Transcript No. 2000/73

TRANSCRIPT

Treasurer

Peter Costello joins us now from Melbourne. Treasurer, good morning.

TREASURER:

Good morning Fran.

KELLY:

Well, Kim Beazley says, your GST will divide this country because it will benefit big

business and those of us on high incomes, and others will be losers. Will you be watching

to make sure that prediction doesn’t come true?

TREASURER:

Well if Kim Beazley thinks it will divide the country he would be promising to repeal

it, wouldn’t he?

KELLY:

Well, he says you can’t unscramble eggs. As we know, business has spent millions,

if not billions, of dollars on revamping their computer systems. I guess they

wouldn’t want him to take all that away and start again, would they?

TREASURER:

No Fran, it would be the easiest thing in the world. It’d be a one-line bill . . .

KELLY:

Really, it wouldn’t mean . . .

TREASURER:

. . . Goods and Services Tax is hereby repealed, and Wholesale Sales Tax Act is hereby

enacted. It would be the simplest Act that the Parliament could pass. If Mr Beazley really

thought that GST couldn’t be made fair, last night he would have said these words

– I will repeal it. The fact that he doesn’t say those words Fran, tells you

what we all know, is, that this is a reform that had to be done for Australia. It is

irreversible. You would no more think of going back to wholesale sales tax today than you

would think of going back to the pounds, shillings and the pence. And the big difference

between Kim Beazley on Friday of last week when he was still a supporter of the wholesale

sales tax, and Saturday morning, is that this tax which he said all along, he’s

opposed to, can’t be made fair, he now wants to keep.

KELLY:

Well, he has opposed it all along, and he said he was going to come up with some

rollback of the tax, and other changes to make it fairer and simpler. If he does come up

with a rollback to give some people a greater buffer zone, or make some who perhaps feel

they’re losers, feel like they’re not losers, would you look at matching that?

TREASURER:

I think this is another important point, Mr Beazley’s change, his flip-flop. He

now talks about making it fairer. He told the ACOSS National Congress on the 6^th

of November 1998, we do not believe it can be made fair. He said in Port Adelaide on the

14^th of May 1999, a tax that cannot be made fair. His whole campaign . . .

KELLY:

He’s still saying it’s not fair though. He’s said he’ll make it

fairer . . .

TREASURER:

He, no, he said, it cannot be made fair. He said he was opposing tax reform because it

cannot be made fair. It can’t be done. Now, of course, that the Government has taken

the lead, and now, of course, that the Government has done all of the hard yards, the hard

yakka, he’s changed his view – it can be kept, and it can be made fair. You see,

he’s boxed himself into a corner. For the last three years, trying in a opportunistic

way to oppose tax reform, saying, it can’t be made fair. When the heat comes on, and

all he has to say is, I’ll repeal it, we would find out what he’s really been

thinking all along. I’ve said this all along Fran, that he wanted the Government to

do the hard yards. He wanted the Government to lead. And his greatest wish in the world

was that once we’d done tax reform, he could get himself elected and take the

benefits of it. That’s what this argument has been about for the last two or three

years.

KELLY:

Well, you have done tax reform now, it’s in place. If Kim Beazley’s

successful in rolling it back, if he can make it fairer for some people, if he can make it

simpler for business, are you concerned that that will get him the points at the next

election.

TREASURER:

Well, tell me how he’s going to roll it back, because . . .

KELLY:

Well, he said he will tell us in plenty of time for the election.

TREASURER:

Well, you’re asking me to comment on a policy of his which he can’t tell us

about. And Fran, this rollback, this disappears by the minute. On Friday he was going to

roll back 100 per cent. By Sunday he’s not even . . .

KELLY:

I don’t think . . .

TREASURER:

. . . going to rollback . . .

KELLY:

. . . I don’t think that’s a fair, I don’t think he was ever going to

rollback 100 per cent . . .

TREASURER:

Oh no, no, Fran, no, that’s true. The Labor Party said that before it came in they

would repeal it. Wayne Swan put out written material, so they would repeal it right up

until the 30^th of June . . .

KELLY:

Sure but, that’s saying . . .

TREASURER:

Now, now, on Sunday . . .

KELLY:

. . . they opposed it.

TREASURER:

. . . well, they opposed it . . .

KELLY:

They opposed the tax.

TREASURER:

. . . okay, they opposed it on Friday. Do they oppose it today?

KELLY:

Well, they say they can’t unscramble the egg, and they will rollback. Come the

next election . . .

TREASURER:

Well you can . . .

KELLY:

. . . they will announce . . .

TREASURER:

. . . Fran, Fran . . .

KELLY:

. . . their rollback.

TREASURER:

. . . it’s a one-line bill. The Goods and Services Act is hereby repealed. The

Wholesale Sales Tax Act is hereby enacted.

KELLY:

Okay, well look, let’s go to this bill . . .

TREASURER:

It’s a one-line bill, it can be totally repealed. If they really believed deep

down, which they never did, that wholesale sales tax was preferable to goods and services

tax, today they would be promising to repeal it. But they never believed that deep down,

you and I know that. Deep down they always wanted us to do the hard work, and they wanted

to take advantage of it.

KELLY:

Well Treasurer, let’s go to your promise, your promise that there would be no

losers under this new tax except tax cheats. There are some people who don’t get

anything through tax cuts or through your compensation benefits because they’re

outside the tax net and social security net. You’re offering them a one-off payment

of $120, now that’s just over $2 a week, how is that going to be enough to compensate

these people for increased costs on a beer, on clothes, on rent, on petrol, on train

fares?

TREASURER:

Well Fran, if you’re not earning an income, you are entitled to a pension or an

allowance of some kind . . .

KELLY:

But you know there are some people who are outside those nets.

TREASURER:

Well, give me an example.

KELLY:

Well, migrants on a two year waiting period, people who are self-employed earning very

little, some students, post-graduate students . . .

TREASURER:

Well, self-employed people who are earning are paying tax, they’re paying tax and

they get tax cuts. If they’re not earning, they’ll be getting job search

allowances. If they’re studying, they’d be getting Austudy allowances. If

they’re families, they’d be getting family allowances. All of these allowances

are being increased. Now what we’ve said is, if you could find these cases, and they

have to be pretty unusual cases of people who don’t earn anything and somehow

don’t qualify for a pension, then if they come forward we would provide them with

some assistance. But can I say this. It’s never been done in the past, you know, in

the past where there’s, if you could find people that don’t earn anything and

somehow don’t qualify for a benefit, and the CPI goes up, as it did regularly right

throughout the 1980’s and 1990’s, I never saw a Government before saying you

could come forward and claim an additional benefit. So here we are, we’ve done, doing

something that’s never been done before. Never, ever been done before.

KELLY:

Well Treasurer, we’ll have to see how it goes, this biggest shake-up of the tax

system since World War II. Thank you very much for your time.

TREASURER:

Thanks Fran.