TREASURER: Today I’m announcing that the Government has reached agreement with the crossbenchers to hold a Tax Forum on the 4th and 5th of October in Parliament House, Canberra.
This is a very important part of our plans to broaden and to strengthen our economy as we go forward. The Government has an ambitious reform agenda and we are already putting in place very substantial reforms particularly to small business taxation, to superannuation and of course investing in infrastructure. This is all part and parcel of responding to the challenges that come from dealing with Mining Boom Mark II and making our economy more prosperous into the future. There’ll be approximately 150 people at the forum. I want to see broad participation.
Having the forum later in the year gives us the opportunity for people to get involved, for people to engage in all sorts of interactions prior to the forum.
You will see from the release that I’ve put out today that we will put a framing paper in place in the next couple of months so it really does give everybody the time to be fully involved. I don't think this should just be a discussion between experts either. I do want to see broad representation from business, from unions, from community groups and individuals in our community. The Government is very proud of our record on tax. We’ve already put it place personal income tax reductions over three years worth something like $47 billion. We announced almost 12 months ago some very substantial responses to the Henry Report, and this will be part of an ongoing conversation about how we further reform our tax system.
I said last year around this time, it was a decade-long engagement. It will be and I’m really looking forward to the forum towards the end of the year.
JOURNALIST: Treasurer wouldn’t it be better to have the tax summit earlier so that those at the summit could have some input into the carbon tax and any tax cuts?
TREASURER: Can I just make this clear: the Government has got priorities that it must implement. The carbon tax is one, and of course the reforms we announced last year. We’re going forward implementing those reforms. It’s important that we put them in place as quickly as possible. But there’s a very broad agenda out there for people to further involve themselves in. We welcome participation in the discussion and that’s what I’m looking forward to at the end of the year.
JOURNALIST: If you went the Garnaut route and broadened the compensation to also include wider tax reform that would have to be done would it not before this Tax Forum?
TREASURER: Well the government has outlined our timetable if you like to reach agreement through the Multi-Party Committee on Climate Change. As you know, an emissions trading system puts a price on carbon for the largest polluters so they will pollute less in the future. The revenue used from the issue of permits to those large polluters will go -- every single cent – will go in assistance to households and to industry and to various climate change policies. That’s the position we’ve had and of course it’s always an option to have tax cuts as part of that mix, to assist people but the Government hasn’t reached a conclusion about that. We’ll work our way through those issues through the Multi-Party Committee as we said we would.
JOURNALIST: But it would have to be decided before October?
TREASURER: Well I don’t necessarily accept the premise of your question. Tax reform is ongoing in this country. One of the things I’m most proud of for example has been the very substantial increase in the LITO, the low-income tax offset - over the past three years which has delivered very significant tax cuts to those on lower incomes in our community. One option is to have initiatives in that area and as you know there are a wide range of recommendations in the Henry Review relating to personal income taxation. I think we can respond to the challenges that are posed by climate change through the Multi-Party Committee, we can do that within the timetable we’ve talked about, but that doesn’t impede a wider review of many of the issues that are raised in Henry’s recommendations or indeed, other views that people may have about those recommendations and the their ambitions for reform...
JOURNALIST: Won’t you, for a tax enquiry, tax summit, you won’t have the GST...
TREASURER: It’s a tax forum
JOURNALIST: Tax forum, you won’t have the GST on the agenda and the MRRT?
TREASURER: No, I’ve made it abundantly clear what the Government’s position on the GST is – we are not touching its base or its rate. If people want to talk about it at the forum they can, but the policy of the Gillard Government is not to touch the base or the rate of the GST, they’ll...
JOURNALIST: So it’s the same for the MRRT?
TREASURER: Well we’re going to get that in place, it’s very important. We took our proposals to the last election and we are going to put those in place as quickly as we can. I guess this is one of the reasons we have forums inside.
JOURNALIST: Why was it delayed by three months after June 30 and also can I ask you if it’s not going to talk about the GST, it’s not going to talk about pricing carbon, it’s not going to talk about..
TREASURER: No, I’m sorry, I haven’t said that. They can..
JOURNALIST: They can talk all they like.
TREASURER: No, no, no, look you’re trying to say the two are mutually exclusive, they are not. It’s going to have a role in shaping our decision making on the future of the tax system. In the meantime, the Government has and is putting in place the MRRT and we are doing that and that has to be done for business certainty. We are also working on a price on carbon and an emission trading system through the Multi-Party Committee. That has to happen in the name of certainty. But also, there are a wide range of issues...
JOURNALIST: Such as?
TREASURER: The tax and transfer payment system generally, the environmental taxation, state taxation, the relationship of state taxation to federal taxation. All of the issues that are canvassed around the Henry Report and more that people want to raise. And we will have a broader discussion about all of those issues. So the two aren’t mutually exclusive, but the Government is going to get on with its agenda and we’re doing that as well.
JOURNALIST: Sorry to be obtuse, but wouldn’t the tax and transfer system, and environmental taxes all be sort of be tied up with a tax reform package around the carbon tax and why...
TREASURER: Well sorry, there are a wide range of issues, a wide range of issues, across those areas of taxation which we can and will be talking about when we get to the tax forum later in the year. And if people want to talk about the decisions that we’ve already taken in some of those areas and discuss their implications for the future of reform in the next decade, they’re welcome to do that to.
JOURNALIST: Would you be flexible about changing any of your decision in the light of the summit?
TREASURER: Well I am not going to go on and speculate about this. You all know and we all know that tax reform is broad and that you have to walk and chew gum at the same time. We’ve got priorities we’ve got to put in place and policies we’ve got to deal with, but this is about the next year or necessarily the year after, it’s a decade- long process that we spoke about when the report came out. There’s a lot of people that have got a lot of views, about a lot of issues that are raised in the Henry report and wider ones as well, and we can to do both and we’re going to do.
JOURNALIST: What’s the difference between a forum and summit?
TREASURER: It’s a forum because it’s got about a 150 people, and that’s what...
JOURNALIST: What's a summit?
TREASURER: Well that’s a pretty tiny forum.
JOURNALIST: And why have you decided to delay it, just on Phil’s question?
TREASURER: Well basically to give people the time to get organised. If I was walking out here and saying today that we were holding it by the end of June, people would be screaming and yelling and saying there wouldn’t be enough time...
JOURNALIST: Where’s the certainty for business in getting a carbon pricing regime that starts, potentially 1 July 2012, but then knowing that there is a whole lot of extra changes..
TREASURER: No, no, hold it, hold it, hold it. We can have a discussion about carbon pricing, about permits, about targets, about assistance for industry and put that in place. It still leaves plenty to be discussed more generally when it comes to business taxation. They’re a whole range of issues that business raise with us that don’t even come within the ambit of carbon pricing. For example, one of the things that upset businesses is a lot of the fiddly small state taxes that they’d like to see dealt with. This is a matter for the States, the States will also be at the forum. We will put certainty in place in terms of carbon pricing by working on and developing an emissions trading scheme. We’re going to do all those things, we can’t just suspend the whole of government. We don’t intend to do that, what we’re going to do is what we’ve said we’re doing and I think it’s a pretty good way to go about it.
Where's Clarke, Where's Dawe?
. Suddenly tax cuts are back. Garnaut at the Press Club
. Might this be the wrong time for a tax summit?
. We've a tax debate. Sort of.