TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Debate Simon Crean

Sunrise, Channel 7

Wednesday, 6 October 2004

8.15 am

MELISSA DOYLE:

Well joining us from his electorate in Melbourne is Treasurer Peter Costello

and in the studio, Shadow Treasurer Simon Crean. Good morning to both of

you, we do appreciate your time.

TREASURER:

Good morning.

CREAN:

Good morning.

MELISSA DOYLE:

Now the election has been a bidding war at the expense of the taxpayers

pocket and all policies have to be independently costed by the Treasury

because of the Caretaker Government Convention. Have all of your policies

been submitted and passed Peter?

TREASURER:

All of the policies that we have released have been submitted for costing

and all of the policies that we released were submitted before the cut off

period last Thursday at 5 pm. Unfortunately, Labor hadn’t submitted any

full costing policies by Thursday of last week. They put in a whole heap

on the 4^th of October which of course was after the deadline

and they will be hoping that the Treasury doesn’t actually cost those, but

we made a practice of putting all of our policies in for costing and they

have all been given to the Treasury Department.

DAVID KOCH:

Simon, that is a bit rough not to put them in and to get them costed.

CREAN:

Well I think it is even rougher for Peter Costello to just not tell the

truth. I mean we have actually put 44 in the week after the Pre-election

Economic Forecasts and all of those were savings measures. Since that time

we have put in an additional 50. We are not going to put them in before

we announce them David, we can’t be expected to do that, but we have put

in far more than them and more than half of them are savings measures. In

their case they have hardly put in any savings. Now, we believe that if

you are going to make announcements, make policy commitments, you have got

to try and find the savings. Because if you do that well, that keeps downward

pressure on interest rates. If you keep cutting into the surplus like Peter

Costello, you will put upward pressure on interest rates. Now we are absolutely

committed in terms of our tax, our health, our education – all of

them – fully costed and fully funded. Why? Because we want to keep

downward…

DAVID KOCH:

So Medicare Gold got in on time and will be fully costed by Treasury and

Finance?

CREAN:

…Medicare Gold, we announced it on Wednesday, it was in on Friday.

DAVID KOCH:

So the…

TREASURER:

The Medicare Gold did not go in on time.

CREAN:

No, no, that is his deadline, that is his deadline…

TREASURER:

No, no, I am sorry David, it is very important that we get to the facts

here – the Secretary of Treasury and Finance said that if they wanted

to have those policies costed, they had to be in at 5 o’clock on Thursday

– that is what they said. And the Labor Party put Medicare Gold in

after the deadline had cut off so that the Departments of Finance and Treasury

said, we can’t cost it unless we have had it by 5 o’clock on Thursday. Lo

and behold, the Labor Party puts it in after the deadline. Now you have

got to listen very carefully…

CREAN:

…I don’t think that is right…

TREASURER:

…to what Mr Crean said, he said before, ‘we put in 44 savings

measures.’ Yes, what they did is they itemised little measures and they

put them in before the deadline. What they did not put in, is they did not

put in any full policy that they announced, new policy with new spending,

before the cut off on the 29^th of September. Now the reason they

did this David, was that they have been running throughout this campaign

from independent scrutiny, they want to make sure that we get to election

day before this comes out. There are now only what, Wednesday, Thursday,

Friday, before election day and it has been an elaborate game all through

the campaign by Mr Crean to try and avoid independent scrutiny.

MELISSA DOYLE:

Alright, if I can just interrupt you, we have actually seen a letter, we

know that the deadline was Thursday evening. One of the things that has

come up in most of our debates, in both of the debates that we have had

so far this week on this issue, is that on behalf of voters, how are we

expected to make a fully informed decision, surely both parties should have

everything announced and all costings done so that Treasury can give us,

as voters, an independent view, when here we are a couple of days out from

an election and we still aren’t getting details filtering through. We haven’t

got independent costings on everything, where does it leave us when you

guys are both saying so many different things?

