JUST:
Good afternoon Mr Costello.
TREASURER:
Lovely to be with you Ingrid.
JUST:
It is great to have you with us. Firstly, news just coming through this afternoon, it looks like you are eager to take on Mr Latham in a great debate.
TREASURER:
Well I can't understand why he has decided to make some people worse off, particularly mothers who stay at home and look after their children. He plans to take money back off them if he gets elected and I would be very interested to know what his explanation is. It may well be that he didn't understand his tax policy, and this is just an error but it is quite clear now that mothers who stay at home to look after children will have money taken back off them.
JUST:
So you would be happy to take on Mark Latham in a debate one to one?
TREASURER:
Oh I would be happy to debate him and his policies on any occasion and I would be very, very happy if he would explain to people why he has got this tax policy so wrong.
JUST:
He is in some ways almost suggesting that you may be taking over leadership Mr Costello.
TREASURER:
I am very happy to debate economic and tax policies with anybody…
JUST:
So why not Mr Crean?
TREASURER:
Well I will be debating with Mr Crean but I don't understand. This is my question for Mark Latham – why are you going to penalise families where Mum stays at home to look after the kids? Why are you going to take money off them? Now, there are two explanations. One is, he didn't know what he was doing. The second explanation is he deliberately wants to target the family which only has one income. Now, it is quite possible that he didn't know or understand his own policy because today one of his back benchers, Jann McFarlane on Western Australian radio has let the cat out of the bag. She says that Labor is 'looking where the disadvantage is' under their policy 'and what we can do to adjust the policies.' So, it may well be that there is another tax policy coming, this one having failed and been exposed that Labor is now producing some new policy but we need to know immediately, is this the final tax policy of Labor, because if it is, it really discriminates against parents where Mum stays at home to look after the children. Or is there another policy which we haven't yet seen?
JUST:
Before we go to callers, thirteen after five, speaking about tax policies, the Budget surplus is an absolute whopper and there is some concern that people here and now aren't necessarily being helped with the announcement that the surplus will be spent on the futures fund, will the Howard Government give any more relief to those earning less than $50,000 with the announcement of that surplus?
TREASURER:
We have announced a number of policies to help people in those income areas, we announced one last Thursday for older Australians who want to stay in the workforce, those above 55, where we have announced a new tax reduction of $500 per year. We have also announced for the older Australians, increases in their private health insurance premium rebate and the big thing that I think is going to be of enormous benefit for middle and low income earners is our superannuation co-contribution scheme which, if you put $1 in, the Government will match it with $1.50 and that is put into a savings fund for you and for your retirement which is an enormous benefit, it is a really big benefit.
JUST:
What about young families earning under $50,000?
TREASURER:
Well of course young families, what the Government provides, is it provides a $600 per child per annum benefit and Mr Latham is going to abolish that. Now I say to all of the people that are listening to this programme, those and they are young, will be in majority, receive the Family Tax Benefit. You would already have had the $600 payment before 30 June last year, you will be receiving that $600 payment in respect of this year, many of them now, that payment is going to be abolished by Mr Latham and it is the abolition of that $600 annual payment that is going to make hundreds of thousands of families worse off. Now, if they are a single income family and mum stays at home to look after the children, you are going to get another penalty and that is why Jann McFarlane, the Labor Member for, in Western Australia has said on radio today that Labor is looking at the disadvantage they are causing those families and they want to know what they can do to adjust their policies. Well I would suggest that they actually drop their policy because then the hundreds of thousands of Australians that are going to be worse off wouldn't be made worse off.
JUST:
Twenty after five, ABC Local Radio Queensland, Mr Costello is joining us from our Brisbane studio, if you would like a question to be answered by Mr Costello, 1800 151 897. Perhaps it is about the $600 Family Payment, call now, 1800 151 897. We have (inaudible) Mr Costello, on the line, he is from Rockhampton, good afternoon Bombay.
CALLER:
Yes.
JUST:
And your question?
CALLER:
Ingrid I would just like to congratulate the Treasurer on the work (inaudible) it has been great but, zonal taxation can we (inaudible) taxation rate in depressed areas such as (inaudible) as a stimulant to further economic growth in those areas?
TREASURER:
Well we operate a system of zone tax rebate which gives rebates on income tax for people who live particularly in remote areas and some of that is indexed to other payments. And we think that the best thing to do in relation to taxation is to reduce all rates, that is what we are doing with our proposals in relation to levels, thresholds, superannuation co-contribution. That is what we are doing in relation to a capital gains tax rather than pick out particular areas and deliver it on a geographic basis, we believe that it is best to deliver it across all areas with those additional zonal tax rebates in place.
JUST:
I guess there is some concern Bombay, thank you for your call, Mr Costello that in regional areas the services that access to employment is of great concern and if there is a surplus coming through why can't those areas that are struggling receive some sort of benefit?
TREASURER:
Well I think it is important to help all areas that are struggling. Can I say Ingrid, I think that the Australian economy today is a lot stronger than it was eight years ago. Our unemployment rate is now significantly lower, it is the lowest it has been in 22 years. But one of the things that I think has improved conditions in regional Australia very much is the changes we have made to tax on transport. The long haul transport in the trucking industry has brought the tax on diesel fuel down from 44 cents to 20 cents and that was deliberately designed to reduce transport costs which are greater in regional Australia.
JUST:
Hmm.
TREASURER:
And to make sure that the prices that were otherwise were being driven up by the taxation on fuel has come down and I think that in that transport area in particular there are enormous benefits for regional Australia.
JUST:
Twenty four after five, we have got a lot of people wanting to speak with you. Let's go to John in Charleville and John has a question about the $600 Family Payment. John.
CALLER:
Oh yes. I would just like to ask a question with regard to the $600 payment. Is it, why can't it be paid in weekly or fortnightly instalments as opposed to a $600 lump sum because I have seen the $600 lump sum squandered quite considerably through the poker machines. So I would like to see it paid as a weekly, as a fortnightly instalment.
TREASURER:
Well you should bear in mind that that's not the only payment of Family Tax Benefit. There are fortnightly payments that people get all the way through the year. The full amount, the minimum full amount is $1,600 and for the maximum full amount is $4,000. So the large part of that payment is made on fortnightly payments through the year. It is the annual bonus if you like that amounts to $600. Now I actually think that there is a benefit in that. When people get the $600 bonus at the end of the year then they are able to make purchases which they might not be able to make. You know, John said, oh they waste it in poker machines and so on, I don't think there is any evidence of that at all, that people waste their $600 payment in poker machines any more than they waste the remaining of their $4,000 entitlement in poker machines. And this, by the way, this idea that you can't trust a family with $600, most families income would be more than $600 a fortnight. We trust them with their pay packets which is in excess of $600. Why can't we trust them with their Family Payment which is $600?
JUST:
We are going just to near Gympie, to Glenwood, and Bob is on the line. Hi Bob.
CALLER:
G'day. How you going?
JUST:
Good thank you. About the surplus? That's your question?
CALLER:
Yeah mate, yeah, yeah, yeah. You there Mr Costello?
TREASURER:
Yes I am Bob.
CALLER:
Yeah, consider yourself up, lining up, for a dartboard when you are aiming for the bullseye.
TREASURER:
Hmm.
CALLER:
And you miss double top which is basically what happened with all the expertise that you had and your own economic expertise, all the professional help that you had the surplus was well away from landing on the board. Now what my, I mean, what I can't work out there is, how does that happen? Was it because there was an ineptitude or was it because you were being overtaxing us? I mean you don't get money out of a hat. You get it from tax. That's how you get your revenue. You don't win it in lotto…
TREASURER:
And Bob you know, you know the best way…
CALLER:
…or you cannot hit the target.
TREASURER:
…no Bob the best way of getting the Budget back in surplus, let me tell you, is to have more people in work. And it is not that you are paying more tax, it is that more people are paying tax. If you have the lowest unemployment for 22 years as we now have in Australia, you have got 1.3 million more people in work, that is 1.3 million people who are contributing to taxation revenues rather than drawing down in unemployment benefits or whatever. This is the object of economic policy, if you have a strong economy, more people in work, more people contributing rather than drawing down, if you have a strong economy, company profits are higher, companies are paying more tax than they would otherwise be. This is the object of economic policy - profitable companies and strong employment growth. And it doesn't mean that people are paying more tax it just means that there are more people paying tax or that they are making higher profits that can be taxed.
JUST:
It is twenty eight after five. A question from Susan in Proserpine which I will have to put to you. And we only literally have a minute to go Mr Costello. So quickly if it is possible, how are you going to go about the super co-contribution? From Susan in Proserpine.
TREASURER:
Well, if you are earning less than $58,000 you can put money into superannuation. You put money into your superannuation fund and they will notify the Government or you can notify the Government. You put money into the superannuation fund, if you put a dollar in, the Government will contribute $1.50. If you put $10 in, it will contribute $15. If you put $20 in, it will contribute $30. So if you want to put $20 in, the Government puts in $30. That's a $50 contribution that goes into your fund, it's invested on your behalf and it's available for you in retirement. It is a very generous scheme. It is the best co-contribution scheme that has ever existed in Australia. Unfortunately the Labor Party is against it. They want to abolish it. But it is a very good scheme for people and I would urge them to take it up.
JUST:
Susan I hope that helps to answer your question. Mr Costello we appreciate you making the effort to go into the studios for us and taking calls from our listeners. Thank you so much.
TREASURER:
It is great to be with you. Thank you very much Ingrid.