DAVID SPEERS: … as we heard before the break, Climate Change Minister Greg Combet reckons the Coalition’s plans on climate change are all over the shop, pointing to various comments today, particularly about what happens to businesses who are actually pretty happy with the carbon tax would they be compensated if it is removed? Joe Hockey seemed to leave the door open to that yesterday, saying that they would be looked at on a case-by-case basis. He and others, including Tony Abbott, have since moved to clarify that position and say that, no, they’re talking about the billion dollars in their Emissions Reduction Fund that could be used to help businesses. To tell us a bit more about it, the Shadow Minister, Greg Hunt, was unavailable he’s in his electorate today but we are joined by the Shadow Parliamentary Secretary, Senator Simon Birmingham. Thanks for your time.
SIMON BIRMINGHAM: Good afternoon, David.
DAVID SPEERS: So, just clear up for us: what happens to a company like Hydro Tasmania, at the moment, that’s… says it’s about $70 million better off because of the carbon tax…what happens to it when you get rid of the carbon tax?
SIMON BIRMINGHAM: Well, David, what we have at present is, of course, the carbon tax along with a Renewable Energy Target and a range of policies there and, frankly, if you look through a lot of the expert advice, it demonstrates that, right now, the Renewable Energy Target has been and continues to drive investment decisions far more than the carbon tax necessarily does, in any event, so what we are looking to do is remove the impost from business, remove the carbon tax a $9 billion a year tax on Australian business and then we will provide an Emissions Reduction Fund that will support new emissions reduction activities and…
DAVID SPEERS: Okay, well, this is the key new emissions reduction activities. What about those hydro, wind power companies at the moment… what happens to them when you get rid of the carbon tax?
SIMON BIRMINGHAM: Well, those companies are receiving significant incentives and support through the Renewable Energy Target and that will…
DAVID SPEERS: But they’re also receiving support through the carbon tax, aren’t they? You can’t deny…
SIMON BIRMINGHAM: Well, they’re not directly…well, no, they’re not directly receiving support through the carbon tax. They don’t…
DAVID SPEERS: Well, they’re better off. They’re better off because of the carbon tax.
SIMON BIRMINGHAM: And, of course, David, in the end, if they can manage to compete with industry, then they will be able to compete with industry with the generous support that comes through the Renewable Energy Target but we are focused…
DAVID SPEERS: But you can’t sit here and deny… they’re going to be worse off, aren’t they? Hydro, gas, wind, AGL, Origin Energy… these guys are going to be worse off if you get rid of the carbon tax.
SIMON BIRMINGHAM: What I do know is that many, many existing Australian businesses are worse off because of the carbon tax. We’d have to look, of course, at the detail of whatever claims anybody might make in that regard but what is important here is we’re going to remove a $9 billion impost on Australian industry. We…
DAVID SPEERS: Okay, you’re not convinced that there will be some companies worse off?
SIMON BIRMINGHAM: I’m not convinced of that, necessarily, David, and I think we will no doubt see the Government, as a desperate government as they are at present, jumping onboard any possible claims that anybody possibly makes but these claims, if the Government wants to say they’re valid, should be substantiated we should know for sure that these companies are going to in some way be impacted. I believe these companies are getting the bulk of their benefit… and research and even Professor Garnaut has previously said that the Renewable Energy Target drives change far more in the early years than the carbon tax does…
DAVID SPEERS: And you’re going to keep…
SIMON BIRMINGHAM: … so the Renewable Energy Target is there. The Coalition introduced it, way back in the Howard days. We continue to support it. That, of course, is what will support things like Hydro Tasmania in their development in the future.
DAVID SPEERS: Has that been pointed out to Angus Taylor, the candidate in Hume, who’s clearly got concerns about the Renewable Energy Target?
SIMON BIRMINGHAM: Well, Angus is entitled to his views. The Coalition policy is very clear. There’s a legislative review in 2014. That will take place and obviously we’ll always look to iron out any wrinkles that may exist and make sure that policies work as efficiently as possible but we’re committed to that policy and it is what is driving change in the renewable energy sector and in the energy sector. The carbon tax actually still sees, of course, Australia’s emissions go up at a domestic level from here through til 2020.
DAVID SPEERS: Alright. Just clear up for us, though, this Emissions Reduction Fund that you will have is a $1 billion fund? Is that right?
SIMON BIRMINGHAM: It averages, through to 2020, $1.3 billion per annum.
DAVID SPEERS: Okay, and what… will it be used at all to compensate businesses who may feel they’re worse off? If they come to you and say… like, Hydro Tasmania comes and says ‘you’ve got rid of the carbon tax, we’re now so many million dollars worse off’, can they access funding under this?
SIMON BIRMINGHAM: Well, David, no is the short answer there. The $1.3 billion, on average through to 2020, is funded to provide for new emissions reduction activities to ensure we can meet our 5 per cent reduction target by incentivising new activities that are the lowest cost available. If Hydro Tasmania…
DAVID SPEERS: So, there is no compensation for businesses who come to you saying ‘we’re worse off’?
SIMON BIRMINGHAM: If businesses come to us and say ‘we’ve got something new we want to do’, then of course we’ll look at that. Let’s not forget, David, that governments, of course, make changes all the time. What has been clear about this policy all along is that the Opposition has always opposed it, always said we will repeal the carbon tax since Julia Gillard backpedalled on her promise…
DAVID SPEERS: I know that. I’m just trying… I’m trying to work out how it will work, though.
SIMON BIRMINGHAM: … and so businesses who are making business decisions are making those decisions fully aware that, if there is a change of government, the carbon tax will be repealed.
DAVID SPEERS: Can I also ask you… Tony Abbott said today, in talking about this policy, that ‘we believe in incentives, we don’t believe in penalties’. However, your Direct Action Plan from the last election and this is it here does talk about penalties. It says that businesses that undertake activity with emissions above their business-as-usual levels will incur a financial penalty. The value of the penalties will be on a sliding scale… The value of the penalties will be set in consultation with industry… Are there going to be penalties or not?
SIMON BIRMINGHAM: David, this is primarily and overwhelmingly an incentives driven policy but, of course, you have to have a safety mechanism in there and the safety mechanism is to make sure that businesses can’t allow their emissions to balloon out through adopting poor practice. We don’t…
DAVID SPEERS: So, there would be penalties if that happens?
SIMON BIRMINGHAM: If that happens… well, we don’t expect, however, Australian industry to adopt poor practice. Australian industry has shown a great willingness to be as efficient as possible and that’s the crime of the carbon tax at present in that it penalises industries even if they are very, very efficient.
DAVID SPEERS: Okay, but just under your… I want to focus on your Plan here… when Tony Abbott says ‘we don’t believe in penalties’, that should then say ‘unless they balloon… their emissions balloon out of control’?
SIMON BIRMINGHAM: If they’re doing the wrong thing, then of course we have to make sure that it doesn’t jeopardise the effectiveness of the policy we’re putting in place…
DAVID SPEERS: So, there will be some penalties?
SIMON BIRMINGHAM: … but we don’t believe that business will do the wrong thing. Business in Australia has shown a great capacity to do the right thing. That, of course, is why the Howard…
DAVID SPEERS: But if they don’t… if they do the wrong thing, there’s a penalty.
SIMON BIRMINGHAM: That, of course, is why the Howard Government met its Kyoto reduction targets, because Australian industry did the right thing even without a carbon tax in place. We know we can meet targets without a carbon tax and that’s what we’ll get on and do.
DAVID SPEERS: Simon Birmingham, thanks so much for joining us this afternoon.
SIMON BIRMINGHAM: Pleasure, David.
[ends]