E&OE….
Topics: Renewable Energy Target, Federal Budget
RAFAEL EPSTEIN:
Greg Hunt is the Environment Minister in Tony Abbott’s Federal Government. Minister thanks for coming in.
GREG HUNT:
Oh it’s a pleasure and good to see you.
RAFAEL EPSTEIN:
What made the deal? How come now?
GREG HUNT:
Look, I think it is all about reaching a sensible balanced middle ground. For the listeners, what have we reached? We’ve reached an agreement on really three big things – 23.5% Renewable Energy Target. So, not 20% but 23.5%.
We’ve reached an agreement to ensure that small scale solar continues unchanged and also that the trade exposed industry – so, a lot of our manufacturing sector which is facing competition from imports that are not subject to an equivalent target has an exemption and both parties have agreed on that. There were a couple of last sticking points. It took the best part of a year for the ALP to put any figure on the table but in my view, this was the figure I was aiming for, we’ve got there now and I’m delighted.
RAFAEL EPSTEIN:
Whose fault is the delay?
GREG HUNT:
Well, my view is that it took the ALP the best part of a year to put any figure on the table. Once they put a figure on the table then we got there very quickly.
RAFAEL EPSTEIN:
So, was any of the uncertainty your responsibility – or the Coalition’s?
GREG HUNT:
Well, the review, of course, was legislated by the previous government but if there are two parties to an agreement, I’m always happy to, you know, take my responsibility. This is, I think, potentially the sixth major piece of environmental legislation.
We will have got three through with the crossbench, two through with the ALP, one through with the Greens. So, in our portfolio, we work with all parties whether it’s on strengthening protections for animals such as dugongs and turtles, whether it’s the Green Army, whether it’s the Emissions Reduction Fund and the repeal of the carbon tax…
RAFAEL EPSTEIN:
But some of their…
GREG HUNT:
…we’ll find a way through each time and sometimes it takes a while to negotiate but my goal is always, protect the consumers, improve the environment and that’s what I think we’re doing here.
RAFAEL EPSTEIN:
Some of the uncertainty – I mean, there was a big drop in investment as well, in the industry, because of the uncertainty. Are you happy to cop some of – is some of that your fault?
GREG HUNT:
Frankly, I don’t think the idea of trying to blame either party is very useful. We’ve reached an agreement today. The requirement for a review was mandated in legislation as agreed by the Greens and the ALP. They introduced this notion…
RAFAEL EPSTEIN:
The legislation…
GREG HUNT:
…we then worked in…
RAFAEL EPSTEIN:
…forgive me I don’t know the legislation but did the legislation say we’ll reconsider how much should be mandated or was it just reviewing how it was going because…
GREG HUNT:
It said it will be a review of the target on a two yearly basis. Those reviews have now been dropped as of the agreement today. But that was the ALP’s own requirement that they and the Greens specifically agreed – and not just agreed but mandated by law – anyway, the real point here is a 23.5%, real certainty for the industry going forward.
There will have to be a lot of renewable energy created and generated so that will be a challenge for the industry but to actually build it all out although they assure me and the Clean Energy Regulator, who’s the Government principle advisor, assures me that it can be done and it will be done.
RAFAEL EPSTEIN:
Does it mean entire trees get burnt? The industry definition I think at the moment is that whole trees can be burnt if they’re not suitable for wood chipping. Would you include that in what they call biomass?
GREG HUNT:
So, there’s a definition that was put in place by the ALP, this was their definition and we will use exactly that definition…
RAFAEL EPSTEIN:
But they’re not happy with it now, are they?
GREG HUNT:
…what is means is it has to be sustainable and essentially, the advice I had from the CEO of the Australian Forest Products Association today is that to the extent that it has any impact at all, it will mean that we are only using wood waste that would otherwise have sat on the floor of the forest and either rotted and produced methane or sat on the floor of the forest and burnt and produced CO2 so it’s…
RAFAEL EPSTEIN:
But it encourages…
GREG HUNT:
…the advice they have is that it’s not likely to have any impact on forests other than to use waste which would have sat on the floor and either rotted or been burnt…
RAFAEL EPSTEIN:
But it makes it more sustainable…
GREG HUNT:
…it makes good sense.
