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Leader of the Opposition criticises the tax reform package.

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Subjects: GST


CARLTON: The Finance Minister John Fahey had promised us on a stack of bibles that he would appear promptly on time to the second, at twenty minutes past four. He’s now six and half minutes late. I’m not in the business of hanging around crawling, waiting for Government Ministers trying to flog things to appear at their own leisure, and so the Government will not get on. Stuff ‘em. We will, however, have the Leader of the Opposition, Kim Beazley, who has kept to his word. Good afternoon.


BEAZLEY:  That was a fine introduction.


CARLTON:  I thought you’d like that.


BEAZLEY:  I did, I did.


CARLTON:  It may be the first of many disappointments do you think?


BEAZLEY: Well, talking to Government Ministers you might well get disappointed Mike, but you won’t get disappointed talking to me because I’ve got plenty to talk about.


CARLTON:  Well, I may, go for it, what do you think?


BEAZLEY: Well, this is about the most unfair tax package I’ve ever seen a Government put forward. I mean, basically, the more you have, the more you get, the more likely you are to keep it. It is fundamentally unsustainable, so heavily does it cut into the surplus. But, while we’re not going to reveal our tax package for a couple of weeks, I can say this, for low and middle income working Australian families, we’re going to beat this hollow. Not just in relative terms, in absolute terms, and we’re going to do it without a GST.


CARLTON: Well, the Government says it will mean a tax cut of $40 to $50 for the average Australian family. That’s not bad, you can’t match that?


BEAZLEY: Well, then take the GST effect out of that and that is a —and what is going on here is a massive tax mix switch, that really is what’s going on here... put it this way...


CARLTON: . . .well, what do you say then?


BEAZLEY: OK. If you’ve got three times the average Australian earner, if you earn three times the average Australian earner, you get four times as much as they get. I mean, that’s if you want to go to unfairness, and just do it in one. But I’ll tell you where the real unfairness is, and there’s a pretty big unfairness there, but the real unfairness is what happens to the pensioners, I mean after the nursing home fiasco they’ve had a second bite of the cherry, and what they’ve produced here, in this particular proposition, is a hijacking.... there in the Budget for bringing the pension up or keeping it at 25% of average weekly earnings and they’re calling that amount of money compensation effectively for the impact of the GST.


CARLTON: Well, hold on again, the Government says pensions will rise by up to 4 per cent and there will up to a $2,000 handout to cover the introduction of the GST.


BEAZLEY: Well, that’s what they say, but what you’ve got to do is to look at the inwardness of it, and remember this, pensions are adjusted by two modes. First is the impact from CPI and the second mode is to keep it at 25 per cent of average weekly earnings. And those two are capable of coming together and the way they’re going to come together on this occasion is by the compensation package applied to the pension taking them up to that 25 per cent where they would have got anyway under the legislation which is in place. That’s the point I’m making.


CARLTON: So you argue, do you, that pensioners, self-funded retirees, people with a nest egg will get clobbered. Is that what you’re saying?


BEAZLEY: Well, basically, yes. Unless they’re very, very high income self-funded retirees — there’s a possibility that they would benefit — but those who are self-funded retirees get between one and three thousand, once off, but the GST stays there forever. And let me tell you that the price effect assumptions that apply to the GST, on which all these calculations of compensation and everything else, are based, are by far and a long way the most conservative of all those that have had a look at it. And this is not just the Labor Party talking, but if you go to look at Arthur Andersen, what they’ve had to say, what Neil Warren, who the Government has been taking as a great tax expert — and he is — has had to say, and they fall way short of that. So all the calculations you hear about 40s and 50 dollars here and there, forget ‘em, forget ‘em, because this basic calculation on which it is based is probably wrong. It is probably too conservative.


CARLTON: Thank you, Kim Beazley, I’ve got to leave it there, we have our 4.30 news on the Network. Thanks very much for your time.


BEAZLEY: Thanks, Mike.


CARLTON: The Opposition Leader, Kim Beazley will be across the media, but he says it’s a, well as predictably, I suppose, but he says it’s a swindle.