CELINE FOENANDER: Federal Finance Minister Lindsay Tanner is no stranger to the Gippsland area, in fact, he was born in Orbost. He went to primary school in Orbost, then he went to St Anne's, in Gippsland, Grammar School in Sale and was the dux of 1973. You might have been an old school mate of Lindsay Tanner. Well he's gone on to politics and is now, as I said, the Federal Finance Minister. Lindsay Tanner joins me now. Good morning to you.
LINDSAY TANNER: Good morning Celine.
CELINE FOENANDER: Thanks for being part of our Politician Talkback. It's nice to have a Federal Minister on our program, and one that would be able to answer some of the questions of our listeners. So appreciate your time today.
LINDSAY TANNER: No problems.
CELINE FOENANDER: What do you remember, first of all, about Gippsland, your days in Gippsland?
LINDSAY TANNER: Oh, look, I loved Orbost and still do. I don't get down there very often now, but it's just a great part of the world. It's a long way from the rest of Victoria, of course, but it's just a nice place. Lots of fantastic areas. Beautiful state forests there and great people. So, I've got very fond memories of Orbost.
CELINE FOENANDER: Yes, and like going to school, secondary school in Sale as well. Like, you do have an appreciation and an understanding of our region here in Gippsland; and you've been in politics for a long time, so you've dropped down this way more than, you know, a couple of dozen times at least, I'm sure, so you would be well aware of what some of the issues are in our area.
LINDSAY TANNER: I certainly am and also I've got a connection with South Gippsland. My sister lives in Foster and my father is also in a nursing home in Toora not too far away. So I tend to get down that way a few times a year as well. So I'm still very fondly disposed to the Gippsland region and I keep an eye on things that do surface from time to time about Gippsland.
CELINE FOENANDER: Okay. Well one of the issues that is bubbling along at the moment is the Emissions Trading Scheme and the Carbon Pollution Reduction Scheme. It is going to have some affect on a lot of regions, but in particularly ours which has the brown coal fired power generators here, Lindsay Tanner, so you'll be able to speak to us about that. I'm sure you're well across the issues that are facing that and it has caused a lot of political debate in Canberra. The Opposition leader Malcolm Turnbull now has gone away, he's having a look at the Emissions Trading Scheme. He's going to come back with some amendments by which the Government will then consider. But a lot of people, just at a grassroots level Lindsay Tanner, don't understand what it's all about, the Emissions Trading Scheme. It is quite a complex piece of legislation and I'm sure, even for the politicians, it is one that is very difficult to get your head around. Can you explain, very simply, what it is and why we need it?
LINDSAY TANNER: I'll do my best. First, we have a serious threat with climate change, that the amount of carbon dioxide in particular, but some other gases as well, that we have been pumping into the atmosphere because of our industrial society, is reaching a level where it's causing the planet to gradually heat up. And our planet's much more fragile than people think, because although you think, oh, okay, it might be 10 degrees one day and 30 degrees the next, if you get a long-term change in average temperatures, that has potentially dramatic affects and, of course, the most extreme risks are with things like polar ice caps melting and sea levels rising, which could mean that huge amounts of current land end up under water. And there are a whole range of other threats. So the big challenge is how to reduce the amount of carbon dioxide we pump into the atmosphere and very much that connects with things like using coal for electricity and brown coal is the most polluting form of that. So the whole structure of the scheme we're putting forward is to gradually reduce the amount of carbon dioxide that people are able to emit into the atmosphere each year; so we have a cap on the amount that you can have emitted from the whole economy. And permits will be auctioned in order to get the right to emit carbon. So the idea is that that will, in effect, create a price and, therefore, create a incentive for people both to reduce consumption, reduce what they emit and also move to other forms of energy, so renewable technologies like solar and wind and things like that. And we're also investing huge amounts of money in helping people to - helping companies to shift to things like solar and wind power.
