Paul Neville (Hinkler, National Party) Share this | Hansard source

Once again, we are presented with a big new tax. This tax purports to be a resources superprofits tax, with the emphasis, no doubt, on profits. By so doing, it sounds good, safe and acceptable to attack the big, rich mining companies, and for good measure we throw in the fact that many of these companies are no longer in majority Australian ownership—a touch of xenophobia, as the shadow minister just put it.

I wonder what the Prime Minister’s motivation might be for this tax. Maybe he wants to be seen as a tough guy. Maybe he wants to show the unions he can slap down the big miners. But I suspect, above all, he wants to create yet another distraction from his broken promises, his woeful performances on such matters as health, the BER, the pink batts, the CPRS, GroceryWatch, Fuelwatch and other debacles—it goes on and on.

But this particular move is so inept that its downside effects and its implementation are creating lives of their own. Let me explain how. As the economist Tim Hughes said in the opening paragraph of his article in the Courier Mail yesterday:

The Prime Minister’s resources super profits tax is, without a doubt, the worst tax decision ever made by an Australian government. And the day after announcing it he could not even explain how it worked.

I just pose a rhetorical question: if John Hewson’s fumble on the application of the GST to a cake—to a cake, mind you—became the flashpoint for the 1993 election, how much worse is this tax, striking at the heart of Australia’s currently most successful industry, as a flashpoint for the 2010 election? Worse still, it is an attack on our international reputation as a secure home for investment. It raises important questions of sovereign risk as well as capital investment leaving our shores.

One example is Queensland’s gas resources and the effect of this tax on the development of Gladstone, which I represented for 14 years. The port city of Gladstone was born of industry and its future is industry, but this government has condemned it to the scrap heap. In recent years, investors have poured millions of dollars into the city on the back of the LNG boom which is about to occur. Families have moved there for work and people have set up businesses on the back of the anticipated growth. Because of the uncertainty arising from the government’s actions, we see at least one company, Santos, putting its plans for Gladstone on hold. If it had escaped the Prime Minister’s notice, there are $50 billion worth of coal seam gas to LNG projects in Queensland alone that are now at risk, in varying degrees. I have been told that that is the equivalent of 18,000 jobs a year, and we need every single one of those jobs for our towns, our state and our country.

Further afield, we hear Xstrata is ceasing exploration activities in the great North West Queensland Mineral Province. What does that mean for Mount Isa, Cloncurry and Townsville? Already, the Western Australian miner Cape Lambert Resources has cancelled exploration projects in Australia in favour of Africa. And no doubt, as we are debating this issue in parliament today, more examples of mining companies going cold on this government are emerging. Ironically, just last week we had the ministers of the Bligh government tripping all over Queensland with their new plans for regionalisation. What a cruel irony—when the federal government has effectively put regional Australia, particularly Queensland, South Australia and Western Australia, on the chopping block.

Is this government deliberately setting out to kill regional communities and economies with this tax? I ask the question. One would have to seriously wonder about it. Even the premiers of the states cannot hide their disbelief and anger—and two of those premiers are Labor premiers. Honourable members will also be aware of pending coal developments throughout Central Queensland and the Surat Basin. Not only are expanding communities like Dalby, Chinchilla, Roma and Wandoan involved but new infrastructure such as railway lines is depending on these projects going ahead.

The trickle-down effect is even more insidious. Not only do we have miners and tradesmen working in the industry directly on site but we have another cohort of minors who fly in and fly out of Queensland’s provincial cities and towns. They support a vast array of shops and services not only on the coalfields but in expanding provincial cities like Bundaberg, Hervey Bay, Rockhampton and Mackay. The mining industry also depends on an expert supply chain of dragline scoops, dozers, heavy trucks, loaders and so on. Engineering firms service equipment. Technicians maintain generators. Small businesses benefit by providing fuel, transport, food and other everyday living items. Health services and education should not be forgotten.

This is a pervasive tax that strikes at the heart of resource based states and—I repeat—particularly Queensland and Western Australia. But it does not even stop there. In the same way that mining is not confined to iron ore, coal and bauxite, this tax affects other forms of mining, such as quarrying and fertiliser extraction. We cry out for better roads and highways, but this tax will vastly increase the costs of gravels and screenings necessary for those roads and highways. Cement for the construction industry will be affected by the tax on the mining of limestone. Here we might reflect again on Gladstone. Not only is it the home of a limestone mine but it has the largest cement works in Australia.

This insidious tax invades the commercial and home construction industries, because not only do we need copious quantities of cement and concrete blocks but we also need bricks, and that involves the mining of clay. Therefore, expect dearer building supplies. Fertiliser is crucial for productive farming and in many instances also for experts. Phosphates are also mined in this country, so there will be a downstream effect on the cost of agricultural and horticultural products.

Some might say, ‘Oh, well: this is the price of progress in and around the mining sector.’ But it does not stop there, either. Let us have a look at the effect on the average investor. It is said that BHP has 400,000 small investors, many of whom would be mums and dads, and even kids, who have extensive or modest holdings in the Big Australian. In less than a fortnight, $90 billion has been written off the value of mining shares and, as such, off the investments of these Australians.

Even more insidious still is the impact on the superannuation sector. The retirement savings of every self-funded retiree and worker in this nation have been struck down by this new tax on mining. At the end of last year, Australian superannuation funds held approximately $1.2 trillion in assets. Around 30 per cent of large Australian superannuation funds were invested in shares. That is the equivalent of $370 billion. Mining shares account for around 30 per cent of our stock market. From that you can extrapolate that about 10 per cent of the assets of superannuation funds are invested in mining shares. This tax will have a profound effect on part-pensioners and self-funded retirees. In electorates like mine, the communities of Hervey Bay, Bundaberg and Bargara will suffer. Why? Because they have one of the highest retirement profiles in Australia. And a lot of the retirees there are self-funded retirees. This tax move will impact severely on them. Since the government’s announcement of this new tax, more than $14 billion has been wiped off the value of the superannuation savings of Australians.

In summary, it is not just a tax—as it has been characterised and as, no doubt, the ALP will continue to present it to their union mates—on ugly mining companies. It is worse than that. It is a slap at national wealth and opportunity and the remarkable industry that has driven this country for so long. It will affect myriads of ordinary Australians, starting from those working in the mining companies—many of which are likely to move their investments to more welcoming environments overseas. It will affect miners and all those working in the downstream industries that flow from mining. It will also affect the regional communities, especially those in Queensland, Western Australia, South Australia and the Northern Territory. (Time expired)

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