Transcript No. 99/90

TRANSCRIPT OF

The Hon Peter Costello MP

TREASURER

Doorstop Interview

Wednesday, 24 November 1999

7.30 am

SUBJECT: Business Tax

Mr Costello what’s been agreed to with the Labor Party tonight and how did that

happen?

Well the Labor Party, as I understand it, has agreed to pass the Government’s

business tax reform in its entirety. That means that company tax cuts, trade-offs in

relation to depreciation, capital gains tax, and changes in relation to indexation,

there’ll be changes in relation to integrity measures, the Labor Party has indicated

that it is going to support the Government’s legislation. That means the legislation

should go through the Senate, the first tranche of the legislation should go through the

Senate, I hope as early as next week.

Would you have preferred to do a deal with the Democrats on this?

Well, the Government wants to reform the business taxation system and we believe that

we can do that if the legislation passes through the Parliament and if the Labor Party

wants to vote for the legislation that’s a good thing. We just want to get a better

taxation system and a better taxation system in this country can only be accomplished if

the Senate passes legislation, the Government’s legislation. Now, who passes it, is a

subsidiary question. The important thing is whether or not it’s passed.

Were you negotiating with the Democrats at all on this?

I’ve been negotiating very constructively with the Democrats throughout the course

of the week and we continued our discussions tonight. At the same time the Labor Party

today indicated that on three conditions it would pass the Government’s legislation

intact. We met all of those conditions. And given that the Labor Party, as I understand

it, is in the position now where it’s obliged by the terms of its own offer to pass

the Government’s business taxation reform in its entirety. Look, business taxation

reform is something that’s eluded this country for 50 years. The Government sat down

in a very measured way to reform the business tax system. We appointed an inquiry. The

inquiry consulted. The inquiry came up with recommendations. The Government accepted them.

The Government’s turned them into legislation. The Government’s putting them

into the Parliament. And this is just one of these issues where it’s in the national

interest for business taxation reform to be accomplished and who votes for it is not the

question. The question is whether it’s accomplished.

Do those changes improve the package?

Well, I don’t believe that the Labor Party is insisting on any changes.

How do you feel about the result? Did you imagine you’d get such an easy ride?

Oh, look, I wouldn’t call this an easy ride. This has been long, complicated,

difficult. But if the legislation passes, and I have every reason to believe it will, it

will be a great thing for Australia.

Treasurer you can’t say at the same time you’ve given no ground and it’s

not been an easy ride.

Well as I understand it the Labor Party is now indicating it will pass the

Government’s legislation in toto. We welcome that.

Did you expect that though in the beginning? Could you have imagined …

Well I thought that if the Labor Party was genuinely interested in real reform it

would. Yes. Yes, of course I did. We wouldn’t have put this legislation up if it

wasn’t good legislation to reform the business taxation system.

So is this the end of the Coalition/Democrats honeymoon in terms of doing deals on

Government legislation?

No, no, no, this is a very durable marriage. These things don’t end at the end of

the honeymoon.

Is this bigamy Mr Costello then?

No, no, no we’re just friends with as many people as we possibly can.

Adultery?

(Inaudible)

Look, let me tell you how the Government approaches things. The Government sits down

and it tries to work on big reforms for Australia and it puts legislation into the

Parliament and it asks the Parliament to enact them. And if the Parliament enacts them

that’s good for Australia. And it will be a good business taxation system. We

don’t sit down and say it will only be good reform if this one or this one or the

other one go through. The Government seeks to legislate through the Parliament what is in

the national interest. And if the Senate says that it’s going to accept that and

legislate, we welcome it. We welcome it. Now what’s the good thing about this: we can

reduce company taxes, change depreciation arrangements, reduce capital gains taxes,

simplify capital gains treatment, we can make Australia a competitive base for this

region, we can create more jobs, we can have a higher standard of living as a consequence

of all of that, and that’s a good thing for the Senate.

Is it a better deal for business given that the Democrats were calling on you to slash

the capital gains tax cuts?

TREASURER:

I think the Democrats were negotiating constructively and I mean they might still vote

for the package in the Senate. I hope they do. I’d like to see this go through the

Parliament unanimously. What a great day for Australia, wouldn’t it be, you know

after …

Did you meet with the Democrats this evening?

Yes, I met with the Democrats this evening.

So, did you meet them at six and then found out afterwards that Labor had agreed that a

deal had been done?

Labor put an offer to me at 12 o’clock today which I accepted. I accepted it.

Labor then had to consider whether or not it would accept its own offer. And since there

was a lot of doubt in their minds as to whether they would accept their own offer, the

Democrats wanted to go ahead with the meeting so I could negotiate with them.

So when did Labor get back to you to let you know that they’d accepted that?

I think they’re on the phone at the moment.

Ends