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 21/09/99

Transcript No. 99/65

TRANSCRIPT

of

THE HON PETER COSTELLO MP
TREASURER

 

Doorstop Interview

8.30 am

Tuesday, 21 September 1999

SUBJECT: Review of Business Taxation

 

TREASURER:

This morning the Government is releasing the third leg of its reform of the Australian Taxation System - A New Business Tax System for Australia. It’s Australia’s greatest overhaul of business taxation. And it gives us the opportunity to create a dynamic, growing environment which will lead to more investment and more jobs. What this is all about is, creating a stronger economy which will give us more investment, more jobs. In particular there are some great opportunities for small business and the rural sector who will get the advantage of simplification in their tax affairs and have the burden of taxation lifted, which will give them opportunities to create growth and create new employment opportunities. This has been a huge undertaking. Government has a policy of reforming the indirect tax system. We’ve legislated it. A policy of reforming personal income taxes. We’ve legislated it. Today we announce the reform of business tax, we hope to legislate that in the next coming months. And this will have been the historic overhaul of the Australian Taxation System, which we took to the election and which we’ve now delivered on.

 

JOURNALIST:

How will you overhaul the system?

 

TREASURER:

Well, we’ll be announcing this morning an overhaul of the system which will simplify the system, which will reduce the incidence of taxation by broadening the base, give people more certainty, more simplicity, less burdens, greater opportunities to invest, more opportunities for jobs and contribute to Australia’s strength and economic development.

 

JOURNALIST:

Is revenue neutrality still a prerequisite?

 

TREASURER:

Yes. When we went into this we said, that the fair thing to do was to collect roughly the same amount of tax, but it’s collected in a better way and a more simpler way. And there’s a lot of simplification in this report actually, which means that there will be less complexity. And people will have their eye on good investments and good job creating opportunities rather than tax dodges. We don’t want people to spend their time trying to work out tax dodges because that’s not good for the economy and it’s not good for the citizens that have to pay their full dollar tax.

 

JOURNALIST:

How can you overcome the perception that this is another evidence of propping up big business, giving them a helping hand at the expense of consumers?

 

TREASURER:

Well see, that’s the important thing about keeping it revenue neutral, so that business is still paying its fairer share of tax and in some areas when we take tax dodgers out, paying more. But the honest toiling business that has been carrying the weight therefore gets a break. And particularly for small business there will be big benefits. Why small business? Why help small business and the farming sector? Because we want to help the economy and especially investment and jobs.

 

JOURNALIST:

Have you had any talks with the Democrats yet on getting this through the Senate and how do you rate your chances in that regard?

 

TREASURER:

I had discussions with the Democrats last night and mapped out the way in which the Government was intending to approach this. And they’ve indicated that they’re very open-minded on this and they will take a bit of discussion in their party room, but I expect them to be cooperative and positive.

 

JOURNALIST:

(inaudible) the negotiations to be as intense as over the GST?

 

TREASURER:

The negotiations in relation to business tax have already occurred. This inquiry was set up 12 months ago and it’s reported to the Government after consulting and taking views. We’ve been working on this now for over 12 months and today we get the results. The important thing is to act on the results.

 

JOURNALIST:

Labor says, you’ve spurned their offers of negotiation. Yes, they’re happy to support you as long as you, you know, you include them in the process. They say you’ve spurned them in that. Why is that?

 

TREASURER:

Well, the Labor Party will be given the report this morning, so it got access to it under embargo and it’s up to them. If they want to play a positive result they can be relevant to tax reform. What made Labor irrelevant on tax reform was Labor. Make no mistake. The Labor Party decided to make itself irrelevant. It dealt itself out of tax reform. You have seen, obviously, a large backlash. It feels sensitive about its irrelevance on tax reform. If it wants to get back into business, it’s got to get positive and support the Government. Now, this is a political challenge. A political challenge for the Labor Party. Can they rise above populism and opportunism? If they can, they can be part of mature, political debate. If they’re going to be populist and opportunist they’ll end up where they did in relation to indirect tax reform. Thanks.