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4 Treasury Place, Melbourne, 23 April 1999: transcript of doorstop interview [GST - the disappearing growth tax]



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MEDIA RELEASE

 

The Hon Simon Crean MP

Deputy Leader of the Opposition and Shadow Treasurer

 

 

TRANSCRIPT OF DOORSTOP, 4 TREASURY PLACE, MELBOURNE, 23 APRIL 1999

 

 

E & OE - PROOF ONLY

 

Subject: GST -the disappearing growth tax

 

 

CREAN:

 

John Howard’s S25 billion growth tax to the States has now shrunk to $8 billion. The only way that John Howard can justify his $25 billion is to retain a tax that they have committed to abolish - the conveyancing duty on non-residences. John Howard must come clean and explain how he gets to his $25 billion, but, more importantly, how his growth tax is shrinking by the day.

 

JOURNALIST:

 

On what are these claims based?

 

CREAN:

 

A document was prepared in the lead up to the Premiers’ Conference for negotiating the transition to the GST. It was a document agreed to by the Commonwealth in consultation with the States. It shows that in the year 2005-06 the benefits from the GST are $1 billion not $3 billion — two-thirds less. John Howard quotes the $3 billion, but the only way you get to the $3 billion is by retaining in that year the continuation of the conveyancing tax, which the document itself says would have been abolished by that time.

 

JOURNALIST:

 

So this is a $2 billion black hole?

 

CREAN:

 

This is a $2 billion black hole in one year, but it’s essentially a $15 billion black hole over the ten years. This is not the growth tax that John Howard is claiming it to be. And if he can’t be believed on the figures of benefits to the States, how can he be believed about his commitment to compensate pensioners and low income earners?

 

JOURNALIST:

 

So what will the benefit be to the States over ten years?

 

CREAN:

 

Well, our calculations are - the best you can get to is $8 billion. Now, you might say well that’s growth, but you get growth anyway from a growing economy. It’s interesting that the tax that’s being abolished would seem to yield far more over the ten years than the GST itself. The point I’m making is the GST is not the growth tax that John Howard is making it out to be. The figures don’t stack up, and John Howard has been caught out again lying about the benefit of his tax. If he’s prepared to lie about the tax you can’t believe him on the compensation. One thing is certain — the GST is forever but the compensation will be here today and gone tomorrow.

 

JOURNALIST:

 

These figures you are talking to are benefits to the States, is that correct?

 

CREAN:

 

That’s what it’s argued are the benefits to the States from transferring to them the revenue take from the introduction of the GST.

 

JOURNALIST:

 

So what would the lower figure do to States’ financial planning?

 

CREAN:

 

Well, it would still increase them, but it doesn’t increase them anywhere as much as the Howard Government is claiming. And, in that sense, to be asserting that this is the great growth tax for the future has been demonstrated to have been a deceitful claim.

 

 

ENDS

 

 

 

LK