Subjects: GST; National Party Conference.
E&O.....
REYNOLDS:
Good morning Mr Howard.
PRIME MINISTER:
Good morning Fiona.
REYNOLDS:
Mr Howard, at the weekend we saw disgruntled and unhappy grassroots members of the National Party complaining that their voice isn't being heard in the Coalition ? are they justified in feeling that way?
PRIME MINISTER:
Could I just say something, Fiona, about the caravan park issue. These residents have been completely mislead by the Labor Party and others into believing that if the half GST, and that's what it is, it's a half GST were taken off their residential payments then they would be better off. Now that will not be the case because the way the tax system works is if you pay the half GST, the owner of the caravan park is then able to get a refund of all the input taxes he pays on things like carpets and air conditioning and heating and so forth. On the other hand, if the half GST is not imposed he can't get those refunds and he will in most cases increase his rent in order to recoup the cost of the taxes he's paid on his inputs that he can't get refunds on. And you'll end up with a broadly comparable situation. Now you don't hear Kim Beazley or Wayne Swan telling the caravan park residents that simple fact. I mean we would never have introduced something that unfairly discriminated against caravan park residents. And on top of this, I point out to you that there's something like a 7% increase in the rental allowance for low-income people. And of course, like every other section of the Australian community, caravan park residents share if they are paying taxable incomes in the tax cuts and the other benefits are available.
Their dollar situation a week is not going to be improved by the removal of this half GST and that's what it is - a half GST - and it was put there deliberately to save administrative costs in those situations and there are quite a number where you have a mixture of short and long stay residents in a caravan park and the option has been given of either everybody paying the tax at 5% - the half GST - with a full refund of income tax credits or no GST being imposed and the owners being input taxed which means they'll put up their rents to recoup the taxes they can't recover.
Now that is the situation and that is why of course Mr Beazley won't guarantee these people. He's prepared to scare the wits out of them, he's prepared to mislead them, deceive them, but when it came to the crunch yesterday ? will you Mr Beazley guarantee that under Labor they will not pay anything, he baulked. He said oh they'll get a high priority, first cab off the rank. I mean what does that mean? Nothing. Because everyone knows Mr Beazley hates the GST so much he's going to keep it.
REYNOLDS:
So has the National Party got it wrong as well Mr Howard.
PRIME MINISTER:
Look, this is an issue that has attracted a lot of publicity. It's like a lot of issues associated with tax. And what you have to do is look at the merits. I mean if there were, you know a clear demonstration to the Government that this group of people were being discriminated against, then of course we'd have another view. But I have looked at this very carefully. My senior colleagues and I have looked at this very carefully and on all of the information available to us, we are satisfied that if the half GST were taken off, these people would be no better off.
REYNOLDS:
You don't think there's the slightest possibility that caravan park residents might actually have a case?
PRIME MINISTER:
Well, I can understand why they're upset, because they've been deceived by people like Wayne Swan, who've gone from caravan park to caravan park. But in true Labor style, they never offer a new idea. It's negative, negative, destruction, destruction. I mean here is a government in, about to bring in the greatest taxation reform in Australia's history, here is a government worried about the long-term future of Australia, caring about laying a secure foundation for future generations and the alternative prime minister of the country is just engaging in the politics of destruction and negativism. Yet he knows from his own experience in government that we have needed long-term tax reform in this country for a quarter of a century. Mr Beazley is failing the national mood, the national need, the public interest in adopting such a negative attitude to our taxation reform.
REYNOLDS:
How did you feel though when the National's Deputy Speaker Gary Nehl said on the weekend that your integrity and honour were at stake over this? That you have to reverse it because your Government made a commitment before the last election that no residential rentals would be hit by the GST?
PRIME MINISTER:
Look Fiona, my integrity and my honour is all about a judgement people make as to whether I am doing the right thing by Australia. Now I took tax reform to the last election. I took a risk on that, a huge political risk. We lost some paint, we lost some seats. But the people re-elected us and they re-elected us to introduce tax reform. It's coming in just under two weeks. It will be of enormous benefit to the Australian community, it will make our exports cheaper, it will reduce business costs, we'll have the biggest personal tax cut in our history, we'll get rid of provisional tax, small business will pay lower capital gains tax, lower company tax. There's a huge long list of benefits. Now of course we are going to get arguments surrounding one or other individual aspect of the tax. But let's look at the aggregate benefit to the nation. I mean in the end we're doing this for Australia, we're not doing it for John Howard, we're not doing it for the Liberal Party, we're doing it for Australia because we believe that this will give us a stronger Australian economy and it will provide us with an even more secure position in a very competitive world. And my responsibility is to look to the overall national interest.
