10-May-2009
Portfolio Media Releases, The Economy, Emissions Trading Scheme
Topics: Government’s proposed emissions trading scheme and the upcoming budget.
PAUL BONGIORNO: And it’s good morning and welcome back to the program Andrew Robb.
ANDREW ROBB: Thanks very much, Paul.
PAUL BONGIORNO: Let's just go to the Budget for a minute. The Treasurer yesterday said that election promises will be broken. I guess there’s a precedent for this - the first year of the Howard government found things had changed dramatically and we had ‘core’ and ‘non-core’ promises. Has the Government got any options?
ANDREW ROBB: Look, I find them in total confusion. If it was the right thing to do last week to stimulate the economy with $900 cheques going out – and they’re still going out - why is it the correct thing to do the opposite this week and cut? People must be totally confused. I see no plan for recovery. This Government has now, for 12 months, acted on the principle of “buy now, pay later”. Well, Australians are now going to start to pay and I’m afraid that they will pay for decades, and that will also include - and must include - the Government breaking many promises because of the wanton build up of debt, the billions of dollars of interest we are going to have to pay as a country every year just to cover that debt.
PAUL BONGIORNO: So no excuses? You accept that they will have to break promises?
ANDREW ROBB: Well, they’ve put themselves – they’ve put the country into that situation. They have adopted an attitude of spend, spend, spend. There’s been no prudence, no measured approach. They have fired all the ammunition in the first salvo. What happens if the economy stays in recession for two or three or four years? What’s their next line of action? There is no plan for recovery and the Government is flailing around and it is deeply disturbing what’s happening at the present time.
PAUL BONGIORNO: Going to the emissions trading scheme - and we will come back to some of that Budget discussion - but going to the emissions trading scheme, you said earlier this year that from the work you had already done you could have better targets, bigger targets than the Government, and you could cut emissions more. Is that still your position?
ANDREW ROBB: Our view is that if you look far more widely at this issue there are lots of complementary measures which can be undertaken which will see deep cuts in emissions through energy efficiency and see carbon stored in the soil. We are of the view that you can bring in a scheme which doesn’t result in tens of thousands of jobs being lost.
PAUL BONGIORNO: Can they do that while at the same time achieving a 25% cut in emissions by 2020?
ANDREW ROBB: We think we can at least match the sort of targets the Labor Party has got on the table, but the problem is they have been totally consumed with an emissions trading scheme. They’ve ignored lots of other complementary measures. They’ve got a scheme which remains deeply flawed. This scheme is in no shape to be voted on in the next two months. It is deeply flawed, it will cost tens of thousands of jobs.
PAUL BONGIORNO: You said earlier in the week - last week - that you would have a position by June - in other words, when it comes into the Senate. That sounds like you are willing to engage the Government in the Senate?
ANDREW ROBB: We will have a set of propositions on the table by the time this debate begins in earnest in June, but our view is, in terms of the Government's scheme that’s on the table, it is in no shape to be voted on, they must defer the vote until next year. No-one in the community, in my view, has the foggiest idea of what an emissions trading scheme is. Penny Wong has either been unable or unwilling to explain the Government's scheme over 18 months. Daily, companies are coming out and discovering that they will have a tax that their competitors won’t have, which will cost tens of thousands of jobs. We have to get behind the implications of going it alone in Australia with this scheme before we make any decisions about finalising a scheme.
PAUL BONGIORNO: The unions appeared won over by the Government’s rethink. Here’s what Sharan Burrow said on the day.
SHARAN BURROW (Wednesday): This must, now, get through the Senate. There’s no question that all parties need to support this. That’s where we’ve got to be. There are no jobs on a dead planet, and there are no jobs for us in buying climate change solutions in from other nations.
PAUL BONGIORNO: Now Mr Robb, you said that the Government must not finalise this legislation this year. In other words wait and see what happens in Copenhagen. So to achieve that, what will you do? Will you vote it down? Is that the position?
