Subjects: Tax avoidance, Ralph Review, ANTS deal, Democrats, Sale
of Telstra
E&OE............................................................................................
PEACOCK:
Prime Minister, can you tell me a bit more about this crackdown on
contractors? People who've been avoiding tax by avoiding tax
by forming companies, that kind of thing, are going to pay 20%. What's
that about?
PRIME MINISTER:
Well what we've agreed to do is to refer to the Ralph Committee
the desire of the Democrats to have some action taken in relation
to unfair avoidance of tax through the use of certain company structures,
and also to examine the possibility of the introduction of a 20% company
tax. What we've agreed to do is to refer those proposals to the
Ralph review on business taxation.
PEACOCK:
But it's on the never ever, it may not ever happen?
PRIME MINISTER:
Well no. We have.....
PEACOCK:
It'll be referred.
PRIME MINISTER:
May I finish? We have agreed to refer it to the Ralph Committee.
PEACOCK:
And what happens then though? I mean there's no guarantee.
PRIME MINISTER:
Well the Ralph Committee will have a look at it and make a recommendation
to the Government.
PEACOCK:
So there's still a bit of, what would you call it, fine
tuning' to this package that will be scrutinised by the
Democrats in the Senate?
PRIME MINISTER:
Matt, I don't know what the purpose of that question is. Can
I answer it this way by saying that we have made an agreement with
the Australian Democrats, and that agreement is going to be honoured
in full.
PEACOCK:
Senator Murray said at the weekend that they'll be watching every
paragraph basically through the Senate. You're not concerned
about any changes that may be necessary in the drafting of the regulations
et cetera?
PRIME MINISTER:
We are going to honour the agreement.
PEACOCK:
Mr Costello did describe it as "nightmare on main street".
And is that problem of whether you're putting thermometers or
using your fingers or whatever with cooked chickens and uncooked chickens
one of the Democrats' making? Do you leave the responsibility
at their feet or do you share it?
PRIME MINISTER:
Matt, everyone knows that we would have preferred an option that didn't
include the carving out of some food, but that was not possible of
achievement. Everyone knows that. And the condition of getting agreement
with the Democrats was to leave out food, basic food. Now everyone
knows that. There's no point in going over all of what happened
before we reached the agreement. That is a waste of time.
PEACOCK:
But it is something that the Treasurer dinned into us over the months,
this....
PRIME MINISTER:
Well Matt, Matt look, you know the reality. The reality....I'm
sorry, the reality is that in order to get agreement we had to accept
the excision of food. Now that was the reality.
PEACOCK:
But I accept that this isn't your responsibility, it's not
something that you've deliberately done of your own making. But
how much more unpopular do you think it's going to make the tax?
PRIME MINISTER:
Matt, I think the outcome is very popular.
PEACOCK:
It's not the feedback that comes from the shop owners is it?
PRIME MINISTER:
Well I think the public is very pleased indeed, and I haven't
spoken to a businessman publicly or privately over the last week who
didn't want a settlement, even if the price of that settlement
and that understanding was a carve-out of food.
PEACOCK:
Now both you and the Treasurer seemed delighted on Friday night when
the announcement was made. The Treasurer even went so far as to offer
to kiss Meg Lees over the deal. There is this concern though isn't
there that it may be the kiss of death. Rather than a paradigm shift
for the Democrats, it might be the recipe for a splintering of the
party.
PRIME MINISTER:
Gee, you're negative.
PEACOCK:
But it is, it is a question to be put is it not?
PRIME MINISTER:
I don't think the Democrats are going to split. Anyway if you
want to talk about another political party, go and talk to that other
political party. I mean I'm not a commentator on the Australian
Democrats. It's presumptuous of me to make public comment on
the internal affairs of the Australian Democrats. I have found Meg
Lees and Andrew Murray good people to deal with. They're straight,
they're not playing games. They're interested in the national
interest unlike the Labor Party who've just huffed and puffed
and said no. In those circumstances it doesn't serve anybody's
purpose for me to give running commentaries on the Australian Democrats.
You go and talk to the Democrats about that.
PEACOCK:
We hope to shortly Prime Minister. The green initiatives in the GST
tax package, you're quite proud of them? You think...
PRIME MINISTER:
Yes I am. I feel very comfortable with those initiatives. They sit
very easily, and very comfortably with the initiative we took after
election in '96 to establish the natural heritage trust, the
largest ever capital injection into environmental care in Australia's
history. Those initiatives announced on Friday night are all of the
piece with the earlier one.
PEACOCK:
Are they things you would have done anyway?
PRIME MINISTER:
Well it's very hard to know which and when, but whatever the
answer to that is they're being done and that's what matters.
PEACOCK:
But I mean, it's again relevant, was it something that the Democrats
got?
PRIME MINISTER:
Well the Democrats felt very strongly about those issues. I don't
disguise that. I'm not pretending for a moment those proposals
were all sponsored by us. I'm not saying that for a moment. I
give the Democrats full credit for what they've done in that
area.
PEACOCK:
Are you concerned at all to get back to the question of Democrats
signing off on this deal that any of the Ralph recommendations may
be held up by the Democrats, or do you think that will get a green
light?
PRIME MINISTER:
Well it's a separate issue. We have made an agreement with the
Democrats. Can I say it again very slowly, that agreement will be
honoured in full.
PEACOCK:
But this separate issue is something that business is clearly concerned
about.
PRIME MINISTER:
What separate issue is that?
PEACOCK:
The result of the Ralph review
PRIME MINISTER:
Yes I know, but what I'm telling you is that that is unrelated
to the agreement I made on Friday night. The agreement made on Friday
night was in relation to matters that are not within the reach of
Ralph. We will, after we get the Friday night thing fixed, we will
then move onto the business review. We remain very committed to the
business review and like all of the other taxation changes, anything
that we settle on in relation to business tax has to be negotiated
through the Senate.
PEACOCK:
And there are no strings like this question of the 20% for contractors
that are tied to Ralph?
PRIME MINISTER:
There are no strings. The one is not interdependent on the other,
but the referral of those issues which you asked me about is fair
dinkum. We're asking Ralph to have a look at them.
PEACOCK:
Prime Minister, the other issue of course, Senator Harradine suggested
that you might be able to rustle up a little more money for the Telstra
deal. Is there any chance of [inaudible]?
PRIME MINISTER:
Well I haven't, for understandable reasons, been involved in
the all the detail of that because I've been fairly focused on
taxation. I understand there are ongoing discussions between Senator
Harradine and Senator Alston. Precisely where they are at the moment
I don't know, you better ask one of them.
PEACOCK:
The Treasurer has flatly ruled it out it appears yesterday.
PRIME MINISTER:
Well look, I haven't followed the detail of that. You go and
talk to Senator Alston about that.
PEACOCK:
Or the Treasurer.
PRIME MINISTER:
You go and talk to Senator Alston.
PEACOCK:
Prime Minister, thanks for joining us.
PRIME MINISTER:
You're welcome.
[ends]