E&OE....................................................................................................
MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Good morning, Neil, how are you?
MITCHELL:
I'm well. Gee, it's a nice coincidence to be in Brisbane.
I think there's a little Test match starting up there today.
PRIME MINISTER:
Well, there is.
MITCHELL:
Can you get there?
PRIME MINISTER:
Well, I will later in the morning but my main reason for being
in Brisbane is to address the Annual Conference of the Federation
of Ethnic Community Organisations and that is a long-standing commitment
but it does happen to fall on the same day.
MITCHELL:
Well, that's good. I mean, I was thinking of Sir Robert Menzies
who did manage to get to London for the odd Lords Test. Nothing
wrong with it, Prime Minister.
PRIME MINISTER:
No, no, there isn't. Well, I certainly will be going to the
Test match but I'll be attending to the meeting of the Ethnic
Communities first. And I've got a number of things to say about
issues of concern to them and that's the principle reason for
being in Brisbane, but I'm not disguising the fact that I'll
be going off to the cricket after I've delivered the speech.
I mean, why not, it's Mark Taylor's 100th Test
match.
MITCHELL:
I'd be very disappointed if you didn't.
PRIME MINISTER:
Indeed, most Australians would too.
MITCHELL:
Mr Howard, if we may, domestic issues first. Is it correct the
Government's looking at a new compensation package for the
charities because of the effect of the GST?
PRIME MINISTER:
To be perfectly frank, Neil, I haven't seen the Vos Report
on which this report is based. I've been out of the country
for two or three days. We are meeting next Tuesday. I think that
report is sort of a bit fanciful because the GST doesn't apply
to charities as such. The GST was only ever meant to apply if a
not-for-profit organisation were carrying on a commercial activity
in competition with another commercial activity. It was never the
intention at any stage to apply the GST to the charitable activities
of not-for-profit organisations, to donations or anything of that
kind therefore I can't quite see what the article in The
Australian, which I imagine you're referring to.
MITCHELL:
That's correct, yes.
PRIME MINISTER:
I can't quite see what that article's getting at. But
maybe there's something in that report which I haven't
been briefed on yet but certainly it's never been our intention
that the GST would affect charitable activities, charitable donations
and we'll be keen to ensure that that objective is carried
through.
MITCHELL:
Okay, well certainly the Council of Social Service says they believe
it is going to have significant impact. Is there a possibility here
that it's having an unforeseen impact, do you think?
PRIME MINISTER:
Well, I'm not aware of that but if that were to be the case
then we would do something to stop that happening. And let there
be no doubt in anybody's mind, we do not intend in any way
to burden the charitable activities of Australians or in any way
to discourage giving to charities through the introduction of the
GST. That's not our intention and we'll see that that
doesn't happen.
MITCHELL:
Even if it costs money.
PRIME MINISTER:
Yes, but I don't believe that will be necessary.
MITCHELL:
Will you release the Vos Report?
PRIME MINISTER:
Yes.
MITCHELL:
When?
PRIME MINISTER:
Well I would imagine after the Cabinet's had a meeting next
Tuesday.
MITCHELL:
Can I ask you about another area that seems to me to be a miscalculation
after the Premiers' Conference, is it correct that stamp duty
on business conveyancing will not be lifted now?
PRIME MINISTER:
No, that's not correct. There is a possibility that the date
of lifting the stamp duty on business conveyancing may be delayed
by a year or two, that's all. There's a possibility of
that and only in relation to the stamp duty on conveyances of buildings,
commercial buildings, real property. The stamp duty on all other
business conveyances, business transactions, will be lifted as announced
from the 1st of July in the year 2000. But depending
on how the calculations finally come out - and there's still
a lot of to-ing and fro-ing between the Commonwealth and the States
as to the exact figures because the States have one set of figures
and we have another and they're being reconciled at the moment
- and it may be necessary to delay I underline the word,
delay by a small period of time, the elimination of the stamp
duty on the conveyances of business real property. But there's
no suggestion that they won't ultimately be abolished.
