Subjects: World Cup semi-final; GST; motor car industry; Kosovar
refugees; deportation of Xing Ping
E&OE....................................................................................................
WARNECKE:
Mr Howard good morning.
PRIME MINISTER:
Good morning Rob.
WARNECKE:
Mr Howard, more serious matters, I understand next week you hope
that the GST legislation will finally pass the Senate with support
of most, not all Democrats. But I would suggest to you that there
is more disquiet now then there was a couple of months ago about
the GST coming in on July 1 next year. Disquiet about savings being
passed on to consumers. Are you satisfied that there's sufficient
rules in place to stop profiteering?
PRIME MINISTER:
Well I'm satisfied that there will be rules in place. A number
of those rules have yet to be established but they will be. We will
have a year in which to prepare the community for the introduction
of the new system. I am more than satisfied that by the time it
comes in there will be such a focus on how the new system operates
and such a focus on the obligations of traders to pass on price
reductions and there will be many items that will be cheaper because
there will no longer be wholesale sales tax of up to 22, 32% on
those items. I'm satisfied that there will be plenty of mechanisms,
but also the pressure of an inquiry of well informed well educated
public. For example I anticipate that in the week leading up to
this, the introduction, the newspapers will carry a list of the
before and after GST prices of household items. Television stations
will run programmes of people scanning a supermarket shelf and being
told well this item costs X now, after the GST it should cost no
more than Y. And pity help the trader whose price is higher than
what it ought to be. So don't imagine that the introduction
of this won't be accompanied by an enormous amount of activity
and an enormous amount of focus.
WARNECKE:
Because I think Prime Minister a lot of people are already suggesting
the prices are being inflated now in anticipation of July 1 next
year. We are getting a lot of complaints here from people saying
for example, I got a letter yesterday from a woman who pointed out
that food products had been downsized in the contents but the price
has not gone down. And she's very sceptical about what's
going to happen next July.
PRIME MINISTER:
Well I've heard people make those complaints before and long
before there was any discussion about a goods and services tax.
I would suggest that people who do have those complaints they take
them up with the State prices and consumer affairs lobby whichever
is the relevant agency in Victoria who investigate things of that
nature. But there's nothing novel about people making claims
about character and I know that the critics of the GST are going
to try and blame it for every single and every imaginable transgression
that they might find in the marketplace. But I can only repeat that
there will not only be mechanisms but there will also be the huge
pressure and the huge scrutiny and enormous publicity and education
campaign to acquaint people with how the new system operates. We
remind traders of their obligations to pass on reductions and also
of course to acquaint people of the ways and means of ensuring that
those reductions have been passed on.
WARNECKE:
Well the chairman of the Australian Competition and Consumer Commission,
Professor Alan Fells made a couple of interesting suggestions this
week. One was that while he will have the task of keeping an eye
on prices, and I think you've given him $27 million extra for
next year to do that. He thinks he might need more, and the further
question is would the government be prepared to consider giving
him more? The other question though, perhaps a little more down
to Earth, he's suggesting that price tags should carry the
previous product....previous price for the product, the GST component
and the new price. Do you support that and would you give them more
money?
PRIME MINISTER:
Well we will ensure that they've got adequate resources.
That's a matter for discussion between the Treasurer and the
chairman. But I can assure your listeners that the ACCC will have
adequate resources to do its job. The question of what amounts to
adequate resources is something that needs to be discussed between
him and the Treasurer. But the commitment to provide adequate resources
is clearly there. The other suggestion, well it is not our intention
nor is it part of the law to have other than a requirement on traders
to have a GST inclusive price. In other words we're not going
to adopt the American system of saying this is $20 plus tax. We're
going to adopt the European system of it's $20 including the
GST which is not separately identified. Now that's the legal
requirement. As to what individual traders might do, well that is
something that can vary but it's not our intention to change
our law to require what he's suggesting.
