HOST: Thank you so much for your time.
PM: No problems.
HOST: You've launched, and I apologise Anne we'll get back to you. You've launched major changes here and there are doubts about whether the compensation will be enough as international uncertainty on the stock market, our own stock market dropped seven billion dollars. Is there any way you can be convinced to take this to an election before introducing it?
PM: Neil we've got to get this done. We have been debating pricing carbon and tackling climate change in this country for more than a decade. Prime Minister Howard went to the 2007 election saying he was going to put a price on carbon and introduce what's called an emissions trading scheme. Of course, in the last Parliament the carbon pollution reduction scheme ran into a parliamentary brick wall. In the 2010 election I said to people I wanted an emissions trading scheme and we're going to get there Neil, not by the route I expected but by a three year period we will have a fixed price, effectively a carbon tax. Now what's the aim of all of this? Well it's to get pollution out of our atmosphere, we've got to start on that, we've got to get going and 1 July next year is when we start.
HOST: So is there any way that you can be convinced to take it to an election before introducing it?
PM: We'll have an election in 2013 after it's introduced on 1 July 2012. People will be able to judge by their own lived experience. They won't have to look in the newspapers or listen to people on the radio Neil, with respect. They'll be able to judge in their own lives, what has it meant for me, what has it meant for my family, what have I seen the big polluters do, how have they reacted, what's it done to create new renewable energy, what can I see coming on stream in the future for the clean every we need for the future.
HOST: So do you think that people will swing to support this because the polls are appalling today aren't they?
PM: Well, long after people have forgotten about today's opinion polls, we will live in a nation where we are reducing carbon pollution, that's what matters to me, getting a clean energy future for this country.
HOST: Even if it costs you Government?
PM: I'm determined to get this done Neil and I am getting it done. It's the right thing for the future of our country. And Neil if I can just perhaps reverse engineer this question, I put forward on Sunday a plan which means we will take at least 160 million tonnes of carbon pollution out of the atmosphere in 2020, the equivalent of 45 million cars. We'll do that whilst our economy continues to grow strongly, whilst employment continues to grow strongly, 1.6 million new jobs will be created by the end of the decade and when we're providing assistance to nine out of ten households. Now if you can have a strongly growing economy-
HOST: There is debate about that.
PM: - more jobs, nine out of ten households assisted and cut your carbon pollution, why wouldn't you do it?
HOST: Well there is debate about that as you're aware. What percentage, you talk about reduction in carbon, what percentage of the world's emissions will that be?
PM: Well we will be reducing at least 160 million tonnes of carbon pollution. Neil, I'm not going to play the Andrew Bolt game with you-
HOST: I think that I'm - it's a legitimate question regardless of who asked it.
PM: And it makes an assumption in the asking of the question that other countries aren't acting when other countries are acting on their carbon pollution. We've got all of Europe in an emissions trading scheme, ten US states, President Obama with a very ambitious clean energy goal, Prime Minister Cameron in Britain with a very ambitious goal for change, China acting, India acting. In fact, we come to this needing to get a move on because we are the people who generate more carbon pollution per head than anyone else in the developed world.
HOST: Prime Minister, why aren't the people with you?
PM: Well it's a big change, it's a reform. Reform's not easy. The big reforms of the past haven't been easy.
HOST: Shouldn't the people approve a big change, a big reform? Shouldn't that be approved by the people not sprung on them? PM: If we look back in history Neil, the big reforms in this nation, floating the dollar, cutting tariffs, the GST itself-
HOST: The GST went to an election Prime Minister.
PM: But other big reforms have been made too, floating the dollar, cutting tariffs- HOST: The GST was voted on an election, be fair.
PM: Absolutely, the GST was, but that's not the point I'm making.
HOST: (inaudible)
PM: That's not the point I'm making Neil so if I'll finish my sentence.
HOST: Please.
PM: The big reforms in this country- floating the dollar, cutting the tariffs, not popular at the time, very controversial. GST - very controversial and here we stand today in a prosperous Australia because past political leaders and past generations of Australians had the guts to make the big decisions that put the nation in a better position for the future. Well climate change is real, this is the big decision we need to make today to have a better future for our country and our kids.
HOST: Italy's shaky, Greece shaky, Wall Street down, the Australian market down significantly. There is international economic nervousness, even potential that we're heading to another financial crisis. Is this the right time to do it?
