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Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript No. 2001/012

Hon. Peter Costello MP
Treasurer

Press Conference
Commonwealth Parliament Offices, Sydney
Friday, 16 February 2001
12.45pm

SUBJECT: Business Activity Statement

TREASURER:

In this morning’s meeting we have had the opportunity to meet with representatives of small business and the various accounting organisations to discuss proposals for simplifying paperwork and making compliance easier in relation to the Business Activity Statement. The Government was able to road test a number of proposals that it’s been looking at and received some positive response and the organisations themselves were able to raise issues which they thought ought to be part of the Government’s consideration. It was a very fruitful meeting, a very positive meeting. I thank the wide range of groups that were represented and the accounting bodies that came along. I’ve said earlier that as we pass through this transitional phase we have the opportunity to considerably simplify and remove compliance problems. That’s what the Government intends to do. It intends to do what is required to simplify the compliance and the paperwork burdens and today was a very big part of making sure that our proposals meet with approval.

JOURNALIST:

What issue was discussed the most?

TREASURER:

Most of the discussion centred around the Business Activity Statement and those measures that can be taken to simplify it and to reduce the compliance difficulties.

JOURNALIST:

What sort of measures?

TREASURER:

All measures were on the table and we discussed all of them.

JOURNALIST:

Do you have to change your proposals now, the proposals you put to the meeting, were they sort of acceptable and will you now go ahead with those?

TREASURER:

I think the proposals that the Government put to the group, and we did it because we wanted to road test reaction, were very warmly received.

JOURNALIST:

So when will you be announcing what they are?

TREASURER:

Well we’ve now had the opportunity to put forth positive proposals. We’ve got a positive response. We now have to ensure that the changes, we have to get a handle on the timing in relation to changes and the mechanisms and when we’re in a position to announce in a comprehensive way, then we’ll be doing it. The important point about this is that when you’re administering a tax system, with a couple of million people in it, you’ve got to make sure that you announce with certitude. It is not just a question of throwing ideas off the top of your head. Obligations hang off these arrangements and for a responsible Government you’ve got to be able to announce with certainty so that people know where they are. It’s not a half-baked, Beazley type response. This has got to be a real response…

JOURNALIST:

Can you say…

TREASURER:

…with certainty.

JOURNALIST:

Will it happen before the next statement is due?

TREASURER:

It will happen at the earliest available opportunity. I am not putting a time limit on it. But I think the next statement is due in April and as I’ve previously said, the changes that can be put in place by April will be done by April.

JOURNALIST:

Why can’t you detail what some of the proposals are?

TREASURER:

Well I will.

JOURNALIST:

When?

TREASURER:

When they’re, well I know you’d love to get them today but they’ll be detailed when they’re ready for announcement. Otherwise…

JOURNALIST:

Can we expect annual…

TREASURER:

…if I may say so, when I come to making an announcement there won’t be anything to say.

JOURNALIST:

Can we expect annual reporting?

TREASURER:

I’m not going into the specific proposals but the proposals that simplify compliance and paperwork will be done and, and keep the integrity of the system.

JOURNALIST:

There is an impression Mr Costello that you’ve been dragged behind by the Prime Minister on these changes that you’ve been very unenthusiastic to make them. Is that an accurate perception?

TREASURER:

No that’s not accurate. And…

JOURNALIST:

What’s been your feeling?

TREASURER:

My feeling has been that as I’ve been saying in all of the proposals I’ve put up, that we’ve got to put the proposals in place which will substantially simplify the compliance burden and in fact I was responsible for putting most of the proposals together. They’re endorsed by Senior Ministers and I must say got pretty positive response from the people today.

JOURNALIST:

Do you still believe the big issues, the problems are teething problems with BAS? Or will there be drastic changes?

TREASURER:

Well both. And I’ve said both previously. Whenever you change to a new system you have teething problems. A taxation system doesn’t spring fully fledged handed down from heaven on high. And whenever you move to any new system, people have to adjust to a new system. And that’s what we’re doing here. We have introduced the biggest tax reform in Australia’s history. Now you don’t move into a completely new taxation system without people having to get used to new concepts.

JOURNALIST:

So are you saying…

TREASURER:

As you come through the experience of getting used to the new concepts you have the opportunity to very substantially reduce the compliance. And where we can do that we will do that. That’s what we’re aiming for, that’s what we intend to do.

JOURNALIST:

So if you’ve mainly got this change package together now, it’s just a matter of crossing the t’s and dotting the i’s, or is there still a lot more work to go?

TREASURER:

Michelle, concepts are pretty straightforward but in relation to tax matters you don’t just sprout taxation arrangements into the vapour. They have to be reflected on a proper legislative basis and they have to give millions of people who all have unique and differing circumstances certainty to conduct their affairs.

