Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Hansard source

I am pleased to speak on this matter of public importance. ‘A politician thinks of the next election. A statesman, of the next generation,’ is a quote by James Freeman Clarke which puts the Prime Minister of Australia into context, because Mr Rudd has his eyes squarely focused on what is going to get him through the upcoming election. He is making policy on the run and, according to what the pollsters or the focus groups tell him every morning about his Sunrise performances, that is what he delivers for the day because it is part of the spin cycle. The news for Mr Rudd, the Prime Minister, is that the Australian economy is too important to be run this way. It needs a statesman at its helm, not a spin doctor.

This resources tax was the government’s $12 billion answer to getting the country out of a $93 billion financial black hole that it has dug for itself in less than three short years, managing the soon to be $6 billion interest per annum, which will be crippling. I have said time and time again that it is back to the old school, big-taxing, big-spending Labor government. The Rudd government has given up on Western Australia, so it is going to gouge from it. A headline in today’s Australian screams ‘The resource tax threatens to choke off the second mining boom’. Add this to Premier Colin Barnett’s comments that the $4 billion redevelopment of Oakajee Port rail project could be under threat because of the tax. For the benefit of Minister for Resources and Energy, there is the infrastructure for Oakajee. If people do not invest in the area, what is the point of Oakajee port? Andrew Forrest has been out there talking about 40,000 Indigenous jobs in Fortescue Metals that he wants to plan and create through this industry. That is going to cripple that development. So what happened to the Indigenous job commitment?

The Western Australian Premier is strenuously opposing the super tax because he is looking out for the state’s best interests. As a Western Australian in this place, I certainly support him when we are fighting for the interests of Western Australia and all Australians. Rather than raid the state’s growth, the Premier will always make sure that WA gets its fair share. Unlike the Prime Minister, the Premier is willing to negotiate with BHP and Rio Tinto on royalty rights, and he has been doing so for some time, well before this tax announcement, unlike the retrospective nature of the announcement of and then the negotiations on this super tax that the Prime Minister has delivered. The Premier’s planned royalty rates take them onto the industry standard of 5.625 per cent and offer a concessional rate that they have enjoyed for many years for pioneering iron ore extraction, particularly in the Pilbara. A rise in the rate to 7½ per cent by this time next year would bring about $1 billion in royalties. It is a fair plan and will not inhibit the state’s growth, unlike Mr Rudd’s agenda to essentially make a hostile takeover of Western Australia’s mining and petroleum industry. Do Australians really trust Mr Rudd to give any of these super profits back to the states? You only have to look at his track record which, if I have time, I will get to.

Rio Tinto boss Tom Albanese yesterday said this super tax was his No. 1 sovereign risk on a global basis. Rio Tinto operates in some of the most unstable countries in the world like Mongolia, New Guinea and so on, and he has labelled Australia a sovereign risk. It just shows how much uncertainty it has created for the industry. Rio, which draws 60 per cent of its world revenue from Australia, would not have gone ahead with some of the massive projects like Pilbara iron ore operations had the super tax been in place at that time of change. How many thousands of jobs would have been lost if Rio had known about this tax some time ago?

A super tax does nothing but encourage mining companies to go offshore. In this case it allows our biggest buyer and investor, China, to dominate the industry and to put pressure on ordinary taxpayers, using their funds to bail out failed mining companies. Why would you allow taxpayers’ money to help buy out the penny dreadfuls of this country? It is a disgrace. There are people running out of offices in Perth who fund their whole life and existence out of setting up a company out of blue sky and then living off it. Now this government is going to say, ‘If you crash, we will bail you out.’ It is a real problem and I am sure there are people in this place that know that this is a reality—more borrowing, more government debt, falling share prices and upward pressure on interest rates as a result.

The resources tax was given little thought and no consultation. Any consultation on this super tax now would be retrospective rather than prospective. It is a tax grab that is sending half a million Australian jobs and foreign and local investment offshore like the ETS would have. If you recall, the ETS was going to penalise Australian industries to the extent that they would go to a developing country like Indonesia where there was not any financial impost. We would have exported not only jobs and the income from those jobs such as taxation but also the pollution that would have gone with it. We have dodged the ETS at least for three years; now we have a tax which we are going to have to deal with in the same vein. It is going to penalise companies operating in Australia both prospectively and retrospectively. The impact will not be instant. We are not going to feel this tomorrow. We are not going to walk out tomorrow into St George’s Terrace and find out that the mining companies have shut down. Of course they will not. They will be operating on their current leases and their current operations, but it is going to be felt for years—in fact generations.

This is a tax that could stop any new mining boom—it will strangle any new mining boom—and it will hurt the Australian economy for years to come. These people sitting in here today are going to have to explain to future generations why we made a decision in this place to allow this to happen to their future and the future of many generations of Australians to come. When we had the ascendancy in world resources and the production of world resources at a competitive rate, we in this place are going to be saying, ‘No, we are going to put a stranglehold on that competitive advantage that Australia had.’

The impact of a 40 per cent tax goes far wider than the mining industry. This is a tax on the very working families that Mr Rudd said he would look after. When it comes to jobs, the fundamentals are simple. Industry employs workers and pays them a decent wage, which they spend in the local shops, on homes, in restaurants and on holidays, which keeps thousands of other Australians employed. One job in the mining sector creates at least four elsewhere in the economy—air hostesses, real estate agents, accountants et cetera, all jobs that back up someone in the mining industry. Some people say it is seven jobs for each mining job, but let us be conservative and say it is four.

The tax would push up power bills. On the back of already soaring electricity costs, higher gas and coal prices would be paid by generators and this is obviously going to be passed on to consumers. They will not absorb it. Where does this stop? This tax will grow exponentially and it will continue to explode from now on. Applying to all mining activities, this tax will include such operations as clay mining, the brick industry, sand mining and hard rock mining. This tax applies to more than just corporate conglomerates. I can think of some sand miners in my electorate, for example, that will be hit by this because they might make a so-called superprofit.

As I mentioned last night, Satterley in Perth has predicted the cost of building a new home would rise by more than $20,000. Yesterday, we saw Australia Post appearing in a Senate estimates committee and confirming a return on capital of 12 per cent. They admitted to Senator Cormann that this was not a superprofit but a reasonable return on equity. But from the government’s viewpoint, six per cent is a superprofit. So should we tax Australia Post on profits of over six per cent? How about the banks that are making massive profits? Are they going to get a so-called supertax on anything above six per cent? Westpac’s first-half profits were 21 per cent, or more than $2 billion. No wonder the banks are getting nervous. What about Telstra’s $1.85 billion profit? Let us have a look at their profits too. Woolworths’ profit last year was nearly 13 per cent. Let’s apply a supertax on them as well, if you take the same mentality. It would be illogical to think that the costs would not be passed on to consumers. The message is that, if you are a business and you earn more than the government bond rate, a mere 5.7 per cent, you are making a superprofit.

This tax is not good for business, not good for workers and not good for superannuants. It is a kick in the teeth to working families. As a result, this is not a tax that can be supported. It is tax that we are going to feel harder in Western Australia. Mums and dads, superannuants and generations of Australians to come will suffer. (Time expired)

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