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Transcript of doorstop interview of the Shadow Treasurer: Brisbane: 14 October 2005: Peter Costello's secret tax plans.

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Wayne Swan MP Federal Labor Shadow Treasurer



SUBJECT: Peter Costello’s secret tax plans

SWAN: We’ve seen this morning some more evidence of sneaky behaviour from Treasurer Costello. There we have in the paper, plans that he was developing secretly in his office while he was publishing rubbishing his colleagues who were putting forward similar proposals. How can you trust a Treasurer who puts forward a plan, secretly in his office, and rubbishes his colleagues at the same time for publicly advocating the same thing?

The truth is this country desperately needs tax reform. We have the highest taxing Government in Australian history. Australians who have worked hard deserve some incentive in the tax system, and they deserve that incentive now as they are hit by record petrol prices. So we think that there ought to be fundamental tax reform in this country, and this should include an examination of all rates of taxation. Particularly to give those people who’ve worked hard, on middle incomes, some real incentive and some tax relief.

But they’re not going to get it from this Treasurer. He wants to hold up tax reform so he can have a victory lap later on, if and when he takes over from the Prime Minister. That’s what the Treasurer is about; he’s about his own immediate political interests not about the national interest. But nevertheless Australia, our economy, deserves some fundamental tax reform and we deserve some reform which gives to most workers some tax relief and rewards their hard work.

Journalist: What do you think of the idea of a 30 percent top rate?

SWAN: I think we do need to put some incentive in the system and we need to simplify it. But I think the proposal that’s out there today fails the fairness test. It delivers a lousy $6 to middle income earners up to $85,000. So it absolutely fails the fairness test. Doesn’t mean to say we don’t need fundamental reform. Doesn’t mean to say we don’t have to have a look at all of the rates, including the top rate. But this proposal does fail the fairness test.

Journalist: (Inaudible) … approach the idea of that fairness test, and how the top income earners should be taxed?

SWAN: What we’ve said is that a modern, efficient and fair tax system must be internationally competitive, must have incentive in the system across the board, and must be simplified. I mean, you can’t poll vault over the Tax Act at the moment. And people who are working overtime are paying very high rates of taxation. That’s why we’ve got the highest tax take in Australian history. It’s why we need fundamental

reform, but reform which delivers decent incentive to middle income earners who’ve worked hard to make our economy strong. This proposal fails that test. It delivers a lousy $6 to middle income earners up to $85,000. It fails the fairness test and doesn’t really deliver the productivity boost and the incentive boost that’s required, for most of our workforce.

Journalist: What would you propose then, to pass that test?

SWAN: We put forward an alternative set of proposals during the May Budget which would have doubled the tax cuts for middle income earners. That was clearly affordable. Treasurer Costello knows that’s affordable. He’s now sitting on a $13

billion surplus. What we see is we could have had much better tax reform in the May Budget, particularly for middle income earners who were dudded.

Journalist: Just on the point about secrecy, the Treasurer says this is just one option they’re looking at. Shouldn’t the Treasurer be able to formulate their plans without having to release them to the public every step of the way?

SWAN: These were plans that were requested by the Treasurer’s office. They were specifically requested by the Treasurer’s office, and they were requested at the time that the Treasurer was publicly rubbishing Malcolm Turnbull for his proposals. What we find is that he had similar proposals and he didn’t release them because he wanted to pinch them later on. That’s what we’ve found. This is incredibly sneaky behaviour from Peter Costello.

Journalist: Does this sort of behaviour between Mr Costello and Mr Turnbull damage the Liberal Party at all?

SWAN: Well I think it’s damaged the national interest. We urgently need tax reform. We urgently need more incentive in the tax system, and we need to make our tax system internationally competitive. All of these things have been put on hold because of the political objectives of Treasurer Costello. He’s not acting in the national interest; he’s acting in his own selfish political interest.


Friday 14 October 2005 Contact Jim Chalmers 0417 141 676