PM Transcripts

Transcripts from the Prime Ministers of Australia

Howard, John

Period of Service: 11/03/1996 - 03/12/2007
Release Date:
09/04/1999
Release Type:
Interview
Transcript ID:
11216
Released by:
  • Howard, John Winston
TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP JOINT PRESS CONFERENCE WITH THE TREASURER THE HON PETER COSTELLO MP FOLLOWING THE PREMIERS’ CONFERENCE

E&OE...................................................................................................

Ladies and gentlemen, today we have had an extraordinarily successful

Premiers' Conference. We've reached agreement on all outstanding

matters relating to the financial agreement between the governments

which has now been signed, sealed and delivered. And the last act

in the dramatic transformation of Australia's taxation system

and the last deed required to take this country into the 21st

Century with a financial and taxation system fit for the 21st

Century is for the Australian Senate to take heed of what the governments

of Australia, the Federal Government and the six State governments

and the two Territorial governments of Australia have done.

It was a very good meeting, there was a bit of give and take. The

Commonwealth was able to go part of the way in relation to the Queensland

situation. We agreed with a number of the State requests in relation

to the disputed items. We did not agree with one major request relating

to the fringe benefits tax because that did not involve as alleged

by the States any diminution at all of the goods and services tax.

Overall it was an outstanding result. It speaks volumes for the constructive

character of these meetings when they are backed by a decision of

the Australian people. As one of the Premiers said today, the Federal

Government has a mandate to implement taxation reform and of course

we do. And the Premiers were recognising that and that is why they

signed this agreement. But it would be wrong of us, of either of us,

to discount the historic character of today's agreement. This

is the largest single transformation of Commonwealth-State financial

relations at least since the end of World War II and perhaps since

federation. And it lays the basis importantly for a growth in tax

revenues to the States that will fund the schools, the roads, the

police services and the hospitals that the States need.

One of the ironic things to me about this whole tax debate is that

the GST is the most pro-welfare sector tax system that this country

could ever have. Because it's through the GST going to the States

that for the first time the States will have enough money to fund

all of the services that they want to fund.

The other item that I'd like to mention is drugs. The Commonwealth

has offered a new $220 million drug programme over a period of four

years. This is over and above the $290 million under the Tough on

Drugs strategy that I have progressively released over the last couple

of years. The biggest single item in the new programme is a diversion

strategy whereby the Federal Government will fund, we calculate up

to 300,000 treatment places over a period of four years as part of

a diversionary programme whereby people who have been apprehended

by police that are not judged to be people who would benefit from

going through the criminal justice system are offered the opportunity

of going into treatment. And if, we believe that if we can through

this approach divert a large number of those people into treatment

facilities that will not only be of enormous long-term benefit to

them but also to the community. The Commonwealth will provide the

money, we will fund the places, the States and Territories will provide

the police services, there will be joint assessment teams to be funded

by both the Commonwealth and the States. We will work out a separate

protocol between the Commonwealth and each of the States in relation

to the interaction of the assessment procedure, the police and the

treatment facilities. It does represent a new approach. It does have

some similarities to an approach being trialled in Victoria and also

some aspects of the drug court approach in New South Wales. And it

is going to be adopted on a national basis and in addition to that

we'll be providing a lot more resources for schools, some further

resources to go into the activities of the Federal Police and the

criminal investigation activities of the Federal Police and the National

Crime Authority.

But it represents new money of $220 million over and above the $290

million which now takes to over $500 million the additional Commonwealth

Government commitment to the war against drugs. We don't argue

for a moment that it provides all of the solutions but it will be

another important building block. We have also indicated that we will

to the best of our capacity at a federal level fast track the National

Health and Medical Research Council consideration of the listing on

the pharmaceutical benefits scheme list of Naltrexone and also when

an application is made in relation to Buprenorphine we will adopt

the same approach as well. That is the drug that has been mentioned

by Mr Beattie, the Queensland Premier. And the Victorian Premier placed

on the table for consideration by governments, and it will be a matter

to which we will return later, the proposal to establish a national

institute in relation to depression.

Overall, the drugs component of the conference was equally constructive.

There's a genuine desire Commonwealth and States across party

lines to focus on our many common points of agreement and to make

a further contribution towards fighting the scourge of drugs within

our community. And I am particularly pleased at the very co-operative

attitude displayed by everybody in relation to that.

JOURNALIST:

Mr Howard you mentioned give and take with the States on the tax deal.

Are you ready to extend some give and take to the Senate in the form

of enhancing the compensation package?

PRIME MINISTER:

Well, we think the compensation package is good. We think it has stood

the test of scrutiny and examination and we look forward to the debate

starting.

JOURNALIST:

Mr Howard can you guarantee that pensions under the GST will always

be higher than they would otherwise have been without the GST?

PRIME MINISTER:

Well, I can repeat the guarantee that I gave in the election campaign

and the guarantee on which we were elected and that is that under

our arrangements people receiving the pension will always be in real

terms 1.5 per cent ahead of the CPI. That was the guarantee I gave

in the election.

