Peter Costello

Media Transcripts

IGA, GST, Medicare, Polls - Interview with Neil Mitchell, 3AW

Treasurer

Interview with Neil Mitchell
3AW

Wednesday, 13 April 2005
9.05 am

 

SUBJECTS: IGA, GST, Medicare, Polls

MITCHELL:

Peter Costello good morning.

TREASURER:

Good morning Neil, good to be with you.

MITCHELL:

Thanks for your time. Now, it is reported that you have won, that the States in this brawl over the GST, them cutting taxes in return for GST money, that you have won, is that right?

TREASURER:

Well I don’t think it is a question of who wins between the Commonwealth and the States, it is a question as to whether both levels of government keep faith with the Australian people.

MITCHELL:

Well is it over, is the deal done?

TREASURER:

Well, the deal that was put to the Australian people was when the GST was introduced, nine other taxes will be abolished. I want to keep faith with the Australian people, some of the States have agreed with that proposition, that it is a question of timing and sequencing, but I have never seen this Neil as a contest between the Commonwealth Government and the States, this is an issue between the people of Australia and their elected governments and they were told that these…

MITCHELL:

You have been making one point, the States have been making another, and they said they were digging in, there was talk about ripping up the deal, is it now going to be resolved?

TREASURER:

Well I hope so.

MITCHELL:

Well it looks like it doesn’t it? It looks like they are agreeing with it.

TREASURER:

Well as I said, some of the States have agreed to abolish these taxes and uphold the agreement, I haven’t heard from all of them yet, but the signs are very positive. And this is a win for the Australian people.

MITCHELL:

Who have you heard from?

TREASURER:

Well the matters are still under negotiation and I don’t want to jeopardise the finalisation.

MITCHELL:

If they don’t all agree, if, I mean the suggestion I think Western Australia is holding out, if they don’t all agree, can you do the deal with the other States and somehow not Western Australia or not whichever state causes a problem or is it all in or none?

TREASURER:

Oh no, if there are one or two States that decided to keep the existing taxes and break the agreement, that would be their problem. But if the majority of States as I believe they will, agree to abolish these taxes, then they will be entitled to receive the GST under the agreement.

MITCHELL:

So if you had some States not agreeing to abolish the taxes, would you withhold payments from them?

TREASURER:

I am not going to go into what would happen, but the reality is this Neil, everybody in Australia knows this, that when the GST was introduced it was introduced not to reduce but to abolish other taxes. The GST has been introduced, those other taxes have to be abolished. Now, you can have an argument about the timing, you can have an argument about which ones are abolished first, but those taxes have to be abolished. And the Australian public was told that they would and if the outcome of all of this was that they got the GST and those other taxes stayed in place, that would not be keeping faith with the Australian people.

MITCHELL:

On another tax issue, and it is almost related to the GST, would you put this on the agenda for discussion – the GST as it applies to petrol excise? Because if that was removed now, petrol would come down four cents a litre and it is at horrendous levels.

TREASURER:

Well when we entered into the agreement with the States, we got their agreement for the abolition of these nine taxes in return for the GST. We got their agreement, that is the agreement I am trying to uphold. We didn’t get an agreement that if the GST revenues increased, they would reduce the tax on petrol. We didn’t get that agreement.

MITCHELL:

Well will you try to get it?

TREASURER:

Now, well Neil, the point I am making is that I am finding it hard enough to get them to adhere to the agreement I did get without asking them for progress on an agreement I didn’t get.

MITCHELL:

But you are going to have to re-negotiate anyway aren’t you, why not put this on the table?

TREASURER:

I make this point, there is one State that uses its GST revenue to reduce the cost of petrol. That is Queensland. One State does it. Now, it is a matter for the other States, they could do it as well. But I don’t have their signature on a piece of paper obliging them to do it, I do have their signature on a piece of paper obliging them in relation to these other taxes, that is why I am seeking to uphold that agreement.

MITCHELL:

But will you raise this issue with them? Petrol is crucial as you said the other day yourself, it is crucial to the economy of this country, the economy of the world. Petrol prices are hurting this country.

TREASURER:

Well I am prepared to make the point as I am now making that the States, now that they are sitting on a windfall in relation to GST do have the capacity to do that if they so choose and that is a matter for them.

MITCHELL:

So they have got the money to do it you reckon?

TREASURER:

Well Queensland does it.

MITCHELL:

And you think, well Victoria, has Victoria got the money, could Steve Bracks say, ‘righto, we will give that back, that is four cents a litre cheaper?’

TREASURER:

Well it is a matter for the Victorian Government, they are sitting on a windfall, what are they going to do with that windfall? Well, the first thing they have to do is they have to observe their Agreement and abolish the nine taxes. The second thing obviously that they have got to do in Victoria is cut land tax, everybody knows that. After they have done both of those things they would still have the capacity to look at other areas, that is a matter for them.

MITCHELL:

Including petrol.

