Archive for October, 2007

On the first full day of the 2007 election campaign, the coalition has announced a tax package offering income tax reductions across the board.

A re-elected coalition government is proposing to reduce the number of tax brackets to four over a five-year period: 15, 30, 35 and 40 cents in the dollar. It proposes raising the tax-free threshold to $14,000 next year.

The tax cuts are worth more than $34 billion.

The aim of the restructure is to arrive at a tax-free threshold of $20,000 with the top marginal rate set at 40 cents.

The changes were announced by the Prime Minister, John Howard, and the Treasurer, Peter Costello, at a joint press conference in Canberra.

Listen to the joint press conference held by John Howard and Peter Costello:

This is the transcript of the joint press conference held by John Howard and Peter Costello.

HOWARD:

Well ladies and gentlemen the Treasurer and I have called this news conference today to do two things. The Treasurer will be releasing on behalf of the Government the Mid-Year Economic and Fiscal Outlook and he’ll also be announcing on behalf of the Government a five year plan for further major restructuring of the personal income tax system. It represents the first and certainly a major announcement in a series of announcements which are designed to lay out our plans to improve incentive for workforce participation, to provide the opportunity for people who are feeling cost of living pressures in the community to receive some assistance in dealing with those cost of living pressures; to remind the Australian community of our longstanding belief that you should have incentive in the tax system for effort, for risk taking, for workforce participation - that we believe work in infinitely preferable to welfare.

The tax cuts that are going to be announced and the plan outlined by the Treasurer are a series of tax and is a plan that is eminently affordable. It builds of course on the personal tax cuts contained in the last five Budgets. It gives substance to our assertion that we can further reduce unemployment, drive it down to a level closer to 3.5 per cent because the participation benefits arising from personal income tax reform are very, very significant.

This plan is all about further building and growing the Australian economy. It is about creating more, not less jobs. Unlike Labor’s anti-small business industrial relations system it will lead to more people entering the workforce and it will provide far greater incentive for people who are already there.

Finally, can I say that the economic picture to be outlined by the Treasurer in the mid-year review shows an Australian economy continuing to grow, continuing to perform exceptionally well. The tax reform plan, which is a detailed plan over a period of years, is entirely affordable and consistent with the Government’s objectives in relation to both inflation and interest rates. Treasurer.

COSTELLO:

Thank you very much Prime Minister. First of all I am going to outline the major changes in the mid-year review to what we had at Budget time. I am then going to explain our tax reform plan, which will take place over the next three years. Then I am going to lay out an ambitious tax reform goal for five years time, a goal of where we want to see Australia to be, world class with a competitive tax system and with a tax system which has been absolutely re-cast to enable this country to go for growth.

First of all, since the Budget we have upgraded our growth forecasts for both 2006-07 and 2007-08. Growth in 2006-07 was expected to be 2.5 per cent, in fact the outcome was three and a quarter. Growth in 2007-08 was forecast to be three and three quarter per cent, the new forecast is four and a quarter per cent.

As a consequence of this upgrading of growth and developments in the labour market, we have upgraded employment growth for 2006-07 and 2007-08. In fact in 2007-08 we have upgraded forecast employment growth from one and a half per cent to two and a quarter per cent. The consequence of that is that we now forecast in 2007-08 we will have on average 100,000 additional people in the workforce, higher than we forecast in the May Budget. That 100,000 additional people in the workforce, higher than we forecast in the May Budget, will lead to a growth in revenue for PAYG and increased receipts for superannuation because more people are putting money into superannuation and indeed returns are better. This is part of the story, as you know, of 2.2 million additional people in work since March of 1996.

The announcement that I make today in relation to the tax plan keeps the Budget in surplus above one per cent of GDP over the whole of the forward estimates. That is, this year, next year, 2008-09 and the two projection years out to 2010-11. As you know this puts Australia in a much stronger position than comparable developed economies in the world, all of whom on average in the OECD or the Euro area on average are in deficit, including the United Kingdom, the United States and Japan.

I now turn to the income tax plan which is being announced today. Prior to the reform by this Government of the income tax system there were four rates of tax, 20, 34, 43 and 47, with the top rate of tax commencing on your first dollar of income above $50,000. The effective tax free threshold for low income earners was $6,150. As a result of the announcement in this year’s Budget, our four tax rates, currently in the current financial year are 15, 30, 40 and 45 per cent. The 15 per cent rate goes up to $30,000. The 30 per cent rate which replaced rates of 34, 43 and 47 applies right through middle income areas. People go onto the second top marginal tax rate at $75,000 and the top marginal tax rate for each dollar over $150,000. The effective tax free threshold for low income earners in this financial year is $11,000.

The tax plan which I announce today will next financial year do a number of things. First of all it will lift the effective tax free threshold for low income earners to $14,000 from the current level of $11,000. Secondly it will extend the range of the 15 cent marginal tax rate from $30,000 to $34,000. Thirdly, and this has already been legislated; this is why it’s in blue, the legislated changes that have not yet taken effect will still take effect to increase the 30 cent threshold up to $80,000 and the 40 cent threshold up to $180,000.

That was legislated as part of our two part plan to apply from 1 July. The first part for low income earners, which was the increase in the effective tax free threshold and the increase of the 15 cent rate has already taken effect. That second instalment will take effect but with additional tax relief on the 1st of July for low income earners. The year after, in 2009-10, we will continue to increase the threshold for the 15 cent rate, taking it now from 34 to $35,000 and we will begin to reduce the top marginal tax rate and the second top marginal tax rate, each coming down by 2 cents.

The second top marginal tax rate coming down from 40 cents in the dollar to 38 and the top marginal tax rate coming down from 45 cents to 43 cents. By increasing the low-income tax offset we will also increase the effective tax-free threshold for low income earners to $15,000. The third year we will continue these reforms by again increasing the effective tax-free threshold in 2010 to $16,000 by taking the 15 cent threshold up to $37,000 and by cutting again, this time by one cent, the top marginal tax rate and the second top marginal tax rate. This plan is all to work towards the goal of tax reform which we now set ourselves. Within five years, by 2012-13, four tax rates 15, 30, 35 and 40. That’s why we keep reducing those top two tax rates.

Secondly the goal is to have 45 per cent of Australian taxpayers on a top marginal tax rate of 15 per cent or less. Thirdly to have 85 per cent of Australian taxpayers on a top marginal tax rate of 30 per cent or less. Fourthly, to have 98 per cent of Australian taxpayers on a top marginal tax rate of 35 per cent or less and fifthly, for low income earners who qualify for the low-income tax offset, no tax until they go over $20,000. This is goal we set ourselves over five years.

