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Transcript of Mr Peter Reith, MP Shadow Treasurer press conference, Bowral



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Deputy Leader of the Opposition

26 October 1991

TRANSCRIPT OF MR PETER REITH, MP SHADOW TREASURER PRESS CONFERENCE, BOWRAL

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Reith:

I'd like to start just by commenting on the public release today of a confidential memo within the tax office which reveals again the huge black hole in Australia's tax revenues. Australia's tax system is literally leaking like a sieve, it

is a very unfair tax system giving too much support to the tax cheats and putting to great a burden on the average PAYE tax payer. It is just proof again that we need a major reform of Australia’s tax system to give substantial cuts, particularly

to PAYE taxpayers. It shows again that what the Government says publicly is contradicted by the private advice they are getting from the senior members of the bureaucracy, it is the second leak that we have had of this sort in the last couple of weeks and just underlines the absolute importance changing Australia's tax system.

It reveals again that there is a huge black economy that is not being taxed, very unfair that is for the average PAYE taxpayers and I challenge Mr Hawke now to deny the evidence and the advice from his own bureaucrats that there is a black economy and that the tax cheats are getting a free ride. It

is time tor major tax reform and a goods and services tax is the only way to make sure that the tax cheats make some

contribution to general revenue.

Jrnlat:

Are you surprised by the tax office saying that the evasion is in the billions and billions of dollars?

Reith:

Well we have been saying it now for months and months and months and the Government has been denying it, they have been lying through their teeth about the existence of the black economy and that is because they'd never been prepared to Parliament House, Canberra, A.C.T. 2600

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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undertake major reform of the tax system. And you'll only get a fairer tax system if you are prepared, to Introduce the GST and catch people as they spend money, collect some tax off them that way. At the moment the thing Is literally leaking

like a sieve, there is a huge hole in that tax revenue bucket.

Jrnlat:

There are certain industries that the tax office pointed to, such as taxi driving and commercial fishing was another on, is there anything that you would do as Treasurer that would change that?

Reith:

Yes we are going to tax the illgotten gains as they are spent. That is much fairer for the average PAYE taxpayer. We are also going to pick up some tax from foreign tourists, which we think is fair and you'll see therefore lower personal income

tax for the person in the PAYE system that acts in a vice-like grip manner. So just further evidence of the divisions within the Government coming out of the bureaucracy on this occasion and just revealing the fact that the Government lies publicly

in respect of the contradictory advice it gets from the public service.

The second thing that i wanted to comment on was Mr Kerin's remarks overnight. Mr Kerin has had a bad trip, these remarks seem in fact contradictory to what the Government has been saying. Mr Kerin has now revealed that his expectation is that instead of a recovery in the next 6 months we are going to see a further dip in employment and output and that means more job losses in the next 6 months, a very different story

to what the Prime Minister and the Acting Prime Minister have been saying in the last few weeks. I think it is about time that Mr Kerin got home, called a press conference and told people honestly what he thinks is going to happen to the Australian economy in the next 6 months and hs ought to

explain why it is that the Government seems paralysed to act ae the unemployment numbers continue to rise.

Jrnlst:

... (inaudible) ...

Reith:

Our predictions I think have been pretty accurate in terms of where the economy is at, we are in a rolling recession, the forecasts of the sort of general recovery coming from the Government are clearly not true as we saw last week with the

release again of another secret memo from within the

Government, the real expectations from the Government are that unemployment will rise. Mr Kerin hae finally admitted that this is worst recession for 60 years but he hasn't had the honesty and decency to come back here and tell the Australian

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public. So, conflicting messages from Mr Kerin and he has speeches prepared and then he delivers differently to what his typescript is, if he actually gets around to delivering it in the first place, which was his problem in Bangkok.

I think the critical point though is, is that we are not getting a clear, realistic assessment from the Government, we keep getting different messages. That only suggests that the Government is not prepared to come clean with the Australian public about what they're real views are and what the advice

is that they are getting. And as a response to all of that we are now getting the public service leaking like a sieve to try and get some of this information onto the public record, thereby exposing the fact that the Government says one thing publicly and another privately.

Jrnlst;

What sort of feedback have you had this weekend on the goods and services tax?

Reith:

Well we have had a very good weekend as the conference has proceeded today. Of course the focus of the weekend is on the election timetable and preparing for the next federal election and that is well advanced. There has been a particular focus

this morning on the importance of high calibre candidates to stand for the Liberal Party in the next election. We are very keen to see high calibre candidates, women candidates, standing for the Liberal Party, particularly in marginal seats

at the next election. Dr Hewson is pursuing a strategy to encourage many of those women of high calibre to 30m the parliamentary ranks, we think they would add considerably to the strength of our electoral appeal and we'll be pursuing that in the months ahead.

There are some very, very good potential women candidates and we want to send them a clear message - you would be very

welcome in the Liberal Party, we thing you would make good representatives in the Federal Parliament.

Jrnlst:

... (inaudible) ...

Reith:

Well the GST is an important part of a major reform of

Australia's tax system, we are obviously still on a strategy for its release, we are going through the checking. But today has been about the next election campaign, doing our homework, making our preparations and starting and pursuing that need

for the high calibre candidates that I know we will continue to attract.

Jrnlst:

So how soon can we expect to hear some new announcements about the consumption tax after this weekend?

Reith:

Well we are working on a strategy, this weekend really is off to one side in respect of the GST, this weekend has been planned for some time independently of the GST preparations but the GST position is one where the package is finished and we are going through the checking processes.