CELINE FOENANDER: Okay. So essentially that is, I guess, a dumbed down version and I'm not saying that our listeners are dumb by any…
LINDSAY TANNER: Oh, it is very complex though.
CELINE FOENANDER: Because it is quite a complex thing. One of the sticking points for the coal generators, the coal fired power generators in particular, is the amount of compensation they will get, to get them on the road, in order to transition toward - to the Emissions Trading Scheme. The Opposition now is having a look at the amount of compensation to be given to these generators. Where do you stand in terms - where does the Government stand at the moment, in terms of that compensation in the Emissions Trading Scheme in its present form?
LINDSAY TANNER: Well the main element that's there for the brown coal generators is a specific arrangement for free permits for a period of time. So as well as permits being auctioned, there would be an arrangement for a substantial amount of free permits to emit carbon that would be made available to the brown coal generators, in order to enable them to make a transition. And we expect two things to happen. One is that new technologies will be installed that will substantially reduce the carbon emissions from coal fired power stations. So we will still have electricity being generated using coal, but a much lower emission level coming from that generation. And secondly, of course, that electricity generators will switch to other sources of power, such as wind and solar. So the free permits are designed to do that. Now inevitably, you can't satisfy everybody. We're getting criticised for giving any assistance at all. Some people argue, look, let them go broke and let the new sources of power surface as a way of delivering our energy needs.
CELINE FOENANDER: Is it the Government's role to prop up private enterprise though?
LINDSAY TANNER: Well, I don't see it that way because we're dealing here with a global challenge and something that really is life threatening for the human race in the longer term unless we get on top of it. And that means we've got a big adjustment process to go through. And there are sections of our economy, and parts of the country, that are very exposed to that adjustment. There are other sections of the economy where the impact will be much less. And so our view is that there is a reasonable case for the whole economy, the whole country providing some assistance to those that are most exposed, that will bear much of the cost, so that there's a capacity to transition. The other thing that's important with the brown coal generators is that they're the ones with the expertise, with the capacity. We will be relying on them to help us make the transition. We'll be relying on existing electricity generators to take a lead in moving towards a more renewable power based economy. So we do need them to stay in business if - in the meantime.
CELINE FOENANDER: The angle that the Minerals Council is going with, at the moment though, is that it's going to mean a massive loss of jobs for regions such as ourselves. Senator Julian McGauran is saying the same thing and he is - even if Malcolm Turnbull and the Opposition are likely to support, or come to a compromise with amendments, Julian McGauran was saying today that he is not going to vote with it. What impact has the Government found that this will have on a community like Gippsland?
LINDSAY TANNER: Well I'm not sure how much Julian McGauran knows about Gippsland these days. I'm not sure how much time he actually spends in Gippsland, but you know, Oppositions always carry on hysterically when there's any big proposed change from government. And companies that have got a vested interest will always exaggerate the potential threat, so that - and I've had endless meetings with companies that are potentially affected by the Emissions Trading Scheme and I can tell you invariably they bring their worst case scenario to the table. We've had claims of thousands of jobs being lost. But as the Australian Conservation Foundation and the Climate Institute and others have pointed out, the same companies have been making very different statements to the stock market and in their annual reports. So in the political arena, they're screaming doom and gloom and we're all going to be ruined. But when they're talking to their investors, it's oh, no, no, everything's fine. We're all heading in the right direction. So you have to take all of these claims with a grain of salt mind you.
CELINE FOENANDER: What modelling has the Government done on a community or a region like Gippsland, to say - to see exactly what is going to happen if the Emissions Trading scheme comes into play?
LINDSAY TANNER: Well two points here. One, is we have modelling across the economy. Secondly, economic modelling has great limitations. It is not a crystal ball that enables you to see into the future and it is very much captive to the assumptions that you feed in. And, of course, in this area there are so many factors involved which no government can control, and we can't see into the future as to what may happen. In particular, the most obvious one is technological change. Nobody can say what technology innovations will emerge say in five years time, that could completely transform the way things are done, or particular sectors. So economic modelling has its value for looking at a total economy and giving you some insights into the impact of things, but some people treat it as if it is an absolute clear prediction of the future, it's never going to be that.
