E&OE.................................................................................................
MITCHELL:
I appreciate you taking the time. I hope you didn't have a
glass of water with it in it.
PRIME MINISTER:
No, I didn't. Gee, it's one of those unexpected things
and everybody here's hoping it will be fixed up as soon as
possible. It's a reminder though of things we take for granted,
isn't it?
MITCHELL:
Yeah, a bit embarrassing too, though, isn't it, for Sydney?
PRIME MINISTER:
Of course it's embarrassing and everybody does feel embarrassed
and we hope it's fixed as soon as possible. Meanwhile, boil
your water and brush your teeth in bottled water.
MITCHELL:
Does something like this, I don't know, does it impact on
Sydney as an Olympic City, or do you think or will it be gone by
then?
PRIME MINISTER:
Well, it's expected to be gone by the weekend, so I don't
think it will have any impact at all on that. It is one of those
embarrassing things that can happen to any city anywhere in the
world. Let's be realistic about it.
MITCHELL:
They just tell me if it can't happen in Melbourne, we're
very delighted by that.
PRIME MINISTER:
I see, I see. Well, I won't buy into that.
MITCHELL:
No, fair enough. Now the GST, as I understand it you have briefed
members of the Parliament, your members of Parliament today. Is
that right?
PRIME MINISTER:
We're going through the process of briefing different groups
of people. Neil, I would like this plan to be out in the streets
and on the airwaves as soon as humanly possible. I know there's
a lot of interest in it and in no way are we holding it back or
are we playing games with the public and we're certainly not
leaking out selective bits of information to try and manage the
news. It's just that it's such a big thing that once it's
been approved by the people who must approve it then takes a little
time to get everything printed, to get all the figures checked,
to get all the calculations absolutely A1 perfect and that's
the reason why a little bit more time will go by before it comes
out.
MITCHELL:
I guess that my concern about the way it's coming out is that
it's creating quite a climate of fear because of the dribs
and drabs that are there, and the extrapolation that the newspapers
are putting on to it. Do you think it is dangerous in that sense,
it's frightening people?
PRIME MINISTER:
Well Neil there's nothing we can do about that and I'm
quite certain, when the whole plan comes out and people see the
whole picture and not part of the picture, they will lose their
fear. Until that happens and naturally the only responses I can
give are the sort of ones I'm now giving. We are working overtime
to get all the details together in a presentable understandable
form. It is a very comprehensive change. This is the biggest change
to Australia's taxation system since World War II and we have to
be certain that it's plain and simple in its presentation.
We are not trying to hold it back, we are not trying to play games
with the public. If I could announce the whole thing at the weekend
and if I could miraculously complete all the consultation processes
I would do so. But I just can't do that and I just ask my fellow
Australians to be a little patient. I don't expect the press
to be patient. That is not your job and I accept that. I accept
that it's part of the role of the press to try and get information
before it's meant to be released. I understand all of that.
I do complain occasionally about the media's behaviour on some
issues. I don't blame it for trying to get a story a day out
of the tax reform policy. I wouldn't be so nave. But, please,
take it from me, we're not trying to manage the news. There's
a lot of speculation about what's in it. Can I say to your
listeners it is no more than that. It is speculation. And people
should suspend a final judgement until, or any judgement, until
they see the full plan.
MITCHELL:
Is any of it right, are you willing to say that?
PRIME MINISTER:
No, I'm not willing to say that. I'm just willing to
neither confirm nor deny any of the speculation that's been
in the papers. And I will, of course, see that the plan is fully
and publicly announced as soon as possible. But before that happens
there's more work to be done. There are still one or two details
yet to be finalised. The idea that every single detail was nailed
down a few days ago is not correct. There are a few things left
to be finalised and they are being...in the process of being
finalised and when that happens, then you've got to complete
calculations and cross-checking and printing and all sorts of things
and that does take a little while.
MITCHELL:
Do you think it will be available next week?
PRIME MINISTER:
I'm not going to talk about time at this stage. It will be
out as soon as possible. I wish I could say more, but it will be
well worth the wait when it comes out, can I put it that way?
