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Howard Addresses The Nation On The GST

The Goods and Services Tax came into force on July 1, 2000.

Two days before the GST and its associated tax reforms were introduced, Prime Minister John Howard addressed the nation on ABC television.

  • Listen to Howard’s Address (8m)

Address to the Nation by Prime Minister John Howard.

HowardMy fellow Australians,

May I have a few moments of your time to say why the new tax system which starts on Saturday is good for Australia.

This is something the country has needed for more than twenty years and we’re doing it because it is the right thing for the nation.

It will give us a fairer taxation system.

It will cut our income tax.

It will strengthen us in the world.

It will guarantee the revenue we need to support the health, education, police and other services so important for a fair society.

I speak to you tonight with great optimism.

This is because of what we have already achieved together and because I believe we can achieve so much more if we take the right decisions in Australia’s interest.

The Australian economy now is stronger than it has been for thirty years.

In the last four years we’ve created 712,000 jobs, interest rates for families and small business have fallen dramatically, the budget deficit has been eliminated and we have wiped $40 billion off the debt burden that would otherwise have been inherited by our children.

As inflation is much lower, the take-home pay of workers buys more than it used to.

None of this has happened by accident.

It’s been a direct result of strong but fair decisions made by the Government.

If those decisions had not been taken our economy now would be a lot weaker, we would have been engulfed by the Asian economic collapse, and I would not be addressing you tonight in such positive terms about Australia’s future.

But we cannot be complacent if we want to maintain our living standards, create even more jobs and provide more help for the disadvantaged.

The new tax system is the next crucial step along the road to building an even stronger and fairer Australia.

We cannot mark time.

As a nation we have a choice.

We can either move Australia forward through decisions made in the national interest or, through inaction, go backwards.

Surely no-one wants that to happen to Australia.

You’ve heard a lot about the GST but it’s only one part of the new system.

The new tax system is designed to reward Australians and their families with lower income tax and increased family benefits.

Australians will receive the largest income tax cut in our history – $12 billion.

From the first of July, every taxpayer will get a tax cut.

Under the new lower tax scales you will be able to earn up to $50,000 a year and pay a top rate of only 30% instead of up to 43% at present.

Four in every five taxpayers will be on a top rate of 30 cents in the dollar or less.

Two million families will gain when family benefits and child care assistance are increased by $2.4 billion a year.

The combination of income tax cuts and increased family benefits means an extra $40 to $50 a week for many families.

When the GST begins, the wholesale sales tax with all its complexities and different rates will be totally abolished, along with some other indirect taxes.

This means that some things will go up in price, others will come down and some will stay about the same.

The great bulk of people in business are honest. But to make sure that all the benefits of the new system are passed on to consumers we have given the consumer watchdog, the ACCC special powers.

Certain things will be free of the GST including basic food, most health and education services, nursing homes, eligible child care and local government rates.

All Australians will be treated fairly because pensions and allowances will rise by 4% from the first day of July and will be guaranteed to remain 2% above the cost of living.

Older Australians will also benefit from special savings bonuses, refundable franking credits and the abolition of provisional tax.

Of special benefit to country people, the cost of diesel for heavy road transport will be cut by 24 cents a litre.

The new system will help create more jobs because it will reduce the operating costs of business by about $7 billion a year.

Exporters costs will fall by $3.5 billion a year. This will help them do better in world markets for the sake of more jobs at home for Australians.

To encourage investment, the capital gains tax has been virtually halved, with special provisions for those in small business who’ve worked hard all of their lives and want to retire on the proceeds of their effort and hard work.

Every last cent of the GST revenue will go to the States.

Every State in Australia, over time, will have more money to fund the roads, police, schools and hospitals so important to our daily lives.

This is the best possible guarantee any national government can give that essential community services will not only be maintained, but strengthened in the years ahead.

Whatever teething troubles there may be with the new tax system these will be easily out-weighed by the benefits for all Australians and their families.

I thank the business community, particularly small operators for the work they have put in to get ready for the changeover.

Let me assure them that neither the Government nor the Taxation Office wants to pounce on people who make innocent mistakes in handling the new system.

Compliance is important but that does not mean penalties for genuine errors.

Introducing a new tax system was the central part of the Government’s plan at the last election.

Since then, it has been easy for our opponents to nit pick, obstruct and confuse but there comes a time when we should all move on from political point-scoring.

The new system will be with us in two days time.

What I ask is that it be given the fair go it deserves.

Because this is the tax system that will help ensure that everyone pays their fair share of tax – but no more.

That will give our exporters a fair go to take on the world and give the states and territories a fair go to provide the services we will need in the future.

Now is the time for all Australians to get behind the new tax system to ensure its success.

Together we can move Australia forward.

Good night.

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Malcolm Farnsworth
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