Transcript No. 2000/66

TRANSCRIPT

Treasurer

Mr Costello how much did you spend?

TREASURER:

I spent $23.50.

JOURNALIST:

And how much GST did you pay?

TREASURER:

Well the prices were, that the bread was the same – the bread had gone down I

think by 10 cents – the orange juice had gone down by about 20 cents, the milk was the

same and the wine was the same. But I was given a special deal I believe on the wine as

part of a promotional tour.

JOURNALIST:

So does the receipt show the GST component (inaudible)

TREASURER:

This receipt shows the, this one says the GST has been paid, it’s the equivalent

of a tax invoice. It doesn’t show the amount on each one but the wine separately did

show it. The wine purchase showed it as 81 cents.

JOURNALIST:

Sorry, so it is possible for people to find out exactly what their GST component is?

TREASURER:

Oh yes, yes it is. This is obviously one of the more mixed groceries where you are

going to have some item in a place like this that will have GST and some won’t. For

example bread won’t, milk won’t but orange juice and some of the others will. So

this is your classic mixed grocery, this is where the complexity is probably at its

greatest. This is a shopkeeper who’s taken the opportunity to upgrade the cash

register as you saw, they have the capacity on that cash register to itemise the GST in

relation to all items and to show it separately. In other stores where you’ll get

everything covered by GST, it’s a pretty simple equation, one eleventh of the price

is the GST which you’ve paid.

JOURNALIST:

How does it feel today Mr Costello, a bit like Grand Final Day?

TREASURER:

It does. It feels like a Grand Final, first day of a Boxing Day Test, election morning

all rolled into one actually. It’s a big day for Australia. We’ve been arguing

about tax reform now for thirty years and the day has finally come. I guess the best

analogy is, that I can think of, the best analogy is the change to decimal currency. In

1966 this country changed to decimal currency. We had pounds, shillings and pence. A lot

of people said that pounds, shillings and pence was good enough. There was no need to

change. Yet we did. We look back on those days now and we think to ourselves what was the

argument about? But at that time, all shops had to change their prices. They had to go

around their shelves and they had to change from pounds and shillings into dollars and

cents and people had to cope with the new system. But it was a change that had to be done

for the sake of the country. Nobody would now think of repealing decimal currency and

going back to pounds, shillings and pence. And in five years time, or you know, even five

months time, nobody’s going to say we should abolish goods and services tax and go

back to wholesale sales tax. That’s something of the past. That’s the 1930s. We

are now modernising for a new century.

JOURNALIST:

And are you fearful that people may concentrate more on the price rises than the tax

cuts and that that may take its toll in the polls?

TREASURER:

Well people won’t actually feel the tax cuts until their first payday. So if you

happen to be paid fortnightly some time in the next fortnight, if you are paid monthly

some time I would imagine around the middle of the month, you’ll get income tax cuts.

You’ll see more money in your pocket. In the shops today, you’ll see some things

have gone up, some things are the same and some things have gone down. But the one thing I

can assure everybody of, is, every single taxpayer is going to have more money in their

pocket to cope with price changes. And at the end of the day, Australia will have a better

tax system. As of today, today the first of July 2000, wholesale sales tax is abolished.

It doesn’t exist anymore. Any young person working today gets to take home more of

what they earned. Any family today gets more money from the Government to look after their

children. On Monday, I make the first payment, I authorise the first payment off to the

States of the revenues from GST which is going to fund the schools and the hospitals and

the roads. The New Tax System has arrived. It’s here. We’re now under it. There

are going to be some changeover dislocation and difficulties. That will always happen. But

in four or five months, in four and five years, in forty or fifty years, people are going

to say this was the right decision for Australia.

JOURNALIST:

And you don’t fear that voters may actually be quietly waiting with their baseball

bats to donk you over the head at the next election?

TREASURER:

Well I think people will sit down, they’ll assess prices. They want to have a look

at their income tax changes, their family assistance changes. I think by Christmas people

will be able to work out where they are. I am confident that by Christmas people will

notice that they’ve got a few extra dollars in their pocket. And I can assure people

of this, by Christmas the Government will be collecting less tax than it currently is. And

if the Government is collecting less tax that means that the taxpayers are keeping more of

it. Okay. Thankyou.