GST, Prices, First Home Buyers Scheme

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GST, Prices, First Home Buyers Scheme

Transcript No. 2001/035



Hon Peter Costello MP


Doorstop Interview
ATO Call Centre, Burnie, Tasmania
Wednesday, 11 April 2001
11.35 am


SUBJECTS: GST, Prices, First Home Buyers Scheme


We have just been meeting some of the staff here at the ATO Call Centre in

Burnie. Back in 1998 when I was last here in Burnie we made a pledge that we

would be setting up a Call Centre for the Australian Taxation Office. Weve

delivered on that pledge. Today youve got 40 people who have jobs as a result

of that, working mostly on GST at the moment which is creating good job opportunities

here in Burnie for those employees. I pay tribute to the staff and to the management.

From what Ive seen theyre doing a great job and they seem to enjoy it. Theyre

the frontline troops in administering the new taxation system. And from what

I can tell theyre doing a very good job.


…GST, whats your reaction to the Chairman of Coles-Myer comments about the

effect its having on business and to Coles-Myer?


Well, I think one of the points that he made is that as a result of the surveillance

that we put in place with the Australian Competition and Consumer Commission,

business has been wary about increasing prices and thats a good thing, a good

thing for consumers. Business may have, might be chafing a bit because theyd

love prices to be a little higher but its been a good thing for consumers

and in many areas prices actually have fallen with the change to the taxation



But isnt there a risk that that could then lead to shedding …..(inaudible)…

because businesses have to cut some costs somewhere and …(inaudible)… like



You cant have it both ways. You cant say youd like lower prices and youd

also like higher prices. From a consumer point of view, lower prices are a

good thing. And Im on the side of the consumer Im afraid. I think if you

can have lower prices, thats a good thing for them. Theyre getting lower

prices on fresh food at the moment, thats a good thing for families. And that

of course gives them spending power in other areas. At the same time, families

have had very significant cuts in income tax and increases in family allowances.

They have more disposable income in the family, lower prices in the supermarket

store, think where wed be if people were struggling under higher income tax

and higher prices.


But if jobs go, then theyre not going to have as much money to spend?


Well, I dont think jobs will go because prices have been restrained. If you

think jobs depend on high prices, youd have to put up prices in every shop

in Australia. I dont think that would be very good for employment. I think

low prices are good for consumers. I know you are trying to sort of argue the

contrary case, but I think if you spoke to consumers, theyd be quite happy

with lower prices. I dont see anybody out there complaining that prices are

lower. And youve got to remember this, the Labor Party spent five years opposing

tax reform on the grounds it would increase prices, now we see that prices

are restrained and theyre complaining that theyre too low. You cant have

it every way you know.


Speaking of tax reform, did David Crean push for a roll-back at last weeks

Treasurers meeting?


Dr David Crean came as all of the State Labor Treasurers did, to a meeting

in Canberra to decide the allocation of GST revenue. And Dr David Crean, the

Labor Treasurer from Tasmania was determined to get as much GST revenue as

he could. In fact, Tasmania gets over $1 billion in GST revenue. Every dollar

of GST collected goes to state governments. And in Tasmanias case, $1 billion.

If youre going to roll-back the GST, thats less money for Tasmania and Dr

David Crean is not interested in less money for Tasmania. No Labor Treasurer

asked me to roll-back the GST. What they wanted was more revenues out of the

GST, not less. And I think that Dr David Crean is much more realistic

than his older brother. You have a brother running around talking about roll-back,

none of the Labor Treasurers have the remotest interest in roll-back. In fact

no significant economic figure has any interest in roll-back which will tell

you about the economic significance of Mr Beazley and Mr Simon Creans



One of the things you put up on local radio this morning was the new home buyers

scheme. Has any of the states started giving out the grants?


All of them could actually…(inaudible) …we will fund a $14,000 grant to

every person who signs a contract for the construction of (inaudible) home.

That money is available now. The states have been administering the scheme

since 1 July of last year for $7,000. Under that scheme they can now give out

a grant of $14,000 if its for a new home and I would urge them to put a bomb

under their bureaucrats and start getting that money out. The money is guaranteed

from Canberra. At the moment its paid out and they will be fully reimbursed.

