HOST: Prime Minister, good morning.
PM: Good morning, Neil.
HOST: Prime Minister, before the election you promised no carbon tax, but you also promised you wouldn't act until the economy was ready and the Australian people were ready. Now, is that part of the promise still operative? Is the economy ready? Are the people ready?
PM: The time to act is certainly now, Neil, and we will be out there explaining to people, and part of why I'm on the show this morning is to just that - to be explaining to the Australian community how all of this will work-
HOST: -So you think people are ready?
PM: Well, look, I think there's a job of explanation to do. There's plenty of hard work in front of us and I'm not going to make any bones about that, Neil - plenty of hard work to talk to the Australian community about this, and to consult with Australian businesses, and we're doing that through a business roundtable.
HOST: So, is the economy ready?
PM: Well, I'm absolutely convinced, Neil, that we are ready in the sense that the rest of the world is acting and we can't risk being left behind. So, the right time to start carbon pricing is 1 July 2012. We've got to make sure we transition our economy, which is, at the moment, an economy where we emit a lot of carbon pollution per head of population, into a clean energy economy.
It's right thing to do for our environment. It's the right thing to do for our economic future to make sure we've got the jobs of the future.
But Neil, I understand many people have got questions, and that's why I'm here this morning.
HOST: Shane - go ahead please, Shane.
CALLER: I'm just wondering if the Prime Minister can clarify that, from what she's said, that the cost of living for just ordinary Australians, just workers on wages, is not going to be impacted by a carbon tax?
HOST: Sorry, what's the question?
CALLER: Well, the question is is that the case?
PM: I'm happy to explain that, Neil.
The way in which pricing carbon works is we say to the biggest polluters in the country, the businesses that make the most carbon pollution - and there's round about 1,000 of them - we say to them ‘look, you used to put carbon pollution in the atmosphere for free. Now you're going to have to pay for it.'
So, that means the price falls on them, but of course, and I've been very upfront about this, some of that will get passed through. There will be price impacts for Australians who go to the shops, and so we will help Australians with that by providing generous household assistance to Australians.
So, they will be there with generous household assistance, which could be provided through tax cuts, could be provided through pension increases, or could be provided through direct payments, and we're still working those decisions through, but there will be generous assistance to help households with those price impacts.
Now, interestingly-
HOST: -Sorry, there could be tax cuts?
PM: That's one mechanism for doing it Neil. Yes, certainly.
HOST: But your whole tax summit is to be held in October, after you've decided that. Why won't you bring the tax summit forward?
PM: Because we've got to get on with this job, Neil, and pricing carbon is about creating a mechanism where you're getting the polluters to pay, and then you take that revenue and you use that revenue to assist households - that's the single biggest thing you do - to assist businesses to make the transition, and to fund programs to tackle climate change. Not one cent of this money raised from carbon pricing ends up in the Federal Treasury waiting for other decisions to be taken about how it's going to be used.
So, there's plenty of other things in the tax and transfer system for a tax summit to work through, but when we price carbon, the money comes from the biggest polluters and then is used to help households, help businesses and to tackle climate change, and all of that will be very clear and transparent.
HOST: Well, yes, but you could be changing the tax rates, and then after that you're going to hold a summit on tax rates. What's the point?
PM: Well, Neil, there are plenty of things in the tax system that people want to talk about. There will be plenty of work for the tax forum to do, but I'm not going to hold up getting on with this job for a tax forum later in the year, and Neil, let's-
HOST: -OECD says today income tax is the best way to compensate for a carbon tax. Do you agree with that?
PM: Look, it's certainly a very live option, Neil, a very live option before us. There are a series of options about how you can provide people with assistance, but the main point is we are going to provide people with assistance, and the only threat to that assistance is Mr Abbott and Mr Hockey announced yesterday that if they are elected they will take that assistance away-
HOST: -But they'll also take the carbon tax away, so you won't need the assistance, but what-
PM: -Well, Neil, let's just unpack that for one little moment, because, Neil, it's not entirely right.
What Mr Abbott is committed to doing is he's committed to raising $30 billion to act on climate change through his mechanisms. Now, really, they're all just a sham and they're not going to work, but he has this commitment for a series of measures he needs to fund. That means he's going to raise $30 billion, and that is going to come out of the pockets of families - $720 per year extra.