MITCHELL:
I guess the point I'm getting to, that that is, I suppose,
an adjustment to calculations possibly, if we believe that social
welfare groups, there may need to be an adjustment to calculations
in the welfare area. I mean, how many adjustments are there likely
to be of this nature around the GST?
PRIME MINISTER:
Well, at no stage did I say that there wouldn't have to be
some fine-tuning. And, indeed, we're talking about the Vos
Report. The Vos Report was designed to fine-tune aspects of the
package and obviously a little bit of fine-tuning is always going
to be necessary with something as vast as this. Now, on the question
of compensation. We've had views put to, or the Vos Committee's
had views put to it. I haven't seen them yet. And I'll
be having a briefing on the Vos Report over the weekend and we'll
be discussing it in full at Cabinet next week when we examine the
legislation. But it's always the case with something like this
that you need fine-tuning. But on the issue of compensation, those
documents that were released by the Treasurer last week showed very
strongly that the alleged measure which was going to reveal that
the compensation was inadequate - that is the Household Expenditure
Survey measure - actually in some areas the impact was lower than
what we'd said according to our measure.
MITCHELL:
Were you aware that ACOSS had, well, I suppose, got the backing
of 40 of these key church welfare groups over the issue wanting
change to the tax package?
PRIME MINISTER:
Well, I know that ACOSS has wanted change. They said that during
the election campaign. Now, the question of...
MITCHELL:
It seems to have expanded a bit, though.
PRIME MINISTER:
Well, I don't know about that. And it depends what sort of
change you're talking about, Neil. If you're talking about
a minor adjustment then you always make minor adjustments, you always
fine-tune something like this. But if you're talking about
a big issue like taking food out of the GST, that's an entirely
different matter. I mean, our argument on that is, and it remains,
that if you take food out you don't help the poor but you immediately
undermine the overall package. You create pressure for other things
to be exempted, such as clothing, and where do you stop, do you
have fresh food, do you have take-away foods, do you have restaurant
meals. You have all the confusion that operates in other countries.
Now, that is a major issue. That is quite distinct from whether
you make a particular item sold over the counter at a chemist shop
which is akin to a prescription drug, whether you make that GST-free
or not. That is what I would call a minor fine-tuning.
MITCHELL:
Are you still confident you can get this package through before
Christmas?
PRIME MINISTER:
Through the House of Representatives.
MITCHELL:
Yep.
PRIME MINISTER:
Yes. I believe we can get it through the House of Representatives
and that is our aim because that's what we were elected to
do and we took it to the public. I do have to keep reminding people
that we have had an election and we did lay all of this out. I mean,
we did the unconventional thing. We told people we were going to
change the tax system before the election and not after it as Labor
Governments in the past have done. And we are entitled, therefore,
to say to anybody, the public returned the Government and the Government's
got a mandate to introduce it.
MITCHELL:
Mr Howard, the Tax Commissioner, Mr Carmody, in an interview yesterday
or last night on the 7.30 Report is suggesting, well, he
really says there could be a lot more to be found if tax minimisation's
attacked. And he says if not, if you don't jump on it, it sort
of devalues the effect of the tax reform, that it erodes the effect.
Do you think he's right?
PRIME MINISTER:
Well, without having seen exactly what he said and just relying
on reports of what he said, he's right to this extent, Neil,
that people who seek to exploit every last loophole in the tax system
are not doing the country a service. And we are against that. One
of the advantages of the new taxation system is that that will be
harder to do because with the broad-based, indirect tax it's
harder to evade. And certainly we remain very committed to stamping
out artificial tax avoidance practices. There's always an argument
between what people regard as legitimate business planning. In other
words, nobody goes out to pay more tax than they have to.
MITCHELL:
And that's legitimate, isn't it?
PRIME MINISTER:
Well, that is legitimate. I mean, you can't say to people,
well, we want you to sort of deliberately arrange your affairs in
such a way that you pay the maximum amount of tax. I don't
think anybody would agree with that. On the other hand, if I were
to say that you shouldn't spend your life trying to find every
last loophole to avoid your taxation liabilities, most people would
agree with that as well. Now, the fair balance is somewhere in the
middle, isn't it?
