Transcript - ABC 891 - Two Chrisses - 19 Oct 09

SUBJECTS: Karlene Maywald and the "Royalty for Regions Program"; ETS; State-Commonwealth Government relations

(greetings omitted)

David BEVAN: ...after a marathon four-and-a-half hours...what did you decide?

Christopher PYNE: Well it was actually longer than that for me....my day went from 11 til 8....it's a very important issue to get right and it was very important to give everybody an opportunity to say what they wanted to say and in fact it was a very successful meeting with a very good outcome so I think it was worth the time.

Matthew ABRAHAM: ...now to Chris Schacht, to both of you...Isobel Redmond's royalties for the regions program, which is...I'll raise you and I'll see you to Karlene Maywald's royalties for the regions program. I have to say that the Treasurer this morning, and you would have heard this certainly Chris Schacht. He wasn't as strident because Karlene Maywald sort of cut his lunch on this one. When you've got a Cabinet colleague, and a very important one, she's a National Party MP and she is promoting royalties for the regions, how can you fully attack the Opposition on it?

Christopher SCHACHT: I think a few weeks ago I mentioned about the meeting they were having, the Independents on October the 2nd at the Adelaide Cricket Ground to discuss this royalties for the region, I don't know the outcome, I was away overseas, but this is in effect I knew that this would be an immediate problem for the Liberal Party. They've gotta protect the number of Seats and they're gonna try and win some back, like Karlene's Seat. I also realise that if Karlene as a Cabinet Minister was pushing it there must be some thought and discussion in the Government. The Government would like Karlene to hold Chaffey, obviously, her Riverland Seat.

BEVAN: Kevin Foley said no, he doesn't support it.

SCHACHT: But he also announced, and quite rightly, I thought he handled the interview pretty well, in that he said well there's going to be a political debate coming at the election about this. He also mentioned that his colleague, the Liberal Treasurer of Western Australia, Mr Buswell, was pulling his hair out over what he inherited in the deal to get a Liberal Government with a National Party in WA.

ABRAHAM: ...but Buswell wouldn't be in Office if it hadn't been for that group.

SCHACHT: Yeah, but now that he's in Office he's gotta pull his hair out. But he still gets the white car as a result. I just think that this is an interesting issue for the Liberal Party in trying to defend Seats that they could be attacked on, or above all trying to win back Seats they've lost, and that's one reason they've had to come up with a scheme.

BEVAN: But hasn't Kevin Foley made it difficult now for Karlene Maywald, because he said no he doesn't support this program, so if this is the big issue for regional South Australia, the big vote swinger, and Karlene Maywald obviously thinks there's votes in it, then won't the Liberal Party now be able to go to these regions and say no point. If you love this scheme there's no point in voting for Karlene and her friends because Kevin Foley's not gonna back her up on this, the only way to get it is a Liberal Government.

SCHACHT: Hang on...Kevin Foley, as I say I thought it was a pretty reasonable interview he did, and you blokes asked him a couple of the questions as you would. I've got no inside information on this, but when he said there will be a political campaign, there will be issues debated that to me sounded like of course the Premier and he and Karlene had probably had a good discussion about this some time ago and I think it'll probably emerge that one way or the other. There might be something with the same name...

ABRAHAM: ...do you think they might come up with a plan?

SCHACHT: I'd be surprised if they didn't. They are the Government, they are clever people in working out how to handle what will be a tricky issue, and it's just as tricky for the Liberal Party.

ABRAHAM: Chris Pyne yes, is it tricky for the Liberal Party?

PYNE: Well I won't comment on the actual plan because I'm not a State Parliamentarian, but I will comment on the politics of the situations as I see it. I think that is that Karlene Maywald is very concerned about holding onto her Seat of Chaffey. She has seen that in Western Australia a royalties for the regions program is a populist issue that wins support and she will say and do whatever's required to hold Chaffey, and I agree with C1 that the Labor Party does want her to win Chaffey, because the National's are essentially in coalition with the Labor Party at the State level in South Australia, and I don't believe that Kevin Foley or the Labor Party will support a royalties for regions program under any circumstances. No self respecting Treasurer of a State Labor Government would do so, because of course it's essentially tying funding on the basis of geography rather than the basis of the merit of a scheme...

BEVAN: ...you're saying that Isobel Redmond is prepared to back a dodgy scheme?

PYNE: No, I'm not saying that.

BEVAN: ...you just said no self respecting Labor Treasurer would do it because it's assigning money according to geography not merit. Are you saying that Isobel Redmond has come up with a scheme, which applies money according to geography not merit?