TREASURER:

That is a matter for them.

MITCHELL:

Ok, Safety Net, Medicare Safety Net, will it be cut?

TREASURER:

Well the Medicare Safety Net is a scheme which says after your out-of-pocket medical, out-of-pocket out-of-hospital costs, I think is the way it is expressed, out-of-pocket out-of hospital costs go above a certain level then you can get an 80 per cent refund. It is something that this Government introduced, it is something that the Labor Party opposed, we have to make sure that all of these things are kept on a sustainable basis, that is what we are doing at the moment.

MITCHELL:

What does that mean?

TREASURER:

Well what it means is that we have got to make sure as the ageing of the population means that there is a heavier and heavier drawdown on medical services that all of the ways in which we fund health services in this country are put on a sustainable basis.

MITCHELL:

And a sustainable basis means if necessary you have to cut it.

TREASURER:

I am not going into future decisions because people say, ‘oh what are you going to do in a Budget?’ And I don’t confirm or I don’t deny, but when people ask me about this, it has been an extraordinary benefit for people, this Government introduced it, this Government will be keeping it. But this, but you have got to always make sure that you keep it on a sustainable basis.

MITCHELL:

This Government will be keeping it but not necessarily at this level?

TREASURER:

Well as I said I am not entering into the speculation.

MITCHELL:

Well you are aware of the speculation?

TREASURER:

Sure, I read it in the newspapers.

MITCHELL:

Is it on the agenda?

TREASURER:

I am not going into the speculation other than to say this Government introduced it and certainly the Government will be keeping it.

MITCHELL:

At a level of some sort.

TREASURER:

Well I am not going to speculate any further.

MITCHELL:

Ok, broad brush, the Budget, how close to finished?

TREASURER:

Well about four weeks close to being finished.

MITCHELL:

Can we expect a surplus larger than predicted?

TREASURER:

Well I think some of the commentary has again just been purely speculative Neil, but again I can’t confirm or deny, we will all know on Budget night.

MITCHELL:

You sound weary, have you had enough of the Budget?

TREASURER:

It is a hard road and it is a $200 billion Budget so we have got to put together $200 billion on the revenue and the expense side, we have got pressing defence commitments which are occurring at the moment, we want to start laying down the reform which will make a response to the ageing of Australia’s population, our largest challenge over the next 40 years, and it takes a bit of work, yes, it doesn’t just do itself.

MITCHELL:

You must be relieved this is the last one?

TREASURER:

I could see where you were going.

MITCHELL:

And what is the answer?

TREASURER:

You know every year I get asked if this is the last Budget. I think seven Budgets ago, I think I said it was seven Budgets ago it was the last one and I am still here Neil.

MITCHELL:

And it is still the last one.

TREASURER:

I am not going into any speculation.

MITCHELL:

Just finally, I noticed a newspaper poll yesterday saying you are not as popular as the Prime Minister in the way you do your job.

TREASURER:

Oh look, polls come and go and I think it turns very much on the questions and how you ask them.

MITCHELL:

Do you think you are popular?

TREASURER:

I think, I don’t think Treasurers are paid to be popular, what they are paid to do is to take hard decisions which produce popular outcomes. That is to take the decisions necessary to keep interest rates at 7.3 per cent rather than 10.5 per cent…

MITCHELL:

Do you think you are admired?

TREASURER:

…to take the decisions which have got unemployment down at 5.1 per cent rather than 8.6 per cent and put 1.3 million more people in work. Now, you don’t produce outcomes like that by taking popular decisions, you take right decisions…

MITCHELL:

Do you think you are admired?

TREASURER:

…and look, it is for other people to say Neil, but…

MITCHELL:

Do you want to be respected?

TREASURER:

…my job is to get people in work, keep their interest rates low, balance their budgets and prepare for Australia’s greatest challenge in the future and the record is there, everyone can see it, you can measure it against other countries or other Treasurers.

MITCHELL:

If you don’t mind, just before you go another non-economic thing, are you across the damage that is allegedly happened at Gallipoli? Have you had a look at the photographs?

TREASURER:

Well I have only read it in newspapers.

MITCHELL:

Ok. Are you concerned by it?

TREASURER:

Look Neil, Gallipoli is one of Australia’s most sacred sites, I have been there, I had the privilege of addressing the dawn ceremony a couple of years ago. Two things about it, one, you want to see the battlefield as it was, two, you want to be able to get in there to see the battlefield and you have got to have a road there but it has got to be done in the most sensitive way possible.

MITCHELL:

Thank you very must for speaking to us, I think Melbourne played Essendon the first game of the year.

TREASURER:

I don’t think we had a wager, did we?

MITCHELL:

Oh I think we have a standing wager for the benefit of a charity.

TREASURER:

Alright, name your charity.

MITCHELL:

We will talk about it. Thank you very much for speaking to us.

TREASURER:

Thank you.

13 Apr 2005

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