KIRK:
Mr Costello, good morning.
TREASURER:
Thanks Alexandra.
KIRK:
The ACCC has been swamped with calls from both consumers and small business. The tax office got more than twenty thousand calls from small business. How do you read that?
TREASURER:
Well the ACCC had geared up its inquiry lines for a hundred thousand calls and they got four thousand. And that seems to have been the main problem. They were switching their capacity down from a hundred to four, so they didn’t get as many as they were expecting, quite obviously. In relation to the Tax Office, I think again that’s less calls than we were expecting. I’ll be meeting with the Commissioner during the day. I would expect that to kick up a bit. I would be very surprised if twenty thousand was a number of calls. You’ve got to bear in mind that on some of those days when we were registering the Australian Business Number, we were getting hundreds of thousands of registrations in the one day. So I would be surprised if that didn’t kick up. And of course if it does I would welcome that. Because we want people to understand the answers to all of the questions they may have.
KIRK:
But clearly there is a lot of confusion there on behalf of small business about what sort of prices to set, how to set prices and also a lot of complaints from consumers about prices going up by more than they were led to believe they would.
TREASURER:
Well actually, the inquiries which were done by the Competition Commission showed that 97 per cent of prices had risen by less than 10 per cent. So that’s 97 per cent which is I guess more than, much higher anybody would have imagined. You wouldn’t have imagined you’d have got compliance like that. 80 per cent were within the range that the ACCC predicted and of the remainder some were higher but many were lower. So I think as you heard, even some of the Democrat doubters there on the radio, saying that things had gone much better than expected, I think that’s the general impression. Now we’re not going to stop. I think this is a question of continuing the educational process, but so far so good.
KIRK:
Now Mr Howard confirmed yesterday on this program that people receiving family payments and also post graduate students would be the only people who are given an opportunity to make a compensation claim if they believe they are worse off as a result of the GST. Why can’t other people test the Government’s promise that no one would be worse off?
TREASURER:
Well Alex, we’ve been through this backwards and forwards, we’ve been through Senate Committees, we’ve been through Parliament every single day, every modeller in the country has had their go at it, and no matter what way you look at it with income tax cuts and increases in pensions and family allowances, people are better off. I guess the proof in the pudding is this, at the end of the day, did you know this? The Government is collecting less tax. That is at the end of the day, when you add up what everybody is paying and you take away wholesale sales tax which is abolished, and income tax which is cut, and all of those indirect taxes which will be coming away, the Government is collecting less tax and as a consequence it’s made sure that people are better off. Now that’s just for individuals, but for the country as a whole, we’re now going to have a system where our exporters are helped, where our manufacturing industry doesn’t bear the heavy weight of the wholesale sales tax as it currently does, where company taxes are cut and income taxes are cut and this will make Australia a better economy. And we hear Mr Beazley, last night, goes on television and after what, a three year campaign against tax reform, the words he never uttered was, that he will repeal the GST. Even Kim Beazley now wants to keep GST. After fighting it for three years, he didn’t promise to repeal it last night, he confirmed, and I always said he would do this, he confirmed, that Labor now wants to keep it.
KIRK:
Now Mr Beazley also says that he wants to make it fairer and your GST partners the Democrats, say that students, pensioners, low income earners, should all be able to make a case for compensation if they believe they are worse off. Will you give them that opportunity?
TREASURER:
Well let me take the first point up at the beginning. Mr Beazley says he wants to make it fair. Alex, Mr Beazley’s whole campaign against GST was, that you couldn’t make it fair. He said to the ACOSS National Congress on the 6 November: "We do not believe it can be made fair." He said at a doorstop in Port Adelaide: "This is a tax that cannot be made fair." So he said it should never be introduced, it could never be made fair. We go through the hard work, the Government leads, the Coalition takes the weight of economic reform, we bring in the big tax change and all of a sudden he wants to keep it. All of a sudden he says…
KIRK:
But what about your GST partners the Democrats when they say…
TREASURER:
…all of a sudden he says it can be made fair. But then he says, well you say, well how, what should you do, does this involve repealing 50 per cent, does it involve repealing 30 per cent? Oh no. He can’t tell you that. And look, I make this prediction now. And I said as Labor fought this for the last three years, that all they were doing was being opportunistic and the moment it came in, they will want to keep, they would want to take the benefit of it. I will make this prediction now. The reason Mr Beazley can’t tell you what he would roll it back on, is this rollback is disappearing by the minute. And when it actually comes, you are going to wonder why we all sat around, sort of salivating at the prospect. It’s disappearing. Rollback is the policy that dare not speak it’s name. First of all, he was going to rollback 100 per cent, that was his position on Friday, now he’s going to keep it. He’s not going to rollback 50 per cent, we know that. He’s down to a third, he can’t tell you what he’s going to roll it back on, and as I’ve always said, that the Labor Party’s strategy has been this…
KIRK:
No people believe they are worse off…
TREASURER:
…they wanted to opportunistically take advantage of the Government doing the big reform and their biggest hope in life was that they could get elected and take advantage of it.
KIRK:
If people believe they are worse off, what redress do they have?
TREASURER:
Well people are getting income tax cuts…
KIRK:
No but if they believe that what your giving them isn’t fair, that they are worse off as a result of the GST, what can they do?
TREASURER:
Well, people have got to make sure that they get all of the benefits, because if they get all of the benefits and let me go through them, they will be better off – the benefits of the income tax cuts, the benefits of the increased family assistance - people have got to make sure that they start getting that this week - the benefits of the savings bonuses for the pensions and the self funded retirees, the benefits of the pension increases, the benefits of the rent assistance increase of 10 per cent. People have got to make sure that they get all of their entitlements, and that’s the big challenge for this week to make sure you get your entitlements, check your pay packet. Please, make sure the employer has passed on the income tax cut. Ask the employer when it’s going to be paid, how much it’s going to be, to make sure you get your benefits.
KIRK:
Peter Costello thanks very much for joining us.
TREASURER:
Thank you.