The SBS TV Channel in Australia (State funded multicultural TV) runs a current affairs show called Insight.
Now on Tuesday 5th April 11 they discussed the proposed Carbon Tax – and fairly soon after the start – JENNY BROCKIE the compere brings in PROFESSOR ROSS GARNAUT, GOVERNMENT CLIMATE CHANGE ADVISOR.
In his second paragraph the transcript shows him saying –
“….there’s a way of dealing with it that won’t lead anyone to be poorer.””
About halfway through the transcript other contributors pick Garnaut up for saying that nobody will be worse off.
For example Tim Wilson says:
TIM WILSON: Sorry I actually want to go back there, because I think if you check the tape, you did say no-one would be worse off.
Then Ross Garnaut says;
PROFESSOR ROSS GARNAUT: I did not. That is simply not true.
Well I know what I think words mean – I wonder what readers think about this issue on national TV. Why did not an Insight staffer check this and tell Jenny Brockie during the program so she could inform Ross Garnaut what words he uttered?
I will tell you now for certain what the truth will be if this tax/scheme whatever goes ahead. Those of us taxpayers above some Labor chosen middle tax bracket will most certainly be worse off. The tax will be simply another Labor income redistribution scheme.
Below here is the long transcript.
Before the last election, Julia Gillard promised there would be no carbon tax – now we might have one as early as next year. It’s an issue that is generating fierce debate in the community and continues to cause deep divisions in the major political parties. So, what will a carbon tax mean for all of us?
JENNY BROCKIE: I would like to start with some of the fierce opposition to this tax. Susan Webster, you organised five buses from Sydney to attend a recent rally in Canberra – what’s tipped you into being an activist on this – were you an activist before?
SUSAN WEBSTER: I felt very strongly about the introduction of this tax – I felt that way for a long time, but there’s so much community concern and anger about the fact that the Government did make a pre-election promise not to introduce the tax and now seems insistent on bringing this tax into being without a mandate.
JENNY BROCKIE: What’s your main objection – is it the fact that….?
SUSAN WEBSTER: There’s no mandate – that’s one thing.
JENNY BROCKIE: But are you opposed to the tax as well, whether there was a mandate or not and if so, why?
SUSAN WEBSTER: Yes. It’s a futile tax, it won’t do anything to improve our environment and it’s just going to create huge hardships for people – it’s going to ruin our economy.
JENNY BROCKIE: Toni Westwood, you took an overnight bus ride from Melbourne to attend one of the rallies and you were also at the protest outside Julia Gillard’s office last month. Why are you against the tax so fiercely?
TONI WESTWOOD: Well, I have studied it for a long time and have done a lot of my own research. I’m just an ordinary person, middle of the road, I love this country, I love our sovereign, democratic, free, prosperous way of life and I want to see that continue for my grandsons – I’m a grandmother.
JENNY BROCKIE: So why do you see it as such a threat to that?
TONI WESTWOOD: Because, both on the scientific side, go to www.petitionproject.org for the 31,000 scientists who disagree.
JENNY BROCKIE: OK, no plugs. No plugs for websites please or we will be here all night.
TONI WESTWOOD: Sorry – that’s naughty of me.
JENNY BROCKIE: I am just trying to get a sense of where this passion in you is coming from because the rest of your family supports it, don’t they?
TONI WESTWOOD: My husband has always voted Labor, my daughter votes for Labor or the Greens – I’m not sure, actually. But I’m not allowed to… You know, that’s why I’m here, Jenny, because I can’t influence my own darling husband of 40 years and my daughter.
JENNY BROCKIE: But I still haven’t got a sense from you of where it’s coming from – have you been passionate about other taxes?
TONI WESTWOOD: No. I have never ever taken part in…. I mean, I went up to Canberra on the March 23rd thing – I took 800 signatures from people opposed to this tax, all of them were ordinary people, we didn’t like the silly banners and things – they were nothing to do with us.
JENNY BROCKIE: OK, so at some level, you see it as what – a threat to our way of life?
TONI WESTWOOD: I just think it’s going to put Australia down the gurgler. We’re going to become the multi-cultural trash of Asia along with the rest of the west. We’re going to end up with a one-world government and we don’t need it.
JENNY BROCKIE: OK, Ross Garnaut in Cairns – let me bring you in at this point. You are advising the multi-party climate change committee. Given the latest poll that Labor has suffered this slump in support in this latest news poll today, are you losing the public debate over a carbon tax, do you think?
PROFESSOR ROSS GARNAUT, GOVERNMENT CLIMATE CHANGE ADVISOR: The discussion’s got a long way to go, Jenny and what we have just heard is very sad. The mainstream science, the people who have spent their lives studying climate change, are very strongly of the view that global warming is real, that humans are making a substantial contribution to it and that if we don’t do something about it, we will seriously destabilise the whole basis of our way of life.
It’s just so sad that that lady who is obviously a very sincere lady has been misled in this way. The science is quite clear, there’s a way of dealing with it that won’t lead anyone to be poorer. The money does not disappear when there’s a price on carbon and the Government said it is going to be given back in substantial amounts to households. I have recommended that enough be given back so that low and middle-income earners won’t lose anything at all.
