just hurt ourselves.  That makes no sense.  You know Labor’s going to collect a $9 billion tax in the first year and yet at the end of it, they’re still going to have a $7 billion black hole.  It’s typical Labor piece of financial management.  Collect bigger taxes and end up with more debt.  We’re going to end up under their scheme buying emissions permits from the rest of the world for quite dodgy schemes in some instances.  None of that makes any sense and what’s worse, it delivers absolutely no reductions in Co2 emissions.

 

Peter Van Onselen:  Mr Truss you were a minister in the Howard Government, you understand how the realities of costings and so forth can move considerable as modelling assumptions change.  Now I guess my point on that is what is the moveable option here?  Is it the 5% target and not reaching it if the money that you’ve allocated doesn’t get you there or if you can’t get there are you prepared to up the amount of money being allocated to direct action?  Which one are you prepared to compromise on if necessary?

 

Warren Truss:  Well you’re right to say that the modelling depends entirely on the information fed in.  That’s why Australians are so uncomfortable about a suggestion that they’re going to be 20 cents better off.  Now a Government that can’t get it’s billions right is not going to get it’s 20 cents right and so there is considerable concern that the Government’s modelling much of which has not even been released and some of it’s been done on the wrong assumptions about the carbon price is completely unreliable.  Now when we come to office we’ll have to assess the situation as it is.  We are committed to our program.  We believe that they will achieve the objectives that we have indicated because it’s a flexible scheme, because it’s prepared to be innovative and prepared to accept a range of different technologies.  We believe it’s got the flexibility to deliver the results.

 

Peter Van Onselen:  But if it can’t deliver those results given that yourself and Tony Abbott and others have made it clear that you’re not prepared to spend 1 cent more than the $10 billion figure over the next ten years.  Isn’t it the case that if it can’t get there, you’re prepared to let the 5% target by 2020 be the thing that falls by the wayside?

 

Warren Truss:  You’re making a whole lot of assumptions that I simply don’t accept.  We’ve carefully prepared our plan.  It’s been subject to scrutiny by the Australian electors and by the voters and by the public now for more than three years.  The reality is that we believe it can achieve its objectives and it can do it without creating the pain that’s built into the Government’s scheme.

 

Steve Lewis:  Warren Truss, the Government’s advertising campaign kicks off today, tonight on prime time television, one of the take outs from this week appears to be that Julia Gillard when she was able to directly address concerns about the carbon tax appeared to be able to turn around some wavering voters.  We saw that particularly with the Sky News Courier Mail forum in Brisbane on Wednesday where the numbers of people supporting the carbon tax appeared to increase at the end of the forum as opposed to the beginning of the forum.  Is it the risk for the opposition that the Government will be able to turn around public opinion with the support of this taxpayer funded campaign kicking off today?

 

Warren Truss:  Well I like most of my colleagues have spent the last week travelling around the countryside talking to people.  I have met employers and employees, I’ve met big business and small business, I’ve met retailers, I’ve met retirees, I’ve met people in the tourism industry and I can tell you Julia Gillard is not breaking through with her message.  You know this is a bad tax and therefore it’s hard to sell.  You know you’ve got a dodgy product, you’ve got a salesman who’s lied to you and now she’s having trouble selling the message and I’m not in the least bit surprised.  Now the advertising campaign, that’s another lie.  You know Labor said they wouldn’t do this kind of thing and they’re at the first available opportunity we’re going to get a $25 million promotional campaign.  Now if the campaign was genuinely about explaining to people how much it’s going to hurt, how much their cost of living is going to go up, which mines are going to close, how you’re going to deal with the thousands of bureaucrats that are going to be employed to run this scheme, how your compliance costs are going to go up, if it was that kind of a technical education campaign, it would be justified.  But this is political propaganda using the same slogans that the Prime Minister has been flogging around the country day after day.  Now if she can’t make some impact with an audience with a half hour one to one session, how would she ever hope to sell it to the public, the broader public, who will never see her one to one.

 

Paul Kelly:  What’s your judgment Mr Truss about the mood of rural and regional Australia?  I mean we saw on television last week a deep degree of community angst or anger about this carbon pricing policy.  What’s your assessment of the mood in the communities that you’ve visited?

 

Warren Truss:  Look regional communities are particularly concerned about this tax because they’ll suffer more than anyone else.  They know that the increased price of fuel which is going to add half a billion dollars to the cost of the trucking industry when it comes in in just a couple of years will add to the cost of everything they do in regional communities.  Our cost of living will go up and our cost of getting our products to market will go up.  They know that most of the jobs to be lost from this tax are in regional communities.  Now we have the mines, we have the power stations that’ll close, we have the aluminium refineries and the other industry factories, the food processing sector.  All of those are in regional communities.  We’ve got the Greens saying they’re quite happy for whole rural towns to close down and in fact there is deep concern and anxiety about the future of so many rural towns.  If we lose even 16 coal mines and of course the Greens want the whole lot of them to close, then that’s going to have a huge impact on the royalties revenue that the States will receive, the capacity to provide services outside the capital cities, the cost of building roads is going to go up substantially as a result of this tax.  Now all those sort of things are going to disadvantage regional communities in particular and there’s a great deal of anxiety that once again a city Government is treating the regional community with contempt.  Let me also say that workers in local communities are upset that their trade union leaders in the capital cities seem to be backing this scheme, even though workers’ wages under the Government’s own modelling are supposed to go down and that there’ll be tens of thousands of jobs lost and yet we have unions out there seemingly more interested in the political careers of their leaders backing a scheme that’s clearly going to hurt their own members.