PM: We have a strong economy. We've come out of the global financial crisis the envy of the world. We've got record terms of trade, 140 year highs, we've got unemployment with a four in front of it, we will create half a million new jobs in the next two years. We are living through a resources boom that you and I have not seen the like of in our lifetime. If we're not going to do it now Neil, when are we going to do it, when the economy is strong like this? And I understand with today's strong economy there are lots of people who don't feel that economic benefit in their daily lives and that's why we're taking particular care and concern to work with Australian families and to provide them with tax cuts and payment increases to assist them with the modest price changes that will flow through from putting a price on the big polluters. Neil, just on our economy you referred to the stock market, you would have seen today's Australian, I'm just looking round to see if there's one in the room. You would have seen today's Australian telling us big American mining company wants to do the biggest takeover ever of an Australian coal mining company. Do you reckon they're doing that Neil because they reckon there's going to be no more coal mining?
HOST: Did you see the other Murdoch paper? Get real Julia, it says.
PM: Well, you asked me about economic issues, I'm answering, pointing to the front of the Australian. And Neil, what's interesting about that is the mining companies involved, Peabody is the big America miner that operates here now and wants to do this major takeover cause they clearly see a profitable future for mining, Peabody is where Tony Abbott has been standing including as recently as yesterday and saying there's no future for coal mining in this country and there'll be no jobs. Well, he should retract that today, the evidence is in, it's on the front page of today's Australian.
HOST: Prime Minister was some of the modelling done on a $20 a tonne tax rather than $23? PM: Not the price impacts, no.
HOST: What about the job impacts and the outlooks?
PM: The macro economic impacts were done on $20, that's right.
HOST: So what's affected by that?
PM: Well there'd be a modest difference. The price impacts though Neil and I want to be very clear about this because you said before there's doubt about the figures. Well, on the price impacts, the flow through to the cost of living of 0.7 percent, less than 1 percent, that figure was modelled by our experts in Treasury. They're the same people who did the modelling when the GST came into effect and they got it right.
HOST: What is the $20 modelling? Is that in fact growth and jobs?
PM: Yes, that's right they're the macroeconomic indicators.
HOST: Based on the wrong figure?
PM: But the difference between modelling on the $20 and the $23 - we'll still be growing, we'll still be creating jobs Neil.
HOST: But not as many as predicted in this?
PM: Well, 1.6 million jobs is the prediction. We'll create-
HOST: What should it be do you think? PM: Well I think the variation would be very modest indeed.
HOST: It's still jobs, real jobs.
PM: Yep. But we're talking about 1.6 million jobs Neil.
HOST: And what about the growth, how wrong is that?
PM: Well once again I think it would be a very modest difference.
HOST: Why was it done on $20 rather than $23?
PM: I think the Treasury picked various points to do the modelling, so they obviously picked $20 and further possible price points. But Neil, let's not try and mislead anyone here. With a $23 a tonne carbon price, our economy will continue to grow. Jobs will continue to grow, people will continue to mine coal in a profitable industry, that's what will happen.
HOST: We'll let's do a deal, neither of us will try to mislead people. Are you concerned by the polls?
PM: I'm interested in the country's future Neil. You know, these polls will come and go, polls will be forgotten.
HOST: So that doesn't worry you at all? Seeing that you've got the worst figures of any Labor government ever?
PM: I'm absolutely convinced what I'm doing is right.
HOST: And you're not concerned by the polls?
PM: I'm absolutely convinced what I'm doing is right.
HOST: That's not an answer Prime Minister.
PM: Yes it is, it's an answer as to motivation. You're asking me to be motivated by the polls-
HOST: No, I was asking whether you're concerned-
PM: As I said on Saturday democracy is not one long opinion poll Neil. Democracy is leaders making the right choices for the nation's future. I've made one.
HOST: Prime Minister one of the reasons you replaced Kevin Rudd was appalling polls, these are worst. And you are seriously telling me that the polls don't matter to you?
PM: I don't agree with that analysis Neil, thank you very much.
HOST: One of the reasons, one of the reasons. PM: Well I- HOST: Why do you think Caucus wanted to get rid of him, because they thought they could lose an election.
PM: Well, I'm not going to pick over history but I'm also not going to accept that analysis. You're asking what is motivating me, Neil.
HOST: No, I was asking whether you're politically concerned by these disastrous polls.
PM: I'm determined to build a clean energy future for this country and I'm happy to be judged on it Neil.
HOST: Have you read the reports that Bill Shorten's been sounded out for your job?
PM: Oh Neil, you know, you can play all the games, not going to worry me.
