April 24, 2019


FRAN KELLY: Well the election fight over climate change and costings has flared again. The Coalition is today expected to release some modelling that shows how dozens of companies across the country will be slugged billions of dollars in extra costs as a result of Labor’s plan to reduce carbon emissions by 45 per cent by 2030. The Government is calling it a carbon tax; the Opposition says their modelling is a bunch of dodgy numbers. Mark Butler is the Shadow Minister for Climate Change. Mark Butler welcome back to Breakfast.

MARK BUTLER: Morning Fran.

KELLY: There are a lot of figures flying around here, all of them big. The Prime Minister has been saying for days that Labor’s emissions target will cost $35 billion. The Australian reports today that Treasurer Josh Frydenberg says that analysis done by his ‘policy team’ shows the cost of your emissions reduction policy to business would come between $13 and $26 billion over ten years. The West Australian reports today that the total cost today will be between $29 billion and $56 billion. Does any of that fit with the costings that you’ve accessed?

BUTLER: Look it’s all rubbish, Fran. This is just a rolling series of weekly scare campaigns by the Government all based on dodgy modelling and buttressed often by blatant lies from the Government - like when Angus Taylor told your listeners Fran that the dodgy Fisher modelling was using energy storage figures from ARENA. A claim that ARENA denied blatantly, denied absolutely in Senate evidence only a few days after that.

This is just the latest scare campaign. I don’t know who Josh Frydenberg’s policy team is, but the Secretary of Prime Minister and Cabinet, Martin Parkinson, the head of the Australian public service, has assured us that no modelling of Labor’s policies have been done by the public service. It is just completely unclear where these numbers have come from.

KELLY: Yes but part of it is unclear because you don’t have any numbers. I mean if it is all rubbish what is the right amount?

BUTLER: Because the assumptions under this analysis are utterly ridiculous. They even make those clear, at least they are honest about those assumptions.

The first assumption is that not a single company in Australia does anything to reduce their emissions. Well that is just utterly ridiculous. And it is also assumes that offsets that companies need to buy cost four times what the Government assumes they’ll cost under their own modelling, their own so-called ‘Climate Solutions Fund’.

KELLY: Well the Government is looking at international credits, which under your scheme these large emitters are allowed to offset carbon emissions above the safeguard threshold they are able to offset them with international credits. The Government says looking years ahead these credits could range between $32/tonne and $62/tonne?

BUTLER: Why would business buy international credits if they are four times as expensive as domestic credits, which is what the Government has assumed in their own so-called ‘Climate Solutions Fund’? Why has every single business organisation lobbied the Labor Party furiously to include international credits? Because it would be something that stabilises offset figures, not increases them by a multiple of four.
KELLY: What do domestic credits cost?

BUTLER: Domestic credits are assumed to cost around $16/tonne by the Government’s own Climate Solutions Fund. This is obviously something they need to cost through the Parliamentary Budget Office because they are making taxpayers foot the bill of pollution reduction rather than the 250 or so largest polluters.

We’ve seen all these scare campaigns before. We saw them when the Labor Party had its Carbon Price Mechanism in – that lamb roasts would cost $100 and groceries would go up all across the household budget. None of it happened then, even when there was an upfront price on carbon, and none of it will happen this time.

Frankly I think the community is over this rolling series of weekly scare campaigns. They want a genuine debate about climate policy, not costing scare campaigns. What is going to happen to our energy system? What is going to happen to our transport system? That’s what people I’m meeting in the Australian community want a debate about.

KELLY: Okay can I just clarify something though, you are getting rid of the Emissions Reduction Fund so we won’t have those domestic credits, will there be a domestic credit scheme operating under Labor?

BUTLER: The Emissions Reduction Fund leverages off a credit system that we put in place, the Carbon Farming Initiative -

KELLY: So have you done an estimate on the cost of your scheme if you have a domestic credit scheme in place, do you have those kind of figures?

