ABC 891

SUBJECTS: Kate Ellis confirms electricity prices will continue to rise; impact of FBT changes on car industry E&OE............................... Presenter: Good morning to you Kate Ellis thank you for coming in. Hon Kate Ellis MP: Good morning. Great to be with you. Presenter: And thank you for bringing the Soap Box. There is everything in here from razor blades, shaving foam and I notice band aids. Is this a Kevin Rudd shaving pic – you know for his selfies. Ellis: I was a brownie and I always believe in being prepared. I’ve always got band aids in the handbag and you never know when you’ll need them so… Presenter: And you were prepared for a change of Leader as well as we know, or not? Ellis: As I said I’m happy to provide the toiletries and I think it’s a good cause so thank you for organising it. Presenter: It is. We shouldn’t be churlish at this point. We are raising toiletries for the homeless and others in need in Adelaide. Kate Ellis, just listening to those two industry experts, power prices might go up it might go down. It will be cheaper next year but it mightn’t be cheaper next year. One thing they do agree on though is this sort of constant changing of the goal posts is very bad for industry and ultimately we need industry to invest before we get results. Ellis: Well absolutely. What we need is a clear policy that is going to address carbon pollution but also one which takes in mind the cost of living pressures on our local community and I’ve always believed in an Emissions Trading Scheme. We’ve always argued that that is the best way forward. So I think this is sensible policy. Presenter: But it is certainly not consistent policy is it? The Prime Minister you supported, Julia Gillard, right to the bitter end promised not to introduce a carbon tax, introduced a carbon tax, it ended up being a lot more expensive than everyone thought. Well actually no the carbon tax was a lot cheaper than anyone thought internationally. It was going to be in 2015 we were going to move to an ETS scheme, system, we are now doing that in 2014. And by the way if you get a fleet car and you are paying FBT there is uncertainty in that area. Ellis: Alright let’s come to that. But I think the key is this is a complicated policy. Many people wouldn’t know what the difference between a carbon price and an Emissions Trading Scheme is to begin with, but what we’ve said is that we believe that we’d have a fixed price so you can get some certainty in the system, you can settle in, and then we were always going to move to a floating price in an Emissions Trading Scheme. Business has said that they’re ready to go, they’ve lobbied for this to be bought forward, we’re also hearing from the community that they have cost of living pressures and we know from, I mean there are lot of claims, we heard in the two previous listeners about prices going up, prices going down. One thing that we have seen the whole time throughout this debate is a lot of different claims and counter claims about prices. And the one thing that’s been consistent is the accuracy of Treasury modelling. Now, Treasury is telling us that this will reduce both electricity and gas price prices and I think that’s good news for our community. Presenter: Well the same Treasury is also predicting that the price will go back upon to $25 a tonne by 2017/18, so in four years’ time, will we be paying a lot more for carbon? Ellis: We will be paying what’s in line with the international trading scheme, we will be competing on a level playing field with other countries and other sectors and we think that’s a very good thing. Presenter: But you will be putting back up the cost of our household power bills. Ellis: Absolutely, this will be a floating price and it will move up and down – Presenter: It’s only going to go up according to the Treasury officials that you say are on the ball. Ellis: Absolutely, and it will move in line with international markets so that we know that Australian consumers and Australian business is not disadvantaged. Presenter: When it moves back up, won’t all those electricity savings be wiped out? Ellis: One of things that – of course those savings will move which is one of the reasons why – Presenter: Oh no they won’t move, they won’t get better will they? Ellis: -which is one of the reasons why we are keeping in place all of our assistance packages. There has also been some criticism today that these assistance packages will be too generous. And we have refuted that saying we think it is really important that the community gets assistance to pay for their cost of living pressures. Presenter: Chris Pyne, Shadow Minister for Education, Federal Member for Sturt, welcome to the program. Hon Christopher Pyne MP: Thank you Matthew. Presenter: Chris Pyne is this really Kevin Rudd; I think The Age used the description, all the ducks are in a row now. He is slowly getting all the ducks in a row or very quickly getting all the ducks in a row and leaving you very little to campaign on is he not? The big bag bogey of the carbon tax will be gone. Pyne: Well it’s not gone. That’s the point. The Rudd Carbon Tax is $58 billion, the Gillard Carbon tax was $64 billion. Now if that tax is gone what is that $58 billion of revenue? I heard Kate Ellis say that this is a complicated policy area. It isn’t. If you vote Labor, you get a floating carbon tax that gives you $380 of relief in 2015. If you vote Liberal you get complete relief from the carbon tax equating to $3,000 for the average household and industry gets no carbon tax costing us jobs, pushing up electricity prices and discouraging investment in Australia. It is a very simple policy area. Presenter: We’ve just heard two very good industry spokespeople saying while they are unhappy about the lack of certainty they both agree that the price of electricity would go down under this move. They both agreed with that. Plus people get to keep the compensation that was meant to be there for the price going up. Pyne: And if you vote for the Coalition the price of electricity and gas goes down permanently. In comparison to Labor where it goes down for one year and you get to keep the pension rises and the income tax cuts. So the Labor Party’s deal is an absolute dud. I mean Kate Ellis just admitted on your program when you put it to her that prices will go up again. She said ‘absolutely’. When you said to her will the carbon tax price go up again, she said ‘absolutely’. So she has twice on your show this morning… Presenter: Well that’s not rocket science. It is in the