Carbon Tax release on TV: Transcription taken while listening to the launch on TV – check exact details but as near as accurate as I could transcribe it at the time.

PM Julia Gillard: 5% cut of Greenhouse gas on year 2000 by 2020 and 80% for 2050 the Government will introduce a carbon tax to build a clean energy future. Avalanche of science tells that climate is changing. The science is in. More droughts bushfires Great Barrier Reef at risk sea level rises. Warming produced by carbon activity by humans.

Margaret Thatcher warned the planet about the effects of climate change. John Howard determined to put a price on carbon pollution. Now is the time to get this done. As a nation we need to put a price on carbon and create a clean energy future.

It is incredably simple. About 500 big polluters will pay a price for every tonne of carbon they put into our atmosphere (at the moment they can release it for free). They will pay $23/tonne at the start of the scheme. They will innovate and find ways to reduce their carbon. This adds up to 160000000 tonnes of carbon emissions reduced by 2020.

A fixed price mechanism for 3 years. Works like a tax – the government sets the price. At the end of the 3 years it moves to an emissions trading scheme where the amount of carbon emissions is capped and the market sets the price.

Some of the prices will be passed through to households so more than 50% of the payments from big business will go to households. 9 out of 10 households (about 6 million households) will get a payment to enable them to fully meet the impact of carbon pricing on them and their family as big polluters pass on the cost of things normal families use every day.

20% will go to low income families as a buffer.

All in all the price impact is equivalent to 0.7% of CPI. The modelling done by the same people who did the modelling for the GST.

Also reform the tax system. I believe in getting more people into our workforce. The mechanism we have used to provide tax cuts is to increase the tax free threshold to $18000/year (from $6000). This is an important tax reform.

We also have to work to support Australian jobs working with business and industry to make the transition. Support for coal steel manufacturing – that have high carbon pollution but trade internationally and take the price on the international markets.

Focus on energy efficiency renewable energy land sector.

Huge investments in renewable energy that this package brings. Billions to help build clean energy for Australia. Transition our nation to a clean energy future.

What does this mean for me? Information available through www.cleanenergyfuture.gov.au

It’s been a long complicated difficult debate. We are now moving from the days of words to deeds. It will be in the parliament and legislated later this year.

Minister Greg Combet: 4 key elements for a clean energy future. Carbon pricing. Support for clean energy and renewable energy. Energy efficiency. Carbon in the landscape.

How the carbon price mechanism will work: The problem is that carbon emissions are now free of charge to put carbon in the atmosphere – there is no incentive to innovate to do things more cleanly and efficiently – this means that the whole of society bears the cost. Now a carbon price will give big polluters an incentive to innovate and reduce pollution. If they don’t produce as much pollution they won’t pay as much.

This must be done at the cheapest cost to our economy. Letting the market provide price signals so that the government does not prescribe how businesses go about reducing emissions.

About 60% of emissions will be covered by the carbon price.

Businesses covered by the scheme will have to buy and surrender to the government a permit for each tonne of carbon they emit. From 1st July 2012.

All revenue will be used to assist households to support jobs and competitiveness and to build renewable energy. We expect $100 billion investment in renewable energy leading to 80% ….

The Government and the Parliament will retain the final authority for setting the pollution caps informed by the independent Climate Change Authority.

Supporting jobs a priority in industries facing significant foreign competition. $9.2 billion of support over the first 2 years of the scheme. Also some additional support for the steel industry which is under pressure at the moment – $300million Steel Transformation Plan over 4 years. Also most affected coal mines $1.3 billion support. Electricity sector – the Government will help transform the electricity generating sector. Will seek to close up to 2000MW of dirty coal generating capacity to make way for clean energy generation.

Most manufacturing will see some costs and will receive some support. A new clean technology program provides over $1 billion to help manufacturers.

This is a package that will create the right incentives to clean up our economy. Households will be supported. Jobs will be supported. Competitiveness will be supported.

Treasurer Wayne Swan: A fundamental economic reform. We cannot allow our country to become a technological backwater. We have to drive technology and efficiency reforms to pass on a better world and a stronger economy to our children. Australia can’t power ahead without clean energy in the 21st century.

Treasury modelling shows the economic cost of pricing carbon is small now but the greater the delay the more it grows. Under the modelling we see strong growth strong jobs growth 1.1% growth in average per capita incomes. $9000 per person rise in incomes by 2020. 1.6million more jobs by 2020. Cut domestic emissions in half by what they would have been by 2050. Big growth in renewable energy production.

What it shows is that we can make the transition to a clean energy economy while growing jobs and incomes.

Increase in family payments and pension payments of 1.7%. Tax cuts for everyone below $80000 with most getting a tax cut of $300. These are not only tax cuts they are tax reforms.

Over one million people will be removed from the tax system and not have to lodge a tax return.

The reforms have a net cost of $4.3 billion (the bulk in the first year) over the next 4 years. Once the system is up and running it will have very little effect on Australia’s economy.

