PM Transcripts

Transcripts from the Prime Ministers of Australia

Howard, John

Period of Service: 11/03/1996 - 03/12/2007
Release Date:
28/05/1998
Release Type:
Interview
Transcript ID:
10756
Released by:
  • Howard, John Winston
TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP RADIO INTERVIEW, JOHN LAWS PROGRAMME, RADIO 2UE

E&OE...................................................

LAWS:

On the line from our Canberra studios, the Prime Minister of Australia,

John Howard. Good morning Prime Minister.

PRIME MINISTER:

Good morning John. Nice to be with you.

LAWS:

Good to be able to talk to you. Can I preface our discussion by

saying that I have, and you know it, that I have absolutely nothing

against the GST. I would rather be the supporter of GST. I don't

think we should get too wound up discussing it until we have some

more detail but I do feel that you have left the door open for a

terrific amount of criticism trying to sell it because of the use

of the word, ‘permanently', and the use of the words,

‘never ever'. Do you agree?

PRIME MINISTER:

No I don't. Back in ‘93, I am sorry, back in ‘95

before the last election I ruled out a GST, and you have referred

to that, and that is fair enough, and I don't deny using those

words. And you will be aware of course that I haven't tried

to introduce a GST or tax reform during our first term in Government.

We have formed the view that tax reform, including possibly a broad

based, indirect tax, or GST, whatever you might want to call it,

is desirable for Australia and we are going to the public at the

next election and we are laying out our plan and if the public don't

like it, then they will vote against us, and we will fail.

LAWS:

But Prime Minister but never, ever means never, ever.

PRIME MINISTER:

John, when you say to the public, your position is X, you have an

election and you stick to that and then you believe in the national

interest it should no longer be X, What is wrong with then going

to the public and saying, we have changed our position but before

we implement our changed position we are going to give you a chance

of voting against us.

LAWS:

I don't see anything wrong with that at all.

PRIME MINISTER:

Well, that is all I have done.

LAWS:

But, my only comment, my only comment on the whole thing is...

PRIME MINISTER:

If there's nothing wrong with it, what's all the fuss.

I don't mean you but I mean from others. That is about as open

and as transparent as anybody can ever get in politics. It is different,

if I may say so, from what the Labor Party did in ‘93.

LAWS:

I accept the fact that people should be able to change their mind.

In fact I have always said that I believed it to be an indication

of a big mind if a man can say, well hang on, that might not have

been quite right. Let's have a look at it this way.

PRIME MINISTER:

It's not a question of not being right. I mean, you can form

a different view and if you are honest enough to put another election

between the change of mind and the implementation about change of

mind, that could be, you can't be more open and transparent

otherwise we would all be lumbered with the views we had 20 years

ago. Now you would agree that some of the views you had 20 years

ago on certain issues have changed. So have mine and they will change

again, and providing, in my case as a Prime Minister or a political

leader, I am open with the public and I say, right, I have changed

my position but before I implement that changed position, I am going

to give the public an opportunity at a general election of passing

a verdict, of making a decision as to whether they support my change

of mind.

Now that is very different, if I may say so again, and it's

a very important comparison. In 1993 Mr Beazley and Mr Keating said

they were against a GST and they would give us L-A-W law income

tax cuts and they were against indirect tax rises. They got re-elected

and then they changed their mind, but the crucial difference is

that they changed their mind without giving the public an opportunity

of passing a verdict on their change of mind and they repudiated

all of those promises immediately after they had been re-elected.

Now you know as well as I do that in the 1993 election campaign,

if the Australian public had known from Paul Keating and Kim Beazley

that they were going to increase all of those indirect taxes, that

they were going to renege on the L-A-W law tax. What would have

happened is that John Hewson would have become Prime Minister of

Australia in 1993 and the difference between me and them is that

I am saying to the public now, openly, candidly, my position now

is that I am in favour of tax reform. I will give you all of the

details and you can make a judgement before I implement it, and

if you don't like it, you will vote against me. If you do like

it, you will vote for me. Now that is the difference. It's

open, it's transparent and it's honourable.

LAWS:

But you are drawing the parallel between Kim Beazley and Paul Keating

talking about L-A-W law tax cuts and then going ahead and introducing

certain other increases in taxes without having pre-told the electorate

that that is...

