Interview with Alexandra Kirk: Tax reform, consumer and small business calls, Beazley reply, benefits

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Interview with Alexandra Kirk: Tax reform, consumer and small business calls, Beazley reply, benefits

Transcript No. 2000/74





Interview with Alexandra Kirk


Tuesday, 4 July 2000

8.00 am

SUBJECTS: Tax reform, consumer and small business calls, Beazley reply, benefits.


Mr Costello, good morning.



Thanks Alexandra.



The ACCC has been swamped with calls from both consumers and small business. The tax

office got more than twenty thousand calls from small business. How do you read that?



Well the ACCC had geared up its inquiry lines for a hundred thousand calls and they got

four thousand. And that seems to have been the main problem. They were switching their

capacity down from a hundred to four, so they didn’t get as many as they were

expecting, quite obviously. In relation to the Tax Office, I think again that’s less

calls than we were expecting. I’ll be meeting with the Commissioner during the day. I

would expect that to kick up a bit. I would be very surprised if twenty thousand was a

number of calls. You’ve got to bear in mind that on some of those days when we were

registering the Australian Business Number, we were getting hundreds of thousands of

registrations in the one day. So I would be surprised if that didn’t kick up. And of

course if it does I would welcome that. Because we want people to understand the answers

to all of the questions they may have.



But clearly there is a lot of confusion there on behalf of small business about what

sort of prices to set, how to set prices and also a lot of complaints from consumers about

prices going up by more than they were led to believe they would.



Well actually, the inquiries which were done by the Competition Commission showed that

97 per cent of prices had risen by less than 10 per cent. So that’s 97 per cent which

is I guess more than, much higher anybody would have imagined. You wouldn’t have

imagined you’d have got compliance like that. 80 per cent were within the range that

the ACCC predicted and of the remainder some were higher but many were lower. So I think

as you heard, even some of the Democrat doubters there on the radio, saying that things

had gone much better than expected, I think that’s the general impression. Now

we’re not going to stop. I think this is a question of continuing the educational

process, but so far so good.



Now Mr Howard confirmed yesterday on this program that people receiving family payments

and also post graduate students would be the only people who are given an opportunity to

make a compensation claim if they believe they are worse off as a result of the GST. Why

can’t other people test the Government’s promise that no one would be worse off?



Well Alex, we’ve been through this backwards and forwards, we’ve been through

Senate Committees, we’ve been through Parliament every single day, every modeller in

the country has had their go at it, and no matter what way you look at it with income tax

cuts and increases in pensions and family allowances, people are better off. I guess the

proof in the pudding is this, at the end of the day, did you know this? The Government is

collecting less tax. That is at the end of the day, when you add up what everybody is

paying and you take away wholesale sales tax which is abolished, and income tax which is

cut, and all of those indirect taxes which will be coming away, the Government is

collecting less tax and as a consequence it’s made sure that people are better off.

Now that’s just for individuals, but for the country as a whole, we’re now going

to have a system where our exporters are helped, where our manufacturing industry

doesn’t bear the heavy weight of the wholesale sales tax as it currently does, where

company taxes are cut and income taxes are cut and this will make Australia a better

economy. And we hear Mr Beazley, last night, goes on television and after what, a three

year campaign against tax reform, the words he never uttered was, that he will repeal the

GST. Even Kim Beazley now wants to keep GST. After fighting it for three years, he

didn’t promise to repeal it last night, he confirmed, and I always said he would do

this, he confirmed, that Labor now wants to keep it.



Now Mr Beazley also says that he wants to make it fairer and your GST partners the

Democrats, say that students, pensioners, low income earners, should all be able to make a

case for compensation if they believe they are worse off. Will you give them that




Well let me take the first point up at the beginning. Mr Beazley says he wants to make

it fair. Alex, Mr Beazley’s whole campaign against GST was, that you couldn’t

make it fair. He said to the ACOSS National Congress on the 6 November: “We do not

believe it can be made fair.” He said at a doorstop in Port Adelaide: “This is a

tax that cannot be made fair.” So he said it should never be introduced, it could

never be made fair. We go through the hard work, the Government leads, the Coalition takes

the weight of economic reform, we bring in the big tax change and all of a sudden he wants

to keep it. All of a sudden he says…



But what about your GST partners the Democrats when they say…



…all of a sudden he says it can be made fair. But then he says, well you say, well

how, what should you do, does this involve repealing 50 per cent, does it involve

repealing 30 per cent? Oh no. He can’t tell you that. And look, I make this

prediction now. And I said as Labor fought this for the last three years, that all they

were doing was being opportunistic and the moment it came in, they will want to keep, they

would want to take the benefit of it. I will make this prediction now. The reason Mr

Beazley can’t tell you what he would roll it back on, is this rollback is

disappearing by the minute. And when it actually comes, you are going to wonder why we all

sat around, sort of salivating at the prospect. It’s disappearing. Rollback is the

policy that dare not speak it’s name. First of all, he was going to rollback 100 per

cent, that was his position on Friday, now he’s going to keep it. He’s not going

to rollback 50 per cent, we know that. He’s down to a third, he can’t tell you

what he’s going to roll it back on, and as I’ve always said, that the Labor

Party’s strategy has been this…



No people believe they are worse off…



…they wanted to opportunistically take advantage of the Government doing the big

reform and their biggest hope in life was that they could get elected and take advantage

of it.



If people believe they are worse off, what redress do they have?



Well people are getting income tax cuts…



No but if they believe that what your giving them isn’t fair, that they are worse

off as a result of the GST, what can they do?




Well, people have got to make sure that they get all of the benefits, because if they

get all of the benefits and let me go through them, they will be better off – the

benefits of the income tax cuts, the benefits of the increased family assistance – people

have got to make sure that they start getting that this week – the benefits of the savings

bonuses for the pensions and the self funded retirees, the benefits of the pension

increases, the benefits of the rent assistance increase of 10 per cent. People have got to

make sure that they get all of their entitlements, and that’s the big challenge for

this week to make sure you get your entitlements, check your pay packet. Please, make sure

the employer has passed on the income tax cut. Ask the employer when it’s going to be

paid, how much it’s going to be, to make sure you get your benefits.



Peter Costello thanks very much for joining us.



Thank you.