HOST: The Prime Minister joins me now from our Parliament House studio.
Kevin Rudd, firstly while we're talking about mining, we've just received the transcript of comments from the CEO of Rio Tinto, Tom Albanese, at a Merrill Lynch conference in Miami earlier today where he says he was shocked by your tax announcement but in particular he points out that Rio has reinvested everything it's earned in after tax profit back into Australia in the past ten years, about $38 billion in all, and he poses the question - would Rio have put that amount of money in if there had been a super tax in place? He calls it a super tax, not a tax on super profits, a super tax, and he says the answer was no. Can you afford to ignore that warning?
PM: Kerry, I think it's entirely predictable that large mining companies will complain about what the Government has put forward. What we want to ensure and what I believe in is that all Australians, because they actually own these resources, deserve a fair share back from these resources.
It reminds me, very much, of the debate which was kicked off back in the mid '80s when we brought in the Petroleum Resource Rent Tax. If you were to go to the Financial Times back in those days there's statements similar to the ones you just read out to me about the impending collapse of all future investment in offshore projects in Australia.
As we know that didn't happen. As Martin Ferguson just indicated in the earlier part of your program huge developments have since occurred within that tax framework, a 40 per cent tax, and secondly the largest resource project in Australia's history, the Gorgon project, was launched last year based on that tax. So it's fairly predictable that we're going to have complaints. We think the right thing to do is to obviously consult with the industry, we've said we're open to do that on questions of detail of implementation, of transition, but I've got to say Australians need to have a fairer share of these profits being earned from a resource which the Australian people own.
HOST: -OK-
PM: -so we can fund better super and the rest.
HOST: You've made that point but, it sounds not so much a complaint as a threat, well as a warning, if not a threat. He says the Pilbara business would not have been as big as it is, it would have been a lot smaller with this tax in place. Now are you, are you saying that's a hollow threat, it's just a process they're going through to try and soften you up?
PM: Well as I said before, Kerry, some of the large mining companies and some other companies are going to say all sorts of things as we sort out the detail of this. But again, it reminds me of a campaign which was run against the Labor Party in the lead up to the last federal election about how the abolition of Work Choices would fundamentally destroy the mining industry as well.
Well that hasn't happened nor did the introduction of the Petroleum Resource Rent Tax 25 years ago. So we've got to deal with these things on their merits.
HOST: So do you rule out categorically any significant change in the nature of your tax, whether it's the amount, the 40 per cent and you've said you're not going to, but also about the definition of what a super profits tax is?
PM: Kerry, I'll just repeat what I've said and the Treasurer has said since day one when we launched our response to Ken Henry's report and that is, we think the rates about right, we're very mindful of the Petroleum Resource Rent Tax precedent and secondly we're open for a discussion with the industry on detail, on implementation, on transition-
HOST: -What about on the-
PM: -80 companies-
HOST: What about on the definition of what a super profits tax is or what a super profit is?
PM: Well, Kerry, I don't intend to go beyond a single word that I've just said-
HOST: -OK
PM: -because that describes exactly the ambit within which the discussions are taking place with about 80 companies right now, most of the companies are in talking with the Treasurer about how to make this work but I go back to one fundamental-
HOST: Sorry, that, that does suggest to me that, that, this is still open about what that, what the final definition will be of a super profit?
PM: I just go back to what I said before, Kerry, and I haven't changed what I said from day one, there's going to be lots of sparks flying. I notice David Buckingham, who you may recall was the head of the Mining Industry Council, saying this is exactly what would happen, a whole lot of companies would come out and make all sorts of threats. As the former head of the Mining Industry Council he said that they are unfounded, that in fact this is a good tax for the future of the industry. I think we need to take all of this in our stride-
HOST: OK
PM: -remember what's at stake here is better super for working families, tax cuts for the general economy and furthermore, on top of that, funding the infrastructure which Australia needs. That is why the Government is doing this, because we believe in investing in our country's future competitiveness.
HOST: I'll get to the Budget details shortly but can you clear up a puzzle for me first.
PM: I'll try mate
HOST: -you've spent the best part of two years building up your political capital. How have you managed to damage brand Rudd so comprehensively in such a short time this year?
