E&OE.............................................................................................
RAY MARTIN:
Welcome back Prime Minister, thank you for your time.
PRIME MINISTER:
It's nice to be here Ray.
RAY MARTIN:
Now, I heard you when you released that today officially, you called
it "a moment of excitement". We don't often see John
Howard excited.
PRIME MINISTER:
Well, I am excited because I really believe in here that this is
a very good plan for our country.
RAY MARTIN:
You've got to sell it obviously to the people, we're
going to see how you are going to see how you go tonight. But what
about this image that it's "trust me I'm a politician."
Is that the biggest thing you've got to try and get over?
PRIME MINISTER:
I think what you've got to get over is that this is good for
all of us, it is good for the whole country, and it is fair to individual
groups. Australians are very decent patriotic people and if they
think a Government is putting something forward that is really good
for the country and it is fair to them, they will support it. Now,
I don't underestimate the challenge, and I'm going to
go around the country, I'm going to talk to people, I'm
going to answer their questions and I'm going to try and persuade
them that it is not only good for the country but it is also good
for them.
RAY MARTIN:
All right, we are going to let you do that tonight.
PRIME MINISTER:
I'll have a go.
RAY MARTIN:
We'll go around the country. Let's go first to a family
in Mildura, who are a low income family from Mildura.
Peter, MaryAnn Crisp and their three children Erin, David and
Katie are battlers from the bush. The family's Mildura based
citrus growing business brings in around $14, 000 a year and MaryAnn
receives about $7000 a year from a property trust. Erin gets Austudy
and MaryAnn also gets the full family payment for David and Katie.
Because their income is so low, the Crisp's paid no tax last
year.
RAY MARTIN:
All right Peter and MaryAnn are with us now. Peter would you like
to ask the Prime Minister a question?
PETER:
Certainly Ray. Mr Prime Minister, it's going to take me a
long time to understand this package. It's quite a bit larger
than I expected and I need time to do that before it gets distorted
by the hype of an election. You've had the best brains in the
nation working on this for while, how long have we got to figure
this out before we go into election mode?
PRIME MINISTER:
Well, I'm going to leave it out there for as long as I believe
is necessary for people to get a reasonable understanding. I haven't
decided when the election is going to be, and I want to go around
Australia talking to people and explaining the way their situation
will be affected. I mean, I understand one of your daughters is
on Austudy, well, for example, that Austudy is going to up by about
4%. In your own situation there will be increases for some family
benefits that will help you and certainly as a result of the changes
to the income tax scales, given what I was told about your income
last year, if that continues to obtain into the future then you
certainly won't be paying any more tax and I think after the
effects of a GST with the increases in the other payments your position
will improve.
RAY MARTIN:
We should make the point Peter that you haven't paid any tax
year that your income was so low.
PRIME MINISTER:
Yes well you will get increases in benefits that are there at the
moment and I calculate on the basis of what I understand that you'll
probably be about $15 - $16 better off, because one of the fallacies
of this whole debate is that people think that everything goes up
by 10%. In fact the across the board cost increase is only about
2% because by removing all of those hidden taxes like wholesale
taxes on a lot of household goods, there is a significant fall in
the cost of a lot of items. So I do want a lot of this to go on
over the next few weeks. I'm going all around Australia to
talk to people to answer their questions.
RAY MARTIN:
Come on MaryAnn, just get in there and ask the PM a question.
MARYANN:
Well, the Prime Minister has partly answered my first question
which was that as a farming family we have good years and bad years
and sometimes we pay little or no tax, and I really can't see
how tax cuts are going to be much help to us if we are already not
paying any?
RAY MARTIN:
Yes, but under the changes we've made to the family payments
you get them irrespective of whether you are in the tax system or
not, and that's one of the advantages. And of course, in the
bush, the cuts in the excise on fuel will be of enormous benefit
in reducing farm costs. The bush will get a tremendous boost out
of this because the whole cost structure of country Australia is
going to come down.
