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Shadow Treasurer comments on road funding and petrol prices.



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Simon Crean - Shadow Treasurer

Interview with Mark Willacy

Subjects: Road Funding, Petrol Prices

Transcript - ABC Radio, AM - 14 November 2000

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WILLACY: Mr Crean, do you agree with your Leader, Kim Beazley, that the funding of rural and regional roads amounts to boondoggling?

CREAN: Well, if it's done as part of a national infrastructure program, no. But if it's done according to Liberal and Coalition polling, then pork-barrelling is the worst form in which you can distribute it.

WILLACY: It's not going to win you any friends in country Australia, though, when they look up 'boondoggling' in the dictionary and find it means 'trivial and unnecessary works'?

CREAN: Well, boondoggling is pork-barrelling. And I think that everyone would agree that pork-barrelling is the wrong approach. Now, we recognise the need to do something with our roads and our infrastructure and we've been calling for this for some time. But it has to be done as part of a national infrastructure program, not ad hockery and not survivalist mentality, but something that's going to invest in the future of the nation, not just in marginal seats for the Coalition.

WILLACY: But how do you pay for something like a roads package that will cost $1 billion or more, and then provide fuel tax relief for motorists, as Kim Beazley says, and which he concedes will cost another $500 million to $600 million?

CREAN: Well, it's got to be done in a fiscally responsible way and that's why tomorrow's figures are important. But the first thing that they have to do is honour their promise. I mean, it's one thing to talk about infrastructure needs, it's a more fundamental thing to honour the promise. And the promise that's been broken is that the GST would not put up the price of petrol. It has, and motorists are hurting.

WILLACY: And how do you do it in a fiscally responsible way, as well as tackling the issue of rural and regional roads?

CREAN: Well, the figures tomorrow should shed light on that, but what we want in those figures tomorrow is real transparency. We want them to identify the full extent of the petrol windfall. We've heard the Prime Minister talk about the company tax windfall. A windfall, if you like, that's come from the so-called broken down system that's been in place before the GST came in.

But we want to see transparency on the petrol windfall. We want to see how much is really being collected off the GST, that windfall. We want to see if there is money being returned

through the black economy. We want to understand where they're going with the spectrum sale, and we want to see how they properly cost Telstra in the Budget. Now, if we don't see those things tomorrow, and all we get is an assertion that we've got the figures there, then more scrutiny indeed is required.

WILLACY: But the bulk of this windfall to the surplus has been driven by issues like company taxes and the GST. Now, Labor's pledged to roll back the GST, so, if you were in government, that bonus would have been eroded.

CREAN: Well, I think a significant part of the windfall tomorrow is going to come off petrol - not only the petroleum resource rent tax that the Prime Minister has acknowledged but won't identify the figure of, but also because the Government didn't cut excise by what it claimed it would, the equivalent of the GST. And it also did its calculations based on the strike rate of petrol of 90 cents a litre, when, in fact, it's been hovering around $1.00 for most of the time. Now, these are significant areas of windfall and we want that determined in the analysis tomorrow.

WILLACY: But the Government would argue that the bulk of this surplus has been funded by tax collections. So, how do you, the Labor Party, roll back the GST, fund relief at the petrol pump, then pay for your Knowledge Nation initiative, which involves reinvesting in education, health, research and development. How's the surplus faring under you?

CREAN: Well, look, I think that what the reports today suggest fundamentally is this: the Government has got lazy with economic management. The Government believes that all …

WILLACY: How do you get lazy with economic management and still go beyond forecasts for the Budget surplus of $2.8 billion? How's laziness involved there?

CREAN: It goes to the contribution to growth and it goes to what contributes to that surplus. But let's understand that we've now got higher pressures on inflation from petrol, from the GST, and from the dollar.

And, by the way, the question that continually gets asked is: if the economy's going so well, why is the dollar performing so badly?

And what we've got as an economy is poor current account outcomes, record high foreign debt, and poor savings. Now, these are not circumstances in which the argument goes that the fundamentals are right. This is a government that's been asserting strength in economic management but what these reports are highlighting is the fundamentals are not as good as they're making out.

WILLACY: Well, if we turn to the Dun and Bradstreet survey, do you really believe that business confidence is lower now than it was before the 1991 recession, which Paul Keating famously said we had to have?

CREAN: Well, I've read the surveys and, of course, the survey, as at now … and I guess we've got to see how these things pan out, but I do know, going around the country, that there is a lot of concern about the GST. It's costly, it's complex and it's confusing. This has not been the smooth transition that the Government has asserted, and I think that businesses are finding themselves in important cash flow problems.

Now, what small business has to face up to is the fact that the Government has broken two

promises to them. It promised to halve their red tape, cut their business work, yet it's put it up. And the second thing it promised is the GST would improve their cash flow, that they would have money in the bank for three months. Well, that's not being experienced by any of the businesses that I've been talking to.

WILLACY: Simon Crean, thanks for joining us.

CREAN: Thank you, Mark.

Ends

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.