Transcript No. 65

Hon Peter Costello MP

Doorstop Interview

Friday, 13 November 1998

9.00 am

SUBJECTS: Premiers’ Conference

TREASURER:

Well today we look forward to discussions with the Premiers and Chief Ministers in relation to the implementation of the Government’s new tax package. It’s important that Australia gets on with this. It’s time for us to move on, to get a new tax system. And that’s why we are having these productive discussions with Premiers and the Chief Ministers, they’re interested in making sure that they look after their States, we’re interested in making sure that Australia gets a new tax system. And that the State-Commonwealth finances are put on a better footing.

Mr Costello will you increase the top up to about $4 billion to pay for the transition?

No, no we are going to have discussions about the way in which the policy is to be implemented and as implemented it will ensure that the States are guaranteed to be no worse off and in future years will in fact be better off.

But there’s room to maneuver on that issue?

No, what we’re going to do is we’re going to go through the policy bit by bit and, properly understood, the policy provides that the States will be no worse off and in the long term better off. Why better off in the long term? Because they’ll get a guaranteed share of growth revenues which is something that States have been after for a long time.

What do you think about Mr Beattie’s decision to solicit the support of Senator Mal Colston?

I think it’s right. Premier Beattie has been round the see Senator Mal Colston to ask for his support to get the best deal for Queenslanders. Premier Bacon, as I understand it, has been round to see Senator Brian Harradine to make sure that Tasmania is looked after. And I’d say to Bob Carr he should go round and see Senate John Faulkner and speak to Senator John Faulkner to make sure that Faulkner supports a new tax system and it gets a good deal for New South Wales. Look you can posture as much as you like in the Senate but Australia needs a new tax system. The Premiers and the Chief Ministers are here to negotiate that with the Government, we’ve got to move on. We’ve got to move on and get a new tax system and I think it’s time that the Labor Party and the Senate and the Democrats in the Senate came to the conclusion that you can’t freeze Australia in a 1930s tax system into the next century. We’ve got to move on, we’ve got to do this, we’ve got to do something for the country, we’ve got to step out and we’ve got to engage in bold reform. And I welcome the involvement of the Premiers and Chief Ministers in that today.

Treasurer will you be able to give the Premiers any guarantees on the SPPs?

Well in relation to SPPs, I think as we’ve said, it’s the Government’s intention to make sure that the current programs continue. We’ve got a Budget which is in surplus, we’ve laid down forward estimates and in relation to Specific Purpose Payments it’s our intention that they’ll be continuing.

Even ratching anything back ……..?

As I said earlier if you’ve got a Budget which is in surplus, there’s no agenda there to deal which Specific Purpose Payments. We’ve made that quite clear.

The reports this morning that the Government will have control of the implementation of the GST for the first year, are they true?

Well we want to legislate the base but all of the proceeds go to the States, bear that in mind. When people are saying knock revenue off GST here or knock revenue of GST there, what they would be saying is knock State revenues around. One of the reasons why you have to have a broad base on your GST is to ensure that the States have sufficient revenues to pay for their schools and hospital systems and all the rest of it. Now bear this in mind, the Commonwealth is legislating a GST but none of that goes to the Commonwealth that is all to give the States a guaranteed share of revenue. That’s why I say this is the biggest change in Commonwealth-State financial relations since federation.