REYNOLDS:
Could there be a political consequence to not rolling back, in Kim Beazley's words, this GST on caravan parks? I mean delegates to the National Party Conference are saying . . . .
PRIME MINISTER:
Here we are less than two weeks out, and what is Mr Beazley doing? He's niggling away at one tiny aspect. Important, and the people concerned are entitled to have it properly explained to them and they shouldn't be deceived by Mr Beazley. And I say to them again, you will not be better off if the half GST is removed. He's carrying on in this sort of small-minded, narrow way, yet we're on the eve of the greatest tax reform that this country's ever embraced.
REYNOLDS:
Yes, but National Party delegates were saying that five to six Coalition seats, and they include some Liberal seats, could be in jeopardy, could even be lost because of this tax. Are you at all concerned about that? Does that rate with . . .
PRIME MINISTER:
Fiona, the fate of the next election is a long way from being determined. I think the next election will be very tough for the Coalition because it's third time around. But the thing that I believe will be in people's minds more than anything else at the time of the next election is a simple question ? has the Coalition done enough to deserve re-election, has the Coalition done the right thing by Australia, will Australia be better governed economically and otherwise by electing a Labor Government? Now if we can win the argument on those three issues, we'll get re-elected, irrespective of attitudes on individual issues. But if we don't win the argument on those three issues, not only won't we be elected, but we won't deserve to be re-elected. That's my attitude to the next election.
REYNOLDS:
But in such a marginal seat like Larry Anthony's there in Northern New South Wales, there's a lot of talk that he could lose his seat because of this issue. That he has over 6,000 residents, is that alarmist?
PRIME MINISTER:
In marginal seats, there's always talk that you might win or might just lose, that's the nature of politics. But in marginal seats, as in other seats people make up their minds on whole range of issues and one of the things they ask themselves more frequently than anything else in the end is which government will be better for Australia. And if we can persuade the Australian people at the end of the next year that we will better for the country than the alternative then they'll vote for us. And that is why tax reform is so important because tax reform is about building a stronger Australia for the future. It is not about this or that individual cluster of people, although they're always important. It's about whether we produce a stronger and better economy.
REYNOLDS:
There's a view on this as well that the Government can't move between now and the introduction of the GST, but there might be a bit more room for you to move after the introduction of the GST in the second half of this year. The National Party's former leader, Tim Fischer said that you'd have to have the GST bedded down by Melbourne Cup Day so that you have a clear run into the election. Are you envisaging at all any sort of change on this issue, on the caravan park issue . . .
PRIME MINISTER:
Look Fiona, the policy remains. We're introducing it, we're not changing it.
REYNOLDS:
You're saying today that you'll never ever . . .
PRIME MINISTER:
What I'm saying is that it's fair.
REYNOLDS:
? change the GST?
PRIME MINISTER:
The whole GST's operation will obviously be monitored, but this is fair. Now I see no reason when something's fair to alter it.
REYNOLDS:
Can you say though that you will never ever change?
PRIME MINISTER:
I can only repeat what I've said Fiona. I believe it's fair and it stays.
REYNOLDS:
Well Peter Reith also on another issue today said that cracking down on the black economy would reap a $7 billion estimated winfall for the states and the Shadow Treasurer says that proves the Government's going to collect more tax than it ever said. Is that a fair enough assessment?
PRIME MINISTER:
Well that was Peter's personal calculation, not based on any Treasury estimate. And the Treasury advice is what is in the Budget. And we have no evidence before us from Treasury or any other official source to say that the increase, the increase collection will be greater. So there is no official, or indeed semi-official figure of $7 billion, Mr Reith was expressing a view that he thought the new system would be good in cracking down on tax cheats and it will and isn't that good? I mean isn't it good for the honest taxpayers of Australia that for the first time you've had a Government that's had the guts to introduce a system that is going to drag a lot of money out of the black economy. And who voted against it? The Australian Labor Party, the friends of the battlers. The friends of all those honest PAYE taxpayers who had their tax taken out each week. Who was their friend when it was needed? John Howard and Peter Costello and John Anderson, not Kim Beazley.
REYNOLDS:
Mr Howard, thank you for joining us.
PRIME MINISTER:
Pleasure.
[Ends]