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Parliament House, Canberra, 2 July 2000: transcript of media conference: GST, rollback.



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Kim Beazley - Media Conference Subjects: GST, Rollback

Transcript - Parliament House, Canberra - 2 July 2000

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BEAZLEY: Well, Mr Howard and Mr Costello got their lines crossed today. On the one hand, Mr Costello said I must immediately say how much money will be involved in Labor's plan to roll back this unjust, unfair GST. Then Mr Howard came out and said, when invited to speculate on what he would do with future policy, he said, well, we've got another couple of Budgets to go. You'll know about all of that by the time of the next election. Well, what's good for the goose is good for the gander. As far as I'm concerned, the job of the Labor Party is to hold this Government accountable for the detail on the implementation of this tax, see how it operates, and when it has a thorough understanding of the Budget circumstances and a thorough understanding of all the glitches, botches, unfairnesses in it, then to present a package for roll back in plenty of time for the next election so that people can understand what would happen to them after it. And I particularly want to be in a position, when I put forward Labor's plans for rolling back the GST, of knowing that what I say I can deliver. Australians must never, ever again be subject to a 'never, ever' promise by a Prime Minister he does not deliver on.

Also today, Mr Costello and Mr Howard were claiming that I had said that on the day of the implementation of the GST there would be pestilence, there would be riot in the streets. This, of course, we have never said. What we have said is that the impact of this tax will be cumulative. The actual unfairness of it will strike home over time to the Australian people. It will be the expression we used - a slow burn. And just as the impact of it will occur over time, so the full detail of the effective operation of it will become clear over time. And that time is needed to properly assess it before anyone comes forward with a package to change it.

So, that's, again, a further reinforcement of the timetable that we have for putting in place before the next election an offer, an appropriate set of strategies, for the Australian people on rolling this tax back.

In the meantime, what Mr Howard and Mr Costello clearly want to evade doing is accountability for the tax that is now in. They argue that I should present - immediately - what our proposals would be in relation to rollback and that the questions should come to me. It is fully appropriate that by the time of the next election I should be able to answer those questions. But to avoid questions to them now, and Mr Costello was avoiding dramatically today, his responsibility for the fact that despite his and Mr Howard's promises, tax on petrol is rising.

So, this is the period of time when government accountability is critical and the job of the Opposition is to hold them accountable.

JOURNALIST: Mr Beazley, the Treasurer today was suggesting that following July 1, retail spending will pick up and business spending will rise quite strongly. Do you have a view about those economic activity measures post-GST?

BEAZLEY: I think one of the things about the GST is that the claims the Government makes for it are

false. The Government says the GST will dramatically improve exports, it will improve the operation and functioning of the Australian economy, it will improve savings. It does none of those things. Nobody has introduced VATs, which is what they're more commonly called elsewhere. Nobody's introduced VATs for those purposes. If you told the Europeans that that's what VATs did, they'd laugh at you. They'd say, no, it produces material for television programs like Minder. But what they actually do is produce revenue and that's what this VAT will do - it will produce revenue. Now, where the economy goes has been predicted by Treasury and what Treasury has said is that the growth that we had when we were in office, which we have now, in the last two years got back to, will be sustained for the course of the next couple of years. If it is to be sustained, then Mr Costello will need to be right. Mr Costello will need to be right that consumption will pick up and he will need to be right on business investment. But if he is right on both those fronts, all that will happen is that the economy will keep on going, as it has been going, under the previous tax system.

JOURNALIST: Mr Beazley, you've said today that you would give the electorate plenty of time to digest your proposed rollback. Can you elaborate on that? Would you expect that to be closer, like in the normal election period, if you like, say, six weeks out? And isn't there a danger for you that in announcing the rollback, that you will have the complexity of this system, given that it should be bedded down..?

BEAZLEY: I like the expression of Mr Costello's. I like this expression of his. Back in 1994, and, I might say, that he observed this dictum for himself to the letter for the '96 election, except what the ultimately did after the '96 election was something quite different, he said: "Coalition policy would be released when we get within the clutches of an election". That was a nice expression, I thought, clutches of an election. When we were within the clutches of an election, you'll get the final detail, not just on rollback, but all of the Labor Party's policy. And I liked, also, a comment by John Howard at the same time: "We've no intention of responding to the Prime Minister's pressure to start dribbling out policy now. We intend to follow a strategy of presenting the fine detail of our policy and major initiatives during the campaign". Well, that seems reasonable.

