Transcript by The Hon Jenny Macklin MP

Climate Change, Carbon Pollution Reduction Scheme, PBS


Jointly with Senator Penny Wong, Minister for Climate Change and Water

MACKLIN: Thanks very much. And if I could thank Erin and her family for having Penny and I here today. We really appreciate that Erin. And for allowing us into your home.

We do understand how important it is we introduce a Carbon Pollution Reduction Scheme into Australia. We know it is important to our children and for our grandchildren so that they have a secure future. We do also understand that the introduction of a Carbon Pollution Reduction Scheme is going to have an impact on households. And we want to make sure that households, especially low and middle income households, pensioners and carers, veterans, are able to maintain their standard of living as we introduce the scheme. And that’s why we’ve wanted to make sure we introduced a proper system of compensation to do that.

Erin has agreed that we can provide you with the details of her situation and she has a pretty typical family; her family have a dual income there’s two parents – mum and dad with an income of $60,000 split approximately half and half between them. They will receive two increases in the low-income tax offset to help with the increased cost of the scheme and they’ll also receive an increase to their family tax benefit A. And in total, over a year, after the introduction of the scheme this family, which is a fairly typical family, would be $341 a year better off. That is because we have to make sure that for different types of families we provide enough compensation for a middle income family like this to allow them to maintain their standard of living.

WONG: Well can I also thank Erin and Sunny and Billie, while he’s asleep, for your hospitality and for letting us come into your home to talk about climate change and what the Carbon Pollution Reduction Scheme means for this family and for Australia.

Yesterday the Prime Minister announced the Carbon Pollution Reduction Scheme. And this is a comprehensive strategy to change, over time, the Australian economy from one of the most highly carbon polluting economies of the world to the low pollution economy of the future. Now that is a big task but this is a comprehensive scheme that will enable that transformation – that transition to occur. So we know that it is important for us to act on climate change. We understand the economic costs of not acting – the cost to our environment, to our way of life. But we also know that in order to act on climate change we need a comprehensive strategy. We need to change our economy, over time, to move to the low pollution economy of the future. So that was yesterday’s announcement, it is important to Australia, it is important for the future and it is important because what we don’t want to do is continue the delay and the denial of the last twelve years. So what we need to do is to ensure we make a choice now so that our children and our grandchildren are not left to bear the costs.

Happy to take questions.

JOURNALIST: Senator Wong, with such generous compensation for households, especially low income households, where is the incentive for them to use less energy?

WONG: Well it’s actually one of the questions Erin asked me. How will this work. Let’s remember what this scheme does. For the first time, what this scheme will do is ensure that the cost of climate change is actually reflected in the prices we see and in the decisions that businesses make in terms of how they produce and what they produce. So until now we’ve been polluting without limit and without cost. What this scheme does is, for the first time, place a cost on that pollution and that means that we will actually start to see the costs of climate change in the prices that we pay and in the decisions that businesses make. That’s the way you get the economic incentive to make the changes we need to our economy. So for households, they will still see increased energy prices – we have been upfront about that. But what we also know is that we will be providing them with assistance to fully meet the expected overall increase of the costs of the scheme if they are low income households. We are also making substantial assistance to middle income families. So what the scheme enables us to do is to ensure that those things that cause more climate change will cost more, those things that contribute less to climate change will cost less. And that is the important difference in the prices that we will see in the years to come.

MACKLIN: Can I just add to that, what we know is that pensioners and low to middle income families are very price sensitive. And so when they go into the supermarket and they see a product that costs less because of the impact of this scheme they’re more likely to buy the product that costs less. So the real incentive in this scheme is price.

JOURNALIST: We haven’t had a chance to ask this yet but how do you respond to the claims that heavy polluting industries have basically rolled sections of the Government. And why is the White Paper much weaker in terms of some of its… compensation through free permits and conditional permits to industry than the Green Paper was.

WONG: Well I just want to make a couple of points about that. The first is that under this scheme nobody gets a free ride. All those firms who pollute will be required to make a contribution to the national effort of reducing our carbon pollution. So nobody makes a free ride. Of course we put the Green Paper out for consultation. We’ve had that consultation and we’ve responded in some areas to the concerns that some in the business community have made. We’ve always said we’d do this responsibly, we’ve always said that we would consult with industry as well as with the community.

But let’s remember the scheme that we’ve put out here. There has been some discussion about targets. There seem to be some people that think you can achieve a target just by saying it; you need a plan to get there. What we’ve put forward is a plan to get there. These are serious targets. A minus 15 per cent for Australia would mean that every man woman and child in Australia between 1990 and 2020 would emit 41 per cent less carbon pollution. That’s a very substantial reduction and it reflects what we have to do in terms of our economy.

Can I also mention something about the opposition. Because we’ve seen some people in the opposition – Senator Barnaby Joyce already saying that this isn’t a good thing and that he doesn’t want to support the Carbon Pollution Reduction Scheme. Well it is time for Mr Turnbull to stand up. As the Prime Minister said – will the real Malcolm Turnbull stand up? We know when Mr Turnbull was the Environment Minister he wanted to do the right thing – that’s what he told us. It’s time for him to stand up to match what he says with what he does because people will judge him on what he does.

JOURNALIST: Jenny, I just have a question for you. It’s about the PBS. Are you concerned about how it will affect pensioners when the PBS prices rise early next year?

MACKLIN: We certainly understand that pensioners across Australia are under significant financial pressure. That is why recently we decided to, as a down payment, to give pensioners an increase of $1400 for a single pensioner, $2100 for a couple. And that’s to make sure that they can meet the price rises that they are currently facing. We are also undertaking a major review of the pension that will be published in February and what we want to do is respond to that report in next year’s budget. We do understand how serious these issues are and that’s why we’ve acted in the way that we have.

WONG: Thanks guys.