BUTLER: They will be the same; the only difference is whether the taxpayers pay for it or whether polluters pay for it. That is the only difference in the decision Tony Abbott made to remove our Emissions Trading Scheme. What that meant was that taxpayers needed to pay for these credits rather than the large polluters. So those credits will be available - if anything, they will be expanded because we’ll reinvigorate the Carbon Farming Initiative, which is something business has asked us to do, so there will be a much more liquid market. We’ve also said, in response to an ask from the business community, that we’d investigate the availability of electricity sector offsets and, as I said, international offsets will again be available to allow business to trade in the international carbon market in the same way they can trade in every other robust international market.

KELLY: And the logic you’re saying is they would only do that if those credits are cheaper -

BUTLER: This is why businesses lobbied us furiously about all of those things, which we’ve agreed to - not because that would increase the costs of offsets, but because it would reduce the costs.

KELLY: The bottom line is though there is no cost free way to reduce emissions that is the truth isn’t it, therefore if big companies are paying for emissions then we will all pay in some passed on way. Isn’t it time to have that discussion?

BUTLER: What we’ve done is we’ve said we would put in place limits on pollution by about 250 companies. How they meet those limits is a matter for them. If they can reduce their emissions by making changes to their operations, then that is something that wouldn’t impact anyone. If they can’t reduce their emissions in the way they are required to, then they will have to purchase offsets, but the idea that that would flow through to household budgets is an absolute fantasy.

We’ve had these scare campaigns when there was a actually a $23 price on carbon for every tonne of pollution by all of these companies, and that flow through didn’t happen then. Woolworths confirmed, for example, in testimony to the Parliament that only five out of their 40,000 grocery items shifted in price under the so-called ‘carbon tax’. So 99.99 per cent of grocery items in the economy did not shift at all when there was a $23 price on carbon. 

KELLY: Well the Government has looked at Woolworths, for instance, it has also looked at the pressure this would put on household name like Arnott’s and chicken producer Baida, which produce Steggels, would be hit under the plan. They have done those costings and they say they would be hit by up to $3.7 million and $8.2 million respectively.  

BUTLER: They haven’t done costings. Josh Frydenberg’s policy team, whoever that is, has dodged up some modelling based on some ridiculous assumptions. That is very different Fran, from doing serious modelling. We know from the head of the public service that no serious costings, no modelling has been done by the public service on Labor’s policy - so these costings should be utterly rejected by the community.

KELLY: The Government is going to keep putting these costings out, I think there is more modelling to come next week as I understand it, this puts pressure on you to come up with some kind of the estimate of the impact that this will have. Bill Shorten’s comeback is often the cost of taking no action on climate change. What is the cost of that, do you have that figure?

BUTLER: This is the thing. What the Government assumes is there is a ‘do-nothing’ option here. There is no do-nothing option. Business knows there is no do-nothing option - they are increasingly being told by their own investors and lenders, and by regulators like APRA and ASIC. Only a few weeks ago the Reserve Bank of Australia said that not doing anything on climate change is a serious risk to the stability of the global financial system and also something that would impact company director legal obligations, potentially arising in litigation in the courts.

Business doesn’t want to see all these scare campaigns in an election campaign that is supposed to be significantly about climate change. They want the major parties to debate what we are going to do. What is the plan in energy? What is the plan in large manufacturing and LNG? That is not what they are getting from the LNP.  

KELLY: Sure but at the same time, I mean very briefly we’ve only got a minute to the news, isn’t it true too that business would pass on costs? One of our listeners says that of course big polluters will get their money from you and I. There is no cost free way to cut emissions for any of us is there?

BUTLER: Business is going to have to cut its emissions. They recognise that. You’ll realise that these scare campaigns that are coming out on a weekly basis, they are being trumpeted by the Liberal Party and by a particular section of the media. They are not being trumpeted by business. You don’t hear business getting out and saying all of these things because they recognise that this is something we utterly have to do. What they want is a series of policy options that can ensure they can reduce their emissions in the lowest cost way possible. That is what the Labor Party is giving them.

KELLY: Mark Butler thanks very much for joining us.

BUTLER: Thanks Fran.

KELLY: Mark Butler is Shadow Climate Change Minister. We did invite the Energy Minister, or tried to invite the Energy Minister on the program but have had no response.