E&OE................................................................................................
Well, ladies and gentlemen, I just called this short conference to
say a few things about the statement that Senator Harradine made in
the Senate this afternoon. Needless to say I'm disappointed that
Senator Harradine has indicated that even with the significant increase
in compensation which the Government proposes to make, he is unable
to support the package.
Let me first of all outline to the Australian people the additional
compensation which I told Senator Harradine yesterday with the Treasurer,
the Government intended to make. Firstly in relation to pensioners
we intend to increase from 4% to 5%, the compensation factor for pensioners
and allowees. We also intend to increase from 25% to 26% the percentage
of male total average weekly earnings linked to the pension. Those
two measures represent a dramatic increase in the level of compensation
available to pensioners in particular, and also in relation to the
5% allowees.
It has been our view that the current proposals are adequate, but
we took account of concerns expressed not only by Senator Harradine,
but by others, that in their view the compensation should be higher.
We didn't believe that those arguments were compelling but we
did believe that there was a capacity to provide more compensation.
Therefore it was resolved by myself and the Treasurer that that additional
compensation should be offered.
We also have resolved that in relation to families, within the existing
family allowance arrangement there is a special loading for families
with four or more children which represents an additional $15 to $16
a fortnight. It's our intention to double that allowance, and
furthermore it will in future operate from the third child onwards,
and not the fourth child onwards as now obtains.
The third alteration relates to self-funded retirees. We intend that
the bonus payable to self-funded retirees should be increased by $500
and that that additional $500 should be payable in the second year
of the package, that is the year 2001-2002. Of equal importance we
intend that the special bonus for self-funded retirees should be available
to self-funded retirees who are aged 55 or over, which represents
a significant liberalisation of the existing arrangements.
Two or three other matters were discussed with Senator Harradine.
The first of those was that we indicated a willingness, and an intention
in fact, three years after the package comes into operation to have
a full inquiry into the adequacy of the compensation and that that
inquiry should be chaired by a person independent of government. We
also indicated, having regard to the concern that Senator Harradine
had expressed regarding
people who he claimed were outside the taxation system and therefore
not eligible for any of the compensation arrangements, that we would
establish a special arrangement in the nature of a relief scheme so
that people who claim to be dis-entitled could establish their disadvantage
and be compensated in accordance with the same compensation principles
applied to people who readily came within the compensation mechanisms
of the package.
It is our view that there are far fewer people in this category, particularly
people deserving of compensation than is the view of Senator Harradine
and others but we are nonetheless quite happy to accept the principle
and to provide a relief scheme in relation to those people.
Two other matters I should mention. In the discussion the Treasurer
alluded to a change in relation to the taxation treatment of credit
unions which the Government quite separately believed ought to be
provided for. That's a matter, of course, unrelated to the principle
matters under debate. And finally, I indicated to Senator Harradine
that the Government would accept in full the changes that he wanted
made in relation to the youth allowance and which were the subject
of some discussion earlier this week. Those changes will have effect
in the forthcoming financial year and, of course, are quite unrelated
and will be quite unrelated to the changes to the taxation package.
I indicated to Senator Harradine that that would be done. The fact
that Senator Harradine has indicated today that he is unwilling to
support the tax package in no way alters the commitment I made to
him yesterday.
I take the opportunity of putting on record that at no stage had I
previously given any undertaking to Senator Harradine about specific
changes in budgets in relation to the youth allowance. What I had
told Senator Harradine, and what I repeat today, is that in the discussions
we had last year I have told Senator Harradine that the Government
would take account of the costs of raising children when it framed
its taxation package. And that undertaking was given in the context
of seeking Senator Harradine's support for the common youth allowance
and the terms of that undertaking were put into the Senate Hansard
on my behalf by Senator Hill. So I just repeat again, at no stage
have I broken undertakings given to Senator Harradine. I reject that
completely. I did give him an undertaking yesterday in relation to
the common youth allowance and that will be honoured in full and I
told him this afternoon when we spoke on the phone that that undertaking
would be honoured in full.
I should also make it plain that what was put to Senator Harradine
yesterday were not private bribes to him. They were changes that the
Government had decided ought to be made and they will be made to the
legislation in the Senate before it is voted on within the next few
weeks. We intend to amend the legislation to give effect to what I
outlined to Senator Harradine yesterday. Our resolve to do that is
unaffected by the speech that Senator Harradine made in the Senate
this afternoon.
I should also say to you that the Government's commitment to taxation
reform remains undiminished. We fought and won an election with this
taxation plan fully disclosed, fully revealed to the Australian people.
We believe we had a mandate to implement it, we believe that if the
Senate votes the legislation down it will be disobeying the wishes
of the Australian people. I can't think of an example in my political
experience where a government has been more explicit, more upfront,
more detailed, more candid, more honest about what it intends to do.
We made full disclosure, we held nothing back. We have listened to
concerns expressed and although we do not believe they are properly
based we have been willing to make very generous and significant changes
which involve the cost of between $1 to $1.5 billion on an annual
basis and, of course, on a three or four year basis a much larger
amount. And given the other demands on the Government's surplus including
debt retirement it represented a very generous but balanced response
to the changes that were sought. It remains an even fairer package
with the amendments that we intend to make. We will put those amendments
and we will invite the Senate to vote on the package as amended. And
those who vote against it will be voting down an even more generous
compensation package.
