SIMON BIRMINGHAM:  Under Labor’s carbon tax prices will go up and they will keep going up. We will see a situation where the price of everyday household goods – bread, butter, cheese, Vegemite – will all go up. We will see a situation where the price of Tiny Teddys will be hit by the carbon tax. Tim Tams will be hit by the carbon tax. You name it, it will be hit by the carbon tax in a direct way. These prices will go up, not just in the first year, but the carbon tax will increase each year and the prices will go up each year. The Government needs to acknowledge that this will flow right through the economy into all goods and services. Australia’s food and grocery manufacturers are right to highlight their concerns about the carbon tax, are right to demand that the Government ease that impact. What the Government should do is acknowledge that its carbon tax is the wrong policy and they should be ditching that carbon tax and coming up with a better policy for the future.
JOURNALIST:  Well we all knew with the GST it was 10 per cent – any idea what the rise will be with the carbon tax?
SIMON BIRMINGHAM:  We know the carbon tax will go up by more than inflation each and every year. The Government is calling this an escalation factor. Well, they need to tell us just how much prices will escalate each year under the carbon tax. Whether it’s footy franks, weather its Tiny Teddy biscuits they’re all going to go up, they’re all going to keep going up. The Government needs to come clean – what’s the starting price? What’s the rate of increase? And detail which industries will be in, which industries will be out; who’s paying, who’s not.
JOURNALIST:  The Government’s published its details, well at least said that they will give compensation to some households. Do you think that will be enough?
SIMON BIRMINGHAM:  Well it’s clear on the compensation from what they’ve said to date is that millions of Australian households will be worse off. Millions of Australian households will receive absolutely no compensation. And there is no point talking about compensation like it’s some bonus when the price of milk, the price of bread, the price of every good you put in your supermarket trolley, will go up, along with the price on electricity and fuel. In the end people will be worse off under this carbon tax and there is no guarantee it will deliver emissions reductions.
JOURNALIST:  What do you think the end result will be if all these prices keep going up for households?
SIMON BIRMINGHAM:  Households are already feeling the pain of increased cost of living pressure. They’re feeling pain of increasing electricity prices already, increasing fuel prices and the pain of increasing food prices, particularly as a result of the Queensland floods. All of those increased prices will just pile upon each other under the carbon tax regime where we’ll see electricity go up further, petrol up further and the price of all goods and services up further. So for average Australians when you flick on the electricity switch at home, start the motor in the car, or go to the pantry to get something out for dinner you will be paying the carbon tax.
JOURNALIST:  Well aren’t you on this exactly how Labor was on the GST when it was announced and then that election campaign. Could it backfire on you in the way it did on Labor?
SIMON BIRMINGHAM:  The difference with the GST is, firstly, that John Howard had the courage to take it to an election campaign which he won. Secondly, the GST was part of a wholesale tax reform regime. It reduced the prices of many goods because it eliminated the wholesale sales tax. It simplified the tax system. This carbon tax is far from a simplification. It will be applied on goods right across the board in an indirect way and it will be hard for people to see how much it’s related to the carbon price and how much it’s related to other factors but it will push up the price of all goods. It will push it up with a complex formula. The compensation mechanism for industry and for households will be complex. There is no simplification here, no benefit. The comparison between the GST and carbon tax is like chalk and cheese.
JOURNALIST:  So what do you suggest the Government should do then?
SIMON BIRMINGHAM:  The Government should recognise that its carbon tax is a complex way of doing business, that there is no guarantee of reducing emissions, but absolutely guarantees it will push prices up. It’s the wrong policy. It’s bad policy. They should ditch the carbon tax and adopt a simpler system of reducing emissions such as the Coalition’s incentives based system that targets incentives to the 5 per cent of areas where we can reduce emissions and can get a reduction rather than taxing 100 per cent and just crossing your fingers and hoping you get a reduction.
JOURANLIST:  But realistically you don’t want them to ditch it, do you, because you’re 15 points ahead in the latest opinion poll? This is the best thing for your party, isn’t it?
SIMON BIRMINGHAM:  Governments get into trouble when they stop listening to people. This Government stopped listening under Kevin Rudd. Julia Gillard said they’d lost their way. She may have lost her way but she certainly hasn’t found her hearing aid. She’s not listening any more than Kevin Rudd was listening. In fact, she’s losing touch faster and harder than he lost touch. The carbon tax is a classic example of where consumer sentiment, the sentiment of Australians is being heard loud and clear. They don’t want this. They don’t want the price impacts. They don’t think it will work. And the Government should ditch it if it’s to actually heed what the Australian people think and want.
JOURNALIST:  Do you think she’ll lead Labor to the next election?
SIMON BIRMINGHAM:  Well Labor’s leadership woes are a matter for Labor. They ditched one Prime Minister under remarkable circumstances. We see many people circling in the Labor Party at present. Bill Shorten, Greg Combet – they all have aspirations. That’s a matter for the Labor Party. What matters for Australians is their cost of living pressures and how they’re going to be reduced in the future.