Subjects: Cheryl Kernot's comments; superannuation; Centenary of Federation; tax effective schemes; Fremantle Barracks
E&OE................................
BARTLETT:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, Liam, nice to be with you again.
BARTLETT:
Thanks very much for talking with us. I would have thought you'd still be smiling after hearing Cheryl Kernot's comments yesterday criticising her own Party's leadership.
PRIME MINISTER:
Oh yes. It was another ill-disciplined outburst. That's really a matter for Mr Beazley to deal with. But she basically said he was a dud, and I expect her to say I'm a dud because she's a member of the Labor Party frontbench, but it's pretty extraordinary that she said he was a dud. It sounds to me as though she's sort of feeling a bit nostalgic about the Democrats.
BARTLETT:
What would you have done if it was one of your MPs?
PRIME MINISTER:
Well, it hasn't happened so I don't deal with hypothetical questions. But I'm really more interested in the choice that people have to make, over the remaining months of this year, between the Coalition and the Labor Party as the future Government of Australia. And with suggestions within the Labor Party that they're going to slug small business by increasing the superannuation guarantee charge from 9% to 15% - Mr Beazley's trying to put it back into the box but.
BARTLETT:
Well, they have ruled that out, haven't they, publicly?
PRIME MINISTER:
Well, Mr Beazley's ruled it out but Simon Crean raised it on the weekend and Sharon Burrows, the President of the ACTU, wants it. You've got to remember that if Labor wins the Federal election at the end of this year you will have, in five of the six Australian States, including in Western Australia, you'll have the double whammy of Labor governments at both a State and a Federal level.
BARTLETT:
Well, Simon Crean said on AM yesterday it was absolutely not on, the move from 9% to 15%. Kim Beazley has said, since that interview, it's also absolutely not on - he's completely ruled it out. I mean, are you saying that we shouldn't be believing them?
PRIME MINISTER:
Well, why did Simon Crean say in his weekend interview with Paul Kelly that it had to go above 9% and why did he look back in earlier comments to previous Labor policy which was to take it to 15%? I suggest that the reason why they're now trying to put it back into the box is they realise it's damaging for their pitch to small business. And it's also damaging when they're trying to claim that they will be able to get unemployment down to a level of 5% because if you increase this charge - economists estimate that every 1% effects employment to the tune of about half a percent and that adds up, in 6%, to about 200,000 jobs over the period that the levy might go up from 9% to 15%. I mean, the old adage is where there's smoke there is fire.
BARTLETT:
Well, that's the worst case scenario and obviously a very good scare campaign for your side in the lead up to the election.
PRIME MINISTER:
We're dealing with the reality, Liam, that if Labor wins the next Federal election you'll have, essentially, wall-to-wall Labor governments, a blanket Labor coverage all over the country. And the union movement, which has great control over the Labor Party - and you're already seeing it here in Western Australia with the election of the Gallop Government, you're seeing the 'no ticket, no start' rules reappearing on building sites in Perth - if you get a Labor government, federally, you'll only have South Australia with a State Liberal government, as far as the States are concerned. And it will give an unprecedented opportunity for the unions that run the Labor Party still to get their way on so many of these issues. And 15% is a goal of the trade union movement. The President of the ACTU, Sharon Burrows, has said that it is a goal of the trade union movement, and it was Labor policy before the defeat of the Keating Government in 1996.
BARTLETT:
Well, Prime Minister, either way the superannuation debate has been reignited. Let me ask you this, do you have any plans to overhaul the Parliamentary Super scheme, to bring that more into line with the conditions faced by the average worker?
PRIME MINISTER:
I was asked about that and it is an issue that is under consideration.
BARTLETT:
In what sense?
PRIME MINISTER:
Well, it is under consideration. I am not in a position to say any more than that, but it is under consideration. There are features of it which are generous. There are also features of it that require larger contributions. Members of Parliament make 11% contributions. Most people don't make contributions out of their salaries anywhere near that order, some don't make any.
