Streamlined GST and PAYG Reporting
February 22, 2001Entity Taxation Â
February 27, 2001Transcript No. 2001/015
Transcript
of
Hon. Peter Costello MP
Treasurer
ABC Radio AM with Mark Willacy
Friday, 23 February 2001
8.10am
SUBJECTS: BAS Streamlining, petrol, competition policy, Julie Bishop
WILLACY:
Mr Costello, just a couple of weeks ago you told Parliament that it was impossible to
move to annual reporting because business had not been lodging returns for a year. What
has happened since then, beside the Coalition drubbings in Western Australia and
Queensland?
TREASURER:
The difference is this, that you could not go to an annual system of annual returns
when you didnt have four returns. But we have now put an absolutely break-through
initiative, which is, we wont wait for four annual returns. We think the December
return is sufficiently representative to use that as the bench-mark, so that anybody who
has filed their December return and wants to take advantage of this option can just pay
the amount that was on their December return for April and July, and then lodge an annual
return. The great thing about that, is, you dont need to do another quarterly
report, you dont even have to have 12 months of quarterly reports. We can now
take it off the second instalment, the December instalment, and that is the end of the
quarterly return for those businesses that want to take it up. But can I just say, Mark,
because I have had a number of people who have contacted me in the last 12 hours or so,
and in the lead-up to this announcement, there are many businesses that have adjusted
their systems on the quarterly reporting system.
They have said, you know, we have coped with it, it suits us, and I want to
re-emphasise for those businesses, they dont have to change. They can stay under the
current system.
WILLACY:
Well, if we look at the original BAS, you defended it, you argue that it took most
small business less than a couple of hours to fill out. If that was the case, why buckle
to calls for change?
TREASURER:
Well, for most businesses the quarterly system, they had adjusted to it, and they work
it, and I think many of those will continue with it. But, there was a significant group
that didnt adjust to it. For a significant group it was too much compliance and too
much paperwork and we cant overlook the fact that for those people they were not
able to do it as quickly as others in business and so there is an option for them now.
Those businesses that are under $ 2 million, all you have to do, and if I can just explain
it again to business: you take the December payment, you make that in April and July, and
then you will not have to do another return until your annual return, which will be due
with your annual income tax return
WILLACY:
(inaudible)
TREASURER:
which for many businesses it is going to be as late as February 2002.
WILLACY:
The December quarter, though, if you take that, that is the biggest trading quarter for
many businesses. Wont you be paying inflated GST liability on that?
TREASURER:
We thought about that too. We couldnt take the first quarter because there were
so many transitionals in it, including wholesale sales tax credits, pre-payments, and that
kind of thing. The second quarter, also, could not be the best representative sample. But,
it is the best you have got if you want to free people immediately from quarterly returns.
Now, for those businesses that think that December is not representative for them and they
want to take this option, they can do a variation. So, you can do two things, you can take
this option, with a variation, or you can pay your actuals, which is the continuation of
the quarterly reporting system.
WILLACY:
Well, do you accept responsibility, really, for failing to foresee the complexity of
the original BAS? It was in your hands.
TREASURER:
We accept responsibility for the fact that, the, a problem had arisen with a
significant number of small businesses for whom the current system of quarterly reporting
required too much paperwork. We accept responsibility and we fix it. And we fixed it.
Thats why, if we see a problem and we fix it, thats the announcement we made
yesterday, I think, from the reaction that you have seen from business and from
self-funded retirees, this has got enormous support. And
WILLACY:
You were saying
TREASURER:
thats what the practice of Government is all about, I think. Where you have
a problem fixing it.
WILLACY:
You said a significant number of businesses had a problem, but a couple of weeks ago
you were saying most could fill it out in a couple of hours. What has changed?
TREASURER:
Well, the surveys show that most could fill it out in a couple of hours. But, a
significant number of people
WILLACY:
So were you just
TREASURER:
No
WILLACY:
So, were you just (inaudible) basically wanting to change it?
TREASURER:
No, no, no. Most could fill it out in a couple of hours, but a significant number
couldnt. For a significant number, it was taking them far longer than that, and for
those people there was no point in sitting around and making them do hours of paperwork,
that is not a system that is working well for those people. For those people they
now
WILLLACY:
Do you think
TREASURER:
have an option of not doing the quarterly return at all.
