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Parliament House, Canberra: transcript of doorstop interview, 6 November 1997 [COAG, tax reform]

EOE

TREASURER: Well as you know the Commonwealth Government has invited all of the States and Territories to a meeting today to discuss tax reform. We've done that because we believe it's the time for leadership in relation to tax reform in Australia. This is our last best chance to reform the Australian taxation system and make it adequate for the 21st Century. And we want to involve a broad range of Australia in this discussion. Starting off with the States and Territories today but we are of course consulting with business and consulting with the peak welfare organisations to try and develop agreement on how to fix what has been a very difficult problem in this country - the taxation system. It's going to take a lot of leadership, it's going to take a lot goodwill but it's something that is worth striving for and it is certainly something worth achieving.

JOURNALIST: Treasurer, how confident are you of getting all States and Territories reaching a consensus on this?

TREASURER: Well today we'll be listening to the States' views in relation to taxation. They have put out a number of principles in advance. Those principles in general terms are good principles but I think we have to take it a step further and we have to try and get agreement on the shape that we want to see in our taxation system. The shape of broader based indirect tax, lower rates. Broader based personal income tax base, lower rates, and a taxation system that makes us competitive in the world.

JOURNALIST: Mr Costello, the Federal Government hasn't yet put anything down on paper yet the Premiers will want to be hearing ideas of what the Federal Government is going to do and also some definition of how mega the mega package is going to be. Will you be able to provide that sort of detail?

TREASURER: The direction that we want to go, I think is pretty well known. We want to broaden the indirect tax base and lower rates. We want to broaden the personal income tax base and lower rates. We want to simplify business taxation, we want to make Australia one of the competitive tax areas of the world. We don't want to increase overall burdens of taxation but we want to make it simpler and fairer on a broader base. So that's the direction in which we're coming and I think anyone who has looked at the Australian taxation system knows that's the direction that Australia has to go. So we'll be hoping that the Premiers agree with that and that the Premiers are part of what is really going to be, I believe, a great journey to improve one of the weak areas of the Australian economy, its taxation system, and to make it better.

JOURNALIST: Will you also be able to promise the Premiers if there is any community pressure in response to the package that the Government won't be caving in?

TREASURER: Look the Government's leading this tax debate and we're asking others to come along with us, starting today with the Premiers and the Chief Ministers but its not just them. This is a national issue. This is an issue that as a nation we have to face up to and its going to eventually involve all Australians in being consulted and having their say in relation to this.

JOURNALIST: But might not the Premiers have some concerns about the Prime Minister's ability to push through major changes given the back-flip on nursing homes?

TREASURER: Oh don't worry about the Government's intention to renovate the Australian taxation system and nobody should doubt that this Government intends to do what other Governments have tried and failed to do. That is to give Australia a modern, efficient, taxation system which will set us up for the next century.

JOURNALIST: Starting your talks today, when do you hope to finish them and have the Government's position set out?

TREASURER: We'll finish our talks on tax with the Premiers and Chief Ministers today, I believe, and we are having further discussion on other issues with them tomorrow. But the Government is taking soundings from all sectors of the Australian community and we expect to be putting forward our proposals sometime next year.

JOURNALIST: (inaudible)

TREASURER: Well this is a Government which is determined to renovate the Australian taxation system. This was tried in the 70s, tried in the 80s, tried in the 90s, we can't afford to fail this time. We can't afford to fail this time, we can't afford to fail by becoming a victim to populism. We know that Parties that can't show leadership in this issue will run around and try and attack tax reform. We know that Labor can't bring itself to be part of this debate but for the sake of Australia, it's important that this is done, it's important that we succeed this time.

JOURNALIST: So what's your reaction to some of the negative comments already by some of the Premiers about a GST?

TREASURER: Well I think that many of the Premiers believe that a broad based indirect tax is essential to tax reform in Australia and I hope they all agree because that is a corner stone of reforming the Australian taxation system. If every other country in the world can do that, why can't Australia.

JOURNALIST: A lot of the other attempts at tax reform fell apart because of community or vested interest pressure and even, some may say, a scare campaign. On the nursing homes it was only really one sector of the community that was pressuring the Government, yet in the tax reform debate you'll have a whole series of sectors pressuring the Government. How can you say you won't cave in, what's different about the Government this time?

TREASURER: Oh I expect that there will be a scare campaign on tax because we now know that Federal Labor, Beazley Labor, won't be part of tax reform. But it won't do them any good you see, because sooner or later change will be forced on us. If you don't renovate our tax system it's not going to last into the 21st Century. So they think they can run a scare campaign now and it will do them good, it won't do the country any good. And if they were ever to return to Government, it wouldn't do them any good. So we regret the fact that they won't join the great cause and we regret the fact that they will engage in scare campaigns but for the sake of Australia we will ensure that we take that on and we argue our case. And we do the right thing by the country, that's what we intend to do.

JOURNALIST: Is the Prime Minister going to be tough enough to fight off the pressure?

TREASURER: The Prime Minister is absolutely committed to tax reform. Let me just remind you that Labor and Liberal Governments from the 1970s on, have realised the importance of tax reform. Labor and Liberal Governments. This should not be a politically partisan thing, this should be something for the country. This is a leadership thing and our Government is going to show the leadership, that's what it's all about. We wish that Beazley Labor would have joined us, there's still time for them, if they can rise to the occasion. But if they can't we will go on without them.

JOURNALIST: Is this going to be a great adventure that you relish personally?

TREASURER: I think that this is going to be a great thing for the country and I think that if we accomplish taxation reform, in the years to come we can look back and say "We did it and we set Australia up for the next century". If we don't accomplish tax reform, our opportunities will just be much shallower, that's the way I see it. Our opportunities as a country will be that much shallower and I want to make them deep and broad and positive. Thank you.