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Transcript 10640

TRANSCRIPT OF THE PRIME MINISTER THE HON. JOHN HOWARD MP TELEVISION INTERVIEW WITH RAY MARTIN A CURRENT AFFAIR

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 13/08/1998

Release Type: Interview

Transcript ID: 10640

E&OE.............................................................................................

RAY MARTIN:

Welcome back Prime Minister, thank you for your time.

PRIME MINISTER:

It's nice to be here Ray.

RAY MARTIN:

Now, I heard you when you released that today officially, you called

it "a moment of excitement". We don't often see John

Howard excited.

PRIME MINISTER:

Well, I am excited because I really believe in here that this is

a very good plan for our country.

RAY MARTIN:

You've got to sell it obviously to the people, we're

going to see how you are going to see how you go tonight. But what

about this image that it's "trust me I'm a politician."

Is that the biggest thing you've got to try and get over?

PRIME MINISTER:

I think what you've got to get over is that this is good for

all of us, it is good for the whole country, and it is fair to individual

groups. Australians are very decent patriotic people and if they

think a Government is putting something forward that is really good

for the country and it is fair to them, they will support it. Now,

I don't underestimate the challenge, and I'm going to

go around the country, I'm going to talk to people, I'm

going to answer their questions and I'm going to try and persuade

them that it is not only good for the country but it is also good

for them.

RAY MARTIN:

All right, we are going to let you do that tonight.

PRIME MINISTER:

I'll have a go.

RAY MARTIN:

We'll go around the country. Let's go first to a family

in Mildura, who are a low income family from Mildura.

Peter, MaryAnn Crisp and their three children Erin, David and

Katie are battlers from the bush. The family's Mildura based

citrus growing business brings in around $14, 000 a year and MaryAnn

receives about $7000 a year from a property trust. Erin gets Austudy

and MaryAnn also gets the full family payment for David and Katie.

Because their income is so low, the Crisp's paid no tax last

year.

RAY MARTIN:

All right Peter and MaryAnn are with us now. Peter would you like

to ask the Prime Minister a question?

PETER:

Certainly Ray. Mr Prime Minister, it's going to take me a

long time to understand this package. It's quite a bit larger

than I expected and I need time to do that before it gets distorted

by the hype of an election. You've had the best brains in the

nation working on this for while, how long have we got to figure

this out before we go into election mode?

PRIME MINISTER:

Well, I'm going to leave it out there for as long as I believe

is necessary for people to get a reasonable understanding. I haven't

decided when the election is going to be, and I want to go around

Australia talking to people and explaining the way their situation

will be affected. I mean, I understand one of your daughters is

on Austudy, well, for example, that Austudy is going to up by about

4%. In your own situation there will be increases for some family

benefits that will help you and certainly as a result of the changes

to the income tax scales, given what I was told about your income

last year, if that continues to obtain into the future then you

certainly won't be paying any more tax and I think after the

effects of a GST with the increases in the other payments your position

will improve.

RAY MARTIN:

We should make the point Peter that you haven't paid any tax

year that your income was so low.

PRIME MINISTER:

Yes well you will get increases in benefits that are there at the

moment and I calculate on the basis of what I understand that you'll

probably be about $15 - $16 better off, because one of the fallacies

of this whole debate is that people think that everything goes up

by 10%. In fact the across the board cost increase is only about

2% because by removing all of those hidden taxes like wholesale

taxes on a lot of household goods, there is a significant fall in

the cost of a lot of items. So I do want a lot of this to go on

over the next few weeks. I'm going all around Australia to

talk to people to answer their questions.

RAY MARTIN:

Come on MaryAnn, just get in there and ask the PM a question.

MARYANN:

Well, the Prime Minister has partly answered my first question

which was that as a farming family we have good years and bad years

and sometimes we pay little or no tax, and I really can't see

how tax cuts are going to be much help to us if we are already not

paying any?

RAY MARTIN:

Yes, but under the changes we've made to the family payments

you get them irrespective of whether you are in the tax system or

not, and that's one of the advantages. And of course, in the

bush, the cuts in the excise on fuel will be of enormous benefit

in reducing farm costs. The bush will get a tremendous boost out

of this because the whole cost structure of country Australia is

going to come down.

