HARGREAVES: Thanks for your time Minister. Well, are you happy with the way things are now?
WONG: I think it is the right thing for the country to put a price on carbon, Gary. And Ive argued for it for some time. But I accept that weve got a fair bit of work to do to explain to people how it will work and to remind people of the tax cuts that anyone earning up to $80,000 will get as part of our assistance package.
HARGREAVES: What about those above $80,000?
WONG: Its true weve had to make a decision as to where we provide assistance. And weve chosen to provide it in a couple of ways. One is to give some increases through things like the pension and the Family Tax Benefit those existing assistance programs in the federal budget. And also weve combined it with some tax reform, which is to triple the tax-free threshold. And thats a good thing. Itll take a lot of Australians out of the tax system, and make sure we also reward people for working better.
HARGREAVES: Well, last week we were told we were going to get a $400 increase in the price of electricity, on average, across Queensland homes. I dont think its got anything to do with peoples income. Everybody is going to be paying more.
WONG: I think you should unpack what has been driving increases in electricity prices, whether in Queensland or around Australia. And the vast majority of the increases have been driven because of investment in poles and wires. That is, the network ...
HARGREAVES: A failure to invest.
WONG: ... and investment. The fact that consumers, we all pay for that investment through the market, through the prices
HARGREAVES: I guess what I mean ... by failure to invest ... for many years here in Queensland theres been no power stations built. Theres been none of the investment that were now having to do in the last few years. And theres been a real shock and awe approach pardon an attempt at a pun on catching up to years of neglect. And thats why I think were paying more here.
WONG: Thats actually a very good point. In fact one of the things that the electricity sector has said is why people have looked to get certainty and get the price on carbon sorted out and work out how it will work and get put into place, is because these are long-term investments. And part of why we need to get this legislation through and get it in place is, we need to give people the investment certainty.
HARGREAVES: OK, well, last week we were talking to people calling this program who said they had no idea. They were hearing about massive increases here, massive increases there, refrigeration chemicals or refrigeration gases going up in price. Theres not this sort of one per cent kind of increase. Theres massive increases in a number of places.
WONG: What Id say to people is, rather than believing what some of the rather extraordinary claims which are made, have a look at whats actually happening. And over the weeks and months to come people have the opportunity. The average increase across all prices thats what we call the CPI is 0.7 per cent. Thats less than one cent in the dollar. So obviously there are different things which will cost more and different things which will cost less, but I think its important that people take with a grain of salt some of the more outlandish claims that are being made.
HARGREAVES: But what about the big bailouts? The massive amounts of money given to companies like Alcoa last week kind of prove that the pain that theyre going to go through is being offset for a little while, so that the pains not obvious on day one.
WONG: Gary, I dont think thats right. I think if you read what Alcoa have said, its that they are a company that has had to deal with a couple of things in the international market. Its a very high dollar, as you know, and also aluminium prices internationally have been lower than previously, and thats put a lot of pressure on Alcoa. And they themselves have said their difficulties are not as a result of carbon, theyre as a result of whats occurring in world markets. So, I know therell be a tendency for people to want to jump on every story and say this is because of the carbon price. But it isnt responsible for everything, and I think we ought to just keep our feet on the ground.
HARGREAVES: Well, I think somebody said last week if Queensland doesnt win the State of Origin three itll be the carbon taxs fault.
WONG: (laughs) Well Im from South Australia, so
HARGREAVES: So youre ambivalent about the whole thing?
WONG: No, well I generally go for Queensland, if only because we tend to barrack for anybody in South Australia against New South Wales. Though thats probably lost me votes in Sydney now.
HARGREAVES: (laughs) Youre starting to talk like the people.
WONG: (laughs)
HARGREAVES: Now, the carbon tax money, where is it all going to Penny Wong?
