E&OE..........................................................................................
GILBERT:
The Prime Minister joins us now. Good morning sir, how are you?
PRIME MINISTER:
I am very well thank you.
GILBERT:
I can't imagine many people who have gambled so much as you
are at the moment.
PRIME MINISTER:
What is important about this plan is that it is good for Australia's
future and my responsibility as Prime Minister is at all times to
take actions that I believe are good for Australia. If I believe
that tax reform is good for Australia, if I believe that the present
tax system must be changed to make the Australian economy stronger
for the 21st century then irrespective of the so-called
political risk involved for me it is my responsibility to put forward
that plan. And most Australians believe that the present tax system
is inadequate and should be changed in a quite fundamental way.
We in the Government believe that and we have put forward a plan
that is above everything else we believe will make the Australian
economy stronger and it therefore will benefit the Australian nation
into the 21st century.
GILBERT:
Yeah, we probably will only get this one chance of the bite
in the apple' as it were I would suggest Prime Minister.
PRIME MINISTER:
I think that is true. If Australians really want to throw out the
present tax system then they really have a clear choice now. We
are putting forward a plan that will change the system for the better.
It is not just a tax cut, it's not just a change in the indirect
tax system, it is an integrated plan which addresses the fundamental
weaknesses of the present system. It has enormous benefits for Australia's
overseas trade because there will be no GST on our exports and that
will reduce the cost of those by about $4.5 billion a year. It will
be a very great benefit to country Australia, it's for the
bush because the cost of fuel which is so important in a big country
will be lower as a result of the arrangements inside the package
and that is something you can't have without the GST. And,
of course, there will be benefits for individuals and families far
outweighing the cost involved in relation of the GST through the
personal income tax cuts. So it is a total plan. It is not just
a bit of patching, it's not a band-aid, it's not another
tinkering at the edges which we have had for years. It is a genuine
assault on the weaknesses of the present system.
GILBERT:
Now I was absolutely amazed at the weekend, one of the polls, and
I'll ask you later I suspect we are being a bit over-polled
in Australia at the moment, but one poll the question: Is
a GST good for Australia?'47 per cent said yes but then another
question in that same poll: Should the Opposition allow the
GST if Howard is re-elected?' 47 per cent said no. How do you
read those figures? They say yeah it's good but no it shouldn't
be allowed?
PRIME MINISTER:
I think those polls were internally contradictory. Let's have
a few more before we get a proper read on what the public is thinking.
There was another one in the papers this morning that was going
in a very different direction that showed very strong support for
the whole plan. My feeling, moving around the country and I have
done a bit so far, and I have got a lot more ahead of me this week
is that people know the present system needs changing, they know
that the former Labor Government had 13 years to fix it and didn't
and they respect the fact that this Government is trying, is having
a go at putting forward a plan that will fundamentally improve the
system, make it fairer into the 21st century.
GILBERT:
Did you find yourself waking up on Friday morning or Saturday or
Sunday and going: gee, I should have put that in or boy I really
could have left that one out, or are you still happy with the total
package?
PRIME MINISTER:
No I have not gone through that experience. We took months to put
this plan together. I have never worked on anything as much in my
political life as I have on this and I was satisfied in the end
that the balance was right. It does fundamentally reform the system,
we are not fiddling at the edges. The new GST system is much fairer
and better and more efficient and better for Australian business
and therefore for all Australians because it will boost economic
growth than the existing Wholesale Sales Tax system. The personal
tax cuts are both necessary and desirable. We have this new top
rate of 30 per cent in the dollar for everybody on an income between
$20,000 and $50,000. And that's 60 to 70 per cent of all wage
and salary earners in Australia. They will never pay more than 30
per cent at the margin. That is a huge improvement on the present
system. We have very significant family benefits and very importantly
we have a lot of protection and a lot of compensation for retired
people and people on the pension. I mean we are getting rid of provisional
tax. A lot of self-funded retirees have hated that for years. We
are bringing in a 30 per cent tax rebate for private health insurance.
We are boosting the attractiveness of retired people having shares
in companies. Many of those people on modest incomes don't
get the full value of those and they will under our plan in the
future and there's a savings compensation of up to $3,000 untaxed
for retired people as well. There are lots of benefits loaded into
this plan for retired people, for pensioners and retired people
so that they are not just protected against the introduction of
the Goods and Services Tax but given additional benefits over and
above the compensation that is necessary to protect them.
GILBERT:
Now you have heard the critics, people have said: oh sure it's
been guaranteed to be capped at a percentage, the GST in overseas
countries, and it has crept up and up. I know you have explained
it but please can we go through it slowly again so that people are
very clear why are you able to confidently say 10 per cent does
in fact mean 10 per cent.
