Sky News Lunchtime Agenda

TOM CONNELL: I might just start with you Stephen Jones on this issue of climate and the targets that are being set at the moment.

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Labor says that it essentially wants to lead the debate on this, you're already talking turkey on a target for the RET, are we going to hear soon a target that Labor has in mind? We've got all sorts of studies out there available to look at for the post 2020 target or even a ramp up of the 2020 target itself.

SHADOW ASSISTANT MINISTER FOR HEALTH, STEPHEN JONES: Firstly, we've got to deal with the issues with the RET because this is the thing that the Government really has done enormous damage to. We've seen a capital strike, we're seeing jobs being lost in the renewables energy market, so first thing's first - we've got to sort this out. It is up to the Government to explain the sense or lack of sense behind its own policy, but what we know is more and more questions are being asked domestically and overseas. The people that we are negotiating with to get bilateral and international agreements with are starting to focus on what the Government is doing and the big gap between its rhetoric and the reality. Frankly, things are starting up and -

CONNELL:
Just to jump in, there are also focussing on what is a bipartisan target of five per cent reduction by 2020 - is Labor going to soon lock in something, try and lead the debate on this, rather than wait for the Government to set something and then criticise it? Come up with your own number?

JONES: Well we've already got a policy that we took into the last election. It was a bipartisan set of numbers, the now Government agreed to the same figures. The difference is that we had a credible policy about how to get there. We believe that the best way to get there is the most economically efficient way. In complete contrast to the Government, whoever wins the results of this tender that they've got in at the end of this week, what we know is that money - millions of dollars worth of taxpayers' money - is going to be handed out to big polluters. Everybody knows that that is the most ineffective way to go about it.

CONNELL: Paul Fletcher the Emissions Reduction Fund is part of Direct Action - if we do get to this point in the near term of a 20 per cent target or 25 per cent target, do you think that Direct Action can do that? Would it be affordable?

PARLIAMENTARY SECRETARY FOR COMMUNICATIONS, PAUL FLETCHER: Well let's just be clear about where we are Tom, there is a bipartisan commitment to a five per cent reduction on 2000 emissions levels by 2020. We are on track to achieve that and the primary policy instrument that the Abbott Government is using to achieve that is the $2.55 billion Emissions Reduction Fund. This was the policy that we took to the 2010 and 2013 election, endorsed at that election. The first auctioning process actually occurred last week and this is a competitive reverse auction process to get the most cost-effective carbon abatement and we are very confident that that is going to achieve - 

CONNELL: We are talking 2015 now, you took that policy to 2013 and we are already seeing some of our major trading partners set more ambitious goals. Are we ready to do that with this policy? We know what that is going to achieve, we know that the Government is saying that it is going to do five per cent, what about 15? What about 20?

FLETCHER: Well let's be clear about where we are in terms of the international process. So there is a major conference in Paris at the end of this year and what the Australian Government has said is that we will announce a target for beyond 2020 later this year. There is a meeting in Bonn around the middle of the year and just last month a significant discussion paper was issued by the Prime Minister, by the Minister for the Environment and by the Foreign Minister, setting out the process that we are going through and seeking submissions from the community about the approach we should take in relation to a target beyond 2020. We need to look at a range of issues. We need to look at what other countries are doing, we also need to look at how we are going. Now we believe we are well on track to achieve the five per cent reduction on 2000 levels by 2020, Australia is a country -

CONNELL: You are talking about what other countries are doing, so they are shifting though aren't they? We have seen this deal between the US and China, the two biggest emitters in the world, this action that the Government has long spoken about wanting to see before we moved - well it's already happening.

FLETCHER: Well we are going through a careful process of understanding key factors that are relevant to the offer that we will be making. Now those factors include what other countries are doing and I emphasise doing as opposed to saying. Because Australia has a very good track record of delivering on what we said we would do in relation to reductions in emissions. Our performance in Kyoto and in the UN Framework Convention on Climate Change - we need to continue to maintain our track record but we need to understand what the rest of the world is doing and we need to understand how things are travelling in our own economy and in our own country. But I do emphasise we've got a policy instrument in the Emissions Reduction Fund that will be effective to get the promised reductions and we have commenced consultation on what our new target will be.

CONNELL: If I could just direct you to nuclear energy side of this. South Australia is beginning a Royal Commission into this, is it something that you are comfortable with as part of the energy mix here in Australia?

JONES: Look I'm very comfortable with Premier Weatherill conducting a Royal Commission. I personally think it will come up with the same answer that previous studies have done into the viability of a nuclear energy industry here in Australia. You might look at it if you didn't have an abundant supplies of natural gas, abundant supplies of solar and geothermal and wind, the sort of benefits that other countries that have had to look to nuclear don't have. So more than comfortable at having another look at the science but I think it will end up in the same position. 

