HOST: Prime Minister, thanks for joining us.
PM: My pleasure, Neil.
HOST: Do you accept, August last year, the eve of the election, you lied to the voters when you said this:
AUDIO CLIP: There will be no carbon tax under the Government I lead.
HOST: Is that a lie?
PM: I went to the last election, Neil, saying that I believed climate change was real, that it was caused by humans, and that we had to price carbon. What I announced yesterday was a market mechanism to price carbon. It's going to have a fixed price for the first few years.
Now, there was going to be this silly semantic debate break out about whether or not that was effectively like a tax, and I'm happy to say for the first few years with a fixed price, it's effectively like a tax, but Neil, this is the right thing to do.
HOST: So did you lie to us on the eve of the election?
PM: Well, Neil, I've just explained to you I went to the last election saying I wanted to price carbon, that that was the right thing to do, and that's exactly the thing I am going to be doing.
And Neil, if we want to comb through the history, I'm sitting here with a quote in front of me from Tony Abbott, where he says that the simplest thing to do would be to tax carbon.
HOST: But he's not Prime Minister, Prime Minister. We went into the election with a promise from you there would be no carbon tax. There is now going to be a carbon tax. Why should you be trusted?
PM: We went into the election and we emerged with this parliament that people voted for, and in this parliament the Labor Party is committed to pricing carbon, and we are obviously working with others in the parliament committed to pricing carbon.
The Australian people want us to get on with it, Neil. It's the right thing to do.
HOST: The Australian, I'd suggest, want honesty and directness, particularly before an election. Did you, before the election, believe in a carbon tax, because you now believe in one? What was your view before the election?
PM: Neil, every day, every day of the election campaign, every day of the last parliament, for a long period of time, I have believed that global warming is real. I've watched the science-
HOST: -But did you believe in a carbon tax?
PM: Well, I'm answering your question, Neil. I've believed that global warming was real. I've seen the scientific evidence come in. Having seen that evidence come in I knew we had to do something about it, and I became persuaded by the economists around the world who said the best way of tackling carbon pollution is to price carbon.
HOST: When were you convinced of that?
PM: Neil, any day you would have wanted to ask me that over the last several years I would have said that to you.
HOST: So why did you tell us there'd be no carbon tax, and there now is?
PM: Well, Neil, we're getting involved in some word games here-
HOST: -No, we're involved in an issue of integrity, Prime Minister, and-
PM: -and I'm answering that issue, Neil. And do you want to get out all of my quotes during the election campaign, where I talked about climate change being real; where I talked about it being induced by human activity; where I said this nation needed to have a clean energy future and price carbon, and that was something that the parliament should do, should price carbon, and that's exactly what I announced yesterday. We will price carbon.
HOST: Do you believe, at the last election, the Australian people voted for you believing you would impose a carbon tax?
PM: I think the Australian people voted for me knowing I believe climate change is real and that I was determined to act on it, and that the Labor way of acting on it was to price carbon. I don't think anybody could have watched the last few years in politics and not come to that conclusion, Neil.
HOST: So, your quote, ‘there will be no carbon tax under the Government I lead.' How do we misinterpret that, Prime Minister?
PM: Well, get out every statement from the election campaign, Neil - all of the ones where I talked about the need to price carbon. This is a semantic debate about the mechanism, the mechanism for pricing carbon, and let's be clear about this, Neil.
Yesterday, I announced the carbon pricing mechanism. That mechanism is a market-based mechanism.
That means that, ultimately, a market will fix the price of carbon. For the first few years it will be fixed by the Government, and people were going to say, ‘well, isn't that going to work, effectively, like a tax', and we were going to have one of those silly debates about whether or not I would say the word ‘tax', so I just clarified yesterday that the first few years, with the fixed price, do work effectively like a tax.
