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Friday, 31 July 1998: transcript of doorstop interview [tax reform, economy]



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PRESS RELEASE

 

TREASURER

 

TRANSCRIPT of

HON. PETER COSTELLO MP

Treasurer

 

Doorstop

SUBJECTS: Tax Reform, economy

 

Friday, 31 July 1998

9.00 am

 

E&EO

 

TREASURER:

 

Well tax reform moves a step closer for Australians today as we continue the consultation process, consulting with further colleagues to day in relation to changes which will give Australia the kind of tax system that it needs to take it forward for investment and jobs, helping families into the next century. And I look forward to making sure that we can help Australian families with a much better tax deal and a much better tax system.

 

JOURNALIST:

 

Jeff Kennett says the States should have the veto power over the GST rate. What do you think about that Treasurer?

 

TREASURER:

 

Oh well, we always listen to everybody’s suggestions and then we take the right decisions.

 

JOURNALIST:

 

The Tax Commissioner, Michael Carmody, has also warned that this current debate can help to destabilise the tax system because talking about the loopholes and evasion, so me people may seek to avoid their tax responsibilities. What do you have to say about that?

 

TREASURER:

 

Well, let me make this point, that if you happen to have the resources to get expensive advice in Australia today you can minimise your liabilities and that’s because the tax system is not a fair and even system. Now, in relation to high income earners, if you are taxing their spending you are making them pay tax and if you get a much better income tax system for families you can reduce their tax burden at the same time. So this is the whole point behind tax reform: to get a better system. Look, if those problems are occurring at the moment why would you want to keep the current system? See, why does Labor fight for the current tax system? We have in the newspaper today a letter from Mr Gareth Evans, the Deputy Leader of the Labor Party, writing how he’s going to oppose a reactor, even though he knows it’s right, because, as he says, the realities of politics. Here is a letter from the Deputy Leader of the Labor Party in the newspapers today saying that the reality of politics has led the Labor Party to oppose a position which is difficult to justify in objective terms. Now, you might well say exactly and precisely the same about Labor’s position on tax. You could have written this letter about Labor’s position on tax: “the reality of politics have led us to opposing a position difficult to justify in objective terms.” And they know it’s right. But they will do or say anything, even oppose the national interest, because of this craving that they have to try and get back into office. Now the Deputy Leader of the Labor Party blew the lid on Labor today and he blew the lid not just on their science policy but on their tax policy, indeed, on the whole of their policy.

 

JOURNALIST:

 

The Prime Minister said the other night that there will be a mechanism to ensure that the GST rate doesn’t rise. Will that be a States veto?

 

TREASURER:

 

No. The mechanism will be the one that we announce at the time. And it will ensure that indirect tax rates don’t rise.

 

JOURNALIST:

 

For how long?

 

JOURNALIST:

 

Mr Costello what makes you so confident that you can actually sell, or convince voters that a GST is the way to go when so many others have failed?

 

TREASURER:

 

We’re convincing voters that income taxes should be reduced in this country. This is all about tax relief. This is all about tax relief, particularly for families. Families have a great opportunity now to get a better deal out of the income tax system and that’s what we’re on about. That’s why we’re doing it. Now, at the same time we want to help Australia’s exporters because if you take out taxes on exports you can help them as well. But this is a great reform, particularly for the families of Australia.

 

JOURNALIST:

 

... mechanism Treasurer. Are you saying that it’s not going to be a States’ based mechanism or are you saying wait and see?

 

TREASURER:

 

I haven’t said anything about mechanisms.

 

JOURNALIST:

 

Mr Costello are you giving a guarantee that your economic growth forecasts won’t be changed as part of this tax package?

 

TREASURER:

 

We won’t be putting out growth forecasts as part of tax, no. But I may have something to say about economic developments probably later on but that is not part of tax reform. In fact I think the Australian economy is showing good, strong resilience. You would have noticed the housing approvals yesterday which were good. Retail sales appear to have been very strong, the reporting which is coming out of the retailers. And of course interest rates are still very low which is a great climate for homebuyers.

 

JOURNALIST:

 

So you’re sticking by your 3 per cent?

 

TREASURER:

 

Oh yes. The forecasts that we put out at Budget time are reviewed mid-year and we will review them with our mid-year review, yes. Thanks.

 

 

KD