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First major steal of coalition policy by Hawke

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T im Fischer mp Federal Member for Farrer

Leader of the National Party of Australia

Shadow Minister for Energy and Resources

"First Major Steal o f Coalition Policy by Hawke" "Government Runs Scared on ’FigfrtbacF Package"

The Leader of the National Party, and Shadow Minister for Resources and Energy, Tim Fischer MP, today congratulated the Minister for Primary Industries and Energy, Mr Crean MP, on adopting the Coalition's policy to abolish the Coal Export Duty.

"We promised in the 'Fightback package to abolish seven major taxes - the Hawke Government has now stolen one of these policies.

"The Government must bite the bullet and adopt the whole package, or face certain defeat at the next election by a country that is tired of the Prime Minister's rhetoric, and demands action. This has been clearly shown by the continuing endorsement of the Fightback package.

"The Coal Export Duty is an iniquitous tax grab, introduced by the Whitlam Labor Government, and has been a continuing thorn in the side of one of our major export industries," Mr Fischer said.

"The Coalition's proposal to eliminate the Coal Export Duty is fully funded from revenue gained from the GST and from spending cuts. The Government's proposal, which doesn't come into effect until 1 July 1992, does not indicate where funding will come from. Presumably it will come out of consolidated revenue, thus deepening the already huge Budget deficit.

"While I welcome the abolition of the Duty, and the sketchily outlined proposal to reform research and development arrangements in the coal industry, the Government needs to provide more detail.

"The Government has shirked its responsibility in its -reforms of the Joint Coal Board. Minister Crean has had the Kelman Report on the Joint Coal Board since February, exactly twice as many months as it took to write the report! The Minister should table the Report on the next day of sitting of the House of Representatives, so that all interested parties can have access to it," Mr Fischer added.

ENDS 3 December 1991

For further information, phone John Anderson on (06) 277 4058 Jim Groves on (06) 277 4225 ........

v 1 C O M M O N W E A L T H


Parliament House, Canberra, A.C.T. 2600. Telephone (06) 277 4058. Facsimile (06) 277 2052







3 December 1991


E & OE





Please note, most questions inaudible for transcription.

TAF Greetings. There will be a hand out directly. I'll just make a short statement and then I'll be happy to answer any questions that you might have. Thank you very much for coming along.

The Labor Government has announced the first big policy steal in relation to the GST package, namely, the abolition of the Coal Export Duty $48 million a year.

I say, steal one policy. Steal the lot. In the national interest and in the interest of creating jobs and getting this economy back on the rails.

Kerin said yesterday, I think in this room, watch this space. Well here is 650 pages to fill this space in terms of a proper agenda, economic reform and recovery for Australia.

I might say I read of interest a talk of a Cabinet reshuffle in January. We need a new Treasurer, we also need Queensland Cabinet Minister, we need an economic U turn. It would be one fantastic bipartisan circuit breaker which would do much to break the great feeling of negative attitude in relation to the economy, if in fact, mid January we got our new Treasurer and we got bipartisan acceptance of the GST package.

Whilst, I don't hold my breath in that regard, it is a m atter of record that that would do so much to give people hope to electrify the country in terms of its attitude to the economy and to really break the back of this recession, that one

act alone could do so much in the national interest. So I say again, steal one policy. Steal the lot.

Let me then just add in respect of the Democrats comments on the GST. I note they have not ruled out the package entirely. I note they have gone down the path and made the mistake of going for the very blunt edged weapon of picking and choosing and trying to keep GST of food and of clothes, when surveys show rich people spend a great deal of money in respect of those areas more than the poor people and there are better ways and more effective ways of accommodating that. And I note particularly their questioning of the clear cut commitment of the

Coalition to abolition all Federal Fuel Excise Tax, by that one act, the Democrats have marginalised themselves in country Australia. As I move around central Queensland, nine meetings over the last weekend. Northern New South Wales and all over Australia, criss-crossing Australia selling the package with my colleagues. The one big thing that is winning great support beyond the Capital

Cities is the clear cut commitment to abolish all Federal Fuel Excise Tax.


But again, in terms of the Government and their decision to steal a key part of the "Fightback" policy. Steal one. Steal the lot. Happy to answer any questions you might have.

