Subjects: Regional areas, election, Richard Court, mandatory
sentencing, GST, wine tax and tobacco industry, return of INTERFET troops
E&OE ...........................................................................................
BARTLETT:
Prime Minister Howard, thanks for coming in this morning.
Good morning to you.
PRIME MINISTER:
Well, very good to be with you and it's good to
be back in Perth again.
BARTLETT:
I know you are here for a couple of days . . .
PRIME MINISTER:
Mmmm.
BARTLETT:
Three days all up, but do you have any plans to tour
country WA as you did last week in other states?
PRIME MINISTER:
Not on this visit, but I have visited country WA quite
a lot already. I was the first Prime Minister to visit Kalgoorlie for
almost twenty years. I've been up to Port Hedland and I'll be
visiting country WA again in the course of visits later this year. You
can't go everywhere in a state as big as Western Australia on every
visit. But I have in fact, as I say, spent a lot of time in country areas
of WA and I'll be spending time in country areas of other states
as well as the time I spent in New South Wales and South Australia a couple
of weeks ago. But it's a big country to use that old clich. And
the suburbs of the big cities are important. I was in the outer suburbs
of Perth last night, Joondalup and that's the second, or first ,
it's either the fastest growing or the second growing area in Australia.
It competes with the Albert Shire in Queensland. So, the challenges and
the needs and the concerns of people in the outer suburbs are also important.
I try and make a fair and equitable distribution of my time, I don't
try and focus on one area of the country to the detriment of the other.
I take great care to see that I visit representative areas of the country
as regularly as I possibly can.
BARTLETT:
The reason I ask that question, a lot of pundits are
saying that the next election will be won and lost in the bush. Do you
agree with that?
PRIME MINISTER:
Well, I think the bush is important irrespective of the
election. I think there are problems and challenges and difficulties in
the small country towns and in areas of Australia that have been heavily
dependent on wool and wheat and beef, the traditional commodity exporters.
And they need understanding and help quite separately from any electoral
or political considerations. I don't go to the bush for political
reasons. I go to the bush because I am concerned about some of the problems
Australians living in the bush are facing.
BARTLETT:
Prime Minister do you think on the electoral subject,
do you think Richard Court has anything to fear electorally from the introduction
of the GST on July 1?
PRIME MINISTER:
No, I don't. To start with of course it is a, it's
a federal measure. It's been driven by the Federal Coalition and
people do decide federal elections on federal issues, and state elections
on state issues. But more importantly than that, the GST is very good
news for Western Australia. It is very good news for state services, because
for the first time ever, the state of Western Australia will have a growth
tax, and this is something that the current Premier and his predecessors
both Labor and Liberal have always wanted. All the GST goes to the states.
A lot of people lose sight of this fact, they think all the GST is going
to be collected by the Federal Government. In fact, every last dollar
of the GST will be dedicated to the states and the states will have over
time more money for public hospitals, for government schools, for police
services and so forth.
BARTLETT:
When will the confusion stop about the GST? When will
we stop talking about things like used car prices and tampons and such
like?
PRIME MINISTER:
Well, there's no confusion about tampons. Tampons
are going to be included in the GST. But of course people buying them
will have tax cuts.
BARTLETT:
Will cars be cheaper or dearer.
PRIME MINISTER:
Well, cars will be cheaper than they would otherwise
have been without the introduction of the GST. That's always been
the case, there is no confusion about that. That was the case, that was
the case when I announced the tax policy in September of 1998, it's
still the case. As a result of the GST, cars will be cheaper than they
would otherwise have been without the GST, because you will have a 10%
GST replacing a 22% wholesale sales tax. And therefore the end price to
the consumer, if you replace a 22% wholesale sales tax with a 10% GST
must be cheaper than it would otherwise have been.
BARTLETT:
The Australian Taxation Office has admitted today that
less than 20% of Australian businesses have so far registered in the lead
up to the GST. How confident are you that there won't be mass confusion
come July the 1st?
PRIME MINISTER:
Well, people always put things off. It is human nature
and Australians are no different. They say, oh new tax system, that's
next July I'll get around to that after Christmas. And . . .
BARTLETT:
You think that's all it is?
