Sunday Agenda 16.08.09 - Nick Xenophon
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Sky News Sunday Agenda Nick Xenophon, Independent Senator for South Australia 16 August 2009
Interview with Nick Xenophon Sunday Agenda program, 16 August 2009 Helen Dalley: This week in parliament we saw the senate defeat the government’s carbon pollution reduction scheme with the Coalition and both independents voting against it. Now the real game begins with the government already expected to split the renewable energy target bill out of the ETS bill putting further pressure on the Opposition. Independent senator, Nick Xenophon, voted against it on the grounds that it will create too much economic disruption for too little environmental gain. He wants a rethink on the whole issue and to explain why he joins us this morning from Adelaide. Senator Nick Xenophon thanks very much for joining us. Nick Xenophon: A pleasure. Helen Dalley: Now, you voted against the government on its emissions trading scheme. We really need to get it straight whether it is emissions trading scheme or CPRS, this week. You’re pushing the Frontier model more. Now, if that isn’t accepted by the government what model would get your vote? Nick Xenophon: Well, let’s firstly look at what occurred in the senate last week. Every nongovernment senator voted against the government’s emissions trading scheme; none of them supported it; the Liberals, the Nationals, Family First, the Greens and myself all for different reasons I might add. But I think it is important we put this in perspective that I think it’s important that we actually look at an alternative way of getting deeper greenhouse gas reductions at a lower economic cost. And I blelieve that’s possible because the Frontier model indicates that you can be twice as green and 40 percent cheaper. And when you look at the people behind Frontier, Danny Price, their managing director, he was responsible for designing and implementing the world’s first mandatory emissions trading scheme in the form of New South Wales GGAS scheme for the Carr Government in New South Wales 10 years ago. So these people have an expertise in emissions trading in the markets. They know what goes on in the real world and it would be foolish for the government and others to ignore them. I mean I found it incredible, Helen, that before anyone had read the Frontier report it was being dismissed out of hand by a variety of government ministers and others in environment groups when they hadn’t even had an opportunity to see what was in the Frontier model. Helen Dalley: All right. Well, as we understand it it had been hawked around a little bit before it was presented. But just let me ask you I mean that model also offers a lot more compensation for big emitters. How is that good for the environment? Nick Xenophon: This is about the transition. I guess to me, and firstly can I say there was a discussion initially about the Canadian scheme, this is clearly a modification of that, in the sense that it uses electricity having a baseline and intensity model for electricity which is responsible for about 40 to 50 percent of emissions and in the absence of going down that path you would have very significant price rises for electricity for small and medium
Sunday Agenda
16 August 2009
Nick Xenophon
businesses which is bad for the economy and a lot of revenue churn which also has huge direct and indirect costs. On the issue of compensation my aim is to get the maximum reduction in greenhouse gases. If that involves compensation on a transitional basis while we transition from a high carbon to a low carbon economy to send the right investment signals there for businesses to invest in green technology in renewables, in low emission technology, then I think that’s a sensible approach, because if we don’t go down that path you will end up having a situation where we have an energy shortage in this country. I think you will have a huge consumer backlash if there is blackout after blackout. Helen Dalley: All right. The government now looks like it will give in and agree to at least split off the renewable energy target legislation from the CPRS. Now that’s an amendment the Coalition wanted. Will you vote with the government then on both bills now? Nick Xenophon: Well, in relation to the renewable energy target, that’s coming up this week, the Greens wanted it split off. The Liberals wanted it split off. I’ve wanted it split off. Helen Dalley: Everybody wanted. Nick Xenophon: Everybody wanted it split off except the government. I think they’ve bowed to the inevitable. And look to be fair to the government it would have been foolish for them to even consider splitting off the bills until the government’s emissions trading scheme was knocked out. So I expect that we will be dealing with it from tomorrow or Tuesday in terms of the senate agenda. But can I say I think that the bill could be improved even further. There’s a real question from the evidence that was presented to the senate . . . Helen Dalley: This is the renewable energy bill? Nick Xenophon: The renewable energy bill in terms of for instance renewable energy certificates that are given to air-pump water heaters and there are many who consider that to be completely unacceptable. It goes against the grain of what the whole renewable energy target is about. And I’ll be doing my bit to put up amendments to say that those air-pump water heaters are a rort in the context of a renewable energy target and they ought to be phased out very quickly. Helen Dalley: All right. So let’s just get this straight. You will be voting for the renewable energy bill if it is spilt off. Will that also put pressure on you and the others