Theres no excuses for delays on this. This is money for first home buyers

and I say to the first home buyers make sure that you put in an application,

this scheme is only going to last until the end of this year, after that, the

maximum grant will go back to being $7,000.


Which states are doing the job?


Well, I think all of the States could lift their game and put a bomb under

their bureaucrats seats. (inaudible) I saw Dr David Crean, for example, was

running around with $7000 (inaudible) for first home buyers, (inaudible) and

now he is running around with $14,000 grants. All he has got to do is he has

got to get his (inaudible) problem. It is fully funded from the Commonwealth,

it is to help home buyers, is not to help State Governments, it is to help

home buyers and to kick start the housing and the construction industry.


…comments from yesterday from Ian McFarlane supporting the GST saying it

was good for the economy. Do you think people listen to those sort of comments?


Well, the Governor of the Reserve Bank said that he supports GST as the Commonwealth

Government does. 150 countries in the world do. The OECD has recommended this

tax change, the International Monetary Fund has recommended the tax changes.

As far as I know in the modern world, the only two areas where there is opposition

to GST is in Swaziland and in the leadership of the Federal Labor Party. Beazley,

Crean and the Government of Swaziland are the only people who oppose GST. 150

countries in the worlds, now, I dont think you will get anybody else on the

record saying that Wholesale Sales Tax is preferable to a GST. I make this

point, if Beazley and Crean are so against GST, then they would promise to

reform it, wouldnt they? They have been fighting it for 5 years, and they

reckon they are going to get elected, if they were so against it theyd be

repealing it. It has just been an absolute charade. This has been an absolute

charade. All it tried to do is be cheap and populist, take a few political

points and their desperate desire is for us to fix up the taxation system and

they persistently desire to try and take advantage of it.


Is it frustrating for you then, that perhaps the general population out there

the isnt grasping the GST benefits, in light of the recent polls that have

come out, now the Bulletin poll, saying that your seat is in fact in jeopardy

for yourself?


We have to campaign hard in every seat and I can assure you I do no less than

anybody else. I think (inaudible) of the benefits now that we have reformed

the taxation system. GST now pays the salary of every school teacher, in every

classroom, in every school in the state of Tasmania. It now puts policemen

on the beat. You want to roll-back the GST, if Beazley and Crean want to rollback

the GST they should name the classrooms where they are going to ……….(inaudible)

police stations, where they are going to axe policemen, because the GST going

to the State Government, it is now paying for all of those services. Thats

the benefit. Now, the reason why they never name a policy is they dont want

the public to know the truth. That is, if you are going to roll-back the GST

you are going to have to start taking these services away from people. Now,

there is a very interesting article in todays Daily Telegraph that has Labor

Party backbenchers saying that Mr Crean spent the last 5 years promising to

spend more and now he says he is going to spend less, one of the backbenchers

says, I cant work out the maths on that one. Simon Crean is the kind of bloke

that will tell you nine plus five equals ninety-two. You know, it is all over

the place. It defies logic and this GST roll-back takes services away from

people. You have got to understand that and it means higher income taxes.


Are you (inaudible) worried about the Bulletin poll about your seat and the

Prime Ministers seat?


Look, what we see in Australia today is quite common, and I approach every

single election as a tight contest. Now, Beazley and Crean reckon that they

are going to walk in this Federal election. They are so confident that they

are refusing to release policy. Mr Beazley, in the papers today, saying, he

says, all of us are campaigning, he says, its distracting, I should be writing

policy. He said in the Financial Review today, I should be writing policy.

Well, I ask him this? What have you been doing for the last 5 years? He should

have been writing policy to date. What happened in the last 5 years? Hes been

the Opposition leader for 5 years and he says, I should be writing policy,

too right. He should have been writing 5 years ago. But hes just got this

lazy attitude of coasting into Government without a policy, but the people

of Australia need to know what he stands for and they deserve to get a cold

hard look at him.


Speaking of elections, does it worry you that the State Liberal Party is running

at an approval rating of about 25 per cent? Do you think that will affect the

Federal Liberal Partys holding in the next election?


Well, look, I am not down here to comment on State issues. I am not responsible

for the State issues, I wish my State colleagues well. I am here to deliver

on a promise which I made before the last Federal election and I am here to

support Alan Pattison, who is the Liberal candidate in the next election, and

I am here to work on federal issues.

Thank you all for your time.