PRIME MINISTER:
I do, I do. We're starting a major advertising campaign
tomorrow, to encourage people to register to get their Australian business
number and it is very important that any business that's going to
be caught by the GST and that's ones with a turnover of more than
$50,000 have got to register. Then really you should, you should do it,
otherwise you will not really be part of the system and you'll find
carrying on business a lot more burdensome. But I believe that as we get
closer that that number of people who've registered will rise very
sharply.
BARTLETT:
Have you had any discussions with Richard Court about
how to handle the electorate strategically after the 1st of
July?
PRIME MINISTER:
Not particularly, because I mean he is a seasoned politician
and he knows that the next state election will be determined on whether
or not the West Australian people want his Government to continue or they
want a return of Labor which has a terrible record in Western Australia.
BARTLETT:
But you've talked about it with him obviously?
PRIME MINISTER:
Not in great detail no.
BARTLETT:
Just informally?
PRIME MINISTER:
Well, I don't think we've had a discussion
about this for some weeks, I mean we talk a lot about general political
issues. But Richard is a strong supporter of tax reform. The other reason
why it's good for Western Australia is that Western Australia is
a great export state and GST is very good for exporters. Exports will
be cheaper under the GST to the tune of about 4, 3 to $4 billion a year
at least. Because you take all of those embedded wholesale sales tax out
of the cost of preparing goods and services for exports.
BARTLETT:
The input costs.
PRIME MINISTER:
The input costs. Now I know a lot of people, exporters
say I've got a wholesale sales tax exemption, but that doesn't
cover the embedded taxes and of course fuel will be cheaper. Not only
are we going to cut the price of diesel, for the mining industry and for
many others, but on top of that you will be able to get, you'll be
able to get a rebate of the GST paid on any fuel that you buy for a business
reason.
BARTLETT:
It would want to be cheaper though, wouldn't it?
I mean today it's hit a dollar. And for the . . .
PRIME MINISTER:
Yes, yes.
BARTLETT:
And in a couple of north west town of Western Australia
it's hit a dollar a litre.
PRIME MINISTER:
Yes but Liam that's got nothing to do with the GST.
That is due to the world price.
BARTLETT:
Yes, but there's understandably nervousness about
what is going to happen to the price.
PRIME MINISTER:
Well, there is. We made a commitment that the price of
petrol need not rise as a result of the introduction of the GST. And we
intend to honour that commitment. But world oil prices going up or down
are in no way related to the goods and services tax.
BARTLETT:
Prime Minister, ten days ago, if we can just move onto
something else. Ten days ago, your Government indicated they would be
writing to the Northern Territory Government and also the WA Government
to request that they review mandatory sentencing laws. Now those letters
have still not be sent. How serious are you about intervening?
PRIME MINISTER:
Well, we take the view that traditionally sentencing
and criminal law matters are matters for state governments. And there
would have to be a very exceptional circumstance to use the external affairs
power, foreign affairs power to intervene. And, I mean there are a lot
of things that state governments do that I may as an individual disagree
with. There are probably things that I, that my government does that the
people in state governments disagree with, but we do run a federation
in this country and criminal law is one of those fundamentally state issues.
BARTLETT:
Well were you just filibusting when you talked about
. . .
PRIME MINISTER:
No, I wasn't filibusting and the Attorney-General
is writing. There's no filibuster. But you have to understand that,
a couple of things, that traditionally this is a state area of state responsibility
and the other thing that seems to have been overlooked is that there has
been no formal finding that the mandatory sentencing laws of Western Australia
or the Northern Territory are in breach of Australia's international
obligations. There seems to have been an assumption made that they are
in breach. Now some people are alleging they're in breach, but I
sought advice on this from the Attorney-General's Department. And
there has been no formal determination. The UN body which sort of adjudicates
on the compliance by party states to international conventions, has not
made a finding that these laws are in breach. Now they may, people may
not like them, there may be people in the UN who have reservations about
some aspects of them but there seems to have been an assumption that there
is an open and shut case on legal grounds for federal intervention, quite
apart from any of the other considerations. Now . . .
BARTLETT:
So, can we just clear that up? Will you still be asking
them to review it?
PRIME MINISTER:
Yeah. The Attorney-General will be expressing some concerns
about the application, in particular, the application of it to people
under the age of 18. But . . .