Treasury modelling isn’t it? Pyne: I know but that’s just the whole point. Why are we even discussing this today when the Labor Party has kept the carbon tax, admitted prices will go up again, admitted the carbon tax will go up again. But if you vote for the Coalition you don’t have a carbon tax at all. Kate Ellis: Christopher is quite right that the Coalition policy is a very simple policy. Unfortunately it is so simplistic that their serious solution they are putting forward to a key policy matter is this so called ‘direct action’ which would mean that they would need to plant trees across the area that is five times as large as Tasmania in order to get any sort of relief. And that all of the modelling is saying that that would actually cost families $1,200. So Christopher you are quite right saying that your solutions are simple. Unfortunately they’re not real solutions. They are slogans and they are not going to address what is a critical issue which we need serious solutions to. One of which, which you and your previous leaders supported was an Emissions Trading Scheme. We’re getting on with the job of putting in place this real and important policy. Pyne: Well Kevin Rudd has supported the CPRS. Then he ditched the CPRS after Copenhagen. He supported an emissions trading scheme then he ditched the emissions trading scheme. He supported the carbon tax, he supported increasing the carbon tax on July the 1st he voted for it. Now he says he’s terminating the carbon tax when he’s not actually abolishing the carbon tax, and Kate Ellis has admitted that this morning on your program. Ellis: I’ve done absolutely no such thing Christopher. Pyne: Well you did. You said absolutely electricity prices would go up again – your word. You said absolutely the carbon price would go up again - your word. And I’m sure that will come back to bite you for the rest of the day. Presenter: Now, on another issue that’s related to this because the government now has to find savings and it’s going to find the money by adjusting the arrangements for the fringe benefit tax in cars. Now you live in a car state, we build the things here. Ellis: Absolutely. Presenter: We put a lot of effort into trying to maintain an industry out at Elizabeth and yet we hear from the motor industry that they’re seriously worried these changes are going to affect baseline car sales. And again, it’s another erratic policy; they didn’t get consulted about this. Ellis: No, well, the Minister has made very clear that there will be detailed discussions with the sector. But what I would say is I am incredibly proud to be a part of a government which is supporting the automotive industry, which is supporting manufacturing jobs here in South Australia; which opposes Christopher and the Coalition’s policy to rip $500 million out – which we know would shut down Holden overnight. But what I would say… Presenter: But what about one of Australia’s largest leasing firms? According to carsguides.com.au – one of Australia’s largest leasing firms, Smart Salary has issued a bulletin to dealers late yesterday ordering them to halt deliveries until further notice. And another major player is doing a very similar thing and that’s the McMillan Shakespeare group, another leasing firm. They manage more than 80 thousand vehicles. Ellis: Look, the measures which we have announced are not targeted at Australian manufacturing – they are across the board. But what I would say is we need real measures in place to increase the number of Australian made cars which are sold, which is why I’m very proud that we’ve actually been putting in place changes. We’ve put in place changes which have increased the number of Australian bought cars that from part of the Commonwealth fleet and we’re calling on Liberal Premiers in states like Western Australian where only 26% of government bought cars are Australian made, to increase that and I hope that Christopher would support those measures. Presenter: Is this why you opposed Kevin Rudd coming back as Prime Minister? Because of these sort of unannounced, without consultation policy decisions? Ellis: Look, this is something that the Cabinet have been working through. We’ve listened to the community; we’ve listened to the business sector who have said we want to move to a floating price an emissions trading scheme, sooner …. Presenter: Is this why you opposed him? Ellis: Look, I am absolutely supporting Kevin Rudd; supporting this measure and supporting taking real action on climate change unlike the slogans being put forward by Christopher which we all know, not only will not work but they will slug Australian families $1,200 a year. Presenter: Chris Pyne, while there may be uncertainty about the impact of these FBT changes on Holden, there is a certainty about the impact your policy of pulling $500 million worth of assistance out will have on them. Correct? Pyne: No, there’s no uncertainty at all about the effect of Labor’s catastrophic decision to hit the car industry with a $1.8 billion tax impost today. No uncertainty about that at all. Every car manufacturer in Australia, none of whom were consulted by the Government yet again, has said this will hit the Australian car industry potentially by up to one third of new sales. This contrasts markedly under the Howard Government where there was record turnover, record exports and record investment in the car industry. A $1.8 billion hit to the car industry on top of the $1.4 billion that Labor has already hit the car industry in the last six years will catastrophically affect Holden in South Australia. Ellis: You’d shut down over night by cutting $500 million from them. Pyne: That is a bald faced lie, Kate and the problem for you is that you should have resigned with the other Cabinet Ministers, the other seven Cabinet Ministers who couldn’t serve under Kevin Rudd and for some inexplicable reason you chose to stay…. Ellis: I can tell you exactly why I stayed, Christopher. Presenter: You’d better make that quick. Ellis: And that is because every breath of my being, I will be out here, putting forward why your policies, why your Leader in Tony Abbott should never be Prime Minister and why we should have real policies, thought through solutions for Australia’s future …. Presenter: … and we need to go… Pyne: … and while you crush the car industry. Presenter: We need to go to Ian Henschke but I do thank you Kate Ellis for coming in to the studio with a soap box and Chris Pyne has also committed a soap box for the homeless as well, as we get in to Day 3 of that. ENDS