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Saturday, August 15, 1998

Australia's PM begins media blitz to sell tax reform 

REUTERS  
Canberra, Aug 14: Australian prime minister John Howard and his ministers launched a media blitz on Friday selling the government's risky re-election pitch -- a reform plan which includes tax cuts and a 10 per cent value-added tax.

``I'm going to go all around the country and pour myself into explaining this plan because I believe in here (in my heart) that it is good for our country,'' Howard said.

``It (the plan) will give us a stronger economy, make us a better economy, give us greater growth and generate more jobs,'' Howard told Australian Broadcasting Corporation radio.

Howard on Thursday announced a plan to radically overhaul Australia's taxation system, offering voters A$13 billion (US$8 billion) a year in income tax cuts to offset the introduction of a 10 per cent consumption tax.

The only catch is that disillusioned voters have to re-elect the Howard government, trailing in opinion polls, and Howard must pass the tax legislation through what is expected to be a very hostile upper house, orSenate, of parliament.

The government has struggled to pass legislation through the Senate in the past 12 months, at times being forced to dramatically modify legislation. The Labor opposition, minor parties and Pauline Hanson's One Nation party all oppose the tax reform plan.

Howard's conservative government conducted a flood of radio and television interviews selling the reforms and favourable newspaper headlines, editorials and front-page stories on Friday showed voters the tax cuts they could expect.

The government hopes the package will boost its flagging popularity and deliver a knockout blow to populist Hanson, who has stolen a significant proportion of the government's traditional rural voting base.

If the government's sale campaign is successful and opinion polls improve in the next three weeks, Howard is expected to call an election for October.

But Howard is well aware of the political risks of trying to sell a new tax. A similar plan cost the conservatives, then in opposition underleader John Hewson, the so-called ``unloseable'' election in 1993.

Treasurer Peter Costello on Friday admitted his tax plan was politically risky. Asked if his job was on the line, Costello told a radio station in South Australia: ``Of course it is.''

Finance minister John Fahey also admitted the government faced a tough battle convincing voters to support the plan.

``I think it's a volatile electorate...,'' Fahey said.

``The difficulty will be the capacity of people like myself, and more particularly the prime minister and the treasurer, to get that message across and to convince those people out there that there is a benefit in it for them,'' he said.

``We aren't the most respected people, I accept that, and therefore the question of our credibility will be the first stumbling block,'' Fahey said.

The government's popularity is floundering at record lows with support at around 35 per cent, a level which would mean a landslide loss for the coalition if an election were held now.

If the packagefails to lift its support, the government is expected to go full term until mid-1999.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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