Transcript No. 2001/078

EMBARGO

TRANSCRIPT

of

THE HON PETER COSTELLO MP

Treasurer

Doorstop

Monday, 28 May 2001

2.10 pm

SUBJECTS: Beazley’s Tax Increases, Small Business

JOURNALIST:

Treasurer, you seem to have some fairly clear ideas of what Mr Beazley might do to

increase taxes.  Do you think they’re three sitting ducks, if you like?

TREASURER:

Well, the Labor Party says it’s going to rollback GST and spend more money.

  And the only way it can do that is by increasing taxes, which is the point that

Senator Conroy made last week.  When you listen very carefully to Mr Beazley, he

hasn’t given a guarantee on company tax and you’ve got to remember that when

Labor won the 1993 election one of the first things it did afterwards was increase company

tax from 33 to 36 per cent.  The Labor Party always had a policy of indexing petrol

and Mr Beazley won’t give a commitment to support our Government’s abolition of

indexation.  And the third thing is that the Labor Party opposed help for people with

private health insurance.  We give a 30 per cent rebate.  Labor was always

against private health insurance, they never had a rebate, they opposed private health

insurance and under a Labor Party the 30 per cent private health insurance rebate would be

very much at risk.

JOURNALIST:

There has been some commentary in the media that this will be a tax election, if you

like, that the debate will be all centred around tax.  Are you happy to fight it on

those grounds?

TREASURER:

Certainly. The last couple of elections have been centred around tax.  The last

election we went to the Australian public with a tax plan, we were very upfront about

it…

JOURNALIST:

Yet many of those questions in there, people aren’t happy with that tax plan.

TREASURER:

…and we went to the last election with a tax plan.  We laid it all out, we

were very upfront about it, and we argued it out in the campaign.  Now, we are happy

to go to any election on tax. The only thing I say is that Mr Beazley should lay his tax

plan out.  He’d been running around saying he was going to rollback the GST,

that is shrink the  revenues, and he’s going to spend more money…

JOURNALIST:

But you had the business community…

TREASURER:

…now the only way he can do that is by increasing taxes.  Now he ought to say

which ones and then we can have a legitimate argument.  Is it better to have higher

income taxes, is it better to have company taxes as he believes, is it better to have

petrol indexation? But he has got to stipulate and be honest with the Australian people so

we can have a proper argument.

JOURNALIST:

Well, the Prime Minister will only say that it’s not his intention to increase

taxes, that’s a bit short than a water tight guarantee itself, isn’t it?

TREASURER:

Well hang on, we have laid out a plan which is lower income taxes.  We

haven’t been actually about just maintaining these, we have been about cutting them.

  We have cut income tax, we have cut company tax, we are now abolishing Financial

Institutions Duty, we are abolishing stamp duties on shares, we have abolished indexation

on petrol and we have cut Capital Gains Tax for individuals.  That’s a very long

record of tax cuts, that’s what the Government has been doing.  We have been

cutting taxes, no question of increasing them – cutting them is what the Government’s

been doing in the last couple of years.

JOURNALIST:

So, can you say definitely, no tax increases there?

TREASURER:

Well actually, what I can, I can go further than no tax increases.  I can go

further and say tax cuts.  Tax cut on company tax, tax cut on stamp duty on shares,

tax cut on Financial Institutions Duty, tax cut on transactional taxes, and tax cuts for

Capital Gains Tax.

JOURNALIST:

So, definitely no tax increases in the next term of the Coalition Government?

TREASURER:

Definitely tax cuts.  It’s not a question of no increases, it’s tax cuts

from 1 July…

JOURNALIST:

Does that mean no increases though?

TREASURER:

No, no, no, cuts doesn’t mean increases.  Cuts means cuts, cuts means less

tax.  Tax cuts from 1 July right, which will be in place during the period of the

next Coalition Government.  A lower company tax…

JOURNALIST:

But you can cut some and raise others…

TREASURER:

Well, hang on, hang on…

JOURNALIST:

…can you say there will definitely be no increases?

TREASURER:

Well hang on, hang on, we are going to cut taxes.  A lower company tax, lower

income taxes, we’ve just cut them, we are still.  We haven’t even had the

first year.  The abolition of Financial Institutions Duty, the abolition of stamp

duties on shares, halving of Capital Gains Tax, the abolition of petrol indexation.

  This Government is cutting taxes.  That is the difference, actually cutting

those taxes, some just flowing through now, some starting to flow through 1 July, but all

of them flowing through another term of Coalition Government.

JOURNALIST:

So, can you just answer that straight out, there will be no increases then?  No

tax increases in the next term?

TREASURER:

I’ll go further.  There will be tax cuts, there will be tax cuts…

JOURNALIST:

There was a fair bit of anger in there from a couple of small business people, has your

Government…

TREASURER:

…the tax cuts that we have already flagged and the tax cuts that we are putting in

place.

JOURNALIST:

Has your Government done enough to appease the anger of small business in terms of the

administrative burden that the GST as presented to them?

TREASURER:

I think so. We have put in place some measures in February of this year which mean that

there is no necessity for quarterly reporting.  Quarterly payments can be made on the

basis of the December payment and varied if people think that that is too high.  And

an annual return can be put in with the annual income tax return for a particular company.

  And since then we have had another return, we had the third quarter return, the

March quarter return, and that seems to have gone a lot better.

JOURNALIST:

Small business still seemed very angry though.  Are you confident, is it just a

matter that the Government will ride out that anger?

TREASURER:

I think small business appreciated the changes that were made.  I think they were

of advantage and I think the March quarter return was handled better as a consequence of

that.  And I also think the most important thing that you can do for small business

is give them certainty.  Nothing could make life harder for small business than if

you now changed the whole tax law again which is what roll-back is all about, changing the

whole thing again.  They would have to go back and re-allocate all of their systems

because the base was changing.

JOURNALIST:

But you’re hoping that anger will wash out before the election?

TREASURER:

Well, as I say, look we have put in place a number of measures which have simplified

things and I think they helped with the third quarter.

Thanks.