Jrnlst:

Is November 18 the likely date?

Reith:

Oh look many dates have been suggested and all will be

revealed all in due course.

Jrnlst:

But you would have to concede that a non-sitting week would be the likely week it would be released?

Reith:

Well I don't have to concede anything about the timing and we haven't and we have run to a strategy, to a timetable and we are sticking to that - that is very nicely on track - and we will stick to what we have said publicly which is that the GST package and the tax reform package will in fact be released by the 30th November, nothing has changed on that.

Jrnlst:

... (inaudible) ...

Reith:

Well the handling of the package and the policy formulation is a matter within the Parliamentary Party and that is a matter for Dr Hewson and myself.

Jrnlst:

So are you getting a lot of feedback though, have you had any negative feedback?

Reith:

Well in terms of some comments yesterday obviously we are very pleased with the strong support that we have within our ranks for tax reform, there will of course, be substantial

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reductions in personal income tax, it is a very major reform of Australia's tax system as far as business is concerned and that means jobs for the ordinary Australian, a critical focus of our tax package policy,

Jrnlst:

Mr Reith what role are you expecting the State Leaders to play? And is this a part of what you are discussing today in the selling of the GST?

Reith:

Look we have not been on GST today, today has been really a follow up to the meeting we had at Sefton last year which was a strategy meeting looking at the Parliamentary term and today has seen a progress report on our preparations for the next election.

Jrnlst:

... (inaudible) ... .

Reith:

Well we have never worked on the basis that we are going to fall into Government at the next election. We have worked on the basis that we have to command respect as a result of pursuing those policies that really are going to turn this country around.

Look there are nearly one million people unemployed, it is the worst recession for 60 years and the obligation on us ae a Coalition is to advance those changes which really are going to help people. And sitting back would be an indictment on us as political parties and we are not prepared to be in that game. Nor are we prepared to lie about our intentions, we

intend to be very honest and straight forward with people, call it the way it is and advocate the changes that are going to help ordinary Australians - that is the absolute imperative in the worst recession for 60 years, we need some honesty, some decency and a straight forward package of solutions that will fix Australia's long term economic problems.

Jrnlst:

Do you expect it will be easy selling the GST both to your Liberal colleagues and also to the people of Australia?

Reith:

You will see when the package is finally released that it ie a very powerful document addressed to Australia’s economic problems. l think most people do understand, if not the detail of our problems, they understand that Australia is in the worst recession for 60 years and we need some leadership

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to get out of it. The good news is that we can turn this

economy around, not overnight, but if you are prepared to make the policy decisions that will provide benefits to the Australian community and fix the problems then I think you will attract a lot of support. I think people have been waiting for a political party to really put up the positive

substantial changes that will make the difference in economic terms.

Jrnlst:

You spoke about the selection of candidates, can we expect then at the next election for a greater role for the central organisation rather than branches in selecting candidates for seats?

Reithi

Well I wouldn't want to be foreshadowing all of our campaign arrangements and in particular some of the internal

administrative arrangements, but we had I think a very successful campaign in part in the last federal election and Petro Giorgio and Michael Kroger in Victoria were very successful in their marginal seats strategy. We want to extend that capacity and expertise and the techniques around Australia, a lot of work has gone into that, but it is very much a co-operative arrangement between the Federal

Secretariat where we have a lot of skills and the State organisations that are on the ground and have the local knowledge and capacity to implement the sort of strategy that we have in mind.

Jrnlst:

Why do you see a need for a concentration on this particular process that you were discussing here today?

Reith:

Well to win the next election we have got to have the policies but we have also got to have the capacity to explain to people what it is that we are proposing to do and that means a lot of organisation, it means you have got to focus your resources on particular seats, you have got to have a clear electoral strategy and you have got to put the candidates in place. And that is why there has been real emphasis this morning on ensuring that we attract and encourage high calibre

candidates, particularly women candidates, who we think have got a big role to play in an incoming Hewson Government and we are very keen to see them sitting there both on the frontbench and the backbench.

Jrnlst:

So you want candidates who will go in and hard sell the GST rather than ones that might have some doubts about it?

Reith:

Well the GST is part of a package of tax reforms and for

example the benefits to families will be very obvious in the package, we have a commitment to seeing a bias towards families in the tax system. It is not a matter of a hard sell so much as explaining to people how the GST is part of a

broader tax reform package and the tax reform is part of a broader economic package directed to Australia's problems, Now, the GST is not a quick fix nor is it the only fix, there are a lot of things that have got to be done if we are going

to turn this economy around.

Jrnlst;

Any chance at all the GST in some shape or form may be

abandoned before you get to the next election?

Reith:

Look the GST is part of a tax reform package, we are

absolutely committed to tax reform, we are committed to the substantial reductions in personal income tax, we are committed to abolishing tax on exports, we are committed to abolishing the preference given to imports compared to Australian made goods because that means jobs for Australians. Unemployment is the big issue and you have got to have a tax

policy and other policies that is going to get Australia working again.

Jrnlst:

John Howard referred to the debate that has gone on in the Liberal Party about economic rationalism, whether it is the right path. Can we take it from what you have said today that you are looking for a more united team in getting behind that

particular economic theory, the one that is propounded by Dr Hewson?

Reith:

We have, I think, the most united team that we have had at the Federal level ....

Jrnlst:

But in terms of selection of candidates.

Reith:

Well the selection of candidates is undertaken at the divisional level and people will be selected on the baeie of quality and the contribution that they can make. You will see some very good candidates standing for us next time around.

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