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

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

4 October 2011

Interview with Marius Benson

ABC News Radio

4 October 2011

SUBJECTS: Tax Forum; Government's record of tax reform

BENSON:

Treasurer, before I get to the Tax Forum can I ask you about a story in the papers this morning and on the basis of those stories, can I ask you are you planning retrospective legislation on company tax to prevent huge loses that you've been exposed to by botched legislation relating to mergers and acquisitions?

TREASURER:

Well there's certainly a lot in that story that is overstated. What the Government is currently doing is considering a report from the Board of Taxation, which is a technical advisory body to the Government, about the impact of legislation which was first introduced by the Howard Government in 2002. But over and above that, I'm not going to speculate about the nature of those discussions, we've been having those through the Board of Tax with the industry in good faith, we're going to work our way through those issues.

BENSON:

But is botched legislation at the heart of this?

TREASURER:

Well I don't accept that characterisation. There was changed legislation that went back to the Howard Government in 2002, and what we want to do is work our way through all of the issues associated with that regime. We're doing that in good faith with the industry and that's what we'll continue to do.

BENSON:

Is it costing you a $1 billion a year potentially as reported?

TREASURER:

Well as I said, I'm not going to go in to the details of all of those reports today. The fact is that there is an issue that we've been working our way through, through the Board of Taxation, we'll continue to do that.

BENSON:

Okay, to the Tax Forum. It's not your idea, it was imposed on you by the independents, so some say you don't really have your heart in it, you're meeting an obligation rather than being a man on a mission.

TREASURER:

Look, I've rolled up my sleeves and I'm going to get stuck into it today. Because what I said when the tax review came down 18 months ago was that there were some issues we'd act on then, there were some issues we'd never do, and there were some issues we needed to have a conversation about. We're having a conversation about those issues, building on a very strong record of reform over the past 18 months. I'd just remind you, I mean $47 billion worth of tax cuts over 3 years; some big reforms in terms of resource rent taxation, big tax cuts coming from that revenue stream, the 2.7 million small businesses, a big increase in money which goes to the superannuation savings of low-income workers; a tripling of the tax-free threshold. They are all measures that we've put in place in recent times. I think pretty formidable record and we want to look at the next steps.

BENSON:

And beyond discussion, you seem to have already indicated that there will be one definite change from the forum, that there'll be a change to the treatment of company loses. That will be a definite action on the part of participants in the forum on the part of the government?

TREASURER: No, we haven't said that. What we've said is we're very interested in looking at what we can do to respond to the pressure of the patchwork economy on many sectors of industry and most particularly on manufacturing. We think that there are some issues that are worth looking at, some of which were raised at the original Henry Review when it comes to loses. We want to hear what people have got to say about that because we think it's a pretty important issue.

BENSON:

What's the biggest problem with the Australian tax system right now in your estimation? Is it that tax is too high? That it is inequitable? That its collection is inefficient?

TREASURER:

Well I think there are a variety of challenges. We want to make sure the tax system is fair. We want to make sure it's efficient. We want to make sure it rewards incentive. And we want to make sure that it's sustainable. And if you look at the original Tax Review it said that our tax system was in reasonable nick. When it comes to levels of tax here compared to the rest of the world, we're reasonably low compared to the OECD. But because we're a relatively small country in the Asia Pacific we should always be trying to update our tax system and make it better. And that's the spirit we bring to the tax discussions today.

BENSON:

And a comment made by a lot of observers is that you just don't have the political capital to spend on driving tax reform which is going to cost you votes regardless of who's driving it. You are in political deficit.

TREASURER:

Well we've already put forward some of the most substantial tax reforms that any government could ever do and I ran through some of them before. We're in the process of putting the MRRT though the parliament, a very big reform which is going to fund a cut in the corporate rate, substantial tax cuts for small business , the boost to superannuation savings. We are n the process of tripling the tax-free threshold, fundamental reform of the income taxation system and the list goes on. So I just reject that analysis in total but what I have said is that it's very clear that if any people have got suggestions in terms of reducing taxes they've got to indicate how they're going to pay for them.

BENSON:

And before the forum opens there are plenty of sceptics around saying that this has fizzer written all over it. Do you believe they'll be proven wrong?

TREASURER:

Well there are always cynics around the place, I've noticed, but the fact is that this is an important discussion, it's the next step in tax reform, it builds on a very substantial record of tax reform by this government and we're going to be there and participate enthusiastically.

BENSON:

Wayne Swan, thank you very much.

TREASURER:

Good to be with you.