RAY MARTIN:

All right, last question, can we go to you Erin. You are 18, you

are going to vote this year for the first time in this election,

whenever it is. What troubles you about this package?

ERIN:

Well I'm a bit unsure that the 4% increase in my Austudy is

going to compensate for all the living expenses I'll have to

take care of at Uni.

PRIME MINISTER:

Well we think it will because we believe the, across the board

living increase is going to be in the order of 2% and there's

a guarantee in the package that at all times there'll be a

1.5% cushion over and above the increase in prices across the board

so that people on fixed incomes and people on allowances like you,

and pensioners will be protected to the tune of about 1.5% above

the actual cost increase.

MARTIN:

All right. We will move on though. To Peter and MaryAnn [inaudible]

thank you for being part of tonight and thanks for your questions.

Let's go on then to Adelaide, in fact Christine Small who is

a single mum with two tiny children. Adelaide, let's have a

look.

BACKGROUND:

Christine Small is a single mother from Adelaide with two children,

Jack 8, little Lucy is 6. Chris is studying part time at university.

She receives no maintenance from her ex husband so she and the children

live on $603 a fortnight. A combination of soul parent's pension,

family payment and Austudy. Chris is concerned that the services

tax could increase the cost of childcare forcing her to drop her

studies.

MARTIN:

Christine, welcome. Can I ask you, do you feel better off tonight?

CHRISTINE:

Not really, I feel quite scared actually.

MARTIN:

What scares you?

CHRISTINE:

It feels like I've been left out. Can I ask Mr Howard a question?

You talked about fairness in your speech. Under the new tax arrangements

I'd like to know how much better Mr Costello's family

will be off in comparison to mine.

PRIME MINISTER:

Well I can answer you with mine. I don't know the precise

details of Mr Costello's family because his wife works and

I don't know her income and I don't seek to know it. But

the tax cut that I get is in the order of $85 a week. Anybody on

my income gets that and of course the fact is I now pay about $2000

a week in tax because of the size of my income. The other thing

I can say about the Government's tax package is that we haven't

dropped the top marginal rate of tax. In fact after $75,000 people

on higher incomes don't get any dollar gain as a result of

the tax cut. So we have tried in that sense to make it fair. Now,

you, there was a question asked about childcare. Childcare is free

of the GST. Therefore the actual cost of childcare should fall,

quite apart from any increases in the childcare benefits that we're

providing for....

CHRISTINE:

Well you said that with rebates but my childcare costs have increased

$20 a week because you cut [inaudible] payments as well.

PRIME MINISTER:

Well I can point out that in relation to this, because of the new

GST system and because childcare is GST free, childcare operating

expenses will be lower.

CHRISTINE:

I didn't actually ask you about childcare.

PRIME MINISTER:

Well there was a reference to it in the introduction.

CHRISTINE:

Yes I realise that but you've already said in your speech

that childcare was going to be free from a GST.

MARTIN:

Why are you frightened though?

CHRISTINE:

Well I'd like to know whether there's any kind of guarantee

that social security payments will increase if there is an increase

in the GST.

PRIME MINISTER:

Yes, that will be put into the legislation.

CHRISTINE:

That they will rise with...

PRIME MINISTER:

Yes, the guarantee is that the pension will be increased in a way

that it is always 1.5% above the price impact of the GST. And as

far as the GST rate itself is concerned it can't be increased

because...

CHRISTINE:

Mr Howard,...

PRIME MINISTER:

Well could I just finish? You did ask me the question, I'm

trying to answer it. It can't be increased without the unanimous

agreement of all of the State and Territory governments of Australia

plus the Federal Government plus the Senate and the House of Representatives.

Now, of 24 years experience I've had in Parliament I've

never found all of those governments and all of those people agreeing

on one thing. I don't think there's a chance on Earth

that you'd ever get their agreement to increase the rate. I

think it's the greatest guarantee that anybody could give that

it's not going to go up.

MARTIN:

All right.

CHRISTINE:

Well Mr Howard you did promise not to bring in a GST so...

PRIME MINISTER:

Yeah, and I'm being honest enough to go to the Australian

people with this new plan asking them to pass an opinion on it.

If they like it they'll support it, if they don't they'll

vote against it. You can't be more open than that.

MARTIN:

All right.

PRIME MINISTER:

It doesn't seem fair.

MARTIN:

Thank you Christine for talking to us, thanks for the questions.

CHRISTINE:

Thank you Ray.

MARTIN:

Let's go to Sydney now. Let's go to Esme and Tony Smith

who are self funded retirees. Have a look.

BACKGROUND:

Esme and Tony are self funded retirees with three grown up

children and eight grand children. They've been living in the

same house in Sydney for the last 40 years. With careful investments

leave them roughly $500 a week. They lose $120 of that in tax. Esme

and Tony receive no welfare payments and they have private health

insurance. Like many on fixed incomes they worry about any rise

in the cost of living.

MARTIN:

Welcome both of you. Would you like to ask the PM something?

TONY:

Hello Prime Minister.

PRIME MINISTER:

Yes, how are you?

TONY:

Fine, pleased to have this opportunity. We're very concerned

to preserve the earning capacity of life savings which represent

5% of our gross salary over a period of 35 years from 1953 until

1989. We don't have the capacity to top that up anymore with

part-time work which unfortunately I had been able to do for several

years until just now. That's hardly a question but we are concerned

to preserve these savings of ours which are providing something

like $360 a week.

MARTIN:

All right Prime Minister.

PRIME MINISTER:

Well let me set you at ease, on a number of fronts. Like anybody

you'll get a tax cut and I think just on what you've told

me is probably in the order of $15 or $16 a week. In addition to

that, because you have investment income, you'll get access

to the savings bonuses which is $1000 for everybody 60 years and

over and there's an additional $2000 for self-funded retirees

of pensionable age. Then on top of that, if you are in receipt of

any share income and you will get the benefit, if you get any franked

dividends, and people in your situation will know what they are.

That's the dividend you get after the tax has been paid by

the company, and if the company rate's more than the tax rate

you're paying at the moment you lose the difference. Well under

our new plan you'll get it. So that if your tax rate's

say is, 20%, and 36%'s been paid on the share the tax department

will send you the other 19% and that is a particular boost for self-funded

retirees. And one other thing is, you've got private health

insurance. Now you're going to get 30% of the cost of that

private health insurance either through the tax system, if that's

what you want, or simply by going along to the government office

and presenting the insurance premium receipt and they'll give

you 30% of it.

MARTIN:

All right. Esme, quick question for the Prime Minister.

ESME:

Well I can only say that, as it's a broad based tax and it

seems to be, it's going to be of an advantage to the self-funded

retirees, and I only hope that the 10% is really set in place and

will not be raised, although the Prime Minister has said that by

law it will not be raised so I hope that will be true.

PRIME MINISTER:

Well it certainly will be.

MARTIN:

All right. Well we thank you both for that. Thanks for talking

to us.

TONY:

Thank you very much indeed.

PRIME MINISTER:

Thank you.

MARTIN:

Welcome back. We're talking live with Prime Minister John

Howard. We're talking to a bunch of Australians all around

the country. Let's go to Melbourne now to a couple who we could

call a middle income couple. Have a look at this.

BACKGROUND:

Paul and Anne Duffy are middle income earners from Brunswick

in Melbourne. They have two children, Emily and Hugh. As an engineer

Paul earns around $50,000 a year and pays about $14,000 in tax.

Because Anne stays at home with the children she receives the basic

parenting allowance of $110 a fortnight.

MARTIN:

Welcome to us. Would you like to ask question to the Prime Minister?

ANNE:

Yes. Mr Howard, how will you ensure that where a GST means a lower

tax rates, that the savings will be passed on in full to the consumer.

PRIME MINISTER:

Well we're going to get the Australian Competition Commission

with the threat of $10 million fines to make sure that happens.

And your family will do very well out of this plan because....

ANNE:

How many people are you going to need to do this though?

