December 07, 2016





KRISTINA KENEALLY: I’m sure you want to tell us that the Government has utterly back flipped on carbon pricing and the Prime Minister has thrown Josh Frydenberg under a bus. Is that your main message today?


MARK BUTLER MP, SHADOW MINISTER FOR CLIMATE CHANGE AND ENERGY, MEMBER FOR PORT ADELAIDE: Well it is and it is an incredibly stark message, with the brutality in which the Prime Minister threw Josh Frydenberg under the bus this morning. What it says about good, sensible policy making is the more important long-term message.


This has been a model which has been worked up for a considerable period of time now. It was proposed by the Energy Market Commission to the Government last year, back in 2015, it has been endorsed since that time by a number of bodies: the peak electricity bodies, the Climate Change Authority (which has been re-constituted by the Liberal Government), by the CSIRO, group after group.


Indeed as we understand it has been worked up as a model to be presented to the COAG leaders meeting on Friday. Work done, I’m sure, with the authority of the Prime Minister and the Premiers.


So to see the Prime Minister walkaway, so quickly after a bit of gunshot by Cory Bernadi and Tony Abbott is an incredibly depressing signal if you want good, sensible discussion on climate change policy next year.


LAURA JAYES: But you have the emissions reduction scheme, which is working with that safeguard mechanism that the Government already flagged it was going to tighten. We have Matt Canavan and Josh Frydenberg in recent days admitting that there is an effective price on carbon in a way, and that is below $12 a ton. Mark Butler, the Terms of Reference for this review hasn’t actually changed, it will still look at how to use international credits. That is something Labor supports, so why would you not welcome that, and the sector by sector approach the Government’s flagged it will take?


BUTLER: We support a sector by sector approach. But the approach of the Government is to do nothing in each sector of the economy. The Terms of Reference do nothing about land clearing for example, which was returned with gusto over the last few years -


JAYES: Can I just ask about the sector by sector approach, would –


BUTLER: I was just going through the sector by sector approach.


JAYES: Sorry, but can we just start with the energy sector. Would Labor support an ETS, the ability to buy international credits once you know energy companies do reach a particular baseline? Because of course someone has to pay for international credits. How would Labor make that work, so the price wasn’t passed onto consumers?


BUTLER: Well we took to the last election the policy that Josh Frydenberg said they were considering on Monday, and what Malcolm Turnbull has asked COAG to consider this Friday.


We took that policy to the last election because it had such broad support in the energy sector. It is a baseline and credit scheme that effectively has a closed internal market for electricity generators so that the overs and unders, the credits and the penalties, are worked out within the wholesale market. The net outcome for consumers is a neutral one because at the end of the day it all evens out once the electricity is put into the retail market. The Energy Market Commission which worked up this model said that this would have the least impact on consumers; something that the CSIRO and peak energy bodies confirmed yesterday.


This is the policy Labor took. We took it after very deep consultations with the energy sector but also with big energy users. All of whom have come and said this is the policy for Australia’s future. The announcement earlier this week about the review was very disappointing, but the one glimmer of hope in that announcement was the Government might be considering this proposal that has such broad support from the business community.


Even though Malcolm Turnbull has asked for this to be presented to the COAG meeting on Friday, at the first whiff of gunshot he’s walked away from it just because Cory Bernadi said some nasty things about him.


KENEALLY: Mark Butler, you make a compelling argument about the backflip. It’s hard to walk away from that argument but Laura Jayes is right, the Terms of Reference haven’t been changed, The Government did not include any explicit language in the Terms of Reference about an ETS. Would you be arguing that the Government should change their Terms of Reference that they should be explicit, and present that to the Premiers on Friday?


BUTLER: Well the problem is the language around the release of the Terms of Reference.


Firstly, it says from the Prime Minister and from Josh Frydenberg that the Government will not consider any policy to support renewable energy projects beyond 2020; what that effectively means is any projects proposed to be built beyond about 2018 or 2019. That is our fundamental concern with the review.


They then had this proposal, which was at least something to help transition the energy sector. But they’ve pulled that now because Cory Bernadi said some nasty things about it.