The careful economic analysis has been done to show that this is consistent with continued economic growth in the medium term. And in the long term avoid a very serious blow to our standard of living. So, it’s just very sad.
JENNY BROCKIE: Chris Johnson, your group helped organise the anti – carbon tax rally in Canberra a couple of weeks ago – a lot of controversy about that, but putting that aside, in 2007, you voted for Kevin Rudd didn’t you? Who was in favour of an emissions trading system?
CHRIS JOHNSON, CONSUMERS AND TAXPAYERS ASSOCIATION: Emissions trading scheme is very different to a tax – yes you are right.
JENNY BROCKIE: But also this tax is going to become an emissions trading scheme, eventually, according to the planning for it. So if you were prepared to vote for Kevin Rudd in 2007 on that basis, what’s changed for you?
CHRIS JOHNSON: There’s not enough information -that’s the first thing. If I could respond to Professor Garnaut and I quote the ‘Australian’ on the weekend. “Professor Garnaut conceded there might have to be Commonwealth Loan guarantees to keep high carbon emitting generators operating if they fail financially under the proposed carbon tax from July 1 next year …” Now, this is economic suicide.
Here is a gentleman who is saying, “Well, we’re going to tax you, then if up can’t afford to pay, we’re going to let you keep polluting – we’re going to give you a loan so you can keep paying the tax and keep polluting.” This is not economic sense – it’s suicide. That’s the first thing – we’ll let Professor Garnaut respond.
JENNY BROCKIE: Okay, I would like a response, Ross Garnaut?
PROFESSOR ROSS GARNAUT: Oh, I think that if Chris or anyone else wants to know what I have been saying, it’s all on the website – www.garnautreview.org.au – that’s in paper number 8. Go there and see what I actually said and not some newspaper summary.
CHRIS JOHNSON: Well, hang on, Professor, hang on – with respect, sir – I have asked you a straightaway question about your quotation in the Sunday paper and you haven’t answered me. Why would you penalise a company that’s producing coal, maybe emitting emissions that aren’t acceptable and then say as they become unviable you will give them a Commonwealth-quarantined loan so they can continuity to pollute and continue to pay the tax?
JENNY BROCKIE: Okay Ross, do you want to respond to that?
PROFESSOR ROSS GARNAUT: Yes. In my paper, I explained how we’ve got a good electricity market and it’s quite likely that this adjustment can be managed without that – without financial support. I suggested some strengthened regulatory arrangements along the lines of the relationship between the Reserve Bank and the banks to provide some additional underpinning for stability. I said that I thought that would be enough but if there was continued anxiety, then the most cost-effective way of dealing with that would be to provide transitional loans on the most emissions intensive…
JENNY BROCKIE: I am going to move on from this because we will come back to it a bit later on. Chris, you didn’t answer my question which was, you voted for Kevin Rudd in 2007, he was in favour of an emissions trading scheme – what’s changed?
CHRIS JOHNSON: Since then, a lot of information has become available and I have researched this a lot more thoroughly. I am not a scientist and in addition to that, I have looked at other countries, for example, France – they’re going down the drain economically, and they have a carbon tax. New Zealand is in a similar position – they’re taxing farmers because they have cows which burp and fart and they are giving them a carbon tax – and the farmers are going broke. The cost of the meat and the dairy products are going off the wall so how can Professor Garnaut say this will be good for our economy, I just can’t see it.
JENNY BROCKIE: Okay… Erwin.
ERWIN JACKSON, THE CLIMATE INSTITUTE: The New Zealand Emissions Trading Scheme doesn’t cover agriculture – it doesn’t cover it until 2015. So we just need to be really careful when we are debating this that we have the facts on the table, because we know the New Zealand ETS doesn’t cover Ag.
JENNY BROCKIE: Okay, Christine Milne, let me bring you in here because Kevin Rudd said he made a mistake dropping the ETS. Julia Gillard went to an election saying there wouldn’t be a carbon tax and now she’s pushing for one. What do you think of the way Labor’s handled this? Particularly given the attacks, from Labor – from Julia Gillard on the Greens this week – I mean, how do you think they’re behaving?
SENATOR CHRISTINE MILNE, AUSTRALIAN GREENS: Well, I certainly think there’s a problem in terms of the Government’s credibility and that has managed to get mixed up quite badly in the discussion about how we should respond to climate change. One thing the Government hasn’t solved is that what’s on the table is actually moving to the architecture of an emissions trading scheme which operates in the initial years as a fixed price and then moves to a flexible price, so it’s actually the architecture of an emission trading that we are trying to move towards and the reason we’re doing it is to try to address the very serious issue of climate change and to reduce our emissions in the most cost-effective way.
As to the government, yes, I think Kevin Rudd was wrong to drop emissions trading and I think his problem in credibility was he said it was the greatest moral challenge facing our generation and he’s absolutely right in that. But you can’t say that and then abandon it and maintain your credibility, which is why he lost it, which is why the Labor Party is struggling to be credible on this issue.
JENNY BROCKIE: Of course, he’s said he was urged to do this by some of his colleagues. Do you think Julia Gillard is genuinely committed to a carbon tax and an ETS? Or do you think she has been pushed to it because she relies on people like you?
