Peter Costello

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Emissions trading, the economy - Interview with Kieran Gilbert, Sky News

Interview with Kieran Gilbert
Sky News

 Friday, 1 June 2007
12 noon

SUBJECTS: Emissions trading, the economy

GILBERT:

Treasurer, first of all, can I start on the importance of this Council in the context of this election year?  Just how important is it in terms of rallying the troops?

TREASURER:

Well I think it is important to talk about what the Liberal Government has as its future programme, and for doing the right thing for Australia.  And we are bringing together all of the key members of the Government and our State organisations. We will be laying down a platform for the issues that will be confronting Australia over the years ahead and we will be outlining and showcasing the responses that we have.

GILBERT:

Normally it is a chance to boost the leadership, it is a buoyant event, but this year you are struggling in the opinion polls, you are 20 points behind on the two-party comparison. How do you expect that to play out in terms of the mood of this Council?

TREASURER:

Well I think the important thing is for us to focus on the economic needs of the Australian nation and people. Making sure that people can stay in work, keep their houses, keep their jobs is absolutely essential. And the record is there for the Government. I have no doubt that, as we get closer to the election, people will think about how a change of government would put a risk into the economy, a risk into their job, a risk into their mortgage, a risk into their business – that people will be thinking much more carefully about a change of government.  And a Council like this gives us the opportunity to talk about the key issues that are before the Australian people – and none more important, of course, than whether or not they can keep jobs and keep the security of a family home.

GILBERT: Is the mood of the troops important?  Is it important to rally the troops, so to speak?

TREASURER:

I don’t know if the troops need any rallying. I think the important thing is to talk about the issues that are important to the Australian public.  That is what the Council is really about, and the policy responses that will be needed to deal with them.

GILBERT:

Mr Costello, the Government has now received the taskforce report into the Emissions Trading Scheme, there are suggestions today by some commentators by not recommending a set figure for a target on cuts to emissions, that it might give you a licence to do nothing. 

TREASURER:

I think the important thing is to have the shape of the scheme and to explain it.  These are quite complicated things and people will need to understand how it is going to work:  for example, how the caps are going to be put in place, what you can do inside of those caps, what the coverage will be across the economy.  And I think it is important that you get the scope of the scheme out there first.  Now, in relation to the actual targets, here is the important fact: - before you set the target you have got to know what the consequences are.  If you set a target which – for example – would put the Australian economy into recession or cost millions of jobs, as you start to count down to those targets you will have to either give away millions of jobs or give away the target.  It is very important that you know the consequences before you set the exact amount.

GILBERT:

Isn’t it also true though if you have got a trading scheme, without any cap, without any target, without any parameters, isn’t a trading scheme then almost meaningless if you don’t have those parameters set?

TREASURER:

I think the important thing is to understand the trading scheme and understand the rules.  Then when targets are set they have got to be realistic targets and they have got to be targets with known consequences.  That is the important thing – known consequences.  There is no point setting a target now and finding out what it will mean next year, because if it is inappropriate, that target could change.  When you are talking about decisions that have to made over decades, in some cases over half a century, the important thing is to set the right objective first so that people have security to where they are going rather than set an objective on a yearly, varying basis.

GILBERT:

Do you feel pressure to set a target before the election so people know that you do have a vision for the future and where your government will take us?

TREASURER:

Well I think this is the most visionary explanation of a trading system, not only that Australia has seen, I think probably that the world has seen.  This is very sophisticated, this.  It has wide coverage, it will be national and the rules once they are understood will give a framework.  But the important thing I think is to make sure people understand those rules.

GILBERT:

So you don’t feel any pressure then to set a target before the election so people know with that sort of clarity?

TREASURER:

I think the important thing is to get an understanding of the system, to stake out where it is going to go and then to explain the dimensions of what it will mean in practical terms.  When you are talking about dealing with climate change you are not talking about tomorrow or next week or next month.  What we are talking about here is what the situation will be in 2020, 2030, 2040, 2050. And the important thing is to make sure that you know the consequences, that the rules are well understood, so that people, when they are taking decisions now, can take into account the framework as it will be in 20 or 30 years time.

GILBERT:

And other than the economy, will that be the key issue of this Council?

TREASURER:

I think that will be a very big issue - emissions trading, our response, full response to greenhouse and climate change issues and of course the economic consequences of all of this. Because if Australia undercuts its economic performance, if we put in place a scheme which destroys prospects in the Australian economy, that won’t help us improve the environment. All that will do is diminish the resources that we have to respond.

GILBERT:

Mr Costello, you have got an executive meeting to get to, thanks for your time.

TREASURER:

Thank you very much Kieran.

1 Jun 2007

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