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G&C Bodyworks, Slacks Creek, Brisbane, 1 October 1998: transcript of doorstop interview [GST; tax ads; growth; GST analysis; jobs; Victoria crisis]



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LEADER OF THE OPPOSITION

 

TRANSCRIPT OF DOORSTOP, G&C BODYWORKS, SLACKS CREEK, BRISBANE, 1 OCTOBER 1998

 

 

E&OE - PROOF ONLY

 

Subjects: GST; Tax ads; Growth; GST analysis; Jobs; Victoria Crisis

 

BEAZLEY:

 

(Holding up a yellow pages directory) Well, people ask me on what is there going to be a GST. Well, the answer is this: let your fingers do the walking because in all the services and all the goods that are advertised here, you will find that the GST impacts, a very substantial impact indeed. So, everybody in their households have got their GST guide, along with their telephone. Of course, we know what the GST is on but what Mr Howard needs to do is to come clean on how much it is going to cost families because what we find today revealed in the press is that the Government has misled the Australian people, particularly low and middle income families, as to the real costs of the GST on their lives. The measures which we have used to measure the effect of tax and indirect taxes on the reform package that we did in 1985 with the Liberals own estimates of Fightback in 1991 has been abandoned by John Howard. And the contrast between the two positions is this: what seems to impact on the low income family, according to Mr Howard’s figures, for $3.50 a week, in fact is over $18.00, when you take the Bureau of Statistics survey, Householder Expenditure Survey, into account. So, we know what the GST is on. It’s on the yellow pages. But we know now that what the cost of it is, is a great deal more than the Government is prepared to own up to. I’ve also have added today the costs in a business like the one that you see around you. The owner has pointed out to me that the very substantial increases that he would experience. Firstly, the rent. He pays rent here. It would go up buy about $6,000. He pays insurance. He pays on repairs and maintenance, on the telephone, accountants fees, registration, electricity, printing, advertising, cleaning, consultants fees, security patrols, legal help, freight, plant hire, all of which substantially augments the costs of his business. Those are a dozen or so things in the yellow pages that he has to deal with. But, of course, for all businesses they’d be experiencing something very similar themselves. And this business, which is enormously competitive and a great deal of work is done for insurance companies, he would probably have to absorb those costs one way or another in that competitive environment. It’s bad for small business. It’s bad for consumers. And the Prime Minister will not reveal the true figures about it. The Prime Minister and this Government have suppressed the real estimates of the cost of a GST for families.

 

JOURNALIST:

 

Mr Beazley, ... more details into the Governments that they put out just before the election was called. Why have you sort of been so light about it? There hasn’t been a lot of criticism about it in the election campaign? And what outcome do you hope for?

 

BEAZLEY:

 

Sorry, in terms of the cost of the GST?

 

JOURNALIST:

 

No, the ... ads that the Government put out.

 

BEAZLEY:

 

Oh, I see.

 

JOURNALIST:

 

Yes, before the election was called.

 

BEAZLEY:

 

Well, we have had a thing or two to say about the $17 million worth of ads which never mentioned the GST and which everybody was regaled. But, of course, once an election campaign is under way you deal with the main issues. And it’s more important for us to say that this is the last chance people will have to vote against a GST but if they do, a GST will be off the Australian political agenda forever. It’s a more important message to give out than simply the fact that the Government has spent $17 million of taxpayers funds, which could have usefully gone into nursing homes or any other of the areas of expenditure that this Government has scoured. Important though that message is, of course, it’s not one that lasts through an election campaign.

 

JOURNALIST:

 

Mr Beazley, the IMF is coming out with growth forecasts for Australia of around two per cent. Now, I’m sure you’d say that’s a problem for the Government but isn’t it also a problem for your own tax package?

 

BEAZLEY:

 

It’s a problem for every Australian, what the IMF has just done. It means, of course, in terms of this election that only the Labor package is affordable. Only the Labor package can actually be sustained. But it also raises another issue. In an environment in which small business is feeling great pressure and in an environment in which consumers will be losing confidence wholesale, and in an environment in which jobs will be at a premium, is the most sensible answer to the problems we confront in 20 months from now to impose a massive, difficult to administer tax on consumption? I don’t think there’d be a single country in the world looking at the sorts of international economic circumstances that we face that would say it would be a good idea in the middle of this to do a GST.