SENATOR CHRISTINE MILNE: Well, certainly we had an agreement after the election that we would work together across all party lines to try to develop a mechanism to deliver a carbon price in Australia. She committed to that and she is working hard to achieve that and I think that she is absolutely committed to delivering it by 1 July 2012. And we are doing everything we can to try and get through this in Australia and actually start making the transformation that is actually going to lead to big opportunities in this country. Everybody talks about what they perceive as the downside, but the shift to renewable energy, the shift to green jobs is where the future lies in this country or else, we will see major dislocation in the future.
JENNY BROCKIE: I should point out we did invite the Climate Change Minister, Greg Combet and his shadow Greg Hunt, to come on tonight – neither of them were available, so I just wanted to make that clear to everybody in case they were wondering why they were not here. A few more points of view about this – gentleman here, yes?
PATRICK LYNCH: Christine referred to and it’s often referred to in the media lately about the green jobs. I have yet to find someone to tell us exactly where these green jobs are, what they involve, what they pay. Are they going to compensate people who loose their jobs that have good careers now, are they going to compensate them with a green job of equitable reward? I don’t think they can, because Bob Brown goes on about green jobs – green jobs – where are they – can they please be more specific?
JENNY BROCKIE: Okay, Christine?
SENATOR CHRISTINE MILNE: Well, just recently, for example, the Minister launched a green apprenticeship program in Melbourne for plumbers, for example. So, the tradespeople are going to be fully employed in making the transition to these new technologies. We will also see the commercialisation in a range of energy efficiency and renewable energy technologies and see those rolled out across the country. One of the reasons why the insulation program didn’t do as well as it should have is we didn’t have enough trained people out there to be able to implement it and the same with rolling out solar panels. One of the problems is you don’t have the trained people to do it, so if anything – we have a capacity shortage in delivering this transformation and there’s huge opportunity there in Australia for a whole range of new employment opportunities.
JENNY BROCKIE: Okay, we have heard a few people’s views about the carbon tax. Scott, what do you think about it? How are you feeling about it?
SCOTT PETTET: The thing that I keep coming back to on this debate is the moral and ethical dimension. For me, the carbon tax is about drawing a line in the sand and saying enough – for a long time we have had this voracious appetite for consuming the planet’s limited resources – we have polluted the environment with little to no regard for it’s long term effects. So, the carbon tax is about taking responsibility for that and holding ourselves to account.
JENNY BROCKIE: So you’re prepared to pay?
SCOTT PETTET: Absolutely. There’s a price that has to be paid, there’s no free ride on this, we have had a free ride for decades, there’s a price that has to be paid and if the price is the carbon tax, then so be it.
JENNY BROCKIE: And do you have party allegiances around this?
SCOTT PETTET: I have zero party allegiances – a-political on this issue.
JENNY BROCKIE: Vivienne, what about you? I just want to get a couple of other views on this Chris!
VIVIENNE STORY: I agree. I think Australians, traditionally, we are innovative, and we have a moral responsibility, we live in the lucky country, we live the good life. We should be leading on this issue, as we have done on many issues in the past and it’s an opportunity. It’s an opportunity to export this technology and to, you know, show the way to the rest of the world.
JENNY BROCKIE: Are people clear on what it’s going to be like – on what a carbon tax means? Lyn?
LYN: I would agree with Scott and the ladies over there on that issue, in that there is a moral responsibility that we as individuals need to take.
JENNY BROCKIE: Do you understand what a carbon tax means – do you feel you have a grasp of what it means? How many people here feel clear about what it’s going to involve? Very many? A few – A few hands not going up.
Ross Garnaut, I would like you to clarify this for people at home too, because there is a bit of confusion, quite a bit of confusion, because we’re still waiting on detail from the Government. But how will a carbon tax and the subsequent trading scheme actually work?
PROFESSOR ROSS GARNAUT: Well, what the Government and the multiparty committee are talking about Jenny, is a carbon tax that is really an emissions trading scheme at the beginning. And for an emissions trading scheme, a certain number of large polluting businesses will have to buy a permit before they put carbon dioxide into the atmosphere – they will have to buy that from the government regulators. That’s why the Government will have money to give back to the community and to ease the burden on households. Then, once a firm has bought such a permit, later on, it will be able to trade it, but in the early years, there will be a fixed price. It’s a bit strange to call it a carbon tax – it’s actually an emissions trading scheme with a fixed price at the beginning and a floating price after a few years.
JENNY BROCKIE: And you’re saying… And you’re saying that fixed price will have to be about $25 a tonne to meet a target of a 5% reduction in carbon emissions in 2000 levels of carbon emissions by 2020?
PROFESSOR ROSS GARNAUT: I recommended in my paper on carbon pricing between $20 and $30 a tonne and $25 is the mid point of that range. I’m going to say a bit more about the consequences of prices within that range 20/30 and its effects on targets in my final report to the Prime Minister at the end of May.
CARBON TAX RALLY SCENES:
WOMAN: We’re not extreme. We’re just people with thumping hearts and national pride and we are over it.
MAN: It’s a relatively small cost, it’s got to cost us more. We don’t have any choice.
WOMAN 2: I’m passionate about Australia and I hate the way it’s running at the moment.
WOMAN 3: I think it’s important to be accountable for your effect on the planet
WOMAN 4: I’m not extremist and I’m not Klu Klux Klan.