Q Mr Fischer, how can you say the Government stole when it is a product of three months negotiation with BHP and they gave substantial offsets ...?

TAF We had in our 1990 Policy Speech an absolute commitment in the Coal Export Duty. We reaffirmed that in the "Fightback" package. They have known where the Liberal and National Parties stand on this very critical issue. It has just taken them many more months to get to the negotiating table, to have three months of negotiations. They anticipated, obviously, that it would be in the "Fightback" package as one of the seven taxes which we seek to abolish. They have stolen that particular policy plank and may be they are going to steal more along the path, but it is a comprehensive package. And I say again, if they are going to go into the business of stealing policy they should steal the lot.

Q But you don't have any offsets in your package in terms of new investments. You would be giving extra money to BHP for nothing?

TAF That's a cheap line which, I notice Simon Crean tried to run yesterday. We are as committed to the R and D aspects as the Labor Party Government are committed. We have always said that that was an iniquitous tax and we would seek to remove it with our affirmation in our 1990 Policy Speech reaffirmed in the "Fightback” document and, in fact, BHP will expand their investment even more so under the adoption of the "Fightback" package because we are abolishing all of their sales tax, all their payroll tax and alike. They are not going to have to have some fierce and determined commitment nailed down by Government. It will happen by due natural process under the dynamics of the economic reform package.

Q What in the package ... 50% of those taxes go back to the company as profits ...?

TAF It is a very dynamic package in terms of what it provides for both the agricultural and mining sectors. I must say calendar 1992 is looming as a very difficult year for agriculture and mining. Those two sectors, as in evidence by the Balance of Payment Figures yesterday, are in deep trouble. There ability to contribute to an economic recovery is now very much under question, especially the agricultural sector still working its way through this horrific drought, and it is premature to speak of recovery in either the agricultural or mining sector. The "Fightback" package would even help farmers, small business operators and boutique coal miners in survival mode because we will greatly lower their cost structure in a very positive and practical way.

I might add, we have funded the abolition of the Coal Export Duty there is little evidence that the Government has said where it has said where it is going to get the funds for its decision announced to steal part of our policy and abolish the Coal Export Duty. I know it dosen't happen until mid year next year but they could have pointed in the direction of where their funding was going to come from, they failed to do so.


Q Do you think the Treasurer ... Queensland ...?

TAF Well, I don't necessarily say a Queenslander should be Treasurer. Although I note that over history we have had some extraordinary Treasurers from Queensland. One Theodore and one Fadden on both sides of the political fence, but I do believe the corridors are now abuzz with the comments there is a forthcoming Cabinet reshuffle. It was pointed to in the Financial Review this morning, but it is far wider then that, the knives are out. Once Caucus starts leaking against a particular Cabinet Minister and circulating rumours that John Kerin is going from Treasurer there is a sense of inevitability about it.

I just simply say that the Prime Minister made a very big mistake by not putting a Queenslander in the Federal Cabinet. He appointed Kim Beazley as some hilarious representative from Perth to some how represent Queensland as it works it way through a horrific drought at the Cabinet level, that's been a failure he must address that. In terms of who might be a future Treasurer of this country, whoever he appoints, it's just for those lingering twilight months of this

administration. I will leave it up to the Prime Minister to work that one out.

Q Mr Fischer you've been talking about the abolition of Fuel Excise ...?

TAF Absolutely wrong. It is an absolute commitment to totally abolish all Federal Fuel Excise Tax on petrol, on diesel and on Avgas. That will be a 19 cents a litre saving for all motorists. It is responsible, it is funded and it helps things back to a situation which existed eight years ago. A mistake in this area, which is highlighted in this Government's own report, The Industry Commission Report of 5 November 1986, is when they attached Federal Fuel Excise to the automatic indexation and in process rapped in up from 6 cents a litre to over 25 cents a litre today. In the last eight years of Labor we have had quadruplication and highway robbery of the motorist as consequence of Labor's policies.

We have adopted what the IC has recommended. We have had the courage to do that. We will be totally abolishing all Federal Fuel Excise Tax there will no Federal Fuel Excise Tax in any form under the Coalition Government with the introduction "Fightback" package.

Q ...