PYNE: No, because Treasurers are universally the doctor no's of Australian and world politics, they always say no to every scheme. That doesn't mean that Premiers and Leaders and Political Parties don't have a different view to Treasurers. When Peter Costello was Treasurer he was always cast in the role of having to say no to ideas, but that didn't mean that John Howard didn't go ahead with things that he thought were a good idea backed by the cabinet or the Party Room. Kevin Foley would say what he has said, that doesn't mean that Isobel Redmond has to agree with Kevin Foley. The point is Labor won't support Karlene Maywald's position in Government, but they will say positive noises about it in order to help her win Chaffey because she's in coalition with Labor. I don't think that Karlene Maywald will win Chaffey because she hasn't delivered for the Riverland when it comes to water.

ABRAHAM: As a matter of principle though, do you think regional people should get a greater slice of the mining royalties?

PYNE: That isn't a matter for me because the Commonwealth doesn't receive the royalties that are being talked about. That is a matter for the State Liberal team and the Labor team.

ABRAHAM: Okay. Chris Schacht?

SCHACHT: I don't agree with any region getting an absolute guarantee out of the royalties. They belong to the whole of the State and I think it should be a debate about how the money is spent, for the benefit of the State across the State. If the Liberal Party goes ahead with whatever they call their scheme and says we're gonna guarantee so much of the royalties from mining going to the regional area, it'll come back immediately to Kevin Foley and the Labor Party will say you've taken $50 million out of here over to the regions the following three schools are not going to be built in three marginal Seats in the metropolitan area and she says she's gonna make savings elsewhere...

ABRAHAM: ...we won't spend $300 million on running the tram any further to the Entertainment Centre.

SCHACHT: ...in the end the response [unclear] of Labor Liberal from the incumbent will be you're gonna spend money over there, we're gonna say you're gonna do it at the expense of these people here and that's part of the political debate.

ABRAHAM: Harry from Meningie has called. Harry, good morning.

Caller HARRY: (inaudible) insightful article alerting the general public to just how much crap the parties can come up with for political gain. He makes the point that after the first two years, the government will have virtually no control over the rate of cost of this Emissions Trading Scheme. They would have control if they bought in a carbon tax. The problem is that a Carbon Tax can easily be legislated up or down, what have you. This Emissions Trading Scheme...is going to become an underdog's breakfast very quickly. It's succeeded nowhere in the world, yet the Liberal Party, Chris Pyne, you're prepared to (inaudible) why don't you just explain to the public and the only people in favour of it are some Green groups and the businesspeople who are going to make money out of it? It won't do a thing about carbon dioxide or Global Warming unless you're a subscriber of that particular religion...how can you contemplate backing any policy when you're going to amend it?

PYNE: well it's the biggest issue at the moment and I might take some time to properly respond but in terms of what the caller is saying, it is not true that there is no Emissions Trading Scheme operating in the world. Emissions Trading Schemes are quite commonplace in the United States, amongst some of the states and of course in New South Wales and across many of the European countries. The Coalition's position is that there should not be a vote or finalisation of the Emissions Trading Scheme until after Copenhagen for the very reason your caller identifies. That it would inevitably mean changes to the Emissions Trading Scheme Australia ends up with....

BEVAN: Well, Harry's not asking for you to postpone a decision on the Emissions Trading Scheme...

PYNE: ...he made the point that it was foolish to go ahead before Copenhagen and I'm saying that in that part I agree with him.

BEVAN: Harry, you're not particularly worried about waiting until Copenhagen, you want the whole idea scrapped. You think Emissions Trading is a dumb idea? ...

Caller HARRY: ...I do, even if you want to bring in a Carbon Tax and set it up in Government and it bears the brunt so everyone knows exactly what they're paying. You bring in an Emissions Trading Scheme and you'll hurt every person. The only people who are going to make money are the dealers who are going to set the rate themselves because they'll decide what carbon costs, not the Government. We'll all be poorer while the Prime Minister skips off to China.

PYNE: ...the Emissions Trading Scheme...the Government is perfectly entitled to introduce an Emissions Trading Scheme. It went to the election on the basis that it would do so. The Coalition says that the Emissions Trading Scheme they have introduced is fundamentally flawed, what it will push up electricity prices by 40%. That it will add to the price of petrol, food and other daily commodities. That it's out of step with our trading partners and that we are acting too soon. We should wait until after Copenhagen. That said, the Coalition, in case anybody missed it, lost the election two years ago so we don't actually control the Government's adgenda or timetable in Parliament.

ABRAHAM: Okay, so Chris Schacht...

PYNE: ...they want this to be debated before Copenhagen and therefore we have put amendments to them which are just sensible and we are prepared to negotiate with them to improve the Emissions Trading Scheme. The ball is now in their court as to how they respond to the Opposition's good faith in the offer.

SCHACHT: Well without any attempt to discourage Mr McRann and the Herald Sun in the Weekend Australia, whatever it was...it might be good argueing for a Carbon Tax as well and not instead of...the thing is that most of the Western world and now the developing world, including China, are now committed to getting some kind of outcome on controlling Carbon Emissions. If Australia doesn't take something to Copenhagen we're going to be belted by our trading partners, including China, where our economy is locked into. They've said...they'll take a leadership role in Copenhagen. I think that is very good.

