Transcript No. 99/38

Hon Peter Costello MP

National Press Club

Wednesday, 12 May 1999

1.00 pm

SUBJECTS: Budget

TREASURER:

Thank you so much Ken. Chief Minister Kate Carnell, members of the diplomatic corps, ladies and gentlemen. Can I say Ken its always a pleasure to come here after a Budget and its always a pleasure to be delivering Budgets, its a pleasure to be in Government. So I hope Ill be down here on some further occasions.

When we were sitting down to put together this Budget we had some very clear ideas about where Australia was and where we wanted it to be; what our key objectives were and how we wanted to achieve them.

We wanted to provide a Budget which would give Australia a bridge into the 21^st Century. We wanted to make sure that as we came to the end of this Century and started looking forward to the next that we could enter the 21^st Century, that we could enter the turn of the next decade, that we could start much as we started in 1901 as a Commonwealth young, prosperous, free, with all of our potential in front of us. We thought that just as we entered this Century with a clean sheet, a debt free Commonwealth, we could enter the next Century as a debt free Commonwealth a clean sheet, no interest to pay, a growing economy, jobs and opportunities for our young people, and all of our future in front of us.

We wanted to lay down a Budget which would keep growth in our economy strong. Growth which would provide jobs and rising living standards. We wanted to lay down a Budget which would be responsible not just for this generation, but responsible for the next generation as well. We wanted to lay down a Budget which would keep to a framework.

When our Government was elected in 1996 we wanted to set out objectives and we wanted to meet them. Our fiscal objective was that we would get the Budget into balance in our first term and we met it. That we would halve the debt to GDP ratio from 20 per cent to 10 per cent by 2001 and we are on track to meet it. That we would be fair in generational terms to future Australians who are bearing the brunt of bad economic policy in the past. And when I heard somebody say on the television last night the markets have taken this in their stride, there are no surprises, I thought that that was really an indication of our success. That we had laid out a road map and most importantly we had kept it. Gone are the days when a Treasurer used to be able to go out and massage expectations in a hope of defeating them. Gone are the days as happened in the last year of the Labor Budget where, unbeknowns to the Cabinet, a group of Ministers decided to privatise the Commonwealth Bank so they could say the Budget was in surplus when it was $10.3 billion in deficit. Gone are the days when you could pull the rabbits out of the hat, searching for the cheap headline or the short-term boost to cover up long-term policy failure.

And if we as a country could put together a framework and keep it and give that certainty to the business community, and give that certainty to our citizens, and give that certainty to those that are investing in our country, and give the certainty to policy makers, we could set up a framework which would give Australia some very great opportunities.

So we wanted to give our country the opportunity of the Century as we move into the 21^st Century. We wanted to keep within our framework and we wanted to meet our promises. We may have done something very special in this Budget. Weve published a document which outlines every one of the promises that we made in the lead up to the last election in October and matches it up with all of the Budget measures that fund them. We wanted to do that because when we made those promises we did so conservatively, we did so in full knowledge of the implications that we would be held to them if we were elected. And we did it because we want the right to introduce all of our promises.

And the one great promise that stands between promise and actuality is the new tax system. The new tax system for the new Century. Kim Beazley seems to believe in the reverse mandate theory of politics. The only mandate according to him that you get when you win an election is a mandate to break your promises. Politics is changing. We say that the mandate you receive in an election is a mandate to keep them and we ask for nothing more and nothing less. We say to the Australian Democrats, the Australian Democrats who claim to be elected for the purpose of keeping governments to their promises, we say to them very simply: yes please. Thats all we ask for. We wont complain if were kept to our promise. Our complaint will be if were not allowed to bring it to fruition.

We say to the Australian Senate, the House of review, not the House that makes a government, not the House that draws a tax system, not the House that administers revenue bills, that in accordance with long time Constitutional practice, an elected government should be able to manage the economy, including the revenues of an economy, which originate in the Lower House, and which are necessary to the process of government.