JOURNALIST: Mr Beazley, given the determination of your campaign against the GST over a considerable period now, don't you think the Australian people have a right to some indication in the broadest terms, you know, in relation to the size of the rollback?

BEAZLEY: In relation to the directions of the rollback that we're going to focus on, key injustices, we'll assign some priority areas. We have said that we'll be kept within the constraints of reasonable budgetary policy. Yes, we have said those things and it's reasonable for people to understand that that is where we intend to take it, and we've said it. John Howard has said there are two Budgets away. I just go on what John Howard's said this morning. There are two Budgets between now … or at least one Budget and one mid-year statement, this Budget in operation and another Budget next year before an election is called which, of course, is something that I don't control, he does. And he was specifically invited, for example, to address how you'd spend the surplus, how much tax cuts there'd be, all these sorts of things. And he, very reasonably, said, "ask me then". And I, very reasonably, say, "ask me then".

The details of where we're going are appropriately to be announced at that point of time. And, quite clearly, the most obvious detail that would have to await an understanding of the budgetary situation is the amount that you put in to the first phase of your rollback. That is obviously a most important thing to wait.

We've been able to say one or two things. We've said one thing because of the particular political

circumstances which emerged, but it would not be a hugely costly thing, so you could say it, I think, quite reasonably. We've said, for the most battling people in this society, those who live in mobile homes, we'll take the GST off their site fees. We've said that.

But, by and large, the most sensible thing to do, particularly if you're starting to talk about items that may be bigger ticket items than that, is to note the fact that people have made those complaints, to incorporate it within your consideration of what the rollback should be, and announce it them.

JOURNALIST: But right now, will you give us any order of magnitude, in percentage terms, to directly … on Costello's challenge? Will you give us..?

BEAZLEY: I would not defy the Prime Minister on this. I mean, what would be the point of me coming out and saying, in advance of what we know the budgetary situation will be, what the size of the rollback would be? That would not be sensible. I mean, I find rare opportunities to agree with a proposition of the Prime Minister and this would be one of them - that would not be a sensible thing for me to do. I don't know what the budgetary situation is likely to be then. He doesn't know and he's the Prime Minister. How can I know as the Leader of the Opposition?

JOURNALIST: You said in Newcastle the other day that you were expecting that an election could be only six months away. Does that mean that you would then be caught short if it was called early and you wouldn't have a policy ready? I mean, how can you see what the economic situation … you must have an idea now?

BEAZLEY: Well, we don't actually have our feet up and just puffing away at cigars. I mean, what we're actually doing is all the time, we have a Policy Review Committee operating. We're looking at all our promises. We are going through a first cut of policy, but it's a very raw cut of policy, associated with our National Conference on the broad range of things that the Labor Party is considering. Our policy committees and our staff are operating all the time. And if an election were called and, I might say, I would not encourage an election at the end of this year, I believe Parliament should serve their full term -and I have called in the past for four year Parliaments and I will do so again before the next election - but because there is the possibility of an election in the next six months, we already have people working out what our policy stances would be. But, quite clearly, we will know a lot more about the budgetary situation and a lot more about the character of the operation of the GST, if an election is held at the end of this Parliamentary term when an election should occur.

JOURNALIST: When Peter Costello warns taxpayers that rollback means their tax cuts are on the line, petrol prices will go up, how can you convince them that you can deliver rollback on any other measure than that unless it means dipping into a surplus that may exist that Howard can then go to an election and say I'll give you more tax cuts?