ANDREW ROBB: The scheme they’ve got on the table we will not support. It is a deeply flawed scheme.
PAUL BONGIORNO: OK, I accept that, but are you willing to work on changing that scheme and then vote on it this year?
ANDREW ROBB: Our view is, and we had an independent report done by the Centre for International Economics, which came down a week ago. No-one has disputed the findings - no-one. The findings concluded that major work has been deliberately not undertaken - in other words, what are the implications of Australia going it alone with none of the other countries coming on board in the next 10 or 15 or 20 years? It’s a black hole, the next 20 years – a transition period – and it creates enormous uncertainty and risk for this country.
PAUL BONGIORNO: Now, you and Malcolm Turnbull have been making this argument at virtually every step along the way - Green Paper, White Paper, Treasury numbers. It does seem that you’re pushing it out. Are you're avoiding the final decision because the Party Room isn’t united on this?
ANDREW ROBB: Paul, this is the biggest deliberate structural change perhaps in the history of the country that we are contemplating introducing. We have to get this right. If we don’t we're talking, especially for a lot of the big regional centres, predictions of a shrinkage of those communities of up to 20%. There’s too much at stake for us to rush into this. The Government is trying to steamroll this legislation through the house. There has been major analysis not undertaken - deliberately not undertaken. We don’t know what’s coming out of Copenhagen later this year. A number of alternative approaches to a scheme have not been analysed. All of this work could be done, preferably by an independent body, the Productivity Commission...
PAUL BONGIORNO: It doesn't look good for the scheme, does it?! We’ll have to pick it up in a minute because it’s time for a break. When we return with the panel, the stimulating argument over debt. The ‘Daily Telegraph’ caught the imagination over the week with a Robin Hood theme, forecasting a Budget that will take from the rich to give to the poor.
MALCOLM TURNBULL: Hmm, Robin Hood. I have to say, I think Wayne Swan and Kevin Rudd are more like Ali Baba and the Forty Thieves.
KEVIN RUDD: He is not advancing an alternative budget. In fact he should be out there selling steak knives.
PAUL BONGIORNO: You’re on Meet The Press with senior Liberal Andrew Robb, and welcome to our panel, Michelle Grattan From ‘The Age’ and Phillip Clark from Radio 2GB. During the week the Treasurer revealed the Budget had suffered a $200 billion loss of revenue, and Malcolm Turnbull blasted Kevin Rudd for not taking any tough decisions. The Opposition Leader said that if he were prime minister debt would be lower, more people working and the economy stronger.
WAYNE SWAN (TUESDAY): ..so it is incumbent on the Opposition Leader to indicate what he would do in those circumstances. Would he support a set of policies that would lead to higher unemployment? Would he impose savage cuts on government services, or would be dramatically increase government taxation to make up for the cut in government revenues imposed by the rest of the world?
PAUL BONGIORNO: Michelle Grattan?
MICHELLE GRATTAN OF ‘THE AGE’: Mr Robb, obviously with the big collapse of revenue there has got to be a substantial deficit in Tuesday’s Budget. What deficit do you think would be responsible?
ANDREW ROBB: Well, we are not privy to the numbers. The point to be made is that there has been nearly $100 billion of new expenditure since the Budget last year - $100 billion! So the deficit is going to be much larger than it needed to be.
MICHELLE GRATTAN: But what should it be?
ANDREW ROBB: Well, that’s for the Government, with the numbers, to determine. It should be as small as possible. At the moment we’ve got a government whose whole approach has been “buy now, pay later” - spend, spend, spend. That’s been the attitude and I find it quite extraordinary that we’ve been stimulating the economy endlessly right up until now – there’s money still going out - and yet the Government is now this week saying, well, the opposite is the approach to take. The deficit is a critical issue but the Government…the best way to deal with a deficit is to constrain spending.
MICHELLE GRATTAN: Let me ask you about something where you don't need the numbers - the Government is going to means test the health insurance rebate. This would seem a reasonable measure in the economic circumstances. Do you intend to oppose that in the Senate, or will you go along with it, in the circumstances?