BARTLETT:
Well, many can't afford it.
PRIME MINISTER:
Of course and I'm not suggesting they should. But it is under consideration, yes.
BARTLETT:
I'm just wondering if it's appropriate for the Government and the Opposition to be arguing over contribution rates when both sides enjoy rates that other Australians can never hope to attain.
PRIME MINISTER:
Well, that is arguable. And can I also make the point, we're talking here - I mean, you're talking about increasing the super guarantee charge, you're talking about a levy on business, and we think to increase the existing levy on business would be damaging to business profitability and it would be damaging to jobs as well.
BARTLETT:
Let's move on. Prime Minister, the cost of sending State and Federal MPs to Melbourne next month for the Centenary of Federation celebration, are you comfortable spending $3 million plus on that?
PRIME MINISTER:
Well, this is a bipartisan decision. This was a decision that was taken by the Victorian Centenary of Federation Council and, of course, Victoria now has a Labor government but it was taken with our support. I'm not suggesting that it was done by the Labor Party alone but they shouldn't be allowed to suggest it was done by us. Yes I do, I take the view that we only celebrate the Centenary of Federation once in 100 years. And historically speaking, I'm talking from a city whose vote, way back almost 100 years ago, finally resolved that Western Australia would enter the Federation. If my history is right, if it hadn't been for the votes of the people of Kalgoorlie, Western Australia would never have entered the Federation, it certainly wouldn't have entered the Federation at the time it did. But the answer is that you can always criticise spending money on a historical commemoration.
BARTLETT:
But how many times do we commemorate? Last year the Government.
PRIME MINISTER:
You only do it once every 100 years.
BARTLETT:
But that's not true is it [inaudible]
PRIME MINISTER:
What we commemorated last year was the passage of the Constitution Act through the British Parliament.
BARTLETT:
But that was a Centenary trip to London.
PRIME MINISTER:
Yes it was and I defend that.
BARTLETT:
Two million dollars.
PRIME MINISTER:
Well, I defend it. You run a populist campaign you can take a swipe at every observance and you will get some support for doing so. I often hear people say to me, oh gee, isn't it wonderful when the Americans choose a new President they have an inauguration and they make a big fuss of it. Isn't it wonderful how proud the Americans are about their history?
BARTLETT:
Well, they have 200 million taxpayers, we have nothing like that.
PRIME MINISTER:
Yes, I know, but they spend a lot more money on those things than we do on ours too.
BARTLETT:
Well, how many official dinners and cocktail parties can our taxpayers afford?
PRIME MINISTER:
Well, I think it's a question of what is reasonable and I think what is being done on this occasion is not unreasonable.
BARTLETT:
When you say unreasonable, it's reported that there's about 828 State and Federal MPs who have been invited, along with the relatives of politicians who were first elected to Parliament in Australia, are those numbers getting to the over the top stage?
PRIME MINISTER:
No, they're not getting to over the top. People have got to pay their own accommodation. Some of them will have allowances and some of them won't.
BARTLETT:
Well, some of the Federal MPs are getting allowances way over and above what they normally get to stay Canberra, why is that?
PRIME MINISTER:
Yes well, because the costs involved are greater outside of Canberra. They're not getting anything more than they would normally get if they were going on business to which they are entitled to get an allowance. They're not getting some kind of special allowance. But, Liam, I think we'll just have to agree to disagree on this. You either believe that we should mark the Centenary of the first sitting of the Parliament of Australia 100 years ago with an appropriate observance or you take the nitpicking view that some are taking that you don't ever commemorate anything because no matter what you do with a commemoration it costs money.
BARTLETT:
But can our budget afford that sort of money?
PRIME MINISTER:
I think it can.
BARTLETT:
Prime Minister, we'll open the talkback lines - 9484 1720 in the city, in the metro area, 9484 1720. In country Western Australia, 1800 626 720, if you'd like to have a word to the Prime Minister.
