E&OE....................
Good evening. As Australians we have every reason to be very optimistic
about the future. No country in the world has better prospects as
we enter the new century.
We are a united, resourceful and talented people. Our economic strength
as a country is undoubted as we now enjoy the strongest economic fundamentals
in a generation.
We have:
* the lowest unemployment rate in almost a decade;
* the lowest number of unemployed teenagers looking for full-time
work in over 20 years; and
* the lowest levels of inflation and interest rates in around
30 years.
These strong economic results have not come about by accident. They
are the result of sensible and practical reforms in earlier years
including strong but fair decisions to return the budget to surplus
and to remove the debt burden on future generations.
Just as past decisions have produced today's economic strength so
it is that the right decisions taken today will deliver an even stronger
economy in the future.
That is why Australia needs taxation reform because that reform will
deliver an even stronger and better Australian economy tomorrow.
That is why I committed the Government to a plan for a new tax system
before the last election.
A plan to put behind us once and for all an outdated, complex and
unfair taxation system.
A plan to reward Australian workers who have endured high rates of
personal income tax, to encourage Australian exporters to take on
the world without an inefficient wholesale sales tax system, and to
give Australian families even more choice about how they raise their
children.
I can report to you tonight that our new tax system has become law.
From July next year Australia will have a modern, fairer and simpler
taxation system - one that is good for Australia.
The new system will strengthen the Australian economy because it will
cut the cost of exports, reduce business costs and, through lower
personal tax, give middle Australia more incentive.
At the heart of our new tax system lies the largest personal income
tax cut in Australia's history - $12 billion - to give Australian
workers genuine reward for their efforts.
At present, 80 per cent of all Australians earn less than $50,000
a year. Depending on their income their top tax rate can be up to
43 cents in the dollar. Under our plan it can be no more than 30 cents
in the dollar. We propose that between $20,000 and $50,000 a year
workers will be able to earn more without paying a higher rate of
tax.
Families with children are the greatest beneficiaries of our tax plan.
In addition to lower income tax, families will receive $2.5 billion
more in family benefits each year.
Parents will enjoy greater choice as to whether they stay at home
when their children are young and will not be penalised should they
choose to rejoin the workforce.
Families already benefit from our 30 per cent rebate for private health
insurance which rewards those who take personal responsibility for
their family's health care.
From July next year the 10 per cent Goods and Services Tax replaces
the ramshackle, hidden, wholesales sales tax, with all its six rates
with many household items taxed at 32 per cent.
When the hidden tax is abolished, many everyday household items will
actually fall in price.
Fresh food, as well as health, education, childcare, nursing homes
and hostels, local government rates, water and sewerage charges and
charitable activities will all be free of the GST.
It is expected that next month the price of goods such as radios,
televisions and video recorders will fall when the 32 per cent rate
of wholesale sales tax is reduced to 22 per cent on the way to its
complete abolition.
We have ensured that the rate of the GST is locked in at 10 per cent.
Overall, under our new tax system, typical families with either one
or both parents in the workforce, will be $40 to $50 a week better
off even after the GST.
Our new tax system also protects older Australians, pensioners and
low income earners.
From July next year pensions will be increased by 4 per cent and we
guarantee that they will always remain 2 per cent ahead of any rise
in the cost of living.
We will provide additional tax rebates for pensioners and self funded
retirees and a one off savings bonus. Older Australians as well as
many small businesses will also benefit from the abolition of provisional
taxation.
Our tax plan also recognises the special needs of the bush.
The cost of diesel excise for heavy transport will fall by 23 cents
a litre and the cost of petrol used in the commercial operations of
farmers and other businesses by about 7 cents a litre.
We are also completely removing excise from the rail sector.
More than $7 billion of taxes a year will be removed from business
and costs for exporters will fall by several billion dollars a year.
This will help Australian business to take on the world, generate
profits and create more jobs, especially for our young.
To help small business and others adapt to the new tax system we will
provide $500 million for start up costs.
Our agreement with the states and territories will at last give them
a secure revenue base to provide the essential community services
such as roads, police, schools and hospitals that we all know are
needed.
Never have I been more convinced that we are doing the right thing
for Australia than I am on taxation reform. We have done much to restore
the economic foundations of our country. Now we have created a new
tax system which will make those foundations even stronger for the
future.
But there is more to be done.
We can only realise our full potential as a nation if we continue
to seize at every opportunity the chances that lie before us.
And my Government will not rest in its efforts to improve Australia's
prospects. We will continue to govern in the national interest, hard
at work for an even stronger Australia. Good night.