I am delighted to announce that an agreement has been concluded between the Government and the Australian Democrats which will secure passage of the coalition's historic proposals to reform Australia's taxation system.
This agreement follows lengthy discussions between myself, the Treasurer, Senator Meg Lees, the Leader of the Australian Democrats, and Senator Andrew Murray, Democrat spokesman on economic matters.
My colleagues, Senator Robert Hill and the Hon John Anderson, have also been involved in discussions at critical phases.
All major elements of the original plan have been kept.
The principal changes are the exclusion of basic food from the GST and restructuring of proposals concerning diesel fuel in response to the strongly put views of the Australian Democrats on environmental issues.
The full measure of the income tax cuts for middle Australia have been preserved. This means that from 1 July 2000, 80 per cent of Australian taxpayers will be on a top marginal rate of no more than 30 cents in the dollar. There has been some paring of the original proposals for income portions above $50,000 a year.
The family benefits have been maintained in full.
The special savings bonus for self-funded retirees will now be available from age 55.
Compensation arrangements have been strengthened.
Generational reform of Commonwealth/State financial relations remains. The States will, as promised, receive the full proceeds of the GST. There has been some rescheduling/deferral of the abolition of certain State taxes.
Benefits for rural and regional Australia have been preserved. In one area, they have been enhanced.
When, on 13 August 1997, I announced that the government planned to reform and modernise the Australian taxation system in readiness for the 21st century, I announced five broad principles which were to govern the reform process. Those five principles have been met.
My thanks are extended to Senator Lees for the manner in which she led the negotiations on behalf of the Australian Democrats. At all times she was direct, constructive and willing to explore issues in an endeavour to resolve differences. She and her colleagues have approached taxation reform with a strong concern for the national interest.
The Democrats' approach has been in stark contrast to that of the Labor Party, which by its vituperative negativity towards taxation reform confirmed its enduring irrelevance to serious policy debate in Australia.
Like every other person who has held high political office in our nation in the last two decades, Mr Beazley knows that Australia needs fundamental taxation reform. Yet he has lacked the political courage to put the national interest ahead of short term, partisan political advantage.
I particularly record my appreciation to the Treasurer. At all stages during the reform process, he has displayed a skilled and comprehensive understanding of the many complex issues involved in what has been by far the most detailed and extensive economic reform embraced in Australia for many decades.
It has been agreed between the Government and the Australian Democrats that we will work to secure passage of the government's legislation, with appropriate amendments, by 30 June 1999.
When that occurs, Australia will have a new tax system for a new century.
28 May 1999