The Opposition are claiming that they're going to push you to tell the public who the next Governor-General will be. Is there are problem with that appointment?
PRIME MINISTER:
No, there's no problem and the public will be told when the announcement is made. I don't know what they mean by pushing me. Heaven's above, of course I'm going to announce, after the due process of approval has been gone through, of course I'm going to announce a new Governor-General and that will be announced well before the term of the present Governor-General ends on the 30th of June. I don't quite know what the Labor Party's getting at saying they're going to push me. I don't need to be pushed. The present Governor-General will leave office on the 30th of June and the name of the person to take Sir William Deane's place will be known well before the 30th of June. I don't know what all the fuss about.
BARTLETT:
Will that person know before that, Prime Minister?
PRIME MINISTER:
Look, I'm not going - well, of course the person would know before the 30th of June.
BARTLETT:
No, but in terms of making a public announcement from your office.
PRIME MINISTER:
Liam, look, I'm not going to get into any games like that. Let me simply say.
BARTLETT:
Just I'm asking the question because Sir Zelman Cowan is reported today as saying that when he became Governor General it took him something like six months, five or six months to make preparations to move into the office.
PRIME MINISTER:
Well I heard that interview. Look I'm not going to comment on that. I'm simply going to say that there's plenty of time for the announcement to be made, there's plenty of time for the person affected by the announcement to have prepared.be preparing and be ready for the position. It doesn't become vacant until the 30th of June. The Labor Party will try and manufacture a political issue out of anything. I would have thought that the last thing you wanted to try and do was to manufacture a political issue out of the circumstances surrounding the appointment of a Governor General. I'm following exactly the procedure that was followed, in relation to the appointment, that was followed by Mr Keating. He informed me a few minutes before he made the announcement and I will inform Mr Beazley the identity of the new Governor General before the announcement is made. There's plenty of time and I can say this to you and your listeners that the person to replace Sir William Deane will be a very distinguished Australian.
BARTLETT:
From the legal profession?
PRIME MINISTER:
A very distinguished Australian.
BARTLETT:
One more question before we go to the phone. As you may know there are many investors in WA...
PRIME MINISTER:
Yes.
BARTLETT:
...certainly where you are at the moment in the goldfields who have been burnt by the Tax Office with their amended tax scheme rulings. Do you plan to give them any specific assistance?
PRIME MINISTER:
Well there will be some people affected who I will talk to and I'll listen very sympathetically to them. This is a difficult issue. The schemes that people went into did provide for very very generous deductions, very generous. That's why people went into them. I know that people thought that they were okay because they were told by the promoters that they were okay. It is not correct as some have claimed that everybody was in effect given the green light by the Tax Office. That's not my information. My information is that the promoters may have said that and we would certainly like to see the promoters prosecuted to the full rigour of the law for misleading people. See it's not the Tax Office that misled people, it's the promoters who misled people. But it is a very distressing situation and I'm sympathetic to the position of people and they are obviously attracted and induced to go into these schemes by the very generous deductions. I mean that is why people went into them.
BARTLETT:
No doubt about that.
PRIME MINISTER:
I think we have to understand that. I mean people went into these schemes because they offered extraordinarily generous deductions.
BARTLETT:
Well should there be a situation where these schemes are not allowed to be publicly offered before there is a definitive tax ruling on them?
PRIME MINISTER:
Well it's very hard to..the law, the law doesn't prevent people offering schemes. The law provides remedies if you are dishonest in the representations you make when you offer the schemes. So it's really a question of..it's very hard to write a law that prevents people making dishonest representations before they make the representations. You can write a law which we have had for years which says that if you make a dishonest representation and people are induced to enter into that and suffer a loss, well you can be prosecuted.
BARTLETT:
But hang on, what's complex about the prospectus being given to the ATO and the ATO making a definitive ruling based on what the prospectus is saying?