CONNELL: We will take that as a no vote from Stephen Jones. If I could move onto the Budget, Paul Fletcher, because we've had the Treasurer Joe Hockey today quoted as saying that he will shrink the deficit. He is talking though about shrinking it as a percentage of GDP, the indication there perhaps not in real dollar terms. Is that something voters are going to buy?

FLETCHER: Well what you are going to see as we've said is a consistent movement, a consistent reduction in the deficit over the coming years. Now it is very standard, very much standard practice, to measure the deficit in terms of the percentage of GDP, that is just a completely standard practice. But I'm just amazed by the extraordinary hypocrisy of Bill Shorten and Chris Bowen even talking about this issue when Labor has the most atrocious record on budget management over the six years of the Rudd-Gillard-Rudd government. Over $200 billion accumulative deficit and -

CONNELL: We will get to that in a second, if I could just ask you about the Budget we are about to see Paul Fletcher. With some of the revenue write downs we are about to see $40 billion in the next couple of years, so no reduction in deficits in dollar terms -you still think that could be a pass mark if you measure it against percentage of GDP?

FLETCHER: What you are going to see from the Abbott Government is a steady improvement in the Budget bottom line year after year. The Liberal/National Government can always be trusted to do a better job of Budget management than the rank incompetence we saw from Labor the last six years. Frankly if Bill Shorten were the Prime Minister now the budget would be in a terrible mess. We are focussed on -

CONNELL: But if that number continues though and it doesn't drop. If I could just ask you one more time - if it doesn't drop in dollar terms do you think that would still be a pass mark against this other measure?

FLETCHER: I'm not going to get into agreeing to particular numbers you are putting in front of me, you'll have to wait and see as the Treasurer said what the numbers are on Budget night. But what I will say is - you will see a steady improvement in the Budget bottom line year after year and you can always trust a Liberal/National Government to do a better job on budgetary management than the rank incompetence of Labor.

JONES: Tom what you can't -

CONNELL: When it comes to Labor's plans, I'll just direct you towards this because we know that Labor has spoken a lot about taxing multinationals more - $7 billion over a few years there. But you are also opposing a lot of the savings measures, pension scaling back, $85 billion in school and hospital funding, it's hard to see Labor making these promises and saying that they will get the Budget back into surplus anytime soon.

JONES: We will close down the tax loopholes that -

FLETCHER: Come on Stephen! This will be good -

JONES: We will close down the tax loopholes, we will ensure that as we bring the Budget back into surplus we will do it by looking after the people who need government services the most. We won't do it by attacking Medicare, we won't do it by attacking our universities or our school system. The problem that Paul has and why he is making so much noise and why he wants to talk about us instead of themselves is that there is a yawning gap between what the Government said they were going to do before the election and the reality of what they have done after the election. The reason they are in so much strife now is -

CONNELL: Well [inaudible] -

FLETCHER: What about the $5 billion of measures that -

JONES: I've listened to you in silence Paul and the problem that they have is that they went around before the election saying we can increase spending and cut taxes and bring the Budget back into surplus in our first year. Now everybody knew that that wasn't possible, unfortunately nobody called them on it. Well now we are calling them on it and we are saying do what you promised or get out of the way and let another team have a go.

FLETCHER: Frankly nobody believes that Labor is the slightest bit serious about reducing the deficit. If they were serious about reducing the deficit, if they were serious they would not have walked away from $5 billion of budget reduction measures which the Labor party took to the last election as measures that they said they were going to implement. They have subsequently refused to pass these since they've been in opposition, so if we want to have a -

CONNELL: Stephen Jones if I could just - 

FLETCHER: We need to get Labor to step up and actually take some action on supporting the measures - 

JONES: We've already promised -

CONNELL: Stephen Jones if I could just ask you, it seems hard to take this line that you want to keep the Government accountable to its broken promises so no cuts to pension in future years or schools and hospitals. Tens of billions of dollars, yet at the same time you are critical of bringing the Budget back to surplus, you are not going to be able to both oppose all of those savings and get it done any quicker surely?

JONES: Well what we are not going to do Tom - and nobody could be blaming us for this - is assist the Government in breaking these promises. I mean what responsible opposition would go to an election asking - 

FLETCHER: Honour the promises you took to the last election -

JONES: [inaudible] He makes a lot of noise, is this a debate or this a monologue from Paul? We will not help you break your promises Paul, it is as simple as that and you should be doing what you promised to do.

CONNELL: On that note I think we are out of time, it is certainly setting the scene for what we can expect in three weeks’ time. Stephen Jones, Paul Fletcher thank you for your time today. 

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