5AA Breakfast with Keith Conlon, John Kenneally, Jon Blake, Jane Doyle and Chris Mcdermott - 11/07/2011

11 July 2011

JOURNALIST: Senator Penny Wong has joined us. Senator, good morning.
WONG: Good morning to you both.
JOURNALIST: Is the problem here Senator, that it is poison because of its flip-flop past within the Federal Labor Government?
WONG: Theres no doubt that this whole policy area has had a lot of starts and a lot of stops, hasnt it, over the last few years? But weve put out a package thats got the support of the Parliament. A very broad package that puts in place a price on pollution, invests in renewable energy, invests in energy efficiency, and gives opportunities to landholders so that the land sector can cut pollution.
So its a very good package, and as you said, a package that includes a very substantial amount of tax reform tripling the tax free threshold in the years ahead.
JOURNALIST: Are you prepared to tell us how many people will actually be worse off under the scheme?
WONG: Weve been up front about that, we said that 9 out of 10 households will receive assistance. Almost 6 million households will get tax cuts or increases in payments that cover the entirety of the average price impact. That means there are some people who dont they are higher income Australians. Were a Labor Government, and weve designed this package very much focused on ensuring that the assistance is where people need it most.
JOURNALIST: Senator, Joe Hockey says that this will be amazingly complex, he says there will be six new Commonwealth bureaucracies and 20 new programs that need to be run. Is he right?
WONG: This is a very big reform; this is a transformative reform. This is about a clean energy future for Australia. Were an economy, were a nation that is the highest polluter per person of any developed country in the world. So we do need a big reform to shift that around. But ultimately we know climate change is real, we know that we have to drive investment in clean energy, we have to start to reduce pollution. Thats what this package does.
JOURNALIST: Finance Minister, you lead us to one of the big questions. Why do we sure, were one of the heavy polluters but why do we get out so far in front of the rest of the world?
WONG: Well I dont think we do. And I think people who suggest we do are probably not looking sufficiently at the facts. The fact is Europe has had a price on carbon for years now. We know that New Zealand has, we know that South Korea is proposing to put one in, in the next few years. Countries are acting. People have either prices on carbon or regulatory changes, or things called energy intensity targets. People have different ways of approaching this.
Weve chosen this package, which includes at its core a price on carbon and tax cuts, because that is the most economically efficient. That is the lowest cost way of getting where we want to go to, a cleaner energy future.
JOURNALIST: What about some of the South Australian questions. For instance, we know there has been a lot of emphasis in the last few hours on brown coal in Victoria. But of course we have our own brown coal at Leigh Creek, we have our own power stations at Port Augusta. What do you see as their fate?
WONG: Certainly we put a lot of money on the table in terms of transformation of our energy sector. Youre right we do need to transform our energy sector. What a price on carbon is really a signal to investors, we want you to invest in clean energy not in the older, more polluting forms of energy.
JOURNALIST: So does Alinta get some money towards conversion to gas for instance?
WONG: What weve said is were prepared to look at purchasing power out of the market, capacity out of the market for replacement. That obviously would be by tender process. We obviously also put assistance on the table for the energy sector to ensure energy security. So companies like this do have the benefit of an energy security package that recognises we have to shift to cleaner forms of energy.
JOURNALIST: Can you assure South Australians that between the Victorian brown coal stations and our brown coal stations, with the risks to them, is our future electricity supply safe?
WONG: Were absolutely focused on energy security and thats why we put so much into the energy security package which includes assistance, particularly to highly emissions intensive so thats very polluting power stations. And also the capacity to shift to cleaner energy. Remember this is all about a signal to investors, we have to get people investing in clean energy.
JOURNALIST: 19 to 7, Senator I was wondering if you could take a call for us. Anthony has phoned through, morning Anthony.
CALLER: Hi. Just a quick one, wondering the amount of money collected. How much is actually going to be handed back when you say 9 out of 10 people? But also, is it you hear the United Nations are going to get a fair whack now and again. What money will be collected and how much is actually going to be handed back to the people? Wheres the rest of it going?
WONG: All of the money is being spent on the programs in the package and over half, or at least half is going to Australian households. So thats the most important point. We gave a commitment that at least half the money raised from taxing big polluters, putting a charge on pollution, which the big polluters pay. We said, look, over half of what we raise will go back to Australian households. And we put on the table a very significant tax reform package which will lift the tax free threshold, that is, how much money you can earn before you even start paying tax, to $18, 200. And in 2015-16, its just under $20,000, so thats a very big reform.
JOURNALIST: Anthony raised the question of the United Nations. Do they get a cut?
WONG: Not out of this, so Im not sure what hes looking at. It is true that as part of Australias international programs we do give assistance for climate action in various other countries. For example, you might look at renewable energy projects in the Pacific so that people as they get more energy, as they increase their energy needs are going down a cleaner energy path, rather than a polluting energy path. And thats in Australias interests.
JOURNALIST: One of the areas thats concerning anybody on the private industry side is truckies. Now in South Australia, independent truckies will cop will they not?
WONG: Fuel is a fairly complex area because fuel is already taxed in so many different ways, or not taxed in so many different ways because some people get fuel tax credits. But essentially, on road use is out so household and light commercial vehicles are not included. What weve said is we do want to bring the heavy on road vehicles sector that is over four a half tonnes into the scheme after two years. And we do that by changing the current fuel tax credit arrangements, but thats a couple of years down the track.
JOURNALIST: But those truckies have already told you no doubt, and theyve certainly told us on the station that they cant pass their costs on. There are real fears that a lot of the independent contractor truckies will just go out of business.
WONG: Well Id like to talk to people about passing the price on. The reality is we are going to be putting a carbon price on other modes of transport, such as shipping and rail. And were saying to this industry well give you two years where you continue to get the tax breaks you currently get, but well reduce those in a couple of years time. That gives you the opportunity to look at ways of using less fuel and to prepare for it.
JOURNALIST: Thanks for your time this morning.
WONG: Good to speak with you.
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