The plan that I have announced to be implemented in the next three years puts us well within striking distance of meeting that goal. It does it by lifting the effective tax free threshold in the stages I’ve described by reducing the two top tax rates in the stages I’ve described and by lifting the threshold for the 15 cent rate in the stages that I’ve described. Over the three years to 2010-11, as you can see, this will mean that we will have an effective tax free threshold that is for people qualifying for the low income tax offset, no tax until they go above $16,000. The reason we are doing this is to get more – encourage more people to join the workforce and to boost the capacity of the Australian economy. This is part of our go for growth strategy.

Treasury modelling shows that the tax reforms that we have put in place since 2000 have boosted, in a cumulative way, the number of people in the workforce by 300,000 and the changes which we announce today will boost the estimated workforce by around 65,000 people. Encouraging more people into the workforce, particularly by reducing their tax – effective tax free threshold, and particularly by lifting the threshold up until you which you pay 15 cents in the dollar, is boosting the number of people joining Australia’s workforce and this is producing a virtuous cycle. Lower tax encouraging more people into the workforce, more people into the workforce lifting the number in work, increasing the number in work, boosting revenues, boosting revenues allowing us to cut tax. Cutting tax, encouraging more people into the workforce.

These are the results that can be delivered from strong economic growth. This is where we have got ourselves after increasing employment by over two million in this country and this is where we can drive the agenda by increasing the workforce further.

Finally, you will see in the pack that I am about to reduce…to release that from the period of 2002-03 when we began regularly cutting tax, we have cut tax very substantially for people on low incomes. For people on $15,000 we will cut it out entirely. For people on $50,000 they will have a net tax cut which will reduce their tax paid from around $11,380 to $7,850. Let me emphasise: these tax cuts which began with the new tax system in 2000 have continued through our last five budgets and now have the aspirational goal which we announce today, have delivered tax cuts right across the income spectrum but the highest in percentage terms to the lowest income earners, in percentage terms. In dollar terms, of course, because they pay less, the dollar terms are not so great but in percentage terms they have, as a consequence, been the highest.

This tax plan is moving us towards a goal which we set today for a five year period. It will make the Australian taxation system competitive. It will boost employment, it will grow our economy and it is part of setting Australia up for the next generation. Now I’ll ask the staff to release both the mid-year review and the tax release in relation to the income tax cuts.

HOWARD:

Then we’d be happy to take questions. Could I just make one observation that encapsulates the incentive effects. By the year 2010, 65 per cent of women with children in the part-time workforce will face a top marginal tax rate of no more than 15 per cent. Now given that a very typical family employment formation is a full time husband in the workforce or a husband in the full-time workforce, and a mother working part-time, this is a hugely significant figure. 65 per cent by 2010 of women with children in the part-time workforce will face a marginal tax rate of no more than 15 per cent. That is one of the quite stunning implications of this tax reform plan. We’ll distribute it and then we’ll be happy to take questions.

COSTELLO:

Also, I ask my staff to give me a copy of the press release, I didn’t bring one. Please.

JOURNALIST:

Can I ask, what do the tax cuts cost?

COSTELLO:

Yes, the tax cuts cost $34 billion, roughly, over three years. If I can take you to the area where they are in the mid-year review, you will see them in the revenue measures on page 62. $7.1 billion in 2008-09, $10.9 billion in 2009-10, $15.9 billion in 2010-11.

JOURNALIST:

Prime Minister, why are you release the tax policy now? Why decide to go so early…

HOWARD:

Well the right time to release the tax policy is the time of the release of the mid-year economic review so that we are able to say immediately that these tax cuts are fully funded and it’s a very sensible, conservative, logical thing to do.

JOURNALIST:

Treasurer, (inaudible) consistent with the provision of decent services? Aren’t the polls telling you at the moment that people are keener on the government providing more services and they’re not too fussed about tax cuts?

COSTELLO:

Well can I make the point that the Government will provide decent services and is funding decent services. After this tax cut, as I showed you in my graph, the Budget will still be in surplus by the equivalent or greater of one per cent of GDP. That’s the goal that we’ve also set ourselves to deliver surplus Budgets. Now, we have a situation where we have increased revenue because of a surge in employment. The Government can either hang on to that revenue or return that revenue to taxpayers by building a more competitive tax system. I think it’s a matter of fairness it’s right to return it but also in order to build capacity and to get into this virtuous circle whereby you encourage more people into the workforce, you might be able to do it again in the future. That’s what we’re about when we go for growth.

JOURNALIST:

Aren’t you pumping an enormous amount of money into an already overheated economy, or overheating economy?

HOWARD:

No we’re not. These tax cuts are done in stages. They start with about seven billion from the first of July next year, a larger amount a year later and a still larger amount a year after that. But you’ve got to remember that the things that produce the revenue surge that we have also tell us that unless you return a significant portion of that by way of further tax relief, over time you are going to reduce the incentive for people to work and once you reduce the incentive for people to work you begin to reverse the very positive economic activity that we have at the present time.

JOURNALIST:

So you’re not concerned even though the MYEFO prediction for CPI (inaudible) from 2.5 per cent to (inaudible) closer to the top of the Reserve Bank’s…

HOWARD:

No we’re not because I’ll tell you…one reason why we’re not concerned is that we have an industrial relations system that in fact contains wage pressure. What would be of concern would be a return to a regulated centralised wage fixation system whereby wage increases in very profitable sectors in the economy such as the mining industry flowed through without lead or hindrance to other parts of the economy. You can go back to what Glenn Stevens has said and what Ian Macfarlane have both said that it’s different now then what it was, and the reason is that we have a decentralised wage fixing system.

JOURNALIST:

So you relying on WorkChoices and the wages system to contain inflation?

HOWARD:

Well I’m certainly pointing to the fact that one of the things that helps contain wage increases not based on productivity gains is a more flexible industrial relations system and one of the reasons why now as was the case three years ago that I can say that interest rates will always be lower under the Coalition than under Labor is that we are running a sensible industrial relations system and one that is not centralised and one that’s not regulated in the way Labor would propose. Labor’s industrial relations policy would be of enormous threat to the stability of inflation and thereby interest rates.

JOURNALIST:

(inaudible)

COSTELLO:

Look we have shown that the plan to be legislated to take effect over the next three years will keep the Budget in surplus at one per cent or greater. We’ve shown that in the mid year review. Now to go on and to complete the last two years of the five year goal will require the economy to continue to grow. If it continues to grow as we forecast it will, this will be capable of completion.

