PM: Today the Australian Government is announcing significant changes to the Carbon Pollution Reduction Scheme. In response to three sets of factors, the first is obviously changes in the global economy and the impact of the global economic recession and the recession which impacts on our shores as well.
Secondly, the need to continue to provide maximum impetus for a strong outcome at the Copenhagen meeting due at the end of this year and the reason for that of course is that a strong outcome in Copenhagen is in Australia's long term economic and environmental interests.
And the third factor is that it is in Australia's fundamental national interest to provide business certainty and investment certainty for the future and therefore to conclude these arrangements.
Firstly, let me go to the industry measures that we are speaking to. The package includes a number of measures to manage the impact of the global recession. The worst global recession since the Great Depression means we must adapt our climate change measures but not abandon them.
Firstly, the start date of the Carbon Pollution Reduction Scheme will be delayed one year to commence from 1 July 2011. Secondly, to further assist business a one year fixed price period will apply until 1 July 2012 and thirdly, we will then have a floating price through the full operation of the scheme from 1 July 2013* [2012]. Now this we believe represents an appropriate response to the current uncertainty.
During the fixed price phase an unlimited number of permits will be issued to liable companies at a price of $10 per tonne.
Furthermore a new global recession buffer will be provided as part of the assistance package for emissions-intensive trade-exposed industries. Industries eligible for 60 per cent of assistance will receive a 10 per cent buffer for a finite period, while industries eligible for 90 per cent assistance will receive a five per cent buffer for a finite period. Eligible businesses will receive funding to undertake energy efficiency measures from 1 July 2009.
Let me now go to the question of targets. On the question of targets the Australian Government remains committed to reducing carbon pollution by five per cent against 2000 levels by 2020, regardless of action taken internationally.
Secondly, we also retain our commitment to reduce emissions by up to 15 per cent of 2000 levels by 2020 in the context of a global agreement that falls short of the 450 parts per million outcome but satisfies criteria already specified in the White Paper.
Thirdly, we now commit to reduce carbon pollution by 25 per cent by 2000 levels by 2020 if the world agrees to an ambitious global deal to stabilise levels of CO2 equivalent in the atmosphere by at least 450 parts per million by 2050. This of course, 450 parts per million outcome, is an outcome consistent with Australia having the prospect of saving the Barrier Reef.
Furthermore, if this happened, that is if we did achieve that significant and ambitious and comprehensive global outcome around 450 parts per million, the Government has further committed to realising five per cent of that 25 per cent - up to five per cent of that 25 per cent - by the Government purchasing international credits including investment in the protection of international forests.
Thirdly, let me turn to individual action. The Australian Government has also been engaged in not just active discussions with business and industry, active discussions with the community at large, active engagement with the international community but also with those concerned about appropriate contributions to this important target by households themselves.
In terms of the household sector, we believe that this is best enhanced in terms of its contribution to bringing down greenhouse gas emissions by the establishment of an Australian Carbon Trust to allow households to do their bit by investing directly in reducing Australia's emissions and to drive energy efficiency in buildings.
Individuals and households will be able to calculate their energy use at home and pledge contributions to the $25 million plus energy efficiency savings fund to effectively offset their emissions. Individuals will be able to calculate their energy use and establish the savings they could achieve with a more energy efficient home. A household or individual could then make a tax deductible donation to the pledge fund, which the pledge fund would use to buy and cancel carbon pollution permits equivalent to that level of energy use.
Because the pledge fund will pool pledges, even small amounts can contribute to making a big difference overall. Also, as part of the Australian Carbon Trust, the Government will provide $50 million in seed funding to the energy efficiency trust to promote energy efficiency in commercial buildings and in wider business operations. The trust will bring together public seed funding, business skills and technical knowledge to leverage investment in energy efficiency projects. By demonstrating and showcasing commercially viable energy efficiency opportunities, the trust will promote the benefits of energy efficiency. In addition the Government will take into account the contribution of individual households that purchase accredited GreenPower in setting the Carbon Pollution Reduction Scheme caps.
