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Opposition Leader discusses the Budget; the scan scam; and Sophie Gosper.

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Kim Beazley - Interview with Jon Faine Subjects: Budget, MRI, Reconciliation, Sophie Gosper

Transcript - 774 ABC Melbourne - 12 May 2000

E & OE - Proof Only

FAINE: Kim Beazley is the Leader of the Labor Party in the Federal Parliament and, of course, delivered his reply last night in Parliament to the Costello Budget. Mr Beazley, good morning to you.

BEAZLEY: Good to talk to you again.

FAINE: Thank you for joining us. It was a lack of clarity of a Labor tax plan that cost you the last Federal election. Last night you failed to outline the details of your alternative tax plans again. Surely, you can't continue to have no detail to your alternative tax plan.

BEAZLEY: Look, it's an old tactic from a Government when the Budget has run into a bit of trouble. And for the first time they've had a Budget that's run into a bit of trouble in the course of the last week to say to the Opposition, 'produce the Budget 2002 now'. That's what they say, 'produce the Budget 2002 now'. What you'd do on education, what you'd do on health, what you'd do on tax rollback and the works. It is, of course a nonsense. If you could produce the Budget 2002 now, they would produce the Budget 2002 now. So, you ought to dismiss that as just a bit of Government persiflage. What we said was very clear yesterday on what our intentions were. We're going to roll back the GST. That doesn't mean we're going to repeal it.

FAINE: How do you roll back a GST?

BEAZLEY: $4 billion has been spent by business in doing it. What we will be doing over the next 18 months, before the next election we'll be putting forward clearly what we intend to do. The first stage of our rollback is looking at where the weaknesses are in the areas of its complexity, the weaknesses are in the areas of injustices it imposes, and the weaknesses in terms of its impact on what you might call the critical things that are supposed to be excluded like health, education, charities and the rest.

FAINE: That's not rolling back. That's fine tuning, Mr Beazley.

BEAZLEY: That's rolling back. And we've got some interesting precedents now, generally speaking, most GSTs roll forward. And we had, for example, Tony Blair for the first time start a process of roll back in his last budget delivered about three or four weeks ago in Britain when he rolled back the goods and services tax, VAT, they call it there, on women's sanitary products. Now, we will be rolling it back. But there is a question that can be answered now, right now, by me and by Mr Howard. And that is, what about the roll forward because generally speaking, as I said, GSTs roll forward. And there are two critical areas. One, food, the items that have been excluded which Mr Howard says should be in there. And, two, the right of the States to put forward to the Commonwealth the suggestion the Commonwealth should raise tax. And, remember, GSTs whenever introduced, within a few years, and a very few years, have gone up usually a couple of percentage points. So, the question can be asked right now because it can be answered right now: will you support a roll forward onto food and the items excluded and will you

support, if the States come to you asking for an increase in the rate, will you support that increase? I can answer, no, to those propositions. We've yet to hear Mr Howard. You don't need to know what the budgetary position is in three years time for that.

FAINE: If you proposed to reduce the amount of revenue the Federal Government earns from a GST by rolling it back, whether it's a rollback or fine tuning, we could leave. But if you propose to do that, then that costs the States the income they get from the GST. How do you then compensate the States for the money they don't get when you roll back the GST?

BEAZLEY: We have said we'll compensate them. But we've also said...

FAINE: Well, how? Where do you get the money from?

BEAZLEY: You provide them with the resources. Now, let me just point a few things out. We are 18 months away from that election date. We do not know the resources that will be available to the Commonwealth at that point of time. There are a set of forward estimates in this Budget. Those forward estimates two or three Budgets ago suggested we'd be $11 billion in surplus in this Budget. Instead, on our figures, we're a couple of billion in deficit, on theirs we're a couple of billion ahead. But that does show you the movement that takes place as a result of government decisions. Well, what we will say is that we will calibrate the rollback, and all our other policies, for that matter, all the things we intend to do about making savings, all the sorts of things that you do when you go through a process of formulating a Budget or a set of election promises and the extent of the first stage of the rollback, just like the extent of what we do on education, health and all the rest of it, will be determined by all the calculations we make in the framework of a responsible Budget, or responsible budgetary policy, 18 months from now. Oppositions sensibly do that. When Howard and Costello were in Opposition, that's precisely what they said they would do.

FAINE: With respect, I don't think you've answered my question. If you give...

BEAZLEY: I think I've answered it absolutely.

FAINE: If you give less money to the States from the GST, where do you get the extra money that you propose to pass to them? Where does it come from?

BEAZLEY: The same place that you'd get the extra money that you'd spend on education and the other matters I'm talking about. But...

FAINE: ...income tax rates will be lowered. Would you put them back up again?

BEAZLEY: What combination of those factors you require at the time you would put in place at the time. But what I have said is that we will be looking, not to increase the tax burden on families, because the GST is a family tax above all, but to lower the burden of taxes on families. So, whatever we do in relation to revenue, it would be to lower the burden on families.

