20 March, 2012
Sky News AM Agenda
Kieran Gilbert and Nick Champion MP
19 March 2012
8:45am
E & OE
Subjects: Mining tax, carbon tax, pairing
KIERAN GILBERT:
This is AM Agenda, thanks for your company this morning. With me now Labor MP Nick Champion and Liberal frontbencher Senator Mitch Fifield. Gentlemen, welcome. The mining tax set to pass the Senate. It’s taken a while, hasn’t it? Millions of dollars spent on both sides of the debate, it brought down a Prime Minister in part. Finally today, it must be a relief for Labor to have this through.
NICK CHAMPION:
The most important thing is it’s going to deliver benefits to the Australian people, rather than having a whole raft of wealth amongst a privileged few, held in perpetuity by them for their interests, we’re going to have it spread amongst the Australian people, amongst small business, amongst rural and regional communities in the form of infrastructure, and most importantly amongst workers through their superannuation. So it’s a relief for the Government obviously, and a good reform, another reform along with the structural separation of Telstra, carbon and a whole lot of other things which we’re doing for Australia’s future but most importantly it’s a good reform for the Australian people.
GILBERT:
It’s a tough position for the Coalition to be in, in part because of the tax cuts for small business, and for larger companies for that matter, which you’re going to block as part of this revenue measure?
FIFIELD:
It’s not difficult for us at all Kieran. This Government are systematically going about removing every competitive advantage Australia has. We know that they’re doing that with the carbon tax cheap energy is one of our great advantages. They’re doing that with the mining industry, which is fortunately going great guns employing people. Yet the Government is determined to try to punch them in the solar plexus. So we have no difficulty at all opposing the mining tax.
GILBERT:
What do you do, then, about the two-speed economy? Because obviously the mining industry is doing so well, and then Henry Review did say that some profits-based tax was needed. What would you do to level out the two speeds?
FIFIELD:
That’s the Labor approach the way to address the two-speed economy in Labor’s book is to smash that part of the Australian economy which is actually going well. What you want to do is you want to try and bring up those other sectors of the economy. And you don’t do that by hitting the mining industry with a mining tax, and you don’t help bring up those other sectors by hitting them with a carbon tax. It’s a very perverse approach. Kieran, this may be very inside the beltway, but today we’re going to see on about the 10th or the 11th sitting day of the year, the Government bring down the guillotine in the Senate on the mining tax debate. There are still important questions that need to be answered. The Government haven’t come clean with their full revenue assumptions. The Government haven’t come clean with the costings on the ancillary programs related to the mining tax. And they still haven’t come clean as to whether their costings include a full accounting of the royalty compensation which they’ve promised.
GILBERT:
I suppose that does dilute the Government’s argument in the sense that you’re saying, ‘OK, we’re providing a tax cut for small business,’ but then they do have that additional impost through a carbon price. So it does confuse your argument, as Senator Fifield pointed out?
CHAMPION:
It’s not so much about the public arguments, it’s really the long-term test for the country, Kieran. And the long-term test for the country is that we’re providing benefits to small business when they’re under pressure, we’re providing benefits to companies when they’re under pressure from the currency, and the currency is rising because of commodity prices and because of the enhanced profitability of the minerals sector. The minerals sector doesn’t actually employ that many people compared to other areas of the economy like manufacturing. And so what we’re doing is doing something that’s going to show up not in next week’s papers, but I think down the track 5, 10, 20 years. And there is no doubt in my mind that the Coalition will end up keeping this tax because to try and embark on a roll-back that is to try and unscramble the egg will be a disaster for the Coalition and most importantly it would be a disaster for the country.
GILBERT:
It will be a tough argument to make, though, in terms of the roll-back. We saw that with Kim Beazley, with the GST. Once it’s in place, do you concede that it’s more difficult to get rid of, as much as you do think it is hampering the fast-lane of the economy, as you argue?
FIFIELD:
You’re right Kieran, it will take work to undo some of the bad things that Labor have done, whether it be the MRRT, or the carbon tax.
GILBERT:
But that would also be an increase in the tax rate for small business. That wouldn’t go down too well.
FIFIELD:
Kieran, we’ve made it clear that we will take to the next election a tax plan, and part of that will be personal income tax cuts modest but also a company tax cut which we will fund from savings. These guys are pretending that the mining tax is going to be fully funding their tax cuts, but dollars fungible. They’re increasing tax to cut tax. If you’re cutting a tax by increasing other taxes, as we’ve said time and again and will continue to say, it’s a con.
GILBERT:
What about the carbon tax? The argument has been that the tax – the price – will help drive innovation toward clean energy. We’re seeing a report today by the Bloomberg New Energy Finance – their projection is that the price worldwide could be $5 per tonne of carbon by 2020. That won’t drive much innovation at all.
