Transcript No. 99/65

TREASURER:

This morning the Government is releasing the third leg of its reform of the Australian

Taxation System – A New Business Tax System for Australia. It’s Australia’s

greatest overhaul of business taxation. And it gives us the opportunity to create a

dynamic, growing environment which will lead to more investment and more jobs. What this

is all about is, creating a stronger economy which will give us more investment, more

jobs. In particular there are some great opportunities for small business and the rural

sector who will get the advantage of simplification in their tax affairs and have the

burden of taxation lifted, which will give them opportunities to create growth and create

new employment opportunities. This has been a huge undertaking. Government has a policy of

reforming the indirect tax system. We’ve legislated it. A policy of reforming

personal income taxes. We’ve legislated it. Today we announce the reform of business

tax, we hope to legislate that in the next coming months. And this will have been the

historic overhaul of the Australian Taxation System, which we took to the election and

which we’ve now delivered on.

JOURNALIST:

How will you overhaul the system?

TREASURER:

Well, we’ll be announcing this morning an overhaul of the system which will

simplify the system, which will reduce the incidence of taxation by broadening the base,

give people more certainty, more simplicity, less burdens, greater opportunities to

invest, more opportunities for jobs and contribute to Australia’s strength and

economic development.

JOURNALIST:

Is revenue neutrality still a prerequisite?

TREASURER:

Yes. When we went into this we said, that the fair thing to do was to collect roughly

the same amount of tax, but it’s collected in a better way and a more simpler way.

And there’s a lot of simplification in this report actually, which means that there

will be less complexity. And people will have their eye on good investments and good job

creating opportunities rather than tax dodges. We don’t want people to spend their

time trying to work out tax dodges because that’s not good for the economy and

it’s not good for the citizens that have to pay their full dollar tax.

JOURNALIST:

How can you overcome the perception that this is another evidence of propping up big

business, giving them a helping hand at the expense of consumers?

TREASURER:

Well see, that’s the important thing about keeping it revenue neutral, so that

business is still paying its fairer share of tax and in some areas when we take tax

dodgers out, paying more. But the honest toiling business that has been carrying the

weight therefore gets a break. And particularly for small business there will be big

benefits. Why small business? Why help small business and the farming sector? Because we

want to help the economy and especially investment and jobs.

JOURNALIST:

Have you had any talks with the Democrats yet on getting this through the Senate and

how do you rate your chances in that regard?

TREASURER:

I had discussions with the Democrats last night and mapped out the way in which the

Government was intending to approach this. And they’ve indicated that they’re

very open-minded on this and they will take a bit of discussion in their party room, but I

expect them to be cooperative and positive.

JOURNALIST:

(inaudible) the negotiations to be as intense as over the GST?

TREASURER:

The negotiations in relation to business tax have already occurred. This inquiry was

set up 12 months ago and it’s reported to the Government after consulting and taking

views. We’ve been working on this now for over 12 months and today we get the

results. The important thing is to act on the results.

JOURNALIST:

Labor says, you’ve spurned their offers of negotiation. Yes, they’re happy to

support you as long as you, you know, you include them in the process. They say

you’ve spurned them in that. Why is that?

TREASURER:

Well, the Labor Party will be given the report this morning, so it got access to it

under embargo and it’s up to them. If they want to play a positive result they can be

relevant to tax reform. What made Labor irrelevant on tax reform was Labor. Make no

mistake. The Labor Party decided to make itself irrelevant. It dealt itself out of tax

reform. You have seen, obviously, a large backlash. It feels sensitive about its

irrelevance on tax reform. If it wants to get back into business, it’s got to get

positive and support the Government. Now, this is a political challenge. A political

challenge for the Labor Party. Can they rise above populism and opportunism? If they can,

they can be part of mature, political debate. If they’re going to be populist and

opportunist they’ll end up where they did in relation to indirect tax reform. Thanks.