in the senate to vote for the CPRS? Nick Xenophon: Well, the CPRS won’t come back on for three months. It will then be a double dissolution trigger. But in the meantime I’m hoping that what will happen with, I hope with some bipartisan goodwill because this is the biggest economic issue and environmental issue that this nation has ever faced. We’ve got to get it right. And I think it’s important that the government looks seriously at some of the findings of Frontier Economics, who by the way use the same modelers, economic modelers, as the government did for Treasury and the Department of Climate Change’s model for their legislation. I think it’s important that we take the time in the next few weeks and months to sit down, see what common ground there is, and actually go for higher target as well because five percent, according to the scientists, simply won’t do it in terms of getting us down to a level of greenhouse gases that will actually make a difference in terms of climate change. Helen Dalley: All right. So, you’re saying that you won’t support – I know it comes back in three months, but you won’t support the other bill, the CPRS. There’s talk around this morning that the Coalition will be duty bound, that they’ll be pressured into voting for both bills, agreeing to both bills, because if they don’t vote for the CPRS as well as the renewable energy target bill, then the interim assistance package, the compensation that you want will
Sunday Agenda
16 August 2009
Nick Xenophon
not be as generous nor be given to as many industries as if both pieces of legislation were agreed to. Nick Xenophon: The two bills are separate in terms of, they can be hived off and obviously how this bill is split off, the renewable energy target bill, it’s important that it be a stand alone bill so it’s not contingent in any way whatsoever to the CPRS or the ETS bill that will be coming back into the senate in November. It needs to be a stand alone. The concept of renewable energy, of assisting renewable energy, is something that is quite distinct from an emissions trading scheme in the sense that there’re all there to achieve the same goal to reduce greenhouse emissions, but the two should be split in a way that they’re not contingent on each other. Helen Dalley: But don’t they need to in some way be contingent because until you get some carbon pricing in then the way into the renewable and making sure you’ve got 20 percent of your electricity being provided by renewables will be a cost on those producers. Nick Xenophon: Sure. Inevitably there will need to be a carbon price but in terms of what industry needs now, in terms of the investment certainty they’re getting that investment certainty by virtue of having renewable energy certificates. But in terms of the emissions trading bill what we need to look at there is to ensure that we have a scheme that can maximize the environmental benefits whilst minimizing the economic cost and that’s why I think it’s important. Helen Dalley: All right. Will you position, will it change from last week now that you know that the bills will probably be split off? Nick Xenophon: My position is to support the renewable energy bill and I believe that it can be improved with amendments. But in relation to the emissions trading bill if the government sticks to its current scheme in good conscience I can’t support that when there’s compelling evidence to the contrary that you could have a much more efficient scheme environmentally with a much lower economic cost then why wouldn’t you go down that path? And I would hope that the government would think about it. Helen Dalley: All right. Do you think therefore it’s more likely that a deal will be done to win agreement from the Coalition than perhaps from you and Steve Fielding and the Greens? Maybe you won’t even have a place at the negotiating table. Nick Xenophon: Well, look, I think I’ve got to place somewhere given that I jointly commissioned the research with the Frontier Economics model with the Coalition in that I think that we need to get this right. But in terms of the raw arithmetic of it the fact is that the government needs all seven cross-benchers to get this legislation up. It seems that Senator Fielding, and he’s entitled to his view, is a climate change skeptic. In terms of anthropogenic climate change, he has quite a different view from the view I have and many in the Liberal Party and of course all of the Greens. So I think that if the government wants to get this through they need to bring the Coalition, or at least the Liberal Party, on side. Helen Dalley: All right. Do you think it still could become a double dissolution trigger and the government would have to go to an early election and put it to the people? Nick Xenophon: Well, it could. I mean I think there are two schools of thought in the Liberal Party from what I’ve been able to gather. Some want to avoid it at all costs whereas there are others who say we should fight an election on this. So that’s their attitude. I’d like to think that we should get this right. Helen, the problem is that to transform Australia from a high carbon to a low carbon economy it will involve billions and billions dollars worth of investment. The best way to get investment certainty is to have some bipartisan support on
Sunday Agenda
16 August 2009
Nick Xenophon
