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Transcript: Opposition tax package

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Thank you very much ladies and gentlemen. The Opposition's package is the product of Professor Hewson's cold computer driven theories. It involves you paying a new 15% tax on almost everything you buy

- food, clothing, services to replace other taxes. It also involves new health costs and massive cuts in the provision of Government services. Now you can't make huge changes like this without there being substantial

social and economic implications. We'll be subjecting the package to detailed analysis. When we've done that we'll have a far better idea of who the real losers and winners are than the Opposition does now, and of course we'll be informing the public.

How long will that take Mr Kerin?

Well I don't want to put a time scale on it but it will take certainly days but we'll certainly have a feel for what the implications are through next week.

Are Treasury and Finance both working on the package?

Well I know Treasury is and I would expect that Finance will be looking at costings.

At this stage, a preliminary one, is there anything in there that interests you as Treasurer - anything that you may find interesting yourself?

There's a heck of a lot that I find very interesting there but I think it would be better to let the dust settle a bit and look at it with a more analytical point of view.

Do you think there's anything to be learned in terms of helping business. I mean a reduction of payroll tax and excise duty would most certainly help businesses but do you think that maybe there's something applicable there?

Well there's always a lot. I'd just like to say he calls it Labor's payroll tax and Labor's fuel excise when Askin and Fraser introduced them. It's the winners and losers that's the real test plus there's a

great belief that the private sector can always do everything.

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Journo: You have had it since 9 o'clock last night or at least the executive summary.

Kerin: No I haven't. I didn't get it until I got home quite late, it was on my doorstep.

Journo: Well you've had it for at least 12 hours.

Kerin: Only the summary.

Journo: You must have been examining it in a fair amount of detail and yet no-one in the Government seems to be able to identify anything immediately wrong with it, other than the

Kerin: There's plenty that's wrong with it, but I mean to say I don't think it's sensible to go into details at this stage. I mean to say, there are mistakes. There are things that are wrong with it, but basically it's the

rhetoric and the ideology. It’s a very political document but I think it's proper that we get a proper factual analysis rather than getting into counter-rhetoric.

Journo: Could you name a mistake Mr Kerin. You say there are mistakes definitely. Could you name one?

Kerin: One - just one. Well page 1, point 1, living standards have fallen. The reality is that real household disposable income has risen by 24% since 1983 and per capita real household income has risen by


Journo: Do you think the two million jobs Dr Hewson is talking about by the turn of the century is obtainable.

Kerin: Well I just don't know how he arrives at that figure and I watched the Press Club questioning today and he was very fuzzy on that and I think anyone that predicts an absolute figure with a modern economy is

being a bit foolish. We were able to achieve an increase of nearly 1.5 million jobs during the time we've been in Government but I can't see how from what he's saying there's going to be an increase of jobs of

that order when it's quite obvious there's going to be enormous transitional costs and many jobs will be lost.

Journo: Could Labor produce that sort of job result by the turn of the century and can it halve unemployment by this time?


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Kerin: I certainly think we can halve unemployment by that time, the unemployment rate, but as I just answered the other gentleman saying that if you put figures on what you think you're going to create or otherwise,

basically we have to create so many thousand jobs each year and that's the task for Australia.

Journo: Mr Kerin you'd have to concede that the tax cuts are going to be pretty electorally popular. Doesn't that put (inaudible) on Labor?

Kerin: Well there's winners and losers. If you look at the tables, it's quite obvious that higher income earners are going to be better off and the whole package is supposed to be revenue neutral and if that is so, pensioners and lower and middle income earners by definition must be worse off. As I keep saying, it's got to be subject to a proper detailed analysis.

Journo: But does it put the heat on Labor to offer some tax cuts as well?

Kerin: No, not necessarily at all. We ’ve done an enormous number of taxation changes and continue to do so. Just last week with respect to the removal of taxation on inputs, wholesale sales tax, that's probably worth well over a billion dollars to the producing sectors. And so we're always busy on the job with respect to

changes to taxation and superannuation simplification, all of these things are continuing job of Government.

Journo: Do you feel more or less confident about your chances at the next election than say 24 hours ago?

Kerin: Well I think I really do feel quite a bit more confident to be quite honest.

Journo: Have you looked at the compensation package and what can you tell us about that?

Kerin: No I haven't looked at the compensation package yet at all in any detail. I really think it should be done professionally rather than me just sort of going off the top of my head.

Journo: Except that's relevant to your earlier point as to who's better off and who's worse off. You can't say that without looking at the compensation package.

Kerin: But in terms of principle, it's very clear to look at those taxation tables that people with incomes of over $50,000 are going to be better off and by definition some of the things we've had luxury taxes, they’re all going to drop to 15% and Dr Hewson doesn't walk away

from that. So it really is a question of analysing who the real losers and winners are.

Journo: Treasurer, the fact that you and the Prime Minister both see the need for detailed analysis. Does that mean the package itself has been put together very well?

Kerin: Well I think it’s a reasonably good job, but it's been put together by economic consultants, not people who really are close to the electorate or practical politicians and I think that it would be far more

sensible for us to give the public a proper analysis rather than be saying things at this stage which could be subject to further scrutiny. I just really want to be quite accurate about this. The Opposition has set up this straw man of we're going to run a scare campaign. I ’d like assure the people we're not going to after seeing all the dimensions of this package which has been years in the making. I'm quite

confident there’s no need to run any scare campaign and no-one will need to. Thank you.