FOR MEDIA 4 JUNE 1985
TRANSCRIPT OF INTERVIEW BETWEEN PRIME MINISTER AND JOHN LAWS,
RADIO 2GB
LAIJS:
On the telephone the Prime M~ inister 0' 1' AuStralia -Good Morning.
PRIME flINISTMR:
Good Norning, John.
LA173: Hlow av: e you?
PRIME UIWST~ k:
I'mi ve, 4y % 7011l thnnl YOU.
Good. Hav-do you thin!, it went?
The launch of it?
LAXS: PR ITV B ITSX8PR:
Well I v; asn't able to tune into P~ xul but I understand relve got
off to a reiLonablQ start. There's a ligJob in front* of us
now an~ d up until the summit and Including the soinrnit, Jobn.
I tbink the iuiport'. nt thing ' that c~ l! your-listcn,-rs and all
Auatiprljano nocd to understrnd ino thot tue P-s f) ( mvPrnm-nt h~ ve,
diseharfed our' obligation first step, that is to try and
outline hov the prGo-ent system has broken down, to set out ways
in. vihdp think ve can proccuce P. fairer system for all
Australi. js. Now vie vart to discurss It in ever. V possible Tw , v
with our Australian electorn te with all Australiari fea and
women having a chance to think about it. Ve'll Go irntVo the
summit not vith a closed mind. 11' it can be shotia that there
arc better vw-v; than relve cii~ j oste0 of' dcoi nr . t 0-n ePn
to bear them. We're-about tryinfg to produce Zoi-Australia a
systeni which is silrand : airer and more ecouoz-ically
efficient, fes I think it's very iimportant that the general public TV--lise
4dI th~ the O:. position is not al~ igthem ltin, r* 0 Y nlili
t h~ 11r. lesL a ) a j r-t13a t i s t o b o d j13c u s th~ t i a It
the U i1tAtu~ n in' it?
PRIIIE14r1I STER:
No definitely not, John. We have done what vie th~ knkr is the
obligation upon us because % eno w thpt Australinns understani
that the present systemi is not good. Vie ktnow that they don't
like having to pay' so much o. the iinuc-e they ear. n strFaiLht ou'
in income taxu. We've got the positisn v.' here about 40%, Johnn,
of ' full-time earners are payiig 46 out of every dollar as
a margin as tan. Now we think.-that thalkt. is not what they want.
rie knovo they thinl( it's not fair it's not efficient in economic
terms. So if we're going to be able, John, to got a substantialand
we're looking at. about a 30% reductiqn for the avex-age wage
and salariy earner a 30% reduction in the direct income tax he
pays then we've got to work out what % w. e think are the best
ways of getting alternative revenue so that we're going to be
able to provide the services that the people still want. Now as
you rightly say, John, this ' is an outline of the ways in which
wde think we can get there.. But we're not saying to the Australian
people there it is, taR-u, it or leave it. We want you to talk with
us about it. Paul lKeating and I and others will beavailable
in the period up) Lu Lhe ziunwIilL Lu t! Aylulii but. ziuL juzsL u, 3 Lv Lit
talking but also to listen to what people have-got to say.
Yes, I think Lhat's very important and it does worry me a bit
that', the Opposition is rather giving the impression that this is
Lt and this is what they're going to have to cop, and that is
not the case.
PRIME MINISTER:
Yt is not the catse but it is consistent with the attitude of
the Opposition. 1ihen they were in Government they knew that
certain basic things bad to be done, John, to got this economy
into bel. t6er shspe.. Just very quichly you can list then,
I'll come the question of tax at the moment -but in the area
of the financial systemn they did the w,, ork, they hvnbv that the
financial system should be deregulated. They didcn't have the
1t6 to" the decisioa. They knc--that the dollar ohould be
floated. They did the work but didn't have the guts to makie the
decision. They knew that more banks should come in here so
that ordinary Austral. ians co'~ ild have -a more competitive banking
system dVi d the wiork, didn'tt have the guts to make the decision.
In tan Howard knew that the sort of changes that we're talking
about should be brought in did the work didn't have the guts
even to bring it right up to the Australian peop3e. Now in
Opposition they are just as bad. They are scarerilonvers. They
are trying. to misvepresent now if they thinR that that'Is the
sort of thing that the Australian electorate appreeiates; I think
that tñ~ ey are inahing a bad political judgement.