ANDREW ROBB: We will look at the totality of what’s put on the table on Tuesday. It is all speculation at the present time but it is very difficult - it is very difficult - to confront a situation where there’s $300 billion of debt. I think that the principle that must be applied here is that the Government must curb its instinct to just spend, spend, spend. We cannot get to a point where there’s $400 billion, $500 billion of debt. Everyone needs to, I think, share the pain in this. We will have to look at what measures they bring down, who they attack on Tuesday, and whether they’ve applied some equity and whether they‘ve - first and foremost - whether they have sought to protect the productive base. Keep the cost of employing people down so that we can keep people in work, because they are predicting another 250,000 people out of work over the next 12 months.
PHILLIP CLARK, RADIO 2GB: A deficit, as you say, is absolutely critical and we will be running these for some years – they’re necessary. Isn't it time that you got into supporting some attacks on some structural issues, like middle-class welfare, for example? If we are to cut back on these deficits and get back to surplus you are going to have to support things like that, aren’t you?
ANDREW ROBB: First and foremost we need to have the Government not making wanton spending, not doing things - we have spent $100 billion - $100 billion! - since the last election. $22 billion in handouts. You’ve got a situation where there is speculation about $26 billion worth of infrastructure spending, which they are saying is a huge amount of money. It is about equivalent to what has been handed out in $900 cheques in the last few months. This is such a misplaced approach to dealing with this crisis. They have thrown money around and now we are all faced with the situation of making hard decisions, including the Opposition. The Government has put the country into a very unfortunate position.
PHILLIP CLARK: That’s true, but you're going to have to make the hard decisions, too. The hard decisions in the future about these budgets are going to be, “What are the structural issues we're going to take on?” Middle-class welfare is one of them, isn't it?
ANDREW ROBB: It depends what you’re talking about. There is and there has been a lot of assistance to Australian families. This will be the first Budget in a decade where Australian families are going to be - have measures taken off them, where they are going to be put under pressure, where they are going to have things which have assisted them removed. There is no doubt about that. We have been trying to support, as a country, Australian families to help them – you know, for children, get on with life, develop this country - and we have got to keep a balance in this. We have got to keep ensuring that those people who are making a go of it, building the wealth, creating the jobs, are protected throughout this crisis.
MICHELLE GRATTAN: Can I come back to climate change? You were saying before that we need more inquiries, we need more examination, delay, we have got to see what other countries do, and yet the Howard government was ready to go with a scheme for emissions trading. How come?
ANDREW ROBB: The Howard government had a policy to further develop an emissions trading scheme and to deal with the issue of CO2.
MICHELLE GRATTAN: It was further forward than that!
ANDREW ROBB: What we're looking at is - we have got a scheme on the table from the Government. That is what the community is being asked to support and the Parliament is being asked to vote on. Our examination and the examination by industry and by the green groups of that package is that it fails on all counts. It does not protect jobs - in fact it will lead to tens of thousands of people unemployed - and it does little or nothing about reducing CO2 emissions. Their scheme is flawed, that’s the thing we have to vote on. There are a lot of unknowns about that scheme which need to be analysed. We have the opportunity now, because they have delayed the scheme 12 months. There’s nothing to be lost in doing that work, putting off the vote and then settling this issue some time next year.
PAUL BONGIORNO: One of our viewers has a question. Gary from Adelaide writes, “Your party can’t support the ETS in its current form but blocking the bill,” he says, “will certainly lead to a double dissolution election, which the polls suggest you can’t win. Is this checkmate to the Government?”
ANDREW ROBB: I believe that if we get the policy right, the politics will look after itself. The important thing is - this is the biggest structural change proposed in our history, in the country, the biggest deliberate structural change. We have got a responsibility to get this policy right and put the politics - let the politics sort itself out.
PAUL BONGIORNO: Thanks very much for being with us today, Andrew Robb.
Media Contact: Stuart Eaton, 0433 298 620