MITCHELL: The Prime Minister, Mr Rudd, good morning.
PM: Good morning, Neil. Thanks for having me on the program.
MITCHELL: Well, thanks for coming. It's reported you're taking 113 people to Copenhagen with you, including a personal photographer and nine media advisers. Is that right?
PM: No, it's not.
MITCHELL: How many?
PM: I think I'm taking a press secretary, I think I'm taking a media assistant. Penny's probably got one as well. So I'm not quite sure where all that came from.
And in terms of, you ask about official photographers, since day dot Neil, there's always been official photographers, Mr Howard's time and before, who go around just compiling the Australian documentary record.
In terms of delegation size, a large number of those folk are attached to the Australian delegation from various state and territory governments, that's one thing. In terms of our core, Australian Government delegation, it's probably in the order of about 50 or 60. A number of those are also accredited to our existing embassy in Copenhagen, they bring in extra staff from Europe to support what is a very big conference.
But let me just say this - this is a very big conference in terms of Australia's national interest, because climate change and the response to it globally affects the environment and the economy for a long time ahead, so you've got to have a team of legal officials, policy advisers to scrutinise a highly complex text, because the implications for Australia, long-term, are very significant.
MITCHELL: OK, I can understand the official photographer, of course, but there are not nine press secretaries. That would look like a publicity -
PM: Yeah, but it's not. That's just untrue. That is just absolutely untrue.
MITCHELL: Why do we have more people there than the British?
PM: As I said, last time I looked at the British Isles, they didn't have state and territory governments. A large slice of those folk are coming from other governments, and that again has been consistent with previous practice, with state and territory governments where there are matters under discussion which affect their long-term interests as well, we extend an invitation to them and they come. Frankly, who among them actually front at the end of the day, I'm not sure, but we're required to give an accredited list to the UN.
But I go back to my general point - this is a big, complex document. You need to have your legal and policy people scrutinising it. You don't want anything to happen by misadventure which affects Australia's national interest. And when we're talking about bringing down greenhouse gas emissions, acting on climate change and doing so in a way which has least impact on the Australian economy, it's important that we've got the best advice on hand.
MITCHELL: I'd like to get back to emissions trading later if I may, but Barnaby Joyce, the new frontbench spokesman for the Opposition, has said overnight, well he's predicted the possibility of economic Armageddon because the United States may renege on its debts, and he's said today, only a short while ago on AM, that the states, the Australian states, may not have the capacity to repay their debt, particularly in Queensland. What's the implication of that?
PM: I would suggest that the Liberal leader, Mr Abbott, and Mr Hockey, the Shadow Treasurer, come out today and confirm or repudiate what Senator Joyce has said. We are dealing with big, national economic interests here. If Mr Joyce or Senator Joyce, the Coalition spokesman on Finance, is now saying that's it's the Coalition's view that state governments in Australia could default on their debt, that is the most serious charge. He's got to produce of evidence of that, but just be mindful of the Australian economic interest here.
You want someone in a national position of responsibility broadcasting to the international financial markets a view that state and territory governments could default? I mean, there are basic interests for Australia at stake here, and responsible, calm, considered policy suggests that that sort of remark - erratic, ill-considered - should simply not be made. Mr Abbott and Mr Hockey have a responsibility to come out and clarify Liberal National Party policy on this today.
MITCHELL: Is he wrong?
PM: The Australian states and territories have among the strongest credit ratings anywhere in the world - a combination of AAA and AA. The sovereign credit rating of Australia is AAA. Around the world, when you go to international bond markets, the bonds most sought after around the world are those from Australia, from the Australian Government and from state and territory governments. We have built up a proud reputation and it has been absolutely rock-solid and robust on our public financial reputation. And to have the Finance spokesman of the alternative government of Australia saying that one of our states could default - this is gross economic irresponsibility, policy on the run, shooting from the lip.
MITCHELL: So what are the implications of him saying this? I mean, he only Opposition. He's not you or one of the premiers. What are the implications? What are the dangers for the states here?
PM: Well, can I just say this: in international financial markets, they are ultimately built on the basis of trust and confidence, and therefore if you have what will be seen in trading rooms across Europe and North America as a credible national spokesman, that is the alternative Finance Minister of Australia, saying that one of our states could default on their borrowings, there are national interests at stake here. You know what it's like, you're a very experienced news man, you know what it's like if you're in a foreign news bureau and you see this thing come in on the wires, it gets disseminated through Bloomberg and it sets off a whole series of concerns on the part of people who may not be familiar with the detail of Australia's finances.