LAVIS; Yes but the-point is this: * I don't like paying tax and neithar
doco anybody elcac and thor'o might b-5 many poopie wjho are going
to find parts of the suggestion that has been maeby your
government most unpalatable. Btt if in the 7iashtill the majority
of Australians are going to be better off surely if2 we're proper
human beings, that chould ctr primn~ concern -Iz~ ouldn't it?
PRIME MINISTER:
Well John' I appreciate that and there are two pointo to be made
In regard to what you said. You very ri-htly _ ma7 the point
that it's a package and obvi. usly in any tot" al. p.(, age thrat a
Government puts forwiard which has to deal with r. vtole rangea 0i
taxes there will. bc parts in it which zre unpalatnble to som2
and parts vih-iclh other p -ople ) lke. '; So if you looh at the vhole
comm~ unity of Australia there' 11 be pointo bero, '. there and
everywhere pieople will say I don It like that. But you! re quite
Tight John it: saying wiell let's lookc at thiF pachF. Ce as a whole,
17hich leads me to the second tbing: that the overwhelming
majority of Australians will be bett6r of f. No ernnent in its
* ri-ht mind and we're certi. nly Iii our -ight inind
goin-to bring in chang.. 6 which io Going to be woe~ se for the
majovity of Australians.
Of courSe not.
PRIME M! INISTER:
It's politicailly stupid and economnical. ly disastrous. Novi via re
nlot about e3. tlier of th1oze eourses. Now one can ask then why
will the mrajority of Avrtralians able to be better off
when you have tax changes and the reasons, basica'ly, are
simple. Firstly, there are as know unfortunately very many
of our fellow Australians who don't pay any tax at all. Tbey
don't do that bacause they are able to avoid the obligations
in respect of their income by getting into a whole lot of tax
evasion and avoidan~ ce, Howv part of our pr~ oposal is to broaden
the direct ta.-base so that we tvill pichk up a. lot o? tax from
those people vtio are cuirrently avolaing and evading. Ana
the Jeccnd thing uwder our preferred optionr is th 8t. with a
bi-oad based consumnpti. on tax these people w,, ith their huddreds
Uf 1huususnds, in -3~ n cn.; s milliuns of doj lurs o airv 130t.
paying any direct tax and are not paying any tax on a large
area of their consu-nD) ion wil nc-: 7 be nialzin-a contribution
to tho-general revenue through P. con&; umptioi; tax,. So when you
bring -Zhcse elemnents toehrJohn gettir-i themn in the direct
tax 3L'en by the broadening oT the base and bring~ ner in a
consumption taxt so that they are r~ iking a contribution to the
general revenue thtit way that":-bringing in to -tbe genecral
rcevenue pool available to help all Australians some millions
of dollars which are ablte, then to distribute to the mass olf
Australians to mnake them better off.
LAWS: Now vwh n you and your men sat around and discussed thi~ s you
must have all said Gjod we're going to be in trouble there,
or thnyrll. bo after us, or w-e', re going tn hsvp i8 pn hlki In
this area. W~ hcre do you believ4 the biggest problem is going
to couie frow?
PRIME r1IrISTER;
Well John you're right. flow " let me just make onae pr-elimninary
point and then go to directlly . answer your question:
we knew when we approa ched this job of tryinp_. to reform the
tau x astce. n we knew that wea were ! L0-nag risk. We hnow still
that wie're taking a rish and you very astutely Put your finger
on part of it bcmuse there are campaigns of inizrepresentation.
.1e have an ultimate belief that. if you are honest with people,
talh to them,. listnsn to them, that between us as a government
and as a conmuinity vorkling together we ought to boe able to get
a bet-ter system. Vee know there are risks. Okay, where are the,
particular areas of rin~ k? I guess, John, the thin-rs that we'll
xioed to explaiiu most aare uhese: 1 hzrtly, in the area of
fringe benftt. Novi this bas fired uip in a way which is
exploding now End if sonmething is not done abot it now will
mean that more and ioro burdens will Tue placed upon thiose in the
con-munity who don't get any. friinge benefit-s and they are
still the MiAjorlty X cvcss.
4.