WARNECKE:
Yes, he seems to think that particularly in the first month of
the GST it might help to....
PRIME MINISTER:
Well it may well be that some people will elect to do that and
that is something that no doubt different firms will take a different
approach to it. But it's not our intention to require other
than a GST inclusive price. And there are many good and proper commercial
reasons, particularly for smaller operators why that should be so.
WARNECKE:
You will recall as we all do with some mirth that when the GST
was first mooted by your predecessor John Hewson that the debate
seemed to get stuck on the question of birthday cakes and the component
of birthday cakes. This time it seems to be the chook. Now there
still seems to be some dispute about whether cooked chooks, whole
cooked chooks should be covered by a GST. I understand from this
morning's papers that the government wants whole cooked chooks
GST'd.
PRIME MINISTER:
Well Ross, there are discussions taking place between the government
and the Australian Democrats about the fine detail of the changes
we agreed and those discussions are still underway and I'm
not going to canvass those discussions publicly. They're being
conducted in a very cooperative way. There's a lot of good
will. The position agreed with the Democrats which we will honour
in full is that basic food is going to be exempt so we're trying
to give a proper legislative expression for that in a way which
is as simple as possible, recognising when you tax some food and
don't tax other food then there's bound to be some discussion
at the margin. But I'm not going to get into the detail of
it. The issue's under discussion right at the moment and it
doesn't help me to be giving a running public commentary on
it.
WARNECKE:
All right. Well offsetting the GST of course is tax cuts.
PRIME MINISTER:
Very significant personal tax cuts.
WARNECKE:
Well I noticed in this morning's Australian they flagged
an item that they'll be running tomorrow in The Weekend
Australian where they've had two, they call them the nation's
top tax researchers, Professors Ann Harding and Neil Warren, have
analysed the GST package and the tax package. They apparently came
to the conclusion that no matter what you and the Democrats agreed
to, still pensioners are going to be worse off. They will lose most
under this system.
PRIME MINISTER:
Well I didn't quite read the article. I dug through that
article and let me say that I haven't read the analysis by
Ann Harding and Neil Warren so.
WARNECKE:
Well let me tell you, basically it's just pensioners....
PRIME MINISTER:
I know the article, I've read the article in The Australian,
but that article is a trailer of the analysis. What I'm
saying is I haven't read the analysis and until I've read
it and you've read it's a bit difficult to answer questions
about it.
WARNECKE:
Does it surprise you?
PRIME MINISTER:
What?
WARNECKE:
That they find that the pensioners are in fact worse off and that
the rich [inaudible]....
PRIME MINISTER:
What do you mean by.....are you saying that they are inferring
that pensioners are made worse off?
WARNECKE:
Yes. They are saying pensioner couples...
PRIME MINISTER:
I don't think they're saying that. I think what they're
saying is that the greater gains under the.....well what the
article says [inaudible] Harding and Neil Warren are saying until
I've seen their article. But I understand that article to say
that a group other than pensioners will gain most out of the package,
doesn't mean to say the package makes the pensioners worse
off.
WARNECKE:
Well they will gain least. Let's turn it around and say the
pensioners will gain least.
PRIME MINISTER:
Well I would like to see the analysis. You better remember with
all of these things that it is inevitable that you have a tax cut
that people earning more money will in dollar terms get a larger
cut because they're paying more tax. That is an inevitable
night follows day consequence of any reduction in tax. If your tax
bill is $200 a week and you get a tax cut you obviously get more
dollars out of that cut than somebody whose tax bill is $100 a week.
But it doesn't necessarily make it unfair because the first
bloke is paying more tax in the first instance. So of course in
dollar terms if the cut is even right down the rate scales then
he's entitled to get a bigger reduction.
WARNECKE:
Well let's wait until that article comes out tomorrow and
then we can analyse for [inaudible] next week. Another matter regarding
the GST, you're quite clear that the automobile manufacturing
industry in this country is a little worried that with prices likely
to fall from July 1 and quite substantially from July 1 next year
that there may well be a buyers strike over the next 12 months.
