E&OE....................................................................................................
LIEBMANN:
Prime Minister, good morning to you.
PRIME MINISTER:
Hello Steve.
LIEBMANN:
Meg Lees says this agreement creates a fairer taxation system for
all Australians. Are you confident it will create a fairer more efficient
tax system and will encourage investment and jobs growth?
PRIME MINISTER:
Yes I am.
LIEBMANN:
Peter Beattie says, for example, the tourism industry in Queensland
is going to lose thousands of jobs.
PRIME MINISTER:
Well, the tourism industry in Queensland is in exactly the same position
as it was when Peter Beattie signed up enthusiastically to the agreement.
There has been no change, no change at all. So if the tourist industry
was going to lose the thousands of jobs of which Mr Beattie was speaking
yesterday why did he sign the agreement a couple of months ago? I
mean, this is just silly talk. If Peter Beattie had, you know, really
wanted to be candid with the Australian public he should acknowledge
that two months ago when he signed up it had a certain disposition
to the tourist industry. Nothing's changed so I mean let's get real.
LIEBMANN:
Okay. Are you also confident that the in-principle agreement with
the Democrats will hold, that there is no backing out because Meg
Lees says she's got an escape clause?
PRIME MINISTER:
Steve, this agreement will be honoured in full. I haven't invested
in an enormous amount of time and energy into negotiating this agreement
with the Australian Democrats to walk away on some technicality. I
don't want to walk away because this agreement is a first-class agreement
for the long-term improvement of the Australian taxation system and
I can assure the Australian Democrats and the Australian public that
full faith and credit will be given to the agreement when the legislation
is drafted. Now, obviously there'll be some complications. The technicalities
of drafting legislation are always difficult but there won't be any
attempts to chisel away through the negotiating process with the legislation.
LIEBMANN:
When are we going to see the fine print though because I imagine the
business community is going to be very anxious to have a look?
PRIME MINISTER:
Yes, we'll see it as soon as possible. But can we please get a sense
of realism. Everybody has wanted tax reform for years. Every senior
business figure to whom I spoke privately last week said to me, even
if we don't like some of the anomalies that a food carve out will
produce please negotiate an agreement. And I think you have got to
understand that there's a certain amount of sectoral posturing going
on at the moment. Of course the chief executives of certain business
organisations feel it incumbent to complain about the complexity.
Everyone knows that we would have preferred the inclusion of everything
but we couldn't get that.
LIEBMANN:
Even an across the board five per cent GST on all food?
PRIME MINISTER:
The Democrats wouldn't agree to that. Businessmen constantly say to
me, John, you have got to understand the market place in which we
live. I say to businessmen, you should understand the political marketplace
in which a Prime Minister lives. And we got the best deal that could
have been got in the political circumstances that having regard to
the composition of the Senate. And I think it's a great deal. It's
something that has eluded every government for the last 20 years and
the overwhelming private response I have had from the business community
over the last 72 hours has been extraordinarily positive.
LIEBMANN:
Do you agree with your Treasurer who estimates that the additional
compliance cost for business is going to be about $100 million?
PRIME MINISTER:
Steve, there will be some additional compliance costs. I don't know
the figure, I...
LIEBMANN:
Who is going to pick up the tab?
PRIME MINISTER:
Well, the whole business community obviously will have to carry some
of it, yes, of course they will. But there are huge benefits for the
business community. You take a company like Coles/Myer, take a company
like Woolworths that will have this, sort of, divided food situation.
They have enormous cash flow benefits because they hold money interest
free for a certain number of days. So there are a lot of gives and
takes.
LIEBMANN:
Prime Minister...
PRIME MINISTER:
Steve, it's not ideal but you don't get anything in this world
that is ideal. And it's 85 to 90 per cent of what we wanted and I
find this, sort of, cheese-paring at the edges by some of the spokesmen
for the business community, given what I know to be there strongly
held private views, a bit extraordinary.
LIEBMANN:
But, I mean, look, I went into my local delicatessen yesterday, non-computerised
business. They're saying you have handed them a nightmare, that they
can't....they are just saying to themselves, how can we possibly
discriminate or determine what's in, what's out? And what is it going
to cost us and am I going to pass the cost onto the consumer?
PRIME MINISTER:
Well, look Steve, that wasn't our preferred outcome but I faced a
choice of walking away entirely from fundamental taxation reform or
delivering the outcome that I delivered on Friday. Now, it's as simple
as that, there wasn't another option. The public didn't want another
election which the main issue would have been, do you want a GST on
food or not? The Government didn't want it, we'd had an election last
year and there was no guarantee that if we had another election, even
if we won it, that we would have the numbers in both houses to pass
the legislation at a joint sitting. So there was no practical alternative
and once again I say to those people, I understand what you are saying,
I agree with you that it would have been better not to have had this
carve-out but at the end of the day that was the condition on which
I was able to secure the support of the Australian Democrats. And
I think the national interest has been better served by doing this
deal, 85 per cent of what we wanted, than spitting the dummy and walking
away from it.
