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Transcripts from the Prime Ministers of Australia

Transcript 11061


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: 17/05/1999

Release Type: Interview

Transcript ID: 11061



Prime Minister, thanks for joining us. Just how live an option

is a double dissolution? We heard Senator Ron Boswell today saying

it would be better to have no GST than half the GST and we should

see the Government come out with its guns blazing to an election.


Well, there are no degrees of being alive, Matt. There are a whole

lot of options. The need for taxation reform has not changed. The

implications of losing this opportunity for tax reform should be

fully understood by the Australian people and we'll certainly

be spending a bit of time over this week driving home to the Australian

community just what is at stake not only for our economy long-run

but for our exporters, for the costs of doing business, for the

States. And one of the consequences of losing tax reform is that

an historic opportunity to provide a secure funding base for the

States so that they can provide increased support for hospitals

and government schools and police, that is also something that is

at risk. That is why the State Premiers, Labor and Liberal alike,

were all very willing to sign the agreement when we had our Premiers'



And they've already expressed concern, I note, in the last

24 hours. You were obviously surprised by Senator Harradine's

decision. Had you ever considered, until you got his phone call,

that he might say no?


Well, of course I had. I have always regarded it as an on-balance

thing with Senator Harradine. I think you will remember, and I draw

your attention to the fact, that whenever I was asked whether I

was confident I always said that I was hopeful but never over-confident

because I knew he had reservations about a tax reform package that

included a goods and services tax. He said so before the election.

But he also said before the election that the Government was right

to put the matter to the people and I hoped that the thing that,

in the final analysis, would tilt him in our direction was the fact

that we had been so honest and upfront and transparent and had made

such full disclosure before the election. I think this is a very

crucial point, Matt, that it's one thing to say, when you're

in the Senate, no to a government when it hasn't been completely

honest and forthcoming before a poll. I mean, if I'd just gone

to the last election and said in general terms I'm going to

reform the tax system, I'm going to cut people's tax and

rationalise the indirect tax system and nothing more and then when

the fine detail came it was the package, then I could understand

people saying, ‘hang on, you didn't tell us the whole

thing.' But I knew people might say that and that is why I

went to the last election with such a detailed package because I

knew we weren't going to win a majority in our own right in

the Senate. I mean, that's impossible under the present voting

system as a result of the enlarged Senate from 1984. I knew, therefore,

my best hope lay in telling the full thing to the Australian people

and then saying to the Senate, we made full disclosure, you really

do have a moral obligation to pass our legislation.


But there was more to disclose, wasn't there? In the end

you gave Senator Harradine most of what he wanted and then were

prepared to talk more. I mean, you offered something like $1.5 billion

more than what we were told at the election and that was for pensioners

and all those things that the Democrats and Labor have been saying

were getting dudded.


It's not what they want because if it was what they want

they would now say they'll pass the package. We went to the

election with a completely fair and balanced package and that is

what we presented to the Parliament. And we offered some more compensation

because people had said they wanted more, not because we believed

it was essential but, I mean, it stands to reason if you want, in

the face of questions people ask, if you want to get something through

it's silly not to offer a little bit, what I call fine-tuning,

a little bit extra.


$1.5 billion and plus?


In the overall scheme of the plan, Matt, it was not a large amount,

although it's significant. But you now have a situation where

the Government made full disclosure to the Australian people. We

didn't hold anything back and we now face a situation where

having been honest, having been candid and upfront and forthright,

we are now facing the prospect that the package will not be accepted

by the Senate.


Well, why not do what Peter Reith did with Cheryl Kernot and,

to use your words, offer a little bit to the Democrats, how about

a little bit of food?


Well, Matt, the Democrats' demands go far beyond food. The

Democrats want not only exemptions in relation to food and other

things but they also want a radical change to the tax scales that

we propose. They have what I regard as strange ideas about what

represents a high family income. We don't think family incomes

around $50,000 a year are high these days with so many two-income



If they restricted it to food, would that give you room to talk?


I'm not going to get into a hypothetical with you on this

or that. I'm simply making the observation that although of

course we'll have talks with the Democrats – Peter Costello

has already had discussions with Senator Lees – and we'll

have further discussions with the Democrats, we're perfectly

happy to do that, but I think the public should understand that

there's a huge gulf between what the Government would regard

as a reasonable maintenance of its package and what the Democrats

really want. And certainly their objections in relation to the fuel

proposals are quite unacceptable to the Government. We made certain

commitments to the bush and they were made by me in the name of

the whole Government and we certainly do not intend to walk away

from the commitments that we have made to the bush.


But the Democrats are saying that their fuel proposal only applies

to the city, why would the bush care if bus drivers in the city

have to pay more?


