HOST: Good morning, Prime Minister.
PM: Good morning.
HOST: Steven from Waitpinga Beach is worried that if the carbon tax means we have more imported coal, we have more imported food, that that will be counterproductive, effectively.
PM: I don't think he needs to worry about that. Obviously, as we've explained to people and we're going to keep explaining, this is a price that is paid by around 500 of our biggest polluters. There are some flow through impacts but less than one per cent of the cost of living. So, if you were talking about, an item of food, maybe a jar of jam or something like that, the cost impact for that food item is far, far less than the cost of getting imports here from overseas.
HOST: So, what will the cost impact be on a jar of jam?
PM: Well, less than one per cent, indeed less than half a per cent for foodstuffs.
HOST: OK, Prime Minister, the latest poll out today, the Nielsen Poll, shows that Labor's primary vote is down to 26 per cent. Clearly the hard sell of the last week hasn't helped you.
PM: We'll keep out there explaining it. I'm not surprised that with so much anxiety around that we have got to keep out there explaining this to people. I said a while back that this was tough and it's going to get tougher. This is a big reform for our country's future.
I am determined to deliver it because it will mean, for the long term, a better environment and a stronger economy. A lot of fear has been raised, a lot of anxiety has been raised and we have got a lot of work to do to get the facts to people; but the facts are on our side
HOST: Prime Minister, you're saying you're determined to keep selling this. Your personal approval rating according to the Nielsen polls has plunged. Tony Abbott has now opened a big lead on you as preferred Prime Minister. Is the best way for you, to sell this tax for your party, for you to get out of the way? Because, these polls appear to show that you are the problem. And so how can you sell a tax, when you're unpopular? How can you sell an unpopular tax, when you Julia Gillard, are unpopular?
PM: Well politics is a marathon, it is not a sprint and democracy is not one long opinion poll, it's actually about showing the leadership that's necessary for the country's future; and that's what I am doing as Prime Minister.
I was determined to make this change for the country's future and remain determined to deliver it, because I know it's the right thing to do. I have well and truly got the courage of my conviction-
HOST: -I know you have.
PM: -and I will be out there providing the leadership that's necessary as we tackle this big reform and, as of course, we do the other things that we need to get done to ensure that we keep our economy strong; and keep spreading opportunity right around the nation.
HOST: Prime Minister would you come to a point, if this is a most important challenge as you see it, facing our nation, what if it comes to a point where you come to the conclusion that ‘I am the problem and the best way for me to get this big reform up is for me to get out of the way?'
PM: Well, you're asking a question based on opinion polls and I don't judge what the government is doing, or what I'm doing against opinion polls.
HOST: Well, you did when you rolled Kevin Rudd, if you don't mind me saying so Prime Minister.
PM: There is an assumption in that question I will not share. So, this is about providing the right leadership for the nation's future. I mean what I want to be able to do is look Australians in the eye today and look future generations in the eye and say that in this year, in this time, we made and delivered the decisions that were necessary to give them the best possible environment, and the strongest economy.
HOST: Prime Minister, the carbon tax and carbon reform is more important than Julia Gillard, I think you'd agree with that.
PM: Well, I'm leading it, so it's very important to me and I will keep providing the leadership necessary to deliver it.
HOST: But, if the carbon tax and carbon reform is more important than you, and if perhaps unfairly, perhaps fairly, perhaps that's just life, you have plummeted in the opinion polls, it's irrecoverable; then you see the end point of Matthew's question. Do you get to the point where you say: ‘look, this is more important than me, I will step down and let somebody else have a go?'
PM: Oh look, you know a million assumptions in that question and I'm not sharing any one of them. I'm here as Prime Minister, providing the leadership that we need on hard reforms like climate change and pricing carbon and I will continue to do that.
HOST: But, Prime Minister, there aren't assumptions in that question. If you don't mind - we'll move on to some other issues in a moment - but if you don't mind us saying so, the biggest risk to a carbon tax would it not be, would be Tony Abbott becoming Prime Minister; and these polls at the moment show that that is a very real threat.
Now, you say polls don't matter, but you know they do matter. You know the ALP spends a lot of money on polling internally and a lot of time thinking about polls. So they do matter. The question is, is that the big risk, that you can blow up the carbon tax; you can have Tony Abbott as Prime Minister, if you continue in the job.
PM: Well, I think you've forgotten one very important point which is the next election will be in 2013 and I will be very happy to fight that election on who's got the best vision for the country's future and who's got the best policies and plans to keep our economy strong and to keep spreading opportunity. Who's got the best plan to tackle climate change and price carbon and who's got the best plan to keep improving the nation's schools? Who's got the best plan to keep improving our hospitals? Who's got the best plan to do things like make available technology we need for the future, the National Broadband Network, and of course, who's got the most profound commitment to fairness and decency at work?
