E&OE...
LIEBMANN:
Good morning to you.
PRIME MINISTER:
Hello Steve.
LIEBMANN:
Belatedly, happy New Year.
PRIME MINISTER:
And you too. Very good to be back.
LIEBMANN:
How much.....I'll find out about that in a moment. How much damage have the events of the past week or ten days, the confusion, the contradictions, the newspaper headlines, the negative headlines, how much has all that done?
PRIME MINISTER:
Well I don't think in the long run any real damage at all Steve. What you've got to remember is that we are embracing the biggest single change to Australia's taxation system ever. It will be of enormous economic benefit for this country. It will make our exports cheaper, our fuel in the bush cheaper, our business operating costs cheaper, and all Australians will participate in the biggest personal income tax cut in this country's history. Now that is the story. Of course you're going to have debate over individual aspects of it but we must never lose sight and I won't be, that the goal, you know, the end game of all of this is to give this country a more competitive taxation system for the 21st century. And that is what I'm committed to and I want the Australian public to know from day one of my return that I am absolutely irrevocably committed to this new tax system because I believe in it and I believe it will be good for our country. That is why I am committed to it.
LIEBMANN:
Okay that's the big picture story.
PRIME MINISTER:
But it's also the main story.
LIEBMANN:
But public confidence in the GST I would suggest to you at the moment needs to be restored.
PRIME MINISTER:
Well Steve, public confidence is often in the eye of the beholder. I mean if you look at the public's judgement, we did go to the last election, we won that election with it. It has been passed through the Parliament. We're not now talking about something that might happen. We're talking about something which is now the law of the Commonwealth of Australia. It was passed through the Parliament. Of course you're going to have debate over individual items.
LIEBMANN:
But a lot of items.
PRIME MINISTER:
Yeah but Steve, well, because it is a major overhaul of the system. I mean the whole idea of a broad based indirect tax being part of tax reform is to tax everything at a relatively low rate and get rid of the ramshackle system at the moment where you have some things taxed at over 40% and some things zero rated. And to establish a system whereby you can make our exports cheaper, our business operating costs lower and in the process give everybody a $12 billion, give people a $12 billion tax cut where 80% of the Australian community will be on a top marginal tax rate of 30 cents in the dollar or less. Now that is revolutionary in a beneficial sense.
LIEBMANN:
But when there's been confusion over rounding up, over the GST and local government, over....
PRIME MINISTER:
Well there's no confusion about GST on local government. We laid down a principle that things like water and sewerage rates and municipal rates would not be liable to the GST. But where a fee for service was being....where a fee for service was being charged there would be a GST. And we said that well before the 1st of July, and I say now it will be quite soon, the Treasurer would be releasing a detailed outline of the implementation of that overall principle. There has never been any confusion. I mean what you've got to understand Steve is there are plenty of people out there who are trying to destroy this politically. The Labor Party, Bob Carr the New South Wales Premier made an allegation about small business last week. I've read that report and that report in fact finds that the businesses reported that the implementation costs were not going to be as great as they expected. I mean if you actually read the full extent of that report....
LIEBMANN:
But surely Prime Minister that's your problem. You're waking up every morning to a new headline. Claims that rents are going to rise by more than twice your Government predicted. I mean as recently as.....
PRIME MINISTER:
But Steve I expected this. I mean we are playing for high stakes, yet the Labor Party doesn't have an alternative taxation policy. They have one policy for the next election - try to create as much fear and loathing about the GST. Hang the public interest, forget about the long-term economic benefit for the country, forget about the personal tax cuts. I mean Mr Carr wants the extra money that the GST will give him and so he should. The people of New South Wales should be saying to him we want that extra money for our government schools, for our public hospital system and so forth. The States will be better off because they will get the GST.
LIEBMANN:
Are you going to reconsider the GST on tampons?
PRIME MINISTER:
No, well I don't believe there's any case for doing that.
LIEBMANN:
What is the difference between, and I don't want to get in....
PRIME MINISTER:
No no [inaudible].
LIEBMANN:
....okay, difference between tampons and toilet paper?