CREAN:

Well that is why we have made certain that in terms of our announcements

we have had them independently costed. There is a problem with this Charter

of Budget Honesty, I mean you look at how much the surplus increased from

the Budget to the Pre-election Economic Forecast – it almost doubled.

Now how are you supposed to deal rationally with those circumstances until

you know what the facts are? We have consistently put out all our costings

and they have been independently assessed. But if the Peter Costello point

is right about the deadline, how come they put in, I think five of their

policies, just yesterday?

DAVID KOCH:

OK, Peter did you hear that?

CREAN:

And the reason for that is…

DAVID KOCH:

Let’s get an answer…

TREASURER:

…because they hadn’t announced them yet.

DAVID KOCH:

…from Peter Costello.

TREASURER:

Well Simon Crean said he has had policies independently costed –

that is just wrong. He said at the beginning of this campaign that PricewaterhouseCoopers

was going to independently audit all of his policies. Do you know something?

PricewaterhouseCoopers has not made a single statement in this campaign.

So I am sitting here waiting for PricewaterhouseCoopers to come out with

their reports Simon, that is number one. Number two, as I said earlier,

he has put his policies in after the deadline of last Thursday so that they

couldn’t be costed…

DAVID KOCH:

OK, let’s not go through this he said, he said sort of thing so let’s move

on…

CREAN:

Yes, let’s move on…

DAVID KOCH:

…Simon Crean…

CREAN:

…he is wrong.

DAVID KOCH:

…we have had 13 consecutive years of positive economic growth…

CREAN:

Yes.

DAVID KOCH:

…we have got unemployment down, this Government has done a pretty

good job in terms of the economy. Will you be able to do a similarly good

job and how can you guarantee that to us? We would be a bit nervous that

you would come in and muck it up.

CREAN:

We believe we can do better David, that is the point. It is the reason

we have made the commitment in terms of funding and costing our policies

so that we keep downward pressure on interest rates. But as much as we are

about taking the pressure off families through our tax cuts, through restoring

bulk billing, through making education more affordable, we are also about

investing in the things that will make the economy stronger, in particular,

education and skills.

DAVID KOCH:

OK.

CREAN:

The growth economists tell you, that if you invest in your education and

skills you can get a higher growth rate. Well we have had dis-investment

in education and we have had the costs shifted to individuals. We believe

Governments should make that investment so what we are trying to do is to

develop policies that not only benefit the individual but benefit the economy

and strengthen us for the future.

MELISSA DOYLE:

Peter, can I ask your plans for superannuation?

TREASURER:

Well, we have a superannuation co-contribution scheme which is available

to middle and low income earners which says that if you put a dollar into

superannuation, the Government will match it with $1.50. Now, people ought

to know this – if Mr Latham is elected on Saturday, that scheme is

going to be abolished on Monday. Abolished. That is, if you are a middle

or low income earner and you put money into superannuation you will get

nothing from the Government. The second thing of course that the Labor Party

wants to do if it gets elected is to increase the superannuation surcharge.

We have managed to reduce that down to 10 per cent from next financial year.

The Labor Party wants to increase that to 15 per cent. When you put together

the changes that the Labor Party proposes by abolishing the co-contribution

scheme, increasing the surcharge and then having a measly reduction in the

contributions tax, Labor plans to take out through taxes or abolition of

benefits, billions of dollars from superannuation. Labor is raiding the

superannuation savings of Australians…

DAVID KOCH:

Now Peter Costello…

TREASURER:

…to try and (inaudible) policies.

DAVID KOCH:

…the Coalition has done a pretty good job up until now anyhow with

four levels of tax, but Simon Crean…

TREASURER:

 Well David he complained…

DAVID KOCH:

…(inaudible).

CREAN:

(inaudible) superannuation ever advanced in this country was under a Labor

Government. We were the ones that introduced compulsory superannuation and

why? Because we made it a universal approach.