TAF Let's just clarify that, because this furphy has been running long enough. Before the Senate this day, is Legislation introduced by the Labor Government to impose a Road User Charge on top of the existing horrific levels of Sales Tax on the transport industry and Federal Fuel Excise Tax on the transport industry. The Coalition says. We are going to totally abolish all Sales Tax and all Federal Fuel Excise and bring it back to a zero base. Our road user charge system which we are prepared to look at down the track will, in fact, only be commercial vehicles, especially heavy transport and in any event it will be from that zero base

circumstance and not as an add on as is being proposed by Labor. In no way, shape or form will there be any reduction in the 19 cents a litre for each and every motorist right across Australia.


Q There will still be extra charges on the registration though won't there. That's where the road user charges will come in. They'll be extra charges?

TAP They will not be in any way extra charges which reduce the clear cut commitment to abolish Federal Fuel Excise Tax. I might add, the discussions which are the subject in part of the Legislation before the Senate today, relate in part to the States forgoing some of their registration apparatus, their levies and the like. We still don't know the outcome of that and we are therefore going to wait and see what is the final detail of what the Government proposes under its road user recovery scheme.

So Prime Minister does not come to this argument with clean hands. He should own up to the full detail of his own scheme which he is seeking to impose on top of the existing horrific regime. We have owned up. We are going to abolish that existing horrific regime.

Q ...?

TAF As you know there will be GST on petrol and diesel and that will effect the motorist at the much lower quantum. It still allows for the absolute protection of our 19 cents a litre saving. What we are doing is absolutely in accord with the Government's own report which the Government has failed to action.

Q ...?

TAF Well you can call it what you like. It does apply to motorist. It is a GST. It is a broadly based and fair GST and it still delivers to the motorist 19 cents a litre less on all petrol.

Q ... so you say that you are not going ...?

TAF We have decided down the track to make those decisions in terms of the road user charge system. I emphasise that will be from a zero base. That is a correct way to proceed. In the meantime we are waiting to see what the Government does with its extraordinary Legislation still before the Senate, not yet debated in

the House of Representatives. It is a requirement on the Government to come clean on this matter and I reiterate on the broader note that we will be

maintaining renewable energy research. We are being absolutely responsible in this whole policy area. And I say again, the challenge to the Government, is they have stolen one of our key policies out of the "Fightback" document let them steal the lot in the interest of Australia as a whole.

Q You are not ruling out th a t...?

TAF I stand exactly by the absolute commitment that it is an unshakeable commitment that motorist will gain by 19 cents. There will be no extra commonwealth fuel based road user charges for ordinary motorists. No ifs, no buts and we will totally abolish all Federal Fuel Excise Tax.


Q ... further road user charges on registration. How would you feel about that from the National Party point of view?

TAP The National party is absolutely behind this package and behind the confidence of working through a sensible set of road user charges down the track and so is the transport industry. They have looked at the package, they say our approach is absolutely correct. It is to oppose the imposition of a road user charge scheme on top of the existing Sales Tax costing many millions of dollars on the transport industry, existing diesel and petrol fuel excise tax and obviously we will be sitting down the transport industry at that stage, it is early days.

What we have done is completely thrown the Government of its pedestal by our sweeping commitment to abolition no less than seven taxes. Ok, they are going to try and pinch one of those commitments the abolition of the Coal Export Duty and we will see how that works out and we will see how they are going to fund that. They have great difficulty in pinching the three big ones, Sales Tax, Payroll Tax and the abolition of all Federal Fuel Excise Tax unless they choose to go down the GST path.

Q ...?

TAF Not if State Governments vacate the field.

Q ...?

TAF That's what they are negotiating with the Government at the moment under this Legislation before the Senate and that's the very point we want brought out into the open because there has been a lot of negotiations at the June Premiers' Conference, the negotiations at the Claytons Premiers' at Adelaide a couple of weeks ago, but we haven't had a definitive statement just where this is up to and

certainly we will be seeking that when this Legislation goes before the Senate and the conclusion of that debate and, more particularly, when it comes before the House of Representatives, I assume on the two day recall of Parliament.

Q But why don't you have your own policy on it. What exactly can you gain ...?