Now, what that means-
HOST: -So how much extra out of yours, Prime Minister? If we're going to play politics on it, seriously, how much money out of yours? How much will your tax take out of people's pockets?
PM: Well, the carbon price, Neil, is paid by the big polluters-
HOST: -So how much will it take out of people's pockets, Prime Minister?
PM: Neil, it's paid by the big polluters.
Yes, there will be price impacts. I've been upfront about that from the very day I announced carbon pricing, and we will assist households. Neil, the decision-
HOST: -How much, Prime Minister? I mean, you're plucking a figure on Tony Abbott. What about your figure?
PM: No, no, I've just done some simple maths on Tony Abbott's-
HOST: -Well, do some simple maths on yours. It's your policy. How much is it going to-
PM: -Well, Neil, if you allow me to answer, then I will. If I can't get a word in edgewise then I can't answer, can I?
HOST: -Well, Prime Minister, we're playing politics. I-
PM: -No, no, we're not. We're dealing with facts, Neil, and I think Australians are entitled to the facts, and they're entitled to understand the alternatives. So, let's be really simple and plain about this, and I'm trying to, Neil, I'm trying to describe it to you.
My option - we will put a price on carbon pollution. It will be paid by polluters. We haven't fixed that price yet, Neil. When we fix that price, of course, we'll be out there explaining it to the Australian community.
What does that money, paid by polluters, go to? It goes to assisting households, helping businesses adjust, and to tackling climate change.
Mr Abbott's scheme is the actual mirror image of this. What he wants to do is use taxpayer's money to subsidise bid polluters. It's the absolute reverse.
We charge big polluters and help households. He'll take money from households and subsidise big polluters.
HOST: Prime Minister, can you tell us how much your scheme will cost the average family?
PM: Neil, I've been very clear - the decisions about the price for carbon and the details of all of all the assistance are yet to come, and when those decisions are made we will be out there explaining them to the Australian community, as I am here today to explain our carbon pricing mechanism to the community.
HOST: Terry, go ahead, please.
CALLER: Hello?
HOST: Yes, Terry, go ahead.
CALLER: Good morning, Prime Minister.
PM: Good morning, Terry.
CALLER: Self-funded retirees - how will they be compensated?
PM: Well, Terry, we will make sure that there is fair assistance. We're a Labor Government, and that's what we do - we do big reforms and we do them fairly.
Terry, I'm obviously not aware-
HOST: -He's asked how, Prime Minister?
PM: Well, I'm not aware of all of Terry's circumstances-
HOST: -He's a self-funded retiree. That's enough.
PM: -whether he's in the tax system in any way at all, so I would need further details of Terry's circumstances, but what I can say to Terry is we will do this fairly, and what I can also say to Terry, and Neil, if I could lean on your producer for this, if Terry wants to leave his details, when we've announced the assistance measures in detail I will be more than happy to provide Terry with a specific answer, and to come back on air and provide it, if that suits you, Neil.
HOST: All I'm - Terry, we'll get your details - Prime Minister, you said you'll provide them in detail. You're not providing anything. This is the problem. There is a climate of fear here because you're saying ‘oh, Tony Abbott will do this', but you won't tell us or you don't know just how it's going to affect us or how we're going to be compensated, so Terry rings and says ‘I'm a self-funded retiree, tell me how I'll be compensated', and you can't, can you?
PM: Well, Neil, I've decided to take this a step at a time because it's a big reform. Now, I understand there are some people who have criticised that decision and said, well, I should have waited a number of months and announced it all in one big package-
HOST: -(inaudible) people are frightened.
PM: Neil, I'm answering your question.
Now, I understand there are some people who believe I should have left it and announced it in one big package. I don't agree with that. I think it's better to explain it a step at a time.
What are we explaining now? What can we explain to people? Well, we can talk about climate change being real and go through that. We can talk about pricing carbon pollution and how that will mean less pollution. We can talk about the mechanism - how it will apply to the 1,000 big polluters directly, and the money raised from pricing carbon pollution paid by those big polluters will then be used to assist households and businesses and tackle climate change.