JOURNALIST:

(inaudible)

COSTELLO:

Well I’m very confident now that just as the Australian economy, we are forecasting, will continue to grow over the next three years, properly managed, properly managed will continue to grow and allow us to complete the last leg. I wouldn’t bet anything on it if there were a change of government.

COSTELLO:

Sorry can I just take this one first? Steve and then Tim.

JOURNALIST:

Treasurer, the $36 billion tax cut announced in the Budget, $36 billion, you got no bounce out of that. Are you concerned that there is a, perhaps a sort of complacency in the electorate and that you’re not going to get bounce out of this tax break?

COSTELLO:

I think we have an opportunity now to get the Australian tax system competitive. Competitive with other countries around the world and competitive in encouraging people to join it. This is serious reform. This is a five year goal which as you saw will have, what was it, 98 per cent of Australians on a top rate of 35 cents or less. This is a goal that would have low income earners paying no tax until they go above $20,000. Now I’ve shown you how in three years we can get very close to that goal and I have every confidence that we can complete it in the two years thereafter. Now I think Australians do want help with their cost of living pressures, yes of course I do, and this will deliver tax cuts for every Australian taxpayer. That’s good. But also this will deliver Australia an internationally competitive personal income tax system. When you think of where we’ve come in modernising indirect tax, in modernising capital gains tax, in modernising company tax, in the landmark reforms of superannuation, to be able to deliver this in personal income taxes is a great reform and it’s going for growth. Sorry, Tim was it?

JOURNALIST:

Ah yeah, I just wanting to clarify, the three stages you spelled out (inaudible)

COSTELLO:

That’s exactly right. The plan is for the next three years with the rates and the thresholds as they will be on the first of July for each of the next three years. The goal is for two years after that and if we implement our plan then that goal will be well within delivery.

JOURNALIST:

5000 jobs, you mentioned, that’s three years or …

COSTELLO:

Yes that’s if I can take you to the, it’s chart three in the press release, Tim, on page four.

JOURNALIST:

Treasurer, are you confident that these….that you will be able to keep to that three year schedule if there were a fall in commodity prices?

COSTELLO:

Well the mid year review sets out all of our assumptions. The mid year review also includes an assumption about a return to more normal commodity prices in the projection years. So we built in an estimate which is very prudent.

JOURNALIST:

Prime Minister Howard, $34 billion isn’t a bad opening up on day one, are you challenging Mr Rudd to say me too?

HOWARD:

Mr Rudd can respond in any way he thinks fit. I would just make the point, Mark, that this is a very carefully thought through affordable, detailed and serious plan about further major tax reform and I’ll just make the additional point that we’ve heard a lot from Mr Rudd and you mentioned him, I didn’t, but we’ve heard a lot from Mr Rudd about cost of living pressures. We’ve been promised inquiries and we’ve had stunts and we’ve had shopping centre visits, but rather than try and fiddle with a committee on prices, isn’t it better to give people additional purchasing power via a tax cut. Isn’t it better to say well here is additional tax relief particularly for low income people, let them decide how they spend it rather then the government fiddling with a housing affordability policy which might add to the cost of buying the first home? Isn’t it better to do this rather than to fiddle with the excise on petrol which can be wiped out with some kind of variation in the world price of crude oil. I mean the infinitely fairer, economically more responsible way of dealing with cost of living pressures is to actually give to the average taxpayer the wherewithal to deal with the pressures in the way that he or she thinks fit; not for the government to say well we think that pressure is worth relieving but that pressure over there is not deserving of relief. That is the case for across the board tax relief, the cost of living argument in favour of across the board tax relief quite apart from the workforce participation and long-term capacity building benefits of lower rates of tax.

Yes you’ve been trying, Mr Coorey has been politely and desperately trying.

JOURNALIST:

(inaudible) does that mean you’re not going to have a housing affordability policy?

HOWARD:

No it doesn’t mean that, just listen carefully; what it means is that we’re not going to embrace policies in any of these areas that actually aggravate the problem. And, I mean, the problem of housing is that over a period of time is land has become far too expensive and that flows from a number of things and it’s much harder now because of that to buy your first home but you don’t solve the housing affordability problem by doing things that further increase the cost and the price of housing. But that doesn’t mean to say we will remain silent on the issue, don’t think that for a moment.

JOURNALIST:

(Inaudible) the mid year statement. Both of you have been calling on Kevin Rudd for the last few weeks if not months to put out his tax policy. Wouldn’t it have been irresponsible if he’d one if before this statement was available?

HOWARD:

No, not at all, not at all because he’s had 11 years or his party has, to produce a tax policy.

JOURNALIST:

Mr Howard, how do you respond to Kevin Rudd’s challenge today that you outline the further reforms you’ll make to WorkChoices if you win?

HOWARD:

Well I haven’t outlined any further changes. I regard the current state of WorkChoices and the industrial relations legislation as right. We brought in a Fairness Test and we don’t have any secret further changes to WorkChoices in a drawer or in our pocket or on a computer or anywhere. We think we’ve got the balance right. We’re concerned that if he wins, particularly small business will suffer because he’s going to bring back the dreaded unfair dismissal laws that will send our falling unemployment into reverse. I mean, you can bank on this, if Mr Rudd becomes Prime Minister, unemployment will go up.

JOURNALIST:

The Labor Party has been suggesting that you would like to go further on…

HOWARD:

Me?

JOURNALIST:

That Mr Costello would like to go further on WorkChoices. Can you guarantee that if the Prime Minister retires and you’re elected Prime Minister that you, or that are, you become Prime Minister without being elected that you are not going do further…

COSTELLO:

I can guarantee you that I thoroughly support our current policy, absolutely, absolutely.

JOURNALIST:

It’s a rather different thing though.

COSTELLO:

Well whatever you would like me to say Michelle, I’ll say because you know, I think I’m making it entirely clear. I thoroughly support the policy, I don’t believe that it requires changes. Is that enough?

JOURNALIST:

But can you, can you definitively rule out…

COSTELLO:

Yes, I can.

JOURNALIST:

What was the gestation period for this tax policy? When did you start working on it and does it constrain in any way your ability to make other spending promises…

HOWARD:

Who’s that question directed at? Peter?

JOURNALIST:

Well whoever would like to answer it.