WOMAN 5: If we don’t pay a little bit now, our kids get to pay forever and ever and ever and ever.
WOMAN 6: A lot of the people over 60 here are here because they have children and grandchildren they don’t want burdened with this tax.
Man 2: They’re idiots. Go and stuff your head in a paper bag and try breathing that for a while.
JENNY BROCKIE: A few strong opinions there, for and against a carbon tax. Tim Wilson, you are from a think tank that lobbies for freer markets, what do you think about this debate?
TIM WILSON, INSTITUTE OF PUBLIC AFFAIRS: Well, I think the debate is actually clouded by a lot of dishonesty and a lot of misinformation and it’s very hard I think for most Australians to actually understand what’s going on. We have heard tonight some misinformation from Ross Garnaut about the fact that nobody’s going to be worse off under a carbon tax. The reality is, we know – but I also applaud Ross for being honest about the fact that the emissions trading scheme is a carbon tax. It’s just a different way of introducing it. What we need is an open and honest debate about the impact, the rate of the tax and how fast it’s going to go up. Ross has talked about 20 to $30 rates but it’s actually a tax designed to go up every year. We know that – it’s in his report – he recommended an increase of 4%…
JENNY BROCKIE: But if we don’t know that detail that you are talking about and we don’t, how do you know that people are going to be worse off, when we don’t know what the compensation will be yet?
TIM WILSON: The political buck has to stop with somebody and ultimately that will be with the parliament and the financial buck has to stop with somebody as well. Someone has to pay and you can compensate people but at some point…
JENNY BROCKIE: Hang on one second.
TIM WILSON: There’s no real benefit in terms of driving change in the economy and we know as I was saying before, the tax might start at $20 per tonne, but it has to increase over time to drive transition particularly in things like electricity generation, which is one of the main sources of our carbon emissions. To transfer from coal to gas, the ANU has recently released research which shows a price of about $70 per tonne, and that’s without compensation, has to be applied to actually drive transitions and then it’s much higher for renewable source as well.
JENNY BROCKIE: Okay, gentleman here?
MAN: This is a magnificent exercise in buck-passing. We are the problem. That light is the problem. We’re addicted to electricity. We are like cigarette smokers who can’t give up. Is taxing the tobacco companies going to stop them smoking? No way. Taxing the electricity producers? No way will they reduce until we reduce the demand. Solar cells on our roofs, solar hot water. Anyone will say, “Oh, that’s too expensive.” Like hell! You invest $20,000 in a 4.5-kilowatt scheme and you make 20% per annum and you run your neighbours air conditioner off it…
TONI WESTWOOD: Only the people who can afford to do it, do it.
MAN: It’s the cost of a Toyota Corolla. Take the Toyota off the road and put in solar cells.
JENNY BROCKIE: You wanted to ask Ross Garnaut a question?
MAN 2: Professor Garnaut, you talked about compensation for consumers, if there is compensation then that means the carbon tax is going to be passed on, if it’s passed on, where is the incentive for the polluter?
JENNY BROCKIE: Ross Garnaut? Good question.
PROFESSOR ROSS GARNAUT: Jenny, first I have to correct something that was said a little bit earlier about misinformation. There’s been a bit of verbalising there – I did not say that no-one would be worse off – I said that low and middle income earners under my recommendations wouldn’t be worse off and it’s not true that people won’t have an incentive to conserve on electricity use, if they’re compensated through reform of the tax and social security system, because electricity prices will be higher relative to other things. People will get more money in their pay cheques, so they won’t be poorer, but they will be able to save money, if they use electricity. The incentive will be there to conserve on electricity, even though they have received tax cuts and social security adjustments, for people on low and medium incomes.
JENNY BROCKIE: Tim?
TIM WILSON: Sorry I actually want to go back there, because I think if you check the tape, you did say no-one would be worse off. But this is part of the debate we need to have…
PROFESSOR ROSS GARNAUT: I did not. That is simply not true.
TIM WILSON: The point is that…
PROFESSOR ROSS GARNAUT: Please go back and check it. OK… The misinformation could be corrected if people went back and corrected, I put everything transparently on the website.
JENNY BROCKIE: We will check it and put it on our website. Tim?
TIM WILSON: The point is – it’s a tax that needs to go up. The challenge for the Government is they haven’t articulated and also politically, in terms of a trust basis, whether people feel that the Government is really going to reimburse people and it’s going to increase and compensate them for it as that price of the tax goes up every year, and whether it’s then also going to drive the transition, when you have compensation, towards low-carbon technologies being adopted, in comparison to other schemes. At the end of the day, a carbon tax and an emissions trading scheme is a regulatory intervention in the market place. And ETS uses market base systems to allocate how that money is charged and how it may transition our lives. There are other ways where we can achieve a low carbon technology where we can drive innovation without the need for a carbon tax.
JENNY BROCKIE: Ross Garnaut, very quickly, I know you’re pushing for this idea of income tax cuts as compensation for the impact of a carbon tax. How would that work and what sort of response are you getting from the Government? Do you think that’s the way they’re going to go?