I want to explain all of that now, and then, as the decisions are made - the price, the mechanisms for household assistance - I'll keep explaining.
I think it's going to help the community to understand it if we do it a step at a time and explain it a step at a time.
HOST: Dan, go ahead please, Dan.
CALLER: Yes, good morning, Prime Minister. One of the things that affects the cost of living directly and indirectly is petrol prices, so much so that I'm a courier and I now have to, I basically can't survive any more. What are you going to do about this obvious price collusion and petrol pricing, because I keep hearing ‘oh, yes, yes, it's not right, we're going to do something about it.' The ACCC's hopeless. They can't do anything. I can show you photos of this price collusion-
HOST: -OK, Dan, I'm sorry, but you're in an entirely different area. We can talk about that at another stage, but while we're on petrol prices, do you now accept, Prime Minister, it's inevitable this will effect the price of petrol? It's already going through $1.50 because of what's happening in Libya. It'll go up further, won't it?
PM: Neil, I certainly understand that when it comes to household budgets the price of petrol - really big factor that people worry about - and representing the part of the community I do out in Melbourne's west, where unfortunately there are lots of times that people have absolutely got on alternative but to jump in the car and use petrol to get around, I understand that the price of petrol really makes a difference for families.
I also understand that the cost of electricity really makes a difference for families.
What I can say to you on petrol, Neil, is we have yet to take the decision about which sectors of the economy will have the carbon price applied to it. Clearly, there is a decision to be made about petrol. You may recall-
HOST: -Is it possible petrol will not be affected?
PM: Look, Neil, I'm not going to pre-empt decisions. That decision is yet to be taken, but I would remind of this, Neil - that under the Carbon Pollution Reduction Scheme, the scheme that was discussed up hill and down dale in the last Parliament, there was a mechanism to take the pressure off petrol prices by reducing the excise.
So, that was in the Carbon Pollution Reduction Scheme.
Can I say something, Neil, about electricity prices, and I want to say something very frank and very blunt, which is the truth is electricity prices are going up. Electricity prices are going up whether or not we price carbon.
If we price carbon, then we will be in a position to provide assistance to households. That's what I want to do.
HOST: But they will go up more if you price carbon.
PM: And there will be assistance to households, Neil. The alternative-
HOST: -But we don't-
PM: -Well, Neil, just on the comparative, how electricity prices will go up, one big problem here in electricity is that there has been an underinvestment in the infrastructure that means you and I can sit in our households and put the electricity on, put the lights on, put the heating on, whatever it is we want to do.
There's been an underinvestment in distribution. There's been an underinvestment in generation. That underinvestment relates to the uncertainty about carbon pricing, so actually not pricing carbon puts pressure on - puts pressure on investment in electricity, and that puts pressure on prices.
So, electricity prices are on an upwards scale, that's true-
HOST: -Yeah, all of which is a State issue.
Prime Minister, Tony Windsor, the independent, said in a doorstop this morning ethanol should be excluded. Will it?
PM: Well, once again, that's in the same bundle as petrol. Those decisions-
HOST: -Well, what do you know? What do we know about compensation, about cost. We know nothing, do we? You're debating it for a month and you've got nowhere?
PM: Well, Neil, very important fact: you know under my scheme there will be household assistance - full stop. Households will be assisted. Under Mr Abbott's scheme, household assistance will be taken away. Mr Abbott committed yesterday to taking away from Australian families any assistance that we provide them.
HOST: Please, let's leave the politics out of this, Prime Minister.
PM: Well, it's a fact, Neil, just simple fact.
HOST: Will people be fully compensated? Will they be completely compensated at all levels for the cost of a carbon tax?
PM: Neil, I've been very clear - we will do this fairly. I do not expect, for myself, as an upper income earner, I'm not the sort of person who needs compensation or assistance. Neil, I don't know what you earn, but I suspect neither do you, so we will be taking into account the circumstances of Australian families and making sure that we're assisting them fairly.
HOST: Prime Minister, take what you can- what is rich? Above what level?
PM: Well, Neil, I'm not going to sit here and pick levels. We're here today-
HOST: -Well, what will you tell us, Prime Minister? Please.