LW7S: Yes. PRTtW. TANTSTR:
Wow what Wve 90': tc do Ii~ to edxplain that the vay we're goi) ig
* about thi.-means that the employers will have to face up to the
implications of this. In many cases they will1 be prepcred to
carry that additional burden, in others they may not. But I
belic-ve that thL-re is a lot of explanation to do Irn that area
but I am sure that wie can do it. Secondly, there has been
concern about the area of capital gain. W7e'll have some
explaining to do there, but I'm more than happy to do tha t
because ' it has been somewhat misreoresented. Let me mahe these
points about'the capital gains John: firstly-and most
importantly there would not be, il vie go ahead with a capita.
gains tax, there would not be any Qapital gains upon the personal
homez on private homes iione under any circumcstan-ers
Ahsnliitrly free of that. Secondly John it would notc bn L tax
upon nomnal gains only upon real gains. So that inifation
is not taxed it's only real gaips. Thirdly, it's only
prospoctive. I mean any gain that's accumulated prior to the
dete of the introduction of. it isnot taxed. Fourthl. y. losses are
offset. In other words, when you tahe those things into account
it ip a very modest capital gain. But the fifth and very
important point to make aonut it is this, that wie Lre -not loolking
at a capi-Cal gains t~ x* simply in terms of revenue. Tha rpvenue
that we'll get from it w" All. be in the scheme of things very small,.
You're talhing about the order of $ 100 m~ illion which shows that
it's not very hecavy in it3 impost, but 4t'zi importance Js aG
an instrument, John, in hel~ ping to beat taN avoidance aind evasion.
And I bolieve that vJiler there thirgs are explained they will be
nvLujvru~ Lly usidetsvLuud buL Y~ Lhlul Uruvidly auut~ pLt-d by Line
Australian comunity.
LAVIJS: Yes, the cost of policing capital gains is going to be-pretty.
high X would imagine. Obviously the revenue is-going to offset
the cost?
PRIME MINISTER:
Oh no I don't think the mechanics and the administration of it
. are enormnously dif ficult John. But as I make the point, vie a-re
not deluding ourselves and nor should the pe~-ople fe el that this
is going to * be a masssive source of reve-t7uut. It's not going to be.
flut what Australians have got to ask themsielves I think is this
simple question: 6-, y is it the overwhelming mAjority of
countries in the western world have a capital gains tax? It's
been thc-re in the United States for a long time. Most countries
havo it.. And they 1L-avt9 it because it is fnir thtt you chouldn't
have the discrimination against the ordinary mass of-. people who
Just get their income-fror., their exertions. Somte people are
able to get very substantial incom-e from appreciation of assets
in which they've involved no effort. Blut im~ ortantly, in doing
this, you do cl. ose off or help to close off very,-very
subst-, ntial a~ er-s of avoi. dance and evasion.
Yes, I think that area and I mentioned it to ba Paul Neating
and I think that you'd be interestod in it too the * fact
that you say that the family home will not be inlddand that's
erirw-nently rec. s; onable and will never be included nnd I thinkC
that that's fair.
PTHYLIX TANKSTFOR
It would tover bo here it ' snotnormally inr. luded eLns e I) hOr e
and it viould not be here.
* Okay, but the question I asked Pau), Neating, and I ask the s~ i:
question ol you: whby can't there be -and I Im no~ t~ lsget
there be 5 or 6 -but why can't there be-two family 1. oyn! s. * If
a iran finds bimself in a position vhore he has paid e;. ceptionally
high tax in order to organise his life sothat ho can have a
house in towin and be luclKy enough to have a beach house -and
oniy zne rich people can do it 5o tiae rich pouple h;, ve puid
high ta2xes in order to enjoy that lugury. W7hy can't there be
trio family homes?
Vell I think, John, you start to break down the principle of the
tan there and. of course, I'm not. saying it would be the case
in your case because I know you pay all your tanes but..
LAUtS: ( laughs) I sure do.
6! es, and good luck to you, but you get a lot of situations where
there could be roi-ts; * 1 thinh, in -this sort of thing. I'm not
saying that that's so in every case but all X c -n say, John,
is where this has been considered it other countries that sort
of distinction is not =, de and I thinh it is not ri,. de because
it would lead to conceptual difficulties a; id, of course,
the otliey thiug is you could have economic diotortlo; is as vgcll
John. You could have an incentive to put money into second
houses as a way of avoiding tax ave; that would not be, in tei7Ls
of economic policy and in trying to get rational allocation ofO
resoure. s a sensible thing to do.
LAWS: Yes, it's just that I feel that as I think things being fair
und equ4 table to everybody is the way that these systems should
wvork ana i~ f a man has organised his life by hard work and bv
paying excessively * high taxes up until this time into a position
Mhere he can afford the luxury ot, a second house I don't really
thinR he should be discriminrated affainst and I can't see anything
wrong vith eiicouraging people to invest in property either.
