11-December-2008
Portfolio Media Releases, Workplace Relations, Emissions Trading Scheme
Subjects: Unemployment; ETS.
MALCOLM TURNBULL: Now we’ve had the very unfortunate news that one of our global mining giants, Rio Tinto, has been forced to shed thousands of jobs as a consequence of the global financial crisis and the economic slowdown around the world. And we hope that for the benefit of all its employees Rio Tinto is able to clarify where those job losses are going to be, and so that those employees whose jobs are not at risk will get the assurance of continued employment. Rio employs a lot of Australians, as we all know.
We’ve also seen the recent job figures. That’s shown that about 8,000 Australians lost their jobs last month and the number of new jobs fell by 15,000. The key priority for the Government, and for all of us, this year and next year and indeed every year, but particularly now, is jobs, jobs, jobs. Every aspect of government policy, every element, every program, every priority must be focused on jobs. That is the single greatest priority government faces today. And that is what we are focused on. And that is why we are concerned that the Government not rush into an emissions trading scheme which will put jobs at risk without environmental gain. We are committed to Australia having a responsible and effective response to climate change – an effective environmental response to climate change but it must also be economically responsible. If we put a heavy carbon tax on our industries that are trade exposed and there is no comparable tax on the industries in the countries with which they compete, we will simply end up exporting the emissions and exporting the jobs. And that is why we have said the design of the emissions trading scheme should not be finalised until we know what the rest of the world is likely to do as a consequence of the Copenhagen summit next year and, above all, when we know what the new American administration under President Obama will be doing. We have to go into this with our eyes open, fully informed. We must get the design right. And that is why we’ve said starting it in 2010 – which, of course, means finalising the design next year – is too soon. Now I notice that Rio Tinto itself has made this point about the very severe economic damage that can come to jobs and to industry from a rushed ETS. And we’ve seen the Australian Industry Group today, through Heather Ridout, making exactly the same point in the newspapers. So we are committed to an effective environmental response to the challenge of climate change but it must be economically responsible as well. There is no point exporting the emissions and the jobs, because otherwise the world will just keep getting warmer and we will start getting a lot poorer.
ANDREW ROBB: Thanks. If I could just reinforce and add to the comments of Malcolm Turnbull’s. The Prime Minister said some six or eight weeks ago that the world has changed as we know it. Well if he really believes that then it would be quite irresponsible for the Government not to take serious account of the impact of that financial meltdown on the real economy. The predictions are dire, and it’s very important that the design of any emissions trading scheme captures and is sensitive to the impact of that financial meltdown. Now what we saw with the Treasury modelling was no account taken of two things: one, the impact of the financial meltdown on industries with the timetable that the Rudd Government had for its emissions trading scheme and, importantly and very worryingly, the Treasury modelling also made no account of not being able to do a deal with the rest of the world. Now it’s quite obvious, if Australia is in there by itself with no deal done with the rest of the world, we’ve got a problem. We’ll be exporting jobs and we’ll be exporting emissions. The climate won’t improve, and in fact it will get worse, and we’ll be exporting Australian jobs. And it is critical that the Government take account of what’s going on out there in the real world. If the Government is not mugged by reality certainly the rest of Australia is. And industries are very concerned about what’s happening. You’ve seen this morning industry groups, one after the other, lining up advising the Government to defer the introduction. You’ve seen the Australian Workers Union, in the strongest possible terms, advising the Australian Government that thousands of jobs are at stake if they don’t revise the timetable. We’ve said for months now that to rush this emissions trading scheme for a political objective, an ideological objective, is reckless in the extreme and all it will do is create great uncertainty for business and do untold damage potentially to jobs around the country. Now, Penny Wong is currently in Poland with negotiations, international negotiations. The real question is for Penny Wong, what is she doing in the negotiations to protect Australian jobs whilst promoting a global response to climate change? The trouble with Penny Wong is, every time she talks about climate change she never talks about jobs. And yet the critical issue is that climate change is best tackled from a position of economic strength.
We are stronger as a country than the rest of the world because of the strong economic management now for over a decade. We’ve got to protect that strength because it will give us the capability to in fact do something about the climate. It’s no different than for a family. If you want to put a solar panel on the roof and you haven’t got a job and you haven’t got any money in the bank, you can’t do it. You can’t put a water tank at home. And there’s no difference for the economy. If we haven’t got people in jobs and we haven’t got money in the bank, we can’t properly tackle the great challenge of climate change.
QUESTION: What is your timetable for an emissions trading scheme? And what would you ideally like to see?
ANDREW ROBB: As we’ve stated for some time now and took to the last election, our very strong preference is for a start-up date in 2012. And that is what we’re aiming for – nearly some four years away – when the design can be properly worked up and when, very importantly, we have some idea what of the rest of the world’s going to do. And that’s critical for any proper design – you have to know what the rest of the world is going to do because there is no Australian solution to climate change, there’s only a global solution. Everyone acknowledges that. So we have to know what is going to happen globally. So 2012 is our preferred date.
QUESTION: What if the world were to come on board with an emissions trading scheme in the meantime and Australia was left on the backfoot and industry found itself on the backfoot because they weren’t able to compete at that level?
ANDREW ROBB: Well, we have said you can’t start one before 2011. Now, that was the advice we got from an expert group that was put together and created the Shergold Report last year, which is Coalition policy. But that report, looking at all the issues of measurement and design and preparation, said it was impossible to properly introduce a scheme before 2011. So we, if we’d been in government, would have been aiming to get a scheme ready for 2011 but the design of that scheme would have been fundamentally influenced by what happens around the rest of the world, with a preference to start in 2012.