HOST: It was reported, seriously did you read that?
PM: Well, look, lots of things get reported Neil.
HOST: Did you ask (inaudible)?
PM: Oh of course not, Neil, don't be so silly.
HOST: Okay. But you read the reports, they don't concern you.
PM: Look, there's lots of things in the newspapers, I don't claim to read all of them Neil. A lot of silly things are written in the newspapers, I don't read every Australian newspaper every day. What I do is I work hard to shape this country's future. I want to see a country generating less carbon pollution, I want to see a country with a strong economy and more jobs, and I want to see people enjoying the rewards of work which is why we've structured the household assistance package so people will better see the rewards of work by having a higher tax free threshold.
HOST: Could I ask you, a higher tax free threshold, now who benefits from that?
PM: People who benefit from that are people who are making a journey into work, often from welfare. They'll see the upfront benefits of working, they'll be outside the tax system, no money out of their pay packets taken out in tax, they'll directly see the rewards of working. It's also something of particular benefit to second income earners generally women who have been out of the workforce for a period of time raising kids and who are looking to go back into it casual or part time.
HOST: But you keep saying it's trebled, it's not really is it for low income earners? They were already on $16,000, it's just going up to $18,000 tax free.
PM: Well there's two effects and this gets into tax law so if people can bear with us, there's two effects, there's the tax free threshold, there's what's called the low income tax offset and they work together. One of the problems-
HOST: Yeah, if you're on low income you're getting $16,000 tax free now you're going to get $18,000. It's not a big difference.
PM: But there's a question of when, because the way the low income tax offset has historically worked is people get the adjustment at the end of the tax year, not in their pay packet week by week as they go to work-
HOST: So how much extra will they get?
PM: And then Neil the other benefit of course is people still needed to file tax returns to get the adjustments under the low income tax offset. Now a million people won't have to collect receipts and scrabble around and you know, sit in the back room doing their tax pack while their family's a good time on a Sunday.
HOST: But it's not really-
PM: They'll be able to just, you know, enjoy time with the family, not filling that tax return.
HOST: Prime Minister this isn't just about tax law it's about credibility. It's not really a trebling of the tax free - it goes from $16,000 to $18,000 for low income earners.
PM: Neil, I'm not going to allow you to get away with that characterisation as if I've been less than frank about this. It's not fair-
HOST: Well what about middle income earners?
PM: It's not right. Well let me finish my sentence. It's not fair and it's not right and you shouldn't do it.
HOST: Okay well tell me.
PM: When this was announced on Sunday it was absolutely clear in the material that was announced that we were trebling the tax free threshold, we were changing the way the low income tax offset worked and -
HOST: (inaudible)
PM: And the benefit overall- not one Australian will pay more tax, lower income Australians in to middle income Australians will see tax cuts-
HOST: Prime Minister who-
PM: That was all very clear on the material, Neil.
HOST: Who gets extra out of the trebling?
PM: People who are moving from welfare to work or a second income earner going into work don't have to fill in a tax return, get directly the rewards of work rather than having some adjustment at the end of the year and Neil, you are putting these questions as if, somehow, between the two adjustments people have come out square, that's not true-
HOST: Well Prime Minister -
PM: Taking into effect trebling tax free threshold and the changes we've made in the (inaudible) people are going to keep more money, more of their money as tax free.
HOST: Prime Minister middle income earners are in fact losing what you're giving them by the increase in the tax rates.
PM: That's completely untrue Neil.
HOST: But we've got independent modelling of it as well.
PM: Neil, you cannot sit here and tell me you've got modelling that any Australian-
HOST: Oh, it was opinion. We've got opinions from accountants, not from me. PM: You're opinion's wrong.
HOST: But you're increasing the tax rate?
PM: And let me explain it Neil. Not one Australia will pay a dollar more tax. When you change the tax free threshold that is more money-
HOST: But that's not what I said Prime Minister. Whatever you're giving them in the $18,000 you're taking away by increasing the tax rate at the higher end.
PM: That is not true.
HOST: Isn't it?
PM: Not it's not true. Do you want to go through an example Neil?
HOST: I'll give you the figure.
PM: Okay, I'm very happy to do figures about how all this works Neil.
HOST: Well, at what level does the rate increase?
PM: People should be getting the full figures. Let's go through and look at people, for example on $20,000 a year. They'll get a $600 tax cut a year. $25,000, they'll get $503. $30,000 - $65,000 they'll get $303.
