PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 10659

TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP RADIO INTERVIEW AM PROGRAMME – MATT PEACOCK

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: 14/08/1998

Release Type: Interview

Transcript ID: 10659

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

PRIME MINISTER:

It is not a rich man's package. It is a package that will

encourage average Australians to work harder. It will protect low

income earners but most importantly of all it will help the whole

country to grow stronger and that is why I am so committed to it.

PEACOCK:

Now essentially this new GST that you are putting in is the tax

for the States, it'll be paying the States' way. Why would

they want it when currently their income is growing by 3.6, I think,

a year and your growth estimate is at 2.7, they'd be losing

wouldn't they?

PRIME MINISTER:

No they won't. Over a 10-year period from just after its introduction

this will produce, we estimate, about $25 billion more revenue than

they would receive under the present arrangements. The States for

time immemorial have said they wanted a growth tax, well now they

have it.

PEACOCK:

Well is that growth assured with the Asian economies the way they

are?

PRIME MINISTER:

Well is anything, you know, anything in relation to growth at a

particular level assured. You can't do better than to say to

the States, you want freedom, you want the capacity to have a growth

tax, you want that independence, well here it is. No Prime Minister

has in the history of Federation made a more generous offer to the

States of Australia.

PEACOCK:

So we put that GST aside and we then look at the income tax cuts

and the various other changes that you are making, where are you

getting the money for them?

PRIME MINISTER:

Well there's a combination of things. We are obviously, because

of the GST, you get a growth dividend, you get dividends from the

black economy and you get some money out of the surplus and if you

look at the figuring you find in different ways contributions are

being made. And it's a very balanced package and, of course,

it all adds up.

PEACOCK:

Isn't all that money though available to equally to Labor

without a GST, I mean they can raid the surplus just the same as

you have and they can try to get the black economy as everybody

has always promised but never delivered?

PRIME MINISTER:

Well the last person to promise personal tax cuts without restructuring

the system was Paul Keating before 1993. Remember L-A-W law, what

did he do? He whisked away the tax cuts and for good measure he

put up all of the existing indirect taxes without giving the pensioners

and the battlers any compensation. The Labor Party if it wins the

next election will do the same thing. So I say to the Australian

people, beware of Labor Party leaders offering tax cuts without

a GST.

PEACOCK:

So your answer is yes, Labor could do it but it is a question of

credibility, you don't think they would?

PRIME MINISTER:

Not only it is a question of credibility but this package is interlocked.

You can't start putting and taking without the whole thing

unraveling. And if you look at the detail of it you will see that

many of the dividends that enable certain things to be done are

as a consequence of the introduction of the Goods and Services Tax,

the cash flow benefits that go to small business won't be there

without the GST. The reductions in business costs. You can't

give the bush a $3.5 billion cut in fuel costs without the changes

that we have proposed.

PEACOCK:

Okay, what about the tax mix? Now there is, you have agreed, some

switch in the mix. There's a switch of what is it, $10 billion

between income tax and indirect taxes?

PRIME MINISTER:

Well it's in the order of 0.7 per cent of GDP which incidentally

is virtually the same as the indirect tax increases that Mr Keating

and Mr Beazley hit us with in 1993 without any compensation for

the battlers and the pensioners.

PEACOCK:

Now in terms of the equity of this package, it appears to favour

upper income people just as much, if not more.

PRIME MINISTER:

No, no it doesn't because you don't just look at the

dollar amounts. It stands to reason that somebody on $100,000 will

in dollar terms get an attractive tax cut because he is already

paying a lot of tax. But if you look at the proportionate increases

the greatest proportionate beneficiaries are middle income families.

I mean look at this, a dual income family 9.9 per cent on $35,000,

you are not going to tell me that person's elite are you?

PEACOCK:

Same list though if we look at it Prime Minister....

PRIME MINISTER:

It's a very good list Matt, it's a very, very good list.

PEACOCK:

$5,000 income, they get a benefit of 2.4 and if you go to the top

of the scale they are getting 6.7 per cent.

PRIME MINISTER:

Yes but have a look at the middle there, I mean don't ignore

the middle. It's fantastic 9.9 per cent, beat that.

PEACOCK:

I can see this argument can go on for some time. How much time

do you think it should go on for, I mean we haven't had time

to examine it. Do you think we need until Christmas for the population

to understand it?

PRIME MINISTER:

Matt, I said before it was released that I would allow sufficient

time to the Australian people to understand it.

[ENDS]

Transcript 10659