this. You won’t have businesses making those long term investment decisions that go way beyond one, or two, or three election cycles unless they know there’s some bipartisanship in relation to the whole issue of emissions trading and renewable energy. And that’s why I think it’s important that both the government and the Opposition do some serious talking and also understand the imperative of going for meaningful environmental targets, otherwise by ignoring the scientists we’re ignoring the main goal here and that is to reduce the risks of catastrophic climate change. Helen Dalley: All right. Well the argy-bargy begins I guess. I want to talk very briefly about some other issues the senate should be dealing with including means testing the private health insurance rebate. Health Minister, Roxon, has had some talks with you, as we understand, and the others in the senate. Will you support her changes on that issue or will you move some amendments? Nick Xenophon: I’m not convinced by the government’s changes for a number of reasons. Firstly, it was an absolutely clear election commitment by Kevin Rudd as Opposition leader that they would not be changing that at all in terms of the private health insurance rebate. Secondly, as part of the negotiations I had with the health minister a few months ago over the Medicare surcharge thresholds the government agreed to have a Productivity Commission inquiry into the mix of the public and private health systems. For the first time we’ll know in a few months time how the systems work, how the systems interact with each other. I think it would be foolish to go down that path of changing the rebate until we know the Productivity Commission says. So basically I can’t support the government’s bill until we see what the Productivity Commission says about the public and private health systems. Helen Dalley: The changes to the Medicare safety net, as you mentioned, the cap which would see much higher out-of-pocket expenses for procedures like IVF. Now what’s going to happen there? What are you going to be pushing for? Nick Xenophon: Look, in relation to IVF I think the government’s made a fundamental mistake here. One is six couples will have a problem in having kids. Everyone knows someone who’s had a child via IVF. And what the government is proposing to do will make it much more difficult for families that IVF will be something for the wealthy and the rest of the community will have to miss out and I find that fundamentally unfair from an equity point of view. And also it’s a false economy of the worst type because what we know is that if we make couples pay more they’ll end up having multiples cycles, they’ll end up having two or three embryos implanted. There’s therefore an increased risk of complications, of intensive neonatal care for infants that are born prematurely and let alone the anguish that that causes to those families. So I would urge the government to reconsider what it’s doing in relation to this, given the savings are relatively paltry when you consider the potential human costs and the unintended consequences of this legislation. Helen Dalley: Okay. Nick Xenophon, we’ll leave it there. We’ll be watching with interest in the senate. Thank you. Nick Xenophon: Thanks, Helen.
Sunday Agenda
16 August 2009
Nick Xenophon
Interview with Nick Xenophon Sunday Agenda program, 16 August 2009 Helen Dalley: This week in parliament we saw the senate defeat the government’s carbon pollution reduction scheme with the Coalition and both independents voting against it. Now the real game begins with the government already expected to split the renewable energy target bill out of the ETS bill putting further pressure on the Opposition. Independent senator, Nick Xenophon, voted against it on the grounds that it will create too much economic disruption for too little environmental gain. He wants a rethink on the whole issue and to explain why he joins us this morning from Adelaide. Senator Nick Xenophon thanks very much for joining us. Nick Xenophon: A pleasure. Helen Dalley: Now, you voted against the government on its emissions trading scheme. We really need to get it straight whether it is emissions trading scheme or CPRS, this week. You’re pushing the Frontier model more. Now, if that isn’t accepted by the government what model would get your vote? Nick Xenophon: Well, let’s firstly look at what occurred in the senate last week. Every nongovernment senator voted against the government’s emissions trading scheme; none of them supported it; the Liberals, the Nationals, Family First, the Greens and myself all for different reasons I might add. But I think it is important we put this in perspective that I think it’s important that we actually look at an alternative way of getting deeper greenhouse gas reductions at a lower economic cost. And I blelieve that’s possible because the Frontier model indicates that you can be twice as green and 40 percent cheaper. And when you look at the people behind Frontier, Danny Price, their managing director, he was responsible for designing and implementing the world’s first mandatory emissions trading scheme in the form of New South Wales GGAS scheme for the Carr Government in New South Wales 10 years ago. So these people have an expertise in emissions trading in the markets. They know what goes on in the real world and it would be foolish for the government and others to ignore them. I mean I found it incredible, Helen, that before anyone had read the Frontier report it was being dismissed out of hand by a variety of government ministers and others in environment groups when they hadn’t even had an opportunity to see what was in the Frontier model. Helen Dalley: All right. Well, as we understand it it had been hawked around a little bit before it was presented. But just let me ask you I mean that model also offers a lot more compensation for big emitters. How is that good for the environment? Nick Xenophon: This is about the transition. I guess to me, and firstly can I say there was a discussion initially about the Canadian scheme, this is clearly a modification of that, in the sense that it uses electricity having a baseline and intensity model for electricity which is responsible for about 40 to 50 percent of emissions and in the absence of going down that path you would have very significant price rises for electricity for small and medium