CELINE FOENANDER: Local Government and some industries in the area are saying that the economy here will shrink by as much as 20 per cent, and they're kind of hanging their hat on that.
LINDSAY TANNER: Oh, that's complete nonsense.
CELINE FOENANDER: You don't believe that that will happen in an area like Gippsland?
LINDSAY TANNER: It's complete nonsense.
CELINE FOENANDER: Why do you say that?
LINDSAY TANNER: Because there's no evidence to support such a claim. This is just hysterical assertions, simply without any foundation.
CELINE FOENANDER: There will be some shrinkage though.
LINDSAY TANNER: No, I don't accept that.
CELINE FOENANDER: You don't concede there'll be any shrinkage in the economy?
LINDSAY TANNER: No, I don't accept that.
CELINE FOENANDER: None at all?
LINDSAY TANNER: No, no, I'm saying I don't accept that that is a definite outcome.
CELINE FOENANDER: That there will be - so you're saying that…
LINDSAY TANNER: No, let me say it again.
CELINE FOENANDER: Okay.
LINDSAY TANNER: I don't accept the claims that given regional economies are going to shrink.
CELINE FOENANDER: Okay, so they'll either - or are you saying that they'll stay the same, or they might grow?
LINDSAY TANNER: No, no, I'll say it again. I don't accept claims that regional economies are going to shrink.
CELINE FOENANDER: What do you accept then?
LINDSAY TANNER: Well, put something to me [laughs], like, you know, it's a nonsense exercise.
CELINE FOENANDER: Will they say…
LINDSAY TANNER: People are making assertions, right, people are making assertions, which in my view lack substantive evidence. I'm saying, well I don't believe there is evidence to support that.
CELINE FOENANDER: Okay.
LINDSAY TANNER: I'm not in a position, nor is anybody else, to say with or without the Emissions Trading Scheme, that a certain level of growth will occur in a given regional economy, again, because there are so many different factors involved, that no Government can control, so many things that could change over the next five to 10 years, or at any time, that nobody can make an assertion that says, well a given economy is going to grow by this much, or it's going to go backwards by that much.
CELINE FOENANDER: Okay, so you can't really say that it's going to shrink, nor stay the same, nor grow, it's just difficult to predict?
LINDSAY TANNER: Yes, I'm just saying that I'm not in a position to make an assertion that says, this is what is going to happen to any regional economy over a particular period of time, whether it's two years, five years, or whatever, these things are very difficult, and people who are making those assertions, I'm suggesting to you, have not got evidence to back them up.
CELINE FOENANDER: Okay, let's go to the phones, Lindsay Tanner, a few callers in that might have some varying questions, so you might have to stretch a little bit, and help them out.
LINDSAY TANNER: Always happy to.
CELINE FOENANDER: Goodo. Terry from Hazelwood North. First of all, solar panel rebates. Hello, Terry.
CALLER TERRY: Yeah, hi, Lindsay. I've - my son is a computer man, and he was on the computer and he found out there were rebates on the solar panels, so he said, send these people a cheque for $2500, and we'll get so much back, and everything will be all right. And I said I'd refuse to do it, until I spoke to somebody that I could sort of say, well you know, I'm going to give my money to somebody I know.
CELINE FOENANDER: Terry, I'll just get you to ask the question, very quickly, to the minister.
CALLER TERRY: Yes, and the fact is that they've bolted with my money, I haven't got any solar panels. When the Government cut it off, they wouldn't accept my paperwork that I tried to fax to them.
CELINE FOENANDER: Okay, so you're - you've got an issue with you had ordered some solar panels, and the date had run out, was it?
CALLER TERRY: Yeah, yeah, the date ran out, and now…
CELINE FOENANDER: When the rebates were due?
CALLER TERRY: Yeah, and they've still got my $2500, and I've got nothing.