On the question of the energy efficiency Trust, let me just give you one quick example as to how that would work. The Trust could identify lighting improvements for example in the business that would cost $2 million to undertake. The Trust would cover this $2 million cost with the business contributing nothing upfront. The business could then pass the energy cost savings from the lighting improvements back to the Trust at a commercial rate until the full $2 million is paid back to the Trust over time. Once the $2 million is paid back the business keeps the ongoing savings which it has achieved.
To conclude, what we have done in this business is work very carefully across the Australian community to deliver the best possible outcome for the Carbon Pollution Reduction Scheme in the very difficult circumstances in which the global economy now faces. Firstly the Australian Government has listened carefully to the representations made to the Government by business, dealing with the challenge of the global recession in ensuring that their businesses can carve out their own business and economic futures in a very difficult environment.
Second, the Government has also listened carefully to international and environmental stakeholders committed to realising the best possible outcome at Copenhagen, which is scheduled for the end of this year, in order to achieve the best and most ambitious outcome necessary to stabilise long term greenhouse gas emissions at 450 parts per million, because applied to Australia's own circumstances long term, that creates the best economic and environmental dividend to Australia, including as I said importantly before, providing a scientific basis for us having a real prospect of saving the Great Barrier Reef.
And finally the Government has also been listening to households and the contributions which they wish to make voluntarily to this Carbon Pollution Reduction Scheme, hence our decision to establish the Australian Carbon Trust.
Finally, the Government will now proceed to introduce legislation into the Senate. The Government through the Climate Change Minister, Senator Wong will now engage in consultations with all parties. We will be dealing with their relevant climate change spokesmen - the Liberals, who I understand have two spokesmen, the Nationals and the minor parties. And our objective of course is to provide business certainty for the future by providing a stable framework, legislative and regulatory framework for the future given that this is a set of changes which affects the entire economy long term.
On the question of the Liberals I would simply note as follows. The Liberal Leader has stated that these goals are shared by the Liberal Party in terms of action on climate change. Goals shared in relation to a slower start, goals also shared I note from earlier comments for the need for more ambitious targets overall.
But here's the rub, it's time to get off the fence Mr Turnbull and it's time to act in the national interest and to secure this legislation and certainty for the future. And on the key question of climate change, which affects the economic and environmental interests of this country long term - will the real Malcolm Turnbull please stand up? The time has come.
Before we go to your questions, can I just ask the Minister for Climate Change to add to my remarks about the nature of the negotiations in which she has been engaged and then we'll happily take your questions. Over to you Senator Wong.
MINISTER WONG: Thank you Prime Minister. Well today we're putting forward responsible changes to the Carbon Pollution Reduction Scheme. We always said we would consult and in fact we have been consulting as you know in relation to this policy for many months now and all of you have been intimately interested I am sure in the consultations through the Green Paper, White Paper, draft legislation and to now.
These changes today are all about strengthening the Carbon Pollution Reduction Scheme. They are to enable the economy to recover to support jobs at this difficult time but also changes which will help us secure the global agreement that this nation needs. We are putting forward these changes, they have been the subject of detailed consultation with the Business Council of Australia, with the Australian Industry Group, with representatives from the Australian Conservation Foundation, the World Wildlife Fund for Nature, the Climate Institute, as well as the ACTU and ACOSS.
And can I say, the Government thanks those stakeholders and representative organisations for the way in which they have chosen to engage in these discussions and consultations.
We do believe that this is a package that has been strengthened and improved as a result of those consultations. These groups have been prepared to look to the national interest in developing this package. That too has been the Government's focus.
This is a package that is in Australia's national interest, it is in our interest to ensure we have a phase-in of the scheme to support jobs, to enable the economy to recover. It is in our national interest to seek a global agreement at Copenhagen that gives us the best chance of avoiding dangerous climate change, and it is in Australia's national interest to pass this legislation this year.
JOURNALIST: Prime Minister, have you broken a promise to voters by delaying the start of this emissions trading scheme to beyond the next election?