PROFESSOR ROSS GARNAUT: I’m sure that income tax cuts will be part of it. Of the revenue that the Government gets from the price on carbons, from selling permits to the big polluters, the money doesn’t disappear and the Government’s committed to giving it back to the community in one way or another. I have made a certain set of recommendations saying that it would be good for about half of that to go into reform of tax and social security. We could do that in ways that would improve incentives for labour force participation. There are other ways of doing it and no doubt, the Government will consider all of those things. They will be discussed in the multi party committee. I put forward one proposal that I think makes sense – others will have different proposals.
JENNY BROCKIE: Okay, Jodie, I wanted to bring you in here because you’re on a disability pension – you have a young family. How are you feeling about this?
JODIE GUERRERO: Personally, I think that families are already on ‘struggle street’. There are too many families who are dealing with a lot of issues in terms of affording normal everyday things like clothing for their children and mortgages and everything else. I am concerned about people with health conditions, disabilities and people who are in that marginalised group. A lot of them are already struggling with problems to do with their health and their disability.
JENNY BROCKIE: As indeed you are.
JODIE GUERRERO: Yes, I have been struggling in the past.
JENNY BROCKIE: Do you believe we need to do something about carbon emissions – I’m interested in seeing where you sit in this discussion?
JODIE GUERRERO: In terms of the whole climate change debate, I am on the fence. But I also feel that there’s got to be some way of penalising the polluters without penalising the marginalised, people in the low income families and middle income families.
JENNY BROCKIE: If you were compensated adequately, would you be in support of it or not?
JODIE GUERRERO: The compensation has to be a significant amount – I would say something like $300 a month maybe.
JENNY BROCKIE: Because you have really high electricity bills, can you explain why?
JODIE GUERRERO: We do have some air conditioning and we try to be very stringent with our air conditioning but my last bill was $836 for three months.
JENNY BROCKIE: But you need the air conditioning because of the condition that you have?
JODIE GUERRERO: That’s right, because I have an illness and a disability and it’s hard, when you have an illness, to sit there and sweat away. You really do need your air conditioning and I think a lot of families are just struggling.
JENNY BROCKIE: Christine, how do you protect someone like that?
CHRISTINE MILNE: This is a really important issue because you can compensate people for the impact of increased cost of living but you can’t compensate people for the impacts of climate change and that is really the big issue here and this is the moral and ethical dimension. We have people suffering all around the world right now because of the impact of climate change. Just go to the Pacific Islanders who have been at the science conference this week, talking about salt water incursion into their fresh water, their inability to feed their people anymore because of over-wash, storm surge and so on.
We know the poor and marginalised from one end of the planet to the other are already significantly impacted and just in our own community, in the heatwave in Adelaide a couple of years ago, we had a large number of people who died from heat exhaustion, and they tended to be the elderly, the frail and the sick and so on. We have got to address climate change but the key thing here is that the compensation is going to be made available because everybody on the multi party committee, across the Labor Party, the Greens, the Independents are committed to providing that compensation and, as Ross has said a moment ago, that will go to low-income, middle-income earners, and to people who have government support…
JENNY BROCKIE: Does that reassure you Jodie?
CHRISTINE MILNE: It is actually going to happen. That’s the reality.
JENNY BROCKIE: I would like to hear Jodie’s response.
JODIE GUERRERO: I have heard nothing specific in the media regarding pension increases for pensioners or people with illness and disability. I have only heard about supplements for low and middle income families.
TONI WESTWOOD: In the paper, did anyone notice how the Government’s coffers are suddenly in debt of $3 billion because they haven’t got the companies tax rates they expected to have. Now, what on earth do you think is going to happen when and why too are people not spending, that’s the other reason.
ERWIN JACKSON: I can give you a concrete example because we have actually trodden this road before in the debate we had around the last emissions trading system. Everyone acknowledged, regardless of what side of the debate you sat on, I think – that we actually do need to look after the vulnerable in the community. In the last package, people were overcompensated – they actually got more money than they were projected to be impacted by. So no-one is saying, and we’re working with the Brotherhood of St Lawrence we are working with Australian council of social services, to look at a package which will help the vulnerable people.
Let’s also talk about why we’re actually doing this. We’re talking about, for the average person, Ross is talking about a $25 a tonne price, a $2 to $3 a week increase on their electricity bill, 50 to 70 cent increase on their gas bill and maybe a $2 to $3 increase on their petrol bill. So we’re talking about $8 to $10 a week. Let me finish. And that will actually start us on a path to starting to deploy cleaner forms of power generation as they are doing in most other advanced economies.
Someone asked before about where the clean energy jobs are – they’re in Europe and they’re in China. There is now more people employed in the clean energy industry in Europe than there is in the coal and nuclear industries combined.
CHRIS JOHNSON: Their economies are going down the drain.
JENNY BROCKIE: Okay Tim, a quick response from you.
TONI WESTWOOD: All the manufacturing in Europe is done offshore, my dear.
TIM WILSON: Part of the challenge though of a carbon price is, will it actually deliver the outcomes, in terms of these green jobs are that by and large heavily subsidised by taxpayers or through indirect means through additional costs and if you look at where a lot of green jobs are, Erwin’s right. There are some in Europe, particularly in Germany, China and the United States.
