HOST: Good morning, Prime Minister.
PM: Good morning, Laurie.
HOST: Prime Minister, how is the effort going to get Australians out of Libya?
PM: Laurie, we've made the decision to withdraw our consular staff from Libya. The security situation is degenerating and the United Kingdom, the United States and Canada have taken similar decisions, so our three consular staff have been evacuated. We've been assisted by Canada to do that, and they are now in Malta.
We do have a very limited number of Australians still in Tripoli. A number of them have made their own arrangements to leave. Some have knowingly decided to stay and we are concerned about the circumstances of one Australian who is being detained by Libyan security forces. We've been making inquiries about his welfare but we have been unable at this stage to confirm his location or to get in contact with him.
So, we will continue those efforts, but Laurie, as Prime Minister, I've got a duty of care to our consular staff and like other nations I formed the view that it was not safe to have them stay in Tripoli, so we have got them out.
HOST: What about the issue of sanctions? The Americans, the EU, have announced sanctions. Are we doing the same?
PM: Overnight, Foreign Minister Rudd has announced sanctions on Australian's behalf. They go to travel and financial sanctions. Obviously we also support arms sanctions. We don't have any direct military relationship with Libya, of course, but we do support arms sanctions.
Laurie, as we speak the Security Council is in session and we are urging that the Security Council pass resolutions which enable the world with to speak with one voice and to further isolate the Gaddafi regime.
As you know from the coverage from Libya, Gaddafi is set on a murderous and violent path and the world does need to speak with one voice in absolute condemnation of this conduct.
HOST: Do we know whether the Gaddafi family or members of the regime have assets in Australia that you can freeze?
PM: Look, I am not advised of any assets but one of the reasons that you do the financial sanctions and the travel sanctions is to close in around Gaddafi and his family and cronies so that they are not able to travel freely and they are not able to move money freely. I don't think anybody wants to see them profit from the kind of violent and vile conduct we've seen on display.
HOST: There are reports in some Sunday papers today that Bob Hawke told guests at a dinner in Perth that you won't go the distance, and Greg Combet will take over sooner rather than later. What is your response to that?
PM: Well, as it happens, Laurie, I had breakfast with Bob Hawke yesterday and we were laughing together about Julie Bishop's endeavours to spin this story, so Bob and I were having a good old chuckle over some yoghurt and fruit yesterday morning.
HOST: So he denies to you, to your face, that he said that?
PM: Oh, what Bob said is, clearly, Julie Bishop has been out and about trying to sell this story and we just laughed about it. It is just one of those silly little flurries.
HOST: Mr Hawke has confirmed that he does expect Greg Combet to be your successor. Now, Greg Combet, is older than you, so that doesn't suggest Hawkie thinks you are around for the long haul.
PM: I think Bob Hawke would happily confirm that he is a fan of Greg Combet - and no wonder. Greg Combet is a very, very talented man and I've recognised those talents and put him in charge of a very big area of policy for the nation and its future, and that's creating a clean energy economy, having the jobs of the future through pricing carbon and tackling climate change.
HOST: OK, let's talk about climate change and the carbon tax. Do you deny being one of those who leaned on Kevin Rudd to shelf his emissions trading scheme?
PM: Laurie, I'm not going to pick over history. I'm all about the future and making sure that this nation has got a clean energy future and we don't get left behind as the world changes. I've never spoken about my private and confidential discussions with colleagues or Cabinet discussions - and Laurie, I never will.
HOST: Well, it looks as though, as I've said once before, that's a fairly easy way out, but this goes to whether you can be trusted, it goes to your credibility, and people will be wondering how you reconciled being a cut and run advocate last year and now a chest-thumping climate change warrior today.
PM: Well, Laurie, firstly I'd say I've never spoken about my confidential discussions with colleagues and I won't. When I give my word to enter into confidential discussions I keep them confidential, so I am not accepting any of the premises of your questions.
For my own belief, Laurie, let me say this very clearly - I've always believed that climate change was caused by human activity; that we needed to cut carbon pollution; and that the best way of doing that was through a market-based emissions trading scheme, that markets are efficient.