PRINAE MINISTER:
Let me make this point: you realise John that if you have a second
house you aon't pay tax on Tho fact of havia a k& econd. luut~ t. I
mean you can have it thcere and you nion't pay any tax on it. it
wuould be only if you divposed of-l that second bouse and made and
derived a capital gain from it. I mean the way y'iUVe been putting
your point it is almost Eas though having a second house attracts
a twi. It does not. You would only attract a capital gains tax
if in regEard to that second house at some stage you daispoEsed of it
at a prtt-aid at a prol&' it beyonid inflaition. lu. otCher wjord: 3
if John Laws buys a second house lot's say $ 100,000 noly
you don't 1t15rough buying it havc any taix to that house, and say
over a peryiod of time you held it for let's tuay just ' Lor
a simple case, Un Sarithm. otical e,, xArple, youl1' opt tt for ten years.
H~ ori you pzy no tax in that period on I. Xf at the end of ten
yoara lct~ o oanj. r and I'm not uc ' ing compouinding herp hilt le's
say the-ro was 10% inflation in 20 years Pad it was worth
200,0000 and X hnow,, AWith co. ind intovest it's different
but irt s; iviplc prlthm,, tic torms and. you sole, it at Q'" 200.000 ii
in ten years time you wouldn't pay any tax, bec,,, Pse thzt vould be
nearly the inflation that had oscurred in the period zpd you
vouldn't pny any tax-,
LAI7S: Yess, well I can see merit gor both arguments and I am aware that
you don't pay any tax simply-by owning it, only vwhey' it's paissed
on, but it is also taxed at the time of death, icn't it?
) PRXPAE HINISTER:
Yes but it's not a death duty, The whole point about a capital
gains is the very fact that your property is increasing in
value you don't simply pay tax, on that it's only at the time
oZ realication of the capital gain and for the purpose of tho
implementat 5on -of a capital gains tax the transfei-ance st the
time of death iv regarded' as accrual for the purposes of
capital a real iation for the purposes of capital gain.
Yes, and I undcerstand that, and again I think it Is something
that should be mnade veyy clear to the public because it'
one of those faceto of your propocml that can distorted nnd
I'm & quite sure that plenty of pe-ople will be preparod to tlistox-t
it. It isn't in fact a death duty even though it Is payable at
time of death, but vhere it's not payable at the time of death
then you could simply pass property on from ge rcation to
Generation to Coneration.
PRIM~ E iHINSTBR:
Egactlyv, and Jolin lot wne mahe the point too to Autvalian
men and vomen this government has showin in its pertod 4-offi.,-e
* that what it ifs about -is trying tc, promote growth and ef fic~. eney
in our economny. The last thing that this governmnent woUld 6o
would be to change the tax laws in a way. which is goinlg to
reduce growtbs reduce the efficient operation of our econony.
And I just ash Australian men and wiomen to ask themselves the
question: why is it that governments in the rest of the woirld
hava this tax? The United S, 1tates could hiardly be regarcied v-s
a country which is against free-enterprise and the opporttxzity
for the individual to expand their acquisition og income and
wealth. It is simply the case that governments alil around the
world have understood * that it's necessary to have this sort of
tax not sim~ ply as a revenue source but also, John, as an
instrument to fight tax avoidarce and evasion.
LAWS: Yes. The ACTU is obviously not happy about what has been
proposed in the form of a consuyiption taX.
PPLXE MIN1ZTER:
17ell there's two or three things to say about that, John.
Firstly, I know tbrt~ you know because you've said on a number
of ozer-sions, this government is not here to do just what the
A~ rU or the trade uions w~ ant.
LAWS T* X IhUP-tnuL,
PRINAE MINISTE1R:
r~ e certainly are not, we regard it as cfonoicaly raid politically
sencible to talh v. 4th the trade uinion iA. ovemi: nt, CvGsvie tall-with
business, because that's 1nvol-v( 1 in our whole approcch -to
goveynnent. We don't regard hc ovganisc-ed woPruiug L. en and 7. oMen
ma-n-and women of this country an Important r-ont'tuont Of
our w~ hole society and their organications as important un; tz;
with whbich governments ought to talk, in the samie tuay' as re regard
business. Novi' duving the last election., John, w~ be X initiated
this p~' ocess of tax reform. I said as a ' seventh principlo the) cnyou
see ve're not changing anything -I said if any ta; z reform
rihich were to inelude a consumptf. oa tax is to work thean it biust
have the support of those who would be directl7r involved the
trade unions -because let me mp-he this qui. Le clpear John -frcii
the outsalg Of these community debates this must be quite clear.