RAFAEL EPSTEIN:
…doesn’t it? It makes a wood chipping project more sustainable because whoever’s doing the logging can burn whole trees and that can be contributed towards the RET? So, you are helping an industry, the people are angry as what they call already…
GREG HUNT:
No, we’re actually using a waste product that would either rot and produce methane or a waste product which would have been burnt and produced CO2. In fact it’s highly illogical and environmentally irresponsible not to make use of those products because that will have a net reduction in emissions and I think that’s a good thing not a bad thing to reduce emissions and we’re doing pretty well on that front.
RAFAEL EPSTEIN:
Greg Hunt’s the Environment Minister, I’ll get to your calls soon. 1300 222 774. How do you know the bills will go down? Power bills?
GREG HUNT:
Well, we have the modelling from both the Government and the Warburton review which says that the likely impact of this is a $20 reduction against what bills would otherwise have been by 2020.
It’s not the big difference in bills and I think it’s important not to over-claim but it comes on top of the largest recorded drop in electricity bills which followed the repeal of the carbon tax. So, we’re focused on consumers, we’re focused on renewable energy and this outcome, which I think is a really good outcome achieves both things.
RAFAEL EPSTEIN:
Happy with the Government’s poll numbers? There’s clearly an immediate bounce in both of the big newspaper polls. It must be nicer to have a tail wind than a head wind.
GREG HUNT:
Look, I know the conventional wisdom is to say we never look at the polls, of course, you’re aware of those things.
RAFAEL EPSTEIN:
But you only say that when the polls are going up.
GREG HUNT:
No, no, my view is you don’t focus on them but you are aware of them and you’ve got to pursue what you think is the right outcome. Where we’re at now I think is that people have a sense that we’ve reduced the deficit from 48 to 35. We’re heading down to $7 billion which is really important in protecting future generations.
But people can also see that because we’ve made space, we’re now able to do things such as the Small Business Package which involves the $20,000 instant asset write-off. People can invest in new equipment, it could be in a new – in a ute, it might be a second-hand ute, it might be a new oven rack, it might be solar panels. I know already a lot of the small scale solar sector have said to – have advertised come and make use of the instant asset write-off in our space…
RAFAEL EPSTEIN:
And that policy…
GREG HUNT:
…so, these things are really landing on the ground, I’ve found that in the electorate on Friday and over the weekend.
RAFAEL EPSTEIN:
That policy may be very appealing to people and you mentioned the deficit. I mean, the Budget deficit’s double what it was 12 months ago and the proportion of taxing the economies going up. I mean, a lot of those numbers are heading in the wrong direction aren’t they?
GREG HUNT:
Well, we inherited a $48 billion deficit…
RAFAEL EPSTEIN:
Understood.
GREG HUNT:
…it’s now down to 35 and then…
RAFAEL EPSTEIN:
But last year’s…
GREG HUNT:
…last it heads to 26, 14 and 7.
RAFAEL EPSTEIN:
…Budget deficit has been doubled. Last year’s Budget deficit’s been doubled. It was about 17 billion last year and now it’s 35, I mean, it’s doubled.
GREG HUNT:
No, no, no. Since we’ve been in it’s been 48, it was the first year…
RAFAEL EPSTEIN:
48’s not the…
GREG HUNT:
…of what we inherited…
RAFAEL EPSTEIN:
…peak figure though is it?
GREG HUNT:
…now we’re down to 35 and so each year it’s improving in reality…
RAFAEL EPSTEIN:
The deficits improving each year.
