E&OE....................................................................................................
Thank you very much, Mr Brooks; to my colleagues, Gary Nairn and Bill
Heffernan; to Peter Cochran, the State Member for Monaro; to Mr Finemore
and to Mr and Mrs Rudd who've kindly made their premises available
for this morning's gathering.
The most important thing about the Government's tax plan is really
what was just said by Mr Brooks. It is a plan very much about the
future of the entire country. It is not just a plan that involves
a reduction in personal income tax. It's not just a plan that
involves sweeping away the rotten, inefficient, old-fashioned, indirect
tax system. It is not just about a plan that abolishes stamp duty
on all sorts of instruments levied by State governments. It's
not just a plan that gets rid of wholesale tax. It is, above everything
else, a plan about delivering to Australia a better and more exciting
economic future. It is an honest, comprehensive attempt to reform
the Australian taxation system in a permanent and decisive way.
We've had many attempts in the past. People have fiddled at the
edges with the Australian taxation system, but never before has a
government presented such a comprehensive plan which goes into every
aspect which needs change to reform the Australian taxation system.
The Australian public knows the system we now have is unfair. Overwhelmingly
Australians say change the present system, and they don't want
an attempt which simply offers something but doesn't attempt
to reform the system. And those who want to win public support, in
our view, have got to offer a comprehensive reform plan and not just
a tax cut here, a change there. What the Australian community now
wants, in the face of overwhelming evidence that the present system
is really reaching the stage of unworkability, what the Australian
public now wants is a fair, comprehensive change to the whole system.
And that is what our plan announced last Thursday offers.
As you know, ladies and gentlemen, one of the most evocative phrases
that has ever been coined about Australia was that phrase of our great
historian, Geoffrey Blainey, when he spoke of the tyranny of distance.
And he put that in the context of the Australian continent's
distance from the rest of the world at the time and also the vast
distances of our nation. And this tax plan tackles head-on the tyranny
of distance within Australia represented by the enormous transport
costs which affect the daily lives and the daily expenses of all Australians.
People ask how is it that if you're putting a 10 per cent GST
on, how is it that supermarket and other costs may only rise, and
all other costs may only rise across the board by something in the
order of 1.9 per cent. Well, one explanation is that it's been
estimated that 20 per cent of the cost of everything that is bought
in a supermarket is represented by transport costs. And if there's
one thing that this package addresses, and addresses in a full-blooded
way, is the cost of transportation within Australia.
Transport costs feed into the cost of virtually every item that Australians
buy in their daily lives. And this package, in a very comprehensive
and sweeping way, completely reconstructs the cost elements of goods
and services produced and delivered in Australia. To start with there
is a reduction from 43 to 18 cents a litre in the excise on diesel
fuel used in heavy transport including rail. There is the maintenance
and extension of the exemption on the payment of excise on diesel
used off-farm. And that is not only of benefit to the farmer but it's
also of benefit to the ferry and pleasure craft operator in the tourist
industry. It is of benefit in relation to the operating costs of power
generators. It is of benefit to many other aspects of the operating
costs of businesses throughout Australia.
But on top of that a perhaps, at this stage, little recognised and
little understood characteristic of the tax plan is that it will reduce
the costs of every litre of fuel used in any business, anywhere in
Australia by seven cents. And that is because the excise on petrol
will be lowered by the amount required to allow the GST to be applied
so that the price at the pump doesn't go up and that amount that
has got to be lowered by is seven cents. And now you'll be able,
as a business operator because it's a GST, to be able to obtain
a full rebate of the GST that you pay on petrol because it's
an input cost to the operating costs of your business.
So every single business in Australia will find that the net cost
of fuel is reduced by seven cents a litre and that is over and above,
over and above, the particular changes that are made in relation to
the cost of diesel, the excise on diesel in heavy transport, rail
and those other uses.
Now, the impact of this on country Australia, the impact of this on
the bush, is enormous. It will flow through every part of the cost
structure of regional Australia. It will represent the biggest single
injection of change to bring about a reduction of the operating costs
of businesses in rural and regional Australia that any government
has ever offered. And it is on top, of course, of the significant
reductions in interest rates which have been enjoyed by businesses
and farmers throughout Australia over the last two-and-a-quarter years.
