HOWARD SATTLER: … a proposed carbon tax. The Government is digging its heels in. The Gillard Government just won’t see the light on this one and doesn’t recognise that just about everybody bar it is against this carbon tax sorry, bar it and the Greens but the unions are against it, the employers are against it, the workers are against it, the voters most significantly are against it as well and I note this one… this is a quote from a story by Nick Butterly, Canberra correspondent, who says ‘Climate Change Minister Greg Combet pleaded with the Greens, unions and companies to stop making their gripes about the carbon tax public’ strewth! ‘and instead negotiate with the Government in private’. In other words, according to ‘JW’ who sent this to me… he says ‘I can only read that one way and that’s Mr Combet, and by extension the Gillard Government, feels the public should not be involved in discussions about the new tax. In other words, keep the general public in the dark.’ Well, I concur with ‘JW’ there. I think that’s what’s going on. Greg Combet at the moment just doesn’t want to go public on it. I suppose that’s why he is not available today. He hasn’t got the time to talk with us about it, despite the fact that all you will be inflicted with the carbon tax if it goes ahead, so without any apology the Opposition gets a free kick. Senator Simon Birmingham joins us Acting Shadow Minister for Climate Change. Hello, Simon.
SIMON BIRMINGHAM: Good afternoon, Howard, and good afternoon to your listeners.
HOWARD SATTLER: You’ve put out a release today saying prices will go up and keep going up. Where do you get that from?
SIMON BIRMINGHAM: Well, what we know is the carbon price, and the Government loves to say, will start as a fixed price but it’s fixed for one year only. Greg Combet on the ABC yesterday made it clear that the Government was considering what he termed the ‘rate of escalation’. Well, what we’re going to see, of course, is a seriously escalating carbon tax. It will escalate above the rate of inflation. That means that there…
HOWARD SATTLER: So what’s it going to start at? How much per tonne is it going to start at, do you know?
SIMON BIRMINGHAM: Well, we don’t know whether it will start at $20 or $30. We know that the price impact the Treasury has modelled shows an $800 to $900 per year impact for the average Australian household on a price in that range but Professor Garnaut has recommended that it should increase at 4 per cent above the CPI [consumer price index] every year, so 4 per cent above inflation, so whether it’s $20 or $30 it will keep going up each and every year.
HOWARD SATTLER: Apologies for taking it back to the beginning again, but how does, say, a $25 a tonne carbon tax… how does that have an impact on goods and services which the public are required… must purchase? How does that happen?
SIMON BIRMINGHAM: Indeed, Howard. Look, this is a key area. Everyone, I think, is coming to understand there’ll be an impact on electricity prices and there’ll be an impact on petrol prices and that those things will, of course, flow through to everything everybody does and all the goods and services in the economy. But what’s not often understood is that, in addition to that impact, there are hundreds and hundreds of major Australian companies producing goods that we all consume every day who will also be forced to pay the carbon tax on their activities and these are companies that produce household goods and services, household brands Tip Top bread, Pura milk, CSR sugar the basic staples of life right through to perhaps some of the little luxuries in life Tim Tam biscuits, Tiny Teddys or footy franks. All of these things will actually be hit. The companies who make them will be paying the carbon tax directly as well as, of course, everybody through the economy paying the carbon tax indirectly, so they’ve…
HOWARD SATTLER: Okay, but the Government says that this carbon tax will stop companies polluting, that they won’t want to pay the carbon tax so they’ll cut down on their pollution. Now, could you explain for me how a flour company like Laucke Flour Mills or CSR or Nestlé Australia… how are they polluters and are they going to just… will they just be passing on the increase, that they’ll have to pay out because of the carbon tax, to the public or will they stop polluting?
SIMON BIRMINGHAM: Well they can only stop…
HOWARD SATTLER: I don’t know whether they are polluting, are they?
SIMON BIRMINGHAM: Well, this is a key thing, Howard. They need electricity. They need fuel. They have processes of course that they have to use to make the goods they’re making. Now, every company already tries to minimise the costs in those processes because they go onto the bottom line of those companies. A carbon tax will simply add another cost and they will pass it through to consumers but, as the many food manufacturers who have written to the Government in the last 24 hours have made clear, if they…
HOWARD SATTLER: This is 19 of them by the way, I should tell people. Nineteen.
SIMON BIRMINGHAM: That’s right, 19 food manufacturers. These are not big electricity generators. These are people who make foods that we all put in our supermarket trolleys. Nineteen of them have written to the Prime Minister and made clear that if they have pass these price increases on, which they will because it will be a higher cost to them, it will simply make them less competitive than imported foods and what that will mean is the real risk that Australian jobs will go and on our supermarket shelves we’ll see more cheaper, imported foods and less Australian made foods.
HOWARD SATTLER: So, again, trying to keep this simple… they’ve got increased costs, they’ve got to pass it on, their prices go up but their competitors from overseas, who are not subject to a carbon tax because their governments are not going to impose one, they will be at a competitive advantage over our companies, our companies will have to cut back, jobs will go and the overseas companies will profit?
