Doorstop Interview

Ministerial Entrance

Parliament House, Canberra

Thursday, 12 May 2005
8.20 pm

SUBJECTS: Labor’s Budget Reply

TREASURER:

Labor stands for higher taxes. For two days they have been making it clear,

they want to deny Australians a tax cut on 1 July and tonight they confirmed

it. If Labor had its way there would be no tax cut on 1 July. Labor will be

voting to delay the tax cuts which Australians need and deserve and the plan

which has been cobbled together tonight by Mr Beazley, frankly, would make people

much worse off. Mr Beazley put together a programme tonight which will have

a higher tax rate for low income earners and which wouldn’t produce a

tax cut of the dimension he claimed until 2008-09. Three years away. You can

see why Labor has been campaigning against the Government’s tax proposals

because they deliver real benefits on 1 July of this year. The cobbled together

confused, misdirected, unthought through proposal that Mr Beazley put tonight

is for something to happen in 2008-09, in the next Parliament. Not in this Parliament,

in the next Parliament.

JOURNALIST:

But the tax cuts under Labor would apply from January 1^st next year,

wouldn’t they?

TREASURER:

Well hang on, the Government is proposing a tax cut on 1 July. Mr Beazley is

proposing no tax cut on 1 July. Mr Beazley’s table – and you ought to

ask him – which sets out allegedly how much you get, is based on what would

happen in 2008-09. Now 2008-09, let me remind you, I mean this year’s

Budget is 2005-06, the next election is due in 2007. He gives you this table

as to what he is going to do in 2008-09. It is a joke.

JOURNALIST:

So Treasurer, why do you deserve a tax cut ten times the size of the one that

you are offering 80 per cent of the Australian workforce?

TREASURER:

Can I say this, that I don’t believe you should go on the top tax rate

in Australia until you earn $125,000. You know, Mr Beazley for all talk and

all the bluster, you know what he said tonight? He said he thinks that threshold

ought to go to $100,000. That is what he said tonight. He has conceded the Government’s

point but he just can’t bring himself to vote for it. He wants to take

that threshold to $100,000 rather than $125,000. I thought his whole point was

that, when he was running his envy politics – Kim Beazley has been running envy

politics all week – when he comes to actually make an announcement, he is like

a balloon, he just runs out of air, it fizzles out and he actually concedes

the case.

JOURNALIST:

Treasurer, isn’t there some merit in offering taxpayers double the tax

cut that you are offering?

TREASURER:

What year? You tell me, what year?

JOURNALIST:

But he claims…

TREASURER:

No, no, no, hang on, hold on. What year does he claim that his tax cut would

take effect?

JOURNALIST:

2006.

TREASURER:

Is that right?

JOURNALIST:

Well that’s what he says.

TREASURER:

Is that right? Is this table here what would happen in 2006? Go and ask him.

JOURNALIST:

But you have analysed it and found that in fact that is not what would happen

in 2006 if he made the changes…

TREASURER:

Hang on, hang on, you ask him, what year, this table here, he has got this

table here on page 3 of his release…

JOURNALIST:

Yep.

TREASURER:

…what year, you notice if you look very carefully there is no year?

JOURNALIST:

Sure, but you…

TREASURER:

No, ‘sure’ you said, you said ‘sure.’ Do you notice

that there is no year?

JOURNALIST:

Yes, yes, no, but…

JOURNALIST:

But he did say that the changes would come into effect from the 1^st

of January 2006.

TREASURER:

No, hang on, hang on, no, he didn’t. This is why they put out, have a

look, have a look at it, how long is it? Have a look at it. Hang on, hang on,

well, what? I am now suppose to explain his policy am I?

JOURNALIST:

Well his policy…

TREASURER:

No, no, no, no, let me tell you, he says – just wait on – he says that he has

a bonus which has a starting value of $500 on 1 January 2006 and would increase

to $680 on 1 July 2008. Right, 2008 delivering a tax free threshold of $10,000.

Now what that means is that is 2008. Go and ask him what year that table relates

to.

JOURNALIST:

Why don’t middle income earners deserve more in tax cuts?

TREASURER:

Well, under the Coalition they will get it. They will not only get tax cuts,

but under our proposal we increased the threshold for Family Tax Benefit A,

we changed the taper on Parenting Payment. Can I tell you something Mr Beazley

didn’t say tonight? Did he say he supported the change of taper and Parenting

Payment? I don’t think so. Did he say tonight that he supported the increase

in the Family Tax Benefit A threshold? I don’t think so. For middle income

families, the value of those changes produces hundreds of dollars in excess

of tax cuts, in excess of tax cuts. Now, I don’t think he said anything

about Family Tax Benefit, did he? I don’t think he said anything about

Parenting Payment, I don’t think he said anything about tapers, I don’t

think he said what year his table relates to. Now, remember this is the Party

that told you when Australians received $600 it didn’t exist. I am going

to raise a question and you ask him. What year, what year, does that table refer

to? Because as far as I can get from reading his documentation it is 2008.

JOURNALIST:

Will you be able to introduce the tax cuts on July 1 without legislation or

have a retrospective…?

TREASURER:

No, you cannot, I’m sorry, you cannot introduce tax cuts unless they

are legislated.

JOURNALIST:

Will you negotiate…

TREASURER:

No hang on, hang on, you cannot introduce a tax cut unless it is legislated.

To legislate something in Australia, it has to go through the House of Representatives

and the Senate. If the Australian Labor Party blocks the tax cut in the Senate,

that means that it cannot take effect on 1 July. You must be very clear about

this, the Australian Labor Party is opposed to cutting taxes on 1 July. And

when we have a look at its press release tonight we see why. It doesn’t

want a tax cut on 1 July.

JOURNALIST:

Mr Costello, you said that you were going to receive advice from the Commissioner

of Taxation this morning about whether or not businesses could sort of come

to their own arrangements in the expectation that this would pass the Senate.

What is that advice and if you haven’t got it yet, what is taking so long?

TREASURER:

The advice is that you can’t cut taxes until legislation is passed.

JOURNALIST:

From the Commissioner of Taxation?

TREASURER:

Yes, you cannot cut taxes until the legislation is passed and so if the legislation

is not passed, people, if Mr Beazley is able to defeat the legislation, I am

afraid Australians can’t have a tax cut on 1 July of 2005.

JOURNALIST:

The Government is refusing to compromise to reach negotiations with some of

the minor parties to do this?

TREASURER:

Absolutely, we want to cut tax, and let me make this entirely clear, we will

get this tax cut through. We will get it through when the Senate changes after

1 July. All Kim Beazley can do is this, delay people’s tax cuts. But I

give this assurance to the Australian public, we are not going to allow Labor

to frustrate their tax cuts. We are going to do everything that we possibly

can to get them a tax cut on 1 July. Thanks.