Peter Costello

Media Transcripts

Australian citizenship - Interview with Barrie Cassidy, Insiders

Interview with Barrie Cassidy
Insiders

Sunday, 26 February 2006

SUBJECTS: Citizenship, Tenth anniversary, GST, Tax Inquiry, AWB

CASSIDY:

Treasurer, good morning.

TREASURER:

Good morning, Barrie.

CASSIDY:

With a, what motivated you as a Treasurer to deliver that speech at the Sydney Institute to stray into that area of citizenship?

TREASURER:

I think it's important for Australia's future. I think we can offer a tolerant Australia which respects the rights and liberties of all as long as we've got agreement on a few key points. One is a secular state. Secondly, the rule of law - law laid down by democratically elected legislatures and a loyalty to Australia. Now if we all subscribe to those views, we can have robust diversity within those views, but if there are people that don't subscribe to those views that's a problem. We need to re-emphasise to those people...

CASSIDY:

But are there? That's the point. What have we've seen or hear or read about to suggest that that is not the case.

TREASURER:

Well, as I said in my speech, the radical cleric Abu Bakar Benbrika put forward the view that he thought that there were two laws in Australia, one was Australian law and the other was Sharia law. I don't want to say too much about him, but he has followers who apparently believe there's another source of law.

CASSIDY:

That's one person in a country of 20 million.

TREASURER:

Well, it's a clerical leader who is putting this doctrine forward to followers and the point that I make is that if the followers believe that, then the rights and liberties of other Australians are going to be adversely affected, believe me. I also say in that speech that terrorists and terrorist supporters who don't respect the rights and liberties of other Australians are also outside the Australian compact. They don't deserve to have citizenship. We've got to be very clear about this, Barrie. I must say, the thing that actually surprised me in reaction was that this was thought to be controversial. I wouldn't regard this as controversial at all. The fact that people came out and said that this was controversial or inflammatory...

CASSIDY:

Provocative was a term used a lot.

TREASURER:

...or provocative. Now, let's just analyse that for a moment. Is it provocative to say that citizens should be loyal to Australia, that they should abide by the rule of law, that they should respect the rights and liberties of others? Is that now provocative in Australia? Gee, things have got pretty bad if that's provocative.

CASSIDY:

It's true that the talkback callers were overwhelmingly of that view. But one other sentiment came through as well and that is this - talk's cheap, they want action. What are your proposals?

TREASURER:

The first thing I want to do is I want to make it entirely clear to those taking out Australian citizenship that when we ask them to take a pledge we mean it. And I have a suspicion that if you were to turn up at a citizenship ceremony, and they're going on all over Australia, you'd get the feeling that the pledge is just a necessary formality. I want to say this pledge is a big flashing warning sign that Australia expects people to subscribe to and to live by.

CASSIDY:

What happens if they ignore the warning signs?

TREASURER:

I also want to say that if you can't live by that pledge and you are a citizen of another country, then you're not eligible for Australian citizenship.

CASSIDY:

How do you establish that?

TREASURER:

Well I think you establish it first of all by making your values clear and asking people to subscribe to them. And I would like to get universal acceptance of those pledges and of those values. I must say, Barrie -

CASSIDY:

How do you do that, though?

TREASURER:

If there's ambiguity which is coming through in the media or from leaders in some communities, as I think we saw this week, ambiguity that you're not actually obliged to do all these things, then you're neutered from the start. That's why I would ask community leader, all community leaders in all communities, themselves to unequivocally themselves express these values and to urge them on their followers.

CASSIDY:

But you want universal acceptance of certain values. You saw the trouble the country got into trying to come up with a preamble on a Republic. It will be as tough, isn't it, to agree on a set of values?

TREASURER:

I think we're a long way there. We've already got four things in our pledge that we're asking of every citizen - loyalty to Australia, democratic beliefs, acceptance of the rule of law and an undertaking to respect the rights and liberties of others.

CASSIDY:

So what's missing?

TREASURER:

Well actually, that's a pretty long way. What's missing, I think, is an unequivocal message that these are our values and we expect them not just to be subscribed to, but to be lived by.

CASSIDY:

The 10th anniversary falls on Thursday and looking back over those 10 years, what do you think is John Howard's secret? What has enabled him to be the only leader other than Menzies to run up 10 years?

