HOST: Prime Minister good morning.
PM: Good morning John.
HOST: The latest polls show support for the carbon tax is at the lowest it's been since the idea was announced. That makes it pretty tough for you, doesn't it
PM: The important thing here John, is that this is right for our nation. I want us to be a nation that seizes a clean energy future, that does the right thing by the environment, and by putting a price on carbon we'll do the equivalent of taking 45 million cars off the road in 2020.
And does the right thing by our economy, keeping it strong and so we do have to move to a clean energy future, and at the same time I want to make sure we're protecting Australian families as we move towards this future.
That's why the vast majority of Australians because they'll see tax cuts, pension increases and family payment increases, will actually come out square or better off after carbon pricing.
HOST: It's still a broken promise.
PM: When I said those words during the election campaign John, I meant every one of them. And I certainly didn't mean to mislead anyone. I'd gone to the 2007 election and the 2010 election saying we needed to put a price on carbon and have an emissions trading scheme.
Prime Minister Howard went to the 2007 election saying we need to put a price on carbon and have an emissions trading scheme. We will get to that emissions trading scheme in three years time.
For the first three years we'll have a fixed price for big businesses to pay for the carbon pollution they generate, a carbon tax, but we'll get to where we wanted to go to, the emissions trading scheme.
HOST: According to many, it's a big price we're going to pay.
PM: The price for individuals will be less than a cent in a dollar. Seven million Australians will see a tax cut in their pay packet when they get it at the end of this week or the end of this fortnight.
For many that tax cut will be around $300, but for some it will be in the order of $500 or $600. That's because we are increasing the amount of money you get to keep before the taxman does anything to you. At the moment that amount of money is $6000. We're increasing it to $18,200. So you can earn that amount of money and the taxman doesn't get a cent.
John we've also increased pensions and will keep those benefits flowing through, and we've increased family payments.
HOST: But $23 a ton. It's pretty high, given the international price is a lot less.
PM: Well let's be very clear. Individuals are not paying a carbon price. They're not paying a price per ton. It is big businesses that generate carbon pollution who are paying that price. Around the world we see various prices for carbon pollution.
We see countries that have prices like Australia's. We see countries that have got prices above Australia's. But what we do know is that around the world people are moving to change their economies so that their economies are cleaner and generate less carbon pollution, and we can't afford to be left behind.
HOST: You keep calling it a carbon price. Why do you avoid that word tax? It's a tax.
PM: Look I'm not going to get hung up on words John.
HOST: But Prime Minister, with the greatest respect, and you know I do show you a great deal of respect, you always say ‘I'm not going to get tied up on words or semantics.' Why not? It's a pretty important word. It's not a price, it's a tax.
PM: It is a price. Let's be clear John, exactly what's happening here. Big businesses that generate carbon pollution will have to get a permit for each ton of carbon pollution they're going to generate. To get that permit they will have to pay a price. That price is $23 a ton.
When we move to an emissions trading scheme, the price will be set by a market that buys and sells these permits.
For the first three years, the price will be fixed by government. So it's a carbon price, a price per ton, fixed by government.
That means from the point of view of those businesses it's effectively like a tax, so call it a carbon price, call it a carbon tax, at the end of the day that doesn't really matter.
What really matters is that we are cutting carbon pollution, keeping our economy strong and providing benefits to people so the vast majority of people will either come out in front or square after the flow-through impacts of carbon pricing.
HOST: How can they be in front if they've got to pay more in tax?
PM: Individuals aren't paying more in tax, John. They're getting tax cuts.
HOST: Yes I know, but you're saying that people are going to be paying less in tax. They're not; they're going to be paying more.
PM: No, individuals, John pay tax through the income tax scheme. You know, the tax that comes out of your pay packet.
HOST: Yes I'm certainly aware of that.
PM: And people will see, people earning less than $80,000 a year will see less tax coming out of their pay packets. The carbon tax, John, is not paid by individuals, there's no individual person in this country who is paying the carbon tax.
That is paid by big businesses that generate carbon pollution. Those businesses will seek to pass some of that cost on. That's the impact for individuals. Some of that cost will flow through to the things you and I buy and everybody else buys. That impact will be less than a cent in a dollar.
HOST: How do you know that?
PM: We know that John because-
HOST: Aren't there going to be opportunists out there who are going to make the most out of increasing prices, blaming the carbon tax?
PM: Let's go through both your questions. How do I know that? We know that because the experts at Treasury - the same people who modelled the impacts of the GST - have modelled the impacts of carbon pricing.
The single biggest impact for individuals is on their electricity bill; a 10 per cent increase. Already around the country, the people who regulate electricity prices have said yes that's right, the increase will be 10 per cent or slightly less.