MITCHELL:
It is. Some of the estimates, though, they're talking about
a couple of billion dollars a year.
PRIME MINISTER:
Well, people fling those sort of estimates around.
MITCHELL:
Do you think that's realistic?
PRIME MINISTER:
Well, it depends on what you regard as tax minimisation. Some people
regard the benefits provided by the law, the use of them as tax
minimisation, others don't. I mean, some people say that it's
tax minimisation to take advantage of some of the deductions available
under the superannuation law but most Australians would say, well,
the whole idea of having a tax deduction in that area is to encourage
people to provide for their retirement and all we are doing is taking
advantage of that, and I agree with that. But then there are some
people in the welfare sector who criticise that. I mean, many of
the people who fling around these figures like billions of dollars
are really talking about changes to the law that deliberately authorise
the taking of a tax deduction for a certain activity. There are
many people in ACOSS who regard the present taxation treatment of
superannuation as akin to tax minimisation. Now, you wouldn't
regard it as so. I don't think many of your listeners would.
But that is the difficulty of a debate like this is to try and get
an agreed definition of what amounts to tax minimisation.
MITCHELL:
I think he's also touched on the GST. He says small business
is going to need more help with the GST.
PRIME MINISTER:
Well, they are going to get our help. They are going to get $500
million of help.
MITCHELL:
He seems to be saying more is needed.
PRIME MINISTER:
Well, I, once again, I haven't had a look at that but under
the plan there'll be $500 million available to help with the
transitional impact of a GST.
MITCHELL:
Could I ask you about private health insurance?
PRIME MINISTER:
Yes.
MITCHELL:
The slide continues...
PRIME MINISTER:
Yes, it does and it will go on until there's more help given
to people to take out private health insurance. And we want to introduce
and we announced before the election a 30 per cent tax rebate for
everybody taking out private health insurance. And it's urgent
that that be passed.
MITCHELL:
Are you going to get that through?
PRIME MINISTER:
Well, it'll get through the House of Representatives. But
can I just say to those in the Senate who are now talking about
delaying it. I mean, what are you going on about? The public voted
for that and don't imagine that by delaying or stopping a 30
per cent tax rebate for private health insurance that that's
going to help the public hospitals because if the slide in private
health insurance continues more and more people will use public
hospitals and there will be a greater strain on the public hospital
system. And we have already increased massively the money going
to the States for public hospitals. And I notice in Victoria that
the Victorian Government is advertising about the huge increases
in money that the Victorian Government is making available to public
hospitals in that State, partly made possible by the extra money
we have given Victoria. So, nobody can say governments around the
country aren't putting more and more resources into public
hospitals. Now, if the Labor Party and the Democrats are going to
in the Senate stop the introduction of this 30 per cent tax rebate
they will be directly adding a further burden onto the public hospital
system of this country. And I just say to the Australian public,
if you want this 30 per cent private health insurance rebate you
get onto your Democrat Senators, you get onto your Labor Party Senators
and you tell them to pass that law when it comes into the Senate
in a few weeks time. Because we took that to the public and the
public voted for it and we are determined to introduce it but if
it's blocked in the Senate it will be on the heads of the Labor
Party and the Democrats.
MITCHELL:
You'd also have to say that your previous attempts to haven't
worked. I think the figure that 500,000 have dropped out of private
health insurance since your Government's been in power.
PRIME MINISTER:
That is true.
MITCHELL:
And you have spent a fair bit trying to fix it.
PRIME MINISTER:
We have but we believe more is needed and that is why we're
increasing the rebate to 30 per cent. The problem in this area,
Neil, is that years ago something should have been done to increase
the incentives while there was a critical mass of people in private
health insurance. Once it got below a certain figure, and it was
identified by a former Labor Health Minister, Graham Richardson,
as being about 40 per cent, once it got below that figure it was
always going to need quite a big subsidy to turn it around. Now,
we are at that very critical point and if this 30 per cent rebate
does not come in as promised there will be a further drift of people,
there'll be more and more people using the public hospital
system and there'll be more and more strain on that system.