GREG HUNT:
In terms of it is reducing in size as you look out over what is called the forward estimates, so for listeners that’s a four year Budget projection and under the previous Government, my recollection is that the deficits were something like 27 billion, 54 billion, 47, 43, 18 and then 48.
So, massive deficits, we’re bringing it down, we’re bringing the Budget progressively towards surplus and that means that kids don’t bear the weight and grandchildren don’t bear the weight of spending today but at the same time you’ve got to drive opportunity for individuals and I think that’s what this Budget has achieved and that’s really what people are focusing on.
RAFAEL EPSTEIN:
Before I ask you about whether or not ABC interviewers are aggressive, let me try a bit of my own aggression. The net debt – the debt now – sorry, in ‘16, ‘17 a couple of years away from now, is 18% of the economy. The net debt in ‘12, ‘13 was 10% of the economy, the Budget bottom line last year has been doubled.
I mean, you’re using – isn’t the Government using selective looks at optimistic projections to make it seem like you are making a difference on debt and deficit when actually the proportion is going up, not down?
GREG HUNT:
Well, in the spirit of good humoured interrogation, what I’d say is – respectfully, you’re wrong and the reason why is because you’ve got to look at where would it have been otherwise and of course it was projected to go to a peak debt of $667 billion under Labor and what does that mean? That means that there was progressive increases in expenditure…
RAFAEL EPSTEIN:
Yeah.
GREG HUNT:
…now we’ve all made difficult decisions and a lot of those were unpopular and I concede that but this is about protecting the next generation so we have reduced that peak debt very considerably and we’ll continue to do that and so it’s about restraining the rate of growth in expenditure whilst not adding new burdens to households and giving them opportunities to generate wealth through small business.
RAFAEL EPSTEIN:
Isn’t the problem with that – and let’s maybe keep away from figures because you and I – we’ll get lost in detail, when the Government says listen, we’ve reduced things like the trajectory, we’ve reduced where the debt would get to, a lot of that relies on Labor’s settings being unchanged. Now you yourself have suffered big drop in revenue – nothing to do with you about falling commodity prices, no one’s settings would have remained the same.
Isn’t it fairer if we seek to assess what the Coalition has or hasn’t done, isn’t it fairer to say well, hold on, let’s not think about simply where Labor would have been five years beyond on the (inaudible) but let’s look at what the Coalition has done. The increase in tax in the economy, up, Budget deficit bottom line is going up. They’re the fairer figures to use aren’t they?
GREG HUNT:
Well no, the Budget deficit bottom line is going down in each of the four years of the Budget. The second thing is if we do what you have just said, we add in the $90 billion of revenue, much of which – revenue lost, much of which came from the crash in the iron ore price, Labor’s figures would have been $90 billion worse so the comparison that you and I are using would be more favourable to the Coalition, less favourable to the ALP. So I thank you for introducing that. But the real – nobody should say that the ABC’s aggressive with a lead in like that…
RAFAEL EPSTEIN:
But there is a strong feeling – I mean, Malcolm Turnbull said this on the weekend that especially around the interviews of the Finance Minister and the Treasurer during Budget Week that the ABC’s too aggressive. Do you think the ABC is, in general?
GREG HUNT:
Look, my view is this. There are home games and away games, and I presume that some interviews will be away games, but you’ve got to turn up to play and you’ve got to be robust.
RAFAEL EPSTEIN:
But is there too much away game for the Coalition on the ABC?
GREG HUNT:
And I always regard the toughest most aggressive interviewer, I’ve said to my staff I’ve got to watch out for that Rafael Epstein.
RAFAEL EPSTEIN:
Yeah yeah, sure sure.
GREG HUNT:
So you’ve got to be able to stand up to it. I would say to everybody on all sides, tough questions yes, let your interviewees have a chance to respond and I always like to ask a question back from time to time.
RAFAEL EPSTEIN:
Yeah I’ve noticed. Greg Hunt, thanks for coming in.
GREG HUNT:
It’s a pleasure.
(ENDS)