PM: Well, Neil, we're here today talking about the carbon pricing mechanism, and I'm very happy to explain to people how that's going to work. There are some basic-
HOST: -But we've been trying now for 20 minutes and I don't know that we've got very far.
PM: Well, Neil, that's perhaps because, Neil, instead of-
HOST: -I'm no good, OK.
HOST: No, no, well, Neil, if you allow me to finish my sentence instead of finishing it for me you'll find I'm going to say something more generous about you than you just said about yourself.
HOST: Well, I don't care, Prime Minister, to be frank. I really just want to get the point through that people are deeply frustrated here because we've been talking about this for a month and we can't tell them anything - not even generalisations.
PM: Neil, that is complete nonsense. If you allow me to explain, I think it's important to explain to people that climate change is real, so Neil, let's have a conversation about that.
I think it's important to explain to people why we need to act now, and what's happening in the rest of the world. Let's have a conversation about that.
I think it's important we explain to people how this will work. I know there are some Australians out there who have got the view that they will go to the supermarket and when they get to the checkout and they ring their stuff through the checkout they'll get a docket at the end that's got carbon tax as an item at the bottom of the docket.
Well, of course, that's not true, and today, Neil, I can speak to your listeners and I can explain to them how it will work - that it's big polluters who pay.
Now, we can go through all of that, you can sit there-
HOST: -(inaudible) polluters pass their costs on to us, Prime Minister?
PM: Yes, of course, Neil-
HOST: -Well, who pays then, Prime Minister?
PM: -and I've said that since the first day that-
HOST: -so let's not just say polluters pay. We all pay.
PM: -we announced the scheme. Neil-
HOST: -That's the whole point. We all pay.
PM: Correct, Neil, which is why, on the very first day when I announced we were going to price carbon, I said to the Australian people I want to be upfront about this: there will be price impacts. I said that on the very first day.
HOST: You did. Hello, Jeff-
PM: -So, Neil, I did say that-
HOST: -You did. Look, I'm agreeing. You said it to me.
PM: OK, well, thank you very much for that, so don't, Neil, try to pretend to your listeners that somehow I am being obscure about price impacts (inaudible)-
HOST: -But Prime Minister, I'll ask you again - how much? - and you can't tell me. That's not obscure? What is the price impact, Prime Minister?
PM: And Neil, I've explained, and you know, that we are going to announce the price later on-
HOST: -Well, that's obscure, in my view-
PM: -we're still working on the price, we're still working on the households assistance, and I will come back on your show Neil, I'll be very pleased to, to talk through all of those details.
There's a lot of content to talk through now, Neil, so you can make a decision. Do you want to complain about what's not there now, or do you want to help explain to your listeners what is there now so they can form a view about it? That's a decision for you.
HOST: Hello, Jeff, go, we're talking calls and every one of them's to do with how it affects them directly, which is not unreasonable from any voter. Yes, Jeff?
CALLER: G'day Neil, Prime Minister.
Prime Minister, I voted solely on your comment about the carbon tax - ‘there will be no carbon tax under a government I lead.' Now, we're a struggling family, my wife and I, trying to put them through school. You obtained my vote and my wife's vote by deception. Is that, yes or no, electoral fraud?
PM: Well, look, I'm very happy to answer your question, and let me say to you I did say before the last election that there would be no carbon tax. I did, and I've walked away from that. Absolutely right.
And during the 2010 election campaign, I said to the Australian people that we needed to price carbon and we needed an emissions trading scheme, which I believe is the best way of pricing carbon.
We also said that to the Australian people in the 2007 election, as did Prime Minister Howard.
Now, when this Government was formed, this minority government was formed, I had to make a decision. Did just sit here and do nothing on climate change, or did I work with other members in this Parliament to act?
Well, I chose to act. I chose to work through and get us to that emissions trading scheme that I talked about as the way we needed for the future during the 2010 election.
Now, I didn't intend to mislead anyone, and we will get to an emissions trading scheme - not in the way that I envisaged in the 2010 election, but we will get there.
HOST: Prime Minister, both the unions - the Manufacturing Workers Union, Dave Oliver - and the chairman of BlueScope Steel today are saying you've created a destructive climate of uncertainty. Now, they're not their words, they're mine, but that's what they're talking about, uncertainty - bad for unions, bad for business, bad for jobs. What's your answer to that?