 

Anabel Hepworth:  Mr Truss, you spoke then about miners and also power stations as those who are due to be slugged by the carbon tax.  Given that Julia Gillard’s campaign is going to start tonight on selling the carbon tax to the Australian populous, what support do you have from the business community and do you have any business leaders who are prepared to stake their reputations on your direct action plan?  Can you give us any names of those who are prepared to support your policy over the Government’s?

 

Warren Truss:  Well I am pleased that there are some people in the business community who are going to be prepared to back their concerns with putting some money forward to try and match some of the Government advertising campaign.  Of course the Governments have got the whole resources of the taxpayers at their disposal and they’ll be able to spend whatever they choose.  But it’s a been bit disappointing from our sector to sort of talk to industries who tell us that their own costs are going to go through the roof but they’re unwilling to come out because they don’t want to spook their shareholders or their bankers.  Now they’ve got to try and keep their businesses running in spite of all the negative publicity Australia’s getting around the world about this being a country where sovereign risk is now an issue and where the rules are being changed as they go.  So the reality is that the business community is concerned, many of them have quite serious war stories that they’ve got to tell about the impact of this tax and I think it’s important that they speak out about it.  You know I went to a factory during this last week where there’s going to be an instant increase in their electricity bill to run their freezers and this is an average sized abattoir of about $250,000 a year, a quarter of a million dollars.  But some of these places are also worried that they may trip over into the 25,000 tonne trigger to have to buy carbon permits.  Now that’s a concern as well.  If you’ve got a factory with 24,500 tonnes of emissions, you don’t have to pay or buy these permits, but if you expand just a tiny little bit then you’ve got an immediate drop dead figure of half a million dollars to go out and buy permits for those first 24,000.  So all those sort of things are causing problems for business.

 

Steve Lewis:  Isn’t that exactly why pricing carbon creates the disincentive for carbon emissions to increase?  I mean that’s the whole point of the scheme isn’t it?

 

Warren Truss:  Well if you’re going to sort of say to factories no-one in this country should ever expand, no new factory should ever open, well then in fact you’ve got a recipe for economic disaster.  The reality is if we are trying to drive our business into bankruptcy, trying to get them to move to other countries, yeah that’ll reduce our emissions alright.  They’ll go down because the jobs will be lost and we won’t be doing anything in this country.  But the emissions will go up in other parts of the world and so the climate and the planet will be the worse for it.

 

Steve Lewis:  Mr Truss wearing your National’s hat, what are the rural industries that you believe are most vulnerable?  Putting aside coal, what about rural abattoirs, dairy, concerns that dairy will be hit and won’t be able to pass on the costs of the carbon tax?  What do you think are some of the industries in rural Australia most vulnerable from a carbon tax and do you think it’s inevitable there will be job losses as a result and can you pinpoint where you think those will be?

 

Warren Truss:  Well it’s inevitable there’ll be job losses because every Australian industry will be less competitive.  People who import from other parts of the world will be importing products that don’t have the carbon tax included in their costs.  If you move sugar from Mackay to Melbourne by ship as it happens at the present time, you’ll have to pay carbon tax but if you import it from Thailand you won’t and all these sort of things are going to add up.  Now I think there’ll be particular pressure in the food processing sector, much of which faces cost disadvantages now with other parts of the world but the food processing sector in New Zealand for instance which has a carbon tax is not covered.  So an Australian dairy factory which competes directly with New Zealand on export markets will be paying a significant tax that New Zealand competitors won’t.  So in Australia as well, if you buy New Zealand butter it won’t have the carbon tax in it but if you buy the Australian product, it will.  If you look even at grain growing and the bulk commodities that we export, the extra costs of transport are going to make a difference.  Now we have strategic disadvantages in some of these commodities and that’ll be accentuated.  The cost of inputs will go up.  Fertiliser and chemicals and other things that are essential to running a farm, all that’s going to be more expensive and that will result in job losses.  It’s interesting to note that in the Government’s modelling they do suggest that some areas of farming may be actually better off under their carbon tax but that’s predicated on wages dropping in Australia.  That the cost of labour will be lower than it is today.  Now I don’t think the Trade Union Movement is telling their members that the Government hopes to make industry survive in Australia by reducing wages.

 

Peter Van Onselen:  Alright Warren Truss, leader of the National Party, we appreciate you joining us on Australian Agenda.  Thanks very much for your company.

 

Warren Truss:  It’s been a pleasure.