Hf we do as a community decide that it makes sense for all the
reasons we've put to move as part of tax ref orm toQ include e
bvoox2 baocd oonov~ mptionc tan co that from that wo can givr; maosive
ta; x cuts -30% 2 tax. cuts to the average wiage earner -you can't
then havIng Got that great benefit In direct; taxr cuts lroii
the introductlon of a broad based consumntion taxz then have yo1. ar
second dip and say X ' m going to have my wages incxyear'ed to covnr
the price incronsi, associated with the introdu. stion of thv tan..
The-. e must be discounting for that. Now iii the dicussions that
Paul Ueating has had with the ACTU and that I have had we have
made it ouite cliear that discounting is essential. hlow,, I thinU
they understand that. They are going to the tan sumit with an
open Mi. nd C. believe, to listen to all the options. And It's
my vio0,,/ John, that they wvill come to see that what t -air members
do really wjant is a very, very substantial % iut in diL'ect taxens.
I meau it is eilly to nave a sltuion, Jlohn, whee~ e the = eCnar y
bloke i2 asking himself a question look shall X worlz a bi.' ruoire
overtime becaus; e virtually half of each extra dollar is going to
the government. It's economically inefficiont and if wke are
going to b& able therefore to cut that 46 rate Clown to somethiing
like 35 and give what's really a 30% reduction then it can only
wYorit in the way I've put. Now I think that ordinary workers and
their unions will comec to see the sense of that. Let nno inalte the
the point John: if you take the average wekly earner, in annual
terms he gets about $ 221, thousand dollars. The income ta-^ % ut
for the average workcer will I' 3l a week, That iS we as a
government vwill be taking $ 31 a week less out of bts pay packet in
direct ta.--cuts. The calculated cort of tlhe increase-ilu the
consumption tax-is about $ 16,80 a tweak. In other vords that
worier in net terms woula be $ 14.20 a week beLter ulf. i'J1 t1% i
be in a position to spend that money hie'll have that net increase
in his or' her hand to w~ ake a decision as to how to best
catisfy his wiants and those of his ki-ds,
Lj1, AVS:
Yes. I wonder why some sections of the msdia choose to take a
negative approach not 7vhat you're going to gain but what you're
going to lose with haeadlines tbat indicate that you're not rezlly
goiig to be bettor offi by Tax changes; to plcase nobody"
is one headline,
W 1 15,* 9..
\ Vell John I ou' pose there's poi. nts about t hant: you're au
old Lmed). a m~ an. I zsuppose it is always, U. e case-thut bcad news
tends to be more salovable than cood nea,-. c vnd so i thy think they
can find soiue bad news in sorn'! th". ng they'll erh~~ ethat
Tho sceond thing John is that ve've got to understand, aa I said
earlier in cur discussion, this is a pachage it Las whole lots
of eleoents and it is true that a * lot of grot ps vwill be able to
point to one element and say well gee I doa't like that and they'll
t -nd to n'oneont-eatp on t; hat. and some newspapers imlaht, thel1Vthan
looking at the wbole package, Just ' to go bark to the
el. aimple I gave: you take this person the average weekly
earner figure who's on about $ 22 thousand, uow it is true that
rith the introdruction of R broad based consumaption tax ywhich io
2'% then prien will go upi, there will b incirease in
the indeR -2o a whbile and it will cost another ~ 1. Oa weeh.
Now if you wiant to run a headline $ 16.80 a wjeek increase in
your outgoings it's a big story, but I suppose you % now the
truthful exposition would require you to say oh yeo but he'll
also havo a week, more in his pocket and in net terms hC'll be
$ 16s. 20 a weel: better off. So if you rar. L to ' write your headlines
$ 1680increase * prices that you Day sure headlines but as I
say a more balanciad one $ 31 a week extra in you;-pay packet P.-
vie I II a VeeYh btter o ff.,
A question that is going to be asked, and it's being asked
Mripantly already and people are going to start to get a bit
Segrlous nbout it is the tax on frinr-e be-anefLts. The que-stkion
being-: izked of course is are the politicians goin-, to ,) ay the
samz e so-vt of taxz oni thebi fringe benefit?