BARTLETT:
But it was said with much fanfare. Ten days is a long
time to send a letter.
PRIME MINISTER:
I don't think, I think it was said very calmly and
very logically. Look this is a difficult issue and I think most Australians
take the view as I do that these are matters to be resolved by Australia
inside Australia. And can I just make the point that the Secretary General
of the United Nations spent an hour with me and he didn't raise the
matter. And he made it very clear, very clear indeed in his speech to
the National Press Club that he did not regard Australia as being in any
way out of line . . .
BARTLETT:
But you did launch a pre-emptive strike a few days before
. . .
PRIME MINISTER:
Well . . .
BARTLETT:
And told him basically to butt out of it anyway.
PRIME MINISTER:
But hang on, I mean hang on if we are clearly in breach
of, irrespective of what I said, he would have, he would have put a view.
But he actually said that Australia was a model member of the United Nations.
Now I think this whole thing has got out of proportion. I know there is
a concern about the application of these laws to people under the age
of 18. I know everybody is justifiably very distressed about the death
of that young man in the Northern Territory. But, you have deaths in custody,
you have suicides of young people quite separately and apart from the
application of any sentencing laws and I don't think it can be credibly
argued that that was the only cause in the, of that very, very tragic
incident. And I don't know that you can make the leap that because
it occurred than automatically mandatory sentencing laws should go.
Now I have views on a lot of things states do. I mean
I don't for example agree with heroin injecting rooms, but I do accept
that ultimately that is something that is going to be decided by the states.
And if states decide to go ahead with it, unless they're going ahead
with it is in direct breach of a federal law, and I am not aware at this
stage that it would be, then it's not really the sort of thing that
you intervene in. I mean we've got a federation in this country,
and if people don't like what the Western Australian Government is
doing, it should vote accordingly. If they don't like what my government
is doing, they should vote accordingly. But I think this constant call
on the federal government to get involved in every single issue that occurs,
and to use the foreign affairs powers to do so, I think that is bringing
an imbalance into our system of government that most Australians don't
want.
BARTLETT:
Let's move on to the phones and take some calls.
Hello Kevin.
CALLER:
Good morning.
BARTLETT:
Morning.
CALLER:
Is that Liam. It is Kevin Fay from the Park Owners Association
Liam. I would like to ask the Prime Minister a question on the GST.
PRIME MINISTER:
Yes.
CALLER:
Mr Howard, why do permanent residents in caravan parks,
who own their own home, have to pay GST on their rent while the tenants
of residential properties do not?
PRIME MINISTER:
Well under the current law as passed, we have a situation
where people in those parks are treated the same as people in furnished
apartments and in long stays in hotels. And what happens is that there
is a five, there is an option as you know as an owner.
CALLER:
That's right.
PRIME MINISTER:
You can either, you can either charge a 5% GST and claim
all your input taxing, or alternatively you can chose to be input taxed,
in other words, no GST at all but you don't get your inputs back.
Right?
CALLER:
Mr Howard, I think you misunderstood me . . .
PRIME MINISTER:
No, I haven't. I am sorry, but I haven't misunderstood
you at all. I know precisely the issue you're raising. And the point
I am seeking to make is that if you want to alter it which your question
implies we should do, that will not in anyway be to the benefit of people
who rent on a long term basis, caravans in caravan parks. They will be
no better off, and the idea that they would be better off if we did away
with that option is just wrong.
CALLER:
Mr Howard, with respect, let me explain again. I actually
and thousands like me actually own our home, we actually live in a park
for which we pay a rent on each week. So, we're not renting a caravan,
we're not . . .
PRIME MINISTER:
Yes, I understand that.
CALLER:
We own the dwelling. Now, what we're saying is that
we are being subjected to a GST when other residents, and residential
properties are not. We are not the same as furnished apartments, we are
not. This is our home.
PRIME MINISTER:
Yeah, look, I do understand that but it doesn't
alter the fact that if we did what you want us to do, and that is to change
the existing arrangement, you would not be any better off.
CALLER:
Why not?
PRIME MINISTER:
Because the impact of the change you have in mind would result in the
people to whom you pay the rent being on an input tax bases and that could
have some impact on your rent and therefore you would be no better off.
