Flare-up In Taxing Times
The Age
Thursday September 11, 2008
PETER Costello "nearly lost it" when John Howard suggested the proposed GST rate be reduced from 10% to 8% just before the tax plan was released in 1998.
Mr Howard thought the lower rate would make the GST easier to sell. But when "he raised it with me I almost had a seizure. We had been working on this program night and day for almost 12 months."Mr Costello started telling Mr Howard all the reasons the change couldn't be made, talking "faster and faster. I could hear my voice rising. I could feel my face starting to flush. I was battling to control my temper."Mr Howard asked Mr Costello to go away and look at the idea. Mr Costello wasn't going to redo the proposal, and when no alternative was developed the PM's office dropped the idea. Independent Brian Harradine, whose vote was potentially crucial, used the GST as leverage for initiatives on social and moral issues. He raised with Mr Costello some publications that received federal funding, including a leaflet on homosexuality called Out There, and a sex education booklet that described sexual behaviour."As treasurer, I took little interest in publications from the Family and Community Services Department but I was definitely going to take a strong line against them if they offended Harradine. Our tax reform was essential for the future of the country. I was not going to let that go down for the sake of some departmental sex education." It was all in vain. Eventually Senator Harradine said he could not vote for the GST, so the Government had to look to the Democrats for a deal. -- MICHELLE GRATTAN
© 2008 The Age