PRIME MINISTER:
Well Graeme, what we are going to do is, when it is introduced
we are going to change the law to say that it can't be varied
without the unanimous request of the States and Territories, the
agreement of the Federal Government and the passage of a law through
both houses of Federal Parliament. Now we will put a law through
Federal Parliament to that effect. Now, I don't believe that
that will ever happen.
GILBERT:
I can't see a State government whacking it up.
PRIME MINISTER:
And I don't believe that once that is the law of the Commonwealth,
I don't believe that any future government, combining with
the Opposition and minor parties in the Senate, is going to agree
to change that law because there will be such a focus on a government
that tries to do that. And there will be such pressure on an opposition
very likely with the minor parties having the numbers in the Senate
that the likelihood of that occurring is just unimaginable given
the sort of experience that we have now had over a number of years
in the interplay between the two houses of Parliament. I mean I
can't imagine a future Coalition Government proposing to change
that law and nor can I imagine a future Labor Government with numbers
in the Senate along with Democrats and whatever else agreeing with
such a change. I mean to me once that is the law and surely if we
win the next election the Labor Party and others won't oppose
it becoming the law because it will give protection to the people,
I can't ever imagine it altering.
GILBERT:
Well you'd be drawn and quartered wouldn't you and I
can't imagine you looking forward to that.
PRIME MINISTER:
Well nobody is going to do that. Once it is there and given all
of the brouhaha that will have followed the introduction I just
can't see it ever changing.
GILBERT:
I just had a call from a person in Giralang Prime Minister and
he asks: would taxes be coming off electricity and gas?'
Are you able to tell him yea or nay on that one?
PRIME MINISTER:
Well our position in relation....the GST will cover electricity.
What it doesn't apply to is council rates and water rates and
things like motor registration fees. But if you are running a business
and you use gas and electricity in it then obviously any GST that
is paid on electricity bills you would be able to get that back
from the Tax Office because it is a business input.
GILBERT:
Now later on this morning you are in Queanbeyan, of course, with
the Federal Member there, Gary Nairn in Eden Monaro talking to truckies
primarily because in our backyard the capital region backyard, the
Hume Highway, a lot of heavy transport. What message will you be
taking to them Prime Minister?
PRIME MINISTER:
Well a very good message because what we are going to do is to
dramatically reduce the cost of using diesel fuel anywhere in Australia.
The present excise on diesel fuel is 43 cents a litre and for heavy
trucks that will come down by 25 cents to 18 cents. And the same
thing will apply to rail and on top of that the off-road use, farmers
for example but not only farmers but also tour boat operators and
ferry operators who use diesel and other comparable fuels, they
will continue to be completely free of excise. So the fuel savings...the
savings in fuel costs under this plan are quite spectacular and
that is very important in Australia because it is a big country
and a lot of people pay a lot extra because the goods they buy are
transported over long distances and anything that reduces the cost
of transporting them over those long distances must be very good
for them. And then on top of all of that any businessman who uses
petrol or any fuel, this is not just a heavy truck industry or farmer,
but any businessman who uses any fuel will find that that fuel is
cheaper after the plan comes into operation because he'll be
able to get the GST paid on that fuel back and that will mean that
every litre of petrol he buys will be 7 cents a litre cheaper
7 cents a litre cheaper than what it is now because he'll get
back the GST that he pays on the fuel and the price paid at the
pump either for him or the ordinary motorist won't go up so
the benefits for, not only the bush but for business generally but
particularly the bush because that's where things are carried
long distances out of this plan are enormous.
GILBERT:
Now if we could just briefly touch on politics in general, at the
moment your major opponent, Kim Beazley, the poll suggests he won't
be returned at the next Federal election. If that, in fact, is the
case and other suggestions are that the counting is already underway
between Evans and Crean to get that leader's role, who would
you prefer to be looking across the parliamentary desk at, who would
make the alternate....
PRIME MINISTER:
Graeme, I haven't turned my mind to that. I will turn my mind
to that after the election. My preoccupation at the present time
is explaining to the Australian public why the Government I lead
should be returned. Mr Beazley's responsibility when he brings
out his alternative tax plan will be to convince the Australian
people that Labor having had 13 years to fix the tax system and
didn't do so now has the capacity within a couple of weeks
of us bringing about this imaginative plan to do so. I am concerned
about choice that the public will make between now and the next
election. I don't take the public for granted. We have got
to earn re-election, I believe we have earnt re-election but I don't
take them for granted. We inherited a deficit of $10.5 billion and
we have now got it in surplus. We have delivered the lowest interest
rates in 30 years, we generated 300,000 new jobs, we now have a
plan that will tackle head-on the weaknesses of the present unfair
tax system and I will spend my waking hours between now and whenever
the election is held to explain that plan and other policies and
ask the Australian people to vote for us again. And I think Mr Beazley's
responsibility is to explain to the Australian people, how is it
that having had 13 years and not having fixed the tax system, he
can fix the tax system by just offering a few tax cuts but not having
a GST. I mean you can't have it both ways, you are either serious
about reform or what you are saying to the Australian people is:
well look we are not interested in tax reform, we'll give you
a tax cut but we won't sort of do anything serious about reforming
the system. I think the Australian people are a wake-up to that.
