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 26/07/01

Transcript No. 2001/103

 

 

TRANSCRIPT
of
HON PETER COSTELLO MP
Treasurer

Interview with Steve Price, 3AW
Thursday, 26 July 2001
5.25 pm

 

SUBJECTS: Income tax, Rollback, Globalisation

PRICE:

It is incredible the way that a speech by the Treasurer, Peter Costello, overnight was reported in two different newspapers today. The Australian newspaper on page 1, its headline was, `Costello pushes for reform'. The Financial Review on page 3, `Costello hints at indirect tax rises' - "The Treasurer, Peter Costello, has warned that indirect taxes may rise to sustain the growing burden of social services". He must wake up some mornings and think what the hell did I say last night. He joins us on the line from Canberra. Thanks for your time.

TREASURER:

Thanks very much Steve.

PRICE:

When you picked up the Financial Review this morning, what did you think?

TREASURER:

It is all too often on the Financial Review. It is probably one of the least reliable papers that you come across. And obviously one of the journalists thought he could make a story. But it was wrong and the other four networks and four papers got it right.

PRICE:

I read the text of your speech and the quotes and you would really be battling to interpret out of what you said that the GST might go up?

TREASURER:

Well, in fact, my whole point was this, that having put the GST in place what it meant is we can bring income taxes down. And if you wanted to rollback the GST it would mean the reverse, that income taxes would go up. That is what I actually said. And that is what the other papers reported, but there was a journalist on the Financial Review that thought that he could try and make a story out to the opposite, and he did. I don't think it brings any credit on the Financial Review.

PRICE:

The Opposition will jump on this, of course. You say if they want rollback then that means higher income tax, they'll now come back and say, well he has got a hidden plan to jack up the GST. You're going to have to work pretty hard, are you not, to stop that message?

TREASURER:

Oh sure, Steve. Because the Opposition, of course, will try and use any weapon that it can invent for political advantage. But the simple fact is this, once you've put GST in place, as we have, it funds social services. All GST revenue goes to the States. It now pays the salary of every school teacher in every class room in every school in Australia. You've got in place a tax base that can run education and can run hospitals and law and order and all of those things. The point I make is this, if you want to roll it back that is fine, it will make things more complicated, but you will have to put another tax up if you want to raise the same revenue to run those services. That is the Labor Party's problem. That is why they can't tell you about rollback because once they tell you how much they are going to rollback, then they have to tell you how much income taxes go up. Now, the Labor Party will do anything it can to try and avoid answering that question, how much rollback? How much will it cost? How much will income taxes go up? And they'll, as I say, use any weapon that they can. But unfortunately this time they haven't struck one that is actually there.

PRICE:

You talked about Australia being able to provide decent social services and having an indirect tax policy meant we'd have the money to be able to do that. We're not there though are we? I mean look at the problems in Victoria, for example, with nursing home waiting lists.

TREASURER:

Look, I think, that as far as the indirect tax base goes, it provides now a decent taxation base for social services.

PRICE:

Is it going to be enough though?

TREASURER:

I think it is. It is something that is now funding every school teacher in every classroom in every school in the State. And more than that it is now funding the salaries of Police. And we now have the capacity to fund those State services.

We wouldn't have had the capacity if we hadn't have had GST because the only thing that the Government could do, and it used to do it, was let income taxes rise. But we've got the GST, we've brought income taxes down, we can now fund social services. My message is this Steve, the last thing you ought to do now is this rollback. If you want to change the whole system now, which apparently Mr Beazley does, then all you are going to do is complicate things and put up income taxes. And having done the hard yards having made the changes who would want to go back there. I think it is madness.

PRICE:

Does it not worry you though, and you are a bit younger than me, but you are getting to the age where your parents possibly might have to look at having to go into nursing home care. They can't get in because there are not enough beds?

TREASURER:

Oh, look, we've put a lot more beds available, even in the most recent Budget we funded increased expenditure in relation to aged care. I know in my own area we've got another 70 beds that should be coming on, in my own electorate.

PRICE:

Well, that is at Cabrini.

TREASURER:

So, you know, we are funding more beds. That is one of the demands. You are going to have to have a tax base that will sustain social services, we've done the hard yards, we've got that. But the only point I make is this Steve, you want to roll it back you are going to have to pull teachers out of schools and you are going to have to put up income taxes.

PRICE:

I know we've only got a couple of minutes. Globalisation was the theme of your speech last night. Do you expect there to be protests at CHOGM in Brisbane?

TREASURER:

Well, the protestors say they are going to demonstrate at CHOGM. But I'd say to you, why? The Commonwealth has now existed, before it was the Commonwealth it was the British Empire, it has now been there for a couple of hundred years, it is an association of people that come together to discuss common problems. Why you would demonstrate against such a meeting, I don't know. But there are some radicals that believe that they are entitled to do so, they tell us they are going to. Let's come back to Melbourne here. In Melbourne we had this Forum, it was a great thing for Melbourne. It brought people in from all over the world. Why the demonstrators decided to try and shut down the Crown Casino, I don't know. Some of them are dedicated Marxists, they demonstrate all over the world. But the point I was making is, I don't think their protest is doing any good, I don't think they're well informed in relation to that. And closing down meetings of the Commonwealth or the World Economic Forum, or indeed the Leaders of the major industrialised countries of the world, I don't see how that is going to help the poor of the world and I don't see how that is going to change anything for those of us that live in the richer countries of the world

PRICE:

Just finally, did you see the greatest comeback of all time?

TREASURER:

Yes.

PRICE:

How did I know that?

TREASURER:

Well, I must say, you go to a lot of matches in your life and you don't remember them, but I think I will always remember that. Gee it was a great game. I pay tribute to North, I think they kicked 12 goals 1 in the first quarter. I've never seen a team play that well in the first quarter. But I've got to tell you I've never seen a team come back in the last three quarters like they did last Sunday too.

PRICE:

Thank you very much.

TREASURER:

Thanks Steve.