ANNE FULWOOD:
Good morning to you, Mr Howard
PRIME MINISTER:
Good morning, Annie.
ANNE FULWOOD:
Did you hear from Mr Clinton this morning, Mr Howard?
PRIME MINISTER:
No. The American government, after the attack had been launched,
informed us and informed, presumably, other countries. My understanding
is that there was overwhelming intelligence and material indicating
a link between the destruction and loss of life in both Kenya and
Tanzania as the result of the bomb outrages about 10 days ago and
that these targets are directly linked with people who the Americans
believe responsible for those terrorist attacks. Now on that basis
what the President has done and what the Americans have done is
justifiable and I support it.
ANNE FULWOOD:
So will Australia be called on at all for any support further to
this fight against terrorism?
PRIME MINISTER:
Oh, I wouldn't have thought that Australia would be called
upon to contribute anything. Australia, of course, has been willing
in the past in relation to other activities to join the Americans
but this represents an American response to the violent and murderous
attack on American citizens and American assets about 10 days ago.
And distasteful as it is, no country, including the United States,
can sit by idle when attacks are made on its citizens and its citizens
are murdered.
ANNE FULWOOD:
Alright Mr Howard we'll move on now to the big issue involving
Australia, the GST. Are you finding it a little harder to sell than
you thought it might be?
PRIME MINISTER:
No. I knew people would snipe at the margin. But what I say to
the Australian public is think of the long term interests of Australia.
We cannot go on forever with the existing tax system and I was fascinated
to learn last night that this is the view of a Minister in the Keating
Government who lost his seat at the last election.
ANNE FULWOOD:
I must say Mr Howard, I see Gary Johns says that but he supports
it ...
PRIME MINISTER:
This is what he said, "I'm coming down firmly on the
side of the Howard Government tax package because it's the
sort of package that Labor will have to introduce at some stage
in the future. Any honest, decent Government would". I can't
think of a more emphatic endorsement.
ANNE FULWOOD:
Do you think there might be others who support him as well from
that side of politics?
PRIME MINISTER:
I'm sure there are. I mean both Gareth Evans and Kim Beazley
supported Mr Keating's 12.5% consumption tax in the 1980s.
I know that in their hearts Labor know it's right to reform
the tax system but what they want to do is to sneak back into office
on the strength of a tax cut promise and nothing else. Now that's
not good for Australia, you can't have tax relief and tax cuts
without tax reform. We've reached that stage in our history
where we have to embrace reform, we have to look at what is good
for the country. You could always focus on one aspect of a plan
like this and say it's bad or you don't like it or you
wish it was something else. But if you think of the country and
the long term benefit of Australia and Australians you have to support
it.
ANNE FULWOOD:
Mr Howard, while you might say there's endorsement there you'd
have to say there's not too much endorsement if we look at
the headlines of the newspapers today and we'll just put them
on the screen. The Fin Review saying, "Tax package starts
to fray" "Nursing home GST backdown" "PM caves
in on GST for the aged" on The Australian. Do you see
that? That's certainly not endorsement is it? (inaudible).
PRIME MINISTER:
Well that headline in The Australian is wrong. We haven't
caved in on anything. We merely confirmed what was the case under
the plan and that is that the cost of providing nursing home services
will actually fall as a result of the GST and nursing home fees
will be free of the GST. Now that's what we confirmed and what
Mr Costello said yesterday was that we would make certain that those
two situations work their way through and that residents in nursing
homes were not adversely affected. I mean they shouldn't be.
If the cost of providing nursing home services actually falls there's
no justification for an increase in nursing home fees. I mean that's
a matter of common sense.
ANNE FULWOOD:
But if their fees rise as a result of a GST?
PRIME MINISTER:
Well, they shouldn't.
ANNE FULWOOD:
But how can you guarantee, can you stop them rising?
PRIME MINISTER:
Well Annie if your costs fall, if your costs go down you have no
right to put your fees up do you?
ANNE FULWOOD:
What about low rent housing for pensioners what about rises there?
PRIME MINISTER:
The situation in relation to that is that the people who are living
there will not be paying GST on the rent. But the question of future
levels is a matter for State housing authorities. We don't
control them and that is a matter that would be in the purview and
the responsibility of State housing authorities.
ANNE FULWOOD:
There is plenty of confusion about isn't there between State
and Federal responsibilities in this which must make it harder for
you to sell?
PRIME MINISTER:
Annie, it is a complex area and if you're gutless and indifferent
about the future you just walk away and you say it's too hard.
But if you really have the long-term interests of the country at
heart, you have the courage and the guts to try and do something
to reform the system and that's what we're doing. And
I ask Australians to put aside some of the petty politically partisan
sniping from the side and to focus on our long-term future. Of course
we will respond to detailed questions, we've provided enormous
detail and that's why we've got a government funded education
campaign. But the question people have got to ask is will this be
good for our country? And in their hearts even Labor members, former
Labor Ministers know that it will be and that is why we are pursuing
it.
ANNE FULWOOD:
Mr Howard, in your presentation of the tax package you said it
was interlocked. Taking things out, putting things back in might
dismantle it. Do you still stick by that or are you going to have
to make some changes?
