UHLMANN: Prime Minister, good morning.
PM: Good morning Chris.
UHLMANN: Were working families better off this time last year?
PM: Well, we've had a huge increases in petrol. We've had significant increases in the cost of groceries and, of course, the wash through effect still of what's been 12 interest rate rises in a row over many years and that means therefore that there are huge new pressures on working families.
What we've tried to do with the Budget is to provide some help on the way through. Each family's circumstances are going to be different. But we've said we would try to help, and that's why we have brought in the tax measures and the other measures.
UHLMANN: Well, when you introduce an emissions trading system will the costs of living rise higher still?
PM: What we've said, as Mr Howard said last year, is that if you act on climate change and the emissions trading system then obviously there's a flow through consequence for the cost of petrol and the cost of energy. We understand that.
What we will be doing is also providing support for working families, working Australians, pensioners and carers to deal with any additional cost to them.
And also, through the system, we'll also be providing support for business to adjust.
UHLMANN: Can you compensate everyone for the costs, the rising costs, of living?
PM: We believe we're going to approach this in a clear and responsible way, which is why we're putting out a green paper on this matter later in July.
On the question of the costs to be incurred by families on the way through, we will be providing compensation for those worst affected.
We will also be providing support for families in general by one means or another.
But we'll be working this through in detail during the course of the second half of this year, because it is a detailed and complex process. We're going to be measured about it, responsible, clear, consultative and it's going to take some time to work it through.
UHLMANN: Do you think that people are aware of the fact that the price of electricity will rise?
PM: Well, Mr Howard of course, when he was Prime Minister last year said that once they indicated themselves that they were going to introduce an emissions trading scheme, and on top of that, include petrol within that scheme, he also indicated that there would be increases in the price of energy and the price of petrol.
UHLMANN: So how much will the price of electricity rise?
PM: Well, that will be determined once the system and its design characteristics have been finally determined. And that is what we have said right from the very beginning, there's nothing new in that. That all goes down to the target that we have set for ourselves for environmental and economic purposes, which is to reduce greenhouse gas emissions by 60 per cent by 2050.
Then, just to explain the logic of it, it depends then on the trajectory that you have between now and then in terms of the emissions you bring down each year. That in turn determines the carbon ceiling, for the economy, and that in turn determines what will be the framework within which a carbon market would operate. And these are the matters which have yet to be determined. So when you ask what will the carbon price be in the flow through, we are some way off having all that determined. And that's why we're going through a green paper and white paper process in close consultation with business.
UHLMANN: It also matters what will be in and what will be out. Will fuel be included in an emissions trading system? Because, of course, you're demanding that the opposition tell us that now.
PM: Well, let me go to ourselves first and then to the Liberal Party second. We've said from the beginning that we believe that the scope of the emissions trading scheme should be as broad as possible. We've said that the fuel and the transport sector have to be part of the overall climate change strategy for the Government.
But the precise definition of the scope of the scheme, that will become clear during the green paper, white paper process.
We're taking our time on this, we believe it's responsible to do that. It takes time to work through the consultation process with business and other affected groups and we have said that from the very beginning.
UHLMANN: You're criticising the Opposition for not telling us what they think about fuel today?
PM: Well, Chris, the contrast which I am about to go onto with the Liberal Party is that one, at 5 minutes to midnight after being in office for eleven and a half years they brought in their policy decision through their own policy paper to introduce an emissions trading scheme.
Secondly, the then Environment Minister said at that time they would include petrol and transport.
And third, since the election they have said that now that's all up for grabs.
The environment spokesman for the Opposition, Mr Hunt, said the other day that they hadn't made up their mind now about whether they would include it or not.
What we have said is we're proceeding on this policy development process calmly, coolly, methodically, responsibly. And that's why we have been out there for the last six months consulting industry. Next stage is a green paper process, following that a white paper. And each of these matters will be dealt with clearly and responsibly through that process.
UHLMANN: Prime Minister, do you think Australians, ordinary Australians understand the size of the task that you're undertaking? This is larger than the deregulation of the economy, this is larger than the GST. Now, your timeframe has it coming in, in 2010, are you committed to that timeframe? Do you think this is something perhaps you should take to the people once they know the detail?
PM: Well, Chris, we believe that we've got to lay out a long term plan for dealing with the climate change challenge. You're right to say that this is a far reaching economic reform. It's a far reaching economic reform. And we're not Robinson Crusoe on this. Governments and economies around the world are struggling with the same challenge. But we all know what happens if you don't address it. And that is, that the climate change challenge isn't addressed, we continue to have global warming, and the possibility that it reaches unsustainable levels with grave consequences for the global economy, the environment and the survivability of the planet.
On our own timetable, we are working very hard on this, as I said before. Step one is to produce our green paper on the future of the emissions trading scheme. We then consult further. We will then produce in time a white paper. Our implementation ambition is 2010. And that's the framework within which we are operating.
It's difficult, it's hard, it's complex and you're right to say there's a huge task of engaging the entire Australian nation on this. Because it does affect everybody.
UHLMANN: And to tell them what the costs will be. For example, there's a by-election in Gippsland this weekend. Can you tell the people who work in the brown coal industry what is going to happen to their jobs, what will happen to that industry, what will happen to the assets in the La Trobe Valley when you introduce a price on carbon, and make brown coal which is the cheapest most abundant source of power we have, the most expensive source of power we have - what happens to that industry?
PM: What I say about the coal industry generally, and I come from the state of Queensland which is a significant coal exporting state, is that coal has to be part of the long term solution as well. That's why the Government, unlike its predecessor, has a half billion dollar clean coal fund.
The future for the coal industry lies in large part in the development and perfection and commercial application of the clean coal technologies.
There are 4 extant technologies. We are working our way through those methodically. And in the case of the La Trobe Valley, which you referred to specifically, my recent advice was that through our clean coal fund, that half billion dollar fund, we're already investing I believe in one or two projects in the La Trobe Valley to look at the application of this technology to them.
That's got to be part of the global and the national solution and the industry solution for coal as well.
UHLMANN: Isn't it likely that that industry will have to be shut down?
PM: I am a complete optimist when it comes to the future of the coal industry. What the nations needs to set for itself, and the world, is a goal to bring about the commercial application at scale of clean coal technologies.
There is a lot of work, often of a disparate nature, occurring around the planet at the moment on this. But we in Australia are probably among the top three or four research countries in this area. What we've done with our half billion dollar platform, through the clean coal development fund, is to provide a huge turbo charge to the work which is going on in this area. But the ambition must be to deploy these technologies within a reasonable timeframe -
UHLMANN: Will you rule out considering nuclear energy as we move towards the change in our economy?
PM: Just to finish the last point then I'll answer the question you just raised.
And that's got to be a clear cut ambition. If you look at China and India on the coal question, you can't wish away their use of these carbon intensive fuels. Therefore, the problem that we face as a planet, quite apart from the interests of our industry, is to get clean coal technology right, not just in the laboratory, but commercially applied in plants.
On the question of nuclear, we believe that we have a full range of energy options available to Australia beyond nuclear with which and through which we can respond to the climate change challenge, and we're confident we can do that.
UHLMANN: Prime Minister, thank you.
PM: Thanks Chris