The United States has virtually a non-existent carbon price for those who choose an emissions trading. China, in terms of renewable energy price is a very small price, the big increase in their price on a carbon price comes as a consequence of replacing coal with coal. And in Europe, electricity generators are subsidised and rebated their permits by 100%.
So, the driver isn’t actually a carbon tax, it’s actually subsidies. It’s actually forced investments in the market place and we need to look at seriously whether these jobs are going to be delivered under a carbon tax.
ERWIN JACKSON: Are you suggesting if we had subsidising there would be market based….
TIM WILSON: No, I’m saying we need to be honest about the debate in which we’re going because if you have heavily subsidised jobs, that would be a big impost on the economy.
JENNY BROCKIE: You have had a good say Tim, I want to move on. I want to talk about energy suppliers. Brad Page, I would like to bring you in here because you represent them. How do you think a carbon tax will affect your sector?
BRAD PAGE, ENERGY SUPPLY ASSOCIATION OF AUSTRALIA: Jenny, it’s fairly straight forward. The carbon tax… Well, it’s permits, with Ross Garnaut, the proposition that it’s actually permits and a fixed price to start with. What it means is, for the generators, they will pay for every tonne of CO2 that they emit and to the extent that it is possible through a very competitive wholesale market, they will seek to pass those costs on, as any business would. In fact, every business that is impacted by this will seek to pass them on.
But in our sector, it’s slightly different, all of the generators have different rates of emission of CO2, according to what fuel they use and what technology they are and for a subset of these generators, particularly in Victoria. The sort of amount of additional costs that they face far exceeds what they will be able to pass through to the final consumer’s price.
JENNY BROCKIE: So these are the big polluters?
BRAD PAGE: Well, emitters.
JENNY BROCKIE: However you want to describe them.
BRAD PAGE: They actually provide a pretty essential service right now, Jenny. The lights are on in Victoria, as far as I’m concerned. But the point here is that these companies in very short order, will find themselves where they are financially impaired, to the point where their banks as well as their equity holders, are finding that they need to come in and start taking some action, which in many ways…
JENNY BROCKIE: So are you saying, it’s going to threaten supply, base load power supply?
BRAD PAGE: Look, without sensible transitional arrangements that make sure we ease into this and that we deal to this impairment that some of these companies could face, then in the worst sets of circumstances, we can see supply interruptions. It’s a very complicated area because multiple markets interface here, so that’s really the problem.
JENNY BROCKIE: I would like a response from you on this, Ross Garnaut because you have said the energy generators shouldn’t get compensation – why?
PROFESSOR ROSS GARNAUT: The question is – why should they Jenny? The proposal was, in the Government’s scheme, in the end of 2009, that over $3 billion would be given in free permits to generators and you need a good reason for that. Now, if there was a big issue of energy security, if the lights were going to go out, without giving away that $3 billion, then that would be a good reason – a very good one.
But as Brad has said, generators will do all they can to pass on the costs. Some generators won’t have costs to pass on, but the price will still go up, they’re putting the price on carbon through the emissions trading scheme, with a fixed price and with a floating price, will put up the price of electricity. All generators will benefit from that – there will be winners and losers. Brad’s doing a tremendous job for his association in trying to get money for the losers without taking anything from the winners.
But we’ve got to have someone here speaking for the community and the community’s interest is in energy security, to the extent that there is an issue, a financial market issue of the kind Brad mentioned. And the solution to a financial market problem is a financial market solution. And if that’s a problem – I’m not sure it will be – but if it is, then my transitional Commonwealth guarantee will be a cheap way of dealing with it.
JENNY BROCKIE: OK, does that reassure you, Brad?
BRAD PAGE: So Jenny, if I can just respond to Ross on that. First of all, I would like to recognise that between his last report and the update, Ross has acknowledged that there may be a problem here. And to give Ross his due, that’s a movement from where he was. With respect, though, Ross, I’m not so sure that low-cost Government guarantees is necessarily the solution here.
Essentially, what you are doing here is you’re saying that the Australian tax payer should then take on the then take on the debt liability of these companies that are in financial despair and they are in financial despair because the application of a carbon price that is then going to continue to rise – in other words, their economics of operation continues to deteriorate. Now, at some point, there’s got to come a point where the Australian taxpayer says enough. But what is the asset that they have got left to secure their loan guarantee? In other words are we nationalising the assets here? And are we suddenly providing to the worst emitters some sort of competitive improved position because they now have a lower cost of debt than any of their competitors – it seems like an odd way to solve a problem.
We ought to fix it up front and actually have a sensible transition for the whole sector so that we get competitive outcomes, really reduce our emissions, get the new investment in place and have a secure electricity supply. That ought to be the objective.
JENNY BROCKIE: Quick Ross Garnaut, a quick response to that?
PROFESSOR ROSS GARNAUT: Oh, I’m delighted that Brad’s saying that the Commonwealth shouldn’t be putting its hands in its pocket, I think this issue can be handled through the electricity market – I have said a lot about that in the paper – we have a good electricity market. Markets can solve harder problems than this one, but I have the transitional loan there as a back-up because there is anxiety about it and that will be a cheaper way than giving a $3 billion worth of permits, as had originally been proposed and it’s a cheaper way that won’t get in the road of adjustment in the sector.
JENNY BROCKIE: Tonight we’re talking about the proposed carbon tax and emissions trading scheme. Patrick, you wanted to ask Ross Garnaut a question?