And in meeting our promises were also able to do some new and exciting things as well. One of the things I think the Government feels very strongly about in this Budget is the increase in national health and medical research. This is something that we as a country are good at. Were good at medical and scientific research. This is the country that brought forth the Macfarlane Burnetts and the Victor Changs and the Howard Floreys. This is the country thats led the world off a strong educational base. This is the country which has world class endowed institutions and hospitals and universities and privately (inaudible). And this is a country which can be at the cutting edge of a new industry a biotechnology industry. And the doubling of funding to the National Health and Medical Research is actually an opportunity, a doubling of opportunity for the country and a doubling of opportunity for our scientists and researchers, who can be amongst the worlds best, who can do here whats at the cutting edge of new techniques and can develop in health and can develop in agriculture and land use new techniques for our country as it moves into the new Century. Part of the new economy for Australia, the educational/service economy which will diversify our economy and contribute to its stability.

And so we had a framework in Budget policy, we have a framework in monetary policy and I think if I had to name the other area where we as a country have to meet the challenges, its in the area of structural change. You know one of the lessons that weve learnt through the Asian crisis is the importance of institutions. I often say that good institutions are like a marriage: you may not appreciate it when its there but when it ends you know youve missed something. And the good institutions: a firm central bank, good corporate regulation, prudential standards, bankruptcy and insolvency laws. All of those things that we take for granted in Australia because they work were a very big part of ensuring that we had the stability to meet the Asian financial crisis. Lets not take this too easily, I think because weve survived the Asian financial crisis theres a tendency in this country to say what crisis?. We have lived in the last two years through the biggest financial and economic crisis of our lifetimes. The one thing we always knew in Australia throughout the 1980s and the early 1990s was whatever we did to the domestic economy, however much we mucked it up, thered be a booming region which would pull us along in its wake. And all that changed in 1998. We had a region in recession, which pulled us down. And as Japan and Korea and Hong Kong and Singapore and New Zealand and Indonesia and Malaysia and Thailand all went in to recession, the expectation this time last year amongst many of the financial commentators was that Australia would follow suit. That we too would be pulled into recession and spiralling unemployment.

The Australian economy didnt go into recession, it grew. It grew faster than the countries of Europe and faster than the G7 and faster than the OECD and faster than the US economy which is sometimes described as being immensely powerful and strong. And its the institutions that contribute so much to stability. A stable budget policy, a stable monetary policy, institutional renewal, our prudential regulation, the Australian Prudential Regulatory Authority; whats known in the literature as the twin peaks doctrine of prudential regulation in Australia leads the world. And there are countries now trying to emulate us. Our Charter of Budget Honesty is recommended by the IMF as a model for other countries. In this budget we move to accrual accounting which puts us in a handful of countries in the world. And may I say it was a big move.

Accrual accounting was a very big move, but having put in place a Charter of Budget Honesty, having put in place a medium-term fiscal framework, having put in place accrual accounting, I dont think any Government in the future could ever go back to the tricks of the 80s and the 90s. The balance day transactions, the use of privatisation for recurrent consumption, concealing the true nature of the underlying deficit. And ramping down the forward estimates by not making provision for capital expenditures. I think these are now irreversible, changes. I hope theyre irreversible changes. They were certainly put in place to be irreversible to ensure that the kind of conduct that we saw in the early 1990s can never be practiced again. Theres been a bit of media commentary since the Budget of last night, to say, well all of this is some how on hold pending the Senate vote on the new tax system. I want to make a few points about that, the first is this is a Budget for 1999-2000. This is a $5.4 billion surplus for 1999-2000, what happens in the Senate will not affect 1999-2000, the new tax system comes into effect on 1 July 2000 for the budget year 2000-2001. What happens in the Senate will most definitely affect, not this Budget, but the one after. But not this Budget. This is a Budget for 1999-2000.

Secondly, this Government does what all Governments have to do, that is, it budgets on the basis that its measures will be passed. When a Treasurer announces a number of measures, he budgets them into his budget. We dont draw up two budgets; one that says what will happen if the Senate accepts the budget and one that says what will happen if it doesnt. Its like in 1996, when we put in place measures to get the Australian budget out of deficit and close the gap by about $8 billion of expenses, that all went in the budget. We had no guarantee it would go through the Senate, but that was way, the way we were budgeting and that is the way that we are budgeting in 2000-2001.

The third point I would make is this. If the Senate rejects the new tax system, it doesnt make the outcome in 2000-2001 worse, it would add $5 billion to the surplus. And I make that point for this reason, the new tax system cuts tax for Australia. The new tax system cuts tax for Australia, it raises it in a much better way, but it cuts tax. The Government is not introducing a new tax system to get more revenues. This is a Government that is not seeking more revenues. In four years we havent increased income tax or wholesale sales tax or petrol excise. We havent increased company tax. In four years weve driven the budget into surplus by pruning expenses. We want to engage in the great structural change because we are looking down the barrel of the new century and we want a tax system, not from the 1930s but for 2030.

