E&OE………………………………………………………………………………..
QUESTION:
Prime Minister, Ian Lawrence. I’d like to ask you this. First of all, one of the criteria that you mentioned for reform was that you wanted it to be fair and I think we all applaud you here today in your attempts to make those reforms very fair for the Australian public. But one of the great difficulties for government is to ensure that those benefits of reform flow on to everybody across Australia, and I just wonder what your plans are to ensure that everybody shares these benefits, particularly across rural and regional Australia?
PRIME MINISTER:
Well I made the observation in the context of tax reform, but it’s a proposition that is valid for any major reform. As far as tax reform is concerned, of course, citizens of Australia living in rural areas get the same tax reductions, they get the same benefits if they’re in business of the improved indirect tax system and those citizens via the strengthening of the capacity of States to provide services over time, will also benefit from that. In addition, we have loaded into the taxation package a number of measures that will produce cheaper diesel and cheaper fuel generally than would otherwise be the case as a result of the taxation reforms. There are disparities between rural Australia, the bush, country Australia, however you describe it – it depends a bit in what part of the country you are what description you’re allowed to use – but there are disparities and that is the result of the long term impact of the decline in commodity prices on many small rural communities. It’s impossible for any national government in Australia to control world commodity prices. We can, through our trading policies, try in a small way to offset the impact of those changes and also the corruption of world markets. We can continue to stress the importance of exports – that’s very important to this country.
We are doing a number of things, particularly in the area of telecommunications and a lot of parts of rural Australia are now getting for the first time the benefits of the money which we set aside out of the second sale of Telstra to provide additional services and you’re starting to see a turn-around in some rural areas towards the Telstra issue, because some of those communities are starting to receive those benefits. You’re also seeing in some communities with our rural transaction centres where we take a very small community and we provide a cluster of basic services, banking, medicare claim facilities and other transaction facilities within the one location. I opened the first of those in Eugowra in central western New South Wales about a year ago, and since then there have been several score of them opened in other parts of the country and at the end of the process we hope to have about 500 of them up and running. Now there’s a multiplicity of things that you can do. It’s important for governments to understand the stress these communities are under. In the last budget we provided $500million over a period of 4 years to improve medical services in the country. The most basic thing that people are entitled to is a doctor if their child gets sick, and a decent facility for hospital and aged care.
So we are in a pragmatic, targeted way, trying to sensibly bridge the gap. We can’t promise the earth because there are some fundamental changes in the level of commodity prices and fundamental consequences of the trading practices of the rest of the world that are having affect on our rural communities and it’s very hard to turn those around. In some areas it’s impossible, but it is possible to put services back into the bush where they shouldn’t have gone or where they have been removed simply because the critical economic mass is no longer present in some of those towns.
QUESTION:
Mr Chairman, through you to the Prime Minister. Prime Minister, you’ve done a fantastic job on the tax reform in this country but could you just give us a few words of wisdom on where you think we might perhaps change and simplify the superannuation system? The media’s been coming forth with a lot of innuendo. Could we have some words on that?
PRIME MINISTER:
Yes you can. Very directly, we don’t have any particular proposal in relation to that in front of us at the moment. I get a number of messages on superannuation. One of the messages I get is that we’ve had too many changes over the years and that people would like a moratorium on change unless, of course, you had some you beaut proposal that removed any kind of taxation impost at all, which would be widely applauded and very enthusiastically embraced. But I’ve got to tell you I don’t, I don’t I’m sorry, the larder is a little bare on that side of things at the present time. There are probably ways and means in which it could be simplified administratively but I don’t want people to imagine that there is some big bang, new slew of changes to be made and if my mail means anything, I get a lot of people saying to me, we’ve had so many changes in this area over the last ten years, why don’t you allow a period of a few more years to go by before you make any further changes because whenever you hear governments coming along saying that they’re going to simplify the superannuation system, they sometimes end up having the opposite effect. Now, I knew they were talking about earlier governments in relation to that and not the present one, so can I say to you very directly, we don’t have, contrary to what may have appeared in the media, and may have been the focus of the media campaign, we don’t have some kind of big bang set of changes, we’re not averse to simplification, we understand the arguments that are put about taxation but we’ve done a lot on the tax front over the past few years and I don’t want to excite the idea that there’s some further big change in that area around the corner. I think we do need a period of time to allow the changes that have been made on 1st July to work their way through the community, we have of course many of the other structural changes impacting on tax and related accounting approaches to work their way through the community and they’re quite big changes and we don’t want the business community to suffer from change overload in this area and I get a message from a lot of people that we’ve got quite a lot of change at the moment, can we just be given a moment or two to absorb all of that change.We know its beneficial but we would like a few more moments, so to speak, to absorb that change.