MITCHELL:
The sort of detail that isn't finalised, is that around the
edges or are we talking about main parts of it?
PRIME MINISTER:
Well, everything's important in something like this. It's
not something that's an absolute central core, but there are
one or two important details.
MITCHELL:
I assume that when you talking about leaks when you
talk to the members of Parliament about it, I mean, the leaks will
really take off then, won't they?
PRIME MINISTER:
Well, we'll wait and see. We'll wait and see. I'm
not - as I say, there's a lot of speculation in the newspapers,
it is no more than that and I'm not going to say which bit
is closer to the mark or which bit is further away from the mark.
It is all speculation and I'm not going to confirm or deny
it. I'm naturally happy to talk about the goals of the policy.
I'm naturally happy to describe it for what it is. It's
more than just changing the way the taxation system works, it's
a bold attempt to give Australia a more competitive edge for the
future. It is very much about the Australian economy in the 21st
Century. And I know there are political risks involved in such a
bold plan but if it's in the national interest then you have
a duty to take that risk. I mean, what I'm risking is the political
position of myself and the Liberal Party. I'm not risking Australia's
position.
MITCHELL:
Yes, I wanted to ask you about that because the Premier, Mr Kennett,
here yesterday, was saying he thought you were, well, he said you
are so committed and excited by what was ahead. I sort of got the
feeling that you were very much putting yourself and your Government
on the line over this, that this either in the old Gough
Whitlam terms it's either crash or crash through, that
this goes ahead and is accepted by the people or it's the end
of John Howard.
PRIME MINISTER:
Well, I wouldn't ever seek to compare the Government with
the Whitlam Government, please, never. However, I have taken the
view, and I have this view very strongly, that this plan, this reform,
this change, is very much to the benefit of Australia's future.
Now, I accept, in the conventional wisdom of politics, there is
some personal and party political risk for the Government. But the
important thing is what is in the national interest and I have an
obligation to risk my own political position in order to achieve
something for Australia. It's not, in my terms, an acceptable
trade-off to say, well, I'll consider our political position
and to hell with the public interest. What really matters is Australia's
future. And everybody knows, Kim Beazley knows, Gareth Evans knows,
you know, Jeff Kennett knows, everybody knows we need a new tax
system.
I mean, for heaven's sake, Kim Beazley and Gareth Evans supported
Paul Keating 12 years ago when he said we needed a new tax system.
I mean, we all know that. We can't go on forever with the present
system. Okay, there is a risk. People can react negatively. Mr Beazley
will run a fear campaign. I mean they will try and scare everybody
but, in the end, is the country going to be any better off? Paul
Keating scared everybody in 1993 and the country was not better
off when he won the election. He then went ahead without notice
and without warning and put up all our indirect taxes. So, in the
end, I have an obligation to argue for what is good for Australia's
future and if I suffer politically, well, that is the process.
MITCHELL:
But you either get it up or you're gone, don't you?
PRIME MINISTER:
Well, that is a matter for the Australian public. What I am doing
is saying that the Australian economic interest and public interest
is more important than my political hide.
MITCHELL:
Okay. Once it's released, whenever that is, next week, week
after, whenever it is, is that it, is it not open to further change?
We saw the situation the last time this was tried with last minute
changes. Once it's there, is that it?
PRIME MINISTER:
Oh, yes. There'll be provision made in the announcement in
a number of areas for consultation. But the essential elements are
not going to be changed, no. We have spent months thinking about
it and testing ideas with various people, with thinking about different
combinations and what we release in the very near future will be
it. We will naturally reserve some areas for discussion, particularly
in relation to transition and implementation and we'll establish
a mechanism for people's views about those transitional arrangements
to be put. However, the rates that are announced and all the other
details and all of those things, they will naturally not be open
to negotiation.
MITCHELL:
One of the things that's coming through to me from people
is a fear that there'll be profiteering possibly around it
where prices which should go down, won't go down because people
will be making the extra dollar out of it. Will there be a mechanism
to prevent that?