RAY MARTIN:
All right, last question, can we go to you Erin. You are 18, you
are going to vote this year for the first time in this election,
whenever it is. What troubles you about this package?
ERIN:
Well I'm a bit unsure that the 4% increase in my Austudy is
going to compensate for all the living expenses I'll have to
take care of at Uni.
PRIME MINISTER:
Well we think it will because we believe the, across the board
living increase is going to be in the order of 2% and there's
a guarantee in the package that at all times there'll be a
1.5% cushion over and above the increase in prices across the board
so that people on fixed incomes and people on allowances like you,
and pensioners will be protected to the tune of about 1.5% above
the actual cost increase.
MARTIN:
All right. We will move on though. To Peter and MaryAnn [inaudible]
thank you for being part of tonight and thanks for your questions.
Let's go on then to Adelaide, in fact Christine Small who is
a single mum with two tiny children. Adelaide, let's have a
look.
BACKGROUND:
Christine Small is a single mother from Adelaide with two children,
Jack 8, little Lucy is 6. Chris is studying part time at university.
She receives no maintenance from her ex husband so she and the children
live on $603 a fortnight. A combination of soul parent's pension,
family payment and Austudy. Chris is concerned that the services
tax could increase the cost of childcare forcing her to drop her
studies.
MARTIN:
Christine, welcome. Can I ask you, do you feel better off tonight?
CHRISTINE:
Not really, I feel quite scared actually.
MARTIN:
What scares you?
CHRISTINE:
It feels like I've been left out. Can I ask Mr Howard a question?
You talked about fairness in your speech. Under the new tax arrangements
I'd like to know how much better Mr Costello's family
will be off in comparison to mine.
PRIME MINISTER:
Well I can answer you with mine. I don't know the precise
details of Mr Costello's family because his wife works and
I don't know her income and I don't seek to know it. But
the tax cut that I get is in the order of $85 a week. Anybody on
my income gets that and of course the fact is I now pay about $2000
a week in tax because of the size of my income. The other thing
I can say about the Government's tax package is that we haven't
dropped the top marginal rate of tax. In fact after $75,000 people
on higher incomes don't get any dollar gain as a result of
the tax cut. So we have tried in that sense to make it fair. Now,
you, there was a question asked about childcare. Childcare is free
of the GST. Therefore the actual cost of childcare should fall,
quite apart from any increases in the childcare benefits that we're
providing for....
CHRISTINE:
Well you said that with rebates but my childcare costs have increased
$20 a week because you cut [inaudible] payments as well.
PRIME MINISTER:
Well I can point out that in relation to this, because of the new
GST system and because childcare is GST free, childcare operating
expenses will be lower.
CHRISTINE:
I didn't actually ask you about childcare.
PRIME MINISTER:
Well there was a reference to it in the introduction.
CHRISTINE:
Yes I realise that but you've already said in your speech
that childcare was going to be free from a GST.
MARTIN:
Why are you frightened though?
CHRISTINE:
Well I'd like to know whether there's any kind of guarantee
that social security payments will increase if there is an increase
in the GST.
PRIME MINISTER:
Yes, that will be put into the legislation.
CHRISTINE:
That they will rise with...
PRIME MINISTER:
Yes, the guarantee is that the pension will be increased in a way
that it is always 1.5% above the price impact of the GST. And as
far as the GST rate itself is concerned it can't be increased
because...
CHRISTINE:
Mr Howard,...
PRIME MINISTER:
Well could I just finish? You did ask me the question, I'm
trying to answer it. It can't be increased without the unanimous
agreement of all of the State and Territory governments of Australia
plus the Federal Government plus the Senate and the House of Representatives.
Now, of 24 years experience I've had in Parliament I've
never found all of those governments and all of those people agreeing
on one thing. I don't think there's a chance on Earth
that you'd ever get their agreement to increase the rate. I
think it's the greatest guarantee that anybody could give that
it's not going to go up.
MARTIN:
All right.
CHRISTINE:
Well Mr Howard you did promise not to bring in a GST so...
