The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

7 August 2008

Interview with Tony Briscoe and Nelly McKenzie

Across Australia Program

7 August 2008

SUBJECT: Review into the Tax System, Greg Hunt's Comments, Peter Costello's Memoirs, Olympics, China

TONY:

The Treasurer Wayne Swan has launched a Review into the tax system, the most comprehensive Review in more than 50 years. The Treasurer joins us. G'day, Wayne.

TREASURER:

G'day. How are you going?

NELLY:

Good morning, Wayne. Three hundred and forty three pages – a discussion paper. To me it sounds like riveting reading.

TREASURER:

Well, I tell you what. If you go to sleep reading it, something dangerous will happen.

TONY:

We've got 125 taxes in Australia. I might have thought there'd be more than that.

TREASURER:

Well, we've got a lot of taxes and there's a lot of complexity and there's a lot of detail. I mean, the Income Tax Act, for example, is something like 6000 pages.

So, we haven't had a decent look at the tax system in this country for probably 50 years, and in that time our economy has changed dramatically, technology has changed dramatically, our engagement in the world economy has changed dramatically. So, we think it is about time we had a root and branch look at the system and, in particular, involve people in that review.

So that's why we put out the discussion paper. It doesn't necessarily point in any direction and we're not necessarily ruling anything in or anything out.

TONY:

Is it a matter of slimming down the tax system? Could we see some of those taxes disappear?

TREASURER:

Well, I think it certainly is a matter of trying to make it simpler and that may mean fewer taxes, but I'm going to leave that up to the Review. I haven't imposed any of my pre-existing views on the panel. They're an expert panel. They've got the full resources of the Treasury behind them and I'm going to let them do that work free of any particular interference from me or for that matter, anybody else.

NELLY:

Wayne Swan, could the tax on superannuation be changed, as Paul Keating suggests it should?

TREASURER:

Well, he was making a slightly different point. He was talking about the superannuation guarantee and the fact the previous government had stopped it increasing to the level of 15 per cent, which was the original intention of the previous government which had put that in place – the Hawke and Keating Government.

We've indicated that we're not going to increase that. That was a commitment that we made to the people. But what we said we would do is have a look at super, and we're doing that also through the Henry Review.

We're looking at the adequacy of the aged pension, for example, and we'll have a final report on that by next February. And as you know, the aged pension is very difficult to live on. A lot of pensioners are doing it really tough, and also on top of that, you've got people who depend partly on the pension and partly on superannuation. And then you've got people who are entirely dependent on super.

So, we're having a look at the superannuation system through this Review as well.

TONY:

What about the Tax department, Wayne? Do you think the Tax department do want a simpler system?

TREASURER:

Yes, I do. They can only work within the law and the law is made by the Parliament. Now, I know there's a fair bit of criticism of the Tax department from time to time but we've put in place mechanisms to handle that.

But what we've got to do is look at the law first and foremost, the rules that are set by the Parliament.

TONY:

Is there any argument for a flat tax system where we pay say 20 per cent on everything, everything we earn, everything we buy, just 20 per cent?

TREASURER:

Well, I'm sure some people may mount that argument. It's not one I've ever supported or been attracted to. I've always supported a fair system of taxation which does reflect capacity to pay.

But all these issues are on the agenda so I'm not going to necessarily rule anything in or anything out. There's a discussion of those sorts of issues in the paper and I'd encourage everybody to read it.

NELLY:

Alright – all 343 pages of it?

TREASURER:

Well, just a chapter or two. I mean, you can perhaps be a bit more discerning and go to the area that you've got an interest in. If it's superannuation, look at retirement incomes. If it's something else, corporate tax or business tax, have a look at that.

NELLY:

On to other matters, Wayne. Greg Hunt, the Opposition spokesman on the Environment, he had some harsh words to say about your colleague, Penny Wong. He compared her to Saddam Hussein. What are your thoughts on that?

TREASURER:

Look, I find those comments deeply, deeply offensive and really very ill-suited to anyone who would aspire to high office in Australia. I think Greg Hunt should, frankly, apologise for those offensive remarks. And they're particularly offensive given the context of the policy, because Mr Hunt was a member of a government that didn't do anything to address problems in the Murray-Darling Basin for something like 12 years, and now he wants us to believe that suddenly water flows in the Murray-Darling are the sole responsibility of Penny Wong, and attack her in such personal terms. I think Mr Hunt ought to apologise for those deeply offensive remarks.

TONY:

Wayne, are you watching the Costello sideshow with much interest, and will you be buying the book?

TREASURER:

I'll only buy the book if it's got a chapter in it from Peter Costello which talks about how he made inflation hit 16-year highs. If he's got that chapter in there and if he 'fesses up to the fact that 10 interest rate rises in a row is slowing the economy, I'll definitely buy the book.

NELLY:

Alright. Now, you do love your sport, we believe. Are you excited on the eve of the Olympics, Wayne?

TREASURER:

Too right I am and I hope to get a bit of time, hopefully through next week, to see some of the events. I'm particularly looking forward to seeing the swimming, and I'll be following that pretty keenly.

TONY:

Just because there's a lot of Queenslanders in there, I imagine.

TREASURER:

I've been sprung.

TONY:

Do you think the Olympics will lead to any changes in human rights in China?

TREASURER:

I think the more the world engages China over time and the more that China engages the world the better, because that's the process that does bring about liberalisation in China.

There's no quick solution here but the more China gets engaged with the world the better chance they've got of doing something in the longer term domestically. But as you know, these are sensitive issues, sensitive issues that the Prime Minister will be addressing when he's there.

TONY:

Just finally, you've got to get your footy players up north to send better signals to the referees.

TREASURER:

Oh well, you know we've got plenty of talented footy players up in Queensland.