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 16/12/2005

Doorstop Interview
Menzies Malvern, Melbourne

Friday, 16 December 2005
12.15 pm

SUBJECTS: Tax, Cronulla riots, James Hardie

JOURNALIST:

There appears to be no better time to grant tax cuts, why are you resisting the move?

TREASURER:

We are actually cutting taxes on 1 July, we have legislated a further tax cut already and I have said that if the Government can balance the Budget, keep interest rates low, fund emerging pressures in health and security and reduce taxes further of course that is what we will do. But putting all of those things together is a very difficult task and it is a task that I am dedicating myself to now over Christmas and in the lead up to next year's Budget.

JOURNALIST:

In principle though, you know, a bumper surplus, is tax cuts high on the list of priorities as a rule?

TREASURER:

I think with the exception of one or two areas of new expenditure it is more important now that we work at containing taxes and reducing the tax to GDP ratios. So I put a priority on reducing the tax burden rather than increasing expenses, that is my priority, not everybody in the Government will have the same priority but that is something that we will work out over the next couple of months.

JOURNALIST:

The Opposition says you are hoarding the people's dollars and that it is not even conservative orthodoxy to hoard big budgets because your Party particularly recognises that it is the people's money not yours.

TREASURER:

Yes well we cut taxes by $22 billion in last year's Budget, we cut taxes by $14 billion in the Budget before that, and we cut them in the Budget before that as well, and if we can keep interest rates low and a big part of that is keeping the Budget in surplus, if we can fund increased expenses in health which are coming everyday with the ageing of the population, and reduce taxes, I think that is an optimal win-win outcome for all concerned, that is what we will be doing.

JOURNALIST:

How will the defence spending (inaudible) affect the degree of cuts that are granted?

TREASURER:

Well you see this is an area of pressure. When you are looking at a Budget it is two sides, it is expenditures and it is revenues. We have got big pressures coming through in defence, that is one of the things that will have to be funded in the next year. We have got bigger pressures coming through in health, that is another one of the issues that we will have to attend to and the most important thing of all is to keep interest rates down because it would be of no consolation to anybody if interest rates went up. There is no tax cuts that can compensate you for a whack on your home mortgage and that is my absolute priority. We said at the last election we would work to keep interest rates low, that is what we will do.

JOURNALIST:

Do you think the Sydney riots have changed Australia, Treasurer?

TREASURER:

No I don't think they have changed Australia. The Sydney riots were an example of hoodlums who got out of control and should have been stopped, and if you let hoodlums get out of control then you are going to get counter responses. I don't think it was caused by racism but lawlessness can breed racism and that is why you don't want lawlessness. You don't want hoodlums in cars smashing windows or bashing people fuelled by alcohol and the important thing is to stop them before it gets out of control. Now that New South Wales police are doing a much better job, they have flooded the area to stop these things starting and escalating.

JOURNALIST:

Are you concerned about the Australian flag being appropriated for these causes?

TREASURER:

Look the Australian flag is a symbol of our nation, and everything good that it stands for, and I don't want to see the Australian flag used in fights or hooliganism. It is a flag that Australians have fought under for their freedom and for law and order. It is not owned by gangs, it is owned by the nation, and you ought to be proud of it and fly it on occasions of pride not on occasions of shame.

JOURNALIST:

Treasurer it appears that a Tax Office ruling may jeopardise payments to asbestos victims by James Hardie. What moves will you take to ensure that they are paid their dues?

TREASURER:

Let me make two points. The first thing is James Hardie can structure its compensation arrangements to take advantage of the tax law and I encourage it to do so. I encourage it to structure its compensation in a way which can take advantage of the tax law. It has got the freedom to do so, it can pay for the advisers that are required. The second thing I will say is this. We announced in last years budget the introduction of what is called black hole expenditures and that is you are able to deduct expenditures which were not otherwise deductible, sometimes called black hole expenditures, over a period of five years. So even if James Hardie can't so structure its affairs to get immediate deductibility it should be able to take advantage of deductibility of black hole expenditures and the company should get its advisers to look very carefully at that.

JOURNALIST:

So you would resist any changes to existing laws?

TREASURER:

Well companies know what the law is and the law applies to all companies equally, the law gives all companies the right to deduct under black hole expenditures, expenses that are not otherwise provided for and James Hardie like other Australian companies should take advantage of that law.

JOURNALIST:

Do you think multicultural policy should be reviewed in light of the riots?

TREASURER:

See the point is this, so many people have different views about what multiculturalism means. If multiculturalism means eating souvlaki and dancing the Zorba, I am absolutely for it. If multiculturalism means not assimilating into Australia and not having your first love for this country, the country where you live, I am against it. What I am actually in favour of is people retaining elements of their culture, fondness for their country of origin, a passion for the food or the dance but being first and foremost Australian. If you want to live in this country, you are living in Australia, your loyalty is to this country, it is to Australia. And if your loyalty isn't to Australia well there may be another country where you feel happier.

JOURNALIST:

Where on that scale between dancing and not loving the country do you think that the whole multicultural exercise fits? I mean where are we?

TREASURER:

Well I think multiculturalism started off as a policy to make migrants feel part of the country but also to be proud of the countries where they came from and its culture and its dress but to be part of Australia. And if we ever get to a stage where migrants come into this country and don't want to be part of Australia, that they want to live under laws or values that are contrary to Australia then I think it will go wrong. I think that is where it will go wrong. And when I hear people say oh, they want to live under Sharia law in Australia I make the point, Australia will never have Sharia Law. If you want to live under Sharia law, Australia is not the place for you. There are countries around the world that practice Sharia law, better try those rather than come to a country that doesn't and won't and try and get it to adopt it. It won't happen. Thank you.