Transcript No. 2001/108

TRANSCRIPT
of
HON. PETER COSTELLO MP
Treasurer

Doorstop Interview
6PR Studios, Perth, WA
Friday, 3 August 2001
9.20am Perth time

SUBJECTS: Union Strike, Mitsubishi, Mass Marketed Tax Schemes, Moulin Rouge Tax

JOURNALIST:

Treasurer, are the workers at Tristar guilty of treason?

TREASURER:

Look, the activities of Tristar have now put about 10,000 people out of work and threatened 50,000 jobs. It’s time that strike finished. And it is time the union stopped encouraging it, and it’s time the Labor Party condemned the union and put pressure on their friends in the union movement to end the strike. This will do nobody in Australia any good at all. It is absolutely irresponsible to have stood down 10,000 people, threatened 50,000 jobs, it is irresponsible behaviour. I call on the union to advise the employees to go back to work and this is a big test now for Mr Beazley and Simon Crean, the former ACTU President. Can they stand up for the jobs of people in the car industry or are they so afraid of their union mates that they have to condone this behaviour?

JOURNALIST:

So what is your advice from the Prime Minister? Does it look as if we will have a decision out of Japan today on the South Australian plant?

TREASURER:

Well I am not sure any decisions are going to be made today but the Prime Minister is in Japan today and one of the groups that he will be seeing is the Mitsubishi car company. His message to them is we want investment in Australia and we want to provide security of jobs for people in the car industry. He has been absolutely undermined by the activities of an irresponsible union at a factory in Sydney who have put at risk up to 50,000 jobs. That strike should end. The employees should go back to work. The workers at Mitsubishi, and General Motors, and Ford should be able to return to work, and this irresponsible union behaviour should be condemned by all major Australian political parties.

JOURNALIST:

Haven’t car companies also been holding us to ransom, in some ways, when they have been looking for financial incentives to stay in Australia?

TREASURER:

Well look, what we have actually done for car companies to help with car production is we have changed the taxation system. Up until 12 months ago every car in Australia was taxed 22 per cent Wholesale Sales Tax. When we brought in a 10 per cent GST it dramatically reduced the tax on cars and in fact for businesses that get GST back they can now buy cars tax free. Now, you might call that an incentive. I call it tax reduction which has been a very, very, direct benefit to the car industry. But, all of that good work can be undone by irresponsible union action which was designed to close the car factory. That is why it was taken.

It was taken at the most sensitive spot in the supply chain so that those factories could be closed, by unions which are affiliated to the Australian Labor Party, and fund the Australian Labor Party. It is irresponsible and that kind of action should end.

JOURNALIST:

The union has got a point, though, for the security of their members with this superannuation levy…

TREASURER:

Well, if the unions are worried about security of employment, why would they be putting 10,000 people out of work and threatening the jobs of 50,000. I don’t think they have a point at all. The union has deliberately taken action at the most sensitive point in the supply chain so that they could close factories which they have now successfully done. That has got nothing to do with securing jobs. What it has done is it has thrown thousands out of work and has the possibility of throwing out thousands more. Don’t try and defend this behaviour. It is absolutely irresponsible, it should come to an end. There are tens of thousands of people that can’t go to work today because of irresponsible trade union action. And I call on those unions to end it, and I call on all Australian political leaders not to give them comfort. And to see the Australian Labor Party giving this union strike comfort, as they were yesterday, to continue their action and throw people out of work is irresponsible of the Labor Party as well.

JOURNALIST:

How seriously is the Government taking the threat of more strategic industrial action which could shut down places like Qantas, BHP?

TREASURER:

Well it’s, look it is very serious. Why take industrial action which throws fellow Australians out of work, and why design industrial action to have that purpose? It is absolutely irresponsible.

JOURNALIST:

Treasurer, do you have sympathy for companies like APT who are struggling through the tax minimisation thing at the moment?

TREASURER:

Look, companies that want to (inaudible) agricultural investments can apply for product rulings by which the Tax Office looks at the arrangements and says that the, for tax purposes, the arrangements are okay. They are in quite a different situation to so-called tax effective schemes which never sought product rulings. It is quite a different situation. You know, sometimes people say, oh well, you know, I saw a lawyer’s opinion or an accountant’s opinion.

That is not the same as a product ruling. A product ruling is from the Australian Taxation Office and it is quite a different thing. But the Tax Office will give you a ruling for tax purposes. It doesn’t warrant that the investment is a good commercial investment.

JOURNALIST:

The ATO’s denied tax breaks, I’m sorry…

TREASURER:

I was going to say, at the end of the day I would say to people you have still got to make sure your investment is commercial. Don’t take commercial advice from the Tax Office, it’s not good at giving it.

JOURNALIST:

But these companies that are falling…

TREASURER:

Not as a (inaudible)…

JOURNALIST:

…that seem, that are falling over, APT and other forestry companies that are, are, seem to be going to the wall, that don’t seem to have done much wrong, do you have sympathy for them?

TREASURER:

Look, there are a whole host of commercial reasons which can affect companies’ profitability and I am not entering into that. All I am saying is that those companies which had product rulings from the Australian Taxation Office are in a different position to those that didn’t.

JOURNALIST:

What about Government support for legal aid for people who want to take their financial planner or some of the promoters of these schemes to court? What about Federal Government assistance?

TREASURER:

I can say that the Australian Securities Commission is investigating these promoters. Some action has already been taken to take some licenses away, and some of the unscrupulous promoters could face criminal charges. And if they do it is a matter for the courts to determine. But they could be, if they are guilty of crimes, they could be punished and we have made it clear to the corporate regulator that it should be taking such action that is open to them in relation to those promoters. That is the proper way to do that, in a court of law.

JOURNALIST:

(inaudible)…

TREASURER:

Last question.

JOURNALIST:

…recently denied tax breaks to Moulin Rouge and it said that this is going to throw $300 million in film projects in jeopardy. Is the ATO tax stifling a new industry?

TREASURER:

I haven’t seen that ruling and if such a ruling has been given, obviously I haven’t seen the ruling so I don’t know, but obviously if such a ruling has been given you should refer questions on that to the Tax Office.

Thank you.