PM Transcripts

Transcripts from the Prime Ministers of Australia

Howard, John

Period of Service: 11/03/1996 - 03/12/2007
Release Date:
29/07/1998
Release Type:
Interview
Transcript ID:
10764
Released by:
  • Howard, John Winston
TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP INTERVIEW WITH RAY HADLEY RADIO 2UE

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

HADLEY:

May I say firstly thank you for that, it was fantastic to read

in the Telegraph after a story yesterday, I think in the

Women's Weekly, that your wife has made a full and complete

recovery and our best wishes go to her.

PRIME MINISTER:

Well, that's very nice of you. We all hope that's the

case. She did have a bad operation a couple of years ago. She's

a private person. She's spoken about it for the first time

in this interview. She doesn't want to say a lot about it.

Life moves on, but we are very grateful that the prognosis is very

good. She's had a lot of love and support from those around

her and we're very grateful to have her with us and for many

years into the future we all hope.

HADLEY:

I think your wife probably represents to many people who don't

even know her, what all our Mums and our wives should be about .

She cares about her husband, she cares about her home, she cares

about her family but she's a person who is an individual and

strong and ....

PRIME MINISTER:

Absolutely. Absolutely. Janette is a very strong, intelligent woman.

She takes the view that the public voted for me, they didn't

vote for her, therefore the idea that the wife of a Prime Minister

rides on the back of his position in order to run her own agenda,

she takes the view that if you want to run your own agenda, you

run for office yourself. She thinks one politician in the family

is enough. But she is a wonderful companion to me, wonderful, and

an absolutely superb mother and I'm very grateful for all the

support and the love and the protection that she's given to

me and to our three children. I couldn't be more grateful for

that.

HADLEY:

I offered the opinion and the congratulations to yourself and Mr

Beazley earlier this week over a debate about some words uttered

by a former Prime Minister about the level to which you men have

risen in Parliament in Question Time and other areas. How do you

respond personally, and how do your family respond to the sort of

demeaning and insulting things that are said about you by someone

who should know better?

PRIME MINISTER:

Well, as always happens in a close family, you are always more

upset by what is said about those you love than what is said about

you. So my children and my wife from time to time no doubt get upset

and angry about what is said about me. They accept that that is

part of the territory. I try to avoid personal attacks. I disagree

with Mr Beazley's policies. I don't think I've been

guilty of personal attacks on him and I don't intend to. There's

plenty to attack him on on the policy front or his lack of policy

front, but you won't be finding from me insults of a personal

kind. I don't think that helps politics at all. In fact, it

has driven public esteem for politicians and politics down a lot

and if it is felt in the community that there has been a change

over the last two-and-a-quarter years on that front then I'm

very pleased because I've certainly tried and I'll go

on trying, and you won't get any personal abuse from me directed

at Mr Beazley.

HADLEY:

I think what people, I think you said just earlier there that it

is something perhaps people come to expect. Well, maybe we did,

but I don't think we should.

PRIME MINISTER:

No, I don't. And I think you'll be surprised. I think

all of us in public life will be surprised at the positive public

response if we do avoid the personal vitriol.

HADLEY:

Okay, to the most talked about issue on this programme this morning

and, perhaps, on open line programmes right across the country,

the GST. I've asked listeners to fax me, to phone me with their

concerns about it. The GST, there seems to be a great misunderstanding

from everyone. A retail tax. I had a fellow call me this morning

and said, "Look the bloke that chops down the tree, mills it,

turns it into a piece of furniture, is there 10 per cent all the

way down or just when it gets sold as a piece of furniture?"

PRIME MINISTER:

Well, it's – whatever the per cent is – all the

way down. But people in the chain until you get to the consumer

get a refund of what they pay and the tax is ultimately borne at

the retail or consumption level because that is the nature of the

tax. But you pay it at every point to make itself enforcing and

if you are in the middle of that supply chain and you paid it, then

you have an incentive to collect it from the person you on-sell

to because you then get a credit. So it has a self-policing characteristic.

The other thing that's got to be said about it is that if you

have a GST, the cost of some things will go up but the cost of a

lot of things will go down because there are a lot of hidden taxes.

I mean, it is no secret that if we introduce a GST we are going

to get rid of the wholesale sales tax. Now, the wholesale sales

tax has rates of 22 per cent, 32 per cent, 45 per cent. Now those

hidden taxes - they've been there so long people don't

know they exist - those hidden taxes, when you take them out of

things like toothpaste, you take them out of household utensils,

you take them out of videos, TV sets, then the price of those things

is going to go down. There will be other things where there is no

GST on them at the moment, I'm not going to go into exemptions

at this stage, but they will go up. But the overall result will

clearly be, because of the compensation that we have and the tax

cuts, the overall result will be that people will not be worse off,

they will be fully protected and, indeed, they will be pleasantly

surprised to find how beneficial the plan is to all of them.

HADLEY:

The exemptions, because it has to be broad-based to work, will

obviously be few and far between. It's been suggested that

health will be one area, education...