BEAZLEY: Look, Mr Costello can press all he likes on these matters. Mr Costello can evade all the questions that are directed to him, as he was evading a few quite notably this morning, in relation to petrol prices and, I also might say, he was slipping neatly around questions in relation to how he might deal with the States, and I'll say a bit more about that in a minute. Suffice it to say this, I am not going to impose greater pressures on Australian families, economically. That's not what my intention is, quite the opposite. And our rollback is going to be calibrated in accordance with that concern, the size of that rollback, the timing of the rollback, the objects of the rollback. These are all the sorts of things that sensibly await a full understanding of the operation of this tax and a full understanding of our budgetary

situation. But let me just say this in terms of roll forward, which has been raised today: and that is the obvious point that is in this GST, that the States and Territories have to request the Commonwealth on whether or not they want a rise in the rate of the GST. Well, hands up all those folk who've seen restraint on the part of States in the past, of asking the Commonwealth to raise Commonwealth taxes. But Costello was invited to respond. This is how I respond to that: at no time when I am Leader of the Australian Labor Party, would I accept a request to raise the rate of the GST. At no time, while I am Leader of the Australian Labor Party, would I accept a request to expand the GST to cover food. I think you're entitled now to ask Mr Costello and Mr Howard if, at any time, they received a request to raise the rate of the GST or extend its coverage, would they do so?

JOURNALIST: ...Mr Costello say this morning about the rate that they would not raise the rate.

BEAZLEY: He almost got there. He almost got there in his remarks. Well, I think that an explicit requirement is on him to come explicitly to the point - if he ever led a Liberal Government, would be accept the proposition that the rates should be raised?

JOURNALIST: Mr Beazley, one more question on rollback, if I might. Accepting your argument that the time is not right, we don't know the budgetary position, I mean, to follow that logic to its conclusion you may not be in a financial position to roll back at all?

BEAZLEY: I think that you can await … let us all await what the Budget produces.

JOURNALIST: So, that's...

BEAZLEY: …currently and I would not concede that possibility. I do not believe the Budget would be in a situation which would oblige that. I believe we'll be in the circumstances where we'll be able to commence rollback.

JOURNALIST: Mr Beazley, … on that point, you made the point earlier on that the GST is … to produce revenue, rather than anything else. If the GST, or the Government's tax package, does as Reith and others believe it will do, raking in a lot more cash than the Government expects from the black economy, would you be more inclined to spend that cash in government programs, or hand it back in the form of tax cuts?

BEAZLEY: I think that we have a major problem with nation-building investment now. We are the only county in the OECD going backwards on spending on education. We are the only country going backwards in innovation, in terms of investment in R&D, in business, and overall in the private sector and the public sector. We've got to understand that one of the deleterious effects of this entire tax debate has seen Australia uniquely, in the industrialised world, arguing around - and we've had to argue it around because the impact on social justice is so strong - really, a European debate of the 1960s when the rest of the world has been working out how they can establish a competitive advantage this century. Now, there's been a rollback going on in this country, a rollback that's been going on in this country is a roll back of our sense of independence and dignity in foreign policy. There's been a rollback on community relations, in particular in our relationships with the Aboriginal community. There's been a rollback in public education. There's been a rollback in public health. This is under a government fixated on creating unfairness with the GST. Now, we cannot afford to stay that way as a country. We cannot afford it. And so I have a multiplicity of concerns on my plate which is why I want to look specifically at the budgetary situation and all the factors you outlined would come into it. If they do collect more, and many people think that Peter Reith slipped the cat out of the bag when he had to say what he had to say,

though the Prime Minister jumped on him, said that would merely become another factor in the Budget equation when that Budget rolls around. And we will be looking at the breadth of that agenda, what should be done for the health of our people? What should be done about the creation of a knowledge nation? And what should be done about rollback and how all three of them intersect.

JOURNALIST: Mr Beazley, you have identified a number of areas that you say will be priorities for … rollback … such as education and small business … your draft…

BEAZLEY: Complexity for small business, yes.

JOURNALIST: Your draft policy document you referred to discusses the arts. It says Labor, in principle, would Labor be supportive of the view of the GST … deleterious effect on the arts community, or will have. You've identified a number of areas. Is there a danger that you will build up public expectations of rollback that you might not be able to meet, come the election..?

BEAZLEY: That is one of the reasons why I'm so cautious with you in the things that I say. We're going to run a responsible government, if we get the chance to, and the things that people need to focus on, and that's always the case, you know what happens with a Labor Party Conference, the policies that we produce there very sensibly shows the directions in which we're going. But there is always this saving clause, and that is the traditional assumption that the timing and detail of the implementation of all of this is a matter for the Parliamentary Labor Party. What the Labor Party's Conference does, I believe, is present a sort of 10 year rolling picture of where the Labor Party would like to see the nation go, for the detail of the first three years await the policy documents associated with the election campaign.

Ends

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.