TRANSCRIPT - FIRST EDITION WITH PETER STEFANOVIC

E&OE

Subject/s: UN Report on Climate Change, Housing Policy, Government Mechanisms

PETER STEFANOVIC: And the UN has warned humanity is on thin ice during the release of a major climate report which calls on the world's leading economies to fast track net zero targets to 2040. Let's go to Canberra, joining us live, the manager of opposition business, Paul Fletcher. Paul, good morning to you. So this comes off the back of the latest climate report. The UN issuing a dire warning there. As you just heard. Now, as the government debates safeguards mechanisms, what's your reaction to that report overnight? Because it kind of sounds like we're in the Last Chance Saloon here.

PAUL FLETCHER: Well, good morning and good to be with you. Clearly, the Liberal Party is committed to net zero by 2050. So, the issue is not the objectives, but the mechanism by which we get there. You know, when we were in government, we achieved a reduction of 20% on 2005 levels by 2020. We're now debating, for example, in the Parliament, the safeguard mechanism which in effect amounts to a carbon tax. If companies, the 215 companies, that would be targets of it don't meet the requirement to reduce emissions by 4.9% a year, each year, then they end up paying effectively a $75 carbon tax. And of course, one of the environmental consequences of that is that could cause activity like steel making concrete and so on, to move offshore to countries which don't have the same environmental standards in Australia. I think what the IPCC report reminds of if this is a global challenge. Every country needs to play its part. That was certainly our focus when we were in government and of course we took to the UN the nationally determined contribution of net zero by 2050. What's important is that we have clear and achievable mechanisms and we do have in the Labor Party a government that's very keen on symbolism and bold promises, but they're often very, very weak on the mechanisms of how you get there. And so that's one of the questions certainly we're debating when it comes to the safeguards mechanism. It's also a similar issue we're seeing in terms of housing at the moment.

STEFANOVIC: Okay. We will get to that in a sec. Just on to the UN report, though. The humanity is on thin ice. Do you think it's that bad?

FLETCHER: Look, I think the scientific consensus in relation to climate change and the need to reduce emissions is well understood. The challenge then for policymakers in Australia is what are the achievable, deliverable processes to get to the outcome. And I'll give you one example. It's well accepted that natural gas is a key transition fuel, so that we can reduce our reliance on coal. In fact, I think last year in Australia, the percentage of energy that came from coal in the national electricity market was in the mid 50s in percentage terms. So we're still very significant uses of coal. Natural gas has a critical role, but we're seeing both a federal Labor government and state Labor governments make it very difficult to bring on stream new natural gas supply and so the important thing is to have a clear focus on what the plan is and then the mechanisms and certainly natural gas is a critical role to play as the trademark.

STEFANOVIC: The UN has argued the G20 nations, which includes us, should now be fast tracking our net zero targets to 2040. So that's ten years earlier. Would you support such a move?

FLETCHER: Look, I'm not going to get into detailed responses to a extremely…

STEFANOVIC: Doesn't need to be detailed, yes or no.

FLETCHER: That's just issued overnight. I'll leave these matters, first of all, to the government. And secondly, if they will, if and when, what you know, in the normal way, as the government proposes policies, then the opposition will consider them and respond to them. But I'm not going to engage in responding.

STEFANOVIC: Do you think it's even possible, though? I mean, because many people argue that it's going to be impossible to get to net zero by 2050. So bringing it forward ten years given that so much technology hasn't even been invented yet, do you have doubts about whether that can actually even be achieved?

FLETCHER: Well what I'd say is a clear focus for the Coalition has always been what are the practical mechanisms to achieve these things and how do you get the private sector, which is absolutely critical, going through these processes? That's why we had a clear focus on technology, not taxes. And we have a government right now which has, you know, a strong appetite for symbols, grand, symbolic gestures. Our focus has always been methodically what are the mechanisms within the economy that will get these outcomes and we'll continue to engage actively with it long term.

STEFANOVIC: Just the final point on this one, because China is continuing to accelerate its plans for coal expansion. So does that in that sense, does this report and its future wishes lose credibility?

FLETCHER: Well, again, it's a very lengthy and detailed report. I think the contents of it need to be analysed and tested. But what is clear is that, as we've always known, this is a global challenge and it needs every country to play its part. China needs to play part and every other country needs to play.

STEFANOVIC: Is China playing its part?

FLETCHER: Well those are questions that properly will need to be analysed after a careful study of what is a very detailed report.

STEFANOVIC: I mean, people will say, well, why do we need to do all of this if China isn't?

FLETCHER: I think that, you know, the debate has moved on well beyond that under our government, under the Morrison Government, we were very focused on a practical pathway to reduce emissions. We achieved a reduction of 20% on 2005 levels by 2020 and we're on track to achieve projecting the mid-20th by 2030 a reduction, percentage reduction of up to 35%. So as a political party we're much more interested in the mechanics, the detailed work getting stuff done rather than the big showy promises, which is much more the style of our political opponents. The Government has eight sitting days left before the budget to push four key pieces of legislation through Parliament. There's the housing plan, which looks like it's in trouble. The safeguard mechanism, the NRF and the Voice machinery. Will you support any of them? Oh, look, our position on all of those is clear. You know, when it comes to housing, for example, the Housing Australia future Fund, the so-called $10 billion fund, this is just a piece of financial engineering that borrowing $10 Billion, investing it, and hoping that the returns on what's invested will exceed the extra cost of the taxpayers have to pay on the interest on the borrowed funds. And then with that difference, they say they're going to build houses. What we need, what we were very focused on when in government was encouraging new housing starts through the private sector and through measures like our very successful homebuilder policies. We are very sceptical about the effectiveness of what Labor's proposing and to be going out and borrowing additional money at this stage and essentially hoping to make an extra margin on that. You can't be sure each year, how much it's going to earn under this convoluted financial arrangement, which creates uncertainty as to how the whole thing's going to work. We've opposed it clearly for that reason. Similarly, the national rate Construction Fund, again, $15 billion of borrowed money. Enormous amount of discretion given to the minister. We had a much clearer approach with our modern manufacturing grants to support activities as there's a proper role, of course, for government in supporting manufacturing, particularly in startups and in new technologies. But that's best done through grants. That's what we did. Rather than having a minister out there with complete discretion about how to spend $15 billion of borrowed money.

STEFANOVIC: All right. Paul Fletcher. So I'm appreciate it. We'll talk to you soon.