FAINE: You can increase excise on petrol and alcohol and cigarettes. Is that what you propose? You can put income tax rates again, or company tax again. But you can't have more money with less tax all across the board.

BEAZLEY: No, what I'll do is give you a sheet of paper on which you can write out all your ideas on these matters and you can send then up to us when we put down our promises at the next election. That's

what you can do. You can send those all forward to us. Because we now sit in the situation where we're 18 months out from a poll, where there's another Budget and at least one mid-year economic statement between now and them which are going to throw the Budget parameters all over the place if the experience of the last couple of years is the same. And for me to sit down here with you and go through these items would be a silly exercise, and a futile one. Because even if I did come up with the a Budget 2002 now, I would, of course, be proved wrong on those assumptions because I'd be operating on Government assumptions which will in the fullness of time almost invariably be proved to be wrong.

FAINE: Do you accept, then, that by the next election you would need to have that level of specificity in your proposals because it cost you, because of Gareth Evans' inability to articulate sufficiently a detailed tax policy, it cost you the last election.

BEAZLEY: No, we had a good detailed...

FAINE: In my opinion.

BEAZLEY: That's fine, Jon, that's your opinion. We had a good detailed tax policy. But when you've that giant hairy gorilla sitting in the middle of the tax debate, like the GST, the chances of you getting a focus on anything else you will accept is pretty remote.

FAINE: All right. Moving on to other things. Michael Wooldridge, the Health Minister, this morning on AM responded to your Shadow Minister, Jenny Macklin, over the so-called scan scam. He says, 'I don't have to resign because even though there may be arguments about who was at a meeting and who wasn't, there's no argument, no-one says, no-one has got evidence that I leaked Departmental information or Budget information'. Why should he resign?

BEAZLEY: Well, you've got to balance the probabilities finding by the Auditor-General the person on who's evidence he has most relied, the counter evidence, if you like, of all the radiologists, who've said that the control measure associated with the MRI scanners, which was, ultimately a Budget measure, and was then, at the point of time when he was holding the discussion with them, a matter of correspondence, Cabinet-in-Confidence, between himself and the Prime Minister at that point of time. The person on whom he has relied principally to defend his recollection of the events of that night, against the four other independent participants, has been found, apparently to have had a fault in the statutory declaration that she put forward, I think, about six months ago and that Wooldridge was clutching like a drowning man clutches a lifebelt, in Parliament and has been clutching ever since. Now, if there is a flawed and faulty memory there, and that is his principal defender, and the Auditor-General is finding on the balance of probabilities that from this meeting information went forward that caused a dramatic surge in the orders of MRI machines. You know, we're not a court of law in politics. We operate on the balance of probabilities. And on more than the balance of probabilities he should go.

FAINE: But an argument about who was or wasn't in a meeting is a different argument to one about what was or wasn't leaked in the...

BEAZLEY: Who or who was not at the meeting is not important in itself. The point that is important is that it indicates a flaw in the memory of that meeting. And the meeting…and there is a disagreement between the evidence of that person about what went on at the meeting and the evidence of the four radiologists who were there. And the evidence of the four radiologists who were there is augmented, if you like, or improved by the fact that the next day, the day after that meeting, the incoming president of the College of Radiologists testified that he was briefed on the detail of the control mechanisms. And that

would be further evidence that the recollection of those four of them is correct. So, what we now have is an example of a flaw in the recollection of Mr Wooldridge's ... the thing on which he principally relies, and that is very bad news for him indeed. But on the evidence that's been there already he should go.

FAINE: But if it quacks and waddles it's a duck, but what sort of a duck? I suppose is the response there. This morning Dr Wooldridge on AM invoked your name in saying that even Kim Beazley is on the record as saying that "departmental administration is not something to resign over".

BEAZLEY: Oh, I agree. A Minister can't be expected to know absolutely everything that's going on in their Department. I don't dispute that. And to ask a Minister to resign over a set of decisions that are taken inside a Department which have not percolated, or only marginally percolated onto his desk. It's not a sensible thing to do. You've got to be practical about these things. We're not dealing with that. We're actually dealing with meetings in which the Minister was present and matters directly under the Minister's control. Cabinet had assigned him responsibility to deal with it. And evidence, not that the Departmental head or some junior official down the line handling a particular problem associated with negotiations leaked a particular matter that would subsequently be there in the Budget and which was capable of being used should you be in on the know, have the insider information on it, in a way that benefited you personally. It's not a junior official doing that, it is Mr Wooldridge himself. That's a different matter. That is the suggestion that it's Mr Wooldridge himself who is handling these matters, not a junior official.

FAINE: Two other Budget matters. Peter Costello at the Press Club when discussing the Budget with journalists said he thought the next task might be to reform superannuation. What changes to superannuation would the Labor Party like to see?