PRIME MINISTER:
Well I don't know whether you can do that in every case. I don't think there'd be too many promoters who'd want to do that because they might think that the ATO would automatically say no and that that would mean they couldn't promote the scheme even though if they did promote the scheme they might think they might end up having it held up..upheld by the courts as being valid.
BARTLETT:
It might save a bit of heartache.
PRIME MINISTER:
Well you won't stop some unscrupulous people making misrepresentations. But look I am very sympathetic to what has occurred but, and I know the Tax Office is everybody's sort of whipping boy. I understand that. But I don't think it's quite right to suggest that every problem associated with this issue started with the Tax Office. But the Tax Office are sending people, particularly to the goldfields of Western Australia, to try and help people and I will be of course happy to talk to people who I meet today who may raise the issue with me because I am sympathetic particularly in relation to the fines and the penalties that are accumulating.
BARTLETT:
Prime Minister, let's take some calls.
PRIME MINISTER:
Okay. But can I just make one other point because it's quite important to your listeners this issue. Most of the people are in Western Australia. I can't arbitrarily cancel assessments because I don't have the legal power to do so. That's given by law and by Parliament to the Tax Commissioner.
BARTLETT:
Okay. Stuart is our first caller. Stuart good morning. Hello Stuart. We're not making any connection.
PRIME MINISTER:
I think Stuart's left me.
BARTLETT:
I think.there's a noise there somewhere. Hello Bob.
CALLER:
Hello Liam.
BARTLETT:
Good morning.
CALLER:
How are you?
BARTLETT:
Good thanks.
CALLER:
Good morning to yourself and the Prime Minister.
PRIME MINISTER:
Good morning Bob.
CALLER:
Good morning. I'd like to ask a question regards to tax affected investments, that being, why does the Tax Department treat people differently? Judi Moylan had a meeting with Senator Kemp I believe, if that was correct...
PRIME MINISTER:
I'm sure she's had a number of meetings...
CALLER:
Can I ask my question?
PRIME MINISTER:
Sure. I thought you asked me did I know she'd had a meeting. I'm sorry.
CALLER:
She had a meeting with Senator Kemp and tax and ATO representatives on my behalf. I've got a letter from Judi Moylan saying that certain people have what were called tax product rulings. They were [inaudible] rulings. Those people that invested in those, and this is my understanding and hers, that people that invested in those schemes with these product rulings are okay. But people that invested in the same schemes but didn't have a private product ruling are not. Can you explain the anomaly in Australia why we've got two sets of rules?
PRIME MINISTER:
Well there would be an anomaly if the circumstances or the case, in relation to which the private binding ruling had been given, if that case were exactly the same as subsequent cases it would be anomalous if that were the situation.
CALLER:
.that is the situation..
PRIME MINISTER:
Well my understanding is that that's not the situation, that there is a difference. This is the advice I have received. Now I'm always happy to have a look at your letter.
CALLER:
I believe Judi Moylan's brought this [inaudible] in Cabinet meetings anyway.
PRIME MINISTER:
Well she has raised the issue and raised it very vigorously. But my advice, and I phrase it in that way because it is the advice I've received because I haven't seen the private binding rulings, but my advice is that the five private binding rulings that were given were given in circumstances that were different in material ways from many of the other cases that are causing difficulty and that's why as a matter of law you can't say well the private binding ruling having been given applies on all fours in relation to all subsequent tax effective schemes. That's the advice I have received.
BARTLETT:
All right. Thanks Bob for your call. Alan good morning.
CALLER:
Yes good morning and good morning to you Prime Minister.
PRIME MINISTER:
Good morning Alan.