PRIME MINISTER:

I am sorry, it was worse than that.

LAWS:

.... anyway, that they would do it.

PRIME MINISTER:

No, no, it was worse than that because what they effectively did

after the ‘93 election, and this is the view of the best academic

on indirect tax in Australia, Dr Neil Warren, was to introduce in

effect their own GST. They did it without any compensation. So not

only did they, before 1993, say look fellas, we are going to give

you income tax cuts, and go back on that, in addition they said,

we are not only against Hewson's GST but we are against any

increases in indirect taxes and taxes are going to go down. Now

they got elected and they did the complete opposite and they promised

tax cuts and no GST. When they got in they gave you no tax cuts

or only half of what they promised and they gave you their version

of a GST without consulting the public again.

LAWS:

But you've just done the reverse. You've promised people

no GST, never, ever, permanently off the agenda and then gave them

one.

PRIME MINISTER:

Hang on, no I haven't given them one. I will only give them

one if they vote for me in the full knowledge that they will get

it. That's the difference. You can't, I am sorry John,

you can't, nobody can argue against a bloke saying look, that

was my position, I have now had a different, formed a different

view but before I implement that different view I am going to give

the public an opportunity to vote against me if they don't

like the new view.

Now Keating and Beazley did not do that in ‘93. That's

the difference. We are being open and transparent. They in 1993

were deceitful and dishonest and if they had put their plans on

the table, if they had revealed in the ‘93 election campaign

what the ‘93 Dawkins' budget was going to contain, I believe

John Hewson would have won that election and won it quite easily.

LAWS:

Well I am not sure that I would agree with that given that, I mean

there was a....

PRIME MINISTER:

That's a bit academic. Whether Hewson would have won or not

is academic but the behaviour is different. I mean, what I am saying

to the public is yes. My view now is different from what it was

but I am going to lay out my new policy and I am going to give you

an opportunity to pass judgement on it and if you don't like

it, you can vote against it. If you do like it, you can vote for

it. Now I don't know how more transparent, open and honest a political

leader can be.

LAWS:

But Prime Minister, my comment to you, I agree with everything you

are saying abut changing minds and certainly...

PRIME MINISTER:

And the openness.

LAWS:

I agree with the fact that you have been open about it in a convoluted

kind of way.

PRIME MINISTER:

I don't think it's convoluted if you say to the public, I have

changed my mind.

LAWS:

But you didn't say that. I haven't heard you say, I've

changed my mind.

PRIME MINISTER:

Well I have just said it. I now believe that it is in the long-term

interest of this country to have tax reform.

LAWS:

And never ever, in the minds of the Opposition and the minds of

those who are opposed to a GST when it comes from the lips of John

Howard, means three years.

PRIME MINISTER:

No, that's not right. I mean it depends entirely upon... well

it depends what issue. I mean, I am not going to deny what I said

but what I am saying to the Australian public...

LAWS:

You can't.

PRIME MINISTER:

I can't and I won't. I am not going to insult the intelligence

of the public and say that I didn't say it and that was before

the last election and I have honoured that during this term. There

is no GST during this term and now I am saying to the Australian

public I have come to the conclusion and my Government has come

to the conclusion that despite what we may have said in the past

and what views we held in the past, we believe tax reform is essential

to further secure and give safety to the Australian economy and

we are going to lay out a plan, we are going to lay it out before

the public before the next election and to give the public an opportunity.

They can pass judgement. If they don't like me, if they don't

like my plans for Australia then they can vote Labor. If they do

like our plans for Australia they can vote for the Coalition. And

we're not holding anything back. I mean, the difference between

me and Kim Beazley on this issue is that he held something back

in ‘93 because he knew that if the Australian public had been

told that they were going to jack up those indirect taxes in the

‘93 budget, they would have voted for the Liberal Party.

Now what I am saying to the Australian public is, I will give you

the details of my plan. The benefits that accrue to the Australian

public from that plan, if you like it you will support it. If you

don't you will vote for the Australian Labor Party. Now that

is what democracy is all about.