PM: Kerry, obviously the Government's going through a tough time at present. I've said as much to colleagues in the caucus. Governments from time to time go through difficult periods like this. Look, our job is to get on with the business of governing the country. There are lots of challenges we've handled well in the past, there's few things that we've got wrong, but when I go to the future and the proposition we've got to put to the Australian people is, who's most competent and capable of managing this economy in very difficult global times. So, some of those-
HOST: You, I, I said brand Rudd, you said the Government. I'm talking about Kevin Rudd, I'm talking about your image, your credibility, your brand. Whether some of those that appear to have been lost to you this year come back before the next election, or not, do you understand why so many people have turned against you now, Kevin Rudd, not just the Government, Kevin Rudd, and do you accept that they have judged your leadership and found you wanting?
PM: Kerry, that is a question which you should put to other folk who are political commentators and the rest. My job is to get on with the business of-
HOST: No, I'm putting it to you because you can't possibly suggest that this does not exercise your mind at all, that you are so focused, you're so focused on Government that you're not concerned about whether you're losing support going into the next election?
PM: Kerry, look I'm human like anyone else and of course you'd be inhuman if you weren't affected by developments from time to time, that's just the truth of it.
As I said before, we've been going through a tough time. Obviously a whole lot of people in the community have been disappointed by the position I announced in relation to the future of the Carbon Pollution Reduction Scheme. What's the reality that I had to confront there? Well two realities. One is that the Liberal Party backflipped and voted our legislation down, having negotiated an agreement with Mr Turnbull to get it through. That is the reality we had to confront and the second reality is this, that when we got to Copenhagen it didn't produce the sort of progress and the global agenda that we all had hoped, therefore where do we go to from here. Our commitment on climate change hasn't changed one bit, it's happening-
HOST: but-
PM: No, hang on, let me finish, you've asked me a pretty fundamental question here, which is about how the actions which I'm responsible for and the Government's responsible for are being seen. On the question of climate change our view hasn't changed one bit. The greenhouse gas reduction targets remain the same, our commitment to a Carbon Pollution Reduction Scheme as the best way of getting there is the same, but we can't alter the fact the Liberal Party hasn't voted this down in the Senate -
HOST: OK, but-
PM: -therefore we have to-
HOST: -but there's one thing you can't escape and that is this: it is still in your hands to go to the next election on the issue as you defined as 'a great moral challenge of our time', an issue on which you accused the Opposition of political, of absolute political cowardice, it's in your hands to go to the next election, seek a double dissolution, whether you seek a double dissolution or not and make this ETS a fresh mandate for the people to decide and tell both sides of politics what they want. Now you have squibbed that decision. You have put this on the backburner until 2013, at least, and the Budget makes that clear?
PM: You know, something, Kerry, I will be delighted to fight Mr Abbott on the next election, at the next election, whenever it is held, on climate change absolutely-
HOST: On the ETS?
PM: On climate change and actions to bring it about. The bottom line is this, we believe in climate change, he says it's absolute crap.
We believe that an emissions trading scheme is the most effective and cheapest way of getting there, he has rejected that position despite the Liberal Party having formally embraced it. I now have to confront the reality that that is what he's done.
The other thing is this, and this is the second reality I referred to before which you skipped over, and that is that the progress on global action has been slower than any of us would like.
That is why we've announced a decision that we would not seek to reintroduce this legislation until the end of the Kyoto commitment period and on the basis that global action has been adequate-
HOST: -but Mr Rudd-
PM: -in the meantime what we will do-
HOST: Mr Rudd, when the Opposition tried to argue with you on holding back a vote on the ETS until after Copenhagen, that is, until after the world had made a stand, you said that was absolute political cowardice.
So why is it now not absolute political cowardice for you to show leadership on this to the rest of the world by seeking to take the Australian people with you at the next election on an ETS?
PM: You know something Kerry where I think you've got this fundamentally wrong is frankly, being absent from the negotiations in Copenhagen themselves. There was no government in the world like the Australian Government which threw its every energy at bringing about a deal, a global deal, on climate change. Penny Wong and I sat up for three days and three nights with 20 leaders from around the world to try and frame a global agreement.
Now it might be easy for you to sit in 7:30 Report land and say that was easy to do. Let me tell you mate, it wasn't.