CALLER:
I'm a counsellor who visits Kalgoorlie every second week and I..most of the clients that I see are men and their families. And I just wanted to encourage you this morning Prime Minister not to be hard nosed about this issue because there have been some really real tragedies in the goldfields in relation to the decision by the ATO to change their mind over some of these rulings. Now you said earlier that many of these people only got information from the people providing the schemes. Well the men that I work with, and there would be 20 or 25 men and their families, I've looked at correspondence that they've had from the ATO and there's no doubt in my mind and the minds of their solicitors that they were given bad advice and then the ATO changed its mind and they were left with huge tax burdens. Now the reality of the situation is that these decisions have caused deaths in the goldfields, they have caused marital breakdowns, and they have caused a lot of stress in families and I just want to encourage you as you go about Kalgoorlie today that you remain humble and listen to these very very real issues.
PRIME MINISTER:
Can I just ask you when you say they were given bad advice are you saying that the Tax Office gave them one line of advice and then changed it?
CALLER:
Yes I am.
PRIME MINISTER:
Have you seen.
CALLER:
Yes I have and I think you should ask for the information from the ATO.
PRIME MINISTER:
Well they ..look, I'm sorry, I'm trying to respond sympathetically, I'm not trying to push your question aside. I can't ask for correspondence with individual taxpayers, the tax commissioner won't give it to me because of the secrecy provisions of the tax act. I can't do that. Even though I'm the Prime Minister I cannot do that under law. Therefore I haven't seen this material. If you are saying to me that you have seen correspondence between the tax office and individual tax payers, that has said one thing in relation to conduct that people can engage in, and then another which has countermanded that.
CALLER:
Yes they were given the green light and.
PRIME MINISTER:
Well I would like to see that because that is not the advice I have received.
CALLER:
Well my understanding is that you will shown correspondence.
PRIME MINISTER:
Well that's good, I'll follow it, I'll have a look at it with great interest. But please, I'm not trying to be, can I just finish this Liam, it's quite an important issue. I'm not trying to brush aside what the gentlemen has said, I'm just making the point that I can't go to the tax commission and demand correspondence in relation to individual tax payers. I can only seek correspondence if individual tax payers are willing to give it to me.
CALLER:
Well just be aware, and I know you will be, that these people in Kalgoorlie are in real crisis and I would urge you today to be very sympathetic to their needs.
BARTLETT:
Alright Alan, stay on the line for us for a second.
CALLER:
Thank you.
BARTLETT:
And we'll make sure that the Prime Minister can get to see those documents one way or the other.
CALLER:
Thank you.
BARTLETT:
Thanks very much. Bert good morning.
CALLER:
Good morning. And good morning Prime Minister.
PRIME MINISTER:
Good morning Bert.
CALLER:
Prime Minister I would like to ask a question that not only that people in Kalgoorlie and surrounding areas with these tax rulings of the ATO but also I could speak for just about all small business people in Australia, they're going through a very difficult, difficult times that the, sorry I lost the word, the big consent that is being put on, as to enormous burden on small business and the economies starting to collapse.
BARTLETT:
The GST you're talking about Bert?
CALLER:
The GST, sorry the word just completely escaped me. The question that I really have is that I.
PRIME MINISTER:
What sort of business do you have Bert?
CALLER:
I have a security business. I manufacture security products. And I've worked for four or five years very hard to try and get it off the floor and the GST has set it back quite considerable. But besides that it's my personal endeavour. What I am really (inaudible) and we would like to see, I think every Australian, for the good of Australia, that maybe sometimes the two opposites of the spectrum should really start work together and make a better Australia for Australians instead of having (inaudible) enthused fights and bits and pieces (inaudible) average Australian.
PRIME MINISTER:
Well I think I picked up the drift of that Bert, I think you were saying is that the two sides of politics should work together more rather than arguing all the time. Is that what you said? I think that's the substance of what you said. Well look I would agree with that. Can I say that when we were in Opposition we supported the Labor Party on a lot of issues. I supported the Labor Party when it floated the dollar and allowed foreign banks into Australia. We supported the Labor Party when it privatised the Commonwealth Bank, after having promised the public it wouldn't. We supported the Labor Party with tariff reform, we supported most of the Labor Party's spending cuts. We in fact made it possible for a number of the reforms that were introduced by the Hawke and Keating Governments. By contrast Mr Beazley has opposed every single thing that we've tried to do. He left us with a national debt of $85 billion, and he's opposed every attempt to reduce it by the $50 billion we've reduced it by. He's opposed our tax reform, he's opposed our industrial relations reform. You're a small businessman, he's opposed our attempts to take the burden of unfair dismissal laws off your back.
