Birthday Cake Interview


Birthday Cake Interview

The "Birthday Cake Interview" refers to a famous political interview in Australia that was carried out between interviewer Mike Willesee and Liberal Party Opposition Leader Dr John Hewson shortly before the 1993 federal election. It is remembered as the interview which contributed to Hewson's failure to win the election, due to the fact that he was unable to explain one of his key tax policies on live television.

Background

After winning leadership of the ailing Liberal Party, Hewson launched a comprehensive package of proposed reforms called Fightback!, after years of Australian Labor Party dominance in Federal politics. The package included new social structures, industrial reforms and radical economic policies. One of the key elements of the package was the introduction of a consumption tax called the Goods and Services Tax (GST), the compensatory abolition of a range of other taxes such as sales tax, deep cuts in income tax for the middle and upper-middle classes, and increases in pensions and benefits to compensate the poor for the rise in prices flowing from the GST.

Bob Hawke and his Treasurer, John Kerin, were unable to mount an effective response, and in December Paul Keating successfully challenged Hawke and became Prime Minister.

Through 1992, Keating mounted a campaign against the Fightback! package, and particularly against the GST, which he described as an attack on the working class in that it shifted the tax burden from direct taxation of the wealthy to indirect taxation of the mass of consumers. Keating famously described Hewson as a "feral abacus."citequote

The Interview

This assault forced Hewson into a partial backdown, agreeing not to levy the GST on food. But this concession opened Hewson to charges of weakness and inconsistency, and also complicated the arithmetic of the whole package, since the weakening of the GST reduced the scope for tax cuts, the most attractive element of the package for middle-class voters. The complications of the new package were demonstrated in the interview, in which Hewson was unable to answer a question posed by journalist Mike Willessee about whether or not a birthday cake would cost more or less under a Coalition government. Hewson stonewalled and was unable to answer a seemingly straightforward question. Hewson was instead forced into a series of circumlocutions about whether the cake would be decorated, have ice cream in it and so on.

Date

The article [http://www.mumble.com.au/federal/ramsey_in_1993.htm "Hot Pies, Cold Pies AND Pie-Eaters", by Alan Ramsey, Sydney Morning Herald, 06 Mar 1993] places the interview the "previous" Wednesday evening on the Nine Network's "A Current Affair", which would make it 3 March 1993, 10 days before the election.

A Short Excerpt

:Mike Willesee: "If I buy a birthday cake from a cake shop and GST is in place do I pay more or less for that birthday cake?"

:John Hewson: "...well, it will depend whether cakes today in that shop are subject to sales tax...or they're not...firstly. And they may have a sales tax on them...Let's assume that they don't have a sales tax on them...then that birthday cake is going to be sales tax free. And of course it would be exempt...uh, the - then - of course - you wouldn't pay...uh..it would be exempt...the - then...there would be no GST on it under our system. One with a sales tax on it today would attract a GST and...um...then the difference would be the difference between the two taxes whatever the...ahh...sales tax rate is on birthday cakes, how it's decorated, because there will be sales tax perhaps on some of the decorations as well and of course the price....the price will reflect that accordingly." "'

:Willesee: "Just on the birthday cake, because I'm trying to pick up a simple example - you tell us in what you've published that the cost of cake goes down, the cost of confectionery goes up, there's icing and maybe ice-cream, and then there is candles on top."

:Hewson: "Yes...yes...that's the difficulty - that's what I'm trying to address in the question. I need details on the cake to give an accurate answer. I mean if it's just a cake from a cake shop - that's not presently under sales tax - it will not attract the GST. If it is from a cake shop that falls under sales tax, with the candles, decorations as you say, then it will attract the - after scrapping the sales tax."

:Willesee: "...okay...it's just an example...If the answer to a birthday cake is so complex - you do have an overall problem with the GST, don't you?"

:Hewson: "Well, people don't know how much tax they currently pay..."

Aftermath

Hewson subsequently lost the 1993 election, which until that point had been billed by many of his supporters as the 'Unloseable Election', however the contribution of the Birthday Cake Interview to the loss is disputed. While, according to Channel 9's 20 to 1 episode "Unscripted and Unplanned"Fact|date=August 2007, it was the moment Hewson lost the election; the interview was held 10 days before the election, and polls right up to election day predicted a Coalition victory.

Hewson subsequently lost the leadership, and the issue of the GST was dropped from the Liberal Party's agenda until the 1998 election campaign.

In August 2006 Andrew Denton conducted an in-depth Interview with Hewson on ABC TV program Enough Rope. Upon being shown footage of the Birthday Cake Interview John Hewson commented “Well I answered the question honestly. The answer's actually right. That doesn't count...I should have told him (Mike Willesee) to get stuffed!” [http://www.abc.net.au/tv/enoughrope/transcripts/s1705370.htm]


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