11 March 1996 - 3 December 2007
Transcript No. 2001/064
THE HON PETER COSTELLO MP
Interview with Glenn Milne - 7 Network
Tuesday, 22 May 2001
Treasurer, thanks for joining us. Hasnt Kim Beazley got a point when he says this Budget simply proves how much damage the GST was doing for pensioners and retirees?
No, no point at all. When Mr Beazley was in Government, a self-funded retiree got a tax-free threshold of $5,400. Tonight we take that to $20,000. That is, they pay no income tax, no Medicare levy until they earn above $20,000, and for a couple above $32,000, and that is a very large tax reduction for self-funded retirees. It will be good for the economy, the Budget can afford it, and they deserve it. And that is why we are doing it.
Do you concede though now that the original GST compensation for this group was inadequate?
No. We cut the income tax rates from 1 July last year and increased the pension. Whats happened is, that by running strong economic policy we got a better outcome in this financial year than was predicted and we want to share some of the benefits.
And sharing the benefits to pensioners, with a $300 increase, a bonus payment to pensioners and part-pensioners, I dont think this has been done before, and an increase in the tax-free threshold for self-funded retirees, more access to the Commonwealth Seniors Health Card, and access to pensioner concessions, which is something that the self-funded retiree is really interested in.
You mention economic dividends. But the fact is, is it not, that the surplus wouldnt exist without a dividend from the Reserve Bank? What if that dividend doesnt materialise?
Well, it has. Its paid. The financial year finished and they know what their outcome will be and it will be paid. But this argument that you should look at bottom-lines by taking out dividends - the bottom-line has dividends from the Reserve Bank, it has it from Telstra, it has it from a whole lot of other things that the Government owns. It is put together by income tax and company tax, and if any one of those were different, sure you would get a different outcome. But what you do is you budget on taking all of those things into account, and when your Budget is taking all of those things into account, for the fifth consecutive year the Budget is in surplus and we have now paid back $60 billion of Labors $80 billion debt burden. And whats the benefit for that? The benefit is that we dont pay as much in interest, we can spend the money on more important things like pensioners, and self-funded retirees, and new health programmes, because we dont have to service Labors debt with all of the cost that that has, like weve had to over the last four or five years.
Obviously, you hope this is a platform for political recovery. Do you rule out going early to an election?
I dont call elections Glenn, you know that. It is up to the Prime Minister.
But do you still prefer to wait until the end of the year for these changes to be absorbed by the community?
Well, the change in relation to self-funded retirees actually, is a backdated tax cut, it actually goes back to 1 July of last year. And so the sooner you put in your tax return you get the refund, and you cant put in your tax return until after 30 June, but in relation to the pension bonus weve got the legislation at Parliament tonight, all the Labor Party has got to do is vote yes, and the payment could be made next month.
Treasurer, we thank you.