HOST: $80,000?
PM: $70,000 they'll get $253. $75,000 will get $128, $80,000 it's $3.00 and we haven't really claimed that as a tax cut. So what we've been saying is people-
HOST: So you've actually taking it back?
PM: No, nothing is taken back Neil.
HOST: Alright.
PM: No one pays a dollar more tax and they are the tax cuts people get.
HOST: Can I ask it this way, how much less income tax will you bring in as a result of this?
PM: We will bring in less income tax, I don't have that figure with me Neil, I'm happy to supply it to you.
HOST: Is it a significant (inaudible).
PM: I'll have to supply it to you Neil, I don't have it with me.
HOST: That's the bottom line, whether less tax is taken or not, isn't it.
PM: Well I'm happy to account for that. This is an assistance package between the tax cuts and the payment increases of $15 billion. I'll get you break down between the tax cuts and the payment increases, happy to do that.
HOST: Can you explain the can of tomatoes to me?
PM: Certainly. HOST: How does it work?
PM: There's a can of tomatoes, you go and buy it. What's the impact of the flow through from big polluters paying a price on carbon pollution? It'll be less than half a percent.
HOST: What if the fruit is imported and the can's made here?
PM: Well if the can's made here then obviously you're seeing less than half a percent, the less than half a percent for food includes the packaging. But Neil, let's just get really clear about this-
HOST: What about if it's imported?
PM: Well, Neil, let's get really clear about this. Less than half a percent, let's just say that again. That's less than a cent in a dollar. So in terms of something that's imported, if you are going to do comparisons, the shipping costs of getting a can of tomatoes here from anywhere else in the world is going to be a greater cost than a cent in a dollar.
HOST: Get's a bit complicated depending on where you import the fruit from, where you buy the fuel and where you bring the stuff from, surely?
PM: It doesn't get complicated at all. You go to the shops and you will see, for food, you will see an impact of less than half a percent. Generally, in your cost of living you'll see an impact of less than one percent.
HOST: Well, I have this caller and if you have time we'll take a caller now.
PM: Sure.
HOST: But I had a caller earlier who asked the question of whether with the tax free level going to $18,000 you'll be able to - family trusts will be able to put that money into their kids name if it was $6,000 previously can they now put $18,000 in?
PM: No we have special tax arrangements for unearned income because we had some tax avoidance problems a few years back where people were distributing income to children to try and fiddle the tax system, so there are particular arrangements for that.
HOST: Do you agree young families are carrying a lot of the cost of this? I was mean looking at the figures in the Age today, self funded retiree, $80,000, they'll get $2,289 from the Government, it costs them $501. Single person earning $80,000 losing $441 and gets $1,600 back. Do you think young families are carrying the burden here?
PM: When we're talking about young families they get the benefits of family payment increases too. So if you want to go through an example, $85,000 a year income, two young kids you know pre-school kind of age. Dad's working, probably mum working part time. They're getting assistance between tax and family payment changes of $948 a year. The benefit that we think they'll come out on top, that is more than the average impact of the price changes on them, is $378 per year as a family Neil. Families' benefit generally from the payment system as well as tax cuts.
HOST: One of the examples I saw, single income, $90,000 one child under five, you get $409 in assistance, cost of living impact is $546, $137 worse off? Worse off, $90,000 one kid, not much?
PM: Neil, there will be households that do not get full assistance.
HOST: But they're not rich?
PM: Absolutely correct and we've worked with our tax and transfer system so that we are putting our assistance through the family payment system and the tax system. When you've got two taxpayers in a household they get the benefit of two tax free thresholds, though there is a particular supplement for single income families. Neil, what I would say is this, we are talking about tackling climate change. Let's talk about that family and that child that lives in that family, do you want them to grow up in an Australia with more or less pollution? Well I say less. And we will achieve through this system less carbon pollution in our atmosphere. So there is a benefit for everyone. In terms of the flow through impacts for prices. Yep, we've taken our Labor values and our Labor way and that means we've particularly had our eyes trained on low income families, pensioners, middle income families because we want them to have assistance. What I'm absolutely amazed about is Tony Abbott was on TV this morning, he was asked whether he was going to take the money back from pensioners and he avoided the question there.
HOST: Yes he that with me yesterday. Do you mind taking a quick call?
PM: Happy to.
HOST: If you don't mind. Simon, go ahead please Simon.
CALLER: Neil, Prime Minister, how are you?
PM: I'm well thank you Simon.