PM: Well, what I would say to that is there is a clear mechanism for both unions and businesses to have their say on the further details of how we are going to design this carbon price.
HOST: But what about the uncertainty you've created?
PM: Well, Neil, can I just say there's a continuum here, if you like. If you're saying it would have been better for me to work in a closed office, come out of the door and say ‘here's all the details of the carbon price scheme - every detail', that would have given people certainty and it would have given businesses like BlueScope and trade unions no say.
What I've done is I've announced the mechanism. I've said we will announce the details towards the middle of this year. In between, businesses can put their view through our business roundtable. Unions and other organisations that represent people in our society can put their view through the non-government roundtable.
I think including people and consulting with them is the right thing to do, and we're doing it.
HOST: I'd like to ask quickly about another couple of things in a moment, but given what's happened in Japan, do you accept that the world is going to be wary of nuclear power, and therefore there's going to be a reduced likelihood of the rest of the world following the path that you're planning?
PM: No, I don't think that that follows at all. I do think there will be people looking at Japan and there will be discussions in some nations about nuclear energy.
For our own nation, Neil, I don not believe we need nuclear energy. I don't see nuclear energy as part of our future. We are blessed with abundant sources of renewable energy, of clean energy, of solar, wind, tide, hot rocks - you name it, we've got it in abundance, and one of the things that carbon pricing will do is create the kind of incentive we need to give a huge push to that clean energy future.
So that's our future - not nuclear, a clean energy future with carbon pricing as part of it.
In other nations, people are acting for a cleaner energy future. China is acting, India is acting, the United States is acting.
HOST: OK, can we take a call? Steve's related to that, I think. Yes, Steve, go ahead.
CALLER: Good morning Prime Minister, Neil. Prime Minister, if your scheme is entirely successful and we bear the pain of this, what's going to be the result? Are we going to save the world? Are we going to save the environment, or in fact isn't the truth, Prime Minister, that without the big polluters like China, India and America on board, that we're going to achieve absolutely nothing, and we'll all bear this pain to achieve absolutely nothing in the real world.
PM: That's a really good question and I thank you for it and I think it's a question that's on a lot of people's minds.
First and foremost, I think sometimes there's a sort of dialogue out in the community that we're the only ones who are doing anything. That's actually not true.
China is acting. It's closing down small, inefficient, dirty coal-fired power stations at the rate of one every 1-2 weeks, and replacing them with more economically and environmentally efficient power stations-
HOST: -So what's the optimum we can achieve? What's the best we can achieve?
PM: If I can just, Neil, go though - India, taxing coal in order to fund clean energy changes; President Obama out there promising that the United States will have 80 per cent of its energy from clean energy sources by 2035. These are big changes.
So, what does that mean for us?
What that means is we will price carbon in order to make sure we don't get left behind, and I can say very-
HOST: -And what will the impact of that be, Prime Minister, for us?
PM: I can say very confidently to the nation the impact of that will be that we will have made a contribution to tackling climate change and we will have a more prosperous economy as a result, because the world will have moved to a clean energy future and we cannot afford to be left behind with an old-fashioned, high emissions economy as the rest of the world moves.
HOST: How much will we have reduced the world's carbon emissions?
PM: Well, the Government's target is for us to reduce our emissions, to reduce them by 5 per cent by 2020.
HOST: And what affect will that be in world carbon emissions, Prime Minister?
PM: Well, Neil, I can't forecast for you what China's action is going to mean for world carbon emissions or India's action is going to mean or America's action is going to mean, but what I can tell you is they are acting. If they are acting for a clean energy future, then it makes sense for us to use the most efficient mechanism - which is pricing carbon - to transform our economy into a cleaner energy economy.
HOST: Very quickly, the polls are very good today. Are you winning this fight?
PM: Look, I'm not a great studier of polls, Neil. They'll go up, they'll go down. I'm pursuing this because it's the right thing for the nation's future and I'll be out there persuading. Others, Mr Abbott and his team, will be out there raising fear. I'll be out there talking to people about the facts.
HOST: Thank you very much for your time.