05-May-2009
Portfolio Media Releases, Emissions Trading Scheme
Topics: Rudd Government’s backdown on their ETS.
LEON DELANEY: Shadow Minister responsible for an Emissions Trading Scheme, Andrew Robb, Good Morning
ANDREW ROBB: Good Morning Leon how are you?
LEON DELANEY: Very well thanks, how are you today?
ANDREW ROBB: Very good, very good.
LEON DELANEY: I fully expected the Government to attempt some sort of compromise and included in that compromise would be a delay of the commencement of an Emissions Trading Scheme so I am not terribly surprised but at the same time the Opposition is still refusing to support the amended package. Why is that?
ANDREW ROBB: Well Leon, really I think the Prime Minister, it’s quite a cynical move, I think he’s put it off until after the next election because he knows the scheme will kill Labor’s vote in regional centres because that’s where the tens of thousands of jobs will be lost. Nothing has really changed in the fundamental flaw in this scheme. That’s our problem with it. What it means with this scheme is that Australian companies employing millions of Australians will have to pay a huge tax that none of their competitors will be paying, so their costs will go up and there will be tens of thousands of jobs lost and a lot of investment just won’t happen, so until that is fixed we will not be supporting the scheme.
LEON DELANEY: The indication is that industry, generally, despite having similar concerns about the scheme also want to have certainty and they want to see legislation in place so why are you still suggesting that the legislation itself can be delayed?
ANDREW ROBB: Because it is a flawed scheme. Business needs to understand that as much or better than most. But not certainty in the flawed scheme, they need certainty in the right scheme. And if this is passed now then it will take all the pressure off the Government to get this thing right. Look I say to you Leon, I have been around the country, we will see regional centres, in Gladstone, in Central West Queensland, in the Hunter, in the Illawarra, the Kimberly, down at Whyalla and Geelong, all around the country where all of the big energy centres are, where the big resource centres are, those communities are predicted to shrink by about 20% over the next couple of decades as a result of this scheme. Now that is incomprehensible, that beggars belief. It is all about the design of the scheme; it’s about getting too far ahead of the rest of world. It’s being out there with a scheme which is putting huge taxes on these industries which they can’t pass on because their competitors don’t face this.
LEON DELANEY: On the one hand you are saying these dire consequences would inevitably follow from the introduction of this scheme in its present form but on the other hand you are also calling for a renewed examination by the Productivity Commission to quantify exactly what the impact would be so either you know or you don’t know. So which is it?
ANDREW ROBB: Well the thing is I have been around 75 companies around the country and I have listened and I have looked at their books and I have looked at what it would do to their scheme and what it would do to investment and I know there would be tens of tens of thousands of jobs. Also, the NSW Government commissioned research using the Treasury model, now this was leaked a few weeks ago, and the NSW Government got the Treasury, because they were concerned about the impact of this Scheme, to take the Treasury model, they got another economic group, to take the Treasury model, and work it through, to take it down to regional levels and what they found in that research was that all of those centres that I mentioned to you would shrink by 20% plus as a result of this scheme. Now that work has never been formally released, it was leaked.
The Government has not done this work because it knows that the scheme they have designed, if they are to get these sorts of cuts in emissions that they talk about will cost tens of thousands of jobs if the rest of the world is not involved.
If the rest of the world is involved we haven’t got have a problem Leon.
LEON DELANEY: That is obviously a crucial point isn’t it?
ANDREW ROBB: It is, so we are saying to the Government, you have now delayed it, you have now got time to send to the nature of the scheme off to the Productivity Commission, get an independent assessment of the scheme, some of the alternatives, what would happen if the rest of the world doesn’t engage in the next 10 or 15 or twenty years, they have assumed they would, what if they don’t engage. Analyse it, come back with a result, then put it to the parliament, fix up the scheme, get the design right and then you will see some support.
LEON DELANEY: In terms of getting the rest of the world to commit to being involved, is it important or not for Australia to have its position determined prior to going to Copenhagen.