PRIME MINISTER:
Well Steve as far....I mean I think the GST should cover just about everything. And you'll remember that that was our original idea and that the Democrats said no, we won't pass it unless we take certain things out. But people, for example, have argued that you should, you know, if you don't have a GST on condoms why should you have them on tampons. Now, my argument is that initially we didn't want that anomaly. We wanted it to apply and in the course of the discussions with the Democrats they said no, we want it taken off condoms we want it taken off a few other things as well. Now, if you agree to take it off, say tampons, then within a few days somebody will mount a case to take it off something else and the whole thing then comes under challenge. See the whole essence of a goods and services tax remember is to have it on effectively everything at a relatively low rate so you can get rid of these very, very high rates on some things which distort economic choice. I mean, of course if you look at tampons in isolation just as you look at something else in isolation you can mount an argument to take the tax off it. I can mount an argument to take the tax off children's clothes. I can mount an argument to take the tax off old people's clothes. I can mount an argument of a whole lot of things. But we have had that argument and if you start doing that you will have no GST in the end and the whole system will begin to unravel.
LIEBMANN:
So do you stand, this morning, stand by that undertaking you gave all Australians that no Australian will be worse off under a GST?
PRIME MINISTER:
Except tax cheats.
LIEBMANN:
Except tax cheats. And no price will rise by more than 10 per cent.
PRIME MINISTER:
We are committed to all of those undertakings and that is why we acted in relation to this rounding up issue. There's no way that in the process of any kind of rounding up that business is going to be allowed to produce a situation where something goes up by more than 10 per cent.
LIEBMANN:
Why won't you...I mean, Labor is now saying they are going to try again to legislate to have the GST identified on price tags. Why won't you allow that?
PRIME MINISTER:
Well, other countries that have the system we are adopting don't do it. Of course the Labor Party is trying to...
LIEBMANN:
It's not a bad argument for it unless you don't want the Australian public to know.
PRIME MINISTER:
No, no. That is not the case. You don't have the wholesale tax component on the price tag now and we have had that system since the 1930s. I mean, if the Labor Party was so committed to it why didn't they when they were in office do it on the wholesale sales tax.
LIEBMANN:
GST is due to come in July 1, you're due to go to London. The timing is not good.
PRIME MINISTER:
But, Steve, the real work in relation to getting everything ready will occur before the 1st of July. I mean, let's face it, if the 1st of July goes well, and I am sure it will, because this is a win for the Australian community.
LIEBMANN:
It could be a loss for you.
PRIME MINISTER:
Steve, I don't believe...but leave me out of it. I mean, in the end you go into public life to do good things for the country.
LIEBMANN:
But electorally it could cost you.
PRIME MINISTER:
Steve, I took a risk on this electorally at the last election, a huge risk, and the Australian public voted for it because we convinced them that it was good for Australia. Now, that remains my view and that is why I will be spending the next six months responding to people's concern but also pointing out the enormous benefits.
LIEBMANN:
A couple of quickies. Are you happy with the position that Mobil has taken on this avgas crisis, I mean, very few operators have seen the colour of Mobil's money and they will not talk compensation.
PRIME MINISTER:
Well, I am not prepared to say yes or no to that until I have got more briefing today. I am pleased that we appear to be getting towards some return to the air and that's very desirable but until I get more information, particularly from John Anderson, I am not going to say yes or no to that.
LIEBMANN:
Finally, tomorrow night you will announce the Australian of the Year would you like just for a change that person not to be a sportsman or a sportswoman or an entertainer, just for a change?
PRIME MINISTER:
Well, I won't try and pre-empt who it is that I have been informed, although I had no role in the choice, I have been informed who it is.
LIEBMANN:
But just for a change a real Australian.
PRIME MINISTER:
Well, hang on, frequently it is. I mean Peter Hollingworth didn't come into that category. Peter Doherty a Noble prize winner, he didn't come into...
LIEBMANN:
Apart from that?
PRIME MINISTER:
Well, that's two. And I think if you go back over the years the late Professor Sir John Crawford, that's three. Manning Clark, four. We've had aboriginal leaders, five. I think it's a bit of a distortion to say it's always been an entertainer...
LIEBMANN:
I didn't say always. We'll know tomorrow night.
PRIME MINISTER:
Indeed.
LIEBMANN:
Good to see you.
PRIME MINISTER:
Thank you.
[ends]
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