COSTELLO:

We’ve been working on this tax policy for a long time, you know, you don’t just produce a book like that overnight. There’s a lot of work and the detail is in there and it’s fully costed and it’s fully paid for and after it’s done the Budget is still in surplus by one per cent or greater of GDP. Now, we believe that a surplus of around 1 per cent of GDP is responsible economic policy. So that’s how we’re going into this election. I don’t know what Mr Rudd thinks, but that’s what we have laid down, that’s what we believe. We think that’s consistent with Budget policy and we have done that consistent with this aspirational tax plan.

JOURNALIST:

Treasurer, why have you left the top personal rate even at the end of your aspirational period, well above the company rate?

COSTELLO:

Well it will be 40 per cent Paul. The company rate is 30 per cent, the gap is narrowing. When I became Treasurer the top company tax rate was 36 and the top tax rate was 47. So they both will have come down by six or seven per cent, they’re both lower now…

JOURNALIST:

But the argument many economists put up is that they should be in line for reasons…

COSTELLO:

Yeah well, I think there was a period…

JOURNALIST:

…tax avoidance and other things…

COSTELLO:

Well I’ll just make two points…

HOWARD:

We’ll have total nirvana one day, in 100 years.

COSTELLO:

I’ll make two points. I think once, for a very short period of time they were aligned in the 80’s if my memory serves me right at something like 46 or 48 per cent, so alignment is not the point, competitiveness is the point. The second thing I’d point out to you, of course, is that with full dividend imputation now, any dividend that comes out of a company gets a full 30 per cent rebate and you pay the difference. If your tax rate is lower you actually get the difference back and that’s something that this government introduced Paul.

JOURNALIST:

Treasurer, after this announcement today, how much more have you got in the kit to spend during the campaign to keep that surplus at 1 per cent GDP.

COSTELLO:

Well you can examine the figures but you’ll find that this is costed, funded, responsible and we still have a surplus and, you know, can I point out to you there aren’t that many other comparable countries in the world that are where we are. Certainly not America, not Britain…

JOURNALIST:

So how much more have you got to spend in the campaign?

COSTELLO:

…not France, Germany, Europe, Japan. This is a pretty responsible position to be in and not only do we have a Budget surplus, we’ve cleared Commonwealth debt which is now saving the Australian taxpayer $9 billion a year.

JOURNALIST:

So how much more can you spend to keep a surplus of 1 per cent GST?

COSTELLO:

Well as I said to you this is a responsible policy.

JOURNALIST:

Will you be addressing business taxation separately in this campaign or do you think this…

COSTELLO:

Well I think business would support these reforms and I’ll tell you why. One of the things you’ll hear from business these days in some parts of Australia is they can’t get enough employees. There are some businesses that cite labour shortage as their number one problem. Now if you increase the effective tax free threshold and if you make sure that lower income earners won’t face a rate higher than 15 per cent you’re encouraging more people into the workforce. If you reduce your top tax rates, and this will reduce it, lower than the OECD average, you make your country more attractive for skilled immigrants, people who can bring particular skills from all around the world. And I think business will like this because this is an economic plan. This is about building capacity and the point as I said earlier you wouldn’t be able to do this if we didn’t have an extra 100,000 people in work. If you can get another 100,000 extra people in work in a year or two years time these are the sorts of things you can do again.

JOURNALIST:

You say that you’re increasing, you would increase household spending power through this which would help with petrol bills etc, but what about things such as schools and hospitals Isn’t there an argument this money would be better spent on capital works like that?

HOWARD:

Well, we are in favour of more investment in both education and health and we’ve announced it. I mean, the implication, I don’t think you really mean it but a possible implication of your question is that we have neglected those areas.

JOURNALIST:

Well hasn’t spending been cut on public hospitals?

HOWARD:

No, it hasn’t been cut, no spending’s been increased. It’s been increased, and it will be, can I tell you now, we will if we’re re-elected, we will be investing more in the Australian health care agreements, we’ll provide more money for public hospitals around Australia in the next five year health care agreement than is provided under the current one and that is quite apart from all the measures we’ve taken to strengthen Medicare, the safety net and the like. But we’ll also be requiring better administration. I mean, you don’t solve the public hospital crisis of New South Wales by giving Reba Meagher more money to spend unless you’ve got a better regime. I mean, you know really, if I could just say in relation to this how anybody living in western Sydney would contemplate voting Labor federally when they see the mess that Labor at a state level has made of public hospitals and public transport in New South Wales for example, you know, completely and utterly escapes me. We believe in local control for public hospitals and one of the conditions of our policy when it’s announced in detail, and there will be a detailed policy on public hospitals to be released by the Coalition, we will encompass the issue of local control.

JOURNALIST:

Mr Howard, would you describe this tax policy as your, as the lynchpin of your re-election bid?

HOWARD:

Look, that is commentary. What this is, is a bold plan for Australia’s future to keep our nation growing, to give people incentive to work, to maintain the transition towards an opportunity society where people are encouraged to work harder and to take risks. I mean, that’s what I’m interested in and I’ll leave lynchpins and cornerstones and forks and all of those other things that, you know, and committees and commissions, you know I’ll leave all of that to somebody else. Yes?

JOURNALIST:

You did say a couple of months ago that you had no more rabbits to pull out of the hat. Has one just re-appeared on day one of the election campaign?

HOWARD:

Look, that’s, you were inaccurately briefed out of a party room meeting.

JOURNALIST:

Just on who this policy was in part aimed at women who work part time. Do you believe that the incentives haven’t been there? Is this an admission that it’s not working for some families?

HOWARD:

When I say, it wasn’t, I mean it’s aimed at everybody but one of the spectacular, stunning, consequences of this is that remarkable figure I gave you, that 65 per cent of women with children in the part time workforce by 2010 will be on a marginal tax rate of no more than 15 per cent. Now when you bear in mind that, you know, a very typical family arrangement now is the father, the husband working full time and earning at or near or above AWE and his wife in the part-time workforce, now what I am saying is 65 per cent of those by 2010 will be on a marginal tax rate of no more than 15 per cent. Now that is an amazing reform and it is a contemporary modern reform that recognises that nature of family arrangements. I think it is terrific.

JOURNALIST:

Is that how you plan for them to have more money to spend on childcare or do you think there’s still room for more childcare reform?

HOWARD:

Look, I am told that on average about 65 per cent of the cost of childcare is defrayed by various government payments and tax benefits. It is about 65 per cent. Now you can always argue that it should be more but, you know, there are arguments and we will have something to say about childcare during the course of the campaign. But what I am saying about this is that it does provide an incentive for part-time workforce participation and many parents now want a situation where Dad is full-time in the workforce and Mum is, thinks the right thing in order to balance work and family responsibilities is to go back to work part-time, not full-time and that is an increasing formation. The point I am making is that this is facilitatory of that, this encourages that, supports that choice and isn’t that a terrific thing?

