PhIVIE MINISTER
E. O. E. PROOF ONLY
TRANSCRIPT OF INTERVIEW, TERRY WILLESEE, 19 SEPTEMBER 1985
WILLESEE: Well, the tax changes have been quite a bold. move
by the Government. Arid, as we suggested last night, carried
out at a somewhat calculated political risk. But the Hawke
Government has done it. Mr Prime Minister, thanks for joining
US. PM: MY pleasure, Terry.
WILLESEE: Any reservations tonight.
PM: No, no reservations, Terry. I think that we have gone
through a long period now where we have met our commitment to
the Australian people to calk with them, listen to them. And
I think that the tax package that was brought down, Terry, meets
their requirements of fairness. They want a fairer go, arid
they are going to get it. The capacity for government now to
give significant tax cuts back to people comes from getting
. the money from those who have been avoiding and evading. The
only people in Australia tonight who will by happy I will
have to correct myself, who will be unhappy are those who
haven't been paying their share. The fact that we will get
it from them means that your ordinary viewer is going to be
better off.
WILLESEE: What do you think is being said about the Hawke Goverrm. ent
in company boardrooms across Australia?
PM: I think generally there will be good things being said,
because, under the Hawke Government we have restored the profit
level by something like $ 6-7 billion the percentage was 12%
of the national. income that they got. It is now up to historical!,
high levels. Now, that is as a result of our policies. We
are taking very little from them, but at the same time as we
are taking some things from them in the fringe benefits area,
we are giving them somnethinq that 30 years of conservative governrmie',.
never gave them, and which they regarded as intrinsically impor.-tarz
that is full imputation. There is now an end to the double
taxation of dividends. That is very important to them.
WILLESEE: Mr Hawke, there has been some suggestion that the
restaurant trade will suffer as a result of some of the decisions
today. Do you believe that will in fact happen?
PM: Well, I think that some, there may be some adverse impact
in some areas because with the cutting out of the expense allowances,
that means that there probably won't be the same propensity in some
areas. But I think that gradually people will adjust to it to the
extent that companies want to entertain and so on. They will pick
up the expense. But I simply say this, that if you are going to
bring in fairness for the great bulk of Australian taxpayers, I
think they take the view that they, the ordinary taxpayer, shouldn't
be paying for yours and my meal in a restaurant if it has been paid
out of an expense account.
WILLESEE: Also been suggested, Mr Hawke, that jobs will be lost.
Is that a reality in the restaurant trade or do you think that
is just part of the game?
PM: WEll, what I am saying is that I and my Government have a
responsibility for the whole economy. We have produced record
employment growth because we have the right range of economic
policies. Now, a proper taxation policy is part of the whole
range of economic policies, is going to mean more sensible resource
allocation. You haven't had proper investment decisions being made
in this country, Terry, because there have been quite distorted
incentives as to where you invest. Now there is going to be much
more incentive for people to invest in shares.
WILLESEE: Yes, but Mr Hawke, I am talking about the by-product
of your tough decisions. Mightn't there be people who will lose
their jobs as an indirect result of decisions you have taken today.
PM: There could be some loss of employment in the restaurant area,
I have tried to avoid that.
WILLESEE: Have you calculated a percentage of job loss?
PM: There has been no calculation. But what we have calculated
is that a result of the putting of more money into the hands of
a wide range of people, they are going to have the capacity to
spend more, the levels of consumption shoul * d generally rise so
that the overall employment impact of this tax change will be
very positive.
WILLESEE: Mr Hawke, you have promised no capital gains tax, now
we have it. Prior to the last election your government went, and
Mr Keating went very quiet on refusing to confirm or deny there would
be a capital gains tax. Now we have it. Have we been deceived?
PM: Terry, I don't know whether you have been watching another
program earlier this evening, but you seem, you are terribly close
to making the same mistake of another bloke with a similar name to
yourself. I said in 1983, in the election campaign of 1983, no
capital gains tax. And that was for that period of governmnent that
I was going to the people on tl on. And we kc,, t that. We to.
look we are going to have tliis cer t,, 4 ty. We have glot to tje. t
the business of turning this economy around. We did. We introducedl
no capital gains tax. 1 said when I went to the last election,
PM cont: look we have done all these things. We have turned the
economy around to the point where it is the best growing economy
in the western world. We have now got to approach the whole question
of taxation and made it perfectly clear when I went to the people
last time that all elements of tax, including capital gains tax,
would be on the table. And let me say the capital gains tax which
has been introduced is an eminently fair one. It doesn't apply to
any existing asset, no existing asset will attract it. Secondly,
it will only be on real gains.
WILLESEE: Is there not a chance however as a result of that capital
gains tax, that in fact a death duty will come into effect?
PM: Absolutely not. Because the deeming a death proposition which
was contained in the. White Paper has been taken out. There is no
death duty element of this capital gains tax.
WILLESEE: fiNS anyone in your Party said to you that the changes
you have made are so radical that it may cost you votes and even
power at the next election?
PM: There has been some concern earlier, in some quarters. I can
say that now that the people in-the Party have seen the whole of the
package, and they weren't able to see it, there were some elements
of it that you couldn't go to, they just had to be told today before
we went into the Parliament.
WILLESEE: Do you now have complete support?
PM: I think there is complete support. There may be some people
that will have some concerns about particular parts of it and say
that part will need a bit more selling than others. But my impression
is that now that they have seen the whole of it they think it is a
proper and fair and saleable package.
WILLESEE: Do you believe you will get the support of the Democrats
in the Senate on this?
PM: Well, I had the opportunity just before coming into the
studio of looking at the press release put out by Senator Chipp
on behalf of the Democrats and it is a very welcoming statement.