PRIME MINISTER:

Well, I won't, Ray, for reasons I hope your listeners understand,

I'm not going to try and tick things off now, to be fair to

the proper presentation of the plan. It goes without saying that

the broader the base, the lower the rate. And one of the reasons

why you have 22 per cent, 32 per cent, 45 per cent rates in the

present wholesale tax system is a lot of things aren't included

in the net and you'd have to keep ramping up the rates on those

other things and you create distortions in the economy. I mean,

it is a bit crook if you are involved in a business of selling some

of these items that carry 32 per cent and then other sections of

the economy are involved where there is no taxation liability at

all and that just creates absurd anomalies. I mean, the famous one

about you pay 22 per cent on the family car but if you are wealthy

enough to buy a Lear Jet you don't pay any wholesale tax on

that. You pay it on orange juice concentrate at 12 per cent but

you don't pay it on caviar. Now, those sort of examples just

scream an old-fashioned, out-of-date system, when the bulk of the

economy was manufacturing.

And the other weakness of the present system is that it kills our

exporters because we export overseas normally in competition with

countries that have equivalents of a goods and services tax and

their exporters don't bear any tax on the inputs to the production

of the goods they sell overseas, but ours do. And one of the enormous

boons out of a goods and services tax system is that the exporters

are relieved of their taxes on inputs and that is a huge benefit

for people involved in selling and, gee, the future of Australia

is all about selling overseas. If we can crack overseas markets

then we've got a real economic future. If we can't, then

we haven't. And that's one of the very strong reasons

why I'm so committed to tax reform.

HADLEY:

Theresa, a caller much earlier this morning, said what about the

State taxes and she's terrified about stamp duty in New South

Wales as it stands at the moment. Will there be a GST on the sale

of houses? If you buy a house for $200,000 are you looking down

the gun barrel of a GST?

PRIME MINISTER:

I guess once I start dealing with one, I'm under a moral obligation

to deal with all and I won't do that. I can say to her - Theresa

is it?

HADLEY:

Theresa.

PRIME MINISTER:

Theresa. Can I say to Theresa, wait until the whole plan comes

out and you will see it is very fair, there is full protection and

compensation for low-income earners. And that is something that

we've put a lot of effort into because we do not intend to

hurt the poor. We will protect the poor, encourage the thrifty,

hard-working, energetic people and give a real boost to Australia's

export prospects.

HADLEY:

Mimi said, along those lines, not disadvantaging the unemployed

and elderly, what guarantee that the rebate will match what they

actually pay in increased food costs...?

PRIME MINISTER:

Well, it will, it will. It will.

HADLEY:

It just will.

PRIME MINISTER:

It will.

HADLEY:

How long will they have to wait for that rebate?

PRIME MINISTER:

Look, we're obviously not going to hit people with some kind

of tax they're not now paying and then say wait six months

before you sort of get protection. Look, the whole thing will operate

in a way that people are not left worse off. There will be some

people worse off. The cheats will be worse off but people who are

paying their way and working hard and, particularly people on low

incomes, will be protected. I mean, we have no intention of introducing

a system that slugs the poor, that rides off the back of the poor.

We won't do that as a matter of moral commitment, nor would

we do it for other reasons.

HADLEY:

In various industries at the moment there's a black economy

and we've had one caller from New Zealand who suggested to

us, Ann it was, that the black economy is flourishing there under

a GST. That's in contrast to what we're being told. I

think there's probably a black economy flourishing under our

current tax system.

PRIME MINISTER:

Oh, well there is obviously a black economy in Australia and one

of the great advantages of a broadly based, indirect tax is that

you pay it on things...if you are into the black economy and

you are evading income tax and you buy, you know, some people go

out and spend an enormous amount of money on restaurant meals, they

might be into the black economy. Now, if they pay a GST on that,

I'm not saying whether they will or they won't under our

system, but for example, if they do, then the bloke who's into

the black and then spends $300 on an expensive night out for him

and his girlfriend, he pays a bit of tax that way, whereas under

the present system, he doesn't pay any. Now, I mean, that is

one crude example, but nonetheless, relevant example of how people

get caught and how the black economy gets caught. Now, I think there

are plenty of examples to demonstrate that the black economy will

be less under a tax reform plan.

HADLEY:

Still, it'll be there; we can't get rid of it.

PRIME MINISTER:

Well, look, you can't get rid of them. It's like saying

that any government can abolish all crime or whatever. Of course

you can't get rid of it entirely but you can massively reduce

it. And the only way you can reduce it massively is to have a broadly

based, indirect tax or a goods and services tax.

HADLEY:

Self-funded retirees. I know you can't get into specifics

but they are worried about land rates, body corporate fees, they

say they own their car, they own everything else and they're

not worried about rego, those sort of things...

PRIME MINISTER:

Well, Ray, I understand all of those concerns. They will all be

dealt with. And self-funded retirees are a group that we intend

to fully protect and compensate and when they see the details in

the plan, they will know that what I'm saying to them this

morning is absolutely right.

HADLEY:

Okay. I was, well, not horrified, but surprised recently at some

television pictures of David Kemp kissing a baby. Now, when David

Kemp kisses babies I have a feeling an election is not too far away.