So the single biggest thing Treasury had to model and get right, the jury is already in. Their sums are right. And what that means is we can say with a great degree of confidence that the total cost of living impact will be less than a cent in a dollar, which means that we've factored the assistance to families and individuals right.
So that's the first question. In terms of people who seek to profiteer, if there is anyone out there who tries to whack on a big new price and pretend that that's about carbon pricing, people should be ringing the ACCC, the competition people, who are ready to bust down on that kind of conduct hard, and people who are trying to get away with that are at risk of paying fines of more than a million dollars.
HOST: I saw your comparison to the argument over the GST at the weekend. Surely isn't the difference that John Howard took it to an election, you didn't?
PM: Well, carbon pricing, needing to act on climate change, it's gone to the 2007 and 2010 election. What we've seen is a very big fear campaign run.
People had all sorts of myths peddled at them, you know, people have heard claims like Whyalla will be wiped off the map, we won't be mining coal in this country anymore, the cost of what they buy at the supermarket will go up by 20 per cent. None of those things are true John.
HOST: Where did these fear statements come from?
PM: The Leader of the Opposition has made a number of them, as have other members of his frontbench team, and these statements will be proven to be untrue. They're clearly untrue, Whyalla's still there, we're still mining coal, prices haven't gone up by 20 per cent at the shops.
HOST: That's true.
PM: So a lot of fear's been peddled but now, John, we are at the stage where people can judge for themselves. They can go out, work it out for themselves, they don't have to listen to the politicians.
They can look at their pay packets, they can look at how much they're spending at the shops, and they can make their own judgments.
HOST: Okay, if the Coalition wins the next election, and if you take any notice of the polls, and I know that politicians don't take any notice of the polls when they're not favourable, when they are favourable they do, but if they win the next election, do you think they'll be able to repeal the tax?
PM: I don't think they'll try, John. There'll be - should Mr Abbott end up as Prime Minister, and I'll be fighting this out every step of the way in our nation's interests, but should Mr Abbott end up as Prime Minister then he'll engage in a bit of a fiddle, a bit of a fudge, a bit of a name change and carbon pricing will stay.
HOST: Do you really believe that?
PM: Oh, absolutely.
HOST: A number of businesses have come out in support of the pricing system, I've noticed in today's newspapers. Do you think you're received enough public support from people generally?
PM: People will participate in the public debate how they choose to do so, but I think it is significant that 300 businesses have come out today. Global giants like GE, major businesses like Westpac, like Pacific Hydro, all talking about the benefits and opportunities that carbon pricing will give our nation.
HOST: Given the price, won't it put all our industries that export overseas at a massive disadvantage to them when they're competing with other countries?
PM: That's a very important question, John, and we were very conscious of it as we designed the scheme. So for our trade exposed industries that are out there competing with the rest of the world, we are actually providing them with assistance so the effective carbon price for them is $1.30 a ton, not $23.
HOST: In some cases, there either won't be a carbon tax charged at all by some countries, and other countries pay a lot less than Australia. We are still going to be disadvantaged.
PM: Well we are assisting those trade exposed industries, so their effective price is $1.30 a ton, so a very modest impost indeed.
HOST: Any price that comes along, and there will be plenty of price increases coming along, anything that people don't like is now going to be blamed on the carbon tax. How do you, as a Government, argue against that?
PM: Well John, I think we've all got a responsibility to make sure people have the facts. So you know, I think you, I, as a nation, people do want to have the facts. They do want to make up their own mind so anybody who's making a false claim that a price rise is due to carbon pricing when it's not should be exposed. They're not giving people credible information.
HOST: Okay, but there's going to be a lot of administration required to do this. You're expecting people not to take, grab hold of an opportunity to make some more money. It's a very big ask.
PM: Well John let's be clear about the administration. It is only the businesses that are paying the carbon price per ton that need to do any administration at all. That's less than 500 businesses in this country.
Any other business doesn't have to do anything different to what they do with their business systems now. There's not one additional piece of paper they need to get their hands on and fill out.
HOST: Okay, do you agree however that any price rise in business or anything that the people don't like, it's going to be blamed on your carbon tax?
PM: Not if people are dealing with the facts, John.
HOST: (Inaudible)
PM: I think Australians are a smart people, they're a practical people, they're a common sense people. I think there will be people like you who are taking very seriously their responsibility to give people the facts so they can judge for themselves.
And so, anyone who is out there making a reckless claim about a price rise when it's not due to carbon pricing should be exposed as trying to hoodwink the Australian people. That's not the right thing to do.
HOST: No it's not the right thing to do. Is Joe Hockey making reckless claims? Is Tony Abbott making reckless claims?
PM: Joe Hockey, Tony Abbott; have made ridiculous claims.