DAVID KOCH:

Yes…

CREAN:

Peter Costello’s approach in terms of taxation is targeted at the top end,

we are going to give a taxation cut from 15 per cent to 13 per cent as a

down payment on contributions to superannuation. What does that do? It improves

the adequacy of the accumulation funds David.

DAVID KOCH:

…yes, but really you are both to blame really. It is our nest egg,

it is our retirement nest egg, it is a big lump of money and it just seems

that our politicians can’t keep their cotton picking fingers off it. But

you think it…

CREAN:

We are going to reduce the tax on it…

DAVID KOCH:

…only a little on the contributions tax, that is a piddily cut.

CREAN:

…hang on, hang on…

DAVID KOCH:

…it really is and you…

CREAN:

…hang on…

DAVID KOCH:

…have got to put up with…

CREAN:

…how did we…

DAVID KOCH:

…(inaudible) surcharge.

CREAN:

…how did we get to the nine per cent compulsory, David? We did it

progressively from 1985 through to 1996…

DAVID KOCH:

Get rid of the contributions tax.

CREAN:

…well we would like to do that, but that is a very costly option

and we can’t afford to do it at the moment…

DAVID KOCH:

It is equivalent of a $4 a week tax cut, isn’t it?

CREAN:

…we would like to do it straight away but we can’t, you have to make

choices. This is a Government that has blown the surplus. Just think about

what you could have done…

DAVID KOCH:

Oh no, I don’t think they have blown the surplus, they have got a big surplus

and they have reduced Government debt and the whole lot, you can’t say…

MELISSA DOYLE:

Alright I am going to…

CREAN:

…most of the Government debt has been reduced by selling the assets…

DAVID KOCH:

…hang on, can I just have one…

CREAN:

…that is like selling the family home to pay off the mortgage.

DAVID KOCH:

…can I have one big question to both of you?

CREAN:

Sure.

DAVID KOCH:

Big picture stuff, visionary stuff, don’t try and buy our vote. Are either

of you willing to commit to a simplified tax system? You know, I brought

in the Tax Act the other day which is a mountain…

CREAN:

Yes.

DAVID KOCH:

…it is ludicrous, we keep getting bandaids, no-one seems to have

the guts to say, right, in the next three years, we are going to reduce

the Tax Act down to 200 pages and simplify it completely. Will you do it?

CREAN:

Yes.

DAVID KOCH:

Peter Costello, will you do it?

TREASURER:

Well let’s go back through the record over the recent years. When our Government

was elected, you paid 48 ½ cents at $50,000…

DAVID KOCH:

No, no, no…

TREASURER:

…we pushed that out to $80,000. Let me go through it, you can’t…

DAVID KOCH:

…but we are not talking…

TREASURER:

…(inaudible) tax.

MELISSA DOYLE:

(inaudible).

DAVID KOCH:

…but we are not talking numbers, it’s simplification…

TREASURER:

Hang on, hang on…

DAVID KOCH:

…making it easier to understand…

TREASURER:

…we halved Capital Gains Tax…

DAVID KOCH:

… easier to understand.

TREASURER:

…we cut the Company Tax rate…

DAVID KOCH:

Yes, yes, but that is a tax cut, that is not simplification…

TREASURER:

…we abolished the Financial Institutions Duty. We actually David,

I would actually prefer tax cuts to be frank…

DAVID KOCH:

Oh, no…

TREASURER:

…tax cuts …

DAVID KOCH:

…I would like…

TREASURER:

…tax cuts are actually…

MELISSA DOYLE:

Can I just try and get a yes-no answer though, is it…

CREAN:

If I can just address the simplification front, what we have done, if you

look at the Family Tax Benefits, is to move to huge simplification in that.

We have bitten the bullet and why? Because we want to put incentive back

into the system for people to actually get out and work…

DAVID KOCH:

Alright…

CREAN:

…and not be punished for it.

DAVID KOCH:

…OK, you guys have got to deliver. Good luck both of you on Saturday,

we are way over time so we have got to leave it there because we have got

8.30 news coming up. Thank you kindly Peter Costello and Simon Crean.