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Transcript of interview with Peter Martin: "PM" program, ABC Radio: 3 August 1993: Dawkins Budget announcement

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Leader of the Opposition


3 August, 1993

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SUBJECTS: Dawkins1 Budget Announcement


Listening to the deputy Prime Minister and the Treasurer just then has been the Leader of the Opposition John Hewson. He's joined us now to speak to Peter Martin.


John Hewson, how do you make sense of the conflicting things government ministers are telling us?


Well I think you summarised it pretty accurately Peter, that the Treasurer and the Prime Minister are completely at odds. At the Press Club two weeks ago, the Prime Minister's sole justification for bringing forward half the tax cuts was as you said the country could, the economy could do with the stimulus now. Yet Mr Dawkins has said quite explicitly today there's absolutely no qualification, that there· will be both tax increases as well as , expenditure cuts in the budget. So there's, youiknow, stimulus out of one pocket and! taken back in the other and completely at odds. - And of course you've got Brian Howe,' as you've just pointed out, arguing a case, a fairly strong case as I read his speech, for

increased expenditure on public infrastructures. That calls into question not only what they might do this year in terms of increased expenditure but whether they can meet that medium term objective of the budget deficit being one percent of GDP by 1996/97.

Parliament House, Canberra, A.C.T. 2600 Phone 277 4022 COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

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Martin: :

If in your view three government ministers are in conflict, who do you think is right?


Well I think it's just a shambles, actually. I think Keating was struggling to save some credibility at the Press Club by trying to make it look as if he was going to give some tax cuts, and dressing that up as best he could and the only argument he could come up with at the time was of course that this the country needs stimulus right now. But as questioning I think from Kitney and Burton on the day showed, he had no explanation as to how he would pay for these tax cuts. I mean if you look at their numbers they said they were going to start with a budget deficit this year of about $18 billion and they'd

aim to bring it down to $16 billion. So there was already a two billion cut they had to find. By bringing forward the tax cuts, if they were to be stimulatory, that's another three and a half billion dollars, you know so we're looking at very substantial tax increases and expenditure cuts on the numbers they've given us. I mean if we accept those numbers,

I don't know whether they are right or not, and its rather novel though that they are aiming to bring the budget deficit down but in the first year they're going to put it up. The outcome last year was fourteen and a half billion, this year they're aiming for $16 billion. That's a step in the wrong direction if they're about to bring it down, if they say they're going to bring it down to one percent of GDP by 1996/97. So I'd say in very simple terms they are totally confused and Dawkins has just probably been sent out today by the Prime Minister, pushed out there to deliver the bad news, the Prime

Minister is up there trying to get credit for the good news a couple of weeks ago. So it's a good guy, bad guy routine on the budget this year.


Well the bad guy today wouldn't say which taxes he expects to go up - will you nominate them?


No look it's not for me to nominate. All I'd say is they have absolutely no mandate to increase tax. They have absolutely no mandate to introduce any new taxes. That's the message of the election campaign. I mean they ran the whole thing as a referendum on tax and on new taxes, and the only message is that they have no mandate for tax

increases or new taxes. So I can assure you that we're not going to rule out the option of voting against the tax changes in the parliament.



You'll vote against them in the Senate - or sorry you're not ruling out the option ...


We're not ruling out the option, we're going to keep that option alive and we're going to see that they do because we are going to hold them accountable for the mandate they've got.


You're not ruling out the option of blocking supply?


It's not blocking supply - it has nothing to do with i t ...


But it would be in a budget bill wouldn't it?


It's a question of we're not going to rule out the option of voting against the tax changes. We'll have to wait and see what they do.


Will you rule o u t...


The people of Australia have every right to expect that the Prime Minister's held accountable for what he said in his press conference performance - his Press Club performance a couple of weeks ago. He basically admitted he'd lied before, during and after the campaign, and you know, even after the campaign they were out there publicly saying the tax cuts would be delivered while he and Dawkins were behind the shutters scheming on how they'd pull them back or how they'd reduce them and we got a little

bit more of that information today.


Mr Dawkins' has for the first time admitted openly there will be both tax increases and : expenditure cuts to pay for the, to pay for the promised tax cuts. There won't be any stimulus, the tax cuts will go in one side and the tax increases and the expenditure cuts will come out the other side.


If there's something in that budget which you don't like in the field of tax, will you rule out the possibility of blocking supply?


No... Look what we are saying, just to be absolutely clear, is we're not going to rule out the option of voting against the tax changes in the parliament, but we will wait and see what they do, we'll have a look at the budget and the context of the changes that they make, and it'll be an interesting budget session.


Two of the taxes which were talked about today in their report prepared by the committee for the economic development of Australia, were death duties, and effectively a consumption tax, a consumption tax by another name. What would your attitude be to those two taxes?


Well I wouldn't be surprised if the government is working towards death duties, I wouldn't be at all surprised. They've got a very strong view within the Labor Party, particularly on the left and the centre left, that things like inheritance taxes and death duties have to be a part of it down the track and I think that option was raised in the Argy report that you mentioned. As far as whether or not they'll give us a broader

based indirect tax, I think they will. They'll probably go for a GST in the form of a giant sales tax over the next few years, they'll broaden the indirect tax base. They've been quietly creeping the sales tax base more broadly, pushing people from pushing goods from one category to another, from ten to twenty or twenty to thirty percent...


Would you support that, being in line with the policy ....

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Hewson: ! ' ?:

It's not a question of what I support. It's a question of what they are going to do. I mean they're the ones that are in government, they're the ones with the bind, and they're the ones that have been lying to the people of Australia about what they could deliver.


John Hewson, thank you very much.