Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

I know that the Leader of the Opposition has no interest in economics; he has said so. I know that the former Treasurer, Peter Costello, said he could never have him as a Treasurer because he has no interest in economics. But I will ask him to focus on one core concept, which is this: a tax based on volume in the resources sector penalises those firms which do not generate profits in their early years and throttles the long-term development of the industry. That is why we are moving to a profits based tax. That is why, for example, the work done a quarter of a century ago on the petroleum resource rent tax was right, because in the period since then we have seen the phenomenal growth of our offshore developments. That is the reason we have done this. It is good intrinsically for the long-term development of the industry because the tax regime changes the architecture to one which is profit based and not volume based. Secondly, as I said before in relation to companies, we will also of course be consulting the state governments on detail, on implementation and on transition and my advice from the Treasurer is that those consultations are proceeding well.

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