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

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 16/09/99

Transcript No. 99/63

Transcript
of
THE HON PETER COSTELLO MP
Treasurer

16th Asialink Lecture

Questions and Answers
Victorian Arts Centre
Melbourne

Thursday, 16 September 1999

SUBJECTS: East Timor, Tax reform, Referendum

QUESTION:

Mr Costello you mentioned that the crisis in East Timor is going to provide us with, or present us with, considerable budgetary constraints in the future. Do you believe that these will in any way, reduce the opportunity for further income and company tax cuts?

 

TREASURER:

Well, before we start focussing on the next round of tax cuts, lets bear in mind that the Government has legislated income tax cuts from 1 July next year. And those income tax cuts are of the order of $12 billion. They are part of the hitherto legislated tax reform which abolishes many inefficient State indirect taxes, abolishes the wholesale sales tax and replaces it with a Goods and Services Tax. We are currently looking at business taxation, we’ve had a report from Mr John Ralph and we are nearing the announcement of our deliberations. And that gives us the opportunity to reform business taxation. Looking down the track, I’ve made the point in the past that if we are able to eliminate Commonwealth debt, we would have further scope for tax reduction. We’re talking about something pretty big here.

The last three years we’ve been engaged in reducing Commonwealth debt, in the next three years we could engage in the elimination of Commonwealth debt, and if we were to eliminate Commonwealth debt, we would have opportunity to relieve taxation burdens. But that’s something that I don’t see on the horizon until 2002/2003, and I certainly don’t see on the horizon until such time as the Senate consents to the full privatisation of Telstra. So lets digest this meal of tax reductions before we start salivating over the next one.

 

QUESTION:

Mr Costello, unfortunately I can’t get away from tax either, but perhaps putting it in more of an Asian regional context is the possibility raised in the paper this week of Australia imposing taxes on greenhouse emissions. Obviously there was a fairly negative reaction from the energy and mining sector in Australia, who get a lot of Australia’s economic strength from exports into the region, and the potential erosion of their competitive position as a result of that sort of tax being imposed. Perhaps you would be able to give us a little bit on the Governments thinking in terms of greenhouse emission taxes, whether the Government thinks there’s a need to provide incentives to Australian business to actually reduce greenhouse emissions, just where the landscape’s going to be in terms of the political and popular, I suspect, support for the reduction in greenhouse emissions, but obviously the clear conflict that causes in terms of our Asian trade position and overall economic strength in Australia.

 

TREASURER:

Sure. I won’t go into detail into greenhouse reduction targets because these are matters properly for my colleague, Senator Hill, who has done a very good job negotiating Australia’s position internationally. But, you do give me the opportunity to comment on how you started the question about consideration of carbon taxes and so on. I think there was a story on the front page of one of Australia’s tabloids, the Financial Review, two days ago talking about how the Treasury was working on a carbon tax, which was news to me. And I made some inquiries, I found out that a paper had been presented by somebody employed in the Treasury, who had presented a paper at a conference stipulating that this was his own private work and not part of his job at the Treasury, which he presented at a conference in July.

And the tabloid breathlessly reported it two days ago. It had been reported earlier on page 36 of The Australian and suddenly became a front-page lead on the Financial Review some time afterwards. So I can tell you that was no part of any official work, and I think The Australian probably had it right on page 36 rather than the tabloid on page 1. Now people are entitled to do what work they want to and present papers, and if they make it clear it’s their own private work, it should be reported as such. But I wouldn’t put too much store on that being an indicator to official thinking by either me or my Department.

 

QUESTION:

Mr Costello do you think the Australians will vote for the referendum in November? And the second question, what is the relevance of the republican debate in the Asian region?

 

TREASURER:

I made a speech at the Constitutional Convention in which I said, I don’t think we should change our constitutional arrangements for what others think of us, I think we should change them for what we think or ourselves. And if we think this is good for Australia, we should do it. I happen to think it is a step forward for Australia.

What affect does the current instability have, well not much really. I don’t know that it counts one way or the other. When you’re looking at constitutional arrangements I think you should look first and foremost at constitutional arrangements that work, plainly the current ones do, and in my view plainly the current model would work.

I think you also ought to look really at the symbolic nature of the arrangements and I think in symbolic terms it would be a step forward for Australia to recognise what I think is probably the thinking. Now I don’t think monarchism has the appeal, the hold on our public that it might have had a hundred years ago, or fifty years ago, or forty years ago or twenty years ago. And if you hold onto the weak link longer than you should it can start to undermine other more important things, this is my point, and I think there are other more important things. I think the Parliamentary arrangements, I think the stability of the Parliamentary system is very important, I think that is well worth defending and I intend to defend it. I think it can be defended in a stronger way as part of a renewal of symbolism. Now, having said all of that I would like to see the change, I can live under the current arrangements, I have done for a long time, I’m sure I can live under the new arrangements and I think the important thing as people focus their minds on this is to focus their minds on what they think is the best for us, because it’s really we as Australians that have to determine our own constitutional arrangements.

Ends.