E&OE....................................................................................................
PEACOCK:
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.
PRIME MINISTER:
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'
Conference.
PEACOCK:
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?
PRIME MINISTER:
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.
PEACOCK:
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.
PRIME MINISTER:
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.
PEACOCK:
$1.5 billion and plus?
PRIME MINISTER:
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.
PEACOCK:
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?
PRIME MINISTER:
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
families.
PEACOCK:
If they restricted it to food, would that give you room to talk?
PRIME MINISTER:
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.
PEACOCK:
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?
PRIME MINISTER:
...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...
PEACOCK:
This weekend?
PRIME MINISTER:
... 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.
PEACOCK:
Have you left your run a little late here? I mean, have you given
up on Senator Harradine now?
PRIME MINISTER:
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.
PEACOCK:
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?
PRIME MINISTER:
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.
PEACOCK:
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?
PRIME MINISTER:
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...
PEACOCK:
But you're not ruling out personal income tax of some form
without the GST?
PRIME MINISTER:
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.
PEACOCK:
And in the end you're not frightened of a double dissolution
on this issue.
PRIME MINISTER:
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.
PEACOCK:
Do you need a referendum, do you think, another question on the
Senate powers?
PRIME MINISTER:
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.
PEACOCK:
Prime Minister, thanks very much for joining us.
PRIME MINISTER:
You're welcome.
[ends]