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Standard and Poors Upgrades Australia
May 18, 1999
Tax reform
May 21, 1999
Standard and Poors Upgrades Australia
May 18, 1999
Tax reform
May 21, 1999

Tax reform

Transcript No. 99/40


Hon Peter Costello MP

Doorstop Interview

Grand Hyatt Hotel, Melbourne

Thursday, 20 May 1999

2.00 pm

SUBJECTS: Tax reform


Treasurer, do you think your remarks about fiscal rectitude that you made just then and

the comments by Ted Evans in Treasury, do you think it’s worth raiding the Budget

surplus to finance tax reform?


Look, the point I’d make is this. We’ve been through a financial and economic

crisis which has been the greatest in 50 years, and the Australian economy has stood

strong and it’s grown faster than most developed countries in the world. And the

reason it did that is that we had good policy. We had Budget surpluses, we kept our

inflation low and we retired debt. Now, we don’t want to put the Australian economy

at risk. Tax reform is very important, we want to accomplish tax reform. But, we’ve

got to have tax reform and good economic policy. It’s no consolation if our economic

policy turns down, and our economy turns down, and our job opportunities turn down, to say

that you’ve improved tax. You’ve got to run tax reform and you’ve got to

keep the Australian economy on a strong footing.


If it threatens the surplus would you walk away from tax reform . . .




. . . if it threatens the surplus?


Well, we are going to keep our economic policy intact. Because if we don’t keep

our economic policy intact, if the Budget goes back into deficit, or if we lose

confidence, if the economy turns down, if that means less employment then it will be no

consolation to the people of Australia that we gave away good policy. We are going to keep

good policy. The policy objectives, which I laid down in last week’s Budget are very

important to the Government, because they’re very important to the job opportunities

of Australians in the future.


Is there room to move on food in your talks with the Democrats?


Well, we’re going to hear this afternoon what proposals the Democrats have to put

and we will consider them. If there are proposals that are consistent with our economic

objectives and are consistent with our structural objectives, a better tax system for

Australia, we will consider them. But, I want to make this point clear. For the sake of

Australia we have to keep running a good Budget position. If we give away the Budget

position, if we give away our economic strategy, then we will not be doing the right thing

by Australians, which is giving them a strong economy and job opportunities.


So Treasurer, does that mean that revenue neutrality is the bottom line? That whatever

the Democrats propose, it must not hit the bottom line in any way?


Well, what it means is as far as the Government is concerned, we want to run a good

economic policy consistent with maintaining Budget surpluses and retiring debt. And the

risks, if we weren’t to do that, would be hardship and less employment. And we

don’t want those for the Australian public. We want jobs.


You’ve consistently said that the GST without food is not acceptable. Has that



Well, as I said this afternoon the Democrats are going to put various proposals to us.

I’ve said what the Government position is. The Government position is we’re

going to run a credible, good, strong economic policy and we want to reform the tax

system. And if there’s anything that can accomplish both those objectives we’ll

look at it.