PM: We will be legislating obviously later this year. The key challenge we face is dealing with the realities of the global economic recession, responding to the stated concerns of business, responding to the need to get a good outcome in Copenhagen, and the absolute necessity of ensuring that we have legislation through the Senate which provides certainty for the future.
I am in the practical business of responding to realistic challenges with which we are now confronted and that's what the Government is determined to do. This is a hard piece of policy, it is difficult, it is complex, and made doubly and trebly so because of the global economic circumstances which we now confront.
That shouldn't get in our road of doing this. What you have effectively is a slower start to the Carbon Pollution Reduction Scheme and the prospect of a stronger, greener conclusion.
And the reason for that is to do what we can flexibly and intelligently to help business at a time of duress, while having a more ambitious target in terms of bringing down greenhouse gas emissions later on, to underpin the dynamic of getting a really positive outcome in Copenhagen, that is what we are on about.
JOURNALIST: The delay in starting the scheme plus the extra free permits you are giving to the heavy trade-exposed polluters, is that going to affect the material cost of the scheme, what it is going to cost people who aren't entitled to compensation, households, smaller businesses?
PM: We will be speaking, we are adhering to the principle that the scheme will be self-funding and we are confident that we can land that outcome, but let's be realistic about the fact that we have been confronted with the most difficult set of economic circumstances in which to bring in this long term reform to the economy.
Therefore, we think we have got the balance right. This is hard policy, difficult policy. But one thing I know for certain is that every business organisation we have spoken to wants a certain investment environment for the future.
And therefore, for anyone, Mr Turnbull or the Liberals, or anyone else, to simply play politics opportunistically on this on the way through damages long term investment certainty. Starting slower, because of the global economic recession, finishing stronger with the prospect of a bigger outcome on greenhouse gas reductions, by midpoint, by 2020, we believe, gets the balance right.
JOURNALIST: How can you say the ETS is being strengthened when it's being delayed. The heavier polluters are going to get a cheaper ride. And now 25 per cent, the higher figure, is dependent on Copenhagen (inaudible)
PM: It is strengthened because the balance reflected in the package addresses the difficulties of the recession now and a more ambitious target for later on. And the truth is we are not going to land a good outcome for the planet until we get a strong outcome later on. Let's go back to the core element concerning 450 parts per million outcome in relation to its implications for Australia.
You are either going to aim for an outcome which deals with the reality of the Great Barrier Reef or put it in the too hard basket, we think we should keep that aspiration and ambition on the table for Copenhagen.
And as for the additional assistance which has been envisaged through the emissions-intensive trade-exposed sector, it is a temporary measure, responsibly designed to provide support on the way through for firms who are doing it tough in the global economy at the moment.
JOURNALIST: Prime Minister, when the White Paper came out the Government was roundly criticised for not leaving 25 per cent on the table and we were told it was because it was just too hard and too expensive to turn the economy around in that time frame, so what has changed? And second, will you personally talk to Malcolm Turnbull about this in order to try to broker a bipartisan deal?
PM: On the question, as I said before, of the slower start to the Carbon Pollution Reduction Scheme and the stronger finish, we believe by doing that, we provide better circumstances to achieve that stronger finish, conditional on a global outcome being achieved.
Also remember, we are providing better adjustments for business on the way through, particularly for the next five years.
On the question of negotiations with other parties, I have got to say, Senator Wong has been engaged with all relevant industry and environmental groups and consumer groups over time. It is only rational and reasonable that that negotiation continue with the climate change spokespersons of the relevant parties and I think that is the right way to go.
JOURNALIST: When do you expect to put this legislation to the Senate?
PM: Basically as soon as we all get together for a very happy week next week, but very soon, as soon as the parliament hops back in together.
JOURNALIST: (inaudible) you said broadly speaking you hope the scheme would be self funding. Now of course you are setting a price of $10 at the start. Prime Minister and Treasurer can you guarantee that it will be self funding?
PM: Well our belief is that the structure that we have outlined today does do that, but we have a number of outstanding minor technical issues to resolve. And that is why I am simply being realistic about the fact that that is our ambition. And this will be a very difficult Budget to frame for the reasons which the Treasurer and I have been speaking of in recent times.