LIEBMANN:
Okay. But can I just come back to the compliance cost, whether it's
going to be $100 million or not. If there is an additional burden
on business, especially the small businesses, the non-computerised
businesses, and it's going to cost them. Isn't it likely they're going
to pass that additional cost onto the consumer?
PRIME MINISTER:
Steve, whether it comes out of the GST application or not the extent
to which you pass things onto your consumer is determined by pressures
in the marketplace not by any generic rules. But could I come back
to something even more fundamental. This huge historic tax reform
is not just about compliance costs. I mean, surely it's bigger than
that, surely it's the fact that 80 per cent of Australian taxpayers
will have a top marginal rate of 30 cents in the dollar. Surely it
is about the fact that we're taking about $4 billion off the cost
of our exporters. Surely it's about the fact that we have delivered
an even better deal to the Australian bush because diesel on rail
freight which carries our wheat from the remote areas of Australia
to the coast that that will be cheaper. Surely it's also about the
fact that we now have for the first time since World War II a durable
agreement with the States whereby they can have access to a growth
tax. I mean, let us have a sense of proportion. It always amazes me
in this country that when you do something big there is a focus on
the periphery, there's a focus...Now, sure it's aggravating to
some people, I understand that. But you have got to look at the broader
scene, you have got to look at the broader national interest instead
of obsessively focusing on one aspect of it. I find that one of the
most distressing things about debate in Australian public life.
LIEBMANN:
Look, Prime Minister, I accept that we need to look at this in terms
of the big picture but out there people are watching and listening
to us this morning who are saying, well hang on a minute, I have heard
at the weekend that there's going to be a GST on toilet paper but
none on condoms. And I know you'll say, look, this is just nit-picking
petty stuff. I have heard that, for example, the largest circulating
tabloid in Australia this morning is saying, under the list GST will
not be levied on cooked chicken but cooked chicken pieces such as
wings are going to be covered by the tax. How do you clear up all
that confusion?
PRIME MINISTER:
Well, to start with it's a year before it comes in. The precise definition
of food is going to be negotiated with the Democrats, that was part
of our agreement. So you have got 12 months to do all that. Steve,
can I say again it was always going to be a bit confusing, there was
always going to be some anomalies once you decided to carve out some
food but that was the fundamental condition that the Australian Democrats
laid down. So let's just get realistic about it. I mean, was I meant
to say, oh, I couldn't get 100 per cent I'll take my bat and ball
and go home and sit in my, you know, castle and say, no, I am not
going to play. I mean, that's just childish. I would have been condemned.
I mean, that's not what people expect of their political leaders.
They expect them to negotiate decent outcomes.
LIEBMANN:
All right. Prime Minister, give me a guarantee that over time the
tax is not going to be widened and increased and what guarantee all
those indirect taxes that are supposed to disappear now will, in fact,
disappear?
PRIME MINISTER:
Well, the major one that will disappear on the 1st of July
next year will be the dreaded wholesale sales tax, that will disappear
entirely.
LIEBMANN:
But how do we know, how are the....
PRIME MINISTER:
Well, because it will be law, Steve, that is how. I mean, you know,
please, it will be law. You say, how do you know? The law of this
country will abolish it the same day as the goods and services tax
comes into operation.
LIEBMANN:
And what guarantee your wholesalers and retailers between now and
July 1st aren't going to increase their prices?
PRIME MINISTER:
Well, whether you have a GST or not there's never any guarantee that
a price won't go up anymore than there's if we stayed with the present
taxation system you couldn't guarantee that the wholesale sale tax
wouldn't go up. Paul Keating and Kim Beazley jacked it up without
compensation after the 1993 election having won an election campaign
on opposing a GST. So, Steve, I can't predict what people are going
to do in the marketplace. I can only point out that under this Government
inflation is at a 30 year low in other words, prices have risen less
rapidly under us than under any of our predecessors over the last
30 years.
LIEBMANN:
One last question, Prime Minister, is there any more your Government
can do for the two CARE Australia workers in Yugoslavia?
PRIME MINISTER:
Steve, yes. We can continue to play every diplomatic card we have
got. We can continue to push, we can publicly appeal, we can privately
ask. We will continue to do everything we can. We can't physically
get them out, that's obvious. But we will do everything we can. We
think the trial was extraordinary. We think the penalties were harsh.
Their lawyers are appealing, we feel for their families and those
families should understand that all Australians are very much with
them and are thinking of them a great deal this morning.
LIEBMANN:
Should Alexander Downer go over?
PRIME MINISTER:
I don't think that would improve the situation not in the sense that
he wouldn't make a very persuasive case but in one way I think that's
probably not the right way to approach it. I think that is precisely
the, sort of, approach the Yugoslav Government might want only to
reject it. So I believe the more orthodox, low key diplomatic approach
is probably better.
LIEBMANN:
All right. Thanks for your time Prime Minister.
PRIME MINISTER:
Always a pleasure.
[ends]