SIMON BIRMINGHAM: Spot on, Howard. The increased costs flow through to everything in the economy. These food producers will be part of that. They’ll face a double whammy and they will pass it on to consumers because it’s the only way they can maintain their margins but if the imports are cheaper then we all know what the effect of that will be in many, many cases imported food taking a greater share of the Australian market at the expense of Australian jobs as well as the production of food in this country and, of course, all of it for a carbon tax that has absolutely no guarantee of reducing emissions in Australia let alone globally.
HOWARD SATTLER: So food and grocery manufactures are against it. The unions are now against it and they’ve jumped into bed, unbelievably but in this case correctly jumped into bed, with business. Business leaders are against it. Unions are against it. Who’s for it apart from the Government and the Greens and why would the Government want to impose this if it would probably hit it hard at the polls?
SIMON BIRMINGHAM: Well, that is a very good question as to why the Government wants to impose this…
HOWARD SATTLER: They’ve got a death wish. They want you mob in office.
SIMON BIRMINGHAM: Well, they are addicted to… they are addicted to taxes, Howard. We’ve seen it with the mining tax. We’ve seen it with the flood tax. We see it with the carbon tax. They can’t help themselves but when they need to come up with an idea, when they think they need to stand for something, it ends up standing for more taxation and it simply pushes a greater cost of living pressure onto all Australians. We all feel it through our hip pocket and many people out there who are doing it tough, the last thing they need is to get higher electricity bills, pay more at the petrol pump or find that it costs them more when they go to the supermarket.
HOWARD SATTLER: But you should be rubbing your hands with glee on your side of politics, shouldn’t you? This is going to cost them government, surely. If everybody bar them and the Greens are against it, they’re going to lose the next election.
SIMON BIRMINGHAM: Well, Howard, nobody likes to see a government that’s stopped to listen. Nobody likes to see a government that’s not heeding the concerns of the Australian people and nobody likes to see Australians face pain. Now, we’ll do everything we can to stop this carbon tax coming into place and if we win the next election then we will work to repeal it. They’re the commitments that Tony Abbott’s made in black and white terms but, importantly, hopefully we can stop it. The Independents in the Lower House for the first time can hopefully see common sense and help us in stopping it because otherwise Australians will be already feeling some of the impacts of this by the time we get to the next election.
HOWARD SATTLER: On the other side of the fence, what are you going to do about pollution? I don’t want you to go through your whole policy on that but, I mean, they say this is the best way to cut back pollution. What do you say? Is there an alternative?
SIMON BIRMINGHAM: Well, a carbon tax gives no guarantee that you’ll actually reduce emissions. We released back in February last year and it shows that it’s stood the test of time far more than Labor’s flip-flopping of policies under Kevin Rudd and Julia Gillard we released a Direct Action Plan. We will essentially, and to put it as simply as possible, provide incentives to get a reduction of 5 per cent in emissions across the Australian economy.
HOWARD SATTLER: What sort of incentives?
SIMON BIRMINGHAM: These will be financial incentives. We’ll go out to the market, we’ll invite tenders to find the most cost effective ways, and guaranteed ways, of reducing emissions. Now, that’s focusing on the 5 per cent target that we’ve agreed to and indeed the 5 per cent target the Government says it’s signed up to. Our policy comes in at a fraction of the cost of the Government’s because we’re providing incentives for that 5 per cent only. They’re applying a tax effectively to 100 per cent of major emissions in the hope that, by taxing it all, you’ll somehow get a 5 per cent reduction, so it’s complex…
HOWARD SATTLER: But if yours is so clearly superior and not going to cost business, not going to cost jobs, why wouldn’t the Government take it up?
SIMON BIRMINGHAM: Because the Government can’t seem to manage its budget. We fund ours through budget savings. Wee fund it through running the Government more efficiently and making sure that we don’t have the type of waste that we’ve seen with Pink Batts or school halls or other areas of Government inefficiency. You’ve got to be willing to make some hard decisions. We outlined those at the last election in fully costed policies, demonstrating where we would make savings to pay for this, but the Government’s unwilling to make those hard decisions. They just like to tax and spend as is so often their approach.
HOWARD SATTLER: Anyway, it’s going to cost Julia Gillard because at the moment she’s much less popular than Kevin Rudd but also, I’ve got to say, Tony Abbott’s much less popular than Malcolm Turnbull on your side of politics, so is Malcolm Turnbull the man for the moment on this issue?
SIMON BIRMINGHAM: Oh, Howard, look, I think anybody who sensibly looks at the way the arguments have been prosecuted on the carbon tax would realise that Tony Abbott has done a splendid job and has put the Opposition in a winning position, according to these polls. Now, polls will come, polls will go. We’re focused on issues…
HOWARD SATTLER: You like this one, but, don’t you? You don’t mind this one?
SIMON BIRMINGHAM: I would prefer to see ones like this but, in the end, you know they will bounce up and down. They’ll go down again a bit before the next election, just as they’ll go up again at other times but what we’re hearing loud and clear from Australians is they don’t like the carbon tax, they don’t like what this Government’s doing in terms of the cost of living pressures they’re placing on everyday Australians and that’s the argument that we’ll keep focused on.
HOWARD SATTLER: Thank you for your time.
SIMON BIRMINGHAM: Always a pleasure.