BEAZLEY: Can I first say about that, I mean, this is like having the burglar robbing your kitty, leaping out the window and then coming to the front door, knocking on it and say, I'm here to sell you a security system. Why is the superannuation system complex? Well, the surcharge that they just put on is the most ... it is complex anyway, I do agree with that. But the most complexity inducing act by Governments in recent time in relation to superannuation was that, point one. Point two, what else did Costello do? Costello took Labor's and his promise on a superannuation co-payment, knocked it off and then spent all that money on his GST compensation package. But if you're a 35 year old, if you've got a 35 year old listener out there who is looking forward to retirement based on the superannuation guarantee levy. They are looking forward to a retirement as a result of that action of Costello's - $100,000 less well off than would have otherwise have been the case.

FAINE: So, what reforms would you like to see?

BEAZLEY: This is the poacher attempting to turn himself into a gamekeeper to distract attention from people who don't like his Budget. And, frankly, I don't actually think he's going to be capable of coming up with something good. But simplification, movement subsequently towards the sort of situation we had in relation to the co-payment, those would be very good things. If we can go down that road.

FAINE: And infrastructure projects? You criticise the Government for not having any big ticket infrastructure projects. What would you have in mind if it was your Budget?

BEAZLEY: Well, remember we're talking about regional Australia there, primarily. And what I would be looking for in regional Australia is the modern equivalent of the old concerns about roads and bridges, important though they continue to be, and that's important. But what you talk about now if the bush is to

participate in the new economy there's one critical issue, bandwidth. And there has to be an argument and a discussion, if you like between us an Telstra who will be the principal supplier, if you like, of bandwidth in relation to the bush and that…if they have access to fast communications, then you can set up a bush business in the new economy. If it does not, if the bush does not have access to that at affordable rates and a decent amount of bandwidth then they won't. I mean, I think that is going to be the critical bush regional infrastructure issue of this century.

FAINE: Over the next couple of weeks we're going to hear a lot more about reconciliation, Mr Beazley. The Prime Minister yesterday released an alternative statement to that preferred by the National Sorry Day reconciliation committee and the Prime Minister said, 'well, this is what I would be happy with and it's different to what they're happy with'. If the nation is not united on something like reconciliation, well, the Prime Minister is within his rights, Mr Beazley, to put the brakes on it.

BEAZLEY: I do wish the Prime Minister could just expand his office instead of narrowing it to suit himself. I just wish he could take leadership to move the nation forward on this. You see, I think Australians are already there whether they particularly feel themselves responsible or not. They are already there. What they want is this issue to move on, deal with other concerns. If the Prime Minister simply adopted what has been put before him, and it's not perfection, but what had been put before him by the Reconciliation Council, we could all move on. Everybody else is prepared to. Even Richard Court was prepared to offer that apology in the West Australian Parliament. And this Prime Minister worries it like a bone. You have to have the suspicion that he thinks there might be votes in it. Well, every now and then you're allowed, as Prime Minister of this country to move ahead of that on the part both of how your nation coheres internally, how you look internationally and on a simple fair minded judgement, about things that happened in the past. Now I, like the Prime Minister, am interested in Australian history. I love and glory in the interesting parts and the good parts of it. But I'm also prepared to face up to things that have been done that were wrong. Things were wrong. Things that have been done in relation to the Aboriginal community were wrong. In relation to the stolen generation, they involved recent active government decisions. A decision is due.

FAINE: Briefly, on what's being called the Gosper controversy. Your view on the decision taken, apparently by the Hellenic Olympic authorities to let Sophie Gosper carry the torch first?

BEAZLEY: A couple of things, firstly. I think it was a colossal misjudgment. Secondly, I think Sophie handled it extremely well. Thirdly, let's get on with the Olympics.

FAINE: Put all other things aside.

BEAZLEY: Oh, for heaven's sake.

FAINE: A couple of things. I've just been advised that Dr Michael Wooldridge, the Health Minister, wishes to respond to Mr Beazley and will join me after the 9.00 am news on the program and Ron Tandberg, Age cartoonist and Melbourne icon will be joining us in just a second. But, final question, Kim Beazley, before Ron Tandberg does join our conversation, will Peter Costello lead the Liberal Party to the next Federal election, or will John Howard lead them to the next Federal election?

BEAZLEY: There will be a lot of instability in the Liberal Party because they now know that Mr Howard has run out of ideas and increasingly the community perceives him as backward looking and they see him as the author of the GST. The problem for Mr Costello is he's the co-author. And that is a very considerable difficulty for him. And the other thing is, I think I've had a bit of a look at the glass jaw of

Peter Costello this week and I think we can declare him semi-tough. He may be an imitator of Paul Keating, but he ain't Paul Keating. And I very much doubt whether we'll see Mr Howard torn down by him.

FAINE: The glass jaw as in exactly what?

BEAZLEY: The embarrassment that he had over his botched media conference in which he declared the Telstra dividend as disastrous. His effort the night before last in which he said you would have got your tax cuts anyway and you deserved them without the GST where previously he's been saying you could only get the tax cuts because of the GST. I mean, he has made mistake after mistake this week. And some of those mistakes have had an effect on the markets like wiping a billion dollars off the value of Telstra. This has not been a great week for Mr Costello.


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