And we particularly want to do it to make sure we have a tax system which grows to be the kind of economy which we will be building in this country and which can fund all of the social obligations that we believe in, and can make sure that we are fully funding in relation to our pensions and our health care and our education, our roads and our infrastructure and all of the social obligations that we believe in for the future. And thats why good economic policy and good social policy run together. Someone once said its like breathing in and breathing out. You run a good economic policy to run a good social policy. Those people that think that somehow decent or fair or compassion, to run a bad economic policy, to spend money they dont have, and not to set aside the wherewithal long-term to look after the social security obligations are being neither honest with themselves nor with their hearers.

Its sometimes said that you can run but you cant hide. I think Ive seen a new thing after this Budget. I think Ive seen Kim Beazley both run and hide. Hes running from responsibility and hes hiding behind Senator Brian Harradine. I dont think Ive seen a situation where the key response to the Budget comes not from the Leader of the Opposition but a Senate Independent. And its a situation which Mr Beazley himself has created. Rather than run a policy he runs a negative obstructionism. Tax reform, hes against that; putting the budget into surplus hes against that; if the sun came up tomorrow hed probably be against that too; you know if todays Wednesday, hes against that. You name a measure, he will vote against it and of course thats what you do when you cant create; you seek to destroy.

I think the next decade could be a special decade for Australia. I think in the next decade, with a growing economy, the budget in surplus, the removal of Commonwealth debt, low inflation, low mortgage interest rates, job creation, an economy which has survived an Asian crisis, a strong economy leading in living standards in a region which sooner or later will come back. This could be a decade for Australia. But you wont get there by doing nothing. You wont change by voting down everything. I think that we have in front of us something that we can reach out and take hold of, which will give our country the kind of opportunities that come along every couple of decades. And it could be our turn, thats what the Government wants to see and thats what this Budget is designed to take hold of.

Thanks very much.

Thank you very much Treasurer. As we move into a question period, I would like to remind our media members that theres a very big demand for questions here and back at Parliament House where Mr Costello will have to leave from here, for Question Time. So our time is limited and brevity would be greatly appreciated. The first question today is from Liz Riddell.

Treasurer, Liz Riddell, Australian Associated Press. Senator Harradine has reacted very strongly to the Budget, hes using words like shocked and ashamed, saying he is shocked and ashamed that the family compensation is tied to the GST. I was wondering whose idea that was and whether or not it was a wise one? And also you are heading to Malaysia and Hong Kong at the weekend. I was wondering what your message will be to the region.

Well can I make this point. The Government is not just reforming indirect tax, were abolishing a whole lot of current indirect taxes and introducing one broadbased Goods and Services Tax. We are reforming the income tax scales, were reforming CommonwealthState relations, we are reforming family allowances and as part of that, we are amalgamating twelve family payments into three. If you could name the twelve family payments that apply at the moment, their income test thresholds, their taper rates, their assets tests and their levels of benefit today, you most probably would be one of about two people in Australia. The complexity is extraordinary. And the two people in Australia wouldnt include me either by the way. Were bringing them down to three. Theres going to be a benefit paid per child; a benefit paid for the single income family and a benefit paid for child care. Harmonising the income test, taper rates, all the rest of it.

What weve said in relation to those family payments which, replaces family assistance, is unlike family assistance which doesnt apply to 19 and 20 year olds, the benefits going to go right up the scale to 19 and 20 year olds. That is part of the Governments reform of family assistance. You said before its tied to GST, its tied to the reform of family assistance. There isnt going to be a family allowance, you cant tie it to anything else. This is a whole revamp of family assistance giving bigger benefits to families and thats all in addition to the cutting of income taxes. So its not a question of tying it to the GST, its tying it to the benefit which will exist from 1 July 2000, which is the Family Tax Benefit.

