Interview with David Speers

Sky News

Friday, 3 June 2005

9.15 am

SUBJECTS: Tax Cuts, Premiers’ Meeting, Infrastructure

SPEERS:

Treasurer, thanks for your time. This would have a lot of people scratching

their heads this morning – could their tax cuts be delayed. Can you explain

how that could happen?

TREASURER:

Well, we announced tax cuts to apply from 1 July. In order to put them in

place they have to pass the House of Representatives and the Senate. The Labor

Party has announced that it wants to block those tax cuts in the Senate. So

the law will not pass before the 1st of July. What then happened is that the

Tax Commissioner published schedules for employers saying, here are the schedules

you can apply, these will give people their tax cuts. Sure the law won’t

be in place on the 1st of July but some time when the new Senate gets around,

it will be in place. So just work off these schedules and give people their

tax cuts. Now Mr Beazley has then come along and said, but I reserve the right

to disallow those schedules. If he disallows the schedules there is no schedule

in place and there is no law in place and there is no tax cut in place. Now,

yesterday the Tax Commissioner said to Mr Beazley, if you say you won’t

disallow these schedules, they can apply and every Australian can have their

tax cut. Mr Beazley won’t give that assurance.

SPEERS:

Now Labor is saying that it will look at these schedules after the legislation

has been debated and has even suggested this morning that you bring back Parliament

next week, get the legislation debated out of the way and then they can tell

us what they are doing.

TREASURER:

Well, they could have looked at these schedules for the last two weeks. They

have been tabled in the House of Representatives. These schedules exist. They

are already in the House of Representatives. The House of Representatives has

already passed the tax cut. If Labor wants to disallow these things it could

have moved on any one of the last five sitting days in the House of Representatives

to disallow them. This is nothing new, it is all known, it is all public, it

is all there. What has happened is that Kim Beazley made a terribly wrong call

on Budget night deciding he would oppose tax cuts. As the enormity of this decision

is now looming on him, instead of saying, well look, you know, I made a mistake,

people should have their tax cuts, he is twisting and turning and backing and

filling and he has now cornered himself. There is one way out for this –

Mr Beazley can say he won’t disallow the schedules – 850,000 Australian

employers know what to do on 1 July and 10 million Australians get a tax cut.

And it takes one word from Mr Beazley. Now this is not me saying this, this

is what the Commissioner of Taxation said yesterday.

SPEERS:

Well Kim Beazley would also argue that all of this could be resolved if you

agreed to his proposal for a far more fair tax cut – particularly, for

those on the lower income brackets.

TREASURER:

What is fair about no tax cut at all? Mr Beazley’s policy is no tax

cut at all on the 1st of July.

SPEERS:

Well his policy is for more than a $6 cut for those on lower incomes.

TREASURER:

No, no, no, no let’s be very careful about this. No tax cut at all on

the 1st of July. That is his policy. He proposes no tax cut at all on the 1st

of July.

SPEERS:

But a more generous tax cut down the track.

TREASURER:

Well he then says he would like to start changing some things in 2006 and

some other things in 2008. The next election is in 2007 by the way.

SPEERS:

Treasurer can I ask you on the Premiers’ meeting here today, one of

the things they are expected to ask for is a national infrastructure fund. Do

you see any merit in that?

TREASURER:

Well look, the State Premiers are responsible for their infrastructure which

is electricity, water and other areas. The Commonwealth Government has a responsibility

for national highways, AusLink, railways and we would like to take a greater

responsibility through federal regulators with ports. I think that would be

a great improvement if the Premiers were to say that the national competition

regulator will take responsibility for ports – we would get rid of the

kind of nonsense we are seeing up in Queensland at the moment. So, I think there

are clear areas of responsibility but if in relation to say port regulation

the Premiers want to hand powers over to the Commonwealth I think we would be

very interested in looking at that.

SPEERS:

But the idea of a fund, is that a good idea?

TREASURER:

Well, I do not know what they mean by that.

SPEERS:

Oh presumably some State fund, some State money, some Commonwealth money –

with one national fund that decides where the priorities are and puts money

into them.

TREASURER:

Oh no, I think the States should apply their money and take responsibility

for their infrastructure and I can assure people of this, that the Commonwealth

is taking responsibility for the areas of infrastructure that it has.

SPEERS:

And is COAG a meeting you would like to be chairing next year?

TREASURER:

I have been to a few COAGs and I have been to a few Premiers conferences and

sometimes they are interesting and sometimes they are difficult.

SPEERS:

Treasurer, thanks for your time.

TREASURER:

Thank you.