People just saying look I'll put off buying a new car until
next year. And people like Ford and Toyota are talking about closing
down their plants for a week or two. You would have to be concerned
about that surely.
PRIME MINISTER:
Well can I just say that there is probably no section of Australian
manufacturing that will gain more from the GST than car manufacturers.
WARNECKE:
That's next year. What about this year?
PRIME MINISTER:
But hang on. I mean how sort of narrow focused can you get?
WARNECKE:
Well this is.....
PRIME MINISTER:
Hang on. I have regular discussions with the car manufacturers
and sure they are interested in even sales and acquisitions and
such. They do take a long view and they should take a long view
and the long view tells them that Australian cars....Australian
manufactured cars will fall significantly in price. They over the
last couple of years have endured a very strong market and very
strong sales. We are monitoring on a monthly basis the buying patterns
in relation to Australian cars in anticipation of the introduction
of the new system and we have an understanding of the industry regarding
that. We're swapping information almost on a daily basis. But
I don't think it is reasonable for people to conclude other
than this is a hugely beneficial deal. You've got wholesale
sales tax at 22% on motor vehicles. That's going to dramatically
fall, the price of Australian made cars will fall. On top of that
there will be effectively a 7 cent-a-litre cut in the cost of fuel
used for business purposes which will feed through in an indirect
fashion to the motor vehicle manufacturing industry. They are amongst
the greatest winners, the greatest winners and their employees the
greatest winners out of this exercise.
WARNECKE:
It does strike me Prime Minister that their suggestion about phasing
out sales tax and phasing in GST on cars over the next 12 months
instead of having a sudden jump on July 1 next year is probably
impractical.
PRIME MINISTER:
Well I think the arrangements that we have proposed are the right
ones. I'm not getting into a public debate with the motor carriers
and I don't think it wants to with me because I tell you what
they are as enthusiastic as all hell about this new system.
WARNECKE:
And just pretending not to be?
PRIME MINISTER:
Well no, I'm not accusing them of bad faith. But they put
a point of view and they feel the need to argue every point and
I understand that. But your listeners should understand that if
the price of an item includes 22% wholesale sales tax and you're
going to have a GST at a rate of 10% you can see that there's
going to be a huge cut in the price of that product. And you know
you could argue until you're blue in the face about this and
that impact on acquisitions sales and so forth. At the end of the
day that's a huge benefit for the company that makes those
cars, it's a huge benefit for the workers, in an industry incidentally
that has seen record sales of cars.
WARNECKE:
Yeah. I suppose they probably look at the possible reductions
in sales tax on some items as early as next month or the month after
with sales tax dropping from 32% to 22% on things like TVs and watches
and cameras, as an example of what could be done. But those items
will come down well before July 1 next year. I mean they're
looking at that perhaps as an example of what could be done.
PRIME MINISTER:
I mean what I'm saying is you should have a sense of proportion.
They are huge winners out of this new system. I've got the
responsibility of balancing every consideration and not just looking
at a narrow sectional interest and answering and meeting every request
that that [inaudible]. It's quite impossible to do that. It's
unreasonable that some industry spokesmen expect governments to
do that particularly when the benefits for that industry in the
medium to longer term are so massive.
WARNECKE:
Can we move across to the question of the Kosovo refugees in Australia?
Are you embarrassed as Prime Minister by what happened this week
with some of them refusing to go into the Singleton army barracks?
PRIME MINISTER:
No I'm not embarrassed. I would imagine a number of their
fellow countrymen would be embarrassed. I would imagine that the
great bulk of the refugees who are immensely grateful for the safe
haven that Australia's provided would be extremely embarrassed
about the behaviour of a small number.
WARNECKE:
Because it really was when we pointed it all out a very small
number that was causing trouble.