PRIM-TINSTI:
VJell what the paper points out is that in regard to vhetil-er
it-Is politicians or anyone else where you have arbit-rated
decisions they are not covered. WThat I wiant to sity is this:
in political terms ve would not be doing anything which would
b stupid enongh to say look here Is a differentiation, you're
trying to Ilo: ok after politicians favourAbly as aGairist everyone
else i: 2 tbe community. That wouldn't make sense, and we're not
going to be doing it.
You see the point is that people are going to say people
that are a bit stupid but there are plenty of those in the
world are going to-say well look at the f ringe benefits that
the Prime thinister -ets. They simply neglect that as
Prime Minister of one & l the greatest countries in the wiorld
or to my way of thing tqxe great; Pot country it the world you're
entitled to a few but people are going to say well what about
all the frtnge benefits hle gets the car's, tanr overseas
trips, and thre other thin-s.
I autta Just let me tt~ lrc the ovrseas trips one 19 w had
room to fit in over vand above all the demanding jouralits
who wvant to cover everything that happen:, I wouldn't riind taking
your ordinary Australirns5 with us jiust to see how these overseas
J~~ e rcesupeed to be ouch grccat-fUn ot mako the
po.' rt that oue of the frustraiting things about these trips is
that at the e-nd of the day oople will s ay the journalists
will say wie hrad r-great time kseeing The Louvre today or Nwe
wcnt; dowin to the V~ est End. You don't osee them, it's theQ plost
-Pa-e 9
rxstraLing thin-in the w orId. You're there in conerance
cn-wnvlking nvier hrie-, fs -hut tbn's ft perphoraV point.
Let mie get to tlia guts Of it I can tell the peoplo* oi Australia
& s Pri me Minister I am not about tta;, reforin to be,, no. it Do Xiawhe.
At the end of the day the samte sort of rules % vill have applied
* to the P2rime [ LrIi ster as to anyone else. Vv e made it quite
clear that if at the end, in terms of the outco. ne * Pthat I were
to be seen as bering 8ignificnntly better off I've miade it quite
clear that from my own point of view I wjould be disposing of that.
I'm not in this position for personal. benefit and I won't be
doing it.
LAVIS: Yes, you made a point earlier that I t~ hink requires re-malding
and that is that and I've said it on many occasiois concerning
the KST, govern,. ent as well whether wie lihe what you CAo or
twhether te dislike what you do is totally immaterial. We should
at least have enougb faith in ourselvcs as rwozbers of the
public of Australia for electing you that you're intelligent and
the peoplc arouind you are intelligent. Novi no intelligent person
is deliberately going to do something that's goina: to get hibi
out of office. It mightn't be right what you're doing but if
it is virong you're not doing it deliberately are you?
PRIUE MINISTER:
Certainly Pot doing . It deliberately but the other side of that
coin is this, John. I've tried to makhe the point in the last
% 7eeh or so: thin country as you rightly say this groat
country -has Z oz-too long the very heavy price of having
governments, here iz Canberra which knew what needed to be done
for the welfare of thio country and didn't have tae guts to do
It becauneo they thought what they did could be misrepresented.
7 z'uptuL vfki L i L-1md bzwfui-vi4& bU1' 6, flo0atincg the
dollar, der'egulating the financial system, all of those things
crucial to having a better, more efficient functioning Australian
econom~ which voul~ d produce bonefits for the ordinary Australian
tmn Lng woman. N~ ow they vouldn't'ma1he the decisions bccause they
thought they could be misrepi-esented or they mi* ight get some
political fJlal;. Ve've faced up to each onie of? those and vie've
made the decisions. Now it's tht-same with tho tax~ system. It
is quite lear,* John, that this taMc system is diLsinteL} ratirig
and it's disintegrating in a way wihich is increasingly with ecach
passing y( oar imposing a gr-eater. burden on ordinary Mir. and
Lrs. Australl: -, iud the hids dependent upon them. They are the
ones vwhich are increasingly paying 1; he burden. Ncw if we are
prepasred to iaee up to that and aay to Mr'. and Mfrc, Auctralia
he re's how we think we can create a fairer and more econernic
efficient tax system. Vero's our thinking, respond to it and
together we can Improve it. I said just recently John it
would be easy enough to viaYk away from it because I can assuit-_
, you Bob Uawhe, 1aul Keatinr, all tho people arotund me-, we could
get by under this present t: system. Vie won't be hurt. VTe'd
do all right and the people out there the irelatively well to do
in the community they can Set by under this system. In fact
ma. o9 t1 1em are xi e ry, . ery knell Indeed unfler it. But
next yearP the year after, a dectCe after, th, generation after,
the kids of todv~ y will pay an inorcIlnately high ice -a
devastating price if politiciaans and government today haven't
e-ot the guts to face up to it. Now we, bave got the EgUts to ftico
up to it. We know wltYoutz cquestc'n tnat criange has to bo mvdu Lu
produce a beCtor faustrtalia Tor the future ani vie wi~ 1 not vp.) h
away f2rc'n that vnesponsihility.