I just think there is a reputational interest here for Australia, whatever side of politics you're on - Liberal, Labor, National - to defend the Australian economic interest. We have strong credit ratings. They have been reaffirmed over the last 12 months. These should be defended by all sides of politics, not undermined by someone shooting from the lip, policy on the run, policy made up.
MITCHELL: So what about his warning that there could be an economic Armageddon because the United States might default on its debts? Is there any truth in that?
PM: Again, there is a question of responsibility here. When you look at the global economy's response, and global governments' response to the financial crisis over the last 12 months, governments around the world have had to borrow, to step into the marketplace or step into the economy to prevent the whole show from falling into a heap, like happened in 1929-32 in the Great Depression. They have done so, we have done so in Australia, as well, and we've done so with the result being the only economy of the advanced economies not to have gone into recession.
In the United States they've had to borrow more. They also have very large global military operations as well, which are phenomenally expensive, but for someone as the alternative Finance Minister of Australia to run around the place saying 'America could default, Australian state governments could default', that's not responsible economic policy. That is shooting from the lip, making it up on the run, but I think being very, very irresponsible about basic Australian interests.
MITCHELL: Just back to emissions trading, you've got a lot of work to do here to convince the public. I would argue to you, and the by-election showed this, that the public is not generally with you on emissions trading. They possibly don't understand it and they don't support it. They're frightened of it. Do you agree with that?
PM: I think, Neil, there is a lot of complexity in this and it will take a lot of time to explain carefully to people.
MITCHELL: So why would you try to rush it through?
PM: Well, let me come to that in a minute. Remember, there are two things here. One is, why do we need to act? We are in the hottest and driest continent and we are hit by climate change fastest and hardest. That is a scientific fact. And, that's where we stand, among the hottest and driest continents in the world. Therefore, the impact on drought is an economic impact, the impact on agriculture, the economic impact, the destruction of the Great Barrier Reef is an economic and environmental impact.
These are real costs of inaction which flow through to the economy, and what we know from the analysis is that the cost of inaction is vastly in excess of the cost of action. That's the first point.
MITCHELL: But that's based on the premise that it is essentially man-made, that it's entirely man-made, it's not partly man-made. That's based on the premise that we can actually change it.
PM: Global warming is caused by this huge concentration of greenhouse gas emissions in the atmosphere, and the reason it's gone through the roof since the Industrial Revolution is because man's been making more of it. And there are 4,000 scientists around the world assembled by all governments, historically some sceptical governments and other more persuaded, who've got together and produced a consensus scientific report for all the governments of the world which said 'this is produced by humans.'
Therefore, the solution lies with humans and the practical question is how you go about doing it, and why we've got an emissions trading scheme, a Carbon Pollution Reduction Scheme, in three quick steps is this:
One, we in Australia have to bring down our level of carbon pollution consistent with countries across the world, and the most efficient and least-costly way of doing it is through what's called an emissions trading scheme. That was John Howard's solution as well.
Second point, how do we do it? We actually charge the big polluters, the 1,000 biggest polluters in Australia, for the act of polluting or putting out this carbon into the atmosphere, and that's to encourage them with direct incentives to therefore adopt clean energy practices in the future.
The third thing is this: that that the money that we raise through these permits to pollute that are issued to these biggest polluters is then used to provide payments directly to households who would then be affected by any increase in the cost of living. So, if you're a low income earner, under $60,000, you will get 100-120 per cent compensation for any adjustment to the cost of living, which we estimate to be about 1.5 per cent.
MITCHELL: And what if you're a high income earner, over 100-
PM: Secondly, if you're between $60,000-160,000, we will provide partial compensation, but for the first half of that group there'll be full compensation, around about 100 per cent, and then as you go higher on the income scheme, on a sliding scale, the compensation get less. And here's the third point-
MITCHELL: What about over $160,000?
PM: Mate, you and I are on our own, and the reason is we believe that people like you and I can afford the adjustment, but about, from my memory, about 90 per cent of Australia's 8.8 million families will receive either full or partial compensation for what Treasury modelling says will be a 1.5 per cent increase in the cost of living coming from this, so that's how the scheme works.
MITCHELL: And how long does that formula survive for?
PM: Continues into the future-
MITCHELL: What, beyond 2015?
PM: Whatever the target is for the future that we agree globally and Australia agrees, that formula for compensation for low-income earners and for middle-income earners continues into the future. Furthermore, it's all outlined in black and white in the Government's White Paper.
We've got a policy on climate change. It's called a Carbon Pollution Reduction Scheme. It's early action to deal with carbon pollution and to help families on the way through in the way I've just suggested. All we have from the Liberal leader at the moment is, frankly, a lot of fear.
