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Interview with Ian Maurice,
30 December 2009
MAURICE: Well whether you're a Labor voter or a Conservative voter, I'm sure you'd agree that the Federal Government has a little work to do to sell the proposed emissions trading scheme.
I guess they need to sell it to the Opposition and of course then to voters. How does it work, what does it mean for householders, will taxpayers be better off or worse off?
If we listen to the Opposition, obviously we'd be worse off. Well up until now, the Government has only spoken about the financial effects in broad terms. But now the sale has begun, figures are starting to trickle out from the Environment Minister, Peter Garrett's office. According to Mr Garrett, the scheme will leave low income earners $190 a year better off than they are now.
The Environment Minister is on the line. Good morning, Minister.
GARRETT: Good morning, Ian.
MAURICE: Nice to talk to you.
MAURICE: You're saying pensioners, seniors, carers and people with disability will be fully compensated with direct cash payments?
GARRETT: That's right, Ian, I think it's one of the parts of the debate that needs to be fully emphasised, and the fact is that all of those groups that you've described will be fully compensated and all low income households will also be fully compensated with direct cash payments or with tax breaks. And today's analysis is important because it shows how many low income households are affected, and in Queensland it's some 630,000 low income households who will actually be better off as a consequence of the introduction of the Carbon Pollution Reduction Scheme.
MAURICE: What would the effect be on the middle and high income earners?
GARRETT: For middle income households the annual price impact averaged is about $650 and the average annual assistance is about $700. And for all households receiving some assistance, that's about 8.1 million of them, the impact is about $600 and the assistance amount is $650. So that means that about 90 per cent of all householders who do receive assistance, on average will receive around $660 in compensation. And the impact of the CPRS, which was modelled by Treasury, showed that the cost increases in terms of what actual amounts and impacts would come onto consumers, is around about on average $12 a week for households.
MAURICE: Twelve dollars a week out of pocket?
GARRETT: That's correct, that's in terms of the increase in cost of living, and what we're saying is that we more than compensate for low income households for that figure. In actual fact they'll actually receive - the figures show that they will see an impact of around $420, but assistance of around $610 on average and so that as a consequence they can see low income householders being just under - a shade under $200 ahead in assistance under the scheme.
MAURICE: I guess I need to find out from you, if you have your figures, what Treasury regards as middle income?
GARRETT: The range of incomes are in terms of income assistance packages. Low is less than $30,000, for a couple $45,000 without children, for a couple with children $60,000. Medium - single person between $30,000 and $80,000, a couple without children, $45,000 to $120,000 and a couple with children, $60,000 to $160,000. And high - above $160,000 if they have children. So that's the assistance package income levels that were identified by the Government.
I think the critical thing here, Ian is that Mr Abbott came out with a figure that it would cost householders $1100 a year, and today's analysis shows that that figure's absolutely incorrect. In fact about 90 per cent of all households and 97 per cent of middle income households, will receive some form of direct cash assistance under or - tax rebate or benefit under the CPRS scheme.
MAURICE: I want to take you back, I appreciate that, but I want to take you back to those - that range that we're talking about because it's a very broad range for a middle income earner. I mean there's a - I think about a 50,000 differential between the lowest and the highest for what we would regard as a middle income earner, and it seems to me that it's the middle income earners in Australia that are usually the ones with the real overheads, you know, as they try to get ahead. And by the sound of things they're the ones that are going to be worse off under this scheme.
GARRETT: Well about 97 per cent of the middle income earners that you're referring to thereabouts will be receiving assistance under the scheme, and the fact is that we've been pretty clear, and I think even Mr Howard was clear earlier on in that there aren't any no cost ways to tackle climate change. The cost of living figure that I mentioned earlier on for high income earners and some middle income earners will bear some impact upon them as they go forward.
But the other thing I've said today is that we're also providing additional assistance, for example with the cent for cent reductions in fuel tax over the first three years of the scheme, so the higher fuel costs issue has been dealt with. And as well as that we've got a number of measures in place, pretty significant energy efficiency measures and energy efficient guidance measures for all income streams wherever they are to take the sort of actions they can to reduce their emissions and also to reduce energy costs over time. I mean the one that your listeners will know is the ceiling insulation, the Home Insulation Program.
Now that provides you with an ongoing saving of anywhere around the $200 plus figure per year past, you know, the life of the program, it goes on indefinitely into your household. And a range of other measures as well around energy efficiency labelling, appliances and the like where we see that there are significant opportunities for people to actually reduce their energy costs as well.
And I've got a fantastic website, livinggreener.gov.au which provides a lot of information for people, it shows them where the rebates are, provides lots of tips in their household, you know turning off the second fridge over the holidays and the like.
But I think the key thing is that we said that we would provide assistance for those who need it when the CPRS came in, the benefits for low income households are clear under the scheme, and today's analysis, the new facts show that we've got significant numbers of people in states around Australia, including in Queensland, who will be better off as a consequence of the introduction of a CPRS.
MAURICE: Why has it taken so long to release that data?
GARRETT: Well this analysis has had to be done by Treasury, it's on the basis of the original CPRS modelling exercise that Treasury did. And I've got to say I think that Mr Abbott got a little bit of a honeymoon run in his first week or two. I mean he said that we hadn't released any modelling on impacts. And that was clearly not the case, we released significant modelling, that's the biggest modelling exercise ever, that was the Australian low pollution future. And it's on that modelling that this analysis is done.
But you've got to get the figures properly analysed by Treasury before you bring them through, and I think also that around Copenhagen and discussion about targets and numbers and figures that was the emphasis at that time.
The fact is that the Government has always said that it would provide significant compensation under this scheme, it's really substantial compensation and it's a multi billion dollar compensation package, and because we've got some 8 million households receiving direct cash assistance, that is out of a total of 8.8 million, and because we're fully compensating low income households it's important that we let people know that, especially on New Year's Eve or the day before we head into 2010.
MAURICE: Exactly. And on that note let me wish you a very happy 2010 and thanks for joining us.
GARRETT: Same to you and your listeners, Ian.
MAURICE: Peter Garrett, the Environment Minister.