Transcript, Richo Program, 18 July 2012
July 19, 2012
E&OE….
Topics: Carbon Tax costs, repealing Carbon Tax
GRAHAM RICHARDSON: Welcome back, in our Melbourne studio, Greg Hunt, Shadow Minister for Environment is sitting and waiting. G’day Greg, how are you?
GREG HUNT: G’day Richo, yeah really well actually.
GRAHAM RICHARDSON: I’m delighted to hear it. Australia seems to be OK too, we’re what, a couple of weeks into the Carbon Tax, I mean the sky’s still up there, the sun still appears to be in it. Has much changed?
GREG HUNT: Look, I think what’s happened and I was literally out in the streets of Oakleigh today in the Eaton Mall in the market at Oakleigh. People had this sense of; a) they know their electricity bills are going up; b) if you’re a small business person you know that, not just your electricity and gas bills are going up, but if you’ve got any refrigeration and it was the butchers, it was fishmongers, it was people who have fruit, who have cooling, they all say look, the cost of our refrigeration is going up. There’s one guy who had a bill that had tripled, from $700 to $2100 for re-gassing the fridges and cooling rooms in his butcher’s store.
So what’s happening is, costs are going up, people are the ones that are bearing the costs, not some mythical group of 500 companies and they’re also just angry that they feel deceived that they’re the ones who have to pay for the cost of that deception.
GRAHAM RICHARDSON: I look at some of these things and I can read into them, things that people didn’t actually foretell that will have caught the Government by surprise and will point to the compensation packages being inadequate, but when you give a figure like that and I’ve seen several, I mean it just seems to me that it’s impossible to believe that there’s a 200% increase all due to the Carbon Tax. It doesn’t add up does it?
GREG HUNT: Well actually it does, because the refrigerant gasses have a huge mark-up on them. The Refrigerant’s Association produced a statement which said the cost of some gasses in terms of the government levy had gone up 200 to 400 fold-so that’s the government levy. What that means as a proportion of the total is that the gasses themselves, gasses like R404a, which is one of the critical gasses in the refrigerant’s industry are going up two or three or some cases four times in total cost. That’s simply because these gasses has a very high global warming potential, the government has then put this massive levy on them and to double or triple the cost of a key product in some sectors causes chaos.
GRAHAM RICHARDSON: What sort of compensation do these people get- these fruiterers and butchers and all the rest of them?
GREG HUNT: Look, nothing, for small business there is a grants program which is a little like applying for the lottery. A small number of these self employed people of the basic businesses whether they’re coolstores, butchers, fishmongers, whether they are fruiterers aren’t going to get anything. Most of them get absolutely nothing. Either they bear the costs or they have to pass the costs onto their customers. The big point here though is of course two other things.
Firstly that there has been a rash of bailouts on the big business side, so we’ve seen Geelong bailed out, we’ve seen the La Trobe Valley bailed out. Whyalla had already had to be bailed out in anticipation of the Carbon Tax, and then secondly, and this is I think the amazing thing, the whole design of the Carbon Tax is being reviewed. Can you imagine if Peter Costello and John Howard five days into the GST, look we think there’s some problems, we’re looking at changing it from 10 to 5% and removing all clothing items? Everybody would’ve said, you guys don’t know what you’re doing, but they’re doing the equivalent of that with the Carbon Tax and the public’s basically saying, we don’t think these guys know what’s going on.
GRAHAM RICHARDSON: I think there’s a bit of truth in some of that. One of the things that keep reading about are these tip fees, rubbish tip fees that seem to be going up inordinately. What’s your comment on those?
GREG HUNT: Well I went to the Maitland Tip and a couple of other tips nearby in the Hunter Valley, so just on the edge of Greg Combet’s electorate, the day after the Carbon Tax came into being, so the Carbon Tax came into being on the 1st July, I was at the Maitland Tip on the 2nd July, they’d had to hike their prices up quite significantly and the fellow at the weighbridge, Dean, said look if I could meet that Mr Combet I’d really like to have a chat with him- his words might have been a little bit more fruity than that- and he said I’m the bunny that is being hit with all the abuse because everybody is copping higher tip fees. The reason why is tips, whether they’re council owned or privately owned, are the most common form of company that is being taxed under the Carbon Tax.
GRAHAM RICHARDSON: Now when you say that, it’s not then the average person, I mean, I haven’t been to a tip in years, the council pick it up out the front and of course every now and again there’s a clean up day so all that rubbish that accumulates in the garage and all the rest of it, you can get rid of. The (inaudible) of life if you like, you can get rid of. So the individual doesn’t go there, it’s the council that faces it in the main doesn’t it?