 

JOURNALIST:

 

But with growth at two per cent ...

 

BEAZLEY:

 

No, because we have done two things with our package. Firstly, we have structured it to take a much lower level of growth than Treasury was forecasting and even having done that, we’ve come below what would be the estimates of a surplus in those circumstances. We find in the Treasury figures so far under the Charter of Budget Honesty, they have said that we are over-estimating what we claimed in relation to expenditure, but the Government is under-estimating. The Government had a problem to start with. It has a problem augmented. We have been a little surprised to find that while we didn’t think we have a problem, we have an ever less problem than the one that we thought we had.

 

JOURNALIST:

 

... that you used for your package.

 

BEAZLEY:

 

They were considerably south of the Government’s three and a half per cent. But you’ve seen what Gareth has had to say. We’re looking at two to three per cent rates of growth.

 

JOURNALIST:

 

inaudible

 

BEAZLEY:

 

You wouldn’t want to walk out of this election with a Government in power that didn’t care about jobs. What the IMF has indicated today is that a Government coming into office in this country that will not put itself under the discipline to create jobs is not a Government worth having.

 

JOURNALIST:

 

Inaudible

 

BEAZLEY:

 

As I said, 2 to 3%, they’re predicting 2% for next year, we think 2 to 3% through the 3 years but we have also produced in terms of our view about the impact on the surplus a set of calculations that takes us well below what the surplus would be under, in those terms, so we have been prudent and our predictions will survive.

 

JOURNALIST:

 

So you ... revive your costings ... .inaudible... intact?

 

BEAZLEY:

 

Well Treasury seems to have revised it already for us in the downwards direction, but what that means is that we don’t have any level of risk at all.

 

JOURNALIST:

 

So you don’t have any risk of ... inaudible.

 

BEAZLEY: I don’t have any risk of core and non-core p romises, but we were very very cautious in our estimates for the very reason that we, there are many things that an election campaign does and one of the things that is not done in recent years is see us emerge with an enhanced respect for politics and politicians from the process. We have been determined that one of the things that we should care about is that we don’t go through this next three years with anybody being able to say that we broke promises. I think that all the figures that I have seen so far, indicates that whatever else we do, should we form a Government, we won’t be doing that.

 

JOURNALIST:

 

Mr Beazley, the Prime Minister said that you didn’t use… Treasury has used when you were in Government, why should the Howard Government ... inaudible

 

BEAZLEY:

 

You must question the Prime Minister further on that because what he said is simply not true. When we did our estimates for the initial tax package that we did in ‘85 and when they did their estimates on the ‘91 tax package they were using the ABS statistics Household Expenditure Survey, that’s what they were using because it’s a sensible one to use, it has a better focus on the real spending of the average Australian household. That’s what we used for ‘85 that’s what they used for ‘91, and if you use that on Mr Howard’s estimates this time round, for a low income family, the mark up over Mr Howard’s estimates is about 500%.

 

JOURNALIST:

 

... inaudible .. you presented the costs here as just a simple add on without any rebates or anything ... transport costs, in that respect it’s not really honest to be presented like that is it?.

 

BEAZLEY:

 

Well I don’t think you will find that there is any confidence in business, that the impact of a whole sale sales tax change if that is actually something which is a factor in the cost of a part or whatever is that they receive there is any real confidence that they will get 100% of what is passed across to them. We have also found to as people have made closer studies that the actual mark up between the wholesaler and the retailer is vastly greater than most people have estimated to this point and on just that, any product that you care to test, there have been very interesting revelations about business practice since these packages have been debated.

 

JOURNALlST:

 

Is this your worst case scenario?

 

BEAZLEY:

 

No the scenario that we have here is prepared by the owner of this shop, the owner knows exactly what he is in for and he has produced an outcome here which is deeply troubling to him and well he might.