So, what I went to the elections saying and what I believe is that the best way though is to price carbon; for us, as a nation, to have a target and the Government has announced targets about how much we want to cut carbon pollution; to then cap carbon pollution at that moment and allow the market to fix a price for a permit to issue a tonne of carbon pollution.
That is what Labor stood for in the last parliament. It is what I said at the last election, and it is what we are doing now.
Yes, Laurie, some circumstances have changed in the meantime. I didn't predict before the election that we would have the parliament we have today, but we do have the parliament the Australian people elected, and I want to work with that parliament to get things done. That means that in working with people in the parliament, who genuinely want to tackle climate change and price carbon, I have agreed that we would start with a fixed price and then move to the full emissions trading scheme.
HOST: And you have agreed that the fixed price is the same as the carbon tax?
PM: Laurie, I didn't want to get caught up in what I knew would be one of those semantic word games about whether or not I would say the word ‘tax'. You know how these games are played, Laurie. A politician decides they are not going to say a word, and then media, people like yourself, Laurie, spend weeks trying to make them say it. I wasn't going to do any of that-
HOST: -I would do that!
PM: -So I just said - Laurie, maybe you wouldn't have, but maybe others less kind than you might have - so, Laurie, I just have been really clear with people: a fixed price is effectively like a tax.
HOST: OK.
PM: But the end point that we are going to get to is the end point we talked about in the election campaign. That is, an emissions trading scheme where you set a cap, no more carbon pollution than this amount, and then you let the markets sort out the price.
HOST: But you did say before the election, a week before the election, ‘there will be no carbon tax under the Government I lead.' Now just about every Australian has seen that television clip over the last few days, seeing you saying it with your own mouth. Do you now admit that that was a mistake, and will you apologise for it?
PM: Yes, I did say that, Laurie, and circumstances have changed.
What my vision was was to be elected as Prime Minister and to introduce an emissions trading scheme - which is not a carbon tax. A carbon tax is where you fix price. An emissions trading scheme is where you fix quantity and allow the market to sort out price.
That is what I wanted to do, but we have the parliament the Australian people voted for. I had a choice between throwing my hands up in the air and saying ‘I can't get anything done now' or saying ‘I'm for action, I'm tackling climate change.'
I will work with this parliament. That will require some compromises along the way, and I've agreed that there will be a fixed-price period, effectively a tax, for the first few years.
I think Australians will accept that when circumstances change, how you are going to do things may change, but they want you to be true to the goal, and the goal is tackling climate change through pricing carbon in an emissions trading scheme, a market-based system which has a cap on carbon pollution.
HOST: You talk about circumstances changing, but at the time you made that statement, and for a long while before, everyone knew the Greens would almost certainly control the balance of power in the Senate. That didn't change. What changed was the lower house, but that doesn't affect it. If you had a majority, you would have been in an even stronger position, so you are talking about the Senate and that didn't change.
PM: But I am in the same position, Laurie, as prime ministers past. Prime Minister John Howard went to the election-
HOST: -Telling fibs?
PM: No, no. Prime Minister John Howard- well, that may also be an analysis of John Howard's career, but that wasn't the point I was going to make Laurie.
The point I was going to make was Prime Minister John Howard went to an election saying that he wanted to have a goods and services tax. Then when it came to legislating it, he had to sit down with Meg Lees, then leader of the Democrats, and make some changes to his goods and services tax in order to get it done.
Well, effectively, I'm in that same position. I am making some changes in order to work with the parliament that Australians voted for.
HOST: You are in a similar position to John Howard in that he said that there would never ever be a GST, and there was. You said there won't be a carbon tax, and now you say there will be. The difference is that John Howard went to another election to get people to vote on his new policy. Will you do that?
PM: The difference is, Laurie, Labor has gone to two elections, 2007 and.2010-
HOST: -Not promising a carbon tax.
PM: -saying clearly to the Australian people ‘Climate change is real. It's caused by humans. We have to cut carbon pollution. The best way to do that is price carbon and where we want to get to is a full emissions trading scheme.' That is what I'm achieving through the mechanism I announced last week.