TREASURER:

I think economic strength has been a big part of what the Government has delivered to Australians and what Australians have recognised in return. We are now - this is an interesting point - we are now in a growth cycle longer than any growth cycle under the Menzies government. In fact, longer than any previously recorded in Australia. During that period 1.7 million new jobs have been created, mortgage interest rates have fallen, business profitability has risen to record levels, we've had eight surplus Budgets, we've nearly retired all Commonwealth debt, if not already, and kids have got a much better future than they had. And I think the public which concentrates on these bread-and-butter issues recognises that.

CASSIDY:

That's the team effort. What is it about John Howard, though, as an individual? The public seems to forgive his foibles and just focus on the big picture.

TREASURER:

These are the things that are important to people. Will my kids get a job? Can I afford my mortgage? Will the business that I'm employed by be profitable? These are the things people really care about. There's political issues and they're the issues of the day and they're going on at the moment. But at the end of the day what the Australian public wants to know is, can my kids get an education? Will there be a hospital? Will I have a job? Can I afford my mortgage? That's what the Government concentrates on.

CASSIDY:

Have you ever seen a better practitioner of the art of the politics than John Howard?

TREASURER:

He's in a class of his own with four election victories here in Australia. There are other people historically that have had as many, but here in Australia - four - that puts you in a class of your own.

CASSIDY:

After 10 years, are you surprised that his enthusiasm hasn't waned one little bit?

TREASURER:

Serving the Australian people is a great honour. I'm sure there are days when, Barrie, you think the press are a bit unfair on you and you guys make our lives miserable, but outside of those days it's a great honour and he knows that and I know that.

CASSIDY:

Has it been hard for you, though, to maintain that enthusiasm for such a long period?

TREASURER:

It's great privilege. As I said, there are some days when you feel the media is a bit unfair, but we know deep down you love us all.

CASSIDY:

You spoke about regrets, one of them to the 'Australian', you regret giving the States too much GST money and describe it, if it's an accurate quote, that it's "scarred you for life".

TREASURER:

Well, giving the States too much money - the idea of giving the States the GST was this, if you gave the States a revenue base and it was a growth revenue base, you would have premiers who would step up to the plate and say, "Now we have a revenue base, we will take responsibility for our health systems, for our education system." The old argument that I can't do anything because Canberra won't give me enough money would be put to death.

CASSIDY:

You argue they haven't kept that side of the bargain?

TREASURER:

They've taken the GST. Some of them have refused to even abolish the taxes that it was designed to replace. But they haven't changed the script. The script that they're reading from is still the script of 10 years ago.

CASSIDY:

But if that's a loophole, it's one that you left there for them to exploit.

TREASURER:

Well, it was a very generous offer and it hasn't produced the responsibility at the State level which we had hoped that it would.

CASSIDY:

Can you do anything about that now, or is it too late?

TREASURER:

I think we have to keep re-emphasising over and over again the script has changed. You've got a $37 billion per annum revenue base here and it's time for premiers who can show leadership to step up to the plate, take responsibility, along with the GST. They take the GST, take the responsibility that comes with it, change the script and make sure that the services are up to scratch.

CASSIDY:

You're announcing today a new inquiry into the taxation system, what are you hoping to achieve by that?

TREASURER:

I think it's important that we internationally benchmark the Australian taxation system so that we can get clearly in front of the public and in front of the commentators where we sit. Where we sit on the scale between high-tax countries and low-tax countries.

CASSIDY:

But don't you know that now? The figures are available.

TREASURER:

As it turns out, nearly all of the figures show Australia as one of the lowest taxed countries in the OECD.

CASSIDY:

So why the need for an inquiry?

TREASURER:

But what we need to do is we need to get the full-rounded picture on the table. Let me make these points. Some people compare Australian tax rates to US tax rates, federal tax rates, that the US has state income tax, city income tax. Some people compare Australian tax rates to European tax rates, but Europe has what's called social security contributions which is a tax by another name. You've got to get all of these on the table to get some kind of international comparison. Once we do that, what I hope will occur is we can find out where Australia leads, and there are many areas where we lead, but we can also identify areas where Australia lags and they ought to become the priority as we improve our tax system.

CASSIDY:

How quickly will this review be done?

TREASURER:

It will be done by the beginning of April.

CASSIDY:

Obviously, people are now wondering, is he softening us up here for tax reform or is he trying to build a case that tax reform is not necessary?

