Transcript No. 2001/092

 

TRANSCRIPT

of

THE HON PETER COSTELLO MP

Treasurer

Doorstop

Knox City

Thursday, 12 July 2001

10.30 am

 

SUBJECTS: Scoresby freeway, taxes, Kelvin Thompson, Andrew Thomson

TREASURER:

Peter Batchelor, the State Minister for Transport, has sent a letter to the people of Aston claiming that the Labor Party is in favour of the Scoresby freeway. Today, we put on this billboard what Mr Batchelor said when he was asked to commit money to the Scoresby freeway back in November of 1999, as you can see (from the billboard), “the Government has made clear its decision, construction of the Scoresby Freeway will not be considered during the next four years because no provision has been made for any funding”. Now, there have been two budgets since then, the May 2000 budget and the May 2001 budget. The State Labor Party has not committed a dollar to the construction of the Scoresby freeway. I said last Sunday, that if Mr Bracks wanted to prove he was in favour of Scoresby he could do what the Federal Government has done, he could appropriate $220 million towards its construction. He has refused to do so. The only money that the Labor Party has ever put up for the Scoresby freeway is $2 million in their May budget for a study. Now, the Labor Party, if it wants to show that it is in favour of the Scoresby freeway can appropriate money. That is the challenge I gave to Mr Bracks on the weekend. He has not appropriated a dollar. Mr Batchelor made it clear that there is no money in the forward estimates, there is still no money in the State forward estimates today. Not a dollar has been committed by the Labor Party. Just because you say you are in favour of the Scoresby freeway doesnt mean a thing if you wont put a dollar on the table to fund it. The only candidate in favour of the Scoresby freeway in this by-election is Chris Pearce. Any questions?

JOURNALIST:

Treasurer, before you, on Neil Mitchell you said that Kim Beazley if elected would raise income tax. Hes talking about the tax mix. Isnt that a different thing?

TREASURER:

No, it is precisely the same thing. The tax mix is the mix of tax that comes

from indirect taxes, and the proportion of tax that comes from direct taxes.

When Mr Beazley is asked, do you think income taxes are too high? He says, oh

no, oh no, no. He doesnt think they are too high. He thinks that indirect taxes

are too high, and we should change the mix. If you take less out of indirect

taxes, the only place you can change the mix is by taking more out of direct

taxes. More out of direct taxes. This is the same old point, Stephen Conroy

made the point – you want to rollback the GST, you want to have the same revenue,

you want to have the same budget surpluses, you must increase taxes. By the

way, he wont be just increasing income taxes to fund his rollback because he

also said on radio this morning he is in favour of higher spending. So he wants

higher spending, lower indirect tax. He has got to fund both out of the direct

tax base. You heard from Mr Beazley today what his plan is – higher income taxes.

That is as clear as you will ever get it. And, you know, I just ask you to look

at the transcript. If you are going to have lower indirect taxes, if you think

the tax mix is too heavily weighted towards the indirect tax system, then you

are going to have to increase it on direct taxes, that means higher income taxes.

Mr Beazley today confirmed what Stephen Conroy said weeks ago – Labor stands

for higher income taxes.

JOURNALIST:

(inaudible) the economy is strong and the budget is strong next year, you will think of giving the benefits back to the public. Is that via lower taxes?

TREASURER:

I didnt say next year, I said as the economy strengthens and the budget position improves, we as a Coalition always look at returning the benefits to people. One of the great things about balancing the budget and now repaying $60 billion worth of Labors debt, is that as the economy strengthens you can do things to help the Australian public. One of the things we did in last years budget, we had a $300 bonus to pensioners. One of the things we did on 1 July 2000, was we cut income taxes. One of the things that we are going to do as the budget strengthens is abolish Bank Account Debits Tax and then we are going to abolish stamp duties on mortgages. The Coalition believes that you should return the benefits of good economic policy to the public. Where you can do that with targeted measures like helping pensioners, we do it. Where you can do it through reducing taxes, we do that as well.

JOURNALIST:

What guarantees can you give Treasurer that a Coalition Government wont increase any further taxation after the next election?

TREASURER:

We have just cut it. We have just cut taxes.

JOURNALIST:

But you are talking history. What about the future?

TREASURER:

When you say we are talking history, weve just had 12 months of the largest

income tax cuts in Australian history. Why do you think we went through all

the trouble of reforming the tax system? So we could cut taxes. We wouldnt

have gone through all of the trouble of doing that, except to cut income taxes.

Do you think after doing all of that work to cut income taxes, we would somehow

reverse our position. No, we did the hard stuff so that we could reduce income

taxes. The Labor Party…

JOURNALIST:

So is that a commitment that there will be no tax increases?

TREASURER:

…hang on, the Labor Party opposed the hard stuff and today they confirm they

are in favour of higher income taxes. I think you should be down asking Mr Beazley

how much, and when. You see, he has one promise that stands at the centre of

his 5 year tenure of Leader of the Opposition – GST rollback. And that takes

money, and the money has to come from somewhere. He has one cloud that hangs

over his 5 year tenure as Leader of the Opposition, and he wont tell you about

it. I dont have to fund rollback. Im against rollback. So we dont need to

put income taxes up. Kim Beazley has to put income taxes up.