CELINE FOENANDER: Okay. It sounds like a legal issue, Lindsay Tanner, you might have just come in on that, because I transferred your call elsewhere [laughs].
LINDSAY TANNER: It certainly does, it sounds like something that Terry needs to talk to Consumer Affairs about, because without knowing all the fine detail, it's difficult for me to be absolutely clear on this, but if he's in effect made a deposit, and then the company has not done anything, and is not returning his deposit, then he's entitled to get that money back, so I would suggest that he contacts Consumer Affairs, and provides them with all of the details, and asks them to pursue it for him.
CELINE FOENANDER: Yes. Terry, thank you.
CALLER TERRY: Okay, thanks. Bye.
CELINE FOENANDER: Bob, from Merloo, hello there, Bob.
CALLER BOB: Yes, I'm here.
CELINE FOENANDER: Thanks for waiting, your question for the minister?
CALLER BOB: Thank you, thank you minister. Look, it's concerning the rebate reduction for cataract surgery, from November 1…
LINDSAY TANNER: Yep?
CALLER BOB: Now this is a quality of life for people for our ever-ageing population. The cost of the - and the lack of - or the difficulty of receiving public facilities, I think it's a three year wait for that, in some of the public hospitals, I'm wondering, the popular - or the ageing pensioner population, and those people who sacrifice to have private health cover, even now are being penalised, with a severe costing structure there, they are caught between a rock and a very, very hard place. What is your - as you are the one that handles the purse strings, it may be Minister Roxon's ambit, but you're the gentleman who handles the purse strings, what are your comments on this?
LINDSAY TANNER: The answer is fairly straightforward, Bob, that new technology that ophthalmologists have, means that they are able to do this operation now in about a third of the time that they used to do it in, and the old rebate arrangement issue was in effect largely a payment for hours, for time, so like wages, or any payment of that kind. Most payments will ultimately reflect the amount of time that the person working, is putting in, and under the arrangements now, the ophthalmologist can actually do this operation in about a third of the time, typically, that used to be the case, and so the Government's view was that the rebate that was in place, had become excessive, and that it was effectively padding out the incomes of ophthalmologists, and therefore - and it's ultimately you paying the taxes, so as well as any gap fee that you're paying, you're also paying the taxes that are contributing to this. So the purpose of reducing the rebate was to bring it back into line with the amount of time that is actually being taken in these operations.
CALLER BOB: So the problem is, Mr Minister, that rebate reduction, will be added to the cost, because anyone with private health, still had to pay in the ambit of about $700 out of pocket.
LINDSAY TANNER: I can't speak for a specific individual case, of course, I'm not sure what experience you've had, but we certainly don't accept that that's what going to occur…
CALLER BOB: Can I give you an example of two major operations that I personally have had? Now I had a detached retina, a vasectomy, which was done, now I make the sacrifice to pay private health, it is not a taxation thing, it cost $1700 with no out-of-pocket expenses, private hospital overstay. The cataract surgery, some three months later by a different surgeon, I was $700 out-of-pocket, in outpatients. Now the $700, a lot of people making the sacrifice to pay insurance, have to pay that, I think it is $1000 if you walk off the street, out-of-pocket expenses, so it is a rock, and a bloody hard place.
LINDSAY TANNER: Look, again, I can't comment on your individual situation or…
CALLER BOB: Overall, other people too.
LINDSAY TANNER: Well, all I'm suggesting to you is that the old rebate level had become excessive because of the changes in technology, and we would expect that the charges that are being made by ophthalmologists, will change accordingly, and I can't again comment on your specific situation, without a lot more knowledge about exactly…
CALLER BOB: What I'm saying is, people with private health cover, are still out of pocket, and…
LINDSAY TANNER: Yes, but that is a different question…
CALLER BOB: And people who have to wait for the public system, and cannot wait for the public system, in many cases, have to pay $1000 if they walk off the street…
LINDSAY TANNER: You're raising a separate question now, which is the nature and extent of coverage of private health insurance. The question that I was responding to is, at what level should the rebate be set, and whether that will ultimately flow through into the actual prices charged by ophthalmologists? We believe that it will, and that in effect, the reduction will flow through into the total fee that they're being charged, it won't simply be added to any additional costs to the patient.