TREASURER:

What I'm trying to do is I'm trying to identify those areas where Australia lags so we can concentrate on them. Now nobody would say we've got a perfect tax system in Australia, so let's look around the world and let's see who does it better. I think as we look around the world by the way, Barrie, we'll find that by international comparisons there are significant areas where we lead. I think we'll actually show that our company taxes and business taxes are quite low by developed economy standard. But let's now pre-judge the issue. Let's have a look. Where we lead, we ought to maintain our advantage. Where we lag, we've got a focus and a priority to start addressing that area.

CASSIDY:

Everyday someone is calling for tax reform, not tax cuts, tax reform. But if they mean by that lowering the top marginal rate, your message seems to be simple - forget about it.

TREASURER:

No, let's internationally look at where we compare and how we compare, where we lead.

CASSIDY:

You're not saying, "Forget about lowering the top rate".

TREASURER:

What I'm saying at the moment is let's get some facts on the table. We've got a month, we've got two respected business leaders. It will be led by Peter Hendy and Dick Warburton, the chairman of our tax board. They'll look at all of the material, much of it on the public record with OECD studies and the like. Bring it all together, put everything into the mix, all of the relative comparisons, State, local, federal, business, individual, indirect. And let's just try and get some facts into this debate so we can work out where we lead and where we lag.

CASSIDY:

On funding generally, you really can't ignore for very much longer, can you, the pressure for NSW and Victoria for more money relative to the other States?

TREASURER:

One of the things about the increased royalties that are flowing to mining States like Queensland and Western Australia is that their revenue base is increasing and the consequence of that is that is beginning to redistribute money back to the larger States. These are all matters that are taken into account by the independent umpire, the Grants Commission. But I think you'll find - and this is the way the system is designed to work - that if a State takes advantage of a windfall, and mining would be a windfall in royalty terms at the moment...

CASSIDY:

In Western Australia and Queensland.

TREASURER:

...yeah, that's taken into account and averaged back. You see, we've got an independent umpire and it makes a decision.

CASSIDY:

The Reserve Bank Governor has said that it's time to fix this up.

TREASURER:

Let me go through this. The GST cake is about $36, $37 billion which we've put in place. How it's sliced between the States is on a formula the States agree as between themselves. It's done by an independent umpire. We've grown the cake and the States fight about their slices. Let me make this point. When you hear States fighting about slices, it's not a fight against mum who baked and cake, it's not a fight against the Commonwealth, it's a fight as between the siblings.

CASSIDY:

It's hardly a perfect formula, though, is it, because the smaller States are going to gang up on the two large States?

TREASURER:

If it's not a perfect formula and the States can improve the formula, we would be very very pleased to implement it. But I'll point one thing about this formula - what this formula has built into it is that if you have a new source of revenue, that's taken into account. So royalties in Western Australia and Queensland are now taken into account. One of the reasons why NSW, incidentally, was assessed as having great revenue capacity is the predominance of head offices and property values. So all of these things are taken into account.

CASSIDY:

Just finally on the Wheat Board and within the Government now is there at least a sense of not guilt, but embarrassment, embarrassment that more should have been done along the way?

TREASURER:

Cole will come out and he will make his finding on whether or not bribes were paid, who knew about them, and who is responsible. I'm not in a position to give you any of those findings. But just let me say, and I think I speak for all people who are interested in the outcome of the Cole Royal Commission here, if the wheat board paid bribes it's a disgrace because it was a contravention of the Oil-for-Food Program. It was a contravention of a UN program. It is not permissible and if people are found to have done that, then they ought to be charged.

CASSIDY:

But is it equally a disgrace that the Government knew nothing about this?

TREASURER:

If the Government went to the Wheat Board and the Wheat Board gave it assurance after assurance after assurance and no reasonable basis to query that, then that's the finding that Commissioner Cole will make. Let's see what Commissioner Cole makes in his findings.

CASSIDY:

Would it disturb you to hear that some politicians may have sold Australian Wheat Board shares late last year, John Anderson among them?

TREASURER:

They have to declare the share they hold, they have to declare when they buy and sell them. It's all on the public record out there and people will be able to put questions to them. But if the implication is was he somehow insider trading, I wouldn't believe that for a nano second. I know John Anderson. I know he's a man of enormous integrity and if there's some suggestion that he bought or sold on inside information, I would reject that entirely.

CASSIDY:

Just finally, how are you planning to celebrate the 10th anniversary?

TREASURER:

Well, like everybody else, I'll be in Canberra, in parliamentary sittings. Maybe they'll give me an early night off.

CASSIDY:

Thanks for joining us this morning, appreciate it.

TREASURER:

Great to be with you, Barrie, thanks.

26 Feb 2006

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