PRIME MINISTER:
No, no, no, Annie, it is interlocked. For example, you can't
get a dividend out of the cash economy of $3 billion unless you
have a GST. You can't reform Commonwealth/State financial relations
without a GST. You can't reduce the price of fuel in the bush
without a GST. You can't reform the income tax system in a
lasting way without a GST. Labor tried to do that in 1993, Mr Keating
and Mr Beazley offered a tax cut and no GST. They got back into
office they took away the tax cut and they increased every indirect
tax they could lay their hands on and they provided no compensation
to the nursing home residents, the pensioners or the battlers. In
other words we got their GST but without compensation and no income
tax cuts. And they had to do that because they found that the tax
base was just ebbing away and unless we make this reform the tax
base will continue to ebb away and that was a point made last night
by the Reverend Tim Costello on behalf of the Baptist Church.
ANNE FULWOOD:
Mr Howard, the States say they're not going to be dropping
their payroll tax because there's not enough revenue coming
back to them in the GST. Now that might be a bit of a blow to your
plans is it?
PRIME MINISTER:
Well, it's not a blow because we didn't factor in them
dropping their payroll tax. What we said was that we can go this
far, we'd like to go further but that will have to await another
phase of reform. This is a huge reform that reduces by $10.5 billion
the cost of doing business in Australia and reduces the costs for
exporters by $3.5 billion.
ANNE FULWOOD:
But gee, dropping payroll tax, wouldn't that be a boost?
PRIME MINISTER:
Well of course it would but you've got to find some money
to pay for it and it's something, it's like $7-9 billion.
Now you've got to pitch the GST at an acceptable level and
to have got rid of payroll tax you'd have needed a GST of 13%
or more. Now we think that would have been too high, we think 10%
is the right level provided it applies across the board. You've
got $13 billion of personal tax cuts, you've got cheaper fuel,
a reduction in business costs. But it is an aggregate package and
it is a bold and courageous attempt to fix something that everybody
knows deep down needs fixing.
ANNE FULWOOD:
Mr Howard, the support of welfare groups and welfare lobbies is
very important to you and there isn't a great deal of support
at the moment from such organisations as ACOSS and so on which one
commentator described as political dynamite if you don't get
their support. Now how can you get their support?
PRIME MINISTER:
Well, it's not a question of getting the support of this or
that organisation. It's a question of getting the support of
the Australian people. ACOSS won't determine the acceptability
of this package, the Australian people will. And I notice this morning
that Archbishop George Pell, the Roman Catholic Archbishop of Melbourne
speaking on behalf of the Catholic Church made it very clear that
there is no such thing as a Catholic position on tax reform. He
quite rightly made the point that Catholics and Christians generally
will have different views according to their own personal attitudes.
And the idea that the Churches are for or against a GST is ridiculous,
and Archbishop Pell has made that perfectly plain and he also said
that his personal view was that we needed a broadening of the tax
base in order to support a decent welfare system. So I don't
regard that as a criticism I regard it as good leadership, good
leadership from Archbishop Pell asking people to look at the merits
of the package according to their own personal political convictions.
ANNE FULWOOD:
Mr Howard, you might have seen on our news, the Sydney Olympic
Chief Executive, Sandy Hollway showing some concern about the cost
of Olympic tickets after July 2000. Those bought before that won't
attract a GST, those after worry him with his budgeting. What would
you say to him?
PRIME MINISTER:
Well, he shouldn't worry and he should think of Australia
rather than taking a narrow view.
ANNE FULWOOD:
This is Australia's Olympics Mr Howard.
PRIME MINISTER:
Yeah, but hang on, but the people who will be buying the tickets,
the Australians who will be buying the tickets will have tax cuts.
I mean on the 1st July the tax cuts come into operation so any increase
in the price of things will be more than swapped by the increases
in after tax income that people will have as a result of the personal
tax cuts. That particular criticism is a classic example, if I may
say so, of a taking a very narrow view and only telling half the
story. Of course if you say I don't like a GST on this or that,
that sounds plausible but if you were then were to go on and say
but I recognise that everybody buying those tickets will have more
money in their pocket so therefore the Games won't suffer you
would be presenting a more plausible and more honest a picture.
ANNE FULWOOD:
Mr Howard, just in closing. Are you accepting any dinner invitations
say on the weekend of October 17th?
PRIME MINISTER:
Several, several. It's going to be a very, very enjoyable
night.
ANNE FULWOOD:
I see there have been a couple of little, there's a dog and
cat show or something that normally takes place on October 17th
where the tally room is in Canberra I understand it's been
cancelled. Have you heard about that?
PRIME MINISTER:
I saw some news report about it but I can tell you without any
equivocation I have not decided when the election will be. Like
any other Prime Minister I would like to have an election at a good
time. It won't be on the weekend of the grand finals, I can
certainly rule out the last weekend in September. No chance at all
of an election on the last weekend in September.
ANNE FULWOOD:
A lot of people will be very pleased with that Mr Howard. And what
about the fact that the English, your favourite cricketing opponent,
they're coming here late October for the Ashes tour, the first
Test is on November the 20th, Mr Howard.
PRIME MINISTER:
Yes. Well I'm looking forward to that. And I'm looking
forward to a great contest and I'm sure Australia will hang
on to the Ashes. I want to see a lot of cricket during the summer
as well.
ANNE FULWOOD:
So you might have to fit something in between October the 17th
and November the 20th perhaps?
PRIME MINISTER:
Well I always try and harmonise cricketing pursuits with others.
ANNE FULWOOD:
Mr Howard, thank you so much for giving us some of your very precious
time here on 11AM today, we really appreciate it.
PRIME MINISTER:
Thank you.
[Ends]