The difference is, with the circumstances of this parliament, yes, there will be a period of a fixed price, and then we will get to the end goal - the most efficient mechanism I've always wanted and Labor has always advocated for, which is a full emissions trading scheme, a cap on carbon pollution and the market sets the price.
HOST: OK, now, the Coalition is in full cry about the cost of living impact of what you are going to do. Tony Abbott is talking about a $300 a year increase in power bills, 6.5 cents a litre increase on petrol. What will you do to compensate people for that sort of increase?
PM: I do want to be clear about this, Laurie, and I want to be clear about the principles that will guide me as we work the household assistance package through.
First and foremost, the most important thing that revenue raised from pricing carbon will be used for is assisting households. Households will come first, and the assistance that they get will be generous assistance. Because we are a Labor Government, because we care about fairness, of course, we will direct our thoughts and attentions first to lower-income Australians and people on fixed incomes, like pensioners. But many Australians who consider themselves to be middle income will also be assisted.
Laurie, in the last parliament, I struggled long and hard to kill Work Choices because I believe in being fair to Australian working families. I will bring that same principle of fairness to designing the household assistance package.
HOST: Now, how much compensation will there be? Under the Rudd proposals, pensioners and some low-income earners were, in fact, going to be better off. Is that what you have got in mind, and at what level will that advantage cut out?
PM: Laurie, people should expect to see a generous assistance package. They should expect to see that the revenue raised by carbon pricing is put to assisting households first.
And I do want to be clear - every cent raised from pricing carbon will go to assisting households, to helping businesses transition, and to programs to tackle climate change, but the highest priority will be assisting households.
So, Laurie, the exact assistance package still has to be worked through. The carbon price hasn't been determined yet, and that means that the figures people are seeing in their newspapers and coming out of Tony Abbott's mouth are figures of speculation.
And I understand in this debate that Tony Abbott is going to style himself as complainer-in-chief rather than pitch in and get this done, but the nation needs us to do this, Laurie. We need a clean energy economy. We can't afford to be left behind.
HOST: What about petrol prices, Prime Minister? We see reports today that you're considering a neutral scheme, whereby every increase, every cent increase in petrol prices under your scheme will be offset by one cent a litre reduction in excise. Is that what you are thinking of?
PM: Well, when we designed the Carbon Pollution Reduction Scheme in the last parliament we did have a mechanism to reduce excise as the Carbon Pollution Reduction Scheme came into effect. Of course, the carbon pollution reduction scheme never got through the parliament because Tony Abbott leapt into the shoes of complainer-in-chief, even though in the past he has stood for a carbon tax, very clearly stated that he thought that a carbon tax was the simplest way to price carbon.
In this parliament, Laurie, with the parliament the Australian people have voted for, we will keep working and making the decisions about which bits of the economy are phased into the scheme, so -
HOST: -Is that what you have in mind for petrol?
PM: Well, those decisions are yet to be made, Laurie. When they are made, they will be announced. So there has been some speculation about this question, but that is one of the issues still to be worked through.
The question of industry sectors and how they are phased in, household assistance, and the carbon price - these issues will be worked through between now and the middle of the year, and every step of the way, we will be keeping the Australian people informed, and engaging in what I'm sure will be a debate between us creating the Australia of the future, and Mr Abbott, moaning, being a complainer, because he doesn't want to pitch in and build the Australia we need in the future.
HOST: I notice, Prime Minister you are not using the excuse today that you and Wayne Swan have used until now, which is that it is has not been decided whether the petrol will be included. The Greens want it included. Aren't you so conceding now that they are so powerful, if they want it, that is how it will be?
PM: Certainly not, Laurie. We will work through the Multi Party Climate Change Committee. Now, I understand that the deputy leader of the Greens, Christine Milne, made some statements about this matter yesterday. Those statements, in my view, were not appropriate in the sense that these discussions are still to come and decisions are to be taken.
HOST: But they call the tune?
PM: Oh, Laurie, would you have said way back when that Meg Lees called the tune because John Howard sat around a table with her and negotiated details of the goods and services tax, like whether or not it would apply to fresh food? Would you have said then that Meg Lees was calling the tune? I don't think so, Laurie, and really, circumstances aren't different.
HOST: Prime Minister, we thank you.
PM: Thanks, Laurie.