MIKE: Good morning.
PM: Good morning Mike, good morning Sandy.
SANDY: Good morning Prime Minister.
MIKE: You're under fire from all sides here, aren't you? The Greens and the environmentalists are saying you haven't done nearly enough. The Opposition, I think, is saying you've gone to far too fast.
What have you done?
PM: I think the challenge here, Mike, is to, as Prime Minister, is to face the scientific facts, face the economic facts, which confront us. Be upfront about this and put forward a responsible, balanced course of action for the Australian economy in the here and now, but also to do something responsible for our kids and our grandkids.
It's all very easy just to push to one side and say ‘too hard'. We'll get attacked from the left for not haven't gone far enough and from the Liberals - depending on what day it is and what position that they have on any particular day. But, my job is as Prime Minister is to carve our a responsible course of action to reduce carbon pollution over time and to provide, at the same time, adjustments, payments and support for households who can least afford those adjustments. And secondly, to help businesses in the transition period as well.
SANDY: Prime Minister, although there will be compensation for households, do you think Australian families will be supportive of this when they know they're going to be paying more for electricity, for gas, and at the supermarket as well?
PM: Well, Sandy, the easy thing to do would be to run around and say I can bring in a cost free scheme. And I can't. You know, even Mr Howard last year said when, for a moment or a season, the Liberals were embracing emission trading, he said that it couldn't be taken without higher energy costs, without higher fuel costs - he was right. He was right then, he's right now, and that's the position this Government has.
I'd rather be upfront about that than try and sort of guild the lily.
The key thing though is, there is a huge cost to Australia if we fail to act. This is already the world's hottest and driest continent. We are therefore likely to be hit hardest and earliest by climate change. The CSIRO has projected that could have, I should say, the Australian Bureau of Agriculture and Resource Economics has projected that we could have at least a 63 per cent reduction in agricultural exports by the year 2030. That's a huge impact on our standard of living, on jobs. So you can either just allow that all to happen, or you can roll out a plan of action for dealing with it nationally and internationally, and that's what we've done.
MIKE: Alright. And if we head off bravely across the horizon on this and then turn around and find out that China, India and lot of other countries have done nothing at all, that could severely damage our economy, couldn't it?
PM: Well that's why we're taking a responsible, balanced course of action through this.
Firstly, across the developed economies in the world, we've already got 27 economies in Europe who are operating with emissions trading. North America, there are a large number of states in the US and provinces in Canada doing the same. Both candidates - Republican and Democrat - for the US Presidential elections are committed to carbon pollution reduction targets, either the same as, or more ambitious, than what we've put forward.
Then you go to the developing world, and obviously our job is to do whatever we can through our global negotiations, that's why we ratified Kyoto, to make sure that they commit to concrete courses of action for the future as well.
That's going to be tough, it's going to be hard, but we will go into this with our eyes wide open to make sure that we're looking out for the interests of the Australian economy in the long term.
SANDY: But Mr Rudd, shouldn't this go hand in hand with major investment in public transport, in solar energy, that sort of thing?
PM: Well, absolutely. If we step back from all this, what's the overall strategy for climate change? One, reducing carbon emissions through schemes like the one that we've just put forward. Two, climate adaptation, particularly for agricultural and rural areas where you've already got the real impacts - simply look at the state of the Murray-Darling at present for farmers struggling to deal with the reality of climate change. And three, an active, vigorous global negotiating strategy, which is why we ratified Kyoto, so that we can be part of a global negotiation for a decent outcome everywhere.
If you go also to the question of other ways of carbon pollution reduction, this scheme that we put out is one of them. Another will be a strategy that we will release in due course on energy efficiency for homes and for businesses.
MIKE: So why did you pull out of the solar panel scheme then, the subsidy on that one?
PM: I'll come back to that in one sec.
And then also dealing with a much more effective approach to renewable energy across the board. And, what we do with clean coal technology as well.
This is all part and parcel of an integrated strategy to bring down carbon pollution reduction.
On the solar panels point, what we did was simply reflect the means testing of that what the previous Government had already introduced last year for solar hot water systems. So, that simply brought those two systems into line. But as we said before Mike, all these renewable energy arrangements, particularly those affecting households, are very much in the mix as we now approach the assistance that will help households with bringing in more energy efficient technologies into their homes.
MIKE: Alright. Now, that's fine. And you say you will compensate the battlers, I think up to $150,000 or so. It doesn't compensate small business, does it? If you're a small business using electricity or gas, those costs will be going up big time. And plus the general all round price rise?
PM: Remember, we've got about two million or plus businesses in the economy and those who will be directly part of this scheme are only about 1,000 in number - these are the big businesses. And, the debate about adjustment costs for them is outlined in the Green Paper, and the proposed climate change action fund that we are putting forward to assist in the transition for certain businesses. And also the electricity industry supply assistance fund.