PRIME MINISTER:
Yeah, and I'm being honest enough to go to the Australian
people with this new plan asking them to pass an opinion on it.
If they like it they'll support it, if they don't they'll
vote against it. You can't be more open than that.
MARTIN:
All right.
PRIME MINISTER:
It doesn't seem fair.
MARTIN:
Thank you Christine for talking to us, thanks for the questions.
CHRISTINE:
Thank you Ray.
MARTIN:
Let's go to Sydney now. Let's go to Esme and Tony Smith
who are self funded retirees. Have a look.
BACKGROUND:
Esme and Tony are self funded retirees with three grown up
children and eight grand children. They've been living in the
same house in Sydney for the last 40 years. With careful investments
leave them roughly $500 a week. They lose $120 of that in tax. Esme
and Tony receive no welfare payments and they have private health
insurance. Like many on fixed incomes they worry about any rise
in the cost of living.
MARTIN:
Welcome both of you. Would you like to ask the PM something?
TONY:
Hello Prime Minister.
PRIME MINISTER:
Yes, how are you?
TONY:
Fine, pleased to have this opportunity. We're very concerned
to preserve the earning capacity of life savings which represent
5% of our gross salary over a period of 35 years from 1953 until
1989. We don't have the capacity to top that up anymore with
part-time work which unfortunately I had been able to do for several
years until just now. That's hardly a question but we are concerned
to preserve these savings of ours which are providing something
like $360 a week.
MARTIN:
All right Prime Minister.
PRIME MINISTER:
Well let me set you at ease, on a number of fronts. Like anybody
you'll get a tax cut and I think just on what you've told
me is probably in the order of $15 or $16 a week. In addition to
that, because you have investment income, you'll get access
to the savings bonuses which is $1000 for everybody 60 years and
over and there's an additional $2000 for self-funded retirees
of pensionable age. Then on top of that, if you are in receipt of
any share income and you will get the benefit, if you get any franked
dividends, and people in your situation will know what they are.
That's the dividend you get after the tax has been paid by
the company, and if the company rate's more than the tax rate
you're paying at the moment you lose the difference. Well under
our new plan you'll get it. So that if your tax rate's
say is, 20%, and 36%'s been paid on the share the tax department
will send you the other 19% and that is a particular boost for self-funded
retirees. And one other thing is, you've got private health
insurance. Now you're going to get 30% of the cost of that
private health insurance either through the tax system, if that's
what you want, or simply by going along to the government office
and presenting the insurance premium receipt and they'll give
you 30% of it.
MARTIN:
All right. Esme, quick question for the Prime Minister.
ESME:
Well I can only say that, as it's a broad based tax and it
seems to be, it's going to be of an advantage to the self-funded
retirees, and I only hope that the 10% is really set in place and
will not be raised, although the Prime Minister has said that by
law it will not be raised so I hope that will be true.
PRIME MINISTER:
Well it certainly will be.
MARTIN:
All right. Well we thank you both for that. Thanks for talking
to us.
TONY:
Thank you very much indeed.
PRIME MINISTER:
Thank you.
MARTIN:
Welcome back. We're talking live with Prime Minister John
Howard. We're talking to a bunch of Australians all around
the country. Let's go to Melbourne now to a couple who we could
call a middle income couple. Have a look at this.
BACKGROUND:
Paul and Anne Duffy are middle income earners from Brunswick
in Melbourne. They have two children, Emily and Hugh. As an engineer
Paul earns around $50,000 a year and pays about $14,000 in tax.
Because Anne stays at home with the children she receives the basic
parenting allowance of $110 a fortnight.
MARTIN:
Welcome to us. Would you like to ask question to the Prime Minister?
ANNE:
Yes. Mr Howard, how will you ensure that where a GST means a lower
tax rates, that the savings will be passed on in full to the consumer.
PRIME MINISTER:
Well we're going to get the Australian Competition Commission
with the threat of $10 million fines to make sure that happens.
And your family will do very well out of this plan because....
ANNE:
How many people are you going to need to do this though?
PRIME MINISTER:
Well they'll be given all the people they need.