Questions:
1.Short and medium term upheavals – where will job losses be? A. Industries will be able to plan. Support is comprehensive. This is a big reform but it is not the only wind of change for Australia (high A$ resources boom…).
2.Bob Brown said he’d like some sort of public enquiry before it goes through. A. This will be the package that goes to Parliament. There will be proper Parliamentary process for people to make submissions.
3.How confident are you that you will be able to explain the details to Australians? A. A lot of explanation will happen over many many months ahead. This is the right package for the country’s future. It is time to get on with this. We are going to get this done.
4.Some families and household types will be up to $1000/year better off. A. The essence of pricing carbon is the price paid by the big polluters putting a price on carbon pollution for the big polluters. Yes we brought Labor values to helping families to cover the price effects that will flow through taking particular care for lower budget families for whom money is always tight.
5.Why was there difficulty in obtaining agreement on coal steel trucking? A. Three Government-only measures we are determined to deliver. Special assistance for coal mines (gassy mines) – cash grants. Steel industry is in a pressurised situation in any event because of the commodities boom high investment pipeline high A$….. Change to heavy vehicles and their treatment under carbon pricing on 1st July 2014 – regulation change.
6.The heaviest lifting will not be done by Australians but by the purchase of international credit. We will be relying on places like Equatorial Guinea. A. We’ve brought our great Labor responsible tradition of how to modernise our economy at the least cost. Accept the advice of economists to put a price on carbon and to link to international prices for carbon. We will ensure that we are only acknowledging the buying of credits where they have met quality credits – that the abatement being purchased is abatement of a tonne of carbon.
7.Almost all of the effort towards innovation is to renewables. Have you given up on carbon capture and storage? A. No.
8.When does the advertising campaign begin? A. I stand for hard work – we’re here on Sunday. This is a scheme that comes into effect on 1st July 2012 so businesses have plenty of time to digest it. Comprehensive information is available here today.
9.When will we know whether or not this has all been worth while? A. We’ll see 160 million tonnes of carbon reduced by 2020 to begin with. This is a big change. We generate more carbon pollution in Australia than any other people in the developed world. In terms of a marathon we are starting with a big handicap in the race. It is the equivalent of 45 million vehicles that we will be reducing.
10.Congratulations. Thank you for the biodiversity stuff. Thank you for the low income stuff. Thank you for the transport stuff. Now with regards to carbon farming. A. Carbon farming gives farmers the opportunity to benefit from carbon storage. Nearly a $1 billion for a biodiversity fund wildlife corridors. Incentives to store carbon in one way or another. Credits generated supported through the carbon price in 2 ways (Kyoto compliant credits can be purchased; those not Kyoto compliant will get funds).
11.OneSteel and BlueScope Steel will pay virtually zero for carbon taxes in the next 3 years and may be better off. A. A combination of issues impacting the steel industry at the moment. They are big employers particularly in Port Kembla and Whyalla. We’ve put together a plan that will support innovation in their operations and…..
12.What do you say to people who say this is all about income redistribution. A Advertising is going to start in the days and weeks ahead. There’s a household estimator on the website. Giving people information about their circumstances. The centre of it is getting big polluters to pay for their pollution. 9 out of 10 households will get assistance.
13.Net growth in jobs – what are the estimates of job losses in the hardest hit sectors. And on buying back the megawatts from closing down the power plants what is the price you are paying for that. A. I can’t and won’t give you that figure because it is a tender process and if I gave it every tender would come in at the maximum. We are prepared to negotiate up to 2000MW of the highest emitting electricity generating capacity. For the Latrobe Valley in particular these will be carefully discussed. We are not anticipating any changes for some considerable time. Some time before 2020 to allow time for additional investment in generating capacity . Structural support for regions that may be affected in future. We will be very careful to consult with local communities employers local government. There is a lot in the modelling looking at the changes with or without the carbon price with estimates of output by industry sector and employment share from 2020 to 2050. Not by individual components of each sector – simply not possible to do. But the impact of a carbon price is very very small compared with the impacts from other processes going on in our economy. Employment growing strongly in services mining. What you do see absolutely is that the impact of a price on carbon is not the predominant cause of those changes. We are acutely aware that a price on carbon is a major change in our economy. Our first priority is jobs jobs that go and create wealth. What we’ve seen is that we can grow strongly with a carbon price. Other factors are much more important for market share.
14.Tax cuts and assistance are pitched at families earning $150000 per year (about 9 in 10 households). There’s no money tree or trying to pretend that everyone will be better off. We have structured this family to assist lower and middle income families to put assistance where it is needed most.
15.The scheme will cost $4 billion more than it will raise initially. A. Entirely appropriate that we give assistance up front where its impact will be most felt. This is a very big structural change for our economy.
16.Will the cost be offset by surplus? A. These are modest costs when we look at them against our surpluses. We will meet our fiscal rules to bring our budget back to surplus by 2013 meet out GDP target. Address other forces on the economy. We apply fiscal discipline in accordance with our budget rules.
17.Several of the compensatory measures weren’t supported by the multi-party committee? A. There are 3 things which are government-only measures: coal steel and the provision for heavy vehicles. I believe we will be able to secure it through the Parliament. There is a question for the Opposition – will they stand up for the jobs of steel workers?
18.Is this package superior or inferior to the package of 2009 and what are the take-out lessons from 2009? A. The figures can’t be compared because the basis has changed. They are off a different base. In terms of the impact of pollution remember the impact is on the polluters who are producing pollution. How am I going to impact to bring that pollution down? In terms of difference between the 2 schemes: the CPRS ran into a brick wall. I’ve knocked the brick wall down. This has a great ambition: 80% by 2050. $1.3 billion to land sector. New initiatives to support jobs. Tax reform associated with it – this package values work. Cleaner energy and more people in work.