MALCOLM TURNBULL: If I could just add to what Andrew said. Everybody, whatever part of the debate they’re in, agrees that climate change needs a global response. It is a global problem. A tonne of CO2 that goes into the atmosphere from Sydney has the same impact as one that goes into the atmosphere from Shanghai or Stockholm or New York. We all understand that. And so that’s why it is vital that we don’t create the really adverse scenario where we put a big cost on Australian industries which do emit CO2, and as a consequence they simply move to countries where this is no carbon tax.
And if you just consider the steel industry as just one example, if BHP… sorry I beg your pardon I’m going back in time. But if BlueScope Steel were to shut down at Port Kembla and the production were to move offshore and we just imported all our steel, we would still use as much steel, there would still be as many emissions from that steel making but it would come from another part of the world. And that is really the point – it’s this question of carbon leakage, exporting the emissions and exporting the jobs. And so ultimately what we have to do is to get effective global action but we have got to know how what we do fits in with what the rest of the world is going to do. And at this stage we don’t have that information and we won’t really have it until the end of next year.
QUESTION: How will what the world decides at these talks in Poland affect your position on a 2012 timetable?
MALCOLM TURNBULL: Well we’ll see. The critical talks… the talks in Poznan are essentially preliminary. The real focus is on Copenhagen at the end of next year. I think everyone understands that the big challenge in the whole global climate change negotiations – and I have represented Australia at these negotiations when I was the Environment Minister – is reaching agreements between the United states and China. The two biggest emitters; the biggest emitter in the developed world, the biggest emitter in the developing world. China is the fastest growing emitter. Many analysts say China has already got the largest amount of emissions. So those two countries, those two giants have got to reach an understanding. Without that we simply are not going to get an effective global response. Now we should get a picture of how that is going to operate by the end of next year because we’ve got a new administration in the US, President Obama who is committed to action on this front, that’s been his policy. We’ve got to see whether he can implement it and of course we have the focus of the Copenhagen talks. So you see our timetable when we were in government was a methodical one and a careful one. So our aim was to finalise the design of a scheme after we had all the necessary information. Mr Rudd for a purely political purpose in the middle of an election said ‘I will start my emissions trading scheme in 2010’. He had no basis for saying he could do that or should do that. It was simply because he wanted to say he was going to start one a year earlier than the Howard Government had proposed. So once again it’s the same challenge we always have with the Rudd Government, it is the old New South Wales Labor spin approach. You know, Kevin comes from Queensland, his politics are rolled gold from New South Wales. Make the big announcement, get the headline and then well, just don’t worry about following up. And he has done this. And making grand announcements about climate change during the election, where is the follow up? No thought given to actually implementing these grand announcements or the consequences of allowing this sort of electoral rhetoric, this sort of political rhetoric to actually guide your economic management.
ANDREW ROBB: It’s of interest what we would do if we were the government and we understand that and it’s important and we have got a very solid position. But what is critical at the moment is that Labor is in power and they proposed to bring in a scheme in 2010 in this term of office. What we are trying to focus on very acutely is the impact of doing that. I have met now in the last eight weeks, since I have had these responsibilities, with 51 companies. And I can say as the impact of the meltdown has progressed and been better understood by these companies, almost a sense of fear has grown in these meetings about how they will physically handle what’s ahead of them over the next year or two in keeping their business afloat, keeping people in jobs, doing what they have to do to maintain the strength and viability of their business. And then to have the prospect of having an emissions trading scheme brought in over the top, so the physical management of the emissions trading scheme and then the great uncertainty that has surrounded how industries will be affected. We’re only 19 months away from its proposed introductory date which is a very short period of time. This whole issue is creating enormous uncertainty. It’s adding to business uncertainty out there in a most profound way. And it is absolutely critical in our view that the Government move away from a politically inspired agenda, look at what’s going on in the real worlds, look at how they can protect jobs in Australia, how they can keep Australian businesses in Australia and how they can then go along and sensibly and responsibly design a scheme and get the scheme right. Don’t just be driven by political expediency.
QUESTION: Can I just ask a quick question on a couple of other things Mr Turnbull? With regard to the unemployment figures, they weren’t quite as bad as had been anticipated. Has the Opposition got a comment on that?
MALCOLM TURNBULL: Well I think the consensus was that they would be at 4.5 and it’s 4.4, so we’re very pleased that unemployment has… we’re always pleased to see that unemployment levels are lower than perhaps might have been expected. We are committed to jobs, jobs, jobs. Nonetheless the economy is clearly slowing, unemployment is a lagging indicator – the impact on employment tends to come after you see earlier indicators such as a slowing in economic activity and GDP. So the focus nonetheless has got to be on jobs and while the jobs figure is not as adverse as many had predicted, the Government must not be complacent about this. We have to all be committed to ensuring that as many Australians stay in jobs and get jobs as possible. The Howard Government was proud of creating over two million jobs. Unemployment was over eight per cent when Labor lost office in 1996 and it was only a little over four per cent, so it nearly halved during the period of the Coalition government. So our side of politics is committed to high employment and committed to jobs. And that has got to be the continuing focus of all of us.
QUESTION: Is it appropriate for the Government to waive the Governor-General’s $190,000 tax bill?
MALCOLM TURNBULL: Well it’s really up to the Government to deal with that. I don’t have the details of that arrangement. I have seen some material in the press but you really should address that to Mr Tanner and let him set out the case for it.
Thank you.