Budget – Interview with Paul Murray, 6PR

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Entry Into Force Of the Protocol Amending the Australia and United States Double Tax Treaty
May 13, 2003
Labor’s Budget Response – Doorstop Interview
May 15, 2003
Entry Into Force Of the Protocol Amending the Australia and United States Double Tax Treaty
May 13, 2003
Labor’s Budget Response – Doorstop Interview
May 15, 2003

Budget – Interview with Paul Murray, 6PR


Interview Paul Murray


Wednesday, 14 May 2003
10.30 am




Good morning Peter.


Good morning Paul, good to be with you.


Good to talk to you again. Peter if you spread your own weekly tax cut out

over a whole year it will get you a bottle of 1998 Penfolds Grange Hermitage.

What are you going to spend your money on?


Well look, every Australian gets a taxpayer, and I am an Australian, every

Australian taxpayer gets a tax cut I should say, and I am an Australian so like

all other Australians I will get a tax cut. I don’t know what I would do with

it. I am sure my kids will find uses for that money, Paul.


These tax cuts really Peter, I hate to rain on your parade, they’re too low

to mean anything meaningful to a family, I suspect they are designed to get

a headline and some short term political advantage and really it’s money, it’s

$10 billion worth of money the Australian people entrusted to you to spend on

improving services to them.


Well, if your argument is that we shouldn’t have cut tax and we should have

spent more, that is a fair argument. But our view is that we have properly spent

on defence and we funded a war. We have properly spent on drought and we are

funding our farmers. We have upgraded Australia’s security and if, at the end

of all of that, the Budget was still in surplus then the taxpayers deserved

some relief. Now as you say for some people the tax cut will be $500 for others

it will be $300. But I think it’s the principle here, should we spend more or

should we tax less? We have decided we should tax less.


Yeah but Peter is it enough less that it’s going to mean anything to people.

My view is that four bucks a week to the average family means nothing to them.

The $2.4 billion that you will spend on that next year, in a lump sum, put into

our health system or our education system or anything else like that, spent

on our veterans for example, could mean something.


Well your argument is that the Government should spend more and tax more. My

argument is that the spending is right and we should tax less. Now we are spending

more on health than we have ever spent before in Australian history. And in

fact we are announcing new measures in this Budget for increases in relation

to public hospitals and a whole host of other things. I think we have got the

spending right and that’s why I am in favour of cutting taxes. But your argument

is you could have spent more and you could have taxed more. Well you could have.

But I think the public feels that if at the end of the day your spending is

right, and I think ours is, then if you’ve got room to do it, you should try

and cut taxes.


Well you will tax more this year as you know through bracket creep. Is it true

that you will actually take in more in the next financial year through bracket

creep than you’re going to give back in the same period through these tax cuts?




Because that’s what the Opposition is claiming today.


Well, they are wrong. If they said that they are either ignorant or they are

being deceptive.


Can you guarantee that we will actually get these tax cuts over the four years

that you’ve promised them? Paul Keating did that of course.


Well, Labor made an art form of that, announcing income tax cuts before an

election and then legislating them away after. But you see this is different

Paul because this is, there is no election due. This is probably what’s surprised

people. This is a tax cut which is not an election year. And I think the Government

should be given some credit for that. All of the media said, oh they won’t cut

taxes this year, they will save it up for an election.




But my view was if we had met our legitimate expenditures, if we had funded

the war and the drought and the Budget was in surplus. Then, we don’t need to

pay down more Labor debt, we have repaid $63 billion of Labor’s debt. So what

should we do with the money? And I thought we should return it to the taxpayer.

Now there’s an awful lot of taxpayers in Australia so by the time we return

the money it doesn’t amount to that much per taxpayer.






That’s what I can’t make sense of Peter. That’s what I am trying to wrap my

head around. $300 a year.


$300 a year or $400 a year. I am sure people would say, well its better to

have $300 a year than to have a tax rise.


But I will give you a for instance Peter, I mean one of the big problems with

our health system in WA, and I know it’s the same all around the nation, the

number of aged care patients who are in our hospitals. Now they are waiting

for the Federal Government to fund beds for them elsewhere. Now the money could

have been spent on that. It would have gone a long way to fixing up the problems

all the States are having with their hospitals.