ne-, V Pae you goinrg t. o pr'otect Ctic very Iow2 incormie caraierz'? That
about people on fiL4: d -Incones? They aro going to gct hiurto
VeXTA nLo, ther! e are a wowLtsr oz riays ~ in vhicn they will be helpsd.
Fiyrst of all Jobn thcre wil. an incre,, e in tile t~~
throshhold so that people can hanve income rising 3 rom
Snow to $ 120* a wee). absol~ utely tax~ freQ. Thero'll bo no tws,
upon them at all. That's part of tlje move. N~ ov tecondly
in i-egards to pnsi ozn rnd ben', f its and allowiances, the price
impact og the sur-gested broad baned consumption ta,: is about
3. That Y~ incr'enze in the CPX would need juzlt to cover that
a ri~ se of 1 3-a weelt in the pension. What we are pr oposing is
P-n AIncrease of f; O a wekin the sinyle pcnsion o 50t% Fno; 7e
than is suggested by ' Che ris&' in the CP1 and*$ V, a x-eeh for
marricd couple pen io;,. ers. In regard to families the-depe ! dant
spouse robatc and family allowances wiould both be increased by
aot Gbut by Jlz%. Dene_-bCant spouse rebatos for tiho.-o
with childien iwould increase $ 2.75 a wjeek, family allowa& nees
vould increace by $ 3.20 a month for one child,, T5 a monthl
for 2 children and $ 13.20 a month for 3 children zand the family
Incopie supplement which is there "' or-; very low income families
vith a lot of children thr. 1 famlly inccmne supp fv,-nt vwill ^ lso
be inreasad. So altogetlaer John in the compensat ' ioa paclza!, es
that we ' re tqlhing about there is just on $ 2 bi'klio-Z coopensation
pachages whi ch Will z! Ore than compensate' Yor the increased prices
rihich will af~ t hose low,. er level inct_" e people.
LAUB: The assets test I'm quite sure yor would b? propared to admit.
cost you pretty dearly at the last cle~ t ion. Do you thinlk that
this is even a bigger achievewr-nt in your political. career and
do ., you LAhlnh ! L'b K: i big K 901 aij~~ ik
Vell it's a risk. John, as. I said earlier in this program we
do understCand it's a risR. But in politica theEre are as wl
as risks there are obligations and duty. Vie * belleve twe iave
an obligation and a duty to reform the tax system. I'm not"
going to wa~ k away from that obligation. I'm going to try and
talk with t~ e Australian paople try and gpt a gcneral
underatandl . g abouL vihat needs to be done. I have sufficient
trust in the Australian people that if you talk 4ith them
not to thein and at them but with them to try and shvre Vieir
e; xperience and thoughts that wc can get a waqy throughT this
which is going to make for a better Australia in ths futur e
and I'm not going Lo shirk that responsibility Jobn.
LAWS; Okay Prime h~ U~ niLtx-Lhanlk yuu f, y6ur tia,. 7 a good to
talk to you and I appreciate.-you giving us so mouchi of your time
and X hope I cee you soon.
PRXIME LIMlSTEIn:
John can 1 _-ay two things, firctly thanIX you -obvioutly, But
ina sense oven more importantly than that is to say to you
bowi very muc; h I appreciate the wray in wniAch you : ap~ oache1 thiG.
I know that youj vin necessarily agree with evevy eleimtent in the
pr-c1age but FAt least one can L: ncw that withj you czday end in the
Sahelad thnre is goinag to b, a rationFal aud pro it Il
discussion about this issue ard I aLprecirte h~ very mu~ b.
1
% 17 Caxe Of J I; ii'
Thank yPcA1
YLXs: Gur~ 14nitrpsPb ziw ail t