So, ladies and gentlemen, I want to make it very clear that I have
not changed my commitment to tax reform. In the last 24 hours I have
argued in great detail and with great fervour about the value of tax
reform for Australia's economic future. Nothing has changed now as
a consequence of Senator Harradine's speech. If it was good 24 hours
ago for Australia it remains good today. I have always believed in
fundamental reform of Australia's taxation system and I intend to
continue to pursue it with all the vigour at my disposal.
JOURNALIST:
Does that mean taking it to the next Senate after June 30?
PRIME MINISTER:
Well, we'll put it up and obviously if it's knocked back we'll put
it up again.
JOURNALIST:
And does that mean a double dissolution....
PRIME MINISTER:
Oh, I am not going to start announcing election dates, we have only
just had one.
JOURNALIST:
But you are prepared to go to a.....
PRIME MINISTER:
Well, what I am prepared to do is do all that I can to get taxation
reform in Australia.
JOURNALIST:
Is there someone else you can try and woo apart from Senator Harradine?
PRIME MINISTER:
Well, we'll continue to talk to anybody who it seems reasonable that
we talk to. But I'll be talking to the Australian people a lot. And
I'll be saying to the Australian people: we had a seven week campaign
before October of last year. The Government that I lead spelt out
in total detail what I wanted to do. We won that election at some
cost but we won it and if a mandate means anything it means that we
have a right to have that package passed. And those who stand in the
way of that are, in my view, defying the wishes of the Australian
people. And I can't put it any more plainly than that. We need tax
reform. This Government was re-elected on tax reform, this Government
seeks parliamentary passage of tax reform and we'll continue to argue
for tax reform because you go into public life to do things that you
believe are good for the country. I believe taxation reform is good
for Australia and I'll continue to pursue it.
JOURNALIST:
[Inaudible] that does sound like double dissolution talk.
PRIME MINISTER:
Well, they're your words, they're not mine. I think you should reflect
on that fact. I'm simply saying to you that I don't intend
to give up the fight for tax reform. I intend to continue to pursue
it with all the vigour I have at my disposal.
JOURNALIST:
How much did the extra compensation that you offered to....
PRIME MINISTER:
Well that's what I mentioned. I said between $1 and $1 billion
a year.
JOURNALIST:
[Inaudible] billions that Mr Costello rejected on Wednesday.
PRIME MINISTER:
Well I wouldn't have thought 1 to 1 was billions, but you know.
More than one, less than two.
JOURNALIST:
[Inaudible] heavily involved in negotiations....
PRIME MINISTER:
Well the Prime Minister is heavily involved in everything.
JOURNALIST:
Did you get personally in negotiations with Senator Harradine?
PRIME MINISTER:
Of course I had.
JOURNALIST:
Do you regard this as a personal blow that he's rejected it?
PRIME MINISTER:
Well I don't regard it as a personal blow. I am disappointed
for Australia that the task for tax reform is made that much harder,
because the Australian public voted for this. I mean forget my personal
views. What really matters is good policy for Australia's future,
and I have believed in tax reform all the time I've been in Parliament.
I really believe in it. I think I have a responsibility as Prime Minister
to try and bring about change that I believe is good for this country,
even though it's hard, and even though I might be criticised.
But what is the point of holding a great office unless you use it
to the national benefit.
JOURNALIST:
Senator Harradine says that one of the major reasons he's rejected
the GST is that there's no guarantee that compensation won't
be diminished over time. Will you ever be able to convince him that
it won't?
PRIME MINISTER:
Well there's no guarantee of anything in this life, except death and taxes of some form as they say. I mean I can't....Senator Harradine can't guarantee that wholesale taxes won't go up under a future Labor government, the taxes on clothing on't be increased under a future Labor government. He couldn't stop that in 1993.
JOURNALIST:
Are you prepared to offer Senator Harradine anything else to try and win his vote?
PRIME MINISTER:
Well look, I don't know what you mean by anything else. I mean he says quite properly that he doesn't cross trade, and I don't cross trade either. Other decisions that the Government has taken in other non-taxation matters that have been construed as wooing Senator Harradine, I think people have missed the point, that on a number of issues it does happen that my views, and the views of the Government and the views of Senator Harradine coincide.
JOURNALIST:
Well is there anything else you can....any way that you can...
PRIME MINISTER:
You should ask Senator Harradine that not me. I put a proposal to Senator Harradine yesterday along with the Treasurer. And that proposal he acknowledged represented a significant increase in compensation. I mean any of you who studied this will know that it meets the major objection raised by those who were critical of the compensation arrangements. Increasing the MTAWE figure from 25% to 26% is a huge....I think it's a quite significant, even huge change.
JOURNALIST:
So this package is now going to go the Senate.....
PRIME MINISTER:
It will go to the Senate with these changes in it that's the point.
JOURNALIST:
They are additional changes?
PRIME MINISTER:
Well, we certainly don't have any others in contemplation.
JOURNALIST:
Will you revisit exempting food?
PRIME MINISTER:
No. No, no, we are not going to exempt food. I have said that all
along and the more compensation you give pensioners the less is the
case for exempting food. And the whole purpose of compensation is
to protect low-income earners in relation to the cost of the essentials
of life. And if you give them more compensation then the case for
exempting food is diminished, it really is. So as of now the case
for exempting food is a lot less then what it was. The case for exempting
food is greatly diminished. It is much less now than what it was 24
hours ago.
JOURNALIST:
Without the GST going through before June 30, is that going to alter
any of your budget predictions?
PRIME MINISTER:
Well the budget is in relation to this coming financial year.
(ends)