MARTIN:
To police it you mean?
PRIME MINISTER:
Yes.
MARTIN:
Okay.
PRIME MINISTER:
Well just resuming, so far as your own situation is concerned,
as I understand from the introduction, your husband's income
is about $50,000 and you have one child under four therefore you
will be particularly advantaged by the fact that he'll have
a tax free threshold of $13,000 and when you add in the tax cuts
and the additional family benefits and even after allowing for the
GST I'd estimate that you will be $50 a week better off.
RAY MARTIN:
Do you feel better off tonight folks?
PAUL:
Not really no.
RAY MARTIN:
Well talk to me Paul. Ask the Prime Minister what your concern
is.
PAUL:
Well, there seems to be a great emphasis on providing tax incentives
for everybody and putting money in everybody's pocket but over
the past few years there has been lots of very savage cuts in just
basic services to people like hospitals and education and training
of people who are unemployed, how are those things going to be continued
to be funded and if there is a bigger pool of money available from
the GST why can't some money be put back into those services
that you cut rather than out people's pockets?
RAY MARTIN:
Well, we have done that. Last week I announced that the Federal
Government would put another $915 million into the public hospitals
systems of the states over five years, and one of the other things...
ANNE:
Why are you putting $13 billion as tax cuts. The amount you are
talking about is quite small compared to $13 billion. I mean there's
been millions cut from education and health, as just two examples.
Why can't some of that $13 billion go into health, education,
things that all of us especially low and middle income earners will
benefit from?
PRIME MINISTER:
Well, I think low and middle income earners will benefit from tax
cuts, because tax cuts give you more disposable income...
ANNE:
But I would sooner see my children benefiting by a good education,
good health care for all of us. We are all concerned about health
care.
PRIME MINISTER:
Well, this package will enable people to take out private health
insurance a lot more readily and one of the ways in which I would
have thought your children would have been benefited would be if
you had more disposable income in your pocket and you were able
to spend more on their necessities, and I think, as a parent myself,
and as somebody who talks to a lot of parents, I know that one of
their constant pleas is that they would like to have a little more
in the pocket each week so that those little additional things that
they would like to buy for their children, they can ....
ANNE:
Mr Howard, I would like to ask a question about this please.
RAY MARTIN:
Sorry Anne, we will have to go on, we have to go to Perth as well,
but you sound like a current affairs interviewer there. We'll
come back to you please Anne and Paul. Stay with us. We'll
come back to you. Let's go to Perth though, to an aged pensioner
there, Audrey Warren.
BACKGROUND:
Audrey Warren is a 69 year old pensioner from Perth. At the moment
she receives almost $355 a fortnight. Rent takes up one-fifth of
that. The pension is Audrey's only source of income. In one
year, she has just over $9000 to live on. So she is one of those
most worried by a GST.
Audrey, welcome. Would you like to ask the Prime Minister a question?
AUDREY:
Yes I would. Mr Prime Minister, one of things that happens with
pensioners at the moment is that our pensions are indexed to the
CPI, and the CPI doesn't cover things like food and clothes
and electricity and gas and so on. So that our pension has lagged
the way behind with no CPI rises in the last two years, and it lags
away behind. That pension that I get only actually is $177.30 a
week, which is really not very much. 4% added to that is only going
to make about $7 difference, less than $8 difference. Are you thinking
at any time of changing the system so that pensions are actually
indexed to the cost of living or the CPI counts the cost of living?
PRIME MINISTER:
Well, Audrey, I have to disagree with you. The CPI does include
those things. And the CPI is a very comprehensive measure of cost
of living increases.
AUDREY:
Okay. So...
PRIME MINISTER:
I'm sorry to.... you know, what you said a moment ago was
wrong, and I don't think it is fair that I allow it not be
corrected. I mean, the CPI measure includes all of the things that
you mentioned and that is why it is quite a fair adjustment and
under this plan the 4% increase will more than compensate, more
than cover the estimated increase in the cost of living.
RAY MARTIN:
Is Audrey getting any