JOURNALIST:

Yes.

TREASURER:

Now we have some proposals which will radically simplify but they still have to be put into effect and we’re looking at the mechanisms to put them into effect and I think the small business community would say to us, do it in a way which will give us certainty. Don’t have a rolling feast here, don’t have a moving feast. Do it in a way which will give us certainty and this is a very important point, protect all of those people who have now adjusted to the new system. There’s a very large number of people adjusted to the new system who want to know that they will continue with certainty as well.

JOURNALIST:

Why was the meeting told that they couldn’t discuss the detail of what went on (inaudible)?

TREASURER:

Well I’m not sure that it was told that.

JOURNALIST:

Is it how, is it interesting co-incidence there’s a Queensland election tomorrow, the timing of this announcement Mr Costello?

TREASURER:

Well I’m not making the announcement today so I don’t think you could say I’m making the announcement today with the Queensland election tomorrow because I…

JOURNALIST:

(inaudible) changes?

TREASURER:

Well hang on, I foreshadowed changes weeks ago. I foreshadowed changes weeks ago. Now…

JOURNALIST:

You now know that the industry is positive about the changes.

TREASURER:

No, no and I said we would look at those matters that can be simplified and we would road test them. And I can assure you we’re running a national taxation system and we’re going to run it in a clear straightforward and certain manner and it doesn’t, the timing of that doesn’t hinge around state election dates, I can assure you of that.

JOURNALIST:

Treasurer would you tell small business to keep plugging away and expect to be putting another BAS in April?

TREASURER:

I would say to small business that if you haven’t yet filed your quarterly return which was in relation to the December quarter, it’s still got to come in. It’s got to be in. Tax Agents have still got I think another week or so and we want all of those returns in so people know what their obligations are and then we are going to make announcements on how we can in the future simplify the system.

JOURNALIST:

So the next one will be under the new simplified system, the one due in April.

TREASURER:

Oh well I’ll tell you about the next one when we make the detailed announcements.

JOURNALIST:

Why has this taken a year, any reasons why it’s taken a year to have this meeting?

TREASURER:

Why has it taken a year to have this meeting?

JOURNALIST:

Yeah, to address the some concerns the tax…

TREASURER:

Oh no, no we’ve been having meetings with the business organisations for quite some time. What we now have is we now have the experience of nearly two completed returns. The second one isn’t fully in yet. Those that are lodging through tax agents still have about a week or so. But you now have the experience of the two returns and with that experience you now have the opportunity I think to do some important things and if you do that you shouldn’t leave up the opportunity.

JOURNALIST:

Was the National Tax and Accountants Association representing at today’s meeting?

TREASURER:

Who’s that?

JOURNALIST:

National Tax and Accountants Association.

TREASURER:

Is that Ray Regan? No Mr Regan wasn’t at today’s meeting.

JOURNALIST:

Can you tell us who was there?

TREASURER:

All the accounting bodies were at the meeting. All of the major accounting bodies and representatives of most of the small business organisations.

JOURNALIST:

Why not Mr Regan’s organisation?

TREASURER:

Well the major accounting bodies in Australia are the Certified Practicing Accountants, the Institute of Chartered Accountants and the Taxation Institute. They’re the people that represent the accountants of Australia. Mr Regan is not an accounting body. I am not sure what its membership is. You’d better ask him. But it’s not considered one of the major accounting bodies in Australia.

JOURNALIST:

Treasurer lots of countries have a consumption style tax. What’s happened overseas? Are we the first country to have these sorts of problems or were these models not looked at when our system was put together?

TREASURER:

No, we probably have one of the most streamlined systems according to the international models and we want to make it the most streamlined. Now with other countries overseas they’ve obviously had experience of this. They’ve had experience over 15 or 20 years. And I think you’ll find that in the first couple of months in many of those countries they had much greater difficulties than were experienced in Australia. They’ve just had 15 or 20 years of refinement. And 15, 20 years some of them longer to get used to this. In fact I think if you looked around the European models you’ll find that it probably took them years and years to get their systems up and running. We’ve had the advantage of having better design. We’ve got a better design than any of the European models and most of the other models and we want to get the most streamlined reporting as well.

JOURNALIST:

Why shouldn’t the Government…

JOURNALIST:

Mr Costello how many people were at the meeting and what sort of format did it take?

TREASURER:

Oh it was just a meeting of I guess about 20 people and the format it took was a very warm discussion.

JOURNALIST:

Happy? Accountants were they pretty happy?

TREASURER:

They had big smiles on their face when they left. I think they probably were.

Thanks very much.