ANDREW ROBB: Well, there is a lot of over statement here, Leon. The rest of the world is not looking to Australia for how to do all these things. We can have some influence and we can make a constructive contribution. In the end what the United States and China decide to do on the scheme or no scheme will really determine what the world does. We are 1.5% of world emissions, we hardly scratch the surface. Now what China and the US do is all important. We will go to Copenhagen as a country with a firm position as to where the world should head and so we should. And that would be a good thing. We don’t have to have the piece of legislation in place and if that legislation is deeply flawed then the captains of industry from Australia are saying to representatives at Copenhagen that the Australian scheme is going to cost tens of thousands of jobs and be a political nightmare then it will have the perverse affect in Copenhagen.
LEON DELANEY: The changes that have been made extend simply beyond changing the starting date. The Government has increased the level of free permits to emissions trade exposed industries; the Government has suggested that the initial price would be lowered. There are other factors here as well as the change to the start date. Are none of these sufficient to smooth the way?
ANDREW ROBB: They are just tinkering. It is just given for visual effect to sort of imply they have made major concessions. These are just tinkering and we still have 90% of mineral exports, $120 billion worth, will get absolutely zero dollars in compensation, 90% of mineral exports. In a situation like the meat processing industry, $60 million they will pay in permits each year which they will pass on back to cattleman. Teys Brothers in Queensland, $4 million in permits that all they can do is pass back in the price in cattle. They can’t pass back it onto their customers. They export 85% of their meat as you know. So, you have industry after industry which will be paying literally millions of millions of dollars in tax. On the dairy industry, dairy processing, $60 million, that’s about $6-8,000 per dairy farmer. It will be passed back in the price of milk. It will just be a tax on dairy farmers, there’s absolutely nothing they can do to address it. It’s nothing to do with their on farm activities. These are the sort of perverse things that have not come out into the public arena and they are all industries where we are trying to compete in a very competitive market overseas and it is all to do with us moving before the rest of the world. So this is the fundamental problem with the design. So until they get a handle on calibrating this scheme so that all of our export and import competing industries are not affected until the rest of the world comes on board then we have a deeply flawed scheme.
LEON DELANEY: Is there sufficient attention on other alternative forms of re-absorbing carbon for example agricultural carbon absorption? Is there sufficient attention to some of those other alternatives?
ANDREW ROBB: It’s a very good point Leon. This mystifies me, the more we look at as an Opposition we have been looking at what is what is called complementary measures - what else could be done. Especially in the first 20, 30, 40 years to reduce the amount of CO2 in the atmosphere without costing tens of thousands of jobs. Clearly in agriculture there are wonderful opportunities - the soil, there is 80 tonne of carbon in every hectare of soil. It is the biggest carbon sink that is going around. You only have to have a marginal increase of carbon in soil. And carbon in soil actually rehabilitates the soil, it increases the soil moisture, you get a lot more microbial around the carbon and an increase of soil structure. So you get a higher productivity. So to do things which encourage farmers to stop CO2 going out of the soil, till or no till, there are a whole lot of practices which can increase soil carbon and which could lead to literally hundreds of millions of tonnes of CO2 captured per year which would go a large way to meeting the targets the Government talk about. None of that is in the scheme. None of that is in the scheme. The same with our built environment, all of the commercial buildings around. Nearly 20% of all of the CO2 emissions in Australia come from Commercial buildings. So much could be done just to reduce the energy demands in those buildings, increase energy efficiency which reduces CO2. But again they are not in the scheme and there are things can be done and we will add more detail Leon in the days and weeks ahead. We think there is enormous scope to get on and do what everyone wants done which is to see significant reductions in CO2 emissions but without costing tens and tens of thousands of jobs and putting the strength of our economy at risk.
LEON DELANEY: Are you prepared to run the risk of triggering a double dissolution election?
ANDREW ROBB: In my view Leon, what the Prime Minister does is his call but this is a policy of great consequence. If you look at it, it is probably the biggest deliberate structural change being contemplated for our economy ever and the way in which it could, if mismanaged, fundamentally destroy major communities in Gladstone, and Mackay, and all of these sorts of place, really shrink these communities, that’s what we are talking about over time, shrink these communities, it is a fundamentally important decision and I think as an Opposition our job is to get the policy right and I think the politics will look after itself. If we do what is in the right interests of the country, I think the politics will look after itself.
Media Contact: Stuart Eaton, 0433 298 620