This is the right thing to do - to price carbon. That will have price impacts. It means goods that have more pollution in them, carbon pollution in them, will cost more. Goods that have less carbon pollution in them will cost less. People will respond to those price signals and people will be assisted with payments so that they can adjust to this new system.
HOST: OK, will it affect petrol?
PM: It will have price impacts, Neil. What I announced yesterday was the carbon price mechanism. The decisions about the amount of the price and how it will be phased in on industry sectors are yet to be made, and-
HOST: -Well, I'm not asking for the exact figure, but will it affect the price of petrol?
PM: And I've just given you the answer, Neil. The-
HOST: -I'm sorry. I didn't understand it.
PM: Well, the second thing I said is the industry coverage and industry phasing in - which sectors of the economy it will apply to, when - those decisions are yet to be made, and what that means, Neil, is any newspaper you have seen today that has a dollar figure in it suggesting that a particular family will pay a specific dollar figure, all of that is misleading and wrong. The dollar figures haven't been set and there will be assistance to households.
HOST: OK, but it will affect households directly, clearly. I mean, so we don't put a figure on this, say $300 a year.
PM: Neil, let me just put it to you absolutely clearly - there will be price impacts. That's-
HOST: -What's a price impact, Prime Minister. Let's speak, seriously, what is a price impact? Prices will go up.
PM: Neil, if you can't understand those words-
HOST: -No, I'm sick of jargon.
PM: Oh, that's not jargon, Neil. That-
HOST: -Price impact, prices will go up? Will petrol go up, will electricity go up, will gas go up?
PM: Neil, settle back down and let me answer the question-
HOST: -Oh, Prime Minister, I-
PM: -and I'm going to answer it very directly for you.
There will be price impacts, and what that means, Neil, is the price of goods with a lot of carbon pollution in them will go up, relative to goods with less carbon in them.
HOST: So, petrol will go up?
PM: What that means - No, listen to me, Neil-
HOST: No?
PM: -what that means - no, I'm asking you to listen to me, and I will deal with the question of petrol. I'm not having you construe from an interrupted interview what I may or may not be saying.
HOST: Thank you.
PM: So, Neil, there will be price impacts. The whole point of pricing carbon is to say that goods that have got a lot of carbon pollution in the, get relatively more expensive. People innovate, they start to make things with less carbon pollution in them, and those things are cheaper.
What do we do with price impacts? Well, we assist households. The households, therefore, have their purchasing power, they go to the shops, they look at the prices, they will buy the things with less carbon pollution in them.
What does that mean in the long term? Our economy will move-
HOST: -Can I ask a question, rather than you ask them?
PM: -to a low-pollution, clean-energy future.
Just making sure I get a few words in, Neil.
HOST: Fair enough, but rather than you ask the question, then answer them, I'd like to ask a few, and let's clear up the petrol. You say it will affect carbon-causing areas. Obviously, petrol will go up, won't it? And gas and electricity.
PM: Big decisions, Neil, about sectors of the economy and when they will be phased in are yet to be made, but let me deal very specifically with electricity prices, you've just used that example. Let me deal very specifically with electricity to start with.
Electricity prices are going up, Neil. That's the hard truth. They're going up whether or not we price carbon.
The choice we've got here is whether we have them go up because industry is uncertain about carbon pricing and not willing to invest in the absence of a carbon price, or whether we price carbon and assist households along the way.
I'm making the choice to price carbon and assist households, rather than leave households with rising power prices and no assistance.
HOST: Petrol?
PM: Well, Neil, that's an industry sector we will need to make a decision about the coverage of and I've explained to you that those decisions are yet to be made.
HOST: OK, who will make them? Bob Brown?
PM: We will work through the Multi Party Climate Change Committee. We will work through our Government and Cabinet processes. The Government makes its own decisions. I am prepared to work with people of good will to get things done that are the right thing to do for the Australian economy.
I want this nation to have a clean-energy future. I don't want us to be left behind as the world changes. I don't want us to lose jobs because we've been left behind. I'll make decisions about those things and I'll work with people of good will to get them done.
