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

Those opposite seem to regard the peak body of Australian manufacturing as irrelevant to the national economic debate. Try this one. The Council of Small Business Organisations of Australia says that it provides ‘certainty’ for small businesses and that they can ill-afford more instability or change as they are recovering from the global financial crisis. Also, Standard and Poor’s, which the Treasurer just referred to a minute ago, says:

The deficits and additional borrowings do not alter the sound profile of Australia’s public finances, which remain among the strongest of its peer group—

in the world. Therefore when it comes to third-party commentary, and I do not go to the various other groups who have commented positively on initiatives in health, education and elsewhere, let us go to the core proposition advanced by the Leader of the Opposition concerning the resources superprofits tax. First of all I would say to the Leader of the Opposition he should study carefully the fact that that tax—in other words, one on profits—was in the first instance advanced by the Mining Industry Council to the Henry tax review. That is one point. The second is this. I will draw his attention to this fact: the petroleum resource rent tax was introduced some 25 years ago and introduced at a rate of 40 per cent. Can I say to those opposite that in the subsequent 25 years we have seen one huge expansion of the resource projects on the North West Shelf and beyond, including the biggest resource project we have ever seen, the Gorgon project. Thirdly, I would draw his attention to the fact that when we are dealing with a tax on profits it is in fact a better arrangement than a tax on volume, which is what royalties are about. The reason for it makes basic economic sense, namely that if you have got small to medium companies starting up they are sometimes excessively penalised by the volume that they extract from the ground, as opposed to a tax on profits which means that when the company later develops they in fact have a greater financial base to sustain that payment to the general revenue. That is why we had an underpinning economic logic to this proposed tax reform.

Finally, I would say to the Leader of the Opposition this: if you look carefully at the modelling contained within Treasury’s response to the analysis contained in the Henry report, namely the modelling of Econtech commissioned by the Treasury in relation to the impact of this tax arrangement on the mining sector overall and taking into account also the additional tax benefits for the exploration sector, it actually predicts a 5.5 per cent increase in the overall level of mining activity in the Australian economy. Therefore I would say to the Leader of the Opposition that I know these four sets of facts present a problem when it comes to his core rhetorical argument, but I would also conclude on this. The Australian people actually own these resources. The Australian people deserve a fair share from these resources. The Australian people deserve a fair share when it comes to their super. The Australian people deserve a fair share when it comes to reducing the tax on small business. The Australian people also deserve a fair share when it comes to the most profitable mining companies in Australia contributing more to the long-term infrastructure of our nation. Miners deserve a fair share. It is a great industry. The Australian people deserve a fair share because they own this resource and it is their entitlement to obtain a fair share for themselves and for their children and for the nation’s future.

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