CALLER: Listen, I've got to tell you I'm getting very, very tired of all the spin that you're putting on things. Here you are trying to say that you're showing leadership, well you're not showing leadership because leadership means you should be listening to what the people are saying.
HOST: Question please Simon.
CALLER: You should also be taking into account what people are asking and what they are doing and you're not doing that at all. Here you are coming out with all these figures.
HOST: Simon.
CALLER: Yep.
HOST: Do you mind, a question.
CALLER: Sorry?
HOST: You had a question to the Prime Minister?
CALLER: I want to know if you're so confident about all of these things that you're talking about, call an election, let the people vote.
HOST: Okay, it's the election point that I raised earlier.
PM: Simon, leadership is about charting a course for this nation's future and I'm doing it. Of course I'm happy to explain and talk things through with people, that's what I've been doing yesterday, that's what I'm doing now. Obviously Neil and I are talking about figures because he's asking me about the household assistance package. But I think, at base, I've got a different view from you about leadership. Leadership's about charting a course for the future. Leadership's about getting things done.
HOST: Is your leadership unequivocally safe?
PM: Yes Neil. I will be leading this nation to a clean energy future. We will bring this package into effect on 1 July next year. I have determined to get this done, I will get it done.
HOST: But you seem irritated by the question, I mean, it's a reasonable question.
PM: I think it's a distraction from the big question about this nation's future. I mean in ten, 20, 30, 40 years time, what are people going to be remembering about this period in Australian history? A little bit of talk between Neil Mitchell and the Prime Minister about poll questions and leadership questions or are they going to be remembering this was when the nation decided to cut carbon pollution. I believe they'll be remembering that, Neil-
HOST: Well, I think it will depend-
PM: And they'll live in a better environment and a stronger economy as a result of me and the Government having taken this decision.
HOST: I'd suggest it'll depend what happens, anyway. Just one last question-
PM: Well this is happening Neil, it's coming into effect 1 July next year.
HOST: Are you punishing aspiration? When you look at the figures, people who are earning reasonable money but not a hell of a lot of money, are being punished.
PM: Absolutely not Neil. I want people to aspire in this country. One of the reasons I've been so determined to make sure we've got the benefits of a better education system, a growing university system, more apprenticeships, more skills training - one of the reasons I've been so determined to do that is I want people to aspire in life. My own life journey Neil is about aspiration, it's about education and the opportunities education can bring-
HOST: Why are they punished then?
PM: And as you aspire and then you get a better job and you earn more, I think, for a Government, I've got to take the decisions that look at that and say across the broad sweep of Australians, who needs our assistance the most? I don't need assistance Neil to deal with carbon pricing, you don't need assistance to deal with carbon pricing. Nine out of ten-
HOST: No but I think people on $90,000 a year with kids do.
PM: Nine out of ten households need assistance, we're providing it. Someone with kids gets family payment increases, there are tax cuts. Not everybody comes out square or in front Neil, but almost six million households do.
HOST: I know you need to get away, two other areas just quickly. What's happening with Rupert Murdoch's empire in the United Kingdom? Does that have implications for this country? Are you concerned about their operations in this country, of News Ltd?
PM: I've been fairly amazed to see what's happened and what's been exposed in the UK, particularly the telephone tapping for people who are grieving and lost loved ones in dreadful circumstances. I suspect here in Australia it will lead to people talking about media ethics and that's all to the good, it's always good to have discussion and political debate and analysis with how we get our media. Of course, the truth is though people get their information from so many more sources than they used to in the past. The newspapers are one still strong source, but people listen to radio, they watch TV, they blog, they tweet, there's all sorts of ways people get the information.
HOST: So do you have any concerns about the operations of News Ltd in this country?
PM: Well I know that the CEO of News Ltd has issued a statement in relation to their conduct. I do expect that there will be a broad debate about media in this country, you know, debate's a good thing.
HOST: And Lady Gaga. The same?
PM: Look, I can't claim Neil that I sit at home at night with Lady Gaga music on. I don't, obviously I know who Lady Gaga is and I've seen some of the more extraordinary outfits that she's worn, so I'm conscious that she made a statement yesterday on TV about same sex marriage in Australia.
HOST: She won't convince you to change your mind on same sex marriage?
PM: Lady Gaga will continue to have her view and I'll continue to have mine. And no one will confuse the two of us, there's no way in the world anybody's going to get confused which one's which.
HOST: Thank you very much for your time.
PM: Thank you Neil.