CELINE FOENANDER: Thanks, Bob.
CALLER BOB: Well, I'm glad you think so, minister, I don't think it will.
CELINE FOENANDER: Okay, thank you very much, Bob. Bob from Merloo there. If you have a quick question for Minister Lindsay Tanner, 1300 295 222, Federal Finance Minister, Lindsay Tanner, 1300 295 222. John from Sale, hello there, John.
CALLER JOHN: Hi. Gee, this is getting very intense.
CELINE FOENANDER: Now, what are you going to do, lighten it up for us John, or what?
CALLER JOHN: Well yeah, I was going to just ask one question of Lindsay. And that was that when he visited Gippsland Grammar last November, he went to see the new boarding house. And remember, his experiences in the boarding house and how he used to get whacked - and I know how that feels because I, when I was in my boarding house, I got whacked as well, but probably I deserved it. I just wondered how he felt about the quality of the new boarding house at Gippsland Grammar. And then I wanted to say that I have just had a cataract and a lens implant locally, and I'm now down for my other eye to have the same treatment in four months time, and it's not costing me anything because it's been done, because I haven't got private insurance. So I'm not sure that those people who are paying out for private insurance round this area of the world are doing the right thing.
CELINE FOENANDER: Mmm. First of all, on the issue of the cataract surgery, Minister.
LINDSAY TANNER: Well John, look, again, because often, there are individual circumstances in particular cases that, until you really dig into them, you don't know. It's difficult for me to comment and generalise about the issue from whether it's Bob's particular experience or yours, but I'm pleased to hear that you've managed to have the operation without significant out of pocket expenses. On the school question, I didn't actually look at the new boarding school. But interestingly enough, the hall where the dinner occurred that I spoke at was in fact the building that used to be the boarding house when I was at the school 40 odd years ago, and so you could even see the bits on the floor where the walls that had made up the dormitories had previously been. So…
CELINE FOENANDER: Mmm. There wasn't any carvings, Lindsay was here or anything like that.
LINDSAY TANNER: No. Not that I could see, but it was a rather poignant moment. It was rather strange going back after many many years. And I got a great education at Gippsland Grammar School, but I hated the boarding house, and I hated getting caned all the time, and what was a very nasty authoritarian regime. But it was the late '60s early '70s. The whole world was like that then. So I don't hold it against the school, and I think on the face of it, it's a very good school now.
CELINE FOENANDER: Okay. John, thank you very much.
CALLER JOHN: Good on you.
CELINE FOENANDER: And thanks for holding on.
LINDSAY TANNER: Good on you John.
CELINE FOENANDER: One last question for the minister. He's been very generous with his time this morning. Rex from Bairnsdale, hello Rex.
CALLER REX: Yeah, g'day.
CELINE FOENANDER: Hello. Your question.
CALLER REX: Yeah. Just want Lindsay to tell us what's going on with the indexation of Commonwealth superannuation for pensioners.
LINDSAY TANNER: This is an issue that probably many of our listeners, Rick [sic], don't know about, so perhaps I'd better quickly explain it. It's been a long-standing argument by people who are former public servants that their pension scheme, superannuation scheme which is a defined benefit scheme, a percentage of total salary guarantee, that the index that that operates, that changes the amount paid each year increases, it should be, on average weekly earnings, not on the consumer price index. And typically, average weekly earnings will…
CALLER REX: All we want is something fair like, the same as the old age pension.
