Peter Costello

Media Transcripts

Tax Reform Plan

Transcript No. 43
Hon Peter Costello MP
and
Hon Peter Moore MP

Nightline interview with Paul Lyneham

Thursday, 13 August 1998

11.00 pm

E&OE

SUBJECTS: Tax Reform Plan

Waley:

The tax package is one of the most sweeping economic proposals ever put before the Australian people. One of the principal architects is, of course, Treasurer Peter Costello, who is with Paul Lyneham in Canberra.

Lyneham:

Treasurer, welcome again to Nightline.

Treasurer:

Thank you very much, Paul.

Lyneham:

Many people will be wondering tonight what's the catch.

TREASURER:

Well, this is a policy which is good for Australia and it's directed towards families, helping families. It involves cracking down on some techniques which have allowed people with fancy advice to get out of paying tax, but if you happen to be the ordinary hard-working, average wage-earner, who’s been shouldering the burden with 43% income tax, your rate is going to go down to 30% and that's only right. Those are the people that deserve tax relief.

Lyneham:

But you and I will get a tax break each week of at least $80, now where's the fairness in that?

TREASURER:

If you happen to be on the top rate of 47 cents in the dollar, as I assume you are, and I am, no cut in your marginal rate. No cut in the top marginal rate.

Lyneham:

Now, $80 a week is still a lot. I mean, Kim Beazley says this is all about the more you have the more you get.

TREASURER:

Completely wrong. This increases the tax free threshold, so at the moment, Kim Beazley taxes people who earn $5,500 - we increase the threshold. Kim Beazley taxes people on $10,000 at 20 cents - we cut their rate to 17. Kim Beazley taxes people who are on average earnings in Australia at 43 - we tax them at 30%. That's where the benefits are.

Lyneham:

And Peter Costello proposes that millionaires should get a 30% tax rebate on the cost of their private health insurance premium.

TREASURER:

Peter Costello, who pays at 47 cents, still pays at 47 cents - that's his top marginal rate, but in relation to private health insurance, if you want to take out private health insurance, and we want people to take it out, you can get 30% of the cost back. If you want to take out an $1800 private health insurance, you get $600 back.

Lyneham:

That's alright for battlers, but again, what about you and me, do we deserve that sort of a break?

TREASURER:

When you say it's alright for battlers, it's great for battlers.

Lyneham:

It's terrific for battlers but why is it good for Costello and Lyneham?

TREASURER:

Because the government, if it can get you to take out a private health insurance policy...

Lyneham:

I've already got some...

TREASURER:

Good on you, well done.

Lyneham:

Have you?

TREASURER:

I have. If the government can get people to take it out, what that means is that the call on the public hospital system is less and the government actually saves more money...

Lyneham:

...provided that when I get to that public hospital I own up to the fact that I've got private health insurance, which a lot of people don't.

TREASURER:

Yes, well I hope you do in the future.

Lyneham:

Finally, a quick checklist of a few things. Will they have a GST on them or not? Non-prescription medicines?

TREASURER:

We've said that health will be GST free and anything that's on the Pharmaceutical Benefits Scheme or is bought on a prescription will be GST free.

Lyneham:

But not non-prescription medicines?

TREASURER:

Well, look, you get into things like vitamin tablets and so on that aren't prescribed by doctors and aren't really recognised by the Pharmaceutical Benefits Scheme as health issues.

Lyneham:

Nursing services?

TREASURER:

In relation to nursing homes, and in relation to services that are health related, are GST free.

Lyneham:

Government school fees?

TREASURER:

Government education is GST free and what I mean by GST free, let me make this clear, is the school not only doesn't charge a GST but it gets back all the taxes it pays on everything it buys, so it's in a better position than the current situation where it doesn't get those taxes back.

Lyneham:

So when my child goes on a school excursion that won’t have a, you know, the bus fare for the school excursion to the War Memorial, that won't have 10% on the top?

TREASURER:

Well, you get in to these classification lines, but education, that is the teaching as part of the curriculum will be GST free.

Lyneham:

Okay. The Essendon Football Club cake stall?

TREASURER:

Well, if it's a not-for-profit organisation, which has a turnover of under $100,000 it need not register.

Lyneham:

With all your fans, it could be well over $100,000 on the cake stall, couldn't it?

TREASURER:

I'm not entirely sure whether they distribute a profit. I haven't seen one down there for quite some time.

Lyneham:

Local government charges like garbage collection and dog licences?

TREASURER:

Well, local government rates will be GST free, as will water and as will sewerage.

Lyneham:

Yes, but not the dog.

TREASURER:

Where the local government is charging for a service, that is it is rendering a service for a fee, that will not be in the GST free category.

Lyneham:

And Kim Beazley's claim that he can beat you hollow without a GST?

TREASURER:

Sounds rather hollow to me.

Lyneham:

Do you realise out of today's statement you could actually produce a headline saying: beer, cigs up?

TREASURER:

Yes, it sort of rather took me back to the budgets of old.

Lyneham:

It did. Treasurer, thanks for your time.

TREASURER:

Thanks very much.

13 Aug 1998

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