WONG: Half of it, over half of the price thats paid by the big polluters comes back to households. And thats because we understand that there will be prices that will be passed on. And thats where were funding our tax package, which is the tax cut for everyone earning up to $80,000 thats the tripling of the tax-free threshold and the increases in the pension, and the increases in the Family Tax Benefit. In addition, weve got a fair bit of investment to assist manufacturers and other parts of Australian industry to make the investments in new equipment, new technologies to reduce their emissions. So this is part of a change in the Australian economy, it's going to have to happen over time and this ultimately will lead to an economy which produces less pollution.
HARGREAVES: But were hearing about some companies that are shutting down their operations to avoid themselves getting caught in the carbon tax loop abattoirs that are shutting for weeks at a time, or maybe not operating every day of the week. I mean, how can this be good for the economy if economic activity is going to be put on hold like that?
WONG: I was actually asked that question in the Senate last week and the point I made was that there are different technologies you can put in place to try and manage. Methane is particularly the issue in abattoirs in terms of the sedimentation ponds. So there are different technologies that can be put in place. But I understand that Greg Combets Department has been working a lot with this sector to try and make sure that they understand the assistance thats available and how to manage in the new system.
There is an incentive to try and reduce pollution. Obviously what wed prefer to see is companies and local government and so forth taking advantage of the opportunities. For example, in local government if you have a landfill site that produces methane, you can get renewable energy certificates for it if you produce electricity. So there are ways through this, and this is about making sure we harness the innovation across the economy.
HARGREAVES: But the biggest local authority in Australia, Brisbane City Council, is already green in the way that it generates its power. It has all of these carbon offsets already in place and it has a massive increase in its rates because of the carbon tax.
WONG: I think there was a bit of press about that too, wasnt there? And I think
HARGREAVES: Yep, there was a 1.9 per cent increase in rates.
WONG: ... and Im not sure that all of that is reasonably attributable to a carbon price. Although I guess its convenient for people to blame it. But weve got assistance in place for local government to try and help them with becoming more energy efficient.
HARGREAVES: But Brisbane already is doing that Minister.
WONG: And how was that paid for?
HARGREAVES: Well Brisbane is already doing it within itself.
WONG: And my point is people have paid for it through rates. This is why having a price on carbon gives an incentive for people to reduce, rather than an approach which is just to increase the tax.
HARGREAVES: But Brisbane didnt need any federal incentive, it already had an incentive built into its own systems.
WONG: As I said, I think you should take with a grain of salt the sort of figures which are attributed to the carbon price. And Id again say weve got assistance out there for councils to reduce their liability. I dont know if Brisbane has applied for that. But I just was making the point that the reason you have a price on carbon is you try and give the incentive to reduce emissions.
If you do it the other way, which is the way the Coalition want to do it they want to emissions by the same amount, the only way you can do it is by increasing taxes and taking away the assistance that the Labor Government has put in place.
HARGREAVES: Okay, Ive heard that line. Now Minister, just hold the line
WONG: (laughs) Its not a line.
HARGREAVES: Yeah, right, Im hearing the debate. Now Minister weve got a couple of people from the coal face. Alan at Forest Lake now were just going to put him on because he went through something today, and he can give you some direct feedback. Alan at Forest Lake, talk to Penny Wong. Alan, whats your question?
CALLER ALAN: Hey, how you going.
HARGREAVES: Yeah, have you got something you want to tell us?
CALLER ALAN: I went to Brisbane City Council tip today to dump off 160 kilos of rubbish and it cost me $31.00. Its jumped up $12.00. And I said why is it so dear? And the lady turned around and said, the carbon tax.
HARGREAVES: Okay, there you go Penny Wong, $12.00 extra.
WONG: The first point Id make is and obviously Im not the Brisbane City Council but Id make this point that existing waste, that is waste that was deposited before July 1 doesnt attract any liability. The second point Id make is the one I made earlier, which is, if councils capture the methane from large landfills and remember were talking landfills which produce 25,000 tonnes of pollution a year, so thats a very small number of landfills in Australia compared to other firms there are technologies in place where they can, for example, they can flare the methane, they can create electricity from captured methane, and that would be a
HARGREAVES: Theyre doing that, theyre doing that already.