PYNE: I'll believe it when I see it.

SCHACHT: They've made statements that they will...

PYNE: ...they're the biggest emitter in the world.

BEVAN: ...makes a good point. Let's wait for Copenhagen and...

SCHACHT: ...we'll see that, there is a very good reason to say why we should go to Copenhagen. I also accept that over the next decade there will be further international arrangements, changes and amendments come as this issue keeps developing. This is common in most of the Western world and now the developing world, including China, says that we'll do something about emissions etcetera. Australia just can't say "no.", the Liberal Party...

PYNE: ...but why not wait a week? Until after Copenhagen...? Would it really hurt...

SCHACHT: ...the point is that countries are going therewith something on the table already...

PYNE: ...no, they're not. Not going with targets and the greed of the Government's targets...

SCHACHT: ...yes, they are...

BEVAN: ...let's just let you two calm down...we'll go to Pat from Dry Creek. Hello Pat...

Caller PAT: Hello guys, how are you?

BEVAN: Very good. Now Pat, you can be the independent umpire here Pat. Have your say.

Caller PAT: Thanks guys...I'm a little bit worried. I'm a small business owner and we've got between 10 and 15 staff...and I'm wondering what the affects will be in South Australia because we're at a disadvantage compared to other states. We're the worst-taxed state and it's very uncompetitive now and we're facing another cut...a Carbon Tax...now Labor will say it's going to have a minimal effect but won't that all go to the bigger manufacturers...? I'm really concerned if business will be left out in the cold and I just find it really concerning.

ABRAHAM: Chris Pyne, small business?

SCHACHT: Pat, now what I say...you may not have heard much. Which part of the legislation have you...which will affect your business and how?

Caller Pat: No! No, I don't know which...

PYNE: ...I could tell him...

SCHACHT: ...then we won't have an unbiased view...

PYNE: ...but I'll tell him the truth, why don't I tell him? Pat raises a very good point. The Government's compensation in its Emissions Trading Scheme is only for low income earners and for big business which are emmiters of carbon. There is absolutely nothing in the Emissions Trading Scheme to compensate small and medium-sized business for the enormous rises in electricity prices alone. Which will push up their prices as well as push up the costs of what they are selling. What we are saying is that we can actually, through the intensity model of how we amend this scheme, we reduce the increases of electricity prices immediately. We are actually offering something to small business, whereas the Government has decided that small business simply doesn't count!

BEVAN: Christopher Schacht?

SCHACHT: This compensation to the big electricity generators...that means they should not be putting up their charges as far, because they're getting Government compensation. So presumably, if it's working, the charges should not go up as high...

PYNE: ...the Government wants to push up electricity prices because it will reduce emissions. That's the point!

SCHACHT: If any business is concerned about how they're being impacted by the business...if the thing is being applied across the board, everybody gets hit with the same cost. Then the argument is that they'll be disadvantaged against our international competitors. And if there is some sort of global outcome from Copenhagen everybody will be affected. Evenly. So there should not be the worry that one individual business is going to be wiped out compared with another one.

BEVAN: So one down won't matter?

SCHACHT: If they all have the same price increase...there'll be an increase but I don't think a small business should worry about the competitor down the road in another industry...will have an advantage over him...if it's evenly applied.

BEVAN: Allan...hello Allan?

Caller Allan: I wonder what the two Chris' believe about the need for 21 million people to have eight States and one Federal Government. I thought when the crisis in the Murray started surely this was the chance to do something. You've got four warring States, you've got one of them deciding to dump 1,500 tonnes of salt in the Murray. Overall why do we need so many Governments?

PYNE: ...your caller raises a very good point, and the Murray Darling Basin is the best example of why there needs to be a complete rethink of the relationship between the States and the Commonwealth. Power has devolved to the Commonwealth for about 80 years, very substantially post the Second World War. Historically of course it would be virtually impossible to get rid of States. They created the Commonwealth in effect and they created the Local Government, but on the other hand the Murray Darling Basin is screaming out to be a national responsibility. The Howard Government created that, but the Rudd Government has essentially reversed it and maintained the veto of the Premiers. Until the national Government has the responsibility for Australia's national waterway we are going to continue with this pathetic, small minded back biting and bickering between small time Premiers.

SCHACHT: ...I go further than Chris Pyne, it's not just the River Murray, the Murray Darling Basin issue, but that's a good example. I've said for a long time it should be run by the Federal Government in every form, including allocation of water resources etcetera...Australia for 21 million people with three levels of Government and so on is not needed in ... our modern system. I think we need two levels. I would merge Local and State Government, overwhelming all the money's now collected by the Federal Government by taxes. The Henry Review will again emphasise the fact that it's the Federal Government that collects the money and it should be collected equally across Australia. The variation of State taxes ought to be got rid off and then if there if there are State Governments they are the delivery service in accordance with national policy across Australia. We have a system that is designed in the 19th Century for a 21st Century world and it's not good enough.

(ends)