PRIME MINISTER:
There will. We've given a lot of thought to that. And part
of the announcement will be a mechanism to ensure that price decreases,
as a result of changes in taxation arrangements, will occur. We're
not going to cop any attempt by anybody to profiteer. The purpose
of this plan is to deliver to all Australians a better taxation
system. There'll be mechanisms to compensate and protect low-income
earners and we intend to see that those mechanisms work to the full.
And there will be arrangements which will crackdown hard on anybody
who attempts to profiteer.
[COMMERCIAL BREAK]
MITCHELL:
We're speaking to the Prime Minister, talking about GST, but
you can raise anything you wish. Hello, Annette, go ahead please.
CALLER:
Good morning, Neil. I would just like to ask Mr Howard with
the GST, as far as buying and selling or buying, especially young
couples, buying a home, are they going to put 10 per cent on the
cost of that purchase of the home?
PRIME MINISTER:
Well, Annette, I won't answer that because it is to go into
the details of what may or may not be in the plan and until I'm
ready to announce the whole lot I'm not going to announce bits
and pieces of it. I understand your interest. Let me respond by
saying that when you see the whole package, having in mind you interest
in buying a home, I think you'll be well satisfied.
MITCHELL:
You must be a bit frustrated by this, Prime Minister, because you
know the answers and you can't say them.
PRIME MINISTER:
I am, but what else can one do if you want a proper launch and
proper explanation of something. You're damned if you do and
you're damned if you don't. I don't want to disappear
into a cocoon until it comes out and then be accused of running
from answering questions on it. I'm happy, to the best of the
limitation that I've got, to deal with people's answers.
But, gee, when it comes out I think this few days of frustration
will be forgotten in 10 minutes because people will have so much
to occupy themselves and there'll be so many different aspects
of the plan that people haven't thought of that will enthuse
them.
MITCHELL:
How broadly will you debate it once it's released? For example,
will you debate the Opposition on it, debate Kim Beazley?
PRIME MINISTER:
I'll debate Kim Beazley during any election campaign.
MITCHELL:
Okay, fair enough. The other thing Jeff Kennett here said
that he'd be keen to get on the road to help sell it. Do you
want him out there with you?
PRIME MINISTER:
Yes, I do. Jeff has been an enthusiastic advocate of taxation reform
and I would expect, when the whole plan is announced, that Jeff
will be one of its strongest supporters because he's been calling,
for a long time, for taxation reform. And, on this issue, I believe
that Jeff Kennett and John Howard will be working together very,
very closely indeed.
MITCHELL:
I think you might, in general terms, be able to answer this. But
I noticed the Chamber of Commerce is talking about the dangers of
it being inflationary and the need for, well, perhaps even the need
for an interest rate rise.
PRIME MINISTER:
Well, I don't believe there'll be any need for an interest
rate rise, definitely not. When it all comes out I don't think
people will be concerned in the least bit about any possible inflationary
consequences. And bear in mind that Australia now has the lowest
inflation rate in the western world. There could not, therefore,
be a more ideal time to introduce a plan of this character.
MITCHELL:
I should, in fairness, say the American Chamber of Commerce in
Australia, not the Australian Chamber of Commerce.
PRIME MINISTER:
Yes, well, I assumed it had to be an overseas Chamber of Commerce
because the Australian Chamber of Commerce and Industry have been
a very, very strong supporter of taxation reform, very strong indeed.
MITCHELL:
And on the business side, will there be significant business tax
reform or are you going to save some of that for a later stage?
PRIME MINISTER:
Well, we've already indicated that an option in this area
would be to lay out a general framework for future reform and that
there should be consultation with the business community against
the background of that framework. And that is an option that both
the Treasurer and I have spoken of earlier. And certainly there
will be a number of changes and reforms that affect the business
area, but there's also the option of laying out a framework
and taking part in a consultative process in relation to that. Bear
in mind that any fundamental restructuring of the taxation system,
particularly in the area of indirect taxation where you might replace
existing indirect taxes with a goods and services tax at a single
rate, bear in mind that that, of itself, delivers enormous cost
savings to the business community and is, therefore, of particular
benefit to exporters and particularly, again, within that group
of exporters, to people who are manufacturing exporters.
MITCHELL:
We'll take another call. Hello, Mark, go ahead please.
