2CC Breakfast

Subjects: Carbon pricing, ACCC campaign, PM at G20.

Transcript, E&OE

20 June 2012

MARK PARTON: It's 14 to nine. We join the Federal Trade Minister Dr Craig Emerson with news that Tony Abbott at a press conference has just declared that the Victorian earthquake is the fault of the carbon tax, Craig.

CRAIG EMERSON: I'm not surprised. They reckon that the downsizing of the Fairfax newspapers to a compact style is directly attributable to the carbon tax. I think bubonic plague was in anticipation of the carbon tax. And after the first of July, if your footy team loses you'll know why: it's that carbon tax.

PARTON: In all seriousness, welcome to the program. I can tell you that…

EMERSON: I've missed you, Parto. I was sitting there in Kazan in central Russia saying 'where's Parto?'.

PARTON: Don't worry, mate. If we had a number we would have called you — don't worry about that. We've got a number of listeners who have SMS'd some questions. Matt says: "Question for Craig — why do we import produce that our own farmers are perfectly capable of producing, e.g. oranges and pork. We need to support our own farmers more." That's from Matt.

EMERSON: Well, we do support our farmers. And I think the supermarkets, or at least one of them, is going on a big Australian-grown push. But there are factors such as seasonality. For example, mangos in Australia ripen in our summer. And I think it's not a bad thing if people want mangos in our winter that they be able to get them. If they don't want them, they don't have to buy them. I reckon it's a bit rich for governments to say you are not allowed to buy mangos off-season. Now pork's a bit different. But what I'm really saying is that it's a free market and we shouldn't be putting up barriers preventing consumers from buying what they would prefer to buy. But most consumers prefer the Australian variety.

PARTON: I've got to talk to you about the carbon tax and the ACCC. And …

EMERSON: Yeah, sure.

PARTON: … I spoke with Tim Wilson from Rio earlier and we were both of the view that … we've got some concerns over this ACCC campaign, which is basically being pitched as a 'we're gonna save consumers from price rises from the carbon tax'. But it's not how I read it at all, Emmo, because the ACCC is saying ultimately 'we don't care if prices go up dramatically — people can double their prices — as long as they don't say that it's as a consequence of the carbon tax'.

EMERSON: Yeah, the ACCC powers in this context relate to false and misleading representations under the legislation. And that is that if they put their prices up for some other reason they can't then say 'the actual reason we're doing this is the carbon tax'. If it's not the basis of the price rises then they can't pretend otherwise.

PARTON: These people that are in business, though, the fact that they are still in business means that they know what they're doing. And so when prices go up for whatever reason they work out a way how they can absorb it or pass it on to consumers. Now most of them are not entirely sure how much the carbon tax is going to affect their business. So they are, in a lot of cases, being forced to increase prices but they can't truthfully say that? I mean, that …

EMERSON: No, no, that's not right. They can increase their prices, but they can't say 'this is due to the carbon tax' if it is not. Now, the truth is the total effect on the whole consumer price index, the cost of living, is 0.7 per cent.

PARTON: Based on the modelling.

EMERSON: Yeah. And as borne out by the way, Parto, by the electricity price declarations that have occurred around the country in the last few weeks. They're all coming in on the Treasury modelling — bang on.

PARTON: But not everything's come in on the Treasury model. I mean initially we were talking about 1,000 polluters that were going to pay this tax, and now it's less than 300.

EMERSON: I think it was 500, actually.

PARTON: Okay, well let's go 500. Now it's less than …

EMERSON: But that doesn't affect consumers, mate. Let's be fair here. Whether it's 500 or a smaller number, that doesn't of itself affect the prices that will be paid by consumers. And what that means is that a fewer number of emitters will be subject to paying a price on carbon. That's not a bad thing.

PARTON: Let's talk about what's gone on in Mexico. I can't think of the blokes name but…

EMERSON: Barroso.

PARTON: We've all seen the spray, and it was a pretty good spray. And I know that it was in response to a question about Canada, but what do you reckon, mate? Julia Gillard says it has nothing to do with anything she'd said. Do you think there might be a little bit in there directed to Australia?

EMERSON: No, I don't, because Julia had had several conversations with President Barroso, and at no stage did he say that this was directed towards Australia. But, in any event, there are people who believe that Europe needs to do better; and I think that there's a very large number of people. We've got a good economic model here in Australia: strong growth, falling interest rates, low inflation, and unemployment at 5.1 per cent. Maybe there's a thing or two that we do know that may be worth passing on. But I don't think it's a right characterisation to say that Julia Gillard was hectoring or lecturing the EU. He was actually responding to statements that had come out of North America.

PARTON: Okay. Paul sent us an email. He says: "Question for Craig Emerson — you're introducing a carbon tax to hopefully force us to use more expensive clean renewable energy to save the planet rather than the coal. If we're so interested in saving the planet, why do we continue, why will we continue, to export this coal for other countries?'

EMERSON: For this reason: you can't … you need to make a transition to a low-carbon future, to a clean energy future. No-one of any credibility has said you just turn the tap off on coal. And, indeed, we have ample reserves, huge reserves, of natural gas, which is regarded as the transition fuel to a clean energy future. But no-one, as I say of authority, has said 'that's it; on a particular day we turn the tap off on fossil fuels'. So, the initial analysis is right: that you're creating incentives to shift to cleaner energy sources. But, of course, with the enormous growth of China, and the rest of Asia, there's going to continue to be demand for fossil fuels. And we're well-placed to provide that demand.

PARTON: All right. And really quickly, we've got Nick standing by on the other line with a quick question. Yes, Nick?

CALLER: Good morning, Mark. How are you?

PARTON: Excellent.

CALLER: It's got nothing to do with this carbon price or tax business. It's concerning something else if it's all right to make a comment?

PARTON: Is this for Craig Emerson, or not?

CALLER: No, it's not.

PARTON: It's not. Well, hang on a second there — Emmo, I'll …

EMERSON: I'll answer it anyway, Nick!

PARTON: I'll bid you adieu. But thanks for coming on this morning, all right.

EMERSON: Okay then, Parto.

PARTON: Federal Trade Minister Craig Emerson.

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