SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

25 February 2011

ABC NEWS BREAKFAST WITH BEVERLEY O’CONNOR

TOPICS: ALP REFORM, BUDGET, CARBON PRICE

E&OE - PROOF ONLY

JOURNALIST: Finance Minister Penny Wong joins us now from Canberra. Thank you very much for your time Minister.

WONG: Good morning.

JOURNALIST: Why not come up with something a little more concrete? Because already you have your critics because there is nothing firm on the table and as Finance Minister now from a budgetary point of view, this is going to be very complicated.

WONG: I suspect some of those critics would be opposing anything we put up at the moment because we know there are people in this Parliament, Tony Abbott, who will oppose any attempt to put a price on carbon and any effort to tackle climate change.

This is a big reform. And what we said yesterday was we laid out the design but we said very clearly there are a lot of aspects of this that are yet to be determined. We have to work through this process in the Multi Party Committee and in dialogue with the Australian community. So we put out the proposed mechanism, as you’ve outlined. But there is a lot more work to do and a lot more discussion and consultation to be had.

JOURNALIST: You open yourselves up for criticism, don’t you? If you don’t know a firm price, then of course these wild figures are now going to be bandied around; around what it’s going to cost the average household. So compensation on that front is almost impossible for you to answer.

WONG: And what people should be aware of is that every figure out there at the moment, it has no basis in fact because we have not yet indicated what the price would be. We have not yet gone through the things like the coverage, the assistance to households – all the decisions in this big reform that need to be made.

Let’s remember, we know from previous debates that there are people in the Parliament, in the Opposition, who will use any pretend fact, say anything, rather than take action on climate change. This is not a new response. It is a predictable response. But none of this colour and movement is going to detract from this simple fact: we have to take action on climate change and this is the best way to do it.

JOURNALIST: How much room do you have in the budget to soften the impact though on households?

WONG: Let’s remember that there is a range of principles that the Multi Party Committee has agreed to and they include the recognition of the Government’s fiscal circumstances and the importance of budget neutrality.

Obviously, we are absolutely committed to bring the budget back to surplus. And this policy – like all policies across the Government – will have to reflect that fact.

JOURNALIST: Now when you’re talking on –

WONG: Can I say on that, what I should say is that the Prime Minister though has also made clear that we will as part of this process of design ensure that there will be appropriate assistance to Australian households.

JOURNALIST: Your critics are saying though that the prices that are being bandied around – and I know you haven’t agreed – are not enough an incentive to stop the old, dirty types of energy that we’re producing. To encourage business to shift over to cleaner, greener energies, in fact even in the investments phase. What do you say to that?

WONG: That’s why we have to do what we’re doing, which is to move to putting a price on carbon, giving the economy and business the certainty that’s needed to move to a low pollution, cleaner energy Australian economy. That is precisely why the Government, through the Multi Party Committee with the support and involvement of a range of parties and Independents and the Government, is moving down this path.

JOURNALIST: Now you’re talking about moving towards an ETS come 2015. Globally, it seems that most countries are turning off an ETS. What is the likelihood of this scheme ever moving towards an ETS if the rest of the world isn’t doing it?

WONG: I don’t accept that the rest of the world is not doing anything. I think that is frankly a convenience that some people use – I’m not suggesting that you’re doing it – but some people use to bolster their argument against any action at all.

The reality is countries are doing things and they’re doing different things. Sometimes there’s an explicit price. Sometimes there is what we call a shadow price which is the cost of regulation being imposed on dirty industries. We don’t believe that Australia should lead the world, but we don’t believe Australia should be left behind. And if we fail to put the price on carbon, we will be left behind.

JOURNALIST: If there is that mixed international picture though, how do we work out how do we work out how we fit in? What sort of scheme is going to work best with what the international community is doing?

WONG: Look that is a good question. We do need to work out what is the most efficient way for our economy and our nation to make this adjustment, and how do we interact with the rest of the world as countries do the same thing. And part of the process of considering the design elements that the Prime Minister laid out yesterday, part of the process of consultation and discussion will go to some of those very points.

But all of that detail doesn’t detract from this fact: we know it will cost us more as a nation if we do nothing. And we know the cost for the next generation in terms of their quality of life. We know that change must be something we take charge of. And this is about us taking charge of that change to cleaner energy and to a lower pollution Australia.

JOURNALIST: Now the Labor Party internal review after the last election really pointed to the fact that you lost a lot of people, a lot of supporters, because you’d abandoned that sort of commitment to cleaner energy going forward. Is this a way of regaining some of that support?

WONG: I think this is about looking to the future and it’s recognising that the nation is in a different place and the Parliament is in a different place. Certainly the Greens and the Independents are in a place where they’re prepared to negotiate and talk to the Government and work through these issues together.

The Australian people I do think made very clear at the last election that they do want the Parliament, the Government, the nation to take action on climate change. And we’re responding to that and that’s the right thing to do.

JOURNALIST: Penny Wong, thank you so much for joining us.

WONG: Good to be with you.

ENDS