JOURNALIST:

Treasurer, you’ve announced, in the 06-07 budget the surplus was 1.7 per cent of GDP. You’re bringing it down to 1.3. You’ve announced about $16 billion worth of spending since the Budget and you haven’t gone through the Budget (inaudible) campaign promises. How can you argue that none of that is inflationary and an economy running at close to capacity as Glenn Stevens has repeatedly pointed out?

COSTELLO:

Well if you go to page 255, the Budget outcome in 2006-07 was 1.6 per cent of GDP. In 2007-08 we are expecting 1.3 per cent. In 2008-09, 1.2 per cent. 2009-10, about 1.4 per cent. That is remarkably consistent. The movement from year to year is very small indeed. And I would make two points. One is, of course, that if we didn’t cut taxes for all Australians, your tax to GDP revenues would rise, would rise, and we are not about increasing tax to GDP revenues, we are about decreasing them. The second is that this is part of building capacity. I saw a survey the other day, I can’t quite remember which one it was, but business was asked to name the number one problem for small business and they said labour shortage. What business is telling you is what is constraining our capacity now is getting people to fill the jobs. Now, where are we going to get people to fill the jobs? I am encouraging Australians to have more kids. That might help in 20 years time but we have got to encourage people to join the workforce. And what better way of doing that than increasing the effective tax free threshold and then increasing the threshold at which you are only taxed up to 15 per cent. And if you have a plan where you are not going to go above 15 per cent as your top marginal tax rate to $37,000, this is what the Prime Minister was saying, many women coming back into the workforce working a day or two, they won’t go above $37,000. So their top tax rate won’t be their average, their top tax rate will be 15 cents in the dollar.

JOURNALIST:

But isn’t the more pressing issue the skills shortages problem and this won’t go towards that will it?

COSTELLO:

Well let me say the Government is doing more to build skills in Australia than any other government in Australian history, including the announcement which I made in the Budget by the way, of the $500 voucher against TAFE fees and the $1,000 wage subsidy to encourage people to take up apprenticeships in areas where there are shortages. And the other point I will make about this tax plan is that one of the reasons why we are reducing those top rates from 45 down to 42, and our goal is to go low as you know, is again, in the world market for skilled people these things count. They can make a difference and this will take us below the OECD average for the top marginal tax rate.

JOURNALIST:

Treasurer, how much do the tax cuts cost over five years and given the history of previous administrations promising LAW law tax cuts what guarantee can you give of the tax cuts coming through…

COSTELLO:

Well, the tax cuts which we are introducing are fully paid for. And when you say, you know, given previous records of previous administrations, let’s call a spade a spade, given the Labor Party’s broken promises on tax, can you believe the Coalition? The answer is ‘yes.’

HOWARD:

We haven’t taken any back.

COSTELLO:

Never. In fact, as I recall the last lot of tax cuts were in May of this year. Rather than taking them back, we are actually taking them forward.

HOWARD:

Last question. Katherine.

COSTELLO:

Katherine.

JOURNALIST:

You’ve done a lot of work as Treasurer Mr Costello on (inaudible). Are both of you confident that you’ve got the balance right between dealing with the participation problem now and dealing with future pressures on (inaudible)?

COSTELLO:

Well I am, because I think this is a much better tax system. This is really going to be a competitive tax system. We couldn’t have done this before. We can do this because our economy has grown, more people are in work. And I have no doubt that Australia will be a stronger and more sustainable place with a competitive, an internationally competitive tax system. This is what we are about, these are the fruits of good economic management and this is the plan for further reform.

HOWARD:

Can I just add to that we as a Party actually believe and hold to the philosophy of lower tax. And I was asked a moment ago what the gestation period of this was, in a sense, we never stop thinking about tax relief because we think that there is an obligation on a government, where it has the opportunity to do so, to return people’s money to them by the way of tax relief. Thank you.

COSTELLO:

Thank you.

Hours after announcing the November 24 federal election, Prime Minister John Howard has set the terms of the contest as the coalition sees it.

Howard argues that Australia requires the “right leadership”, a direct swipe at the ALP’s slogan, “New Leadership”.

He has stressed the need for experience to maintain the economic prosperity and national security of the nation.

The coalition is also campaigning on what it calls the ALP’s inexperience and domination by trade unions.

Howard warns against the lack of “balance” in “wall-to-wall” Labor governments in Federal, State and Territory parliaments.

This is the text of a statement by the Prime Minister, John Howard, circulated via email by the Liberal Party.

AUSTRALIA’S CHOICE

Today the Governor-General has accepted my advice for an election to be held on Saturday 24 November.

This election is about Australia’s future. It’s about the leadership Australia needs right now to stay strong, prosperous and secure.

Australia has come a long way in the last decade based on the hard work of all Australians and the tough decisions of the Coalition. Now we must make Australia even stronger.

This will not happen automatically. It will happen not through new leadership or old leadership. It requires the right leadership.

The right leadership is the team that knows how to do the job. The right leadership has the experience to further expand Australia’s prosperity and to ensure that everyone gets a fair share of it.

The right leadership is prepared to take unpopular decisions in the short term that will benefit the Australian community in the long term.

The right leadership is a group of men and women who will govern for all Australians and who will not be beholden to a narrow section of the Australian community.

The right leadership will tell the Australian people where it stands on issues and what it believes in. Love me or loathe me, the Australian people know where I stand and what I believe in.

At this election, the Australian people must decide who is better able to build Australia’s prosperity for the benefit of everyone. They must also decide who is better able to promote our national security and stand up for Australia’s interests abroad.

Is it a government with a proven track record on the economy and national security or is it a group of men and women 70 per cent of whom are former trade union officials?

In the weeks ahead, I will be unveiling detailed plans for Australia’s future. They will be both practical and achievable, underpinned by the Coalition’s record of putting the national interest ahead of sectional interests.

As part of our plan for growth and opportunity I commit today to a goal of full employment. Australia’s unemployment rate today is at a 33-year low. It can go even lower with the right policies.

There is no reason why Australia’s unemployment cannot have a three in front of it. If Labor is elected, its anti-small business policies mean unemployment will rise.

We will unveil policies to lift family living standards and to help sections of the community under pressure. Our plan for stronger communities will deliver better services, more choice and genuine help for Australians in need. It will put more power in the hands of local communities, including by giving communities a greater say in the running of their public hospitals.