MIKE: Yeah, but I'm talking about if you have a factory in western Sydney, a metal working factory which is using a lot of gas, using a lot of electricity, your costs are going to go through the roof.
PM: What we are working our way through is how we assist businesses in dealing with these adjustment costs, and just dealing with households. But as I've said right from the very beginning of this exercise, Mike, the problem is if you've got politicians running around the place saying that there is some magical cost free arrangement, magical cost free arrangement, for introducing a Carbon Pollution Reduction Scheme for Australia, then they frankly are just not telling you the truth.
There are costs, they are real, I'm not going to pretend otherwise. But, I'm all ears for Dr Nelson or Mr Turnbull, depending on what day of the week it is, to come up with a cost free system of bringing down carbon pollution in Australia.
MIKE: You just want to see Mr Turnbull and Dr Nelson agree on it, don't you?
PM: Well, having a single position from the Liberal Party on any day of the week would be an advance on where we are. We've had about a dozen in the last week. But, you know, where the Liberal Party comes out on this is pretty important because they will affect the vote on this in the Senate.
SANDY: Prime Minister, you also need the Greens to get your plan through the Senate. We spoke to the Greens' Senator Christine Milne this morning and she said the Greens were pretty disappointed with what's come out. There are several things she thinks need to be addressed before they can think about supporting the Government, one of which is they don't see why big coal generators should be given compensation, more money should be going into renewables. Will you be talking to them over the next nine months? I suppose you will be, to try and get them to try and come to where you are and you to where they're at?
PM: Well our challenge is to get our policy right, the Green Paper is the first stage in this process, we'll have a White Paper years end, early next year with exposure legislation. Then, of course, it is a matter for putting that into the parliament. My appeal is directly to the Liberal Party to either be responsible partners in the future economic direction of Australia - remember that they committed to all this last year, then we had an election and they said, ‘whoops, now it's in our short term political advantage to oppose it.' So the Liberals have got some serious soul searching to do on this question in terms of acting responsibly for the long term.
But, you know, we're going to get attacked from the left on this, from the right. My job is to take the responsible course of action which is balanced for the long term, and I think this Green Paper has the basis for that course of action going forward.
MIKE: The other suggestion being (inaudible) you've got also got one eye on the next election and you're indulging in politics as the ‘art of the possible'?
PM: Well, we committed prior to the last election, it might be an old fashioned view, but we committed before the last election to doing this. We said that we would introduce this sort of scheme. We said we'd ratify Kyoto, we did that within an hour of taking over Government. We said we'd introduce a Carbon Pollution Reduction Scheme, this is the first instalment of that through this Green Paper. We said we'd introduce a half billion dollar renewable energy fund - we've done that through the Budget. We said we'd introduce a half billion dollar clear coal investment fund - and we've done that as well.
These are all initial steps. And can I just say, climate change didn't occur overnight. The science of this has become clearer and clearer over the last decade, and we've had really a wasted decade under my predecessor on this, where he and they preferred to stick their head in the sand. In six months we've achieved more progress on this than our predecessors did in 12 years.
SANDY: Prime Minister, can I ask you about the other big story of the day, just getting away from climate change. And that is, you're meeting the Pope again in Sydney this morning - it's going pretty well, don't you think?
PM: Well, I was at the inaugural Mass the other evening in Sydney and it was just, I've got to say, enormously inspiring to see 150,000 -
SANDY: It's a great feeling.
PM: ... 150,000 kids out there, in a wave of optimism and hope. It was a really good thing. So I'm looking forward to my meeting with Pope Benedict later this morning.
MIKE: Have you got anything to say to him?
PM: Not that I'd say to you, Mike.
MIKE: You might want to confess or something, I don't know. Any confessions that you might like to offer?
PM: You mean confess to you?
MIKE: No. Well if you feel like it. I don't like the chances.
PM: Well, probably neither of us would have enough time.
I'm looking forward to the conversation with Pope Benedict. And I had a shorter conversation with him at the airport the other day when he arrived.
I think all Australians, quite rightly, feel honoured to have the Holy Father with us for this week. I think all Catholic Australians regard this as a very important and special time, as they should. But I think for the entire community, Catholic, non-Catholic and those beyond the Christian faith, this is a really good time of celebration for the wider community.
MIKE: The only possible confession I was thinking of comes from the allegation, the book that was out the other day saying that you use the ‘f' word a lot in private. Do you?
PM: The next question?
MIKE: You've squibbed it!
SANDY: Thanks for your time, Prime Minister.
PM: I've never pretended to be Mother Theresa.
MIKE: Thanks Prime Minister.
PM: See you, bye.