In relation to Malaysia, Im going to the APEC Finance Ministers Meeting in Malaysia on this weekend. We will be pressing our case through the APEC forum in relation to international financial architecture. We think theres a tendency now that it seems that the eye of the storm has passed, to say, oh well theres now no need to continue reform in international financial arrangements. We think there is. We think that the recent events exposed the flaw in international financial arrangements and we think we ought to fix it before the next flaw comes. Now Australia cant fix this on its own and if you were going to change matters, and we particularly want more disclosure in relation to hedge funds, youre going to have to get cooperation from the US and other major economies in the world. The US is a member of APEC, Japan is a member of APEC and we will be advancing our case at the APEC forum this weekend in relation to those financial issues. Will we have a message? Well, we will also have the message that we think strong institutions are important for developing economies. We in Australia are prepared to take a lead in this. We are making available training in prudential regulation, in corporate regulation, in some of the things that we do well here in Australia to try and help our neighbours in the region.

Vivienne Stanton, Bloomberg News. Treasurer, youve said that the growing current account deficit is less of a concern, but many overseas investors are still worried about it. Firstly, how can you allay those fears? And secondly, youve given us your forecasts for the current account deficit, do you have a target and what is it if you have one?

Well, the current account deficit weve forecast has slightly eased in the forthcoming year to about 5 per cent, which is still too high. Its less than the peaks of the current account deficit, the last three peaks of the current account deficit, which was 6, 6 . They were in Banana Republic days, 85/86, in 89/90 when the Reserve started moving interest rates up and in 1994. We think that were better placed to deal with the current account. We have a Budget in surplus and we have low inflation, which we didnt have in those episodes. In addition, the pressure on the current account is caused by low export prices and a strong domestic economy. Now, if you want to deal directly with that you can either push up export prices, which are beyond our control, or you can slow your domestic economy. We think the Australian domestic economy will slow anyway to 3 per cent. And we also think that export prices are starting to bottom. That should see an improvement in relation to our current account. What is the Government doing? Well, the Governments not having any part of that current account deficit. None, no part of that current account deficit is caused by Government dissaving, were saving. That current account deficit is solely as a result of the private sector and those private sector businesses that are borrowing and making a profit and contributing to economic growth should be making their own decisions. But, I just want to emphasise that we have not become complacent about the current account deficit. Its why I nominated the need for a strong surplus last night and its why the Government intends to deliver it. And the best show of faith that we make in relation to that is a $5.4 billion surplus, growing surpluses over the forward estimates and a plan to pay down debt, which I would say to international investors, how many countries in the world are there that dont have central government debt? There arent that many.

Michelle Grattan of the Sydney Morning Herald. Two questions Mr Costello, one on the detail. The extension of the Work for the Dole scheme for older people doesnt seem to be in that comprehensive table of new measures, can you give a . . .

For older people?

Yes, the one for the youth is, but not the other one. Is there some reason for this omission? And secondly, yesterday you said that you wouldnt talk about compensation that it was Budget day, which I guess is fair enough, its now the day after Budget day, can you talk about enhanced compensation?

Why am I not surprised by this Michelle?

Or is your current position that there will be no room for substantial enhancement of compensation, seriously going to be your final position.

Can I just say in relation to compensation, I think the Prime Minister said and Ive said, that weve always been prepared to fine-tune the legislation in the package. And we always expected when you put the package into legislation there would be the need for fine-tuning. In fact weve got some amendments up there in the Senate at the moment to do that. When you say increasing compensation, youve really got to identify those people who you think really need more compensation. You just dont sit down and sort of, like in a poker game and start piling money on the table. Theres got to be a rationale, you identify a weakness, you deal with it. And if you dont identify weaknesses you dont know how to deal with them. And for all of the research thats gone on, I think the biggest point thats been made is not that any category of people would be worse off, but that some would not be as better off as some would like. I dont think any of the researchers found a category of persons worse off. I think even the research commissioned by the Labor Party and the Democrats found all categories better off and then the argument became, how much better off you should be under tax reform? Now, Im willing to engage in that argument, but I want to make one point, this must be the first tax reform in history where theres no category of loser. Most tax changes are done expressly to produce categories of losers. When income tax was introduced and capital gains tax was introduced and fringe benefits tax was introduced and wholesale sales tax was introduced and when all those rates were hiked there were categories of loser alright. That was the whole object of those tax changes. So I mean, having got to that position, I think is a pretty historic position, you can always have this argument, okay well you know, youve done 100 per cent but we want 110 or 120. But you know, I put it in that context.