In the weeks ahead, I will outline a plan to further reinforce Australia’s national security into the next decade. Our environment policies will tackle in a balanced way the great challenges of climate change and water security.

Our plan for Australia will also give voice to my passionate belief that we are One Australia based on a common citizenship, common loyalty and where all are entitled to equal justice.

The Coalition’s plan for Australia’s future has been carefully put together and builds on the strong decision-making of the last decade. Our plans are fully costed and affordable.

Labor is not ready to govern because it hasn’t done the hard work. Mr Rudd has plans for process; not for action. And his core convictions remain a mystery, both to him and, more importantly, to the Australian people.

If Labor is elected, Mr Rudd’s inexperience and lack of judgment would leave a vacuum at the heart of Australia’s government. That vacuum would be filled by a trade union movement determined to take back the running of the country.

And wall-to-wall Labor would mean no checks and balances in our Federation.

Our $1 trillion economy simply can’t afford it.

Australia is facing “new” and “great” challenges and requires “new leadership”, according to the Opposition Leader, Kevin Rudd.

Addressing a press conference in Brisbane, Rudd warned of a situation where “nothing changes” if the coalition is returned at the November 24 election.

Australia requires someone to say “the buck stops with me”, Rudd said, citing Labor policies on education, health, climate change, industrial relations and foreign affairs as areas requiring new leadership.

Rudd said he would serve a full three-year term and beyond. He said Howard has lost touch with working families but Peter Costello has never been in touch.

“I understand the challenges our country is facing in the future”, Rudd said. Long-term economic prosperity beyond the China boom is a future priority.

Rudd emphasised the importance of policies on climate change. An “education revolution” is core business, he said, citing his own educational opportunities as a means of unleashing human potential, as well as providing economic benefits.

Rudd said Howard had offered no plans for the future. Rudd committed himself to signing Kyoto, abolishing WorkChoices, and developing broadband infrastructure. “I am an economic conservative”, he said.

Rudd warned of the “mother of all fear campaigns” over the coming weeks. On experience, Rudd said Howard had “buckets” of experience in fear campaigns. “Australia cannot afford another three years of a government which has already had eleven years”, Rudd said.

He denied that wall-to-wall Labor governments meant a lack of “balance”, as Howard asserted in his election announcement. Rudd said the Senate was where checks and balances operated in the federal system, citing Howard’s policies on WorkChoices as evidence of a lack of balance.

Listen to Kevin Rudd’s Election Announcement Press Conference:

This is the transcript of the statement and responses to questions from the Leader of the Opposition, Kevin Rudd.

RUDD:

This election is about Australia’s future and it’s an election about a choice about who offers new leadership for Australia’s future. New leadership to help working families, new leadership with fresh ideas to deal with Australia’s future challenges. And what I’m offering the Australian is new leadership, both to help working families under financial pressure and new leadership for a plan for our country’s future. This is a great country and there’s no better place on earth to live or to raise a family, but now today our country is facing new challenges, great challenges, and we must meet those challenges if we are going to secure our country’s long term future.

Our country has a future too full of promise to allow a Government that’s been in office for eleven years, a Government that’s lost touch and a Government that’s gone stale just to continue on. You see, when it comes to our future we need better than that. The greatest risk for Australia’s future is for the Coalition to return and nothing changes. Nothing changes on climate change and water, nothing changes for our hospitals, nothing changes for our schools, our technical colleges, our universities, nothing changes when it comes to our workplaces, except of course Workchoices which would be made even worse. That’s why during this campaign I intend to make the case why Australia needs new leadership now.

When I became Leader of the Australian Labor Party, I began outlining our plan for the future and during the course of this campaign I’ll be outlining further fresh ideas, new policies and adding to the plan that we’ve already put out there for our country’s future, not just for the next three years, but for the next five, the next ten years and beyond.

Australia needs new leadership. New leadership for our education revolution so that our kids have the best jobs, the best paid jobs and the highest skilled jobs of the future. New leadership when it comes to our need for new infrastructure. New leadership to fix our hospitals, to have someone prepared to put their hand up and say the buck stops with me. New leadership which understands the needs of rural and regional Australia. New leadership which gets the balance right between fairness and flexibility in our workplaces. New leadership which keeps the economy strong but ensures the economy delivers for working families. New leadership which embraces the enduring value of our alliance with the United States but leadership which has an exit strategy for our combat forces in Iraq.

On these Mr Howard, over eleven years, has failed to act and what I offer the Australian people now is a plan of action. I’m offering new leadership, a plan for Australia’s future, a clear-cut commitment to work for that future and an equally clear cut commitment that if I’m elected to become the next Prime Minister of Australia, I will serve a full three year term. If elected again I would serve beyond that as well.

Mr Howard by contrast says that if he wins the next election he will retire and hand over the Prime Ministership to Mr Costello, without Mr Costello ever having to face the Australian people. Mr Howard has said that working families have never been better off. Mr Howard’s lost touch with working families but Mr Costello has never been in touch with working families.

As I travel around Australia people have asked me, legitimately, why do you want to become the Prime Minister of this country. I am putting myself forward to become Australia’s next Prime Minister because I understand the challenges which our country faces in the future and I want to be a leader of the Government of this country as we tackle those challenges of the future head on.

First to build long term economic prosperity beyond the mining boom through investing in an education revolution, 21st century economic infrastructure like broadband, fixing the federation as well as preparing the nation for the rise of China and the rise of India.

Second, offering help and support for working families on the way through by getting the balance right in our workplaces and by fixing our hospitals so that working families when they need hospital and medical care can get the best we can absolutely provide.

And third, acting nationally and internationally decisively on climate change so that we do not destroy the economic and environmental future of the next generation of Australians.

Whenever I go out across this great country of ours and I speak to working families I talk all the time about the need for an education revolution. For me, this is core business. I have a passionate belief in education. I have a passionate belief in the importance of education providing opportunity for all Australians.

Now, I consider myself to have had a fortunate life. Like many kids in this country, my family went through some rough times but mum and dad always ensured I had a good education at the local country state school at Eumundi. More than anything else a good education provides the opportunity and ensures our young people that they will be rewarded for hard work, achievement and success. More than anything else, an education, a good education offers a new course in life. It enables you to unleash your potential as a human being and it also provides a great opportunity, greater opportunities than people had before.

But more than anything else a good education also is a building block for the nation’s future economy. That’s why I believe in an education revolution. That’s why I believe that a trade certificate is just as good as a university degree because both are critical to our nation’s economic future.