Sunday Agenda
16 August 2009
Nick Xenophon
businesses which is bad for the economy and a lot of revenue churn which also has huge direct and indirect costs. On the issue of compensation my aim is to get the maximum reduction in greenhouse gases. If that involves compensation on a transitional basis while we transition from a high carbon to a low carbon economy to send the right investment signals there for businesses to invest in green technology in renewables, in low emission technology, then I think that’s a sensible approach, because if we don’t go down that path you will end up having a situation where we have an energy shortage in this country. I think you will have a huge consumer backlash if there is blackout after blackout. Helen Dalley: All right. The government now looks like it will give in and agree to at least split off the renewable energy target legislation from the CPRS. Now that’s an amendment the Coalition wanted. Will you vote with the government then on both bills now? Nick Xenophon: Well, in relation to the renewable energy target, that’s coming up this week, the Greens wanted it split off. The Liberals wanted it split off. I’ve wanted it split off. Helen Dalley: Everybody wanted. Nick Xenophon: Everybody wanted it split off except the government. I think they’ve bowed to the inevitable. And look to be fair to the government it would have been foolish for them to even consider splitting off the bills until the government’s emissions trading scheme was knocked out. So I expect that we will be dealing with it from tomorrow or Tuesday in terms of the senate agenda. But can I say I think that the bill could be improved even further. There’s a real question from the evidence that was presented to the senate . . . Helen Dalley: This is the renewable energy bill? Nick Xenophon: The renewable energy bill in terms of for instance renewable energy certificates that are given to air-pump water heaters and there are many who consider that to be completely unacceptable. It goes against the grain of what the whole renewable energy target is about. And I’ll be doing my bit to put up amendments to say that those air-pump water heaters are a rort in the context of a renewable energy target and they ought to be phased out very quickly. Helen Dalley: All right. So let’s just get this straight. You will be voting for the renewable energy bill if it is spilt off. Will that also put pressure on you and the others in the senate to vote for the CPRS? Nick Xenophon: Well, the CPRS won’t come back on for three months. It will then be a double dissolution trigger. But in the meantime I’m hoping that what will happen with, I hope with some bipartisan goodwill because this is the biggest economic issue and environmental issue that this nation has ever faced. We’ve got to get it right. And I think it’s important that the government looks seriously at some of the findings of Frontier Economics, who by the way use the same modelers, economic modelers, as the government did for Treasury and the Department of Climate Change’s model for their legislation. I think it’s important that we take the time in the next few weeks and months to sit down, see what common ground there is, and actually go for higher target as well because five percent, according to the scientists, simply won’t do it in terms of getting us down to a level of greenhouse gases that will actually make a difference in terms of climate change. Helen Dalley: All right. So, you’re saying that you won’t support – I know it comes back in three months, but you won’t support the other bill, the CPRS. There’s talk around this morning that the Coalition will be duty bound, that they’ll be pressured into voting for both bills, agreeing to both bills, because if they don’t vote for the CPRS as well as the renewable energy target bill, then the interim assistance package, the compensation that you want will
Sunday Agenda
16 August 2009
Nick Xenophon
not be as generous nor be given to as many industries as if both pieces of legislation were agreed to. Nick Xenophon: The two bills are separate in terms of, they can be hived off and obviously how this bill is split off, the renewable energy target bill, it’s important that it be a stand alone bill so it’s not contingent in any way whatsoever to the CPRS or the ETS bill that will be coming back into the senate in November. It needs to be a stand alone. The concept of renewable energy, of assisting renewable energy, is something that is quite distinct from an emissions trading scheme in the sense that there’re all there to achieve the same goal to reduce greenhouse emissions, but the two should be split in a way that they’re not contingent on each other. Helen Dalley: But don’t they need to in some way be contingent because until you get some carbon pricing in then the way into the renewable and making sure you’ve got 20 percent of your electricity being provided by renewables will be a cost on those producers. Nick Xenophon: Sure. Inevitably there will need to be a carbon price but in terms of what industry needs now, in terms of the investment certainty they’re getting that investment certainty by virtue of having renewable energy certificates. But in terms of the emissions trading bill what we need to look at there is to ensure that we have a scheme that can maximize the environmental benefits whilst minimizing the economic