Doorstop: tax reform, economy

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National Accounts: September Quarter 1998
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National Accounts: September Quarter 1998
December 2, 1998
ASIC Deputy Chairman to Step Down Next Year
December 7, 1998

Doorstop: tax reform, economy

Transcript No. 70


Hon Peter Costello MP


Thursday, 3 December 1998

9.00 am


SUBJECTS: Tax reform. economy


Yesterday you saw some of the benefits from good economic decisions the

Government’s taken in the last three years. Home buyers now have the lowest home

mortgages since the 1960s and the Australian economy growing and performing and creating

new jobs for young people as a result of policies that were put in place two and three

years ago. That’s why it’s important that we put in policies now so that we can

reap the rewards of good policy in three and four and five years time and that’s what

tax reform is all about – giving lower income tax to help families, encourage people

to save and ensuring that we have a strong taxation base to keep social services going.

You’re not going to improve Australia’s taxation system by running around and

being negative. The Labor Party has put forward nothing in the area of tax. All they do is

oppose. They are hide bound by negativity. They are trapped in oppositionism and for the

sake of the country they should be supporting the Government in these path breaking

reforms, the big reforms which are going to set Australia up in the decades to come.


What do you say to the tax professionals who say with every exemption you have

added further complexity to the system?





Well I think, I think it’s right that the more you have exemptions the more

complex the tax system becomes. One of the reasons why wholesale sales tax is so complex

is because you have so many exemptions and of course you have so many rates. The

Government’s kept the exemptions down to areas like health and education and

charities but if any more exemptions were put in, it would just complicate the whole

thing. It’s one of the reasons why the Government has said all goods including food

should be in. Because if you want to take food out all you are going to do is get a much

more complicated system.


Essentially what they’re doing is criticising the differences between August

and now.


Well I don’t think they’re criticising that. But I think they’re

making the general point, and I agree with the general point, that the more exemptions you

have in your indirect tax base, the more complicated it becomes, the more costly it

becomes to enforce. And that’s why the Government’s kept them to a minimum.

That’s why we say that ideas for further exemption are bad ideas. We ought to keep

the design of the tax package clear and simple and straightforward.


The Democrats say the unexpected concessions yesterday indicate you are ready to

make further negotiations and concessions to get the package through the Senate.


Well, what I did yesterday was define, particularly, what work was charitable and I

think I promised the charities that they would have a very good deal, they’ve got an

exceptionally good deal. And this is a great tax system for charities and I think when the

charities properly understand it they’ll be giving strong support to it. Charities

will do better under this tax system than they do under the current system, significantly

better. So I think for all of the charities, and some of them were expressing doubts, the

great thing about this is that they can support this tax system with a full heart.


So what’s your message to the Senate then?


Well my message to the Senate is here is a historic opportunity to reform

Australia’s tax system. They come along once in a century. And you had a Government

that had the courage to put this to the Australian people and was elected to do this task

and we intend to do it and I think the Senate should grasp the opportunity to be part of

this historic process and endorse the legislation.


How confident are you that New South Wales is going to accept the Government’s

offer on the GST and the memorandum of understanding that’s been outlined by Mr



Well I think they’d be pretty silly if they didn’t, it’s such a good

offer for them.


You’ve tended to hold a fairly hard line though on the application of the tax

package to the Olympics and then lo and behold this development yesterday. What has forced

that turnaround?


No, we’ve always said that the Olympics, and the Olympic tickets will be

subject to GST under the normal rules. The Commonwealth as you know has been giving quite

large financial support to the Olympics and we’ve announced that another way in which

the support will be given. So it’s totally consistent with all of the other benefits

that the Commonwealth has put in in relation to the Sydney Olympics.


Mr Costello can I ask you as a Victorian MP what you’d like to say to the

families of those five Victorian bush firefighters who died overnight.


Well my heart goes out to them. It’s a terrible tragedy. These are people that

are serving their community. They’re only doing it to serve the community and

they’ve lost their lives in tragic circumstances and I and my colleagues and the

Government send our deepest condolences to them and their families. They are very brave


Thanks a lot.