Youre other question was about detail. No less taxing a question. I think you will find that in relation to the measures document, the Year 12 school leavers appears in the measures document as an expense measure since the 1998/99 MYEFO and the mutual obligation in respect to the older people appears as a measure introduced up to the Budget and its both there and both accounted for. I ask the same question myself, I said, how did it get in as a measure announced prior to the Budget and one wag said to me, oh well, it got into that table because it must have been leaked and therefore was announced before the Budget.

Treasurer, Karen Middleton from the West Australian newspaper. Youve said that this is a Budget thats right for the times. Yesterday at your press conference you also said that you hoped that some future Treasurer might look back on these times and say, what a good job they did. Now, Ive heard it suggested since then that theyre might have been a touch of the worlds greatest Treasurers about that and about this Budget overall. So what do you think?

Look I mean, if this Budget had been delivered, let us say in the period of 1983 up until about 1991, the Treasurer of the day would have been using so many hyperbole superlatives about this Budget that you wouldnt know whether you were coming or going. Its, we have tried not to engage in that kind of hyperbole. I was just taking a note of everyone who laughed at that point. We have made the point that these are good conditions, but there are still matters that we have to keep an eye on and I think most of our economic commentators will say that is not overstating the case.

Louise Dodson, Financial Review. Treasurer, you talked about structural change and the Budget Papers show that unemployment is predicted to be more or less the same as it is now. How important is it to have further labour market reforms?

Very important. Youll always get jobs growth with economic growth. Youll get more jobs growth with more economic growth and youll get more economic growth with structural changes. We have a paper in the Budget which says, that if we can maintain the improvements in productivity and engage in the structural change we might be on the verge of being able to lift the long-term growth rate of the Australian economy. And if we can lift the long-term growth rate of the Australian economy well make very serious inroads into unemployment. We quote in that paper by the way, an OECD study of a few years ago saying that full employment in Australia might be 6 to 7 . We now know that full employment in Australia is not 7 and with structural changes full employment in Australia can be significantly lower than that. Now, so Id say strong economic growth, labour market reform, improving incentives, getting better interaction between the welfare system and the income tax system – weve got that as part of our tax package, weve got a tax package, weve got a second wave of industrial relations, these things are all there on the board. I was asked by a journalist on TV last night who said, well, you know, forget your second wave and forget your new tax system and forget your Budget reforms, you know, what current reform agenda have you got? You know, and I felt like saying in retrospect, its like Steve Waugh being at the wicket, you know, and hes 150 not out and the bowler says, yeah, but how many runs are you going to make in the next over? You know, that is a pretty big agenda to have there. And you know, you might be more interested in whether its 2 or 3 in the next over, but Id much prefer to put the 150 down into the scorecard and say that was not a bad agenda.

Paul Smith from the Ten Network, Treasurer. How much would it cost to introduce immediately the increase in the Common Youth Allowance that Senator Harradine is seeking and to up the allowances to the level that he finds acceptable? And can the Budget afford that cost and is there any way that you would contemplate doing it?

Well, can I just make a couple of points about the Common Youth Allowance. The Common Youth Allowance, as you know, applies to both students and the unemployed. Presumably thats why its called the common youth allowance. The object of it was to have the same benefit, the same means testing. When it was introduced and you harmonised those two benefits, and the object of this was that it wouldnt be more beneficial to be an unemployed youth than to be a student in tertiary education, so there would be no disparity between the two benefits. To bring those two benefits into line, what it meant was putting a means test on the unemployment benefit, but increasing what I think was then known as Austudy, the rates of Austudy so that you had the same benefit and the same means test. It wasnt the savings measure, it was actually a spending measure. The common youth allowance actually involved new spending. So, I think youve got to approach it from that point of view. It involved new spending because it upped the benefit for the students. Now, we extended the common youth allowance, where the common youth allowance is less than the family benefit for students up to 21, we extended that last night. Now, I think that is a good measure. We put it forward as our own measure, improving on something that wed done. And I just want to put it in that context. It has involved additional overall benefits, both the original and the now amended scheme.

Tony Wright from The Age, Mr Costello. In one of the documents you released last night you wrote about the tax package, without this plan a different government would have to increase tax rates without compensation just to provide the same level of essential community services. Given the vehemence of the comments last night by Senator Brian Harradine and given the balance of power he holds over this particular tax package, what are you saying here? Are you prepared to go to a double dissolution if this doesnt get through so that a different government has the opportunity of dealing with it or are you prepared to walk away from this tax package if it gets knocked back?