Now, of course, I hasten to add that, as in common with all other
sections of the Australian community, people operating businesses
and farms within rural and regional Australia will also enjoy the
benefits and will also enjoy the credits that are involved in our
planned changes to the personal income tax scales.
But the significance to the transport industry of these changes is
quite historic. They will bring about a reduction of something like
six to seven per cent in the costs of transport throughout Australia.
And that applies whether you're in the bush or whether you're
in the metropolitan areas of Australia. But it stands to reason that
those parts of Australia which require the transportation over long
distances of goods from one point to another will obviously gain,
in proportionate terms, much more than other parts of the Australian
community.
And I have, in the 24 years that I've been in Parliament, I've
been in receipt of almost consistent complaints from people who live
in country areas of our nation about the additional costs that they
have to pay because goods have got to travel longer distances before
they are put into production activity or they are consumed. And what
this particular part of the tax plan does, ladies and gentlemen, is
to deliver a very, very heavy blow in favour of reduced costs. It
delivers more through reduced cost structure for regional and rural
Australia than any other particular measure that any government has
offered since World War II. And the benefits to the Australian economy
of that are enormous. And they're not benefits that are limited
to rural Australia. They are enormous export benefits.
One of the features of this plan is that it will reduce the annual
cost of Australian exports by an estimated $4.5 billion. It will reduce
the total costs of Australian business by an estimated $10 billion.
Because I have to stress again and again that what you will now get
under this plan if you run a business, is a capacity to get a full
rebate of tax paid on your input costs. Whereas under the existing
ramshackle wholesale tax system there are some rebates in relation
to manufacturers inputs but there are many things that you have to
buy in order to produce your goods on which you pay wholesale tax
of up to 22 or 32 per cent and you don't get any of that back
from the taxation department by way of a rebate. But that will all
be swept away, and under the new plan the 10 per cent that is paid
will be fully rebateable because it is paid on an input to your business
activity, and that is the great virtue for business and therefore
for the Australian economy of having a GST instead of the existing
wholesale taxes.
And there is no way that any alternative plan can deliver those $10,000
million of savings for business or those $4.5 billion savings for
our export industry without the introduction of a broad-based goods
and services tax. You can't stand up and say to the Australian
people: we want to reduce business costs but we won't have a
GST. You have to face the moment of truth. You either are serious
about taxation reform or you want to fiddle at the edges. You either
want to say to the Australian people: we will give you tax relief
with reform or we will try and kid you that we can give you tax relief
without reform. Well, that option is no longer available and the Australian
people will, I believe, understand that in the weeks ahead. And I'm
sure that the transport industry understands the enormous value to
their business and the enormous business to Australia of us being
able to offer this kind of sweeping change to their cost structure.
The last thing I want to say, ladies and gentlemen, is that the plan
I announced on the Government's behalf last Thursday is not something
that stands out there alone, it is the next necessary step in making
our country stronger. It's the next essential step in making
our country more competitive and it is the next necessary step in
ensuring that we have the best possible protection against the impact
of the Asian economic downturn.
In the two and a quarter years we've been in office we've
turned the deficit of $10.5 billion into a surplus of $2.7 billion.
We've produced the lowest interest rates in 30 years. We've
generated 300,000 more jobs. We've created economic conditions
that have the lowest inflation rate in the industrialised world and
a historically high level of business investment. Our opponents who
left us with that huge deficit have simultaneously said that we shouldn't
have got the budget into surplus but they are, at the same time expressing
or shedding crocodile tears about the preservation of that surplus.
We have the runs on the board in terms of economic management and
what we're offering to the Australian public with this tax plan
is not a gimmick, is not just a tax handout without reform but a genuine,
long-term, for the future of Australia, restructuring of our taxation
system. And if I wanted the Australian people to have one view and
one view alone of our tax plan, I would want them to see it as an
attempt, for the sake of Australia, to give this country, for the
long-term, for the 21st Century, a taxation system that
recognises the nature of the Australian nation, the size of the Australian
nation, the distances to be traveled within the Australian nation,
and a taxation system designed for all of us to produce a stronger
and more economically viable Australia into the 21st Century.
It's a great plan for Australia and for the sake of Australia's
future, it deserves your support. Thank you.
[Ends]