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Transcripts from the Prime Ministers of Australia

Transcript 21788

Address to Investment and Financial Services Association Mural Hall, Parliament House Canberra

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 14/06/2005

Release Type: Speech

Transcript ID: 21788

Well thank you very much Richard, colleagues, ladies and gentlemen. I do apologise that a slightly longer than expected Cabinet meeting kept me from you. But it's quite a good day. We've sort of finally heard from the Tax Commissioner through a combination of deciphering everybody's press statements we'll be able to have the tax cuts with full effect from the 1st July and we're rather pleased about that.

Can I say that I have valued very much the contact the Government has had with IFSA over the last nine and a quarter years? We've had some very close collaboration in relation to issues that bear upon the nation's savings. We have, I suppose, travelled the full path and back again when it comes to the superannuation surcharge. I know how warmly you welcomed its introduction in 1996. It was seen then as a regrettable necessity, given that we were trying to repair a fairly difficult fiscal situation and over the years we have tried in different fashions to attemper it and alter it but we decided in this year's Budget to go the whole hog and repeal it and I think that's a very desirable move and I think it will provide an additional boost to savings and to superannuation investment.

Richard was good enough to mention a number of other changes that we have brought in. We're very proud of the co-contribution legislation. We took a long time to get it through in its initial form and in last year's Budget we introduced a major liberalisation and expansion of it. And if you look at the superannuation guarantee charge which was introduced by the former government, you look at the co-contributions, you now look at the repeals surcharge you start to see a pattern which stacks up to a significantly greater level of incentive and a number of measures which are providing for people's savings. Now I know that there are many further reforms that you would like made. I know that you would like to abolish all tax affecting superannuation. I have to regrettably inform you that I don't think we'll be able to manage that during our current term.

But savings is a very important goal of the Government. Private savings we encourage by reducing high rates of marginal tax. I think the tax changes in the last Budget will not only be important to people for take home pay, but I think they will provide additional incentives for people in the middle and higher brackets to save. We did have very high, we had high marginal tax rates in this country and they were cutting in at very low levels. And the changes made in the last Budget represent a very significant assault on that distortion in our tax system and I'm very pleased that they're now going to come into full effect. I think that will have a beneficial impact on our savings.

Of course we have contributed rather massively to national savings by running successive budget surpluses over a number of years and we'll be bringing down the legislation in the next few months to establish the Future Fund, which is going to ensure that we manage in a very sensible way the accumulated surpluses of the Commonwealth over the years ahead and the impact of that fund on our financial markets, on the equity markets is going to be quite significant and it's going to be a new and very important development in the management of fiscal policy and when you look at the debt to GDP ratio of this country and you see it what lying at 2.7 per cent or thereabouts and you think of the OECD average of 47 to 50 per cent it's a fairly remarkable achievement, even if I do say it myself. I think we have done rather well in reducing and eliminating very large deficits. We hear a lot about foreign debt. We do have a big foreign debt. Most of it is owed by the private sector and none of that foreign debt is being contributed to by this Government through public sector deficit funding. And I think it's very important when people talk about foreign debt as they want to do to bear that thing in mind.

But you've been here a long time, and I've been running late and I don't want to keep you. But can I thank you and can I particularly compliment Richard on the leadership that he's demonstrated? Can I thank IFSA for the collaborative, cooperative approach it's taken to working with the Government? My office, I know Peter Crone and Arthur Sinodinos, who had quite a lot to do with you over the years, appreciate very much the practical input that you make. And can I say that if you look at the things that have happened, you've done rather well? Your advocacy has been strong and eloquent and well targeted and always in the public interest. And for that reason I'm pleased to say that quite a number of things that you have advocated, we in different ways have been able to accommodate. Now I appreciate that, but it speaks well of the leadership of your Association and speaks well of the goals that you have in mind for the Australian community.

Thank you very much.

Transcript 21788