Well, I can assure you Tony, Im certainly not going to be in the business of trying to get a different government in Australia. You know, we dont do all of this hard work to let somebody walk in and take advantage of it. The point, simply, that we were making there is that as Australia becomes a more sophisticated economy, as the services sector of our economy grows the goods base is shrinking in proportion to the economy. The goods base might be expanding in absolute terms, but in proportion to the economy it is shrinking. And if your indirect tax system is on goods your revenues are not growing in proportion to the economy, they cant. And that means if you want to retain the indirect tax take as a proportion of your economy the only way you can do it is by increasing rates. It is precisely why Labor, when last in government, hiked all wholesale sales tax rates. I mean, they didnt, you know in the August of 93 Budget they didnt decide to hike all wholesale sales tax rates, you know, as a sort of a walk in the park, you know, a leisure time activity. They did it because the goods base, the indirect tax base, was shrinking in proportion to the economy. Now if you want to run an indirect tax system on a goods base only, as Labor apparently does, and the reason I say its a 1930s model is back in the 1930s economies were predominately goods. Thats the reason the wholesale sales tax came in on goods, they were predominately goods. And there was no sophistication about services and how to tax them. If you want to run an indirect tax base on a goods base you will be increasing rates or you can broaden the base and you can lower rates. Ive often said when explaining this, you want to see revenue as an area. If the width of your base is a metre, its got to be 10 metres high to get 10 square metres. If your base is 2 metres wide, its 5 to get 10 square metres. If your base is 10 metres wide, its 1 metre high to get 10 square metres. The broader the base the lower the rate. And if you want a narrow base your rates are going to go higher and higher as your base narrows and thats the point were making. Of course, the Labor Party knows that. So whats its strategy? Its strategy is to oppose the tax reform and if it gets through take advantage of it. This is the Beazley position. We are so opposed to tax reform that if it ever gets through well keep it. Thats his position. Its like the surplus, dont you remember? When we decided that the Budget had to come out of deficit and go into surplus they fought every single measure. Kim Beazley as recently as the 27^th of September 1998: the problem is this, the Government took a baseball bat to growth completely unnecessarily. You know what he said on Monday, he said hed have a bigger surplus. I mean, all these years he has been voting against expenditure savings, he was secretly in favour of a bigger surplus. Boy, he fooled us. He fought it for three years and then he said I was always in favour of it and whats more I was more in favour of it then you and I tell you he is going to do the same on tax. He wants to fight it every step of the way until he hopes to sneak back in government and take advantage of it. It is lazy, lazy politics. He is running and he is hiding on these issues. And there is a lot of talk thats going on in Australia about Senator Brian Harradine holding the fate of tax reform. He only holds the fate because Beazley votes no. Senator Brian Harradines only got one vote in the Senate. He doesnt have the twenty-six or whatever Beazleys got. Beazley throws those votes against all reform, he deals Senator Brian Harradine in and he has dealt himself out of Australian public policy on these issues. And phantom like, he hopes to slip around in the shadows until such time as he can come back.

We have time for just one more question, its from Geoff Brusch.

Im getting warmed up for Question Time.

Treasurer, Geoff Brusch the Seven Network. Your relationships also been a little scratchy of late with the Democrats. As we approach the post-Harradine era, would you be willing to forecast that your relationship with the Democrats may start to improve a little if not significantly?

Well look Ive had numbers of meetings with the Democrats and I have tried to progress negotiations with them. If their position is, and it was the last time I spoke to them, that if the GST applies to food they will vote it down no matter what, that is a position which the Government cannot accept. That opens up $5 billion in the whole package. If the Democrats are prepared to say well thats our position but we recognise your mandate, were here to keep you to your mandate, youve heard our argument but we wont frustrate the elected Government, and they said, you know, but we would like a change here or a change there and it wasnt in the billions mark, you know, we could go forward. But if that is the position and we have always been quite clear about this, we cant go forward. You know, these things didnt pass us by, we could have gone to the election, you know, saying well have a broad based indirect tax and not on food. We could have done that. And we thought it was important for the benefits to have a broad base and having done that and having gone through the fire and having been elected in the anticipation that if we were we would be able to engage in tax reform. Our view is that we should keep faith with that and not pull out some other part of the package. Were trying to do something new here, we are really trying to implement what we said we would do if we were elected.

Ends.