HOST: Is there any way of avoiding an increase in the price of petrol?
PM: I've just explained to you about petrol and making decisions about industry sectors, Neil. I'm not going to play a silly game of hypotheticals. I'm being very frank with you about price impacts, also very frank with you about assistance to households.
HOST: Prime Minister, I'll be frank with you. People are feeling duded. People are feeling unsure and insecure. They see their petrol prices going up, their gas prices going up, their electricity prices have already gone up, as you say. They see them going up more. They see the possibility of an increase the equivalent of the GST, a 25 per cent increase in the GST, every year, and they are concerned, worried, and we can't really just dodge it, which, with respect, I think you're doing.
PM: Oh, what a load of nonsense, Neil, and I'm not trying to do that, and on judging the view of the Australian community, Neil, let's have a frank exchange about that.
Last time I came on this show you were there, bristling and saying to me ‘The flood levy! People hate it! Look at the polls on TV screens! Everybody hates it! There will be a riot and what a dreadful, dreadful mistake!'
Well, I'm happy to say, Neil, that I said to you then, calmly, on that show, I believe the Australian community will come to accept this as the right thing to do, and Neil, I think there's plenty of evidence I was right about judging the community mood.
On the community mood about climate change, I think Australians want us to get this done. They know it's the right thing to do.
Yes, they will be concerned about how it will work, how it will impact them, what assistance they will get, and I will be clear about that as the decisions are taken every step of the way and I will be on shows like yours and right around the country, explaining it, taking questions, talking to people, very happy to do that. That's the way I work and that's what people will see from me.
HOST: Do you accept that this decision is sufficiently contentious to put your Government and your leadership on the line?
PM: Oh, what a load of nonsense, Neil. The Government, in a methodical, careful, structured way is doing the right thing to create a clean-energy future for this country, to make sure we've got jobs in the future. I don't want this country to be left behind. I don't succumb to this hysteria that breaks out in the media.
I mean, honestly, Neil, I get set more tests than the average VCE student. You know, parliament convenes last year: ‘Ooh, can the parliament work?' And it does. I announce the flood levy: ‘Can she persuade the Australian people? Can she get it through the parliament?' Well, I think there's a fair degree of evidence that yes, I can, and it's happening.
On this, I will take the same approach, patient, methodical. I'll leave the huffing and puffing to others.
HOST: Fair enough, but when are told there'll be no carbon tax, they probably believe it and they're a little surprised when they get one.
PM: And when people were told in the last election campaign that the scientific consensus was in, humans are inducing global warming, we need to cut down on carbon pollution, and the best way of doing that is to price carbon, they probably accepted that too, Neil, and that's exactly what's happening.
HOST: So, you really don't think this is important enough to put the Government on the line, or your leadership on the line?
PM: I just don't succumb to this sort of hysteria. What governments do is we make decisions in the national interest. Some of them are tough decisions. Some of them are controversial decisions. Some of them you've got to be ready to go out and put your case and argue for it, and some days those arguments are quite hard.
That's what governments do, Neil. That's what reforming governments do. My Government is a reforming government. That's what I do as Prime Minister - full stop.
HOST: The Council for Social Service says that low-income earners will be the hardest hit and the quickest hit. Do you disagree with that?
PM: That's why we will assist households.
HOST: OK, will you guarantee households at all levels will not pay more?
PM: The way carbon pricing works is the revenue collected can then be used by government. The single biggest thing it will be used for is assisting households.
HOST: Will high--income earners be compensated as well?
PM: We will assist the households most in need, Neil. Someone on your income level - if I may put that to you, I don't know precisely what you earn but I suspect by community standards it's a fair bit of money -
HOST: -Yes.
PM: -I think someone on your income level can probably look after themselves a fair bit.
There are other Australians who need more assistance.
HOST: So at what level will compensation end?