JOURNALIST:

What about in relation to male average weekly earnings?

PRIME MINISTER:

Well, you know the arrangements in relation to male average weekly

earnings. You know that as a result of our legislation there was a

guarantee under that legislation that it would not fall below a certain

percentage of male average weekly earnings and that's always

been the case. If as a consequence of the action of our proposals

and our commitment pensioners are even better off, well that's

good.

JOURNALIST:

Is your drugs policy predicated on zero tolerance especially in schools?

PRIME MINISTER:

Look our drugs policy is not predicated and never has been predicated

upon a particular description. Everybody around that table today is

united in the view that there is no place for drugs in the schools

in Australia, and that we will give the principals, the parents and

the school communities every support in pursuing that objective. Some

people like myself call that zero tolerance. Others might call it

something else. But the name is not as important as the commitment,

and the commitment is that there is no place for drugs in our schools

full stop.

JOURNALIST:

On radio this morning you spoke of an element of compulsion for this

treatment.....

PRIME MINISTER:

Yes there is. There is an element of compulsion. I mean what happens

is that if somebody is apprehended they have to be assessed. They

might then decide not to comply with the, or enter into the treatment

to which they have been assessed. But of consequence of that could

be that they slip back into the criminal justice system.

JOURNALIST:

Mr Costello how important was your conversation with Senator Colston

in arranging the extra money for Queensland and how important do you

think your future dealings will be with him in terms of arranging

passage of the GST legislation?

TREASURER:

Well it's very important. Senator Colston had previously made

representations to us concerning additional funds for Queensland.

He's a Senator from Queensland and I think he's got the

interests of Queensland at heart. I rang him again this morning. We

had a discussion about compensation. He put his view to me and as

it turned out the Commonwealth and Queensland compromised. Queensland

had been seeking an additional top-up after the first year and we

agreed to give a top-up after the second year. And so we met the Queensland

demand half way. But Senator Colston was very important to that and

I recognise the submissions that he made and they proved very successful,

very good for Queensland if I may say so today.

JOURNALIST:

And what about the future of the GST? Did he express or do you expect

to discuss with him any question of compensation for the poor under

the GST plan?

TREASURER:

Well I think Senator Colston's made the point before, that he

respects the Government's mandate in relation to GST. By the

way it wasn't just Senator Colston. Premier Beattie made the

same point today. He accepts the Government's mandate in relation

to GST. We went to an election. We received a mandate and those people

that recognise the outcome of elections, and that governments ought

to be allowed to govern on the basis of their policy recognise that.

And Senator Colston's made that point previously I believe.

JOURNALIST:

Treasurer, the States, Premier Beattie...

PRIME MINISTER:

Speak up George. I can't hear you and I always like to know what

you're saying.

JOURNALIST:

You said Peter Beattie respects your mandate but that still didn't

stop you from kicking in a bit of extra money. The Senate, even if

it did respect your mandate, would be demanding extra compensation.

Is that now the reality that we are in? That having compromised with

the States, that we are looking at some sort of compromise with the

Senate to get the package through?

TREASURER:

Let me make the point about Queensland's claim. Queensland's

claim was that the GST revenue ought to be distributed on a pure horizontal

fiscal equalisation basis which would deliver them a bonus over and

above the minimum guarantee, the current system. And they said that

they should be entitled to that from the beginning. Our argument was

that that money should be used to make the minimum guaranteed payment

to the other States and that for the first three years any bonuses

should be redistributed into the pool. Now we came to a compromise

with Queensland so that Queensland gets the benefit after the two

years. It wasn't fully what they were seeking but it was a compromise.

Now you're asking about the Senate and compensation. The first

point I make, and I think the Prime Minister said it, the Senate is

the States' House. It would be a funny day wouldn't it if

the Senate tried to vote down something that's just been agreed

by the Commonwealth's six States and two Territories. And you

may well ask why the States' House which is there and elected

on a State franchise would be voting against an agreement between

eight governments and the Commonwealth. You might well ask that first

point. The second point is, and I come back to what was said yesterday,

even after yesterday, the preferred modeling which was requested by

Labor from Ann Harding still doesn't identify losers. I mean

it's all very well to go around and say "additional compensation".

But if each category of person under all reasonable assumptions is

still a winner it's additional compensation to people who are

already winning. And....

JOURNALIST:

But on their assumption, pensioners get 30 cents in some cases.

TREASURER:

Well depending on the assumptions you make George, but I think I'm

right in saying, and I think this has been accepted by Warren and

Harding, and by anybody that's looked at it, on all reasonable

assumptions, under tax reform all identified category and classes

are still winners - are still winners. In other words if tax reform

were defeated they would go backwards. Now I know there are a lot

of arguments that got around about additional compensation but that's

sort of premised on the fact of identifying people who would be worse

off. We have still not, and none of our political opponents, and none

of the modellers, have yet identified a category of person that is

worse off.

JOURNALIST:

So are you ruling out additional compensation, Mr Costello?