There is nothing in land clearing; there is nothing to cap carbon pollution, which has started to rise again over the last 12 to 18 months after coming down for pretty much a decade in this country. We are now the only major advanced economy where carbon pollution levels are going up and not coming down.


So it is really the language surrounding some pretty bland terms of reference, which they often are drawn up in the bureaucracy, but it was the language around it from the Prime Minister and from the Minister that gave us such little confidence that this Government intends to do little if all about climate change policy.


JAYES: But Mark Butler, Labor has a stated 50 per cent renewable energy policy by 2030. You still haven’t detailed how you would actually achieve that and certainly haven’t detailed how you would do that at least cost. That is a big concern isn’t it?


BUTLER: What we said is if we were elected in July, and unfortunately we weren’t, but if we were elected in July we would already have underway a review by a body like the Climate Change Authority to recommend to the Parliament the best way in which to achieve the 50 per cent by 2030.


I’ve said for example –


JAYES: Therefore if you are waiting for recommendations though why are you targeting an arbitrary limit, or cap on 50 per cent. Why are you putting a target at all if you don’t have any of that advice?


BUTLER: Well this is how things work Laura. There are 173 countries around the world that have renewable energy targets, well beyond 2020-


JAYES: But when you look at the result of the GDP figures today this is also one of Labor’s core policies in achieving growth in Australia as well. It’s a policy without a lot of detail.


BUTLER: And as I said we would have recommendations from the expert body. This is what was proposed to us as a process from the electricity industry itself and from big energy users.


There has to be a well thought out process that has public submissions, hearings, draft reports and the like. That is how Government works in this country. And then propose a well thought out model to the Parliament to debate and then to finalise probably by about 2018, was the advice we got from the industry.


Now probably what we would see from that is pressure from the stakeholders, industries and so on, to start to look at reverse auction style models. You see that in the ACT, in North America, through Asia, the Middle East, Europe and the United Kingdom now, as the best way to have renewable energy projects built at the lowest possible cost.


But what we do know the Energy Australia Managing Director said only a few hours ago, this electricity System in Australia needs a plan to modernise. The fleet that we have, the gas and coal-fired plant is still aged. AGL, the biggest company in Australia said that three quarters of all thermal plants (coal and gas fired) are already operating beyond the end of their design life. That’s why you are seeing closures like Hazelwood that was built in the 1960’s. This Government has no plan whatsoever about how to deal with that transition. Ensure it is smooth; ensure that supply is still reliable, it’s affordable and also that it complies with our international commitments around carbon pollution.


KENEALLY: Mark Butler, we are running out of time but before we let you go we have to ask you about Kevin Rudd. He is out there today taking what is being interpreted as a thinly veiled swipe at Bill Shorten; saying that Labor needs to rise above union based factions if it wants to win the next election. What is your response to that?


BUTLER: Well I’m not sure it is a swipe at Bill Shorten at all. I’ve read the oped, what it was is a call for democratistion for our party and in that aspect I strongly support what kevin has said. The most significate form of democratisation in my long time is this party was Kevin pushing forward the idea that the leader of the Parliamentary Labor Party at the Federal Level would be selected from a ballot including members’ votes.


That was an extraordinary reform that I think has worked very well. I got elected as Party President last year on a platform of continuing to argue for more democratisation. Similar to the type Kevin talks about in his oped. For example, having members elect our senate teams. I think that is something that needs to be addressed. It’s something that Bill Shorten has supported in his speeches since becoming party leader as well.


People may look to the personality politics of Kevin’s oped today but I think the main message about democratising our party was a really important one.


JAYES: Are you worried about something along the lines of a Jeremy Corbin-esque situation that you might find yourself in down the track?


BUTLER: Well again I think Kevin made the very strong point that the model we have here in Australia where half of the vote is taken from the Parliamentary Caucus (so the members of caucus, the members and senators) and half from the members of the party, avoids the situation you see now in the British Labor party where you have a leader very strongly supported by the members but opposed by the caucus that he is supposed to be leading.


I think we have got the balance right, and Kevin made that point. But there is more we need to do to democratise our party.


KENEALLY: Alright Mark Butler we’re going to leave that there, thanks for joining us on To The Point.