Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

just dead wrong. We have cited a study which was contained in the Henry report that says it is 17c, and of course they have gone out of their way to try and discredit that figure with all manner of irrelevant detail. The truth is the effective tax rate is 17c in the dollar. It does not matter what they do, they simply cannot get over that hurdle. They cannot get over the hurdle of the paper in the Henry report and they cannot get over the hurdle that that figure of 17c in the dollar, which in the first instance was a study over a decade, was based on data that went through to 2004-05.

Of course, the Treasury is updating that. The tax office and the ABS have supplied information for 2005-06 and 2006-07, and the conclusion is the same: 17c in the dollar is the effective rate. Why is this distortion between 30c, 27c and 17c so important? Because the opposition have locked themselves in the cart with the mining industry council, who are claiming the effective tax rate is 27c. But it is not, and they cannot prove that it is, because they know that mining companies get very generous depreciation. Everybody in the country understands that there is very generous tax treatment for mining because it is capital intensive. So it is 17c in the dollar. They are terribly embarrassed by the fact that they have locked themselves into this 58c figure which has been peddled by the mining industry council right around Australia.

The other thing the opposition then like to do is to add royalties in to either the headline rate or an effective rate of 27c to get this extraordinary figure that they claim miners are paid. The problem is that they are not paying that, and that is the whole point. So the detailed work that has been done by the credible people in this community, the Treasury—the people who have access to the ABS, the people who have access to the tax office data—shows that the effective rate is 17c in the dollar, not the 27c that they have locked themselves into in conjunction with the mining industry council, which has bought every one of them hook, line and sinker. They are here paid for, written and authorised by the mining industry council. That is why there has been such a savage attack made on the credibility of the Secretary of the Treasury and the figures that have been put forward by the Treasury.

So the effective rate is 17c and the headline rate is 30c. Of course, this does matter. It matters a lot, and I will tell you why: because the opposition are opposing tax relief for small business. They are opposing tax relief for the rest of the economy. They are acutely embarrassed by the fact that they are going to deny tax relief to small business and the people in other sectors, such as transport and so on. They are going to deny that—that is why they are so embarrassed by these figures.

But of course it gets worse. Let’s just go through it. The whole point about a resource superprofits tax is this: those who are very profitable will pay more. Those who are not so profitable will pay a bit less. But they like to carry on as if everybody will pay a lot more. What is all this about? They have been bought hook, line and sinker by the large mining companies who will be paying more, and they are prepared not only to desert the smaller mining companies but to desert all the other sectors of the economy in their craven cave-in to the opposition to this tax of sections of the industry.

The first point is this: royalties are removed under the Resource Super Profits Tax. We never hear that from them. The second thing we never hear from them is that we are dropping—

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