TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Interview with
Mark Willacy
AM, ABC
Friday, 17 May 2002
8.10 am

SUBJECTS: Superannuation; Labor’s new taxes

TREASURER:

What the Government is doing in relation to the surcharge is reducing it from

15 per cent to 13 ½ per cent, a saving of about, a cost of about $50 million.

He puts forward a proposal which applies a tax cut to a much wider group of

people, including very rich people, which costs about ten times the amount.

WILLACY:

He says it’s revenue neutral though.

TREASURER:

Well he’s wrong. He would only have to think about it for a small period of

time to say that if you cut the rate in relation to one group and compare it

to a cut rate in relation to a group which is five or ten times greater, it

can’t be the same revenue. You see it’s self-evident. But this is the thing

with Mr Crean and I watched him for three years, never did the work, never put

forward a credible economic policy. So, what does he come up with tonight? He

has got two new taxes, he has got a payroll tax in relation to employee entitlements,

he has got a new increase in company tax in relation to paid maternity leave…

WILLACY:

…(inaudible) super thing for a second…

TREASURER:

Okay, no, no, let’s go through it. Then he has unfunded promises in relation

to tax credits, superannuation, education. So you’ve got two new taxes and three

unfunded promises and that’s the Budget reply.

WILLACY:

Well if we look at that superannuation plan, you’ve got an Intergenerational

Report out there which was a key aspect of your Budget. If you’re serious about

making later life more affordable, then surely superannuation tax cuts like

the ones Simon Crean is proposing would make retirement life easier?

TREASURER:

You could abolish all taxes on superannuation, because that would be even more

popular wouldn’t it? But it’s not fundable. Nor is what he said any more fundable.

This is the point I make about Mr Crean, I said it in the Parliament, when opportunism

knocks, he says, welcome home friend.

WILLACY:

Well, what about returning some of the $6 billion you raise in bracket creep?

Give it back, as Mr Crean suggests in the form of tax credits for families?

TREASURER:

Mr Crean, is he committed to a $6 billion tax cut? That’s fair enough. Where

is the $6 billion of expenditure savings? He’s entitled to put that forward,

Mark, he is entitled to put forward a $6 billion tax cut. The public will say,

thank you Mr Crean and just tell us where is the $6 billion of expenditure reduction

to pay for it. Now, now, when he meets his first hurdle, minor savings in this

Budget, he can’t support them. He can’t support savings of hundreds of millions

and yet he enters into a promise which requires savings of $6 billion.

WILLACY:

Well, he’s saying you haven’t been economically responsible, you spent $20

billion in the lead up to the election according to him. Are you embarrassed

about recording a deficit after those years of surplus?

TREASURER:

But you see you push these figures around and they have no meaning.

WILLACY:

But are, but are you embarrassed about recording a (inaudible)

TREASURER:

$20 billion. We spent $20 billion in the lead up to the election? Could you

just explain where the $20 billion was? He throws these things around, a $6

billion tax cut, oh we’ll have a $6 billion tax cut…

WILLACY:

Well the deficit is a figure that’s in your Budget are you embarrassed about

recording a deficit?

TREASURER:

No, no, you asked me, you asked me about his claims. He throws around an unaffordable

superannuation policy and then at the first hurdle when the Government says

small changes to make Pharmaceutical Benefits affordable and small changes to

reduce the rate of increase in disability he says he is against them. So, he

is in favour of economic responsibility, he is just against every step that

is required to get there.