HOST: Julia, thank you for being on the show this morning.
PM: Good morning Leon.
HOST: Now, first of all, let's talk about the Newspoll and that is that it's looking pretty ordinary for you at the moment, to say the least and I guess if it doesn't get any better, are you hoping that you're taking the carbon tax information you're putting around the country, do you think that will improve your position and the Government's position?
PM: Leon, what I'm focussed on is cutting carbon pollution, tackling climate change and getting Australia a clean energy future. What's motivating me here is the best thing for our nation's future in terms of our environment and our economy. Now, long after the opinion poll of today, or any other opinion poll has been forgotten, I want this nation to be cutting carbon pollution. That's why I made the announcement that I did on Sunday, that's what I'm determined to deliver and it will start on 1 July next year.
HOST: OK, now of course we all know that Kevin Rudd was more popular than you when he was taken from his position and replaced by you. So, is the likely scenario to be repeated or are you going to definitely be there for the next election?
PM: I don't agree with that analysis, I'm not going to pick over the past. I'm going to lead our nation to a clean energy future, Leon. Yes, when you're talking about a big reform it can be difficult for people to understand, if people want information I'll be out and about explaining the information. When we look at the big reforms of the past, internationalising our economy, the Goods and Services Tax, these were hard reforms and they weren't instantaneously popular, but we are a more prosperous nation today because we faced up to those hard reform. Today, we have to face up to this reform and cut carbon pollution.
HOST: Alright. Now, you and your Treasurer Wayne Swan have consistently said that the carbon tax package would be revenue neutral. We now learn that there'll be a $4 billion black hole in the forward estimates over four years. How could you allow this to happen and this of course will make people cynical, don't you think?
PM: When you look at the package that I announced on Sunday, you're right over the forward estimates there's an impact of just over $4 billion. Almost $3 billion of that is in the first 12 months, you would expect a big new reform to have a start up cost and it does. Then of course as it gets into full gear it moves to being broadly revenue neutral.
So, in terms of the budget, we'll make the right decisions to bring the budget to surplus in 2012-13.
HOST: Alright. The Greens revealed yesterday, Prime Minister, that part of your package hasn't been modelled correctly by Treasury. They modelled some of the package based on $20 on a carbon price, rather than $23. How credible is this?
PM: Let's be very clear. The price impacts that we've been talking to Australians about will be less than one per cent impact on people's cost of living was modelled on a $23 carbon price. Some of what are referred to as the macroeconomic indicators were modelled on a $20 carbon price. But Leon, we can price carbon and still have a strongly growing economy, strongly growing employment and cut carbon pollution.
HOST: Now, the Greens have revealed that your $10 billion financial assistance program for renewable energy projects hasn't been properly costed either?
PM: I don't agree with that at all.
HOST: You don't?
PM: No, I don't.
HOST: So that's just completely wrong?
PM: In what way, Leon? $10 billion will be put into a Clean Energy Finance Corporation, that's properly accounted for in the figures that I released on Sunday. That Clean Energy Finance Corporation will have a board, obviously people with business experience will be on that board. They will make loans on commercial terms, so the purpose will be to catalyse the development of clean energy sources in this country.We're already seeing cleaner energy sources coming on stream. The Government's work, for example, to develop some huge new solar projects in New South Wales and Queensland. But I want to see more of that right around the country, using hot rocks in South Australia, sunshine in Queensland, wind power in Victoria, tidal power in WA and the list goes on.
HOST: You need baseload-
PM:-$10 billion investment is about and yes, we need baseload and the huge new solar projects that I've had the pleasure of announcing in Moree and Chinchilla are projects that use the sun and also have the capacity to generate electricity that can be used as a baseload.
HOST: It has been reported that 2000 megawatts of coal-fired power is to be removed from the southern grid. What's going to replace this for South Australia?
PM: Well, we will go to market, we will ask people to tender to retire some of the dirtiest coal-fired power generation in our country, 2000 megawatts. As we work our way through that process, at every stage we will be taking proper advice from the industry regulators, so that we've got security of electricity supply.
In terms of what will generate more and more of our power in the future, gas will play a big role, as will the renewable energy sources of solar and wind and geothermal and the like.
But, of course Leon, at every stage we will do everything we need to to guarantee security of electricity supply and that the lights stay on in South Australia and round the nation.
HOST: Alright, coal has been demonised while we can't dig it up quick enough and sent it up to China, who use it to, and are opening a lot of coal-fired power stations, about one a week. Is it hypocritical?
PM: I don't agree with the premise of your question, again. Coal has a great future in this country. Look at the front page of today's Australian, it's telling you that a big American company that already operates in Australia is going to make an acquisition, the biggest ever purchase of an Australian coal mining company. Now, why have they done that? Hard headed business people, because they know there's great future in coal in this nation.
HOST: Ms Gillard, the problem is Bob Brown recently, and it was only a week ago, confronted the Australian media and public with his wish to shut down the coal industry, because it's dirty.
Now don't you think that sends shock waves through many thousands of families across the country, worried about their futures, their employment futures?
