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Treasurer supports review of business taxes.

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Wedne sday 11 April 2007

Treasurer supports review of business taxes


TONY EASTLEY: The Federal Treasurer Peter Costello has backed calls from the Business Council of Australia to review a lo t of business-based taxes. 


He says there are a lot of small taxes that cost a lot to levy, and they should go. 


He says it's one of the issues still outstanding between the Commonwealth and the States. 


The parties will get a chance to discuss the topics at Friday's Council of Australian Governments Meeting in Canberra.  


In London, Peter Costello spoke to journalists including AM 's Rafael Epstein. 


PETER COSTELLO: Look, the important thing, I think, is to concentrate on ways to boost the Australian economy. Improved industrial relations is a big way to do it; better infrastructure, improved national regulation of national economic assets. These are all important things. If the meeting just degenerates into demands for money, by state governments, it's going to miss the point. The important thing here is the policy, the policy improvements which will get Australia where it wants to be in 40 years' time. 


RAFAEL EPSTEIN: But do you agree that the way Peter Beattie sees it, that you've agreed on the way, it's just how much the Federal Government's going to contribute?  


PETER COSTELLO: Well, I, I don't know what he's agreed to, has he agreed to improved industrial relations? Has he agreed to WorkChoices? Has he agreed to better national regulation in relation to economic infrastructure? Have we got full agreement yet on Commonwealth jurisdiction in relation to the Murray-Darling Basin? 


If we can get the big issues agreed, that's great. But there are still a lot of big issues that have not been settled. For example, the Murray-Darling Basin, as far as I'm aware is not yet settled. It should be, it's Australia's most important national water asset. 


So these are the important things, and let's get on with policy. 


RAFAEL EPSTEIN: So does the water issue have to be sorted out before you'll talk about the other things that the premiers want? 


PETER COSTELLO: Oh, no, we always talk, and I'm sure we will talk. But it should be sorted out. What possible basis could there be not to agree? What would worry me is a situation where eight state premiers and chief ministers had an inexperienced federal Labor prime minister, who was beholden to them for finance and for influence. I think you'd see a situation then where uniform Labor governments would need no checks or balances. A good thing is, at least in that room there'll be someone keeping all the premiers and chief ministers honest. 


REPORTER: What can we expect in the budget for business? I mean, there's a lot of emphasis on individual tax cuts, but what can business expect in the next budget? 


PETER COSTELLO: Well, I think the report by the BCA is actually a very good report. What it shows is that there are a whole lot of taxes on business, some which collect very low amounts but have high compliance costs. And the first thing we ought to insure happens in Australia is that all of the taxes that were slated for abolition under the GST agreement are abolished. That's the first step we ought to make, and after that we ought to move on to others as well. Because some of these small taxes cost so much money to collect, bring in little amounts of revenue, they have high compliance costs, they impede transactions, and an improvement in this area would be very welcome. 


RAFAEL EPSTEIN: They've just dropped corporate tax here be 2 per cent, can the Business Council expect something like that? 


PETER COSTELLO: Well, we cut corporate tax by six per cent in Australia, and capital gains tax by 50 per cent, and then introduced full dividend imputation so that you get full credit for company tax and a refund where your tax rate is lower than that. And I think there's a lot of people in Britain that would like to follow the Australian example. 


TONY EASTLEY: The Federal Treasurer, Peter Costello, in London there.