JASON MORRISON: Look, I’m going to spare you the jargon in trying to explain this because jargon is how the political class nowadays confuse you into thinking they’re doing something good for you. Essentially, yesterday the Federal Government decided to ditch part of its carbon tax policy and that was as far as they were hoping you would understand but what they’re doing is ditching the Australian policy and linking it up to the European policy for emissions trading, so we’ll still have a $23 tax that will, over the next three years, climb to $29 a tonne for emissions – that you’re already paying through your power bill – but then once it gets to $29, in 2015, we’ll then float the price and at the moment that price is more like about $10 per tonne so even Europe, that’s the economic basket case that it is run by, in many cases, socialist governments… Europe has decided that its tax is about, well, more than half the price of Australia’s so it’ll drop its price down. The rule was going to be that our floor price would go no lower than $15 per tonne once that price floated. Probably the only concession is that it will go where the world’s price goes but to what end and again you ask the question: what will be achieved by the tax?
Greg Combet, the Climate Change Minister, is just daily shooting his credibility to bits. This is a man who has said as recently as two weeks ago this will never happen. Yesterday he had to go and make the announcement. So here’s the madness: you can have it on one side of the financial year, $29 a tonne; on the other side of the financial year, who knows what in 2015? And remember that this was all apparently about certainty? For business? Tell me where certainty is in this! Simon Birmingham is a Senator that speaks for the Opposition on these matters and he’s with me this morning. Senator, good morning.
SIMON BIRMINGHAM: Good morning, Jason, and good morning to your listeners.
JASON MORRISON: So, Greg Combet does this after telling us all repeatedly this would never happen and did it yesterday, telling us this was to give business what they wanted?
SIMON BIRMINGHAM: Well, that’s right, Jason. As recently as last week Greg Combet was ruling out abolition of the so called ‘floor price’ in the carbon tax and Julia Gillard originally argued that a floor price was necessary to give business some certainty around the carbon tax but what we see now, of course, is, less than two months into its operation, a very dramatic change and a change that could well see Australians paying much, much more than even Treasury had forecast and expected as early as 2015.
JASON MORRISON: The ‘smoke and mirrors’ through all of this has always been ‘but don’t worry, there’ll be compensation for you’ so $23 a tonne – where it is at the moment – there’s apparently compensation for some people; where it goes up next year, still compensation; $29 the year after that, still compensation. What happens after that when it goes floating?
SIMON BIRMINGHAM: Well, once it’s floated we obviously don’t know how the compensation is going to be kept in pace with this unknown price. Yesterday we had Christine Milne grinning like a Cheshire cat, saying that this price could go as high as $50 per tonne in 2015. Now, that is nearly double what’s been expected and nearly double what any compensation has actually been built upon, so many, many more Australians would find themselves even further out of pocket if that ends up being the case.
JASON MORRISON: So, at the moment, the money that we pay in carbon tax goes to the Federal Government and then they choose what they’re going to do with it. What happens when the price floats? Who gets the money then?
SIMON BIRMINGHAM: Oh, when the price floats, in the end most of the money still goes into the federal government coffers but they just don’t know what they’re going to get and, by linking to the European price, it really is a case of uncertainty. We’ve seen that price bounce everywhere from about $8 Australian into the $30-plus Australian range. As I say, Christine Milne and the Greens are predicting it could be as high as $50 Australian in 2015. That compares with $29 which had been forecast so, as you can see, great, great uncertainty from this and let’s not forget this is a tax that’s less than two months old and fundamental changes to its operation are already being made by a panicked government.
JASON MORRISON: And let’s not forget that the people we compete with in this part of the world… many of these nations don’t have one of these at all.
SIMON BIRMINGHAM: That’s just it – Australia’s economy is fundamentally different to many of those in Europe. We are a country that relies very, very heavily on agricultural and resource exports. We compete with countries in our region but with Canada, who of course have ruled out any type of ETS [emissions trading scheme], with countries in South America who are really emerging in the mining and minerals sector, not with the much, geographically, smaller countries of Europe who have very different economies to us.
JASON MORRISON: So, instead, we pick the economic ‘basket case’ of the world – the Europeans. Unbelievable! And New Zealand… I mean, you go across the Tasman… even New Zealand is noticing the impact it’s had on its manufacturing industry and has suspended further development of its emissions trading scheme. It just wants to hold it where it is. It just strikes me as bizarre and you ask, in the end, the question: to what end? What does this all achieve?
SIMON BIRMINGHAM: Well, that’s right. It comes down to having an impact in two really clear ways, Jason. One is on the cost of living – everybody feels that through their electricity prices – but the other really, really important one is on industry competitiveness and it just, over the long term, makes Australian industry less competitive, makes us a less attractive place to invest and really does put Australia ‘on the back foot’ compared with those we are competing with on the global stage.
JASON MORRISON: Good to talk to you and thank you. That’s Simon Birmingham, with the Opposition, and he’s speaking for them on that matter this morning.