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Transcript 10893

TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP ADDRESS TO THE NATION ON THE TAX PLAN

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 13/08/1998

Release Type: Speech

Transcript ID: 10893

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]

Transcript 10893