I believe this with every fibre of my being and when I look to this generation of Australians, the challenges that they will face in the future are even greater than those faced by my generation. That’s why we need a vision for Australia to have the best education and training system in the world. We as a country need to widen our vision.

I’m really looking forward to this campaign and during this campaign I’ll be announcing policies, I’ll be announcing fresh ideas which build on our plan for the nation’s future which I’ve been outlining during the course of this year. What puzzles me is that on the day this election is called Mr Howard, with all the resources of government has not put forward any plan for the nation’s future after eleven years. Let me give you this clear-cut commitment, if I’m elected to become the next Prime Minister of Australia I will ratify Kyoto, I will prohibit the construction of nuclear reactors in this country. I will abolish Workchoices. I will end the blame game between Canberra and the States. I will invest in an education revolution and I will build a world class broadband network for this nation, city and country.

None of this is possible without a strong economy. That’s why I’ve always said and why I will always say, with pride, I’m an economic conservative. I believe in budget surpluses. I believe in the independence of the Reserve Bank. I believe in its inflation targeting regime. That’s why we are also putting forward carefully costed promises for this election campaign all designed to put downward pressure on interest rates.

To win this election we are going to have to make history. We’ve only won twice from Opposition since World War II and we have to win sixteen seats and on top of that we’re up against one of the most clever and cunning politicians this nation has ever produced. But let me make one prediction and that is in the days and weeks ahead the good people of Australia are going to be bombarded with the mother of all negative fear campaigns.

Mr Howard and Mr Costello will say that if I am elected as the next Prime Minister of Australia the skies will fall in. Mr Howard has spoken today a lot about experience. Let me say this, Mr Howard has bucketloads of experience when it comes to negative fear campaigns. He’s done this every election campaign so far and gotten away with it. The reason Mr Howard does this and why he’ll do it again is because he has no positive plan for our nation’s future.

Australia cannot afford another three years of a Government which has already had eleven years. A Government which has lost touch with working families, a Government that’s gone stale and a Government without fresh ideas for our nation’s future. I refuse to stand idly by and allow this to happen. That’s why I put myself forward for new leadership for our nation Australia’s future.

I’m happy to take your questions.

JOURNALIST:

Mr Howard today has said that he campaigned about leadership and (inaudible), he said he’s experienced, he’s had eleven years (inaudible).

RUDD:

Well Mr Howard has had a lot of experience in taking Australia into a war without an exit strategy, the Iraq War. Mr Howard has a lot of experience in telling Australians that the reason for going to war was to reduce the terrorism threat when it has increased the terrorist threat. Mr Howard has a lot of experience in denying that climate change represented an economic and environmental challenge for this nation’s future. Mr Howard has a lot of experience in perpetuating the buck-passing and the blame game between Canberra and the States on hospitals. I’d say Mr Howard gets a big review when it comes to experience in those departments.

I put myself forward as someone who has worked extensively as a senior public servant, someone who has worked as a diplomat representing his country abroad, someone who’s worked in small business and someone who’s now been in Parliament for nearly a decade. The Australian people will make their decision.

JOURNALIST:

(inaudible) …between the Federal and State Governments, Howard said this morning…inaudible.

RUDD:

The checks and balances of Australia’s system of government lies primarily in the Senate and what happened when Mr Howard got control of the Senate at the last election? He used and abused his power to bring in the harshest set of industrial relations laws that this country has ever seen – with a huge impact on working families, stripping away penalty rates, overtime and basic conditions which working families for generations have enjoyed. So that is a core element of the checks and balances of this system so that when we go to the next election we will see the same attitude brought to bear when it comes to elections to the Senate.

When it comes to the States and Territories, can I say this? I think politically it has suited Mr Howard very well to have Labor Governments at the State and Territory level so that the blame game, so that the buck passing can continue as an excuse for not solving national problems.

Guess what? If I’m elected to become the next Prime Minister of Australia it presents me with a unique opportunity in the year 2008 to get to the bottom of fixing health and hospitals once and for all. That’s why I put out a $2 billion plan for doing it. That’s why I put out a three stage timetable for doing it and if we fail to deliver we will have no political excuse whatsoever, that’s my response to Mr Howard’s charge.

JOURNALIST:

(Inaudible.)

RUDD:

Well Mr Howard has said that his plan for the future is to win the election, retire and hand over to Mr Costello. I would say that the Australian people would regard that as curious, given that Mr Costello has not been allowed to face the Australian people in his own right. I’m up against Mr Howard at this election, what Mr Howard chooses to have Mr Costello do or what Mr Costello chooses to have Mr Costello do is a matter for them.

My job is to put forward a positive plan for the nation’s future. I suspect, looking at the content of what Mr Howard said earlier today, that they will see their principled job as running a negative fear campaign from day one.

JOURNALIST:

(Inaudible.)

RUDD:

Well 70 per cent of Mr Howard’s Cabinet did not want Mr Howard to continue as Prime Minister because they did not believe that Mr Howard had a plan for the future. That’s my response to that one.

JOURNALIST:

Mr Howard said that Australians would not know what they were getting with a Rudd Government…(inaudible.)

RUDD:

Well can I say, when asked today, Mr Howard whether he would nominate all members of his Cabinet, he declined to do so. And guess what else Mr Howard and Mr Costello refused to do? When Mr Howard hands over the Prime Ministership to Mr Costello, if he is relected, who will be Mr Costello’s Treasurer? Will it be Mr Downer, will it be someone else? Will it be Dr Nelson, will it be Peter McGauran? Who knows. And then, who would be Mr Costello’s Foreign Minister, because Mr Downer has long said in Canberra his aspiration is to become Treasurer and Deputy Leader and then have another go at the leadership. So I think it’s very important for Mr Howard to reflect carefully on the additional portfolio responsibilities that flow to the Costello handover which he’s now confirmed.

JOURNALIST:

Mr Howard (inaudible)

RUDD:

As I travel across Australia and talk to working families across the length and breadth of the country, working families are saying this to me that, when they look to their long term future they understand that this mining boom is delivering an enormous economic advantage to Australia but they are fearful about what happens long term when the mining boom is over. In the immediate term in our current economic circumstances, those who are experiencing real difficulty are those who are finding it impossible to make ends meet with child care costs going up 12 per cent a year, with mortgage interest rates having gone up five times since the last election when Mr Howard promised that they would not go up again, when rents have got out of control and where groceries and petrol prices have gone through the roof and without any action being taken by the Howard Government to apply more competitive pressure to the system such as we’ve articulated.