 

JOURNALIST:

 

inaudible

 

BEAZLEY:

 

Well of course, the importance about the household expenditure surveys an estimate in relation to consumption, I mean that is the point that is there, we are not making, putting in place a huge new consumption tax. So ours is basically looking at the income tax area, but I don’t think you would find any particular trouble as far as we are concerned in that regard, we have a pretty clear cut understanding that we delivered we said we will.

 

JOURNALIST:

 

inaudible

 

BEAZLEY:

 

Those are two totally different things, two absolutely different things. If you actually estimate the impact of a new tax, the household expenditure surveys a sensible one to go to. The CPI adjustment for pensioners, that has always been there, is the mechanism whereby you adjust pensions. But if you are looking for a distributional effect of a new consumption tax you go to that household expenditure survey, we did in 1985, they did in 1991.

 

JOURNALIST:

 

Mr Beazley, this used to be a safe Labor seat, a lot of former Labor voters voted the other way in the last election, what do you say to those people, why should they vote for you this ti me?

 

BEAZLEY:

 

... half an hour or so, look I think the point is this to Labor voters and to Australian voters genuinely, we have listened and learned over the last two and half years, we have focused our undertakings on the needs of middle Australia and middle Australia contains an awful lot of Labor voters, our tax changes, our changes to the education system, our changes in training, our commitments to jobs, these are the sorts of things that Labor voters and potential Labor voters have been telling me that they want to hear from the Government, they want to hear about security and opportunity and that’s what we’re about.

 

JOURNALIST:

 

inaudible ... are going to cost you votes in key marginal seats in NSW and may stop you getting over the line.

 

BEAZLEY:

 

I was surprised to see those comments on Four Wheel Drive, basically I have found on the campaign trail, after initial flurry once people had realised that we weren’t going to increase the tariff for those who utilise it for genuine off road services, either personally or business wise would be running into that sort of trouble, so that has gone of the agenda, what other people have said is hang on, why should Four Wheel Drives be uniquely advantaged over Australian produced cars, aren’t we all about Aussie jobs, that what has come to me.

 

JOURNALIST:

 

inaudible

 

BEAZLEY:

 

No I don’t think there is that concern, I think what people are comprehending now is, as far as tax is concerned they are interested in the Gorilla in the room not any Chihuahua snapping at the feet, and the Gorilla in the room is a $30 billion Gorilla.

 

JOURNALIST:

 

... inaudible ... jobs target do you ... at 2% growth you can’t achieve .... inaudible

 

BEAZLEY:

 

It depends how long the 2% lasts and it depends what we do as a Government in response to it. IMF has sunk a torpedo big time into the deliverability of the Government’s tax compensation in relation to their tax package, but it hasn’t sunk a torpedo into us, all it has done from our point of view is to say this, if you haven’t got a Government that’s prepared to put itself under the whip of a target you haven’t got a Government that is worthwhile at all.

 

JOURNALIST:

 

Mr Beazley, the Prime Minister has said not one job will be lost under a GST and he has rubbished Colin Hargraves analysis as a shoddy piece of economic analysis, what is your response to that?

 

BEAZLEY:

 

Well it’s the same Prime Minister that said that we would never ever have a GST and that no Australian worker would be worse off. He now says that there’ll not be one job lost under a GST regime and I don’t think there is a single, respectable commentator who says that that is the case, it is not just a question of what Mr Hargraves had to say and 200,000 jobs lost is pretty spectacular, his own Treasury says 30,000, he’s got another modeller out there who said was defending his position but when you look at the swings and roundabouts under that particular Modeller’s view you are talking about 100,000 to 130,000 jobs. Nobody anywhere on earth would argue whatever they think of the merits of the GST that a GST actually creates jobs. No one on earth would argue that, when you look at the impact that it has, coming in in an environment like ours, on small businesses - businesses like this. The impact has to be a cut in jobs, if you put another $13,654 worth of expense on the overheads of a company like this annually, you have an impact on their ability to employ, that just stands to reason, and who is driving jobs? The jobs are being driven in this country by service industries massively, a huge proportion of the workforce, something like 5 times the proportion of the workforces employed in service industries as opposed to mining and manufacturing.

