TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Kangarilla Road Winery, McLaren Flat

South Australia

Wednesday, 19 May 2004

10.30 am

SUBJECTS: Wine Equalisation Tax relief, Budget, tax cuts, Liberal candidate for Kingston, Labor’s response on tax

TREASURER:

Well, we are here visiting Kangarilla Road because it is one of the wineries

of McLaren Vale and in the Budget we announced a change in relation to Wine

Equalisation Tax which will cut tax for every Australian winery for the first

$1 million of their wholesale sales. And this will help particularly small Australian

wineries, places like this which has around about $1 million of domestic sales,

so this is the kind of winery which is being greatly assisted by the Budget

announcement. It is a great move for local business, it is a great move for

South Australia which is Australia’s premier wine state and it will also

help to create jobs.

JOURNALIST:

But this journey overall to be here in South Australia, what is your reason

for that?

TREASURER:

Well, I am doing a post-Budget visit to South Australia to talk about the

benefits of the Budget, I am supporting our candidates, including Kym in marginal

seats and we are talking about some of the benefits to South Australia of the

Budget, and one of the biggest benefits for South Australia in this Budget was

changes to the wine tax which will relieve 90 per cent of Australia’s

wineries, the small wineries, from paying any wine tax and will create jobs.

JOURNALIST:

It has been said South Australia has missed out on a lot in this Budget.

TREASURER:

Well, South Australia has been a great winner in the Budget. There is no state

that has been helped more by the changes to wine tax than South Australia and,

just in my visits to date, this is going to have a good effect on employment,

more people are going to get jobs because of the Budget announcements in relation

to wine tax.

JOURNALIST:

Now, the Public Service Association, you spoke today about the tax cuts for

middle income and high income earners, but the PSA, the Public Service Association

here asked for more health and education funding over tax cuts. They had a campaign

here just a couple of months ago, what would you say to that?

TREASURER:

Well, in the Budget we have increased investment in the health system, we

increased investment in the education system by some $8 billion and our health

funding has increased by around 17 per cent in real terms, so we have made major

investments in both health and education. But I believe that if you can balance

your Budget and reduce tax that is what you should be doing and that is what

we have done in this Budget.

JOURNALIST:

The story in the paper this morning, Ken Henry a Treasury official saying

that we need more tax cuts and immediately.

TREASURER:

I don’t know that he said immediately…

JOURNALIST:

Well, this year.

TREASURER:

…but Dr Henry has made the point that I have made on numbers of occasions

which is this, that we need incentive in our tax system, that too many Australians

in middle income brackets were rubbing up against high marginal tax rates and

that is why in the Budget we pushed the thresholds out so that middle income

Australians don’t have to pay top marginal tax rates.

And there are some people that have criticised us for cutting tax. I make

no apology for cutting tax, that is what we have got to do if we want to have

incentive to work and increase employment in Australia.

JOURNALIST:

Is there room for any more tax cuts though before an election?

TREASURER:

Well, let’s legislate these tax cuts which are very significant tax

cuts before we start thinking about anything else.

JOURNALIST:

But this Treasury official saying we need it, we need it before an election.

TREASURER:

No he is not, he is saying that we need the tax cuts that were announced last

Tuesday, and we do, that is why we announced them, now let’s legislate

them.

JOURNALIST:

Now, Kym here is standing next to you. It is a marginal seat, 1.7 per cent

swing needed, how confident are you that he can achieve that and this seat can

be won back to Liberal?

TREASURER:

Well, he is an outstanding candidate, that is the first thing I would say.

His record of service in the Police Force and his record of service in the local

community makes him an outstanding candidate. You have to win the trust of the

people of Kingston, and he will be working hard to do that and at the end of

the day it is up to the people of Kingston, but I don’t think you have

anybody whose record of service was greater than Kym’s because of all

of the things that he has done and he would make a fine representative in Canberra.

JOURNALIST:

The polls, there is a new one in The Sydney Morning Herald today says that

you still haven’t clawed back support past the Budget, what is your reaction

to that? Were you expecting that you might see a bit of a lift in support already?

TREASURER:

The object of a Budget is good economic management and I think that when you

look at this Budget, the way in which it helps families, the way in which it

reduces disincentives by cutting tax and boosts superannuation savings, it will

be good for Australia and that is why we did it.

JOURNALIST:

So it is not to win back votes?

JOURNALIST:

Mr Crean’s response today?

TREASURER:

Well, if the Labor Party says it is going to offer tax cuts to the Australian

public, they should name today, the rate, the threshold, how much it will cost

and how they will pay for it. Now, we have had enough of these empty promises

that Mr Latham goes on with, promising everything to everybody. You can’t

believe those kind of promises, if he really wants to offer something to the

Australian people, today is the day to do it. Mr Crean is at the National Press

Club, so show us the colour of your money, give us the rates and tell us how

you are going to pay for it. Thanks.