PM: Oh, of course farming will be viable and our modelling is showing that, for example, with food production, what you will see is people pass costs through the consumer, which is why we are ensuring that nine out of ten households get assistance through increased pensions, increased family payments, and a tax cut, which comes with a major tax reform.
Farmers themselves and their families are going to see those benefits and may people in farm families, who go and work in town, potentially part time, are going to see some big tax benefits through our tax reform process.
HOST: You say the costs will be passed on to consumers, but farm groups say that the costs will be passed down to farmers and research released from the National Farmers Federation shows that even with few exclusions from the tax, farmers could pay up to $10,000 a year in extra costs. Are you comfortable hearing these figures?
PM: Look, I simply don't accept those figures and I had noted that there are some spokespeople on TV from the food industry, who say all at the same time that farmers will have to bear the costs, that food producers will have to bear the costs, and that consumers will have to bear the costs. Well, those three things can't be right. Where we will see costs flow is they will flow through in prices that consumers pay and understanding that we are providing the household assistance.
And of course we will see businesses, particularly the around 500 big polluters in this country, who are paying the price for carbon pollution for the first time, innovating and changing so that they are doing things in a cleaner way and generating less carbon pollution.
HOST: But dairy processer Murray Goulburn says that it will pass its costs on to farmers, so what will you do to stop that happening?
PM: We've been very clear, of course, that there is household assistance, which can deal with the limited consumer price impact of putting a price on carbon. We anticipate that to be 0.7 per cent, so less than one per cent.
HOST: OK, let's move on to fuel. In 2014 the government wants to include fuel for heavy vehicles in a carbon price, giving industry two years to adapt, use cleaner fuels and convert to rail. The problem is that there isn't the rail to cope with current needs, so what's going to change in three years?
PM: Well, I think we've just got to be clear here, we are talking about the petrol and fuels that households use and people operating light commercial vehicle use, not being covered at all.
We are talking about heavy trucking coming into the scheme on 1 July 2014. We believe that with heavy trucking in the scheme. We will see over time, greater innovation and reduction in carbon pollution. We know that's possible, because some of our big trucking companies have already engaged in very big emissions reductions, so we know change is possible and that putting a price on carbon will provide that change.
HOST: What about rail though? If you're anticipating a conversion from trucking to rail, where's the-
PM: We're not anticipating, and I don't want to disabuse you of that, no one has ever said we are anticipating a complete conversion in the two years before heavy road comes into this system, no one said that. This government has a proud track record of investing in ports and road and rail.
HOST: The agricultural sector is one of the bigger emitters in Australia, with 15 per cent of emissions coming from the industry. Can Australia afford to exclude agricultural emissions forever?
PM: Yes, we can and we're intending to. So, we've deliberately designed this scheme to meet our needs as a nation and so we've looked at our great farming nation and determined it's appropriate to agriculture to not be included, but we do want farmers to benefit from the fact that our nation is moving to a cleaner energy future, with less carbon pollution, which is why we've got the carbon farming initiative.
This all comes with a huge land package; we're talking about $1.7 billion. So, a new income stream for farmers through carbon farming and of course new funds for land holders to do the right thing by the environment, in terms of better biodiversity.
HOST: So, are you saying that agricultural emissions will never be included in a carbon price?
PM: Look, we've announced the scheme. It's there for all to see and it doesn't include agriculture.
HOST: OK, so that's putting on the table, never-
PM: That is the design of the scheme and we've made that decision deliberately.
HOST: On live cattle exports to Indonesia, the suspension has been lifted, but no cattle have left the country yet. When will the trade resume, can you give us some days, weeks, months?
PM: Well, this is now a question for our exporters and we are continuing to work with them to get the live export industry up and running. Now, exporters can go back to the live trade, they've got to get an export permit which ensures that we can track and trace animals and that there's reporting and accountability and independent auditing. As soon as people are in a position to do that, they can have an export permit and as we know from Indonesia, they are prepared to grant import permits. The advice to me is that there are exporters who believe that they will be in a position to meet those conditions and meet them quite promptly.
But, it's now a question for those individual exporters. Our role, of course, is to set up the right system to ensure long terms sustainability of the trade, because we know that animal welfare standards are being dealt with appropriately.