 

JOURNALIST:

 

about no job being lost

 

BEAZLEY:

 

Look I have been very constrained in describing the veracity of my political opponent I have to say. He would be alone in his belief that no jobs would be lost, he would be marooned on Lizard Island the view from Lizard Island might tell him that, but the view from round town well tell him something different.

 

JOURNALIST:

 

Inaudible ... Victorians that complained about the gas crisis were being soft, is this the right way to respond to it and what would you do on Monday if you’re elected?

 

BEAZLEY:

 

Well I noticed that Jeff said it from Perth and I welcome Jeff to Perth as a West Australian, always nice to see him there, but I doubt very much that his fellow Victorians thought it was much of a place to make a statement like that. One thing we have come to learn is this, Victoria is at the heart of the Australian manufacturing industry, Victoria sneezes and everybody else catches a cold, Victoria has sneezed and we’re all catching a cold. I put out my 100 plan the other day, well I understand now, and I in fact understood then that primary thing I will confront as Prime Minister is the problems that is in Victoria, if I am fortunate enough to be elected on Saturday, on Monday I would start working on that problem or as soon as I was appointed. I think this is a major federal national problem and the Victorian Government cannot carry the wait on it’s own, there may be a requirement for substantial adjustments in social security payments and a substantial adjustment in unemployment benefits, there may be requirements to bring forward a raft of industry policies to deal with the problems that we will confront. We will treat this as a national emergency because of it.

 

JOURNALIST:

 

Mr Beazley it looks like being a close election, do you think we will have clear result on Saturday night or could there be a week or uncertainty?

 

BEAZLEY:

 

Well the mathematics are against us there is no two ways about that, but I hope for clear result because I do know this, only we can form a stable Government on a narrow clear result our opponents cannot. We are approaching a position very quickly now if the polls are right, if the polls are right where people have to ask questions about who forms a stable Government. The bolt from the Liberal and National position by Liberal and National backbenchers during this election campaign, has been unprecedented, unprecedented. But what it does indicate is that we would go into a period of great economic difficulties if we have the Liberals elected with a set of policies that ought not to be implemented that no idea on their part how they back off from them or what parts of them they would do.

 

JOURNALIST:

 

... you said you won’t go to a minority Government with One Nation, but do you know what Peter Beattie has done, .. Peter Andrew has done with ....

 

BEAZLEY:

 

I am taking the model of contemporary politics was set here in Queensland for the Labor Party there is no two ways about that. I would go under exactly the same terms that Peter Beattie is prepared and was prepared to govern, not if his majority is dependent in the House on One Nation members but he is prepared to accept support of Independents if they are prepared to give that to him. I hope it won’t amount to that, I hope if that we would have if we are going to have a majority and we are talking here mathematically not terribly likely outcome, but if we are going to have a majority I would hope to have sufficient to do the job properly.

 

JOURNALIST:

 

inaudible

 

BEAZLEY:

 

Well you have to accept an outcome and make clear how you would handle that outcome, I think there would be an understanding particularly among the Independents in Parliament that Labor has exactly the sorts of policies that are needed now and we would pursue those policies I don’t think that I would have the problems with them that Mr Howard would have, but this is all hypothetical that’s the reality of it, we don’t know what the outcome would be, in most of the polls we are behind, this is just a chance for the people to make a statement for the last time about whether or not they want a GST.

 

JOURNALIST:

 

Are there any Independents that you wouldn’t ... inaudible

 

BEAZLEY:

 

Well lets just wait and see what the outcome is before we get down to ....

 

JOURNALIST:

 

... in Victoria have been asking if there was no clear result for a number of days would you propose to do anything in the interim?

 

BEAZLEY:

 

I would invite Mr Howard, he would still be in caretaker mode and say to him we have an emergency on our hands, a genuine National emergency. Whatever we can do to facilitate your aid and assistance to the people of Victoria and more broadly, it may turn out more broadly, we will support you.

 

Ends.

 

 

 

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