GREG HUNT: It’s a mix of both. At any one tip you’ll have people on Saturdays and Sundays, they’ve cleaned up the garage, they’ve cleaned up the garden over the last couple of weekends, you’ve got builders who’ve got refuse in terms of a skip or mini skip, and then you have people that have done their own renovation, they’re turning up copping the prices, but councils right across the country have got these huge bills. The Wyndham City Council which is in Julia Gillard’s own electorate of Lalor has a bill well north of $10 million for their waste facility alone. Now that’s a big regional facility, let’s be up front about that. But that’s one refuse facility in the first year alone going to be well north of $10 million.
GRAHAM RICHARDSON: Well what do we do about it? Aren’t they doing the right thing saying these things have popped up we didn’t actually figure on these, they weren’t part of the plan? We better have a look and see what we can do to fix it. I mean it seems to me that that’s what governments have to do if something goes wrong.
GREG HUNT: Look I don’t think anything’s going to fix this tax. The reason why is because its fundamental mechanism of an electricity tax at its heart and a gas tax at its heart and a waste levy tax, isn’t effective. Electricity is an essential service. For 20 years, and much longer, prices have been going up, for the last five years they’ve gone up dramatically, but you’ve seen very little change in demand at all and what that means is that if electricity prices have gone up and now they’re being hiked up even more, it’s just the wrong mechanism.
Essential service, people don’t stop using the refrigerator or heating and cooling in particular or the oven and what occurs is they’re out of pocket, the small businesses gets squeezed and where there is an impact on manufacturing, that manufacturing simply migrates to China or India or Indonesia and the world’s is no better off.
GRAHAM RICHARDSON: When I look at things like electricity pricing, there’s been an attempt by your side of politics and I haven’t heard you do it so much, but to try and infer that the Carbon Tax is the reason prices are going up. You and I both know it’s been those infrastructure costs over the last three to four years in particular that have sent bills up by almost 20% a year without a Carbon Tax, nothing to do with it.
GREG HUNT: The best analysis of this was done by Peter Boxall who is the New South Wales Independent Regulator, what he said for the coming year is that there’ll be 18% price rises in New South Wales, 9% of that will be the Carbon Tax. So you do take significant rises over previous years. They have had barely any impact on electricity consumption but then you add the Carbon Tax on top of it, knowing that it starts at $23 goes to $37 according to the Government and then heads north to $350 over the coming decades and you think that’s an awful lot of pain, but it’s not likely to produce much in the way of benefit for the country. On top of that you end up having to spend $3.5 billion, in addition, on foreign carbon credits by 2020 each year and that rises to, believe it or not $57 billion, or 1.5% of GDP by 2050 and that’s completely unsustainable and anybody that looks at it (inaudible) simply going to collapse.
GRAHAM RICHARDSON: None of that will happen and there are two reasons; a) if Rudd gets up I have no doubt he’ll do something about it, because I don’t think Labor can go to an election with this sort of policy in the bag, $23 when the world price is like $6 or $7 or something. It doesn’t work, but secondly let’s assume there’s an election in the next 12 months, you are more than odds-on to win it, you’re at Ajax odds, you can’t get beaten and so things will change. But how do you change them when you don’t have numbers in the Senate?
GREG HUNT: I don’t think it’s too difficult at all, obviously the next election will largely be a referendum, firstly on competence but secondly on the Carbon Tax and if we get up, we don’t expect the Greens will change their position whatsoever but we do think that a defeated Labor Party is likely to step aside. I think the mandate would be so clear and so overwhelming that they’ll look at the result and step aside and if they don’t we have said clearly, categorically, absolutely, we will go to a double-dissolution at the earliest possible time and I think they know we will. So we’ll start on day one, we think we’ll get rid of it in 6 months, if they stand in the way, we’ll go to a double-dissolution and I think the very factor that we are not just willing but completely committed to that second action is likely to ensure that they step aside.
GRAHAM RICHARDSON: OK, lets’ just say that’s been done, then you’re a believer in climate change and you do have a policy that is going to cost some billions of dollars do you not?
GREG HUNT: Look, our policy is $300 million in the first year, $500 million in the second year and $750 million in the third and most significantly it’s capped, so the government make wild claims and that’s fine, they’re entitled to do that, that’s how they operate, but it is a capped policy so we will not spend $1, let alone anything more than that over and above what we have allocated.
We’ll achieve it, it’s not that difficult, all we do is provide a reverse auction, incentives to find the cheapest way to clean things up, rather than taxing the whole economy. If you’re not taxing electricity and just focusing on doing practical things such as cleaning up waste coal mine gas or waste landfill gas or capturing carbon in soil or trees or energy efficiency or cleaning up power stations, you can actually just get on, do the job and achieve the reductions.
GRAHAM RICHARDSON: My god I hope it’s that easy, I can’t believe it is mate. I’m sorry I have run out of time so we’ll have to leave it there Greg Hunt, but I want to thank you very much for coming in, I will be very, very interested in the course of the next couple of years to watch how you do it and if you do it. It’ll be a hell of a ride but good luck to you, we’ll see you soon.
GREG HUNT: We’ll do it.
(ends)
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