HOST: Prime Minister, on the eve of the last election you said there'd be no carbon tax. Were you wrong to say that, and what's change your mind?
PM: The Australian people voted for this parliament, and this parliament gives us an opportunity to price carbon - and we should. It's the right time to do it.
HOST: But people didn't vote for a carbon tax, though, did they, at the last election?
PM: I think Australians voted for action climate change. I believe Australians are persuaded of the science of climate change - the science is in and they want to see us get on with. They want us to do the right thing and the right thing is to price carbon, so the announcement I've made today is that we will price carbon from 1 July 2012, and we announced today the broad design of the mechanism to price carbon.
Now, Heather, I'm well aware there will be any amount of fear campaigning about this from the Opposition and there'll be figures bandied around in tomorrow's newspapers about what this will cost people. We've made a decision and an announcement about the price mechanism. We will continue to work through on issues like the actual price, and none of the figures bandied around tomorrow will be accurate. They'll be baseless, and none of them will take into account the fact that from a Labor Government there will be a fair carbon price and there will be assistance for households.
HOST: Well, you've raised the point - the Opposition Leader has predicted a people's revolt, and Tony Abbott says he'll be fighting against this for every second of every minute of every day. Are you geared up for that? Is this a make-or-break issue for your Government?
PM: Tony Abbott's only got one speed, and that's to oppose everything, and so of course he will be clutching for all of his old slogans, ‘great big new tax on everything' and out there-
HOST: -But there hasn't exactly been a ringing endorsement from business groups, either.
PM: Well, we were expecting and we will see a fear campaign from Tony Abbott. That's the only thing he knows how to do. He will be out there actively misleading Australians with false and baseless figures. He won't be talking to Australians about assistance from the Government to help them through.
I expect, Heather, this is going to be a hard debate, but I am determined that we will be out there winning this debate and pricing carbon. It is the right time. It's the right step for our nation's future.
I don't want to see this country left behind with an old-fashioned, high-pollution economy when the rest of the world has moved on.
HOST: You balked at this in the Rudd Government when the going got tough. Will you balk at it again?
PM: Well, Heather, I'm not going to canvass issues in the past, but-
HOST: -If there is overwhelming pressure, mounting pressure from the public and from voters about this, would you be tempted to balk at it again?
PM: I'm here as Prime Minister, leading a Labor Government, and we have a proud tradition of doing tough things that have built prosperity for Australia. We've done them in the past.
You know, taking tariffs away, for example. People said ‘that'll cost jobs,' ‘it'll be unpopular', but we did it because it was the right thing to do and those kind of economic reforms made a difference to Australia and are part of the explanation for the prosperity we enjoy today.
This is a tough economic reform and I am determined we will get this done.
HOST: Are you confident of getting this through the House of Representatives with the support of the independents, because Tony Windsor, for starters, doesn't look as though he's supporting it yet.
PM: This parliament gives us some unique opportunities, and we've seized them through the Multi Party Climate Change Committee, which the Australian Greens are on, Mr Oakeshott and Mr Windsor.
Mr Oakeshott and Mr Windsor are part of the process. They've certainly said today they want to see the carbon price mechanism discussed by the Australian community. They were supportive of us making this information available today.
The Government has endorsed this mechanism. The Australian Greens have endorsed this mechanism. Mr Oakeshott and Mr Windsor were content to see it be announced so Australians could see it.
We'll keep working together with good faith and good will, the way we have to date.
HOST: With this carbon tax - you do concede it's a carbon tax, do you not?
PM: Oh, look, I'm happy to use the word tax, Heather. I understand some silly little collateral debate has broken out today. I mean, how ridiculous. This is a market-based mechanism to price carbon. It's-
HOST: -With this carbon tax, then, it does seem certain that fuel and electricity prices will go up. How are you going to be sure that you can compensate for that, especially for low-income earners?
PM: Well, can I say this is a market-based mechanism to price carbon. It has a fixed price period at the start, a price that will be fixed. That is, effectively, a tax, and I'm happy to say the word tax.
How will we know that we can support people? Well, every dollar that is raised through this carbon price will go to assist to Australian households, assist industry to help make the transition, and go to fund programs that tackle climate change, and I know there'll be a lot of discussion about electricity prices. The hard truth, Heather, is electricity prices are going to go up. That's what everyone is saying - whether we price carbon or not.
If we price carbon, we will be able to assist people and move to a low-pollution future. Otherwise, electricity prices will go up, there'll be no assistance and no transition in our economy.
HOST: Julia Gillard, thanks for joining us tonight.
PM: Thank you.