LAWS:

Now John, unlike you, you seem to be missing the point that I am

endeavouring to make here, and the only point that I have made about

it is that I would have thought, given the comments that you made,

given the phraseology like never, ever, and permanently, that you

were going to have a great deal of difficulty selling a GST. Do

you not accept that?

PRIME MINISTER:

I don't believe selling a GST or, I won't be selling a

GST. I will be selling tax reform. I want to make it very plain.

LAWS:

But part of it will be a GST.

PRIME MINISTER:

A broad based, indirect tax is clearly one of the options. We haven't

formulated all the details yet but obviously, if we are going to

reform the tax system in a big way you have got to get rid of the

existing wholesale tax system and if we do have a broad based, indirect

tax or a GST, we will throw out the existing wholesale tax system

lock, stock and barrel with all of the inequities and lopsided approaches

that it contains and of course, one of the advantages of a broad

based, indirect tax and one of the reasons why we are looking at

this again is that it attacks the black economy.

A couple of years ago an academic study was done in this country

that showed that no less than $15 billion a year was being lost

to the federal revenue through the black economy, through the cash

economy, and one of the great advantages of a broad based, indirect

tax or GST is that it attacks the black economy and that means that

you and I and all the other honest tax payers in Australia will

be better off because those who are now evading their responsibilities,

will not be able to do it so easily, under a different tax system.

LAWS:

But do you....do you really think that the average battling Australian

is going to care much about the justice of non-taxpaying people

if it means their bread's going to cost more?

PRIME MINISTER:

Well the average Australian tax payer will be cranky if I produce

a tax policy that makes them worse off. And I can promise them I

won't. I will produce a tax policy that won't leave them

worse off....

LAWS:

You see, because that's the difficulty of it at the moment.

Fear, fear that exists because they don't have an understanding

of it.

PRIME MINISTER:

John, John, I can, I understand that when all the details come

out, and even now, we have the responsibility to explain and to

advocate. Now I accept that. But if you're saying to me, that

we face the job of selling and persuading and advocating, of course

we do, I accept that. And it would be an easier life if I took the

lazy approach and said, "oh, no, we'll leave a rotting,

decaying tax system. To hell with the national interest, we won't

do anything about it.". Now, John, Kim Beazley and Gareth Evans,

they were in Government. They were in fact part of Paul Keating's

tax push in 1985. They know, as I know, as Paul Keating knows, as

you know, as John Hewson knows, anybody, Peter Reith, Peter Costello,

anybody who's had any contact with the Australian taxation

system over the years knows damn well that sooner or later we've

got to reform it. I mean I can remember private discussions I've

had with my colleagues on other sides of the House, particularly

Paul Keating, about the need to change the tax system. There was

a time, 13 years ago, when he and I were basically saying the same

thing about tax reform even though we were on opposite sides of

the House. And he knows that, and I remember it very well and I'm

sure he does. Now all I'm saying is that there does come a

time in the life of any political leader that you, when he's

got to take some risks in the national interest. When he's

got to say "well it might be unconventional, it might be unpopular,

people may vote against." But if you really care the national

interests, if you really believe that Australia needs a better taxation

system, than you've got to take the risk. Now I can say to

the battlers of Australia, you are not going to be worse off. Many

of you will be better off. You're going to be fully protected

if there is a broad based indirect tax. You will see in the compensation

and personal income tax arrangements that you are certainly not

disadvantaged and the great bulk of you will be advantaged The only

people who will lose from my tax reform plan will be the cheats.

LAWS:

Will, will there definitely be reductions in regular income tax?

PRIME MINISTER:

Of course there will be.

LAWS:

Dramatic increases?

PRIME MINISTER:

John, until people see the figures. They'll be significant

and they'll be income tax reductions that will, I believe be

seen as not only fair but also, to many people, generous, because

we believe that some tax relief is desirable. But there are also

other benefits that flow from a change to the system and I've

already talked about the

$15 billion that's been estimated as being slipping through

the fingers, but Tim Fischer made the point last night that the

present system penalises our exporters. I mean we tax inputs to

exports. People make things in Australia to sell overseas, and they

pay taxes on inputs and it's crazy.

LAWS:

You said, you said yesterday if we introduce a new broad based

indirect tax you can rest assured whatever it's introduced

at, it will stay at. But there are going to be people who are going

to say "well that's like never ever.".

