ABC 891

SUBJECTS: Wayne Swan; Power price increases; Carbon tax

E&OE……

Matthew Abraham: Christopher Pyne, Liberal MP for Sturt and Manager of Opposition Business in the House, good morning to you Christopher Pyne.

Christopher Pyne: Good morning Matthew and David and Penny.

David Bevan: And Penny Wong, Minister for Finance and Senator from South Australia. Good morning Penny Wong.

Penny Wong: Good morning to you all.

Abraham: What was in the water yesterday? Do you agree it’s appropriate for the federal Treasurer to refer to Opposition members as the Three Stooges? He continued to tweet that after he was thrown out of the House for it.

Wong: I think it’s a pretty robust place the House of Representatives and as to what he said I don’t actually think being called Curly is close to the worst thing that has been said in the House of Representatives. So, the Speaker took action and that’s obviously a matter for him and it shows what an impartial Speaker he is, but it’s a pretty robust place. I think the important thing is what we’re actually talking about, which is the passage of the mining tax. Our plan to deal with the mining boom and spread the benefits across the country….

Pyne: (inaudible)

Wong: I’m interested to see if Christopher can tell us what his plan is. What is the Coalition’s plan?

Bevan: Minister, before we move onto that, can you answer the question of what we were debating just a moment ago, and that is the cost of power in your home state. What are you going to do to reduce the cost of power in South Australia, which within months could have the most expensive power in the world?

Wong: Well, look, people in South Australia often speak to me about power prices and certainly since 1999 when the Liberal Government privatised ETSA we’ve seen very significant increases in power prices. Before Christopher jumps in and blames the carbon price, what we’ve seen is power price increases which have nothing to do with putting a price on carbon.

Abraham: No, however what we do see – and I know there was a privatisation of our electricity here, that was over ten years ago. What we’re now hearing I think from a senior public servant who’s answering for the minister is a problem with the legislation framework as he called it which is unfairly weighted towards the big energy producers. In other words they’ve really have made a killing milking energy consumers for infrastructure upgrades rather than amortising them out and is that an issue that has really come under the radar and as a result is that your home state Penny Wong has the highest power prices according to one measure, the third highest in the world and the highest in Australia.

Wong: You’re right in terms of the things that are driving costs are investments in energy infrastructure and the networks. I understand that Minister Ferguson, who’s the minister responsible for this has put out an energy white paper and one of the issues in that – this is a draft white paper – one of the issues in that is looking at whether the current regulatory structures are the correct ones. It is correct. The major driver of power price increases has been investment in networks and investment in infrastructure, and we do need to look at whether those rules are delivering the best outcome for consumes over the longer term.

Bevan: Chris Pyne?

Pyne: Well, gentleman, the first thing I would say about the electricity prices in South Australia is that they’re going to be made a whole lot worse if even under the Government’s own modelling by the introduction of the carbon tax on July 1. Even the Government’s own modelling says electricity prices will rise by 10 per cent. The energy users association of Australia says they will rise by 20 per cent. The New South Wales Treasury says they’ll rise by 30 per cent.

Abraham: Everybody debates those numbers.

Pyne: Well, the Government….

Abraham: Surely there’s a set of figures and there should be a rigid and scrutinised set of figures rather than plucking figures out of the air like 10 per cent, 20 per cent and 30 per cent. There’s a bit of a difference.

Wong: (inaudible)

Pyne: Hang on; you’ve had a very good run. You’ve had most of this interview so far Penny so I think you’ve got to let somebody else have a go now and then. The truth is even the Treasury modelling; the most conservative figures say that electricity prices will rise by 10 per cent. So South Australian consumers can look forward to high electricity prices from July because of the carbon tax and what the Opposition will do, our first act in Government if we get elected is to abolish the carbon tax and by abolishing it take pressure off electricity prices.

Bevan: Christopher Pyne, do you concede though the fact that it was a Liberal State Government that sold the assets and therefore forfeited a lot of the control from the point of view of taxpayers, it makes it very difficult for the Liberals to argue about the high cost of power?

Pyne: I don’t accept that because if you look back in history electricity prices in South Australia were also high because the Government was taking a dividend. Labor and Liberal Governments…..