Nice fella that he is...

PRIME MINISTER:

Yes, well he is a very nice fellow and he has a couple of fairly

young children. David was, on that particular occasion, he was actually

launching a whole set of work-for-the-dole projects and we are very

proud of the work-for-the-dole scheme. Mr Beazley doesn't like

it. He'll get rid of it. But we are very proud of it because

it helps to instill the work ethic in young unemployed people.

When will the election be? My stock response Ray is some time between

now and when it is due. It's due in March or April of next

year. I expect that we'll release the plan very soon and then

I want the Australian people to have a look at it. I don't

intend to drop the plan and then run off to the Governor General

the next day. I want people to have a look at it. I want them to

ask me questions about it. I want to have the opportunity of travelling

the country to explain it because it is a great plan that is going

to give Australia a much better economic future.

HADLEY:

We've had, I guess in some respects, some of the bad news

in the papers today and on radio and on television...

PRIME MINISTER:

Well, that's speculation. I mean, that hasn't come from

me.

HADLEY:

Would it be good speculation?

PRIME MINISTER:

Well, I neither confirm nor deny speculation but I do want to caution

people and say that, you know, there is a lot of stuff in papers.

It is speculation. There have been no authorised leaks.

HADLEY:

Well, just say there's an unauthorised leak...

PRIME MINISTER:

No unauthorised...

HADLEY:

Just say we've got the bad news today, when is the good news

going to come about those tax cuts?

PRIME MINISTER:

The plan will be all announced very soon and it will be announced

as a whole and I ask your listeners to look at it as a whole and

when they look at it as a whole, believe me, they'll see it

for what it is. It is a terrific plan to secure Australia's

economic future. It will contain personal income tax cuts, yes.

That was one of the five principles that I laid down. And those

tax will include especially fair treatment of families. That was

another principle that I laid down. Clearly it will, and it will

contain protection for unemployed people and for people who are

on other benefits. I mean, we're not going to leave those people

worse off. That would be unfair and it would be rightly criticised

and you can protect people. And I noticed the remark that was made,

which I appreciated very much, from Cardinal Clancy this morning.

I thought that the Catholic Bishops issued a very fair statement.

They said it was a question of waiting to see the entire plan. They

expressed their own preference in relation to certain things, I

understand that, but they then said, "well, we'll make

a judgment when we see the whole plan." They want the poor

protected, I understand that, and I say to them we will protect

the poor. But I thank them for saying that people should have a

look at the whole plan.

HADLEY:

We've implored people to do that, as well, today and yesterday

but, at the end of the day, we need taxation reform. If, as a whole,

the Australian community contributes a thousand dollars in tax,

under the new plan they are not going to contribute $894 or $906.

PRIME MINISTER:

Well, I can assure you of this at this stage, at least, that the

total tax burden is not going to rise.

HADLEY:

It's not going to increase?

PRIME MINISTER:

It's not going to increase. That was the first of the five

principles I laid down. So that is what I am willing to say now,

I'm willing to say that. When you see the details of the plan

then I ask people to make a judgment themselves about what's

happened to the overall tax take. We are not in the business of

putting up people's taxes. I mean, this government has not

increased any taxes, we've cut taxes for families, we've

cut capital gains tax, we've cut provisional tax. We are not

in the business of putting them up. What we want to do is to give

the nation a new tax system that will give it greater economic strength

for the next century. This is good for Australia as well as being

good for individual Australians.

HADLEY:

I know you are an optimist.

PRIME MINISTER:

Yes I am.

HADLEY:

St George charge into the grand final on September 27th,

they beat Brisbane thanks to a Anthony Mundine field goal, and there's

an election a fortnight later.

PRIME MINISTER:

Ah, gee. Well, it's a great idea. The only trouble is you

need to allow longer than

14 days between the calling of an election and the holding of an

election. Ray, all I can say is that whether you vote Labor or Liberal,

those followers of St George have been given great heart this year.

They really have behaved tremendously well and I, as their patron,

their very proud patron, am certainly cheering for them and I hope

that I'll be there. Well, I know a lot of Liberal and Labor

people will be cheering for St George in that last weekend in September.

HADLEY:

Well, that's why I say you're an optimist. See, I know

you can't do it in 14 days so you do it in a couple of weeks

and then you say, "Right we're in the grand final, then

we'll ride on the back of the election just after that."

PRIME MINISTER:

I think we'll - I'd better be careful what I say - I

might sort of set the tongues wagging but, Ray, we'll hold

the election at the right time. Jokes aside, I do want the people

of Australia to have plenty of time to look at our tax plan. They're

entitled to that. It is very comprehensive. It is the biggest change

to Australia's taxation system for a long time but it is not

a revolution. We don't want a revolution but we do need to

see it as the next step needed to protect Australia against the

Asian economic downturn and because of what's happening in

Asia we must reform the tax system. What's happening in Asia

is not a reason to stop the process of reform.

HADLEY:

Prime Minister, thank you very much for your time, we do appreciate

it.

PRIME MINISTER:

Thank you.

10764