TREASURER:

I'm saying that no additional compensation is required if all

categories of person on all possible analyses, with all reasonable

assumptions, are still winners.

JOURNALIST:

Does that mean you are ruling it out?

TREASURER:

Well I gave you the answer ...

JOURNALIST:

At least three of the States are reviewing National Competition policy.

Do you view that with favour and what is your concern about it?

PRIME MINISTER:

It wasn't discussed. Nobody raised it with us.

JOURNALIST:

Premier Beattie...

PRIME MINISTER:

Well he didn't raise it. I mean people can always, you know,

have reviews in their minds and amongst themselves but they didn't

raise it with us.

JOURNALIST:

How much is the total value of the compromises you had to give today

to get the States on board. They were asking $800-odd million, was

it a figure of $600-odd?

PRIME MINISTER:

Nothing like that.

TREASURER:

The largest item of the claim from the States was a claim on fringe

benefits tax of $750 million over three years which is not accepted.

PRIME MINISTER:

But look, can I just say in relation to that – it was give and

take. And one or two of the items that the States put forward had

merit and we agreed to them.

JOURNALIST:

But how much did you end up giving?

PRIME MINISTER:

Much less than they asked for. The precise amount I don't remember,

Paul.

JOURNALIST:

Was it $819 million over three years?

PRIME MINISTER:

Well, I haven't done the calculation. We agreed to give, I think

it was about $70 million a year in relation to the local government

and then there was a certain amount going to Queensland and there

was some in relation to housing and the tax equivalent payments.

JOURNALIST:

Would it have been more than you expected?

PRIME MINISTER:

No. It was about what we thought – look, you may find it very

hard to accept but we actually did try and analyse the merit of the

argument. And there was some merit in the Queensland argument, some

merit, not as much as Queensland claimed. There was certainly some

merit in relation to the local government argument. There was no merit

in relation to the fringe benefits tax argument, none at all. There

was some merit in relation to housing and some in relation to the

tax equivalent regime. So we are reasonable men and we settled in

a reasonable fashion.

JOURNALIST:

Given that, then one could assume if there were any merit in the arguments

put by the Senate you'd have a little (inaudible)....

PRIME MINISTER:

Well, we had an argument about merit last October and we were judged

the more meritorious of the two teams and that's why we won.

JOURNALIST:

Given the defeat on FBT is Victoria the only State that's lost?

TREASURER:

The defeat on FBT doesn't produce any loss in Victoria.

PRIME MINISTER:

No.

TREASURER:

But the claim on FBT by the States was that because the gross up factor

will be increased as a result of the GST, that revenue should go to

the States and not the Commonwealth. The Commonwealth position is

and was that fringe benefits tax, which is an adjunct to the income

tax system, is a Commonwealth tax base and GST is a State tax base

and that the States were not entitled to any of the proceeds off the

Commonwealth tax base. That was that argument. The argument by Victoria

that they haven't done well is an argument in relation to the

funding for 1999/2000. It's not an argument about the distribution

of funds under the new tax system. It's an argument about the

distribution of funds under the current tax system with the relativities

as set by the Commonwealth Grants Commission. It's the last argument

of the ancient regime, that argument. And since they now have a guaranteed

tax base in the future we don't have to have those arguments

anymore because they've got a guaranteed share of the goods and

services produced in Australia at 10 per cent.

JOURNALIST:

Did Victoria go it alone on FBT or did the other States support....?

TREASURER:

It was put forward this morning as a joint demand.

JOURNALIST:

Mr Howard, if the Senate continues to refuse to accept your tax package

in its current form, now that the States have signed off on it, and

if the Senate still refuses, will you consider a double dissolution

election, now that you have the backing of the ....?

PRIME MINISTER:

Oh look, as I've said before, it's not long since I was

re-elected and I've got no desire to race back to the polls.

I remain positive. I remain hopeful. I believe that today's outcome

sends a loud, unmistakable, powerful and emphatic message to the Senate

– get on with it, do the will, do the bidding of the Australian

people; do the will, do the bidding of the Australian States. I mean,

if you can get Bob Carr and Jeff Kennett and Peter Beattie and Richard

Court and John Olsen and Jim Bacon, all of them - three Labor, three

Liberal - to sign up and to say this is the tax system for the new

century, how on earth can the Senate hold out and preserve any sense

of credibility. I mean, here you've got the most recently successful

Labor leader in Australia, he's offered Della yet again to visit

Canberra...

TREASURER:

Which we accepted.

PRIME MINISTER:

Which we accepted. The most recently successful Labor leader in Australia,

the two most recent leaders – I mean, Beattie and Carr have won

elections and those who have lost elections on the Labor side should

take a bit of notice of those who've won elections on the Labor

side and they should heed their message. But we will just take the

Senate in its stride. The debate starts soon. We'll listen to

the debate. We'll talk to people. We believe the Senate should

do the will of the Australian people and I have no intention of hypothesising

and speculating about entirely hypothetical situations.

Thank you very much.

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