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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.