CALLER:
Yes, Neil, good morning and good morning Mr Howard.
PRIME MINISTER:
Good morning.
CALLER:
Mr Howard, I wanted to draw your attention to a decision taken
by the ATO in respect to a movie production which I believe has
been discussed at Federal Liberal Party meetings. Basically what's
happened is, four years ago I, along with 900 other investors, invested
in a movie. Now, at that stage the Assistant Commissioner, Kevin
Hockter, had given an opinion on movies in general to say that they
would be allowed as a tax deduction. Now, we've received, along
with 900 other people, a letter from the Tax Office, saying
four years after that event and despite auditing that production
company for the last four or five years they've decided
that they're not going to have that allowed as a tax deduction.
In addition, they're going to put penalty interest and a penalty
on people who have claimed that as a deduction. And we're getting,
unfortunately, no assistance at the ATO. We've actually had
meetings with the ATO on Monday. We've had a collection of
people drawn together with our solicitor and we've also had
meetings with a local Federal member who said that this has been
brought up with the Federal Liberal Party.
MITCHELL:
Okay, thanks Mark. I think that's explained it and it obviously
has implications for other film investments as well.
PRIME MINISTER:
Mark, I gather that you said you had been told four years ago by
Mr Hockter, was it, Kevin Hockter?
MITCHELL:
Yes, I think that's right. Mark, was that it?
CALLER:
Yes.
PRIME MINISTER:
...that this investment would be an acceptable tax deduction.
Now, if you can provide the evidence, the letter or whatever was
provided at the time, if you could provide that to my office - I
have heard reference to this issue in a number of contexts. I think
there was a press report in the Financial Review about it,
an article written by Trevor Sykes a few days ago - I will have
a look at it. Bear in mind that under the Tax Act the Commissioner
has an independent authority and I can't overturn his decisions
but I can make representations to him in a quite open way if I think
he's done the wrong thing. And I'm not reluctant to do
that if I do think he's done the wrong thing. So could you
and anybody else affected by this who may happen to be listening,
if you can get to my office the material evidence of the assurance
to which you refer, plus, of course, the subsequent communication
which disregarded that earlier assurance, I'll have a look
it.
CALLER:
Okay, Mark, hold on and we'll arrange, if you wish
I'd like to see a copy of that as well if you don't mind,
just hang on.
MITCHELL:
We'll take another quick call or we're running out of
time for the Prime Minister. Judy-Anne, go ahead please.
CALLER:
Good morning, Neil. Mr Prime Minister, it's Judy-Anne from
the National Office of Disability Support Pensioners Australia.
You probably had a couple of faxes from us in the last...
MITCHELL:
Judy-Anne, I reluctantly sort of continue here because this is
not normally for lobby groups, it's for members of the public.
But seeing you're here...
CALLER:
Well, that's what we are Neil.
MITCHELL:
Yes, I understand that, but you have other means of access. So
let's make it a very quick question if you don't mind.
CALLER:
Yes, certainly. Mr Prime Minister, has consideration been given
to those on a disability support pension, the young pensioners,
with the GST for affordability in our pensioners to pay for health
purposes and medications when it comes down to the pharmaceuticals
level? Also, we're looking at utility bills and the list goes
on. We're a bit concerned that we may not be able to afford
these things on such a low fixed income.
PRIME MINISTER:
Well, when you see the plan you won't have those concerns.
MITCHELL:
Mr Howard, I want to ask you about something else. Now the full
Telstra sale is not on, what happens...
PRIME MINISTER:
Well, now, that's not right.
MITCHELL:
Put on yet.
PRIME MINISTER:
No, all that's happened is that it will now be done in stages.
We remain committed to the full sale of Telstra but we will do it
in stages 49 per cent first then if we're told
by an independent committee that the community service obligations
of Telstra will be met, we then proceed to sell the rest.
MITCHELL:
What happens to the social bonus?
PRIME MINISTER:
Oh, the social bonus remains. We have announced some details of
it and some further details will be announced in the future. Obviously
the payment of that social bonus is conditional upon the sale, first
of all, of 49 per cent and then the sale of the subsequent government
interest in the company.
MITCHELL: