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JOURNALIST:
Mr Howard, welcome to Adelaide. Great to speak to you on Friday,
and good morning.
PRIME MINISTER:
Good morning to you.
JOURNALIST:
So far, can you give me an impression of how you think the electorate,
not the media, the electorate is receiving your package?
PRIME MINISTER:
Well so far I think there is enormous interest, there's a
recognition that this is not just a tax cut, it's much bigger
than that. This is about remaking the tax system for the longer
term benefit of Australia. Of boosting our economic performance,
of giving people greater incentive and also cheapening our exports
and generally helping business to operate better. So it's a
big long term plan, it's not just about a tax cut.
JOURNALIST:
Mr Howard, this morning we have been taking calls from our listeners,
many of whom are feeling really reassured, others are quite jaundiced
and disappointed. Those who seem to feel as though the tax will
be bad for them are those on low incomes, very close to pension
areas. Can you reassure low income earners listening at the moment
that the compensations will make up for the increases in price?
PRIME MINISTER:
Well I can give that assurance. The compensation is well above,
it's at least 1.5 per cent above the calculated price impact.
We have deliberately decided that the pension, for example, and
all the other social security payments will go up by 4 per cent
on the first of July 2000 when the plan comes into effect and will
remain 1.5 per cent at least above any increases in the consumer
price index. So what we're doing is we're fully compensating
people for the price effect of the goods and services tax on top
of that we're throwing in another 1.5 per cent for good measure
for further reassurance. Now that's for people who rely entirely
on the pension. If they have other sources of income, we have got
these savings and investment bonuses for both pensioners and self
funded retirees. We're getting rid of provisional tax. We have
deliberately skewed the tax cuts so that the proportionate gains
for low income earners are greatest. We're cutting, we're
increasing the tax free threshold to $6,000 and we're cutting
the bottom rate from 20 per cent to 17 per cent. Now that is proportionately
more help to somebody on a low income than to somebody on a high
income.
JOURNALIST:
Mr Howard, on other issues specifically raised by our listeners
this morning. The issue of banking, now details are not yet available
to us. But can you explain if we will end up paying more for our
banking services?
PRIME MINISTER:
No you will not end up paying more for your banking services. Well
to start with the financial institutions duty and the bank accounts
debits taxes are going to be completely abolished. Now can I say
that again. They are going to be completely abolished. Those aggravating
little entries you get on your bank statement every month or whenever
you get your bank statement, they're going to go out because
one of the conditions about us giving the GST to the States is that
they've got to get rid of those taxes. So there's no way
on earth against that background that the cost of banking services
can go up.
JOURNALIST:
Prime Minister, the media are speculating that you and your Government
will be watching very carefully to see how we are all receiving
this, and that will determine the election time. We have heard you
this morning saying I don't want to talk about that yet. Are
we talking, however, about an election being called within a month
do you think?
PRIME MINISTER:
Julia, I have no idea when the election is going to be. I have
not turned my mind to the date of the next election. My sole mission
in life now is to explain the benefits of this plan to the Australian
people. It is a long term plan to make Australia stronger economically,
to generate more jobs and to help our export performance and to
generally further strengthen the Australian economy in a time of
international challenge. That's my aim in life at the moment.
The election of course will be at some stage. I haven't decided
when and I won't be deciding when for some time.
JOURNALIST:
Is this the most risky moment of your political life?
PRIME MINISTER:
Look, I don't look at it in a personal sense. I am certainly
very proud to lead a Government that has had the guts to put forward
a visionary plan that will help the long term economic future of
the country. I am really very proud of that and I am very proud
of all the support I have had from my colleagues, particularly the
Treasurer, who has worked very hard with me on this plan, and it's
a moment of great importance to the country and that's far
more important than my own personal feelings on the subject.
JOURNALIST:
We were discussing with Senator Meg Lees this morning and our listeners
how to keep the 10 per cent at 10 per cent and I am sure you are
very aware that she has given cautious approval to your system,
although she says it's still very hard to keep it down. She
also mentioned the black economy. You have budgeted quite a bit
of money coming out of the black economy, she says that doesn't
work, countries with a GST elsewhere seen an increase in the black
economy. Can you reassure us that money will come back?
PRIME MINISTER:
Well that is not the advice that we had from the experts. The advice
that we had from the experts was that the introduction of a goods
and services tax, plus a number of other measures that we have introduced,
it's not just a goods and services tax but plus a number other
compliance measures we have brought in, will result in tax now not
being paid being paid in the future. The experience that I've
been told of in relation to New Zealand and other places has been
quite good as far as the black economy is concerned. You have got
to remember that the proposal that we are putting forward is more
failsafe in relation to the black economy than some of the systems
overseas. It's more effective and more comprehensive and therefore
more likely to succeed.
JOURNALIST:
Prime Minister, as we leave you at the airport and a busy day in
Adelaide and a busy weekend with Liberal Party business, you are
sounding tired this morning if I may say, how's the energy?
There's a big sell ahead isn't there?
PRIME MINISTER:
The energy levels very high perhaps the line's a bit thin.
JOURNALIST:
Could well be. We will obviously see and hear much more of you
later in the day. Thanks for your time.
PRIME MINISTER:
Thank you. Bye bye.