Bevan: They went up by more than 20 per cent within a few years of the privatisation. If you’ve spent billions of dollars buying an asset you’d need to recoup it somehow and a private company is going to want to recoup much more quickly than government.

Pyne: Almost every state has privatised their power companies so that is not the reason that South Australia has very high electricity prices and as you point out the highest in the country. You’ve also pointed out that privatisation occurred 13 years ago so I don’t think the current Labor Government can blame something that happened 13 years ago. What I can tell your listeners and I’m sure it’s something they’d accept and agree with this is that a carbon price is only going to make a bad situation worse and the best thing the Government could do would be to scrap the carbon tax before 1 July.

Abraham: Senator Penny Wong on your figures you would agree there will be a 10 per cent increase in power prices in South Australia and elsewhere?

Wong: Look, the Treasury modelling does look at the increases of prices and it does say that electricity on average will go up about 10 per cent and that is factored into the addition assistance we’re giving families and the thing that Christopher doesn’t say is his plan, the “blood oath” as Tony Abbott put it, to get rid of the carbon price if they were elected has to be accompanied by a commitment to reduce pensions, to reduce the family tax benefit and to increase taxes because all of those things are required to role back the reforms the Government has put in place. Remember…

Bevan: Why would you need to do that? If you remove the tax why would you need the compensation?

Wong: We are tripling the tax free threshold. That of its own right is a good reform. Apart from giving a tax cut to everyone earning under $80,000, it also gives more reward for work so it increases the incentive to participate.

Abraham: That is compensation is it not?

Wong: It is a good system. It’s a good economic policy and we say that unashamedly.

Abraham: I suppose if you remove the increased prices from a carbon tax then why would you need compensation because as you say compensation is meant to address the increase in prices. If Tony Abbott rolls back the tax he can also roll back the compensation. It’s a zero sum game is it not?

Wong: That’s what Christopher Pyne would say, and what I say is he should come out and say to people; “if you come out and elect us we will have lower aged pensions, we will have lower family tax benefits and we will take back the tax break for everyone earning under $80,000 a year.” That’s Liberal Party policy.

Pyne: That is not Liberal Party policy and I’m not going to let you get away with verballing in the last five minutes…..

Wong: (inaudible)

Abraham: We should let Christopher Pyne answer now. Is that Liberal Party policy Christopher Pyne?

Pyne: It is not Liberal Party policy. I let Penny keep on verballing – and her relentless negativity against the Leader of the Opposition – for about five minutes, but she finally dropped over the edge of reality by saying it is Liberal Party policy. There is no Liberal Party policy to do any of the things that Penny Wong….

Wong: But how would you afford….

Pyne: Excuse me Penny, let me finish my sentence.

Wong: You’re not answering the question.

Pyne: You don’t get to ask the questions because (inaudible)

Wong: (inaudible)

Pyne: If you want to be the interviewer, hop over the other side of the table and do the interviewing. If somebody asks the questions, you have to let somebody else answer the questions.

Abraham: (inaudible)

Pyne: I’d love to, but she never stops interrupting.

Wong: (inaudible) I can’t imagine which of the three stooges, that’s all.

Pyne: I’m not interrupting. What’s going on here? Penny doesn’t want hear what the answer is which is the Coalition will abolish the carbon tax delivering an immediate tax cut to all South Australian families and taking pressure off electricity prices. We will have a policy to deal with pensions and other income tax cuts, which Tony Abbott has already announced we will do, which will be out well and truly before the next federal election. So the idea that – and we’ve supported the superannuation increase – the idea that we’re going to do the things that Penny Wong suggested is a complete fabrication and it’s just part of the relentless negativity directed towards Tony Abbott just like at Campbell Newman in the Queensland campaign which is the Labor Party’s copybook.

Wong: I was very quiet through all that. I have just one thing to say, they can’t afford it. They have a $70 billion black hole. They can’t afford to do everything they say.

Abraham: Senator Penny Wong. Thank you, we appreciate it. We do. Federal Minister for Finance and Christopher Pyne, Liberal MP for Sturt.

Pyne: It’s always a pleasure.

Wong: It’s a great pleasure. Do you want to be Curly?

Pyne: And you Moe?

Wong: I’ll leave that to the boys.

Abraham: They’re in the studio together.

ENDS