WONG: That would mean they would get assistance under the Renewable Energy Target and they would also reduce substantially their liabilities. I dont know how theyve come up with that figure the Brisbane City Council but Im just saying that theres a few things in terms of landfills which (inaudible).
HARGREAVES: Alright, another quick one. Colin at Collingwood Park thatd be in the Oxley electorate. Colin, whats happened? Whats gone up today?
CALLER COLIN: Yeah, thank you Minister for coming on and explaining it to us. Yesterday, I was in the city and I went to a fast food takeaway place and I bought something that was usually $5.90. They charged $6 and I questioned the girl and she said, Oh, we just put 10 cents on it for the carbon tax. This was a milkshake, and I said you what? And I looked and it was $5.90 on one side of the board, $6 on the other side, and she said that was for the carbon tax.
HARGREAVES: Must be your methane, Colin, with the greatest of respect. What is it Minister?
WONG: (laughs) Well I think thats a bit unfair to Colin
HARGREAVES: Its tongue in cheek. Colin knows me enough, he listens regularly.
WONG: (laughs) Hes a regular listener. We calculate about a 0.4 per cent so thats less than half a cent in a dollar increase broadly in food and grocery items. I dont know where this amount has come from, but obviously if Colin doesnt believe its reasonable then there are consumer complaint mechanisms he can look at.
But I would say to Colin I dont know obviously, what he earns but were not saying theres not going to be any prince increase. What were saying is it wont be anywhere near what some people are saying. And that we are providing assistance to a great many Australian households, particularly low and middle income Australia, to deal with the price impact.
HARGREAVES: So how do you weigh CO2 emissions, how do you do that?
WONG: Emitters and this is why it isnt a tax that everyone has to pay ... emitters who emit over 25,000 tonnes of carbon and they already will have to disclose that to the Government through the
HARGREAVES: But how do they measure it? How do they know?
WONG: Generally they would know. But we have a Clean Energy Regulator who is responsible for regulating this. Its obviously not done by politicians, its done by people much smarter than I.
HARGREAVES: And so how do we monitor the carbon savings? I think thats James of Logans question, is it? James, you there?
CALLER JAMES: Yes, Im here.
HARGREAVES: Whats the question?
CALLER JAMES: My question is to Ms Wong. Good afternoon.
WONG: Good afternoon.
CALLER JAMES: Yes, seeing weve got a carbon tax to be honest with you I didnt want it
HARGREAVES: Yes, but how ... Get to your question, James.
CALLER JAMES: What Id like to know is seeing we get pollution information from NSW and stuff what the pollution and stuff is, would the Government update the public on a weekly basis as to how many tonnes we save this week, or next week. Also, would they tell us, because of the carbon tax, how many degrees is taken off in global warming?
HARGREAVES: Alright James, I think we got that. I think the point here is theres a lot of, dare I say, smoke and mirrors associated with the benefits.
WONG: The first point Id make is we already measure Australias pollution I dont think we do it week-to-week, but it is measured as an annual inventory. And what we do know from the modelling is that we will reduce emissions by about 160 million tonnes in the year 2020 from what it otherwise would be. The second point that was made everybody knows that if were going to deal with climate change we need all countries of the world to do their bit. The question is, if were going to do our bit, whats the cheapest way to do it? Whats the most efficient way to do it? And, just as John Howard understood that the cheapest way to do it and the best way to do it is a price on carbon, so too does this Government.
HARGREAVES: Mind you, he wanted, I think, $5 a tonne, youve come up with $23, but anyway
WONG: I accept theres different policy mechanisms, but I dont think anybody until Tony Abbott came along was suggesting that youd actually just use taxpayers funds to pay polluters and hope that emissions would reduce.
HARGREAVES: Alright, Penny Wong, thank you for your time.
WONG: Good to be with you.
ENDS