PM: Well, Bob's completely wrong on that. Coal has a strong future in this country.
HOST: But he's your partner, without him you can't govern?
PM: I've made the decisions necessary to get this package right, to create a clean energy future and of course as part of that, I've made a decision that there will be a strong future for coal in this nation. We will work with the coal industry, the Government has set aside $1.3 billion to work with the particularly gassy mines that generate a lot of carbon pollution. The coal industry will continue to grow, we will continue to see more people employed in the industry and if you look at the front of today's Australian newspaper what it's telling you is hard headed business people, who watch every dollar and cent, want to make a huge acquisition of an Australian coal company because they know there's a great future and they'll make profits from it.
HOST: Oz Vege have warned that food prices will soar, as their power bills climb into orbit. You've got Adelaide Brighton cement warning that they may have to rely more on cheaper imports, as power costs make the local product less viable. Are we staring down the barrel of job losses here?
PM: No, we're not. If you look at the impact of carbon pricing, we will price carbon, we'll get carbon pollution out of our atmosphere, that's the right thing to do for our environment and employment will continue to grow. You will see lots of claims made in the public arena Leon, lots and lots of claims. But we have worked through this with the same experts in Treasury who did the modelling for the GST-
HOST: -And they underestimated that revenue, Prime Minister.
PM: And they got the modelling effects right, the price impacts for families. Those modelling effects were right. Now, what we know from that Treasury modelling is that the price impact will be less than one per cent in cost of living and of course nine out of ten households will get assistance and employment will continue to rise.
HOST: OK, we've got a couple of calls here, Prime Minister. Gary, you're talking with Julia Gillard, the Prime Minister. What's your question?
CALLER: G'day Leon, thanks (inaudible). Good or bad, Ms Gillard, you'd have to admit this is probably the biggest upheaval in Australian history. Why won't you, and the joint Prime Minister Bob Brown, give the people the right to say yes or no through a vote.
PM: We've been debating putting a price on carbon in this country for more than 10 years. The world's been struggling with this issue for even longer. Another female leader, Margaret Thatcher, stood up in Britain and warned the world about global warming. Prime Minister Howard went to the 2007 election saying he'd put a price on carbon pollution.
Now we need to get this done. We come to this task as per head of population the biggest emitters of carbon pollution in the developed world. I'm not going to put climate change in the too hard basket. We're going to price carbon pollution, make our big polluters pay, we're going to get a better environment as a result and we're going to get the clean energy jobs of the future.
HOST: Prime Minister, has your Caucus been at all intimately involved in any of this discussion, or was it presented to them as a fait accompli after you discussed with your committee, on which Nick Xenophon is very upset that he didn't get membership, but that's another issue. And he rang me this morning and asked me to point it out to you, which I've done.
But did you take Caucus into your confidence and let them have an input into this before you announced it?
PM: Of course Leon, I work with my caucus colleagues, I work extensively with my ministerial colleagues and in terms of the Government making the right decisions here for the country's future, I've worked with a range of ministers, obviously particularly Greg Combet doing climate change, Wayne Swan, the Deputy Prime Minister and Treasurer, Martin Ferguson, with his special insights into resources and energy and tourism, Kim Carr with his special insights into industry and innovation, Joe Ludwig working from the perspective of agriculture and fisheries.
HOST: So they were part of this negotiation, were they?
PM: They were part of the government decision making. The Cabinet and Cabinet Committees worked on this package, Leon.HOST: Alright. Where's the money going to come from to pay this compensation, once the carbon price goes up from $23?
PM: The big polluters will pay the carbon price. The carbon price will go up over time, as will the household assistance. The household assistance, at every stage, will be funded by the money raised from big polluters.
HOST: So, you're not accepting that - there's James here, who's I understand a dairy farmer. James, meet the Prime Minister. What's your question?
CALLER: G'day Prime Minister. The dairy industry yesterday released some figures saying that the impact per farm in Australia is going to be between $5000 and $7000 per farm. South Australia's got larger farming operations here, so we're looking at between $10,000-$14,000 extra on our costs per farm.
We've got Coles and Woolworths keeping the price of food down, to keep your cost of living pressure down, which you find so precious, and we're the only lever that can be used to do that and we're stuck with a situation where our costs are going to be impacted, our electricity cost's going up. ABARE have done data recently in April this year, saying a $29 carbon cost will reduce cash incomes on farms by between 12 and 25 per cent. This is going to be another nail in the coffin of Australian agriculture. What do you want us to do, Prime Minister, do you want us to pack up and go to another country and produce food, or do you want us to stay here?
PM: Of course I want you to stay here, doing all the great work you do to provide the fresh produce we all enjoy. On the prices received by dairy farmers from our big supermarket chains, I have consistently said that supermarket chains need to appropriately reward dairy farmers and they should not be the people who are paying the price for discounting. The supermarket chains publicly responded to that and said that they will not make dairy farmers pay the price of discounting. You will pass any additional costs through, they will be passed through to the consumer and that's what the household assistance is to help with.
HOST: Prime Minister, thank you for joining us today. That's Julia Gillard, Prime Minister, answering some questions.