PRIME MINISTER:
Absolutely. And I think they would be a huge embarrassment to
their fellow countrymen. But the situation Ross is that these people
are free to move around our country. We made a decision when we
said we would take them that we were not going to keep them in detention,
that they were not going to be kept as if in an armed camp. We said
to them: look we'll give you temporary safe haven. We'll
provide you, at our cost, with accommodation of our nomination.
And they don't have a right to pick and choose what accommodation
we will provide to them and pay for. What they do have is an entitlement
to stay at our expense in accommodation that we have nominated,
and that includes in the case of this family that's being difficult
at the Singleton army barracks. Now it might be in the eyes of some
a little basic and rudimentary but we've got to keep [inaudible]
where they came from. And they have a right to move around but they
don't have the right to say to us: well look we don't
like that accommodation which the government is providing. We require
the government to provide us with some other accommodation for which
we expect the government pay. Now we're not prepared to accept
that. But of course if people choose to move around we're not
going to try and keep them in detention. We're not in the business
of arresting people. But we are in the business of saying to people
that the conditions under which you came to this country are that
you come on a temporary basis. We'll provide you with accommodation
that we deem to be suitable and appropriate and that will be at
our expense. If you want to go out of that accommodation then you're
on your own and you're at your own expense. But you don't
have a right to say to us well we don't like the accommodation
you've given us, we want you to give us some other accommodation.
I mean we can't accept that. If one family can do that then
a lot of other families will say that we'll move as well and
the whole system breaks down.
WARNECKE:
Are you concerned at all about Peter Costello and Jeff Kennett
going toe to toe over the Brighton preselection down here in Victoria
and some of the language that's being used?
PRIME MINISTER:
Well that sounds to me very much like a pretty colourful description
of a preselection. I've been in this game long enough to stay
out of discussion about preselections. It's a State preselection.
It's got nothing to do with me. I'm not particularly interested
in it. I wish the candidates well. But I don't really need
to make a comment on that.
WARNECKE:
All right. The Chinese woman who was deported back to China where
she allegedly had an....well we know she had an abortion, a forced
abortion. She's reportedly applying for a visa. The immigration
minister Phil Ruddock apparently has said she's unlikely to
get it which seems to be prejudging the matter a bit. Do you think
we should consider a visa for her?
PRIME MINISTER:
Well I think people who make applications for visas are entitled
to have those applications considered in the normal way and I'm
not going to say if she is or is not entitled to a visa. Obviously
the minister who handles these matters with very great skill and
care is in the position to know a little more about the detailed
procedures than I because he's the minister. And I don't
think anything he's said on this case has been in anyway inappropriate
but....
WARNECKE:
[inaudible] Brian Harradine seems a bit upset about it.
PRIME MINISTER:
Well I understand Senator Harradine's concerns and I've
had quite a number of conversations with Senator Harradine about
this and there are aspects of the lady's return to China that
bothered me and that's why we've ordered an inquiry into
the procedures that were adopted by the immigration department.
Now I don't want to prejudge the outcome but the latest I have
is that.....information I have is that the lady has returned
to her hometown in China, that there were a number of assurances
about her safety, about her position which were given by the Chinese
government. I understand that a representative of the refugee council,
Marion Le I think her name is who's been very active and very
interested in this case and has spoken to the media a great deal
about it, has expressed general satisfaction with the arrangements
that were made which I find encouraging. We'll continue to
follow her case, we're interested in it. On the other hand
we respect the fact that she is a citizen of China and it must of
course be remembered that she originally entered Australia illegally
and it's very important that Australia be able to have a cooperative
relationship with the Chinese government regarding the return of
people who come to this country illegally.
WARNECKE:
All right Prime Minister, thank you for your time and let's
hope we win on Sunday night.
PRIME MINISTER:
I sure do.
WARNECKE:
All right, thanks for your time.
PRIME MINISTER:
Thank you.
[Ends]