PATRICK LYNCH: I would like to ask Ross where he sits. Ross, are you an economist or are you a scientist, because you seem to have grave predictions for this country for both areas. You seem to want to play with a great economy that is very strong – we’re the envy of many in the world, and yet you pontificate about the dire consequences for this country and the world in scientific terms. I don’t think this country has ever had a man such as yourself.
JENNY BROCKIE: Ross, would you like to respond to that?
PROFESSOR ROSS GARNAUT: Well, I have never pretended I’m a climate scientist – I’m an economist, I’ve done a lot of work on what is necessary to make this economy strong and I was asked to do a job by all of the States and Territories of Australia, and the Commonwealth, a few years ago, to work out the costs and benefits of doing something about this climate change problem.
Now, to do that job, I had to put quite a lot of effort into understanding the science. I didn’t pretend for a moment that I was a climate scientist. So I looked for who had the real credibility – who had the real authority. I sought out as many views as I could, including people who come under the name of sceptics. In the end, someone who really looks at the evidence, who respects the academies of science of Australia, of the United States, of the United Kingdom, Japan, Russia, China, India, all of the countries of scientific achievement, if you respect the academies of science, the real scientists there, then you will recognise that this is a big problem.
So that’s all I did. I had to do that to do the job I was asked to do – to work out the costs and benefits of doing something about the problem. Of course once you start talking about the costs and benefits of doing it, then you’re in my home turf as an economist.
JENNY BROCKIE: Quick comment from here, yes?
MAN: The clean energy, is probably good for your watches and calculators, and all the businesses will be made to pay to pollute. But no-one is actually talking – what’s going to happen to this money? Is there a coherent plan to use this money for anything – tons of money is going to be generated by this tax?
JENNY BROCKIE: Well, I think that’s what the whole compensation discussion…
MAN: That’s just shifting money from single mothers and pollutant and between them…
JENNY BROCKIE: I’m going to move on to jobs because we’re running out of time. Mick Crowe, you head an engineering company and you employ more than a thousand people, most of them work on mining related jobs. What do you think about this proposal and how is it going to affect you, do you think?
MICK CROWE: From our perspective, generally, everyone is worried about impacts on the environment and of course anything that improves the use of energy and reduces consumption is a great thing. Domestically, I think, if we are going to put imposts on the Australian people, Australian people need to be the ones who influence the level of a carbon tax, but I think we need to separate that from export industries. Lots of my people and I certainly I know lots of people work in industries that are both reliant on building new industries as well as the long term competitiveness of them and when we put additional cost of things like coalmining or aluminium refining, it can just shift offshore to places where it will still happen, and still generate the same amount of carbon, but just not have the jobs here. If you want to influence the world we need to be a strong and competitive country.
JENNY BROCKIE: Khuzema, you work manufacturing cars for Toyota in Victoria – how are you feeling about this?
KHUZEMA ADAMJEE: There should be a tax on it, but the way the government is passing the tax on to the consumers – that should not happen. There should be more research into these things. There should be a compensation for the manufacturers, so they don’t pass on the costs to the consumers. Like Patrick said, he’s looking for green jobs – there are green jobs. Two years ago, when the hybrid Camry was launched, we had extra components to fit in the car and people to check them, so the supplier had to manufacture more components.
JENNY BROCKIE: OK, you’re also the union organiser at your plant. What feedback are you getting from the union members about how they feel about an emissions trading scheme and a carbon tax?
KHUZEMA ADAMJEE: Members, they want to know what’s happening. They don’t know…there’s no insight into it. They need… more information and I don’t think we should rush this carbon tax. We should do more research on it.
JENNY BROCKIE: Christine Milne, is it taking too long for people to get the detail? Are you at risk of losing the debate because people aren’t getting enough information?
CHRISTINE MILNE: Well, I think your damned if you do and your damned if you don’t, in the sense that we’re trying to keep people informed as to the level of discussion in the multi party climate committee and where we are up to but we can’t announce what a decision is, when we haven’t made it yet, when we haven’t had those discussions. We’re waiting for the Productivity Commission to come back to us with their report on the real carbon price that is operating in various overseas markets. We are looking at various options for compensation and what we do know though, through the polling the Greens have done through Galaxy, is that people, once they understand that they will be compensates for the cost of living increases, they are very happy to accept that the polluters should pay, because they want the transformation to the clean energy economy and they see the opportunities.
The car industry is a classic. Where is the car industry doing best in the world? It’s doing best in Europe and in China. Where are we struggling? Places like Australia and the US. In Europe and China they set high mandatory vehicle fuel efficiency standards, they are moving rapidly to electrification of cars. They see climate change and responding to it as big opportunities for industry development and exports. By lagging behind all the time, we miss our competitive opportunity and we end up having to subsidise industries ad infinitum and the car industry is a classic case where that is happening.
TIM WILSON: Irrespective of climate change, it has always been a subsidised sector, either through tariff protection or direct subsidies we have now… It has nothing to do with climate change.
TONI WESTWOOD: France already has an ETS and has just cancelled a carbon tax.
JENNY BROCKIE: OK, a question from over here?