We are fundamentally committed to climate change. We could not get the global accord that we wanted. As a consequence we need to do further work on the global front, further work on the national front, because I am absolutely passionate about acting on climate change.
We've been frustrated domestically politically, frustrated internationally by the lack of progress there, but we will not be deterred, we will progress this matter and we will achieve the best possible means of bringing down our greenhouse gas reductions, greenhouse gas levels in the future.
And the bottom line is this, the bottom line is this: there is no way you can stare in the mirror in the future and say that you have past up the core opportunity to act on climate change. I will not do that. The Government that I lead will not do that, but I cannot wish away the two realities I've just referred to.
HOST: OK, OK-
PM: -they are there.
HOST: Health is obviously going to be a big part of your re-election agenda and this Budget throws more money at it again but can I humbly suggest to you that you've buggered up the strategy by mixing up a confusing array of big spending health initiatives, with a lot of other important government announcements, good and bad, all coming within a very concentrated period, the mea culpa over the pink bats fiasco, the cutting down of Peter Garrett and ultimately the dumping of the bats all together, the backflip over the ETS that you've already referred to, the Henry Tax Review and the new resources tax, the tobacco tax, more compulsory super, all of which is there for you to sell and explain and now the Budget, this is a very crowded political picture as you get closer and closer to an election?
PM: Well, Kerry, things don't just flow as you would naturally want them to flow all the time.
What was my commitment prior to the last election on health and hospitals? That I would work with the States to bring about a national reform plan for the future of our health and hospital system where the buck stopped with me, where we ended cost shift and blame shift and failing that I would take the matter to the Australian people.
Well it took two years to do, longer than we would actually like, but you know what? We brought about the single biggest reform to the health and hospital system this country has achieved since Medicare.
Now you may make a commentary about the best political marketing of it, there's a whole lot of other factors out there which from time to time you can't control, like a global financial crisis, for example, it's sort of rocking around out there, and you've just got to deal with it as it presents itself to you. It's not everything neatly arranged in your in-tray as you would perfectly like to order your universe. It's not like that.
So what we have done is executed and implemented the commitment we gave to the Australian people prior to the last election. We've got on with the task of doing it.
The national health and hospitals network has been agreed by five States and two Territories and it delivers better health, better hospitals, more funding for doctors, nurses and you know something, the funding flows from one July and I am proud of the fact that Nicola Roxon and I could bring about this fundamental agreement.
If you think it's not been properly marketed, well that's a matter for somebody else; my job is to get the deal done. I also-
HOST: Isn't it--
PM: also have the view-
HOST: Isn't it also your job to communicate it? I mean, as the leader aren't you also supposed to be an effective communicator? Let me put this to you, all the polling you're doing is that showing that the people really understand this array of health measures that you've kept announcing one after the other after the other?
PM: Kerry, if you'd come down the Queensland coast with me and the New South Wales coast to practically all the major centres, in those regions with their local hospitals and sat with the local doctors and nurses and allied health professionals and the patients and spoken to each of their local media, perhaps not read by you in the studio where you are this evening, let me tell you-
HOST: I do occasionally step outside it, but go on-
PM: No, I'm making a serious point to you. Do you read the 'Mackay Mercury'? Do you read the 'Bundaberg News Mail'? Do you read the 'Maryborough Chronicle'? I mean these are papers which are reporting what's happening on the ground in their communities.
Myself, Nicola Roxon, we spent the last six or nine months going around to about 103 of these centres around the country. So you ask are people aware of what we're doing on a health and hospitals front?
HOST: Um, no, I-
PM: Probably more so, probably more so than you may think.
HOST: I was asking, I was asking how much they've absorbed of this complex array of announcements that you've been making in the last six weeks or so with all the other stuff.
PM: Well I've gone to the core one which you've raised which is about the health and hospitals reform.
HOST: OK.-
PM: The Budget of course contains a huge new investment in it. It is linked very much-
HOST: Before you go on Mr Rudd, I'm sorry but we're out of time and I've got serious constraints to meet the schedule. But this is a conversation I guess we're going to have to continue and obviously we'll be looking at the health thing in toto as things move along, but thanks very much for joining us tonight.
PM: Thanks for having me on the program Kerry.