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

I thank the Leader of the Opposition for his question and I draw his attention to the sort of debate which occurred in this place, and more broadly, when we brought in the petroleum rent resource tax in the mid-1980s. There were loud threats across the nation and from abroad about the impact on the Australian offshore mining industry at that time through the introduction of the tax. That tax was a tax on profits. The proposed RSPT is a tax on profits. Every economic analyst concludes that a tax on profits is a more efficient tax than a tax on volumes.

The second point that the Leader of the Opposition asked was about, I think, a reference to Fortescue Metals. Notice was given to the ASX by Fortescue last Wednesday noting that the projects in question had been placed on hold. I note the two paragraphs in the Australian newspaper on 20 May which said:

Mr Forrest’s move to delay the Solomon project was last night labelled a “political statement” more than a genuine setback to the company’s plans.

It went on to say:

Credit Suisse analyst Nathan Littlewood noted Fortescue had not abandoned its Solomon feasibility study due for completion later this year, by which time a federal election would have been held …

I also draw attention to recent statements which have been made by Mr Forrest concerning China and the response which has been forthcoming on that as well. As the Leader of the Opposition will know, there will be many, many statements by many, many companies, and all of them may have this in common: they do not want to pay more tax.

This government believes that the time has come for tax reform which delivers a fair return for all Australians, a fair return for those who depend on this tax for investing in our future infrastructure, a fair return from this tax to support super for working families and a fair return from this tax in order to bring down the taxation burden for Australian business. This reform, as the Leader of the Opposition knows full well, has been projected by independent modelling to bring about an overall increase in mining activity of 5.5 per cent as well as bringing about other deep reforms in the tax system, and incentives and global competitiveness to the Australian economy at large.

See this speech in context