The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 20/05/99

Transcript No. 99/40
Treasurer
Hon Peter Costello MP

Doorstop Interview

Grand Hyatt Hotel, Melbourne

Thursday, 20 May 1999

2.00 pm

SUBJECTS: Tax reform

Journalist:

Treasurer, do you think your remarks about fiscal rectitude that you made just then and the comments by Ted Evans in Treasury, do you think it’s worth raiding the Budget surplus to finance tax reform?

TREASURER:

Look, the point I’d make is this. We’ve been through a financial and economic crisis which has been the greatest in 50 years, and the Australian economy has stood strong and it’s grown faster than most developed countries in the world. And the reason it did that is that we had good policy. We had Budget surpluses, we kept our inflation low and we retired debt. Now, we don’t want to put the Australian economy at risk. Tax reform is very important, we want to accomplish tax reform. But, we’ve got to have tax reform and good economic policy. It’s no consolation if our economic policy turns down, and our economy turns down, and our job opportunities turn down, to say that you’ve improved tax. You’ve got to run tax reform and you’ve got to keep the Australian economy on a strong footing.

JOURNALIST:

If it threatens the surplus would you walk away from tax reform . . .

TREASURER:

Sorry?

JOURNALIST:

. . . if it threatens the surplus?

TREASURER:

Well, we are going to keep our economic policy intact. Because if we don’t keep our economic policy intact, if the Budget goes back into deficit, or if we lose confidence, if the economy turns down, if that means less employment then it will be no consolation to the people of Australia that we gave away good policy. We are going to keep good policy. The policy objectives, which I laid down in last week’s Budget are very important to the Government, because they’re very important to the job opportunities of Australians in the future.

JOURNALIST:

Is there room to move on food in your talks with the Democrats?

TREASURER:

Well, we’re going to hear this afternoon what proposals the Democrats have to put and we will consider them. If there are proposals that are consistent with our economic objectives and are consistent with our structural objectives, a better tax system for Australia, we will consider them. But, I want to make this point clear. For the sake of Australia we have to keep running a good Budget position. If we give away the Budget position, if we give away our economic strategy, then we will not be doing the right thing by Australians, which is giving them a strong economy and job opportunities.

JOURNALIST:

So Treasurer, does that mean that revenue neutrality is the bottom line? That whatever the Democrats propose, it must not hit the bottom line in any way?

TREASURER:

Well, what it means is as far as the Government is concerned, we want to run a good economic policy consistent with maintaining Budget surpluses and retiring debt. And the risks, if we weren’t to do that, would be hardship and less employment. And we don’t want those for the Australian public. We want jobs.

JOURNALIST:

You’ve consistently said that the GST without food is not acceptable. Has that changed?

TREASURER:

Well, as I said this afternoon the Democrats are going to put various proposals to us. I’ve said what the Government position is. The Government position is we’re going to run a credible, good, strong economic policy and we want to reform the tax system. And if there’s anything that can accomplish both those objectives we’ll look at it.

Thanks.