MAN: Where dot Greens stand on selling coal to China at the same time as we’re imposing a carbon tax? It seems to me that this business about pollution of the atmosphere is a global problem and we are trying to solve it unilaterally on national lines which, is an absolute nonsense, because all the coal we send to China will cause so much pollution that that will completely overwhelm and swamp whatever savings we make in Australia. Until we have a global approach, let’s forget about this and not tax our industries.
JENNY BROCKIE: There are a few issues in there – the point about selling coal to China.
CHRISTINE MILNE: Absolutely, we need a global approach but it’s wrong to suggest that Australia is behaving unilaterally, already there is an emissions trading system in Europe, you’ve got the north-eastern states of the United States.
MAN: That is not a carbon tax!
CHRISTINE MILNE: You have other places like China bringing in all kinds of changes to the energy intensity of their economy. So the issue here is coal and I think it’s a valid comment to say that Australia is adopting a hypocritical position – Reducing emissions here whilst increasing exports of coal to China – I think that that is wrong and the Greens have said that quite clearly that we need to decarbonise the economy. We need to do both these things, not just take one side of the ledger.
JENNY BROCKIE: Patrick?
PATRICK LYNCH: Look, Christine’s talking from Canberra, and they have lovely discussions up there. I’m from Main Street and I have a small retail business and the spend in retail has crashed in the last two years, absolutely crashed. If we impose a tax on the Australian people, discretionary spending will dry up further and I’ll tell you then, Julia will have a problem – it will be worse than carbon – I’ll tell you that now. We’re in a world where China and India are powering ahead and we are working hard to destroy our economy -I can’t work it out.
MAN: A number of people have mentioned about the lack of information the general public have actually gotten. What I’m interested in is, why has the science debate suddenly come to a halt?
SUSAN WEBSTER: Yes.
MAN: And I know for a fact that there are many Australians who still don’t consider climate change to be the cause by man they don’t consider it to be, like, concretely proven. Personally, I am sick of having to just swallow the science. Where all we’ve really got is sound bites, like, 97% of scientists believe that climate change is caused by man.
JENNY BROCKIE: OK, we can’t… We’ve got three minutes to go before we finish. We can’t have a climate change debate in three minutes. Quick comments from you Erwin!
ERWIN JACKSON: Yeah, I just want to make a comment that every bit of economic analysis that’s been done in this country, it all shows that you can put in place a carbon pollution price to drive clean energy investment and continue to grow the economy and continue to increase living standards for all Australians. We know that also, China is now the world’s clean energy superpower – it has an effective carbon price three to five times higher than Australia already does because it is regulating and imposing renewable energy targets.
JENNY BROCKIE: It’s still one of the biggest polluters.
ERWIN JACKSON: But it’s decreasing it’s carbon intensity quite significantly, it is actually doing more to reduce pollution than Australia is at the moment.
JENNY BROCKIE: OK, we do have to wrap it up. Christine, in 2009, the Greens rejected Kevin Rudd’s scheme, saying that a 5% target was too weak. Are you now going to support Julia Gillard’s scheme of a 5% reduction of 2000 levels by 2020?
CHRISTINE MILNE: Well, the advantage of having a fixed price moving to a flexible price is that you can start reducing emissions and making renewable energy cheaper without actually agreeing on a target and that is the advantage of this architecture. We will get this scheme in place, starting on 1 July next year and then we will have the debate about what is the appropriate target going forward.
JENNY BROCKIE: What do you think is the appropriate target going forward?
CHRISTINE MILNE: Well, the Greens have made it very clear that we supported the Bali road map, which is for develop countries like Australia, to adopt a target somewhere between 25 and 40% in the context of a global agreement, without a global agreement, we think Australia should do 25% and more. That is clearly a position we will argue strongly, and that is based on the science and bear in mind that economies that are trying to take advantage of this, like Germany, want to go to a 30% target. They’re arguing for stronger carbon pricing because they can see it’s leading to better jobs, better economic growth in their countries.
JENNY BROCKIE: Ross Garnaut, what would a 25% target cost?
PROFESSOR ROSS GARNAUT: Well, obviously, more than a 5% but it depends on what the rest of the world’s doing and what we have to make sure we do is make a proportionate contribution. At the moment, we’re not doing that. The point’s already been made that we’re not doing as much as countries in Europe, as China, the United States. They’re doing it in different ways, and they’re doing it in ways that actually hurt their people’s living standards more than if they did it through a carbon price. We need to make sure we’re making a proportionate contribution. I would like to see us doing that, and then, with other countries, making sure we’re all making an adequate contribution and that, for the world as a whole, would have us going to 25% by 2020.
JENNY BROCKIE: We have to wrap up. I want to know whether anyone here in the room has changed their view as a result of this discussion? Show of hands only. Anyone who’s walked in, changed their minds from the positions they came in, given we had a range of different views? Anyone? Still on the fence? How many on the fence about a carbon tax? How many on the fence? You still haven’t solved anything.
MAN: We had a conversation for an hour and said absolutely nothing. Explain to us like we’re children. Don’t say… Have the debate first. Talk about it. Then introduce it.
JENNY BROCKIE: OK, we have to wrap it up. Interesting final point. You can keep talking about this. And you can keep talking on our live chat. If you’re in the eastern States, jump online and click on the link.