He points to some areas that they will want to talk to us about.
And of course we will want to talk with them.
WILLESEE: You have no doubt made some enemies amongst the
voters in the electorate. Do you think they will still remember
this day come election time?
PM: I hope they do. Because come election time they will see this
as the most sweeping, fairest, most equitable tax reform in their
memory and they will be able to test that decision iri the context
of our whole economic policy which has produced a situation : here
Australia's economic performance is the envy of the rest of -the
world. And that has been translated already into 430,000 new jobs.
By the time we go to the next election, it will be infinite> he.
ti 11: f 4~ 1 l on jo! L) s t i r.; sc : n
~ UV tfOZ2 2tna La rcr svtn 2-
bc able to keep much more of the extra dollar that they cari.,
that they the ordinary taxpayer are not going to be paying f'or
the free lunch of a whole range of the more privileged peop_,.-
They are going to remember those things. And they are goinl -to
be thankful for them.
WILLESEE: Mr Hawke, thank you very much for talking to us tonight.
4.
WILLESEE: Well as you are aware it wasn't just tax changes that
were announced in Canberra today. It was confirmed we will all
be issued with identity cards, it will be called the Australia
Card. It will come into effect from March 1987. Today we
sought the view of privacy committee, the NSW Privacy Committee
gentleman, Mr Jim Nolan, and we will hear his comments and then
seek the reaction of the Prime Minister who is still with us.
Well, Jim Nolan, like it or not we now have an
ID card, even it is without a photograph on it. Are we about to
enter the era of big brother in Australia.
NOLAN: Well, we think so. We have said 4rom the start that the
issue of an identifying number raises serious privacy implications
and that is why we are concerned that it has come up in the context
of the tax debate. WE think it should have been considered quite
separate and distinct from tax or any one particular other issue.
It requires separate consideration because it is so important an
issue. wiaLL-SE 6-We are now going to be anumber. We are not going to
have a photograph. Where is the real danger? Where do you think
the real danger area lies?
NOLAN: WEll the basic significance of the proposal was always the
number more so than the photograph. The real danger lies now in the
fact that the number facilitates massive computer matching across
a government and private sector records and we have said, again from
the start that that raises serious problems of surveillance of
the population in the absence of appropriate safeguards. In
the United States for example, there is a positive obligation on
the bureaucracy to notify the citizens of the way they are using
personal information with these computer matching programs and the
like. Now on the basis of what is proposed here so far, for the ID
proposal, there is no similar proposal up before the Government as
we understand it. And I would have thought that would have been
at least the bottom line for any consideration of the way the
system would work in practice.
tILLESC-. The thoughts of the NSW Privacy.. Committee. Well Mr
HawKe you heard those comments. What do you have to say about them?
PM: I have this to say, very clearly and specifically. The
question was asked where is the danger in the Australia Card.
And the danger is very clearly identifiable. The danger is for
those who have been into tax fraud and social welfare fraud. Because
the purpose of this card is to stop people rorting the system and
cheating on the system in terms of tax and in terms of those
people who have been getting millions of dollars, hundreds of
millions of dollars for unemployment benefits and other social
welfare payments through fraud. That is where the danger is for
those people. It is calculated that when the system is fully in
operation it will.* mean another $ 540 million going into the rev~ an-z7
frcom peop. le w~ ho 1-a\ C ch' 2, atod. That J-, 4 r Y wl* r
Nr Nolarn ought to what ho is 1--L " bt i ._ tis
danger is. And it will be limited strictly under the legisiation to
the purposes to avoid that fraud that has been taking place onl tbc-.-
revenue and in the outlay side. Now that is thle situation and 1
would suggest if I could put to you the question, don't you think
it is fair to have an Australia Card in this circumstance.
* WILLESEE: Yes. I have no worries at all about the Australia
Card. I think it is a good idea. There are those who don't
think it is a good idea. There are those who think there are
insufficient safeguards. ARe there sufficient safeguards.
PM: Yes, Terry. And I can assure you that in the drawing up
of the decisions in regard to this matter we have very properly
taken into account the concerns of those people who are worried
properly about civil liberties. It will only be relevant to the
areas of employment, certain financial and other transactions
relating to tax and in regard to welfare payments. For those
three areas and nowhere else.
WILLESEE: How do you feel about being given a number?
PM: I have no worries about being given a number because I am
like you and like the overwhelming majority of our fellow Australians.
We are honest. And if the provision of a number is going to mean
that there is $ 540 million of revenue coming from those who have
cheated on the system which means one of two things. Less pressure
upon the honest taxpayers, a greater capacity for government to
look after the community, the honest community. Then if that means
that I have got to have a number, then that is something that Io,-v
not only not worried about, but it is something that I would
positively welcome. As I am glad to say you obviously do.
WILLESEE: Mr Hawke, the Treasurer said in his speech that the
ID card would be needed to perform certain financial transactions.
What sort of financial
PM: Just let me give you an example. One of the great difficulties
in the tax collection area has been a matching up, Terry, between
company returns where they indicate interest payments or
dividend payments and then matching up the name " SMith" or
" Jones" that is on that area of income that is going to someone
and then matching with Mr Smith, Mr Jones. Now under the system
of having the Australia Card, that will mean that that matching
up will be infinitely easier. And so that those people who have
been receiving income but not paying tax on it will now not be
in that privileged position. And I believe that the overwhelming
majority of Australians believe that that is something that ought
to happen.
WILLESEE: Mr Hawke, thanks for talking to us and thanks for staying
for the extra..
PM: My pleasure.
ENDS