...she wants to hack into also will damage the bush if they're

hacked into. So, look, Matt, there is a long agenda that the Democrats

have and, as I say, we'll naturally talk to them, of course.

And Peter Costello has already had, as I understand it, a number

of lengthy discussions with Senator Lees...


This weekend?


... of course we'll talk, but I think people should understand

that there is quite a significant gulf and there does come a point

where a fundamental reform loses its fundamental elements and loses

the long-term value to the economy if it is significantly eroded

by too many compromises.


Have you left your run a little late here? I mean, have you given

up on Senator Harradine now?


Well, Senator Harradine made it perfectly clear to me that in

the end his fundamental objection to a GST was greater than any

other consideration. Now, I must accept his word. I had hoped on

balance that he would respect the Government's mandate and

that that respect would be greater than his concerns, particularly

after we made an increase in the compensation – we offered

an increase in the compensation. So I don't think on the basis

of anything that Senator Harradine said to me on Friday – he

made it very clear to me when I said to him, ‘Brian, does this

mean you will vote against the third reading?' He said, ‘yes,

it does.' And then he subsequently made comments over the weekend

about his feelings about the impersonal nature of a GST. I might

remind him that a wholesale sales tax has an indirect and impersonal

nature too. And he seeks guarantees that things won't be removed,

well, there's no guarantee if the present taxation system continues

that a future Labor government won't do what it did in 1993

and increase wholesale sales tax without any compensation. There

are no guarantees of anything in these areas if there's a change

of government.


Prime Minister, your timetable's already been thrown out.

The train carriages may already be backing up in the tunnel, particularly

if you're going to talk to the Democrats. How will this affect

business certainty?


Well, I think business will be very disappointed but I don't

think it's going to unsettle the business community. Business

wants tax reform but business has got to live with the political

process as we have. And I don't see any signs at the moment,

other than that we have a booming business sector around this country,

we have the best economic conditions for 30 or 40 years. I don't

find any signs of trepidation within the business community.


And yet your Treasurer says taxes will go up, yet John Anderson

says you've got room to move to give the tax cuts now?


Well, quite clearly, Matt, if we don't reform the indirect

tax system for the States the way we want to do it State taxes over

time could go up and there's nothing inconsistent in those

two propositions, nothing at all. There's always some capacity

to make taxation changes without fundamental reform and that's

all that John was referring to yesterday but you won't get

$13 billion of personal tax cuts. You won't get $4.5 billion

taken off exports. You won't get a reformation...


But you're not ruling out personal income tax of some form

without the GST?


Matt, I'm not contemplating anything without our package.

I want to make it very clear that my commitment to getting the package

remains very strong. The Treasurer's commitment remains very

strong. We had a lengthy discussion about the matter yesterday and

we both remain very strongly committed to this package. Now, we

are disappointed that Senator Harradine decided on balance not to

accept the mandate we were given by the people last October and

we'll now pursue alternatives. We'll talk to the Australian

Democrats but I warn and caution immediately that I don't believe

it's likely that we can find common ground because the demands

that they are making are way beyond what we could contemplate without

fundamentally altering the package.


And in the end you're not frightened of a double dissolution

on this issue.


Matt, I said on Friday that all things remain live options. We

shouldn't have to go to another election. We fought an election

on the GST last October. We are the only government since federation

that has gone to the people with such a detailed alternative plan

down to the last decimal point, describing all of the changes we

want to make. We put it all on the table knowing full well that

we wouldn't win control of both Houses but thinking in good

faith that if we disclosed everything to the Australian people and

won the election then we would at least be able to say to the Senators

we've made full disclosure, we got our mandate, you have an

obligation to pass it. Could I just say one other thing about the

Senate. I heard this morning that Mr Beattie and other Premiers

are calling for a Premiers' Conference. There's no point

in having another Premiers' Conference. We had one in April.

What I suggest the Premiers do is to have conferences of their Senators,

the Senators from each of their States and to line them up, Labor

and Liberal alike, and tell them the facts of life for their State

revenues and their State finances. Mr Beattie should tell the Queensland

Labor Party Senators that he signed on to a deal that will massively

advantage Queensland for years into the future and that if his Labor

Senators vote against that plan and his Democrat Senators vote against

that plan they will be hurting Queensland and hurting the people

of Queensland. And I would offer the same advice to Mr Carr in New

South Wales, to Mr Court in Western Australia who has been an enthusiastic

supporter of our program and I acknowledge that because there's

a lot at stake in this for the States. The original idea of the

Senate was that it was meant to represent the interest of the States.


Do you need a referendum, do you think, another question on the

Senate powers?


What we want is some acceptance of the responsibilities that Senators

have both in relation to taking notice of the decision of the voters

in elections and also in looking after the interests of their States.


Prime Minister, thanks very much for joining us.


You're welcome.


Transcript 11061