MITCHELL: You willing to fight an election on it?
PM: We were elected at the last election to introduce an emissions trading scheme, and guess what? So was John Howard. That's what he took to the last election. That's what Peter Costello supported. That's what Malcolm Turnbull supported. The only person who doesn't support it these days, it seems, is the current leader of the Liberal Party. Why did Mr Howard and I -
MITCHELL: Well, I'd suggest a lot of the Australian people don't.
PM: No, I understand that. Why did Mr Howard and I finally have a unity ticket on emissions trading? What do you think, Neil? The reason was all of our boffins got together, looked at all the options and concluded, as have 36 governments around the world, that this is the least costly way of adjusting to a low-carbon future. That's why John Howard, Kevin Rudd, arrived at the same conclusion on how to deal with climate change. It's just that it took him 12 years to get there.
MITCHELL: We'll take a break, come back with more from the Prime Minister, including some calls, if we have time.
[Commercial Break]
MITCHELL: We'll take a quick call. Thanks Len, go ahead Len
CALLER: Good morning Mr Prime Minister and Neil. I'm a Labor voter-
PM: G'day Len, how are you?
CALLER: Very well thank you, and I'm a scientist and I wouldn't vote for Tony Abbott if he was to guarantee my team was to win the flag for the next ten years. That aside, I am a sceptic and not a denier and there's a powerful difference between those words and it's not dignified to attack the man and not the ball and to have ad hominem attacks on people who are sceptical about climate change. As a scientist it's very difficult to see a direct causal link between human activity and climate change.
MITCHELL: Well fair enough, there's a fair point there. It's a bit like the new racism, if you question something once you get called racist; if you question this you're called a denier.
PM: What I would say in response to Len's question is, as a government, what's I've got to do is respond to the overwhelming advice of the four thousand scientists called the International Panel on Climate Change, which has been working now for ten for fifteen years on all the global data on the change in the worlds temperatures.
The fact that we've got in the last decade or so, nine of the ten hottest years on record, you can't just dismiss that as being an accident. Secondly, their consensus is that this is brought about by human activity and if you are the chief executive of a company, the chairman of a board and you are given that sort of advice, well frankly, you're going to be held to account by your shareholders in the future if you didn't act.
Similarly as Prime Minister of Australia and presidents and prime ministers of other counties around the world, if you're given this advice by your established panel of scientific advisers and that's their conclusion, you have no alternative but to act for the future.
MITCHELL: Prime Minister, a year ago, you promised, you're government promised to make it easier to switch banks. Now we've seen the experience of Westpac this week and you haven't yet done it. When will you?
PM: Bank switching, the provisions for it, are in. The extent to which they've been used by the public, at present, I don't have the figures in front of me-
MITCHELL: It cost's $750, $1,750 to move your mortgage at the moment.
PM: Well I'll tell you what I'll have the Treasurer on you program ... but this is your last day and I'll try and get him to call into your program later in the day with the facts and figures on that. The idea with bank switching was to make it easy, quick and inexpensive for people to shift in response to any predatory behaviour by banks-
MITCHELL: You think you've done that? You've done that?
PM: The bank switching arrangements have been put in some time ago. The actual take up of it, I can't give you the figures on that but I'll get someone from either the Treasurer's office or mine to give you the figures.
MITCHELL: Japan has announced today that they'll continue whaling, your reaction to that?
PM: Well our policy is absolutely clear cut and that is that we don't accept Japan's premise for those terms of so-called scientific whaling. We've indicated, through the international whaling commission that we're prepared to discuss this with the Japanese and resolve it diplomatically.
But let me be very clear Neil, if we cannot resolve this matter diplomatically, we will take international legal action. I've said that before, I'm serious about it. I would prefer to deal with it diplomatically but if we can't get there diplomatically, that's the alternative course of action that we'll pursue.
MITCHELL: Will you again send ships out if they come into our area?
PM: Last time we sent ships out, the purpose was to gather evidentiary material to support a future court case should that prove to be necessary. What we've done since then is try to work our way through this diplomatically with the Japanese government. That's run in some obvious obstacles; you've just mentioned one of them in your statement this morning. As I said, if we can't get there diplomatically, let me be absolutely clear cut that we will use the resources available to the Australian government to deploy international legal action through the appropriate international judicial forum.
MITCHELL: The 53rd boat load of asylum seekers to arrive this year has been seized, or has been taken. There are around 1,384 people at Christmas Island. We have had riots, we have had continuing trouble, do you expect this to continue into next year?