BARTLETT:
Lets move on, Derek, Good Morning.
CALLER:
Good morning Liam, good morning Prime Minister. Welcome to Perth
PRIME MINISTER:
How are you?
CALLER:
Not too bad. May I call you John?
PRIME MINISTER:
Please yourself.
CALLER:
John, in regards to the GST on the first of July (inaudible) income tax
cuts and the (inaudible) GST. Can you explain to me and the listeners
at the end of the day, that this achieves a revenue neutral situation
regards to the Federal Governments tax take. Will they actually be taking
less money from the people of Australia or what a lot of people believe
will it be a tax bonanza.
PRIME MINISTER:
No. The Federal Government will in fact be delivering a major reduction
in the tax burden. There will be less revenue collected. I mean one of
the things that has been overlooked about this whole tax reform is that
it will result in a reduction in the tax burden. There will be a twelve
billion dollar cut in income tax and the average family will be $47 a
week better off.
BARTLETT:
So what are you saying Derek? You want to know if the Federal Government
is taking more or less?
CALLER:
I want to know if they take more or less. John is this policy taking
less?
PRIME MINISTER:
Yes.
CALLER:
So what people of Australia will have to pay the price with regards services
in regards to hospitals, education and welfare and (inaudible).
PRIME MINISTER:
Well they will actually get better services because the states will get
over time, over time, over time, the states will get the benefit of the
rise of the GST revenue, but of course we have used some of the surplus
accumulated to help fund the tax cuts. We are not denying that. We have
never pretended otherwise but in the end if you build up surpluses, the
public is entitled to get the benefit of that surplus being returned to
them and we have done that in part in helping to fund the tax cuts.
BARTLETT:
Alright Derek, thanks for your call. Denis good morning.
CALLER:
Hello?
BARTLETT:
Hello, how are you?, Go ahead.
CALLER:
Good morning Mr Howard.
PRIME MINISTER:
Good morning, how are you? Derek is it?
CALLER:
No its Dennis. I am talking to you today as the president of the wine
industry association.
PRIME MINISTER:
Yes Dennis, how are you?
CALLER:
Very well thank you. I am sure you would be delighted that my question
is not about the GST. But it is however about another new tax.
PRIME MINISTER:
You are talking about the wine industry are you? Well that is tied up
with the GST Dennis. Let's understand that. The change would not
have resulted were it not for the total tax reform package. So I think
it is a part and parcel of the same thing. So let's not be too coy
about that.
CALLER:
It is a new tax. Anyway, my members are concerned that the basis you
have introduced it which is on value not volume is grossly inequitable.
It threatens their livelihood. It favours the twenty large companies in
Australia that produces 95% of Australia's wine against the 5, against
the 1,200 that produce the remaining 5%. You'll tell me that you
have introduced by the democrats that the three hundred thousand dollar
concession. Let me say that doesn't go with in a bull's roar
of ....
PRIME MINISTER:
Look I know. I do understand the argument and it's an argument that's
been addressed to us at great length by people in the wine industry. There
are a lot of views in the wine industry. In fairness to other listeners,
we are not going to spend all morning talking about one issue. What you're
seeking is a change away from an ad valorem approach to a volumetric approach.
CALLER:
I am not seeking that at all.
PRIME MINISTER:
Well you could have fooled me.
CALLER:
Well I am sorry. I have written to you on this subject, if you answered,
you wouldn't have this confusion. I am asking and our members are
asking and it is supported by the liberal party and the national party
federal conference, the wine makers federation of Australia for an exemption
for the first million dollars of sale in Australia by wine producers.
Now to put that in perspective, two companies alone....
PRIME MINISTER:
Look Dennis, we can't. Look, everybody wants their own exemption.
I mean let's call a spade a spade. I know there are a range of views
in the wine industry. We have already provided in relation to cellar door
sales, quite a generous exemption. You say its not enough. Well there
are a lot of people. I mean I have people in the brewing industry wanting
a change.
CALLER:
Brewing industries are multinationals...
PRIME MINISTER:
Yeah, hang on, it's all very well to say they're multinationals
and use emotive words like that. The reality is that if you look at each
thing in isolation, you can mount a case of change. Of course you can.