Subjects: Aston by-election; tax; Christopher Skase
E&OE................................
FULWOOD:
Good morning to you Prime Minister John Howard. Welcome to Sunrise.
PRIME MINISTER:
Good morning Annie.
FULWOOD:
Now you're wearing I noticed the Olympic top. Now is this an inspiration for the Wallabies just before we get to this election?
PRIME MINISTER:
I hope so, I really do. I'll be out there tomorrow night really cheering for them. I saw the match last Saturday and they were fantastic in the second half. They're a great team and John Eales is a great leader and it'll be a fantastic night I hope.
FULWOOD:
Well yes. I suppose you're hoping on the Aston matter as well for it to be a fantastic night but I'm wondering whether we put too much pressure on a by-election like this as being a sign of the fate of a government.
PRIME MINISTER:
Well you can over do it. But it's going to be hard for us to hold because in a by-election there's always a bit of a temptation to give the government a kick. But we've got a good candidate in Chris Pearce. It's an opportunity for people in a fairly marginal seat to send a message to the Labor Party that it's not good enough just to criticise your opponent for five-and-a-half years, you've actually got to present an alternative for the future of the country. But I'm hopeful but it's going to be very tough. I think in the last 24 hours Mr Beazley has made it very plain that his option if he becomes Prime Minister is to spend more rather than to tax less and if he's going to rollback the GST, that's reduce indirect tax, and he says that income tax is not too high that's a very clear signal that income tax would go up in order to fund his spending plans or to fund the Rollback.
BERETTA:
Okay. Prime Minister if you are successful in Aston would you be tempted then to bring the federal election forward?
PRIME MINISTER:
Well I'm not going to speculate about what I might do according to a particular result. As to the timing of the election it remains my view, my quite firm view, that in current circumstances I'm currently disposed to have the election at the end of the year. Nothing has really changed on that and as each month has gone by I've given the same answer to the same question and nothing has altered. But as to the outcome and how I might react I'm not going to speculate. I'm going to keep campaigning. If there are any Aston voters viewing this interview this morning and who are undecided let me ask them not to vote Labor because that will be a green light to the Labor Party to continue being completely negative. I think Australians are getting tired of negative politics. They want people to say what they will do rather than what they are against. And whatever people might say about us we haven't been frightened to do things and we haven't been frightened to stand up for what we believe in. But the Labor Party for five-and-a-half years has tried to feed off the opposition to things that we've done rather than put forward their own plan. I ask undecided people in Aston to keep that in mind in resolving how they're going to vote.
BERETTA:
Prime Minister you did make a lot of changes after the Ryan by-election. Do you feel that the Government's in better shape now than it was going into Ryan?
PRIME MINISTER:
Well we have made some changes and we needed to because people had legitimate complaints. I'm never frightened to change something where I'm satisfied that people have a reason to ask for change. The changes we made to the taxation of petrol mean that next month the tax on petrol won't automatically increase as it has in every August for the last 18 years. Now that is a very important long term change. We made some other changes but we still are able to point to a marvellous economic record. I mean interest rates now are three to four hundred dollars a month lower than what they were in March of 1996. The last time the Labor Party held the seat of Aston housing interest rates were at 17%. We've had some marvellous economic news this week which indicates that the country is well and truly back on a strong growth path.
FULWOOD:
Mr Howard I'll talk to you though about..you talked about changes to petrol prices, let me talk to you about all these changes that have been made to this new tax system and in the mortgage belt if you like which is Aston with families and so forth. Chris Pearce said they're looking for stability and so on, they're looking at local issues as being the main things. But the hardest hit for middle Australia is this continuing change to the tax system or the BAS.
PRIME MINISTER:
Well Annie when you make a big..we have made a big change to the tax system. We brought in a GST and we cut income tax by $12 billion a year and we made a whole lot of other changes. Now what you've seen this week in relation to the contractors which is what I think you're referring to, you've seen some fine tuning of the details of the legislation. Now there's nothing unusual about that. When you have a huge change to the tax system fine tuning occurs all the time and there'll be fine tuning in the future because it's a very big change. But we haven't changed the direction of the system, we've brought in a GST, we've abolished wholesale sales tax, we've cut company tax, we've cut income tax by $12 billion, but the fundamentals of that change remain in place. But in the process you obviously have to adjust at the margin and adjust some of the detail and I don't make any apology for doing that. And I've indicated that that might be necessary in some other areas in the future. You shouldn't run away from the desirability of doing that. I mean it's a very pig headed prime minister that says with a huge change like this there's not need for some kind of fine tuning at the edges.
FULWOOD:
I just wonder whether it's all been worth it because it's actually hurting people when you've got Labor at 29%, Liberal at 28% in the primary vote at the moment, a lot more undecided. When they've been hurt by all these changes and this confusion that must make them not think so highly of the Government.
PRIME MINISTER:
Well we'll know that tomorrow night Annie. That's an opinion poll and I'm always a little bit sceptical of them particularly in by-elections. But I think the tax changes have been and will continue to grow in the benefit for Australia that they are. I mean our export performance is a lot better and one of the reasons for that is that we no longer have a tax on exports because the GST doesn't apply to exports. We have lower personal income tax, we have of course lower interest rates which are due to general economic management. I have no doubt in the long run tax reform will have been worthwhile. It's been difficult, it's been unpopular in parts. I knew that when I introduced it but what's the good of being Prime Minister unless you're prepared to do something for the long term benefit of the country. I'm not prepared like Mr Beazley just to try and sit back and criticise the other bloke and not offer any alternative of my own. I don't think that is what the people of Australia or hopefully people in Aston really want.
BERETTA:
Prime Minister Treasurer Peter Costello, has he let the cat out of the bag by hinting of tax cuts if the Coalition wins this election?
PRIME MINISTER:
No he hasn't done anything of the kind. I mean he's absolutely right. It is always our preference to tax less rather than spend more. And yesterday Kim Beazley made it very plain that he did not think income tax was too high but he thought indirect tax was too high so he wants to rollback indirect tax, that's the GST, he wants to spend more. Therefore he's got no alternative other than to put up income tax. I think Peter hit the nail right on the head. Mr Beazley was quite vigorous as he said - let me say with some vigour that I do not think income tax is too high. Well if he's saying to the Australian people you are not over taxed and I'm going to spend more and what's more I'm going to rollback the GST that spells higher income tax under a Beazley Labor government.
BERETTA:
Okay Mr Howard. So income tax cuts will be on the agenda. How big might they be?
PRIME MINISTER:
Look there's no point in speculating about that. We've stated our clear preference for lower tax rather than bigger spending. That remains our position. Now we've spent quite a bit of money in important areas like science, and health, and defence, and roads, and salinity. But our view is that if there is further room to move, and there's not at the moment, but if there is in the future further room to move we will give a preference to income tax cuts rather than more spending. Mr Beazley on the other hand he will give preference to more spending and if he's going to rollback the GST into the bargain he's got to put up income tax. I mean it's like night following day.
FULWOOD:
Mr Howard just one more thing before we have to wind up with time our enemy. Christopher Skase, a very sick looking Christopher Skase in the Sydney Morning Herald this morning I see. Does that alter your mindset of getting him here or are you continuing...?
PRIME MINISTER:
No it does not alter our view at all. I think Australians remain collectively outraged about what was allowed to happen some years ago in relation to Christopher Skase and we will continue to pursue him.
FULWOOD:
All right. Thanks Mr Howard very much for joining us.
PRIME MINISTER:
Thank you.
[Ends]