HOST: Reckless?
PM: Reckless and ridiculous, and they are already - you have probably seen over the last few weeks - trying to backpedal because they know how reckless and ridiculous these claims have been.
So they used to wander round talking about a wrecking ball destroying our economy, a cobra strike, we'd all be dead. Now they're changing their rhetoric to a python squeeze to try and give people the impression it makes a difference over time.
Every time Mr Abbott says python squeeze, what he's actually saying is that for the last more than 12 months he hasn't been making credible claims and he knows it. That's why he's changing what he's saying.
HOST: Tell me, how many people have now been employed to administer this carbon tax. How many extra people have you put on?
PM: We've got a Climate Change Authority that will do the administration of it, we've got a Clean Energy Finance Corporation, a $10 billion fund to make sure that we are generating the clean energy projects that we need for the future. I can't give you a total number of people employed, but John, are there people administering the scheme? You bet.
In the same way that there are people administering our income tax scheme, there are people administering Medicare, there are people administering our pension payments. You can't do big things in government without people who then attend to the necessary paperwork.
HOST: Just back to the poll. The poll in The Australian today suggests not even Kevin Rudd would survive the next election. That would seem to me to make the task virtually insurmountable.
PM: Well I'm not a commentator on the opinion polls, John. I'm someone who's always got their eye on this nation's future, and the question that confronts us as a country is do we want to have a clean energy future, do we want to tackle climate change, do we want to reduce carbon pollution? I believe the answer to all of those questions is yes, and putting a price on carbon as we did yesterday is the cheapest and most effective way to get us there.
HOST: Even if the effect of the carbon tax isn't as great as Tony Abbott and Joe Hockey-
PM: Well already their claims have been proven to be, in the words of Gary Gray's mum, bunkum. Mr Abbott's been telling us for month after month that the coal industry would close down yesterday. Well there are people all round the country still mining coal today John.
HOST: But all that put aside, Prime Minister, it's still a new tax you promised we wouldn't get.
PM: Well John, I've fully explained that to you. I believe in carbon pricing, I spoke about that in the 2010 election. Every side of politics committed to that in the 2007 election, and now we've got it done.
Not the way I anticipated we would get it done - I didn't foresee this minority parliament, but we've got it done and that's what matters for our nation's future.
HOST: You've had a hell of a lot on your plate, you've been very busy. You've had to contend with asylum seekers as well - more than 90 boat people on a couple of boats trying to reach Australia. If this panel set up to decide on a solution doesn't back the Bali Process Bill, would you then agree to scrap it?
PM: I set up this panel because obviously I want to break the deadlock here. I wouldn't have set it up John if I was just going to discount its recommendations. I wouldn't have done that. I've set it up because I genuinely want our nation to have the recommendations of these experts at its disposal as a way to break the parliamentary deadlock.
But when we look and the parliamentary deadlock last week, I have been prepared to compromise, the Government has been prepared to compromise.
The Opposition and the Greens have moved not one millimetre from the original positions. I think that that is very disappointing, and I think Australians want to see us achieve change here
So having compromised and seen that compromise be met with people who are just prepared to say no at any price, I've now put in place this new way of trying to get us through.
HOST: The tears that were shed in Parliament, were they crocodile tears?
PM: At the end of the day, people are judged on what they get done, and the important thing is getting effective offshore processing here.
I mean, I want to see that, Mr Abbott says he wants to see that. But he's so negative he's actually now voting in Parliament against the things he says he believes in. He did that last week.
HOST: Yeah. Back to the tears - do you think they were genuine?
PM: Look I'm not going to cast doubts on motivations of individuals, but what matters is what you achieve out of it.
HOST: Will you broach offshore processing with Mr Yudhoyono when you talk to him today?
PM: President Yudhoyono is coming to Australia today. I'll be meeting with him in Darwin. It's our annual Leaders' Dialogue. This is important for both of our nations. I mean, Indonesia matters to Australia a great deal.
We've got a very strong economic relationship which is rapidly growing, we've got strong people-to-people links, you know hundreds of thousands of Australians every year go to Indonesia. We welcome Indonesian students into Australian universities.
We work together for the global economy in the G20 in our region and the East Asia Summit. And together we've been fighting terrorism and fighting people smuggling. So yes, I'll be talking to the President of Indonesia about people smuggling today-
HOST: And offshore processing?
PM: The issue about offshore processing is not one for Indonesia. I mean, it's not for the President of Indonesia to talk about bills in the Australian Parliament, but we work strongly together with Indonesia to fight people smuggling.
So yes I'll be speaking to the President of Indonesia about that but also so much more.
HOST: Okay Prime Minister, thank you very much for your time. As usual you've been extremely generous with it and we thank you.
PM: Thanks John.