Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

Exploration and development in the oil and gas industries have flourished under that system. That is the very tax that brought to Australia the $12 billion Pluto petroleum investment in the 2007 and the $43 billion petroleum investment in Gorgon by the joint venture partners in 2009. Compare that with the inconsistencies that exist at a state and territory level when it comes to mining and resources in Australia. There are complex arrangements with no consistency across state and territory boundaries. If you have any doubts about that, just think about the coalmining industry in New South Wales and Queensland. The systems of coal royalties are different and complex. I also remind you, Mr Speaker, that both those state governments have increased coal royalties over the last 12 months. But that is no different from the state of Western Australia, where we have in place a coalition Premier and where we have yet another variable royalty system. We should also appreciate that in many ways the Western Australian Premier actually supports the endeavours of the Australian government to front up with some hard decisions when it comes to royalties. On 25 February of this year the Western Australian Premier said:

I have to say that a few people who work around the mining industry came up to me over summer and said, ‘By the way, Colin, the mining companies are getting away with murder; they’re not paying enough’.

It is for that very reason that in the forthcoming Western Australian budget that will be brought down next week the Western Australian government is going to rip out of two major iron ore companies an increase in iron ore royalties of the order of $300 million. We will put in place a new tax regime which creates certainty and a proper investment horizon for the resources sector in Australia. But, perhaps more importantly, we will be investing in things with part of the proceeds of that new tax regime that the previous government absolutely failed to invest in.

First, let us go to the issue of infrastructure. Over the previous decade, because of lack of action by the Howard government, we lived off the back of increases in resource commodity prices whilst we lost market share because the Howard government failed to invest in infrastructure. A key part of the Australian government’s proposal will be to establish for the first time ever, through a budget process, a resource infrastructure fund aimed at working with state and territory governments and, I might say, the private sector to actually bring forward resource infrastructure investment, which has held back the expansion of the industry in the past. I would also say that the resources sector, like the rest of the Australian business community, will benefit from a reduction in corporate taxation.

But then we go to the issue of exploration, something that I am sure the member for Groom is vitally interested in because he, like other resources ministers, sought on a number of occasions, during the 12 long years of the Howard government, to put in place resource exploration incentives to encourage brownfields and greenfields exploration in Australia. For the first time ever we will be putting in place a new resource exploration benefit that benefits small preprofit exploration companies.

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