They will give us marks for having included reform along with tax
cuts. If we'd have just offered tax cuts and nothing else they'd
have said: well look you are just like the former Government, you
are playing....
GILBERT:
It's a total package or nothing at all.
PRIME MINISTER:
Well you are either serious about reforming it or not and everybody
knows that the present system is not working and it needs change.
Now we are at least honest and open and courageous enough to offer
reform and change and offer a total approach. But what Mr Beazley
will do is say: well look I'll give you some tax cuts but don't
ask me to reform the wholesale tax system. I mean Mr Beazley wants
to keep the present system.
GILBERT:
Now people in our region Prime Minister will say that after that
March '96 election you were serious about trying to downsize
Canberra. Have we seen the last of the public service downcutting
and outsourcing and all those other things that cost jobs and prestige
around here?
PRIME MINISTER:
Well I think it is fair to say that in the first two budgets there
were a number of decisions that were taken that did result in a
smaller Federal public service, I accept that. In the last budget
that process wasn't there. We don't, at the moment, we
don't see the need for further reductions in expenditure. We
have got the budget back into balance. We have done the hard yards.
We have got rid of Mr Beazley's blackhole of $10.5 billion.
I mean he incidentally tried to stop us doing that and now is expressing
concern about the surplus so according to him we shouldn't
be in surplus. I mean it's very interesting....
GILBERT:
Yeah it's a funny statement isn't it, don't pay
the bills.
PRIME MINISTER:
.....$10 billion deficit, he's tried to stop us getting
that into a surplus. He says that we shouldn't really now be
in surplus yet he says shock horror our tax plan threatens the surplus.
I mean that is a very, very inconsistent position to have. He is
the last person to shed crocodile tears over the surplus because
he tried to stop us getting there, says we shouldn't be there
but says: oh don't do anything that will threaten it. I think
that is very contradictory but as far as future spending cuts are
concerned the present level of Federal Government spending, we don't
see any need to further reduce it so that is the answer that I would
give to that question. In any event there's been a very, very
strong performance by the private sector of the ACT and regional
economy and the signs are that some of the change in the public
sector area is now being well and truly taken over by the private
sector and the ratio between the two is altering and the nature
of the ACT and surrounds economy is altering and I think altering
for the better.
GILBERT:
Are you still enjoying this Prime Minister's job?
PRIME MINISTER:
Yes I am, I still have a great commitment to do things, to tackle
problems. I think what the Australian people are tired of in politics
at the present time is endless debate over personalities and issues
and not enough focus on providing solutions and tackling problems.
They are tired of rhetorical debates, they are more interested in
governments and politicians who offer some solutions. Now not everything
you put up everybody agrees with but there are a lot of Australians
who will give marks to a government that is prepared to have a go
at solving some of our problems. One of the problems Australia has
at the moment is that we do have an okay, out-of-date taxation system.
Everybody knows that. Mr Beazley and Mr Evans know that because
some years ago they themselves supported change but they are too
frightened to do it now and they think there is more political advantage
in scoring points off the government. Now we are prepared to put
forward a comprehensive plan. We are saying to the Australian people:
you can't have just the good side, you can't just have
tax cuts without some attempt to fix the problem. We are offering
both tax relief and tax reform. We are offering both. You can't
have one, in my view, without the other. You can't ask the Australian
people to accept tax reform without giving them tax relief.
GILBERT:
Yeah we have got to stop saying: what's in it for us. We've
got to say: let's look at the country.
PRIME MINISTER:
Well you have got to look at the country's long-term welfare
but by the same token if you are asking people to accept tax reform
they are entitled to have something back. And something that eases
the process of reform and that is what we are offering. But if we
say to them: look we are just going to give you the reform and nothing
else I don't think they will be interested. But equally if
you say to them: well if you can have the tax relief but you don't
have to have the reform, they'll say: hang on, there's
a catch in that. Because that is what happened in 1993, Mr Keating
and Mr Beazley offered tax cuts but no GST. When they got into office
they took away the tax cuts and they put up all the indirect taxes
which was just as bad as in terms of impact, worse than the GST
because there was no compensation for low income earners, the was
no compensation for the poor.
GILBERT:
Exactly. Prime Minister, I never thought I'd say this but
I have got to say that news is upon us and I hate to cut you short.
I have appreciated your time, I know how busy you are. Thank you
very much for this morning.
PRIME MINISTER:
Very nice to talk to you.
[ENDS]