Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

This budget and its outcomes are simply not believable. It is a house of cards. It is a con. The surpluses forecast in this budget are manufactured with new taxes—taxes pulled out of the hat some two to three weeks ago when the government saw that the budget parameters were not going to be met. This government was spooked. This government had knee-jerk policy for crass political purposes. These surpluses are based on minerals growth and new taxes yet the minerals growth will be choked off by the biggest of these taxes, the $9 billion a year tax on mining. No-one can have confidence in the forecast as a consequence of these new taxes—new taxes which were literally conceived in the last two to three weeks, new taxes which received no consultation with business, new taxes which put $9 billion a year on our strongest and most profitable sector in this economy in a world which faces great uncertainty.

I had a call from a friend of mine a few days ago. The friend runs some significant mines in countries in Asia, countries that have some political risk. This friend of mine rang the other day and said he is no longer being asked about political risk in Asia. He said the sovereign risk which has always dogged his attempts to raise hundreds of millions of dollars to invest in these Asian countries is now similarly enjoyed by Australia. Australia is now the laughing stock of sharemarkets around the world because they cannot understand how the government of Australia—so blessed with resources, so blessed with the opportunity to protect itself against further shocks in the world financial markets—would seek to tax those companies that exploit those resources in a way which would make Australian companies uncompetitive. They cannot understand how a government would reduce the competitiveness of our mining companies and impose an effective tax level of 57 per cent, when the nearest tax level of other competing countries is 40 per cent in the United States, 38 per cent in Brazil and lower for every other country.

This means that many of the new projects—the $310 billion worth of projects that are being considered by companies at the present time—will not pass the hurdle rate, will not pass the necessary return on investment, because our mining industries are facing an effective rate of tax of 57 per cent. It is a disgrace. It does indicate the lack of instinct that this government has for the risk associated with business, for the way in which decisions are taken with regard to these major resources. It does show the political crassness of this government and the way in which it goes about constructing important documents like this budget.

There is great uncertainty associated with the forecast side of resources. By putting a great big new tax on, already we are seeing many projects that are no longer being considered or are being put on a shelf so that companies can reconsider where those investments go. Already people are being put off in terms of potential job opportunities. Combine that with the forecast increase in spending—a $26 billion blow-out in spending over the next three years in this budget—and you see the pressure on interest rates going up, and uncertainty associated with the spending programs and with the forecast revenue. This budget confirms this is a government that is losing its way. (Time expired)

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