JOURNALIST:

Mr Costello, we are within six months of a Federal election. Are you saying that the Liberal Party, the Coalition, will go to the next election without offering further tax relief?

TREASURER:

Well, we will go to the next election with the policies that weve put in place,

which is lower income taxes, which is lower income taxes. We have just introduced

the largest income tax cut in Australian history. Its a little over 12 months…

JOURNALIST:

So the voters cant expect any more cuts. Is that what you are saying?

TREASURER:

…a little over 12 months old. Im saying we have income tax runs on the board,

I ask you this…

JOURNALIST:

(inaudible) we want to know what you are going to do for the (inaudible).

TREASURER:

…well, I ask you this, if you want to know what Labor would do in Government,

look at what Labor did in Government last time. Look at what Labor did, well

you know what well do in Government, well cut income tax cause we cut it.

Thats what we did, we cut income taxes.

JOURNALIST:

Youll do it again?

TREASURER:

Hang on. We cut income tax. We cut it 12 months ago. Mr Beazley today says

he thinks income tax isnt high, no, he would like it higher. And he has to

fund…

JOURNALIST:

…(inaudible) to compensate for the GST.

TREASURER:

No, he has to fund a GST rollback. The one difference between me and Mr Beazley, is I dont have to fund a GST rollback. He has to fund a GST rollback. For 5 years, he has been saying he intends to fund a GST rollback. He can only fund it from higher income taxes.

JOURNALIST:

Would the Government fund rollback, if there was scope to cut taxes?

TREASURER:

Pardon.

JOURNALIST:

If you dont have to fund rollback, then that gives you the opportunity to cut taxes.

TREASURER:

You can say this, we dont have to fund rollback. Our income tax rates will always be lower than the Labor Partys.

JOURNALIST:

Kelvin Thompson says you will abolish the GST next. How do you react to that?

TREASURER:

Pardon.

JOURNALIST:

Kelvin Thompsons says the next thing you will be doing is abolishing the GST, if you lose the election.

TREASURER:

Well, is he running for the Marijuana Party is he? Kelvin Thompson.

JOURNALIST:

Are you surprised by the continuing negativity about the GST? Has it surprised you?

TREASURER:

Look, I think the biggest taxation change in 70 years is now 12 months old.

You are not going to change the taxation system without having teething troubles,

but I think all in all as problems have arisen the Government has dealt with

them. And, all in all I think, particularly from the consumers point of view,

things have settled down very well. Now, in relation to business, there has

been teething problems, we deal with the problems as they arise. But you cant

expect to have the biggest taxation change in 70 years without some teething

problems. The one thing I can (inaudible) is this, if Beazley were elected and

decides to change the system all over again, everybody in small business who

is affected by rollback is going to have to go and re-do all of their accounts,

all of their computer programs, and learn a new system all over again. The one

thing that you can say is important now for small business, is to keep the changes

which have been put in place, in place, otherwise you start all over again.

Let me make a point about rollback. Rollback, as its name implies, is taking

items out of the tax base. That is what rollback is. Rollback is taking items

out of the tax base. Now, Mr Beazley said today he is going to take the GST

off womens products. That is what he said today. And that is going to simplify

things. Let me tell you what it means, for every chemist and every supermarket,

that alone, that one change means they have all got to change their computer

program. That one change alone, means you have got to change your computer program,

because the computers at the moment, when you are in a supermarket flash them

across the bar coding record that, as subject to GST. You have to…

JOURNALIST:

Is that complicated?

TREASURER:

Well, yes, it is as complicated as changing every computer in every Coles and every Woolworths and every mixed grocery for one item. And that is only for one item. Now, we dont know what the other items are yet. But lets suppose, you know, you would expect probably thousands. Thousands of changes for thousands of products for every supermarket, grocery, pharmacy, shopkeeper in the country. And then the revenue has to be made up with an increase in income tax. No wonder you never see the policy of rollback. Rollback is a recipe for massive complications of the taxation system paid for by higher income taxes. No wonder after 5 years, he still stands naked with no policy.

JOURNALIST:

Mr Costello, what message does the study tour of your Liberal colleague Andrew Thomson to the US send given that he wont be around for very much longer?

TREASURER:

Well, the Prime Minister has said it clear, I think, that if I read the press rightly, that he has contacted Mr Thomson and said that he expects him to come back. And as I said on radio I think that is absolutely right. And, you know, if there are any retiring Labor Party members in the same position, Kim Beazley ought to contact them and tell them to come back.

JOURNALIST:

(inaudible)…there rules for these sorts of trips?

TREASURER:

I think if you are given a study tour you should use it to study, yes I do.

JOURNALIST:

So perhaps not in your last year of Parliament. Should there be a rule like that?

TREASURER:

I dont know Michelle.

JOURNALIST:

Why do you not know?

TREASURER:

Well, Ive never been on a study tour. I can say honestly…

JOURNALIST:

It is a matter of principle rather than personal experience, isnt it?

TREASURER:

No. I think I can say personally Ive not had a study tour in my ten years of Parliament.

Thank you very much.