So, we'll fight the election in 2013. The task for now is to deliver this big reform for the country's future, and to be out, talking to Australians and answering the fear that's been raised and the anxiety that's been raised with the simple truths and facts that people need to understand to get a handle on how carbon pricing will work; and what impact it will have for their families.
I mean a lot of people have been told ridiculous things about what it means for their cost of living and what it means for their job. I'm not surprised that people are anxious, but the facts are on our side and we'll keep explaining facts.
HOST: Prime Minister, on the weekend I heard one commentator say that your tax of $23 a tonne is substantially more than the cost of carbon under the European trading scheme currently. Is that the case? Would we be paying more at $23 a tonne than Europeans are trading carbon at the moment?
PM: Well, the European price is a floating price; it's a cap and trade scheme, that's what we will get to three years after this system starts. So the price moves around-
HOST: -But is it substantially lower at the moment?
PM: I'm just about to explain that to you. We've done the best possible modelling of what the future will hold for the international price. We believe when we go to a floating scheme it will be around $29, so we have started at $23 so we can do a steady increase to what we believe will be the international price at the time that the scheme moves to a cap and trade scheme.
HOST: What is it at the moment though? That's not a gotcha question by the way, I heard a commentator say that it's a lot cheaper in Europe at the moment. Is that correct?
PM: It's gone up and down and there have been days when it's been cheaper than $23 but the important thing is where we think the price is going to be when our scheme goes to a floating scheme; and consequently what is the right place to start so we can go on a rational movement up, towards that anticipated international price.
HOST: Prime Minister, how much will the carbon tax cost to administer?
PM: Oh look, there are administration costs absolutely but-
HOST: -But what are they?
PM: I can send you the table and the sheet and you can look at all of the allocations for things from the Climate Change Authority-
HOST: Do you have a round figure?
PM: Look, there's money allocated, of course there is, and it's in the millions of dollars, of course it is, for things like the Climate Change Authority that will be led by Bernie Fraser, former Governor of the Reserve Bank. Now, this is a big shift for our economy. We want it to be properly administered and it will be.
HOST: How much will it cost to collect and redistribute?
PM: It's necessary, of course, to have the system that collects what businesses are paying. But before you go on what I think is going to be an allegation about a money go round, let me be very clear here-
HOST: -No I just want an answer.
PM: Yeah, well I'm going to give you an answer. The principle price signal in the carbon pricing scheme is to be around 500 big polluters who will pay the price. So, that's the thing that changes behaviour, gets people to change industrial processes, generate cleaner energy and consequently cut carbon pollution by around the equivalent of 45 million cars in 2020.
HOST: Well, with all due respect that hasn't answered the question either. The question is quite a simple one, how much will it cost to administer, in other words how much will it cost to collect the money and then churn it through the system, in other words go back to in terms of compensation and what have you, all the other bits of the scheme. How much is that going to cost?
PM: Well I'm happy to send you the amount that the regulator will cost and the amount that the Climate Change Authority will cost, but of course, these costs are necessary to drive a scheme that will cut carbon pollution and enable us to secure a cleaner energy future.
HOST: And Prime Minister, what - this is a question I know you were asked by a pensioner as well when you were in Adelaide - what impact will it have on electricity prices in South Australia?
PM: The impact will be around 10 per cent and, of course, we've taken that into account in providing the household compensation and when I talked to pensioners in Adelaide yesterday, I obviously wanted to explain to them that for a single pensioner, we are talking about providing $338; that's more than we expect the flow through impacts of pricing carbon to be on their household budget.
And, we've made special arrangements for self funded retirees as well. Look at the 1.8 million pensioner households in this country, we anticipate that on average they'll get $210 more than they need to; to keep buying the same basket of goods, after the price impact flows through. So, I wanted to get all of those figures in front of people so they could think about what it means for them, and their household budget.
And, of course, Tony Abbott is committed to taking all of that money away from pensioners and from families that we will provide it to.
HOST: Of course, I think it's about 285,000 self funded retirees won't qualify for any compensation.
PM: Completely untrue, completely untrue; and that information should not go out to your listeners because it's not right. Self funded retirees, who qualify for a part pension, will get the same increase as pensioners, $338 for a single pensioner, $510 for a pensioner couple.
Self funded retirees who are in the tax system, and many of them are because they have got earnings that are taxable, will get the benefit of a tax cut, probably around $300 and then, many self funded retirees, around 100,000 of them will get an additional $200 from the senior Australian's tax offset.
So, any self funded retiree listening to this program should get on the cleanenergyfuture.gov.au website and have a look for themselves. But, your statement is completely untrue.
HOST: OK, so the organisation that represents them is lying.
PM: It would have it wrong and I understand with all of the confusion that's around, people in the best of faith, doing the best that they can to absorb the information, can still make an error but I didn't want you repeating that false information that is not right.
And I don't want self funded retirees in Adelaide listening to your program thinking that they're not getting assistance. They should get on the clean energy future website and check for themselves.
HOST: Prime Minister Julia Gillard, thank you very much for your time this morning
PM: Thank you.