PRIME MINISTER:

Well some people will criticise that. I accept that and it will

be for the Australian public to make a judgement.

LAWS:

But you meant what you said, if it's introduced at 10% it

will stay at 10%?

PRIME MINISTER:

I'm not saying what the percent is........

LAWS:

No, no, I know.

PRIME MINISTER:

What I meant is that if it's introduced at ‘X'%

it will stay at ‘X‘%.

LAWS:

Despite the fact that in 21 of 23 OECD countries that have got

a GST, they've all risen?

PRIME MINISTER:

I understand that, but I also understand....

LAWS:

Some of them have doubled.

PRIME MINISTER:

Well, some of them have, but you've got to remember that in

many of those countries they doubled. You know why? Because they

were too narrowly based which of course is the problem with our

existing wholesale tax system. I mean you've got some items

under the present wholesale tax system, take a television set which

is now a pretty standard item for the average family. I don't

think anybody regards a television set as a luxury, that's

32%. I mean, 32% is ridiculous.

LAWS:

And would that 32%.....

PRIME MINISTER:

That would disappear all together. I mean if you have a broad based

indirect tax, what happens is that all of those big lumpy rates

go, and you have a single rate.

LAWS:

I'm just looking here at the, this is interesting, the United

Kingdom introduced one at 10%. It went to 17.5%. It's a pretty

dramatic increase.

PRIME MINISTER:

Oh yes, that's true and it's also true of course that

they had a far more narrow base at the beginning. John, these are

all things that people will make judgements on I'll answer

it when rates are established and the details are out, these are

things that we'll campaign on, talk about, and we'll be

able to tell the public what we intend to do. And if they form a

judgement that this is in the interests of their country and that

it's fair, I believe they'll support it. Now, if they

don't, well they won't, and in any democracy, I will accept

the verdict of the public. I'm not holding anything back. I

mean, I say again, I'm not going to the election saying, if

you elect me I'll do ‘X' and when I get re-elected

I do the opposite of ‘X'. Now, I'm not doing that.

I'm going to the public telling them that we now believe that

tax reform is in the long term national interest of Australia.

LAWS:

When will we get some detail on it?

PRIME MINISTER:

Very soon. I can't tell you exactly when, but obviously...

LAWS:

You're working on it.

PRIME MINISTER:

Well, Peter Costello and I have been working on it quite extensively

and our other senior colleagues, and he's over in New York

at the moment ringing the bell in Wall Street, and he'll be

back shortly, and he and I will be having further discussions over

the coming weeks. But we've done a lot of work, it's well

advanced, it's very....

LAWS:

So are we talking about weeks or months?

PRIME MINISTER:

Well, I don't want to get into that. I mean, weeks merge into

months and ...(inaudible) into weeks. I mean, two months is eight

weeks. So John please, I don't, all I'm saying is that

it is sooner rather than later.

LAWS:

I'm asking you for your sake, not for mine.

PRIME MINISTER:

I realise that, look John, I just you know... sooner rather than

later.

LAWS:

Okay, thank you very much for your time Prime Minister. I think

you are in for a couple of rough days.

PRIME MINISTER:

Well, John, politics is about being willing to do the right thing.

LAWS:

It should be.

PRIME MINISTER:

Well, I think it is right for Australia to have a better tax system

and I am prepared to face the Australian people, to tell them openly

what we intend to do. I don't intend to get re-elected, telling

them one thing and doing the opposite immediately after I'm

re-elected. They really get angry with that, and they have a right

to be angry with that.

LAWS:

But Prime Minister, just back to it again. There are going to be

those people who say well that's just what you've done.

You were elected and you've told us there wouldn't be

a GST and now there is one.

PRIME MINISTER:

But before there will be one, they will have an opportunity to

vote me out if ...

LAWS:

To vote on it.

PRIME MINISTER:

...they don't like me, now that's the difference. They

didn't have that in ‘93. In ‘93 Keating and Beazley

said one thing. They won on the basis of that one thing they'd

said and then they immediately did an opposite without going back

to the public and saying "woops I'm sorry I've changed

my mind, I'm going to introduce my own GST and I'm going

to renege on the L-A-W l

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