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Transcript of doorstop interview of the Shadow Treasurer: Parliament House, Canberra: 23 March 2005: Federal-state financial relations.

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Wayne Swan MP Federal Labor Shadow Treasurer



SUBJECT: Federal-state financial relations

SWAN: Peter Costello today wants a blue with the states to hide his big-taxing ways. He has increased taxes 62 times since the GST was introduced, pulling in about $5 billion. He collects $199 billion this year, $12 billion more than when he did the deal with the states. He says the states have got $2 billion extra; he’s got $12 billion extra. This is the Treasurer who left out, in the last budget, 4 out of 5 taxpayers. They all missed out on a tax cut. He is so embarrassed by his big-taxing ways, and all those Australians that have missed out on tax relief, that he wants to shift blame to the states. That’s what going on today.

Journalist: What do you make of this eleventh hour offer of $330 million to NSW to cut taxes?

SWAN: Yet another smokescreen. You see, the states have kept their end of the bargain. They’re supposed to be here today to talk to the Commonwealth Treasurer about the future of the agreement. Two weeks ago he said the states should be increasing expenditure on infrastructure. Today he’s saying they should be cutting a whole range of taxes. You can’t walk both sides of the street like Peter Costello is on tax.

Journalist: Should the states accept this offer?

SWAN: There’s no doubt that the states want to be cooperative. And there’s no doubt that the states have indicated that in circumstances they will reduce taxes. But they’re not going to operate with a gun to their head when Peter Costello’s playing politics. He’s the big taxer. He’s got $199 billion. His monies are up $12 billion. So Peter Costello’s got the weights on him to perform.

Journalist: Isn’t this part of the agreement that the states signed up to in ’99, that they will cut these state taxes?

SWAN: The states have kept their word. They have adhered to the agreement that they signed in 1999. Since that time GST revenues have increased by $2 billion. And in that time Peter Costello’s revenues have increased by $12 billion. You see,

Peter Costello only ever gives tax relief on the eve of an election and, in the meantime, the electorate can go to hell. That’s Peter Costello’ approach. He is very

embarrassed about it. He’s so embarrassed about that he wants to shift the blame to the states.

Journalist: Is this perhaps a ploy to split the states - some will get more than others?

SWAN: Peter Costello will do anything to hide his embarrassment at his high-taxing ways. That’s what today’s about. It’s about putting a smokescreen across his high-taxing ways.

Journalist: Do you think the offer of … (inaudible) …?

SWAN: Peter Costello is out to spear the states politically. He’s the highest taxing Treasurer in our history. He collects $199 billion. He’s left 4 out of 5 taxpayers out of income tax cuts. He has introduced 62 new tax and revenue measures since the GST came in. He’s highly embarrassed by his own record, so he’s trying to put the focus on the states.

Journalist: With the $330 million … (inaudible) … and the GST windfall you’re saying the states are going to be worse off?

SWAN: The $330 million offer is not an offer - it’s just more game playing from Peter Costello. If he wants to seriously renegotiate the agreement, which is due to be renegotiated this year, you wouldn’t send the treasurers a letter last night and expect a response today. You’d sit down and have a sensible conversation. He’s not about doing that. He’s about playing politics, shifting the political attention away from his high-taxing ways, from his record tax take, from the fact that he’s the highest taxing Treasurer in Australian history. You see, he wants to walk both sides of the street. Two weeks ago he said to the states, spend more money on infrastructure. Today he’s saying cut some taxes. He wants to have it both ways. The truth is Peter Costello ought to get his own house in order, fix up his own backyard. He’s playing politics today to divert attention.

Journalist: Wouldn’t it be better though if the states did cut that $8.5 billion …?

SWAN: There’s no doubt that the states want to provide some tax relief. But they will do it in their time, consistent with the national agreement. It’s that simple. Peter Costello’s simply playing games. He will not give tax relief to 4 out of 5 income taxpayers. He’s highly embarrassed by that, highly embarrassed by the 62 new tax and revenue measures he’s introduced since the GST came in. Highly embarrassed by the fact that he has a tax take $12 billion higher than when this original agreement was put in place. Highly embarrassed by his record on taxation. Today is about dragging a giant smokescreen across his record and focussing attention elsewhere. Well I’ll tell you what - the Australian people won’t be fooled by that. They know who the big taxer is. They know who has his hand in their pocket.

Journalist: Are you saying the Treasurer has his numbers wrong when he says that no state will be worse off … (inaudible)?

SWAN: I haven’t seen his detailed offer to the states, so I’m not doing the figures on that. I’m doing the figures on Peter Costello, who’s collecting $12 billion more. In that time GST revenues have only increased $2 billion. He’s the biggest taxer of them all, and I’m focussing on his record, which he doesn’t want anyone to focus on.

He wants them to look at the states.

Journalist: (Inaudible.)

SWAN: The states are entirely powerless here in the end because the real power lies in the hands of the Commonwealth Treasurer, who is trying to play the blame game and shift the focus in the debate on tax. Well, the average taxpayer out there knows who the biggest taxer of them all is. It’s Peter Costello. He’s got his hand in their pocket when it comes to income tax. He’s got his hand in their pocket when it comes to company tax. He’s introduced 62 new taxes and revenue measures since the GST came in. He’s the biggest taxer of them all.


Wednesday 23 March Contact Jim Chalmers 0417 141 676