Transcript No. 2001/022

Transcript

of

Hon. Peter Costello MP

Treasurer

Interview with Andrew Carroll, 4QR

Tuesday, 13 March 2001

9.35 am

SUBJECTS: Ryan by-election, Brookfield Show, BAS

CARROLL:

Well the other national politician coming to Brisbane today is Treasurer, Peter

Costello, and he arrives this afternoon. Good morning Mr Costello.

TREASURER:

Hello Andrew. How are you?

CARROLL:

I’m fine. Thank you very much for taking the call. We understand you had an urgent

one that kept us delayed. We were going to start off the programme with you.

TREASURER:

Oh, is that right? I’m sorry about that but we were doing a few things this

morning, as you can imagine, but it is great to be with you now.

CARROLL:

Well, thank you very much. What would you have done with the $500,000 if you

hadn’t had to spend it on the Ryan by-election?

TREASURER:

$500,000, well in a budget context if it hadn’t have been spent it would have

probably remained in the Budget. We have a budget for the Australian Electoral Commission

and that’s to cover all of the by-elections and the Federal election, and if it

hadn’t have been spent it would have stayed in that budget probably for the next

Federal election or another by-election. We have by-elections from time to time, we had

one down in Victoria last year, as you can recall, so we just budget for all the

by-elections as they come up.

CARROLL:

You can understand the reason for the question, certainly to the electors of Ryan?

TREASURER:

Oh, I can. And, you know, as a Treasurer I have to sit down and give all these agencies

budgets at the beginning of the year and the money that we provide to the Australian

Electoral Commission will always be greater in an election year because you’ve got a

Federal election. But you’ve always got to allocate some money to it for the

by-elections as and when they come up. And….

CARROLL:

Of course, John Moore would know that it was already sitting there and could be spent

in that sense?

TREASURER:

Well, there could be others too, you see…..

CARROLL:

Not many others….(inaudible)

TREASURER:

Well, somebody could die, that happens from time to time, and so you’ve always got

to make plans for those sorts of contingencies. That’s the way it’s done,

somebody could die, somebody could get ill, somebody could retire on compassionate

grounds, you just have to have money for the Australian Electoral Commission to handle the

contingency.

CARROLL:

Well, just getting and staying, I guess with, at the microeconomic level and the issue

of GST on childrens’ activities at the Brookfield Show, you are obviously aware that

there has been an issue up here. Is it fair that they, those children have to still pay a

GST on their entry fee to any of the competitions and events?

TREASURER:

Well, the way GST works, is, that when people sell goods or services there is a tax

component, and, you know, it is the same with McDonalds, when kids shop at McDonalds or

adults shop at McDonalds or when you go on rides in an amusement parlour there is always a

tax component. There always was a tax component by the way, it was just buried in fees

previously, but that is the way in which these things work. But, I think the point that

has been raised, that some of these kids could be taxed on their prizes, or something,

that is not true, they are not taxed on their prizes.

CARROLL:

Well that appears to have been sorted out now, but they are still going to be taxed on,

you know, if they have to pay a $5 entry fee to any of these competitions or events well

then it is obviously $5.50 isn’t it?

TREASURER:

Well, it is up to the person that is setting the fee to determine the fee. They

determine whatever it is going to be, but there is always a tax component on the fee.

It’s like a football match. When you go to a football match, or like buying a

McDonalds burger – when you buy a McDonalds burger, there is always a component that

is a tax component. As I said earlier, there always was a tax component in these things,

it was buried into the fees, it is more transparent now. But that’s the way in which

all of the new sales and admissions and so on, work. But the thing that was getting, as I

understood it, the Show worried was that they had an idea that if a kid won a prize or

something that was taxable, it is not income, it is not taxable. And I think that has all

been fixed.

CARROLL:

That’s been clarified. Now, getting onto broader issues, and I ask you to comment

on the front page of the Australian today, this so-called hidden tax thing that is coming

out, that is now facing small businesses with the timing of their returns on the BAS

statement.

