E&OE....................................................................................................
Good Evening.
Tonight I want to talk to you about a plan that will help all Australians.
The economic troubles in Asia have brought home to all of us just
how important it is to have a strong and competitive Australian economy.
The Government has already got rid of the budget deficit we inherited,
delivered the lowest interest rates in 30 years and created 300,000
new jobs.
The next step is to fix the tax system, which has been holding us
back.
It's unfair, discourages hard work and penalises our exporters
at the very time when Australia must sell more abroad to do well.
We need a clean break with the past and the tax plan announced today
will create a new fairer tax system for the 21st century.
To start with, we will cut personal income tax by over $13 billion
a year. The tax free threshold will rise to $6,000 and all except
the top tax rate will come down.
Over 80 per cent of taxpayers will pay a top rate of only 30 cents
in the dollar or less and this means a person's income could
rise from $20,000 to $50,000 a year without that person going into
a higher tax bracket, and that's a huge incentive.
There are extra benefits for families.
Under our plan typical Australian families with either one or both
parents in the workforce will be $40 to $50 a week better off even
after GST.
A single income family with one child under five will have the first
$13,000 of income completely tax free. Benefits for childcare will
be improved and there will be no GST on childcare.
I have always believed passionately that Australians should be encouraged
to take out private health insurance. It provides doctor of choice,
and takes pressure off the public hospitals.
Tonight I announce that from January next year there will be a 30
per cent tax rebate or benefit for private health insurance. For more
than 80 per cent of taxpayers this will be at least equal to or better
than full tax deductibility. It will be worth around $600 a year for
a health policy costing $2,000.
This incentive will be available to everyone.
We will replace ten hidden, indirect taxes with one ten per cent goods
and services tax.
The GST will not be an extra tax on top of existing taxes. The wholesale
sales tax will be swept away and with it nine state and territory
taxes such as those on bank accounts, stamp duties on mortgages, and
bed taxes.
Health, education, childcare, hospitals, nursing homes and hostels,
local government rates, water and sewerage rates and charitable activities
will all be free of the GST.
The GST rate will be locked in at 10 per cent because the law will
be changed to stop the rate being increased by anyone without the
full agreement of all State and Territory Governments, as well as
the Federal Government and both Houses of the Federal Parliament.
Many goods will fall in price. A family car, for example, will now
be taxed at
10 per cent, not the old wholesale rate of 22 per cent. But a luxury
car tax will stay.
All up, the increase in the cost of living has been estimated at just
under two per cent. And there will be new special powers to stop unscrupulous
people exploiting the changes.
The new tax system will start on July the 1st of July,
2000. And we will catch more of the cash economy at least $3
billion over 3 years. And remember that without the GST that would
not be possible.
Pensioners and low income earners will be more than fully protected.
Pensions and allowances will rise by four per cent when the new plan
starts so that they are well ahead of any increase in the cost of
living.
The age pension will rise by up to $15.50 a fortnight for singles
and $25.50 a fortnight for couples.
On top of that single pensioners and self-funded retirees will receive
an extra tax rebate of $250 a year while for couples the extra rebate
will be $350.
Also people over 60 with investment income will receive a one off
income tested savings bonus of up to $1,000. For self funded retirees
of pensionable age, the savings bonus will be up to $3,000. There
will be an extra benefit for retired people with shares. And provisional
tax will be totally abolished.
The typical part pensioner couple with $10,000 of investment income
will be $23 a week better off, after the GST, and better off still,
if they have private health insurance.
The bush will get a major boost.
Fuel excise will be reduced by about $3.5 billion a year.
There will be a diesel fuel credit reducing the cost of diesel fuel
used in heavy road and rail transport by 25 cents a litre. The excise
on diesel fuel used off road by farmers and other business will be
fully rebated. Hospitals and others, such as ferry and marine operators,
will benefit.
For all businesses the cost of petrol will fall by about seven cents
a litre. The GST will not increase the price of petrol for the ordinary
motorist.
Small business will gain significantly.
$10 billion of taxes on business will be removed. Costs for exporters
will fall by
$4.5 billion a year.
The new plan will improve cashflow for most businesses and there will
be a special fund of $500 million to reduce any start up costs.
Ours is a unique country, with immense resources, a diverse, well-educated
people and almost limitless possibilities.
It deserves a better and fairer tax system for the next century. Our
plan will help give the nation that future.
[Ends]