cost and that’s why I think it’s important. Helen Dalley: All right. Will you position, will it change from last week now that you know that the bills will probably be split off? Nick Xenophon: My position is to support the renewable energy bill and I believe that it can be improved with amendments. But in relation to the emissions trading bill if the government sticks to its current scheme in good conscience I can’t support that when there’s compelling evidence to the contrary that you could have a much more efficient scheme environmentally with a much lower economic cost then why wouldn’t you go down that path? And I would hope that the government would think about it. Helen Dalley: All right. Do you think therefore it’s more likely that a deal will be done to win agreement from the Coalition than perhaps from you and Steve Fielding and the Greens? Maybe you won’t even have a place at the negotiating table. Nick Xenophon: Well, look, I think I’ve got to place somewhere given that I jointly commissioned the research with the Frontier Economics model with the Coalition in that I think that we need to get this right. But in terms of the raw arithmetic of it the fact is that the government needs all seven cross-benchers to get this legislation up. It seems that Senator Fielding, and he’s entitled to his view, is a climate change skeptic. In terms of anthropogenic climate change, he has quite a different view from the view I have and many in the Liberal Party and of course all of the Greens. So I think that if the government wants to get this through they need to bring the Coalition, or at least the Liberal Party, on side. Helen Dalley: All right. Do you think it still could become a double dissolution trigger and the government would have to go to an early election and put it to the people? Nick Xenophon: Well, it could. I mean I think there are two schools of thought in the Liberal Party from what I’ve been able to gather. Some want to avoid it at all costs whereas there are others who say we should fight an election on this. So that’s their attitude. I’d like to think that we should get this right. Helen, the problem is that to transform Australia from a high carbon to a low carbon economy it will involve billions and billions dollars worth of investment. The best way to get investment certainty is to have some bipartisan support on
Sunday Agenda
16 August 2009
Nick Xenophon
this. You won’t have businesses making those long term investment decisions that go way beyond one, or two, or three election cycles unless they know there’s some bipartisanship in relation to the whole issue of emissions trading and renewable energy. And that’s why I think it’s important that both the government and the Opposition do some serious talking and also understand the imperative of going for meaningful environmental targets, otherwise by ignoring the scientists we’re ignoring the main goal here and that is to reduce the risks of catastrophic climate change. Helen Dalley: All right. Well the argy-bargy begins I guess. I want to talk very briefly about some other issues the senate should be dealing with including means testing the private health insurance rebate. Health Minister, Roxon, has had some talks with you, as we understand, and the others in the senate. Will you support her changes on that issue or will you move some amendments? Nick Xenophon: I’m not convinced by the government’s changes for a number of reasons. Firstly, it was an absolutely clear election commitment by Kevin Rudd as Opposition leader that they would not be changing that at all in terms of the private health insurance rebate. Secondly, as part of the negotiations I had with the health minister a few months ago over the Medicare surcharge thresholds the government agreed to have a Productivity Commission inquiry into the mix of the public and private health systems. For the first time we’ll know in a few months time how the systems work, how the systems interact with each other. I think it would be foolish to go down that path of changing the rebate until we know the Productivity Commission says. So basically I can’t support the government’s bill until we see what the Productivity Commission says about the public and private health systems. Helen Dalley: The changes to the Medicare safety net, as you mentioned, the cap which would see much higher out-of-pocket expenses for procedures like IVF. Now what’s going to happen there? What are you going to be pushing for? Nick Xenophon: Look, in relation to IVF I think the government’s made a fundamental mistake here. One is six couples will have a problem in having kids. Everyone knows someone who’s had a child via IVF. And what the government is proposing to do will make it much more difficult for families that IVF will be something for the wealthy and the rest of the community will have to miss out and I find that fundamentally unfair from an equity point of view. And also it’s a false economy of the worst type because what we know is that if we make couples pay more they’ll end up having multiples cycles, they’ll end up having two or three embryos implanted. There’s therefore an increased risk of complications, of intensive neonatal care for infants that are born prematurely and let alone the anguish that that causes to those families. So I would urge the government to reconsider what it’s doing in relation to this, given the savings are relatively paltry when you consider the potential human costs and the unintended consequences of this legislation. Helen Dalley: Okay. Nick Xenophon, we’ll leave it there. We’ll be watching with interest in the senate. Thank you. Nick Xenophon: Thanks, Helen.
Sunday Agenda
16 August 2009
Nick Xenophon