PM: Well what we've got this year, primarily Neil has come about because of a civil war in Sri Lanka in the middle of, June/ July to August, about the middle of the year. If you look at last year I think we had something like seven boasts arrive all together. There was no civil war in Sri Lanka last year. These things are directly the product of what happens with insecurity around the world.
What happens next year? Look, this is just a challenge you've got to roll with, the key thing is to maintain our cop on the beat out there in the maritime patrol zone, interdicting people smuggling operations around the region. You know, with our friends and partners in the region, we've interdicted 89 people smuggling operations in the last year. These are huge, a whole lot of people have been charged, convicted, throw into jail. But you know, it's not a perfect world, so we've just got to deal with this as each practical step along the way.
MITCHELL: Are you aware Australia has frozen adoption of Ethiopian orphans?
PM: Ah, no, I'm not aware of that.
MITCHELL: To be fair, it's the Attorney-General. I didn't expect it would be.
PM: I'm asked many questions. That one I was not expecting.
MITCHELL: It's causing some angst, but I'll get onto the Attorney-General about it. Now Bob's party, Bob Hawke' party, how was the stripper? It the second one you've seen -
PM: I was wondering if you would ask about that. I think the general view around the room for Bob's 80th birthday, he's a great Australian, been a hugely successful Australian Prime Minister, was one of surprise. There you go.
MITCHELL: Stripper though, was it tacky though? A stripper with John Howard's head?
PM: Well I'm not going to comment of the artistic merit or otherwise of what was provided by way of the entertainment. As I said, generally people were surprised by it. Bob's 80 years old, let's just celebrate his great achievements for Australia and he celebrates his birthday in his own unique way. There were 300 people there, former Prime Ministers, Paul Keating, others, there celebrating along with him. This added, shall I say, a further dimension to it.
MITCHELL: I get that one of your favourite commentators, Andrew Bolt, made the point in the Herald Sun today that uh-
PM: Andrew's a big fan of mine, always has been.
MITCHELL: Politicians tend to say footballers should behave better, but perhaps it wasn't the right message
PM: Look as I said he's 80 years old.
MITCHELL: Was it his fault? Who ordered the stripper?
PM: I've got no idea. Bob, Blanch, the organisers? but look, the arrangements for the day, as I said, were a little unusual but let's just celebrate Bob's life. He is an Australian larrikin from central casting and nobody out there should claim that they're purer than the driven snow, neither you nor I.
MITCHELL: If he's an Australian larrikin from central casting, what are you?
PM: That is for people like you to reach a conclusion on, not for people like me. I just get out there, work hard, do my job others can make a judgement about whether I'm having a good effect or not. That's a matter for them.
MITCHELL: Tough year?
PM: Yeah, it's been a huge year.
MITCHELL: What stands out in your mind this year?
PM: Just wrestling to the ground the economic crisis. I can't begin to describe to you how much physical energy and time that's taken the Cabinet and officials to try and handle this beast. The fact that we've come through, frankly, with the only, one of the major advanced economies not to go into recession, unemployment down yesterday, we've got the second-lowest unemployment when it's going through the roof still in Europe and America. And the fact we've still got the lowest debt and the lowest deficit, I think that has been a good set of achievements, but I tell you what, there were white-knuckle moments all the way through.
MITCHELL: Have you shed a tear this year?
PM: Yeah, I have.
MITCHELL: Why?
PM: I'm a human being.
MITCHELL: What about?
PM: Oh, I don't think I'll go into that. But I respond to tragedy when you see it and you experience it and you feel it. You know, people go through a lot of tragedy in life, and if you just turn yourself into some heart of stone on these questions then you cease being a human being, and if you cease being a human being I don't think you can be a decent Prime Minister.
MITCHELL: Are you having a holiday?
PM: Yeah, yeah, looking forward to it.
MITCHELL: Are going to write an 8,000 word essay during your holiday?
PM: Only if you particularly request, and I'll have you read it on 3AW, word for word.
MITCHELL: What will you read on holidays?
PM: What am I reading at the moment? I'm reading a bit of a biography of Churchill, the new one, a little one, which is written by Paul Johnson, who is the conservative columnist in the United Kingdom, which is quite a good little read. A few other things I'm reading. A history of music and getting into how various forms of music evolved over time, just to get your head out of, shall I say, the normal grind. But Therese, the three kids, our son-in-law, the cat and the dog, you know, that, for me, is perfection come Christmas time.
MITCHELL: Thank for your help during the year, and all the best for the holiday season.
PM: And, can I say this to all your listeners, I wish them a really good and restful Christmas.