LINDSAY TANNER: … will produce a slightly higher result. Prior to the election, the Labor Party committed to holding an expert review of this issue, and that review was undertaken by a guy called Trevor Matthews who's an Australian now working in the UK, but is a world expert on superannuation pensions, all these things - he recommended no change. He has pointed out, A, that a change would lead to a huge increase in the long-term pension liabilities of the Commonwealth which in the current circumstances is not an easy thing to deal with. Secondly, that most people get a choice in these schemes, whether to take a lump sum or a pension, and therefore if you change the pension retrospectively, that disadvantages people who have chosen to take a lump sum because it changes the playing field, and maybe some of them would have done something differently had they had that different choice. There are a range of other complex issues about this, but I think probably the main thing that's worth pointing out is there are a lot of people out there who don't have the protection of a defined benefit scheme who are in what are called accumulation schemes where they carry the risk, and a lot of those people have just seen the value of their superannuation shrink significantly, and so the current context where we had the Budget go into deficit and a lot of people losing out on superannuation, it's very difficult to sustain an argument to - when you have an expert review saying don't change it, that it should be changed.
CELINE FOENANDER: Okay.
CALLER REX: You went into the last election saying it would be changed.
LINDSAY TANNER: No that's not - that's absolutely not correct, Rick. That is simply not the case.
CELINE FOENANDER: Rex it is.
CALLER REX: That was the understanding.
LINDSAY TANNER: No, no, there was a commitment made to conduct an expert review. And that…
CALLER REX: There was two senate inquiries done, and you voted in favour of when you were in Opposition. Twice.
LINDSAY TANNER: Well whatever individual Senators may have done, the formal Labor Party position prior to the election - and I've got all the material - was that we would conduct an expert review. And if we've already made a commitment to do it, why would you make a commitment to conduct that review. So that was… the commitment was to conduct that review. The review came back, with an answer which I understand people were not happy about. That's fair enough. And I'm sure people will continue to pursue this issue. But that's what the review answer came back, and we accept that recommendation.
CALLER REX: If it's such a good scheme, is yours indexed the same way?
LINDSAY TANNER: Mine's not, but the politician's scheme has been changed as you undoubtedly know. So all politicians who have entered Parliament since 2004 are not in as good a scheme as you're in. So all politicians now, entering the Parliament, are in the standard accumulation scheme where they take the risk and where there is no guaranteed payment at the end, no guaranteed pension, no indexation, and nothing. So that has also been changed.
CALLER REX: Yeah, well, over the last 18 years, yours has doubled. Ours has gone up 70 per cent. And the old age pension has gone up about 130, I think it was, the figures I haven't got right in front of me at the moment.
LINDSAY TANNER: And the proportion of people on the Commonwealth superannuation payment are also accessing part pensions too.
CELINE FOENANDER: Okay. Rex, we're going to have to leave it there. Thank you very much for your call and your comments today. Three per cent pay rise, Mr Tanner. Is that what you're going to get.
LINDSAY TANNER: Yes, that's correct.
CELINE FOENANDER: Yes. A little bit happy, you've had to wait two years.
LINDSAY TANNER: Oh look, I - because I'm a cabinet minister, I get a higher rate than the ordinary backbencher, so that's not something I've been sweating on. But I think for those who will be unhappy about it - inevitably there is never going to be agreement about politicians pay. I just make two points: one is, there was no pay increase last year. We froze the rate. And so that's been in effect lost for good for members of Parliament. And secondly, over the past year, average wages across the economy have increased by 3.9 per cent, so the increase that has occurred is slightly below what has been the average across the economy, so I think that's reasonable, it's set by an independent tribunal. A remuneration tribunal. And like I say, we are never going to get people agreeing on these things. There are some people who think we should get paid 10 grand a year, there are others who think we should treble it. You're always going to get different views.
CELINE FOENANDER: Absolutely. Well thank you very much for your time today. And we appreciate you taking some of the calls from our listeners around the region.
LINDSAY TANNER: My pleasure. Thanks very much.
CELINE FOENANDER: Good-o. Lindsay Tanner there, Federal Finance Minister on ABC Gippsland.
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