CHAMPION:
Kieran I find this really interesting. Last year we were told, even last week we were told there were going to be no prices on carbon and that we were acting alone. And now today we find we’re actually not acting alone and there is going to be a worldwide carbon price. Now you can argue and debate about what that level is, and there’s another report which says countries like England have an effective carbon price of fifty bucks a tonne. So the point about it is, last year we were told we were acting all alone, Australia was out there on the very fringe, this year we’re told there actually is going to be a worldwide carbon price. And we know from other reports that we’re a carbon intensive economy, and we’re about 16th out of the G20 in terms of carbon efficiency.
GILBERT:
Nick’s referring to this other report today there are a couple around. This is the one by GE and the Climate Institute that has Australia 16th in the G20 for being prepared to deal with a low carbon economy. So we’ve got a fair bit of work ahead of us.
FIFIELD:
Kieran I’ll come to that, but firstly just to respond to Nick’s points. What we have said is that Australia should not act alone. And when we talk about acting alone, we mean in the absence of major countries such as the United States. The United States is not going to have a carbon tax. The United States is not going to have an economy-wide emissions trading system.
CHAMPION:
California is.
FIFIELD:
California does not the United States make. So that’s the first point. But we’re copping it both ways. Not only are we putting ourselves at a competitive disadvantage with major countries such as the United States who will not have an ETS or a carbon tax, we’re also putting ourselves at a disadvantage with those countries that do. Because as we’re seeing increasing evidence, it’s highly likely that those nations which do have a carbon tax – which are part of a global trade – will have a carbon tax which is significantly lower than ours. So competitive disadvantage with those countries that don’t have a carbon tax, and with those countries that do.
GILBERT:
But there’ll be a floating price after a couple of years anyway, so it’s a moot point, isn’t it?
FIFIELD:
A floating price in Australia, yes. So what are you saying, that it’s OK that Australia cops a competitive disadvantage for a number of years?
GILBERT:
Well the point is, and Nick can make the point, that it’s the free permits that provide that support for industry in the meantime.
FIFIELD:
Kieran, we will put ourselves at a competitive disadvantage.
GILBERT:
Well that is the point, isn’t it?
CHAMPION:
No, that’s Mitch’s assertion.
GILBERT:
You’re putting an extra cost on the economy when we don’t need it?
CHAMPION:
Mitch’s assertions, like the Coalition’s assertions, are slowly running out of steam. Last year, they were saying we’re acting alone, there’s not going to be a worldwide carbon price.
FIFIELD:
We’re talking about the major emitters of the world the United States, the major economies – they are not going to have a carbon tax.
CHAMPION:
These two reports tell you that there’s going to be a carbon price, it’s going to be international, countries around the world are acting, and we are not well-placed for the future in terms of adapting our economy to a low-emissions environment. And California you said that California does not the US make it’s the eighth biggest economy in the world, and Californians have a 40% less intensive carbon rate compared to the rest of America. California is moving towards the future you want to be where Texas is, just belching out pollution.
FIFIELD:
There’s an important point here. All the Treasury modelling on compensation and all the other elements of the carbon tax is based on a price which is much, much higher than the report today indicates is likely to be the case. So if there is going to be a floating price, if it’s not going to be as you say, then Treasury need to redo their compensation figures on the basis of a different assumed carbon price.
CHAMPION:
You pick and choose Treasury modelling a fair bit, the Coalition picks and chooses when it wants it.
GILBERT:
Let’s look at the pairing issue for Craig Thompson. Apparently he’s issued a doctor’s certificate to the Opposition saying he is unwell, but he hasn’t been granted a pair. Where does this end? Surely Coalition MPs would need a pair in a similar circumstance to be absent from Parliament? Essentially, for those unaware, it’s the granting permission to be outside of Parliament.
FIFIELD:
Kieran, I’m the Manager of Opposition Business in the Senate, and I will be the last person to get involved in House pairing arrangements. It’s entirely a matter for our House Whips. They operate on the basis of common sense, and I’m sure they’ll do that.
CHAMPION:
That sounds to me like they’re trying to step away from their position.
FIFIELD:
No, I stick to Senate procedural business.
CHAMPION:
That’s because being probed by the doctors, he now has to face being probed by Warren Entsch and Christopher Pyne and people like that playing doctor strapping on the rubber gloves and getting out the stethoscope and the ear thing. It’s ridiculous. And we know it’s ridiculous, we know you’re going to stepp back, we know it’s all part of a media strategy to put Craig back in the media. It’s ridiculous, it’s unedifying, it’s pretty appalling, and you should just back down and give your guy a pair. Be decent just for once in your lives.
FIFIELD:
I’m not going to eat my breakfast after that!
GILBERT:
That’s all for AM Agenda. Senator Fifield, Nick Champion, appreciate your time this morning.