QUESTION:
Prime Minister, Alan Blood’s my name. In stage two of the Ralph taxation reforms there was comment about and proposals for taxation on cash flow. In any very capital intensive project cash flow is used by the banks and the financiers to sort of mitigate the risk of the project and its become a very very crucial part of very large scale projects in this country which contribute a very large amount to the country’s export earnings etcetera. Would you give an undertaking that any taxation on cash flow will be neutral to the project participants in such ventures in this country?
PRIME MINISTER:
Well I’ll make a statement. You say will I give an undertaking. I always, I mean I’m not loathe in the right circumstances to give an undertaking but I always like to be fully comprehensive, or comprehending rather, of what the undertaking means. Let me put it this way – it is not the intention of that particular part of the Ralph agenda or indeed any part of our taxation reform plan to make investment in those sorts of projects more difficult or less advantageous. You may remember in particular that when we took the decision to change the accelerated depreciation arrangements as part of the trade off for reducing the general company tax rate we did make it clear that we would reserve, in relation to very capital intensive resource projects in particular, we would reserve or acknowledge that it might be necessary for some kind of specific government assistance or incentive to be given in relation to those projects. Now that wasn’t the question you asked me but I’m using it as an example of the attitude of mind the Government has. Now the best I can do with your question is to say that that is not our intention to bring about the effect that you can concern yourself with. I fall short of giving an undertaking because Prime Ministers don’t normally give undertakings on the run particularly in front of large business gatherings who might write the undertaking down and then quote it back at him or the Treasurer some time later. But I understand your point. I hope you understand my response and you understand it is not the intent of the Government to bring about that result and I will certainly, as a result of the question you’ve asked me, I will certainly investigate the point you make and if there is anything further I can say no doubt I can find out your details from Ian Warner and I can let you know.
QUESTION:
Prime Minister, Ian Satchel’s my name. In Western Australia as you rightly pointed out we do contribute a very large amount of Australia’s exports and the resources sector in particular contributes about 20% of Australia’s total exports just from Western Australia. We have a number of issues facing the future of the industry. It’s a very positive future but there are some things we need to overcome and one of those issues is the greenhouse issue. We’re facing some very high growth in minerals and energy projects in Western Australia. Australia and Western Australia have been enjoying very high economic growth generally but reconciling that growth going forward with Australia’s 108% greenhouse gas target by 2008, 2012 is something that our industry is having difficulty in coming to grips with. How are we going to continue to grow producing energy efficient products for the rest of the world and still not be seen as a greenhouse pariah?
PRIME MINISTER:
Well that is one of the harder public policy challenges the Government’s got a present. I think you put it quite well. You probably agree from your perspective that Kyoto was regarded as something of a good outcome for Australia. It was regarded as being something of a triumph against the odds and the work that Senator Hill did as Environment Minister at the end of 1997 was very widely applauded throughout Australian industry. Since then I understand that the concerns of the mining industry have grown. I understand that and I understand why. And we do face over the next few months a number of very important decisions to make in relation to negotiations concerning tradable credits, the treatment of carbon sinks, and the whole process of implementing the Kyoto understanding. And against that background of course we have to ask ourselves what attitude the United States is going to take. There are many people who believe there is no real prospect that the United States Senate ever ratifying American accession to the Kyoto accords. And there is also the great problem that the developing countries which are major remitters are not part of the process. The other problem for us with the developing countries is that they comprise some of our competitors particularly in areas such as the export of LNG, very important to this State, very important to the nation’s export income. And we have the task in front of us and can I tell you, and I know you to be a representative of the resource industry in this State, that we are very aware of the point that you are making and I hope that in the comments I’ve made that I’ve indicated that. And we have a very significant balancing act to achieve. We don’t want to be or intend to be a greenhouse pariah. Equally however we have vital Australian interests to defend on the world front. And I don’t regard it as reasonable that Australia competing against countries which are not burdened by the constraints that people want us to be burdened by should nonetheless be able to freely compete against us for export energy markets. It’s always been the difficulty for Australia that we are the one great industrial country in the world which is a major net exporter of energy, and it’s always been a problem for us in relation to the greenhouse issue. I am aware of that and I hope over the next few months we can find a way of avoiding the label you used that none of us want but by the same token preserving the competitive export advantages that our natural resources give us. It won’t be easy. We’ll need the help of industry and the understanding of the community. But it is really I have to say to you very frankly one of the biggest public policy challenges that the Government has ahead of it over the next six months.