And therefore, we have got to make sure that you know, we cut our cloth accordingly. That remains the ambition, we believe that the scheme will do that. We have two or three technical issues to resolve. Do you want to add to that Penny?
MINISTER WONG: Just a couple of points, first obviously assistance is scaled to the carbon price so household assistance and so forth will be scaled to the $10 fixed price. I comment also on Lenore's question, let's also consider what has changed since the White Paper.
Obviously the global economic recession, the global situation has worsened, but also there have been significant movements on the international front. We see for example, the Obama administration which has clearly outlined its willingness to take a leadership role on climate change internationally. The major economies forum which I attended in Washington recently demonstrated that engagement. We have the United Kingdom willing to put a higher target on the table.
We have always been in the cart for the most ambitious global agreement we thought possible. You will recall in the context of the White Paper, we did say that a 450 parts per million agreement was absolutely in Australia's national interest and we said we left open the prospect of adjusting our post 2020 targets to reflect that.
Given these changed circumstances and in particular the circumstances internationally, it is the view of the Government that we can provide momentum to these international negotiations by putting a 25 per cent target on the table. It is highly conditional; it is still a hard agreement to achieve. We absolutely concede that but we believe it is in Australia's national interest to seek to do so.
JOURNALIST: Prime Minister just on another issue, you said during the election campaign, made a number of promises including tax cuts and uncapped childcare rebates for people and you also placed a premium on political honesty, can you tell us today that you will not renege on any of your election promises either next week or in the subsequent months?
PM: Well can I say to you Matthew that the Treasurer was asked extensively about tax cuts yesterday on Laurie Oakes and we take our commitments on something as fundamental as that pretty seriously. It is actually very difficult in the current economic circumstances, as I am sure you can do the numbers and figure out for yourself.
There are tax commitments which were committed to prior to the last election. Since then we have had this enormous assault on the Government's revenue. But we believe not only in the integrity of the commitment that we have put to the Australian people but also in terms of where we are in the economic cycle, making sure that we have got continued activity - (inaudible) - can I just finish my sentence - is that we will remain therefore committed to those tax commitments, and in terms of let's call it, broader Budget speculation, I will deliver back to you what my predecessor and the Treasurer's predecessor has always said, we will not comment on the content of the Budget.
JOURNALIST: As recently as December 15, you said to us at the National Press Club, “to delay any longer would be reckless and irresponsible for our economy and for our environment”. So why, in your own analysis, isn't today's decision reckless and irresponsible?
PM: Well, what we've had is a deepening of the global financial crisis which has now become a global economic crisis and the worst recession in three quarters of a century, that's what's happened.
JOURNALIST: (inaudible)
PM: Well, actually the data has consolidated and been confirmed considerably since then. The write-down of revenues around the world has been reflective of that. The first quarter numbers in various economies around the world have underpinned the dimensions of that. The IMF report which I think the Treasurer and others have made reference to in the last several weeks underpins that. The global economic reality has worsened fundamentally over the last three to four months and we now face the worst global recession since the Depression. That's fact one.
Fact two is we are dealing with what we set up for the next 40 years, that's what we're dealing with, out to 2050 and with interim targets at 2020. So if I'm faced with the reality of how do you therefore get a proper balanced Carbon Pollution Reduction Scheme up and through now because of the pressures which business face now while still providing the balance of a more ambitious target for 2020, I believe that's the most sensible, rational, balanced response to the fundamental change in economic circumstances today, and dealing with an environmental reality which doesn't disappear for tomorrow. I think it's the responsible way through.
JOURNALIST: You've said this will strengthen Australia's position for Copenhagen. If, however, you can't get it through the Senate, what will be Australia's line at that conference? And secondly, I don't think you addressed the earlier question of whether you'd be willing to negotiate face-to-face with Malcolm Turnbull.
PM: I did. I said that I think the appropriate way for which negotiations should be conducted on that is through the Climate Change Minister with spokesmen. The reason for that is that these are highly technical negotiations which involve a multiplicity of policy, technical and financial matters which have been exhaustively engaged in by the Minister and the Parliamentary Secretary with every business and environmental group in the country.
