Interview with Stephanie Kennedy

ABC AM

Friday, 1 July 2005

8.00 am

SUBJECTS: Tax Cuts

PRESENTER:

The Federal Treasurer has been speaking to Stephanie Kennedy in Canberra.

TREASURER:

Well we have laid down a programme starting on 1 July 2006 for the States

to observe the Intergovernmental Agreement and to abolish the nine taxes that

are replaced by the GST. Six of the States and Territories have come forward

with a programme, some of them are reasonable programmes, some of them are a

bit slow. The remaining two haven’t observed their obligations at all.

They have no timetable for the abolition of those remaining taxes and between

now and 1 July of next year the Commonwealth will be announcing a response designed

to get tax cuts for people in New South Wales and WA.

KENNEDY:

So tax cuts specifically for those two States?

TREASURER:

Well that is because the other States have already agreed that they will be

doing it. But we can’t leave the poor people of New South Wales and Western

Australia out. We can’t allow their State Governments to rip them off

for State taxes and the GST. They would be in a worse position than people in

other States. So we will be announcing a response which is designed to get tax

cuts for people in WA and New South Wales as well.

KENNEDY:

Will they be tax cuts for business or for the average salary earner?

TREASURER:

Well they will be tax cuts which are designed to implement the Agreement –

to cut stamp duties on mortgages, to cut stamp duties on leases, to improve

the situation for business. Look, Stephanie everybody in Australia knows the

GST was introduced to get rid of other taxes. Now the GST has come in, it has

been in for five years, there are two States which won’t get rid of the

other taxes – they are WA and New South Wales. We can’t sit back

and say:- oh the poor people in those States are going to have their State taxes

and the GST. They have got to be given the same justice as the other States.

They have got Governments which have let them down, which are double taxing

them and the Coalition Government, the Federal Coalition Government, wants to

cut their tax burden.

KENNEDY:

If I could just move to the Senate – July the first marks a new era in the

Senate – the Government will have a majority of one. Already some of the

new Senators are speaking out against the sell-off of Telstra, the industrial

relations legislation and the scrapping of university union fees. How is the

Government going to handle its majority in the Senate?

TREASURER:

Well the Government will be very, very careful with legislative proposals

and of course nothing is taken for granted in relation to legislative change.

In order to get legislative change through the Senate it will be necessary to

take all of the Senators with the Government, it will be necessary to ensure

that we argue our proposals well and of course there will still be scrutiny

from Opposition Parties. So this idea that somehow the Government just has a

carte blanche, it can do whatever it wants, actually the Government

will be approaching this very, very carefully to ensure that we negotiate through

changes which are good for the Australian people.

KENNEDY:

Are you willing to negotiate with your own Senators – your own National

Party and Liberal Senators?

TREASURER:

Well as I said, the Senate is very finely balanced and we are lucky that in

Queensland we were able to get three Liberal Senators elected. This means that

we do have the possibility to do reforms that we haven’t been able to

do in the past but we will approach it cautiously, determined to reform but

determined to do what is in the interests of the Australian people.

KENNEDY:

Even Petro Georgiou was able to soften the Government’s mandatory detention

policy. Do you think that sends a signal to others, to hold the line if there’s

a chance that they too can get what they want?

TREASURER:

Well in the Liberal Party anybody is entitled to speak their mind. That is

one of the rules of the Liberal Party, you can speak your mind and the Party

as a whole respects that. But you have got to also bear in mind that the Party

as a whole has to form a Government, the Government has to be able to govern,

people want us to govern. They want us to get on with doing things which are

important for the public. The first thing that is going to happen today is that

every Australian is going to have an income tax cut. That is because we brought

down a Budget which cuts income taxes. Labor tried to stop it but because we

are going to get majority support in the Senate people will get income tax cuts.

This is a point worth making by the way – if we hadn’t have got

a majority in the Senate at the last election nobody would be getting a tax

cut today. Nobody would be getting it because Mr Beazley would have been able

to defeat it. And so the greatest benefit which you see from Government being

able to get legislation through the Senate starts today with an income tax cut

for every Australian.

PRESENTER:

The Federal Treasurer, Peter Costello, speaking with Stephanie Kennedy.