BARTLETT:
Alright, I think we get the point.
PRIME MINISTER:
Well the list goes on. I mean I agree with you Bert but apparently bi-partisanship only operates when Labor is in Government, not when Labor is in Opposition.
BARTLETT:
Bert thanks for your call, I know you've got to go Prime Minister, have you got time to squeeze in one more call?
PRIME MINISTER:
Sure.
BARTLETT:
Jim good morning.
CALLER:
Good morning Liam, good morning Prime Minister. I'm phoning on behalf of the ex-service community in this state, with particular reference to the artillery barracks. Back in January the Federal government announced that it would transfer the whole of the cantonment hill site in Fremantle, which includes the artillery barracks to the state government. We now hear that they want to carve it up and sell bits off to the state government or other people to make a profit out of our military history and heritage. You just said that you believe that investment in commemoration, especially in the centenary year is important. Why has the Federal Government broken its promise to the people of Western Australian on the artillery barracks? Is it a punishment for the people of Western Australia for voting in the Gallop Government?
PRIME MINISTER:
No it's not, and my advice is that we haven't gone back on anything that we've said. And I'm concerned to hear that you believe we have. We made an offer, and my advice is that offer is being honoured. I'm concerned to hear.
CALLER:
The offer is for the whole of the site. I have a letter from Minister Fahey saying that the offer is for the whole of the cantonment hill site.
PRIME MINISTER:
Well that offer is, if Mr Fahey wrote saying that that offer will be honoured.
CALLER:
Well I'm about to go to a meeting with Brendan Nelson where they're talking about carving up the residences, carving up.
PRIME MINISTER:
You say you've got an offer, you got a letter from Mr Fahey offering the whole of cantonment hill.
CALLER:
The whole of the precinct.
PRIME MINISTER:
Well my advice, and I spoke to somebody about this just before I came on radio because I thought you might ring, is that what was previously said is going to be honoured.
CALLER:
Well.
PRIME MINISTER:
Who is saying that it's not?
CALLER:
Sorry?
PRIME MINISTER:
Who is saying that it's not going to, the original commitment is not going to be honoured? Who's saying that?
CALLER:
The departmental officers to the Senate Inquiry on the 2nd April.
PRIME MINISTER:
Well let me investigate that, my advice is that there has been no change on the announcement that was made before the Western Australian election. And let me assure you that we are not a government that punishes people for voting Labor.
CALLER:
Well I'll take you at your word Prime Minister and pass.
PRIME MINISTER:
Let me say this, I haven't got all the correspondence in front of me, but if we made a commitment about this before the Western Australian election, that commitment will be honoured in full. I don't care what anybody says. If we made that commitment, but I haven't seen, I haven't got the terms of the announcement, but what I'm saying to you is that, whatever was promised before the Western Australian election will be delivered.
CALLER:
Well we'll take you at your word and I'll pass that onto the.
PRIME MINISTER:
Okay. Thanks a lot.
BARTLETT:
Jim thanks for calling, just stay there for a second for us Jim. We'll get a contact number. Prime Minister thank you joining us this morning.
PRIME MINISTER:
You're very welcome.
BARTLETT:
Thanks very much for you time. And you're in Western Australia until?
PRIME MINISTER:
I'm in Western Australia until Thursday afternoon, I'm here for three days.
BARTLETT:
Good-o.
PRIME MINISTER:
It's always good to be in the west.
BARTLETT:
Nice to talk to you this morning.
PRIME MINISTER:
Okay.
[ends]