And therefore, if you're going to engage in a discussion about one element of the package which has consequences for the rest of the package, I believe the right way for that to be conducted is through the responsible Minister. I think it's the sensible way to go. I think the sensible course of action is to conduct technical and policy negotiations at that level.
Secondly, I'll just make a few points here. Remember, I seem to recall Mr Turnbull was saying, you know, one to two years, he was saying we needed a more ambitious target than 15 per cent. I go back to my proposition before. This is a major piece of long term economic environmental reform for the nation and for the world. It is time for Mr Turnbull and the Liberals to get off the fence. And will the real Mr Turnbull please stand up on the question of climate change? It's too serious to play opportunistic political games into the future on something as fundamental as this.
JOURNALIST: Malcolm Turnbull wanted stronger overall targets and a delay. Has he had a big win today? Is that what you're saying?
PM: Well, I'm not quite sure where the Liberals currently stand on this question of more ambitious targets. They went out there and said they want something more ambitious than 15 - I think it was carried in your paper from memory, Matthew - and then there seems to have been a period of eerie silence following that.
So, what exactly the current position is across this wide spectrum of views otherwise called the Liberal Party, I'm not sure.
But the bottom line is this: this is serious stuff for the nation. It is fundamentally important we get it right in terms of dealing with the recession impact on businesses now; holding out a real prospect for our negotiators acting internationally to get a strong outcome in Copenhagen at the end of the year - getting that balance right as well as reflecting our attentiveness to what households are saying about their desire to contribute voluntarily as well.
JOURNALIST: Minister Wong, given that today's announcement is partly about jobs - and many jobs have gone in the mining sector, especially in Queensland - why is there no assistance today for coal mines?
WONG: Well, can I say we have negotiated, or we have consulted, extensively with business groups and also with various individual companies, and that's resulted in the package that you have before you today. There do remain a range of sectors where there are further technical issues which will need to be worked through in the period ahead - and obviously you mentioned one of them - and I have asked Greg to assist with that and to work through the issues in the coal sector.
But more broadly, what you have before you today is a package that seeks to ensure that we move this economy over time to a low carbon economy that ensures we maximise the prospect of Australia securing a global agreement that is in our national interest.
JOURNALIST: Prime Minster, just on another matter. What details can you give us about Defence's investigation into the causes of the asylum seeker boat explosion of three weeks ago? Has that investigation been completed? Have you been briefed on it, and what were its findings?
PM: As I recall it, and I've been preoccupied with these matters over the weekend and this morning, that that investigation still lies within the purview of the Northern Territory police. I've not been advised that that investigation has concluded. As I've indicated in previous comments, once it has, then we will of course be making the conclusions of those findings public as is appropriate in consultation with the NT police authorities. We believe that's the responsible course of action.
JOURNALIST: (inaudible) is it looking into it independently?
PM: I'm unaware that that's the case. I'm aware of the Northern Territory police investigation, and its process and progress is as I've described.
JOURNALIST: The targets that you talked about today, increasing the 2020 target, you did say that if you were going to increase that target you would seek a mandate. What happened to that?
PM: It's very clear, and it follows on from a discussion before about timetables, the operationalisation of this scheme does fall beyond the next election. So, it will be absolutely clear cut where the long-term trajectory of this scheme goes, and I've been intensely mindful of that in putting this proposal to the Australian people.
This is big stuff for the nation. It's one of those things that we must get right for the long haul. And there will be an entirely legitimate debate about positions by participants in the political process on the way through and what happens after this. I understand all that. That's a normal, necessary part of political process.
My job as Prime Minister of Australia is to get this balance right and to get it through and to have a credible negotiating position for this economy, the global economy, our environment and the global environment, come Copenhagen and beyond. That's what we're talking about here. It's big stuff. And I wish it was easier to do this. It ain't. It's really hard. But you know something? This Minister and this Parliamentary Secretary have been head down, tail up for a long time trying to work their way through and we intend to get there. It is really important for the country.
Thanks folks.
*please note - the year is 2012