PRIME MINISTER:

Well they'll be given all the people they need.

MARTIN:

To police it you mean?

PRIME MINISTER:

Yes.

MARTIN:

Okay.

PRIME MINISTER:

Well just resuming, so far as your own situation is concerned,

as I understand from the introduction, your husband's income

is about $50,000 and you have one child under four therefore you

will be particularly advantaged by the fact that he'll have

a tax free threshold of $13,000 and when you add in the tax cuts

and the additional family benefits and even after allowing for the

GST I'd estimate that you will be $50 a week better off.

RAY MARTIN:

Do you feel better off tonight folks?

PAUL:

Not really no.

RAY MARTIN:

Well talk to me Paul. Ask the Prime Minister what your concern

is.

PAUL:

Well, there seems to be a great emphasis on providing tax incentives

for everybody and putting money in everybody's pocket but over

the past few years there has been lots of very savage cuts in just

basic services to people like hospitals and education and training

of people who are unemployed, how are those things going to be continued

to be funded and if there is a bigger pool of money available from

the GST why can't some money be put back into those services

that you cut rather than out people's pockets?

RAY MARTIN:

Well, we have done that. Last week I announced that the Federal

Government would put another $915 million into the public hospitals

systems of the states over five years, and one of the other things...

ANNE:

Why are you putting $13 billion as tax cuts. The amount you are

talking about is quite small compared to $13 billion. I mean there's

been millions cut from education and health, as just two examples.

Why can't some of that $13 billion go into health, education,

things that all of us especially low and middle income earners will

benefit from?

PRIME MINISTER:

Well, I think low and middle income earners will benefit from tax

cuts, because tax cuts give you more disposable income...

ANNE:

But I would sooner see my children benefiting by a good education,

good health care for all of us. We are all concerned about health

care.

PRIME MINISTER:

Well, this package will enable people to take out private health

insurance a lot more readily and one of the ways in which I would

have thought your children would have been benefited would be if

you had more disposable income in your pocket and you were able

to spend more on their necessities, and I think, as a parent myself,

and as somebody who talks to a lot of parents, I know that one of

their constant pleas is that they would like to have a little more

in the pocket each week so that those little additional things that

they would like to buy for their children, they can ....

ANNE:

Mr Howard, I would like to ask a question about this please.

RAY MARTIN:

Sorry Anne, we will have to go on, we have to go to Perth as well,

but you sound like a current affairs interviewer there. We'll

come back to you please Anne and Paul. Stay with us. We'll

come back to you. Let's go to Perth though, to an aged pensioner

there, Audrey Warren.

BACKGROUND:

Audrey Warren is a 69 year old pensioner from Perth. At the moment

she receives almost $355 a fortnight. Rent takes up one-fifth of

that. The pension is Audrey's only source of income. In one

year, she has just over $9000 to live on. So she is one of those

most worried by a GST.

Audrey, welcome. Would you like to ask the Prime Minister a question?

AUDREY:

Yes I would. Mr Prime Minister, one of things that happens with

pensioners at the moment is that our pensions are indexed to the

CPI, and the CPI doesn't cover things like food and clothes

and electricity and gas and so on. So that our pension has lagged

the way behind with no CPI rises in the last two years, and it lags

away behind. That pension that I get only actually is $177.30 a

week, which is really not very much. 4% added to that is only going

to make about $7 difference, less than $8 difference. Are you thinking

at any time of changing the system so that pensions are actually

indexed to the cost of living or the CPI counts the cost of living?

PRIME MINISTER:

Well, Audrey, I have to disagree with you. The CPI does include

those things. And the CPI is a very comprehensive measure of cost

of living increases.

AUDREY:

Okay. So...

PRIME MINISTER:

I'm sorry to.... you know, what you said a moment ago was

wrong, and I don't think it is fair that I allow it not be

corrected. I mean, the CPI measure includes all of the things that

you mentioned and that is why it is quite a fair adjustment and

under this plan the 4% increase will more than compensate, more

than cover the estimated increase in the cost of living.

RAY MARTIN:

Is Audrey getting any

Transcript 10640