All these things together impact on working families but you know what is the icing on the cake for working families on cost of living pressures? It’s Worchoices stripping away penalty rates, overtime and basic conditions and, added to the other cost of living pressures, making it very tough to make ends meet so when Mr Howard says to that group of Australians, and they are in provincial cities and towns as much as they are in the cities and suburbs, when he says to them, working families have never been off, they know as they try and balance their family budget that that’s simply not true.

JOURNALIST:

With the six week campaign, is that one week too long?

RUDD:

Well that’s Mr Howard’s decision. I think what’s been quite wrong is Mr Howard putting his hand in the pocket of taxpayers now for weeks and months to fund his election campaign with taxpayer funded advertising. You know, since the Parliament rose last time, $21 million- a million dollars a day in taxpayer funded advertising. I’ve been this last week looking very much at what’s happening when it comes to cancer research and cancer treatments, $21 million would have been better spent assisting some of our researchers do their job in assisting those who are perfecting cancer treatments around the country.

JOURNALIST:

(Inaudible.)

RUDD:

Well I’m a very proud Queenslander and I love this State, I grew up here, my mum was born here, it’s in your veins. I’m passionate about Queensland, I’m passionate about Australia. But you know something? At the end of the day people will make a judgement about my plan for the nation’s future. They’ll also make a judgement about whether our plan incorporates rural and regional Australia and let me add this, how could it be, that this Coalition Government made up of the Liberal Party and National Party could have delivered a second-rate broadband service to non-metropolitan Australia. People ask why have we put forward a $4.7 billion plan on broadband, it’s part of our economic future, it’s part of our building the nation’s future once the mining boom is over, but it’s also part of delivering services beyond the big cities and how could the National Party sit by and allow a second-rate, second-speed, slow-speed system to be delivered to those in regional and rural Australia. It’s just wrong and that’s why I believe that policies like that will have a strong message to sell beyond the cities.

JOURNALIST:

(Inaudible.)

RUDD:

I believe that this is going to be the fight of our lives because we have only won twice from Opposition since World War II, we have 16 seats to win and we are up against a really clever politician and I believe that this will go down to the wire.

JOURNALIST:

How personal do you expect the campaign to get?

RUDD:

Well, Mr Howard and Mr Costello, from Parliament and from their statements outside of Parliament, have already indicated this will be a negative fear campaign from beginning to end based on unions, based on experience, based on interest rates and as I said their overall charge is that if the people of Australia were to vote for me as the next Prime Minister of Australia the skies would then fall in. Well you know something? Mr Howard’s used the negative fear campaign on every previous election and he’s gotten away with it and he thinks he can do so again. I think the Australian people, however, have seen a lot of Mr Howard in the meantime.

JOURNALIST:

(Inaudible.)

RUDD:

We are committed to full employment. The labour movement and the Labor Party always has been committed to full employment and when it comes to a unemployment number with a three in front of it, we believe that’s a right goal for Australia too, but if you have a strategy to reach that goal. And what’s our strategy? An education and skills revolution. A technology revolution through high-speed broadband, taking red tape off the back of business so they can become more productive.

Let me say one other thing though about Mr Howard, Mr Howard comes out and speaks of that particular new objective, Mr Howard at the last election said to the Australian people he would keep interest rates at record lows. Did Mr Howard have a plan to make sure he could deliver on that undertaking? Absolutely not because since then interest rates have gone up on five separate occasions, costing thousands of dollars to those holding average mortgages right across the country, so Mr Howard goes out there and makes a bold statement on the day he calls an election about an unemployment objective, I ask people to reflect on Mr Howard’s bold statements three years ago that interest rates would be kept at their then levels. One more question, then I’m going to zip.

JOURNALIST:

Mr Howard said you never accept responsibility for anything that goes wrong on your side of politics, what do you say about that?

RUDD:

Well Mr Howard has never taken responsibility for the Iraq War, he has never taken responsibility for his statement that if we went to war in Iraq it would reduce the overall terrorist threat, when it fact he’d been warned by the intelligence services that it would increase the overall terrorist threat. Mr Howard has never taken responsibility for his Government, through the Foreign Minister, authorising $300 million in corrupt payments to be made to Saddam Hussein’s regime, money which was then used to by guns, bombs and bullets for later use against Australian troops and Mr Howard has never taken responsibility for children overboard.

On the question of taking responsibility, I ask people to look at the facts of Australia’s recent political history, rather than simply Mr Howard’s spin-doctoring today delivered to him by Crosby Textor and on that, we’ll close.

This is the text of a statement released by the leader of the Australian Greens, Senator Bob Brown.

It follows the Prime Minister’s announcement of the November 24 election.

The Prime Minister’s acceptance that “I take responsibility for everything that happens under my watch” highlights his failures on Iraq, climate change, water security, public hospitals and schools, Indigenous wellbeing, and the plight of 1.2 million pensioners, Greens Leader Bob Brown said today.

“Howard claims the country needs right leadership when in fact it needs good green leadership.

Failure on global warming, forests, water and public transport means failure on economic vision.

His “balanced approach” has manifestly failed the nation in an age of massive, punishing climate impact on our economy,” Senator Brown said.

“His call for “balance” seems divorced from his unbalanced abuse of the Senate majority. The Greens will provide the balance the Howard years have robbed from Australia,” Senator Brown said.

12.00pm

Australia is to go to the polls for a federal election on November 24. The announcement of the date has just been made in Canberra by the Prime Minister, John Howard.

Addressing a press conference in Canberra, Howard said “this country does not need new leadership, it does not need old leadership, it needs the right leadership”.

He said Australia was enjoying a “remarkable level of prosperity” and committed his government to full employment and confirmed the Peter Costello would remain Treasurer and Alexander Downer Foreign Minister in a re-elected coalition government.

Howard talked of a “balanced approach” to climate change in the future.

He said he remained a “passionate believer” in “one Australia” and that the things that unite Australians are greater than the things that divide them.

The Prime Minister talked of the importance of “balance” and warned against a clean sweep of Labor governments in the Federal, State and Territory spheres. He warned against union influence in the ALP.

Howard said he looked forward to meeting with Australians over the coming six weeks.

The Parliament will be prorogued on Monday and dissolved on Wednesday. This means that people wishing to enrol to vote must do so by 8pm tomorrow night.

Howard said the government offered the most experience and a smooth transition to Peter Costello during the next term. There was “openness, clarity and predictability” on the coalition side and “instability” on the Labor side.

Listen to Howard’s Election Announcement Press Conference:

Listen to John Howard’s Speech on Reconciliation to the Sydney Institute: