Peter Costello

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Leadership, tax - Interview with Karl Stefanovic, Today

Interview with Karl Stefanovic
Today

Tuesday, 30 August 2005
7.08 am

SUBJECTS: Leadership, tax

STEFANOVIC:

Good morning to you.

TREASURER:

Good morning Karl.

STEFANOVIC:

Let’s talk the ‘L’ word before we talk the ‘T’ word and leadership. Are you willing to discuss any further your conversation that you had with the Prime Minister earlier this year when you reportedly told him you wouldn’t wait around forever for the leadership?

TREASURER:

Well no, we had a discussion about these things. We have had them on a regular basis and the great thing about them is there are no TV cameras present, no reporters there. People can try and postulate what might have gone on but nobody knows besides him and me and I think it is important that he knows he can have discussions with me and I know I can have discussions with him that aren’t relayed on national television.

STEFANOVIC:

Were you the only two at the meeting?

TREASURER:

Oh yes.

STEFANOVIC:

I just wonder where it has come from then, it must have come from him.

TREASURER:

Oh no, I think it probably came from an inventive journalist, but…

STEFANOVIC:

So that conversation never took place?

TREASURER:

…a journalist asked me about this last night and the funny thing is that when I looked around the room, he wasn’t there so, I think he was trying to do a bit of guess work.

STEFANOVIC:

Okay, so the conversation didn’t take place then?

TREASURER:

Oh we have had many conversations but nobody knows what takes place in those conversations and I am not about to start talking about it now for obvious reasons because these are private conversations.

STEFANOVIC:

Are you ready to lead this country?

TREASURER:

Well look, I am the Treasurer, I am the Deputy Leader of the Liberal Party, so I feel in a sense that I do lead in this country. I have done ten Budgets, I have been responsible for the economy and people’s jobs and mortgage interest rates for the last 9 years so I feel in many respects I do.

STEFANOVIC:

Are you ready to be Prime Minister?

TREASURER:

Well look, if opportunities come along you look at them then but you have got to wait for opportunities.

STEFANOVIC:

There has been reports which you would be fully aware of during the last couple of months that they are looking at some time next year and you, I think you said last night on the 7.30 Report that all will be revealed. Will that happen next year?

TREASURER:

I am not speculating on times or even events, I am just saying the future will take care of itself, it always does Karl.

STEFANOVIC:

Why do you want to lead this country?

TREASURER:

Well look, when you are part of political life and when you have been a senior member of the Government you want to make the best contribution that you can in whatever capacity you can and that is what I am focussed on. It is a tough job that I have got, I am very focussed on it, a lot needs to be done in this country and we need to work towards getting as good a country as we possibly can have.

STEFANOVIC:

Alright, the Prime Minister said yesterday on our show that you two are on the same page in terms of tax reform, is that right?

TREASURER:

Yes.

STEFANOVIC:

So, you think the top tax rate should come down from 47 per cent?

TREASURER:

Look, I said last night: Do I believe that we should try and get taxes as low as possible? Yes. Does a farmer believe in rain? Yes. Does a Catholic believe in the Pope? Yes, of course. The question of course is how you go about things. I am not going to let the Budget go into deficit, I am not going to let interest rates got up for home buyers, we want to fund a good health system. But if we can do all of these things, keep the Australian economy growing, keep people in work, of course you should try and keep tax as low as possible. We have just legislated a change, some of which has already taken place and some of which will take place on the 1st of July next year, but this is something that never ends. Look, you have heard the expression, the two certainties of life, death and taxes, this will be around for a long time, Karl. When you are I are old they will still be talking about tax.

STEFANOVIC:

What is your ideal top tax rate, 35 cents?

TREASURER:

Look, it is just a question of how you go about these things and what is achievable.

STEFANOVIC:

You must have a figure in your mind though?

TREASURER:

Well you know, zero would be the best tax rate, wouldn’t it?

STEFANOVIC:

That is not going to happen though?

TREASURER:

But I don’t think it will happen in our lifetime.

STEFANOVIC:

What about 35 cents?

TREASURER:

Well you know, in our lifetimes, all I will say is this. One, you should have as few as people as possible on it and the changes that are going to come fully into effect next year mean that only three per cent of Australians will be on the top tax rate. You would have to earn more than $125,000 to worry about it and that is not your first $125,000, your first $125,000 won’t be on the top tax rate, it is your next $125,000 we are talking about here now. Now, most of your viewers, we know what average wages in Australia are, $50,000. They don’t pay the top marginal tax rate, probably never will, it is not of great interest to them. Now, if you happen to be one of the three per cent, it is of interest to you. But as a Treasurer and as a Government we have got a responsibility to the whole country, we ought to be interested in the three per cent but gee, we shouldn’t forget about the 97 per cent as well.

STEFANOVIC:

So when the tax reforms come they will be awarding those majority of people?

TREASURER:

Well look, in a society where you want to encourage everybody to work, you have got to make sure the tax system is fair for the majority too, you sure do.

STEFANOVIC:

Alright, Malcolm Turnbull came up with a tax plan as you know, as you are fully aware, what did you make of that plan?

TREASURER:

Well, he didn’t actually have a plan…

STEFANOVIC:

A model.

TREASURER:

…he had 280, so you know, I am sure if you didn’t like one, there were 279 that you could look at.

STEFANOVIC:

He thinks it can happen though.

TREASURER:

Well, which one?

STEFANOVIC:

Well, lowering the top tax rate…

TREASURER:

The point is when you actually have a tax plan you do actually come up with an alternative and these have to be carefully considered because you know - and I have done a bit of tax over the years - there are generally some people who do better and quite often some people who do worse. So, the thing about tax is, look, everybody has got a view. Everybody knows how to run the Australian tax system, everybody knows how to run the country, that is a democracy, that should be encouraged. But when it actually gets down to legislating these things, when you get down to the lines and you want to look at who is up and who is down, that is when the real action begins.

STEFANOVIC:

It seems to me that he might be making a run for the Treasury portfolio when you become Prime Minister.

TREASURER:

Well ambition is a good thing in politics.

STEFANOVIC:

Alright, just quickly before we go, Kim Beazley’s popularity is still waning. Would you expect that you would be going up against him at the next election?

TREASURER:

Well look, you know, I look at the polls, I don’t always believe them but the thing I would say for Mr Beazley is he opposed our tax changes in the Budget, he said that they favoured upper income earners too much, he shouldn’t have done that, he tried to vote them down, he didn’t win and I think it has affected his standing and I think that the message there for Kim Beazley is don’t be an obstacle to progress in this country. You know, let the Government get on with making Australia a stronger place and probably the people are saying to him, if you looked a bit more positive then we would look at you a bit more carefully.

STEFANOVIC:

Mr Costello, it has been good talking to you today, thanks for coming in to Today.

TREASURER:

Great to be with you Karl, thanks.

30 Aug 2005

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