Friday, October 21, 2011

'If he wants me to go, I'm out of here' - Parkinson on being Treasury Secretary for Abbott

Treasury boss Martin Parkinson says he and his colleagues might have to “make a choice with their feet,” should the Coalition win office and direct them to dismantle Labor’s carbon trading scheme.

The Treasury veteran has worked on three versions of the scheme for three prime ministers. He headed the secretariat that drafted John Howard’s emissions trading scheme in 2006 and 2007, he ran Kevin Rudd’s Department of Climate Change from 2007 to 2011 and since February helped draw up the Gillard government’s carbon trading scheme as head of Treasury.

Asked in a Senate hearing yesterday whether he would assist a government elected on a policy of rescinding the carbon tax he had helped build, he told by Western Australian Liberal Mathias Cormannthat as a public servant he would serve the Australian people through the government of the day.

“Everybody has a choice in front of them,” he said. “If they are not prepared to implement the policies of the government chooses to pursue, and that government has been democratically elected, then they essentially have to make a choice with their feet.”

Dr Parkinson said the choice might not be his to make. Mr Abbott would have the right to remove him as head of the department.

“Whether I was Secretary of the Treasury would be a matter for the prime minister of the day,” he said.

“Were I to be Secretary I would serve the government of the day in the way as I have served previous governments."

The Treasury Secretary ridiculed suggestions carbon trading frightened away businesses saying since both major parties announced carbon trading plans in 2007 “there have been very very significant investments in the mining sector that have just grown and grown”...

The cost impacts of the carbon tax and the mining tax were “very, very small”. Much more worrying was uncertainty, as he spelled out in the report signed by John Howard’s emissions trading task group.

“The committee had on it departmental secretaries and very very senior people in business. They took the view that Australia should not wait for global action, that Australia should take action earlier rather than later and to do it in the form of an emissions trading scheme.”

Treasury’s chief modeller Meghan Quinn said the carbon tax would slice a cumulative $900 billion from economic growth over the next forty years meaning the economy would grow $20.4 trillion instead of $21.3 trillion.

If Australia was unable to make use of foreign emissions permits the economic cost would double.

“Those costs assume climate change doesn’t occur,” said Dr Parkinson. “If climate change is occurring then you need to also take account that as well.”

The Coalition yesterday hit back at the clean energy sector over its statements in support of carbon tax, branding green companies ‘‘vested interests’’ and ‘‘white shoe salesmen’’ trying to cash in.

Opposition Finance Spokesman Andrew Robb told The Age/SMH that the government’s $10 billion Clean Energy Finance Corporation, which will help fund green investment, was a Labor-Greens slush fund that would fund ‘‘all sorts of wild and whacky proposals that the banks would not touch in a fit’’.

His remarks follow industry criticism of Tony Abbott’s vow to scrap the green technology fund and the carbon tax, with companies such as AGL and Pacific Hydro claiming the Coalition policy created uncertainty and sent a bad signal to investors.

“Not surprisingly the vested interests are already coming out of the woodwork, talking about the need for certainty in response to us confirming the corporation will be axed should we win office,’’ Mr Robb told the Herald/Age.

‘‘This fund will be a honey pot to every white shoe salesman imaginable and it will be controlled by Labor and Bob Brown; give me a break,” he said.

He was referring to ‘‘those energy companies who have been critical but who have strong interests in renewables and could potentially be major beneficiaries of these subsidies.’’

Andrew Richards, executive manager of corporate affairs at Pacific Hydro, said: ‘‘It’s just a shame that we are investing five times as much in Chile as in Australia because they reward investment in renewable energy.”

‘‘If you were convinced by the science of climate change - and I know Andrew Robb isn’t, you would say the fossil fuel industry has been protected for a long time because they don’t pay for the pollution they create.’’

Published in today's SMH and Age

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