TREASURER:

Well, that story in the Australian is wrong.

CARROLL:

Wrong, wrong, wrong.

TREASURER:

Wrong, wrong, wrong. Because what the story in the Australian leaves out, is, that if

you want to go to the new system, which means you don’t have to put in quarterly

returns, you just pay the amount that you paid on your December return – if that is too

high you can vary it down. You see, you can….

CARROLL:

So, let’s say you’ve had a good quarter, for instance….

TREASURER:

Yes.

CARROLL:

….and then you know you are going to move into a bad quarter, often in the retail

industry that happens…

TREASURER:

Yes.

CARROLL:

…with restaurants or whatever….

TREASURER:

Yes.

CARROLL:

…so you don’t have to base your return on your good quarter. Is that what

you’re saying?

TREASURER:

That’s right. You can vary it down, you can say that was an abnormal quarter, my

next quarters won’t be as high as that, if I paid that amount I’d be overpaying,

and you can put a variation in so that you vary it down to get to the right annual

liability. Now, this was a point that we announced at the time, it’s in the press

release, I’ve been over it in the Parliament on several occasions. If you read that

article in the Australian, he makes no mention at all of the variation and because he has

left out the critical fact, he has got it entirely wrong.

CARROLL:

So no hidden thing?

TREASURER:

There is no hidden thing at all. If you want to go to this system you can pay the

December quarter, if you think the December quarter is too high you can vary it down, and

if you want to pay the actual amount you can stay on the quarterly reporting system. And,

you know, when I read that article I thought to myself, you know, he’s left out the

critical point which is the variation and because he has left out the critical point and

the headline writer has gone to town, you’ve got a story which is wrong. And I think

people in business who have listened carefully to what we’ve said or read the press

release and know the system, would know that, but other people in the general public could

have been mislead by that story which is wrong.

CARROLL:

So, if some business, small business people who are now your tax collectors of course,

are misunderstanding some of this fine detail. What can you say now to even appease them?

TREASURER:

Well, it is not a fine detail. This was an integral part of the whole announcement and

what we said is, you either can do quarterly returns and pay the actual amount, if you

don’t want to do quarterly returns just take your December payment and pay that. If

you think the December payment is too great you can vary it, they’re familiar with

the variation system because they’ve been operating a variation system on provisional

taxes in the past. So it’s not a fine detail, it was up front, big part of the whole

simplification system and, you know, we get these false newspaper reports from time to

time, we’ve just got to answer them and make sure that they don’t confuse

people.

CARROLL:

Ryan today then, you’ll be, you’ll be what?

TREASURER:

I’m going out to Ryan today with Bob Tucker, our candidate. We are going to be

launching a video which he is going to be sending to electors and it tells them a bit

about Bob and his family and his connections with the area, because he has been a local

all of his life and I think he understand the area very well.

CARROLL:

I wonder if the electors of Ryan will be talking about say, that Dun and Bradstreet

prediction from Duncan Ironmonger about the, that R-word, the recession. What is your

reaction to that?

TREASURER:

Well, look over the last four years the Australian economy has enjoyed a period of

unparalleled growth. In the last quarter there was a detraction from the figures, and

we’re talking in the figures, the statistical figures here, principally arising from

house building construction, there had been a big pull-forward into the first half of

2000, consequently it had fallen away in the second half of 2000. There will be a natural

correction but the Government has also put in place measures to encourage house building

with doubling of the First Home Owners Scheme. And I think people would say, well, that is

a fair enough response, if you see that there are transitional difficulties to put that in

place. But if you look at the Australian economy, we’ve got a lot going for us.

We’ve now got a good financial position, our exports are growing, our consumer demand

has been off the level of the last four years but still pretty solid, and our interest

rates are coming down.

CARROLL:

It’s all pretty rosy. Peter Costello, Treasurer of Australia, I hope you have a

good time in Ryan this afternoon.

TREASURER:

I appreciate your time very much Andrew.

CARROLL:

Thank you for yours.

TREASURER:

Ok. Bye.