Well, last night we announced a new programme called Pathways to Home and the

new programme will give the opportunity, particularly for the elderly, to move

home where they will get care, not full hospital care, but where they will get

care so that they don’t have to unnecessarily stay in hospital. We announced

that last night. And that was one of the new measures that we actually funded.

So having addressed that issue, and I think it is a very important issue, we

still were in the situation where we thought we could cut people’s taxes. Now,

I have never heard the Australian public before say they wanted higher taxes.

And when you introduce a cut, a tax cut, a lot of people would say they would

like it to be larger. And I would like it to be larger, but I think this is

responsible after we have met all of our funding commitments.


Yeah look I mean I think there’s a sophistication in the Australian electorate

these days is that they understand the taxation argument and they also know

that they’re going to have to be taxed to get the services that they want…




…and the thing they’re demanding these days is the services. They worry about

the health system, they worry about education.


Well, let me say in relation to the health system, I mentioned that Pathways

to Home programme which we announced last night, we also announced new Australian

Health Care Agreements and they are, over a five year period, $42 billion. Now

the tax cut over a four year period is $10 billion. So that’s what, four times.

So don’t think for a moment that we’re not funding health. Let me give you another

statistic. I put this in the Budget Speech. Since this Government was elected,

health funding by this Government, and that includes the 30 per cent private

health insurance rebate, has gone up 65 per cent. So it’s not as if anybody

is cutting back in health in fact we’re increasing spending on health. Now I

think these are provisions which will ensure that services are improved. But

at the end of the day if you can give tax relief, I think it’s worth doing.

And I guess if I am criticised for giving tax relief, well I will wear it.


Look Peter, you are talking about $10 billion, but you know, you can really

only promise the 2.4 for the next year, because after that there’s a Federal

election, you may lose that Federal election and Labor could do what they like

there. So although you’re talking about ten billion bucks, really you know in

your heart you can only promise 2.4?


Oh well, yes that is fair enough. If Labor gets elected, it can put up taxes

again. Sure it can. But I will tell you this Paul, I will be fighting at the

next election to make sure it doesn’t get elected.


Peter if I can just, there’s a million things to talk to you about, if I can

just ask you about the controversy over the tertiary education sector. You are

going to allow universities to charge in some instances what they want for certain

courses. It is being said today that this is likely to create two tiers of universities,

some very high priced ivy league universities like the University of WA and

some very underprivileged ones like some of the others here in Western Australia

which won’t be able to get those high fees, won’t be able to attract a doubling

of the full fee paying places that you are offering and we are going to get

this huge distance between the lower style universities and the ivy league.


Well bear in mind that as you said we are increasing grants to universities.

So, all universities are eligible for those whether they are ivy league or whether

they are not. So, all universities are eligible for what they have currently

got now plus a bit, I think it’s 7.5 per cent increase. Now in relation to HECS,

at the moment people are charged HECS as you know and the Government lends that

amount to the students. We have said that the universities can vary HECS. Some

of their courses which are really popular they might put them up. Some which

are not they might bring them down. But at the end of the day if a university

is offering a course which isn’t giving value to the student, students won’t

enrol and I think this is a good way of ensuring that universities do have pressure

on them to give good value to their students. And the students want good value

because the better the value of the course, the higher their income generally

speaking that they are going to earn in their working career.


If I could just squeeze in one other issue, the privatisation of Telstra. Last

year you said you wanted to do it in the 2003-04 financial year. The Budget

papers show you have pushed it back to at least 2005. Why is that?


Well because the Senate won’t pass the legislation. We have put this legislation

up to the Senate. It hasn’t been passed. I can’t see it happening in the near

future. We said even if the Senate did pass it we wouldn’t contemplate a sale

until the share price was right. So we have got to make an estimation. We made

an estimation that those two things wouldn’t come together before 2005.


So what, you are hoping for a change in the political complexion of the Senate?


Or you might get some people in the Senate that change their mind. I think

you recall Meg Lees when she was in the Democrats making some statements. She

has now left the Democrats, she is founding a new party, a few people, at least

one person, one of the Labor Senators has left the Labor Party, you just don’t

know on these things Paul. But, you have got to make an estimation when you

think things will happen and the estimation we think is not before 2005.


Okay Peter now I think you are going to be in Perth next Tuesday and I know

we have got an arrangement with you to be in the studio at 8.30 next Tuesday

to take listeners calls.


Okay, I would love to be with you Paul. I look forward to it.


Good oh, thanks for that.


Thank you.