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 01/07/2006

Doorstop Interview
Treasury Place, Melbourne

Saturday, 1 July 2006
1 pm

SUBJECTS: 1 July tax cuts, Baby Bonus

TREASURER:

From today every Australian income taxpayer will pay less tax under tax cuts that took effect from this morning. Combined with tax cuts and family allowance increases, all Australian families and singles will be better off. In fact, allowing for family allowance increases, tax cuts and wage increases, since 1996, the increase in disposable income has been between 17 per cent and 40 per cent for different Australian families. That is the good news. No amount of concocted research proves to the contrary and I notice that overnight the Labor Party released some concocted research trying to prove to the contrary but that they haven’t compared like with like. When you compare like with like, people on the same real income today pay lower tax than they did in every cohort that we have analysed over the last ten years.

JOURNALIST:

Is it a fact though that these tax cuts could be swallowed up by increases in State charges and fees, rates, slugged with council rates, we have seen it gone up again from today. I mean, are you concerned about that though as well?

TREASURER:

Well I am very concerned if council rates go up or State Government charges go up, as many of them will on 1 July. We would like to see State Governments and councils cutting taxes. But the Federal Government is doing its part. It is cutting income tax for every Australian from today, meaning that every Australian from today will be paying less tax. It would be terribly unfortunate if other levels of government increased their taxes to claw some of those benefits back. But it is not something that the Federal Government can control.

JOURNALIST:

Have you got an average for back pocket savings for the average Australian?

TREASURER:

Well for a family with two kids, with family allowances and tax cuts they can be more than $1500 better off over the year. Larger families can be $2,000, more than $2,000 better off over the year, when you take into account tax cuts and increases in family allowances.

JOURNALIST:

What about changes though that you have also brought in that have affected disability pensions, Labor is obviously trying to score some points on that today.

TREASURER:

Well the changes that are coming into effect from 1 July are designed to encourage as many people as possible to join the workforce and if you are capable of part-time work we want to help you look for part-time work. Whether you are somebody who is a single parent or whether you have got an injury that means that maybe you can’t do a 40 hour week, if you can do some part-time work we would like to encourage people to do that.

JOURNALIST:

Will there be significant cuts though for those disability…?

TREASURER:

No, these are not cuts because people who are currently on a disability pension are not affected but in the future all people who want to go on a disability pension but are capable of part-time work, they will be encouraged to do part-time work.

JOURNALIST:

Anything more you would like to say on the first of July, nothing to do with the Essendon Football Club?

TREASURER:

Well it is also the Baby Bonus, can I interest any of you in that? Thank you very much.

JOURNALIST:

Maybe another year.

JOURNALIST:

Actually just on that…

TREASURER:

You want the Baby Bonus...

JOURNALIST:

A couple of weeks ago it was reported that a lot of women were actually getting their babies induced in the lead up to today’s date, or holding off I should say getting their babies born in order to try and get this, I don’t know how they did that exactly the reports were fairly unclear, but there was a fair bit of debate about holding off on it and not trying to have your child born until today’s date. That is a little…

TREASURER:

Well the baby bonus increased from $3,166 to $4,000 as from midnight last night and that certainly is going to be of enormous benefit for parents. I don’t think there is any evidence that people put off the delivery of their baby. When a baby is coming the baby is coming and the idea that you can put it off for days or weeks I think is not right. And I don’t think anybody would do it for $800. But the good news is, from midnight last night anybody who has a child in Australia is eligible for an increase in the baby bonus, it is $4,000 and that is good for families and it is good for babies. Thanks.