TAF We have to wait and seen if in fact the Government succeeds in bringing in some apparatus and then we are going to have to look at that apparatus. See, the Legislation before the Parliament seeks to impose a National Road Transport Commission. Seeks to impose a form of National Registration Charge. Seeks to replace, by degrees or may be totally, what the State Governments are doing in this field. Look until that is clarified it is a very legitimate and perfectly reasonable commitment by us to say that we are totally abolishing Sales Tax, totally abolishing all Federal Fuel Excise Tax. There will be no new fuel taxes introduced by the Coalition under the "Fightback" package that's an absolute and I say that as both Shadow Minister for Energy and Resources as well as Federal Leader of the National Party.


Q ...?

TAF We are going to look down the track a road user charge for commercial vehicles, especially heavy transport, but this will not, repeat not, take the form of a fuel tax. That is pretty clear cut and we are streets ahead of the Government in terms of our whole approach to transport. I can understand you dwelling on this issue, but I think you have got to focus on the fact that our approach, our benchmark, is firstly the abolition of Sales Tax which applies to transport vehicles, applies to all spares parts, applies to freight services and secondly the abolition of the Fuel Excise Tax which has ramped up massively in the last eight years. Has been an anti-decentralisation taxation method which has done much to put jeopardy the viability many small businesses, medium businesses and large businesses right

across Australia. We say enough is enough out with all Federal Fuel Excise Taxes.

Q ... some stage down the track, five years, will have higher registration ...?

TAF Which may be in place of existing State charges. We need to wait and see what is the outcome of the current negotiations in respect of the State Governments and the Federal Government with the Legislation currently before the Parliament which has already been the subject of detailed discussion at various Premiers'


Q ... ?

TAF That's the Deputy Prime Ministers problem. I understand that's one of the reasons why Cabinet reshuffle rumours took off again this morning again around the corridors.

Q Just on another ... the report coming out this afternoon is that the private sector ... 16% interest rate in 1994/95 with the introduction of the GST. Now how do you react to that and given ... how would they ...?

TAF It is a hypothetical injection, I understand from your reference to that particular report. Nevertheless, they have laid down very clearly what we have proposed in relation to the Reserve Bank, we have laid down very clearly that it is a 4.4% percent increase in respect of the Consumer Price Index under the 15% GST. We have given you the figures showing that will be exactly the case. It is a big lie for any one to go around Australia saying that it is an extra 15% on the basket of goods in the supermarket trolley and the like. That is wrong, whether it is toilet paper, toothpaste or a raft of other goods many of them will have sales tax abolished and will actually be lower in cost. So I think we are look at a manageable level with regard to the transition and we are very conscience of the need to handle the transition in a very competent and professional. The sooner we get on with the job the better. The sooner there is an election the better.


Q How can you guarantee the 4.4% might not flow on to various adjustm ents... and add to inflation in Australia ...?

TAF That's a fair question and look at the position of the ACT and the Unions. Mr and Mrs Average PAYE worker is getting very big tax cuts in this package. They are going to be better off so far as the GST dynamic is concerned and as a consequence there is no ground for them to proceed with one off pay claims of a disruptive nature or any pay claims on that basis whatsoever.

Q How are you going to stop them ...?

TAF You have to look at the package as a whole. And with a huge mandate of the John Hewson architect in chief of this package, with the legitimate aim, achievable aim of majorities of both in the Lower House and the Senate there is no doubt in my mind that all of those things will work there way through without a great deal of difficulty, indeed.

So great is the reaction of the package, the positive reaction of the package, the will for change is there and I say, it is not as silly as it sounds, but if Hawke was to go back to his rhetoric of 1985 and sit down in his Cabinet Room on the

second Sunday of January post Bush, and say look fellows put aside the partisan side of this argument I advocated in 1985, I'm going to have some egg on my face, but in the national interest let's do the big U turn.

Nothing would do more to restore economic confidence in this country by that one action then anything else I can think of for what is going to be a very long, hard, hot summer.

Q If inflation ... what policy reaction would you have?

TAF Again, my friend you are being hypothetical and all these estimates are very conservative and hang about for what is going to be a very dramatic change and a very positive change for country Australia, for all Australia.

Q This 16% interest rate is actually based on your 4.4% inflation ... bought out a couple of years ago. It was based on the 4.4%?

TAF Look, I want to see that report in detail before I comment and I am very happy to do that.

Thanks very much.