WILLACY:
Do you think any voters in the Queensland and Western Australian elections lodged a
vote against the GST and the BAS, in particular?
TREASURER:
I think, I have always believed this, State elections are principally a contest between
the two alternative Premiers
WILLACY:
So, not one voter in Queensland and Western Australia would have voted according to
their problems with the BAS and the frustration of that?
TREASURER:
Well, that is not what I said. I said most voters in State elections determine their
vote according to who the alternative Premiers are and who the alternative parties are.
And I think if you go into the Queensland election there was a clear choice between Mr
Beattie and Mr Borbidge, or between Labor and National, National Liberal. And I
think that is what governs most of those elections. There are always cross-over issues, I
am not saying that there are never cross-over issues. But I do not believe that Federal
issues determine State elections. I never have, nor would I, incidentally, believe that
State issues determine Federal elections. The Federal election will be fought on Federal
issues, and it will be fought between alternative Prime Ministers Mr Howard and Mr
Beazley. And just as you wont be casting a vote for Mr Beattie or Mr Court in a
Federal election, you were not casting a vote for Mr Howard or Mr Beazley in a State
election
WILLACY:
Well, you have proved you can listen to the electorate on the BAS, can you now rule out
changing the petrol excise arrangement, is there any flexibility there now?
TREASURER:
Well, we have put in place a number of changes which, in particular, have helped
business and rural and regional Australia on petrol. And I think that has been overlooked.
One of the things we did, particularly in the argument about petrol prices in the bush,
let me just re-state: farmers pay no tax for their off-road diesel, transport was cut by
24 cents a litre for heavy transport, and if you are using petrol in your business, as
some people would be doing, you actually are paying less tax as a consequence of the
changes. And I think some of those changes have been overlooked.
WILLACY:
So, are farmers complaining too much? Because we have got the NFF hitting the road to
raise concerns about the diesel rebates, something you have said they have had a good deal
on, are they whinging a bit too much on this issue? Should they, should they listen to the
Government?
TREASURER:
Well, just for people, and I know this is a technical area, but people who say, well,
you know, they are concerned about farming, can I say, if farmers are using diesel in
their tractors or their headers, they dont pay any excise. There is no excise for
off-road diesel for farmers. None whatsoever, and since they are in business they can get
any GST for any business input, back. So, they can actually get their petrol at a lesser
price, as well. Now, the reason I say that, is in all of the argument about petrol prices,
I think that has been overlooked, and the one point I would make is this if Labor
and Beazley had had their way, today you would be paying 24 cents a litre more for heavy
transport, to and from every farm in Australia.
WILLACY:
Well, if we move on, National Party Leader, John Anderson, said in Corowa this week
that, the Party had a very real concern about the effect of national competition policy on
rural communities. What assurances can you give the Deputy Prime Minister on that?
TREASURER:
The assurance that competition policy, which is an agreement between six State
Governments, two Territory Governments, and the Commonwealth Government – and it is run by
agreement between all of those Governments – requires that first we try and get better
prices for consumers. That is the first thing. And secondly, there are times when you will
accept higher prices for consumers a less competitive outcome for consumers – where
that is in the public interest. But the public interest has to be tested. Prima-facie, the
lower the price for the consumer, whether it be in airlines or whether it be in any other
area, prima facie, you try and do the best thing by consumers unless, for some public
interest reason, consumers interests should be put behind producers interests.
WILLACY:
Just briefly, it seems Liberal backbencher, Julie Bishop, has backed out of the deal to
take over the leadership of the Western Australian Party. Is that a good move on her part?
TREASURER:
Well, I think, if Julie is determined to pursue a career in Canberra, I think she will
have a very good career. I think she is very, I think she is very intelligent, I think she
thinks abut issues very carefully, I think she is a good representative for the people of
Curtin, and if her decision is to seek to represent them to the best of her ability, then
I am sure she will have a very good career.
WILLACY:
Peter Costello, thanks for joining us.
TREASURER:
Thanks Mark.