MITCHELL:
But, what will happen to private health insurance? The AMA say
if you don't get the rebate it's doomed.
PRIME MINISTER:
Well, it will never be doomed for people who can afford to take
it out without any kind of tax subsidy. There'll always be
some people in the higher income bracket that will be able to afford
to take it out and you'll have a more, you'll have a sharper
division between what you might say elite private health insurance
coverage because only the very wealthy will be able to afford it.
And it will become more and more elite and more and more exclusive.
And everybody else using the public system now...we support both,
we support a strong public system and I have great admiration for
the Australian public hospital system and I have seen it at work
and I know how professional and how good it is but we also need
a private system. You need both and what we are saying is, have
both and you can only have both if you have a reasonable percentage
of people in private health insurance and that's why we have
got the rebate.
[Commercial break]
MITCHELL:
Mr Howard, Indonesia. Now the former Prime Minister, there's
probably not much you can do about this, but the former Prime Minister,
Paul Keating, has visited President Soeharto...former President
Soeharto overnight. In the current environment is that really a
good thing to do?
PRIME MINISTER:
He's got a perfect right to do that. He's a private citizen
as is the former President Soeharto. I don't see any objection
to that. I think it would be quite wrong of me to start telling
Mr Keating who he should visit and who he shouldn't visit.
That's his business.
MITCHELL:
I just wonder if Indonesia...he'll be seen in Indonesia...still
be seen as sought of an official of Australia even though he's
not.
PRIME MINISTER:
Well he will be seen by some but he's a private citizen. He's
got a perfect right to see anybody he wants to and I don't
find anything strange at all in people who've served in, a
Head of Government capacity in their own country retaining contact
with others who've done the same thing. I know that Malcolm
Fraser, often when he goes overseas, visits former French Presidents
and Prime Ministers, and American Presidents. It's a perfectly
normal thing to do. I don't, in the visit itself, I don't
see anything wrong at all.
MITCHELL:
He literally walked passed troops to get in there.
PRIME MINISTER:
Well once again I don't know all of that but equally can I
stand by what I say that he's a private citizen and he doesn't
go there in any official capacity. He was Prime Minister of Australia.
He's no longer in politics. He has a perfect right in my view,
as a private citizen to visit anybody he likes. I mean if he expresses
views that I might disagree with well I would say so. But I think
the fact that he's gone to see President Soeharto is perfectly
unexceptionable.
MITCHELL:
The reports of a second Dili massacre in 1991, and allegations
have been made, have been in fact covered up by the then Labor Government.
Do you...was there a second massacre? Do we know whether there
was a second one?
PRIME MINISTER:
Well I guess you have to speak to the former government, Gareth
Evans and to Paul Keating, about whether anything was covered up.
I think it all revolves around what's the definition of a second
massacre'. I think it appears to be the case that there were
some different briefings provided to different people at the time
about actually what happened. But whether that amounted to a second
massacre or not is a matter of argument and debate. I'm not
in a position to pass judgement in precise terms on that. All I
can say is that obviously a very tragic incident did occur. It remains
a source of concern to a lot of people which I fully understand
and there were different reports and different indications given
to people at the time. I'm not alleging that the former government
covered up anything. I think it does, from the reports I've
read, revolve very much around what constitutes the meaning of a
second massacre'.
MITCHELL:
What, how many deaths?
PRIME MINISTER:
Well, and I suppose the distance between when the first part of
the incident had occurred and whether the second part of it is a
continuation of the first or whether there was a sufficient lapse
of time for people to say: well this was one massacre and then there
was another one. I mean I think it all...it becomes a rather
semantic debate. I mean, there was a tragic event that involved
a completely unacceptable loss of life and continues to be an extremely,
you know, an unsavory incident and where obviously a lot of people
were guilty of appalling behavior. Now whether it technically comprise
one or two massacres is something that I can't really answer.
MITCHELL:
The Bishop of East Timor says a new inquiry is needed. Do you think
there's any point in a new i