PM: Well, we will announce the assistance to households, but the single biggest use of the money raised from pricing carbon will be to assist households.
HOST: But not high-income earners? What's a high income earner? I accept I am and you are.
PM: I'm a Labor Prime Minister. I'm from a Labor Government. We do things in a Labor way, which means fairly, and when we do things fairly that means we assist people with the most needs, and high-income earners like you and me do get asked to look after ourselves - and we can.
HOST: Prime Minister, the new era of decent politics - that's gone, isn't it? You called Tony Abbott a hollow man, say he's hysterical. He called you Lady Macbeth. That didn't last too long, did it?
PM: Well, I think Tony Abbott and I, over many long years in various capacities, have been known to have a red-hot go in parliament, and I don't apologise, Neil, for-
HOST: -That was another promise, though. You promised a new era in politics. It's gone.
PM: Well, Neil, I actually don't think I ever suggested that I wouldn't go into the Australian Parliament and have a feisty go in respect of what I believe in. People know I am a feisty parliamentary performer. I can take it up to the Opposition. That's what I've done ever since the day I first got here and I've never suggested I'd do anything else and I never will.
I will always be a passionate, sometimes fierce, advocate for the things I believe in.
HOST: Just to wrap up, do you think there's any other things we've misunderstood you on? I think the public would have said we don't think there'll be a carbon tax. You're now saying ‘well, it was probably always going to happen.'
What else did we believe in that we perhaps got wrong?
PM: Neil, I've said this year is the year of decision and delivery, so let's be really clear about what you can expect to see from me.
HOST: Changes?
PM: We will price carbon. We will get the Minerals Resource Rent Tax through the parliament. We will continue to deliver our education reforms, because I believe every child deserves to get a great education. We will deliver workplace participation reforms. I want people to have the benefits and dignity of work. We will deliver our health reforms. We will deliver the National Broadband Network.
I want to make sure that this country is a land of opportunity and that we seize the opportunities of the future, and having a low-pollution, clean-energy economy is one of them. We cannot afford to be left behind and stranded by history. I'm not going to do that to the nation.
HOST: So, there's nothing else there that we misunderstood?
PM: Well, Neil, I've just run through my agenda for 2011 with you.
HOST: Fair enough, and you haven't been bullied into this by the Greens? It was always going to happen?
PM: I've made my decisions, Neil.
HOST: Without influence from them?
PM: I've made my decisions. I've always believed climate change was induced by human activity, that we needed to cut carbon pollution, that the most efficient way of doing that was a market mechanism to price carbon. That's precisely what I announced yesterday.
HOST: So it's nothing to do with keeping the Greens onside?
PM: It's to do with making sure this nation has a prosperous, clean-energy future and we don't lose jobs.
HOST: No political expediency whatsoever in this?
PM: I've just explained it to you, Neil. Clean-energy future, Aussies having jobs.
HOST: A very quick question, if I may.
The War Memorial, I was there during the week and I know you were there, launching the Hall of Valour. I was there before that, interviewed the three VCs, terrific people. Are you going to restore the $5-7million they say they've been cut or not?
PM: Well, Neil, I'm not going to accept those figures, because they're not the figures that have been supplied to me, but way, way, way before this ever was raised in the Australian Parliament I had become concerned about funding for the War Memorial.
I said to the Minister for Veterans Affairs and the Minister for Finance let's look at the funding of the War Memorial. I want to make sure they're properly funded. Let's look at it properly, do it well, do it methodically, get it all right - get together, work on it, give me a report. I'm receiving that report very soon and we will act on it. I want to see the War Memorial properly funded. It's a sacred place.
HOST: Thank you very much for your time. Did we get through that without patronising each other?
PM: Well, Neil, I suppose that's for others to judge.
HOST: Well, I don't think I did, but thank you.
PM: Well, Neil, all I was doing was making sure that I got my point of view across.
HOST: Thank you very much for your time
PM: Thanks, Neil.