Sid Sidebottom (Braddon, Australian Labor Party) Share this | Hansard source

The message of the budget was twofold. Firstly, responsible management of the economy has seen Australia weather the global financial crisis better than most other comparable economies—a fact almost totally ignored by those opposite. The savings and policies identified in this budget are targeted to get the budget back into surplus in 2012, three years ahead of schedule. The second message is that the proceeds from the resource super profits tax will go straight back into building a stronger, broader economy by cutting business taxes, especially for small business, boosting retirement savings and investing in vital economic infrastructure.

Let us just remind ourselves about how Australia has travelled in these difficult economic times. I sometimes think that we in Australia appear somewhat isolated from the impact the world economic crisis has had, and continues to have, throughout the world, most particularly in the USA and Europe. It is not because Australia is economically isolated from the rest of the world—indeed, to the contrary. The reason Australia has performed so strongly compared to many other comparable economies is largely because the Rudd Labor government acted so decisively to stimulate our economy as private capital evaporated. The stimulus strategy sought to inject spending and investment into the economy as retail spending and private infrastructure investment began to decline significantly. The stimulus worked and kept our economy out of recession. Significantly, in partnership with Australia’s employers, employees and unions, it kept Australians in work. But do not just take my word on this, immensely proud though I am of the government’s record with the stimulus matters that we introduced.

The OECD’s latest economic forecasts are a timely reminder that our decisive action during the global recession has put our economy in a position of strength, from which we can reform the tax system and boost competition in the mortgage market for the benefit of families, workers and small business. The OECD has revised upwards its growth forecast for Australia and now expects GDP to grow by 3.2 per cent in 2010 and 3.6 per cent in 2011, one of the strongest growth outlooks of all OECD economies and well above the growth forecast for the OECD area as a whole. I know it might sound a little bland to listen to those figures, but they are comparably very impressive. I congratulate this government and our community on being able to achieve these forecasts.

On the employment front, the OECD expects Australia’s unemployment rate to fall by 4.8 per cent by the end of 2011, dramatically lower than the eight per cent unemployment rate expected for the OECD area as a whole. The OECD also welcomed the government’s disciplined budget, stating:

… in view of the stronger economy and fiscal restraint, the Government now expects to balance its budget by 2012-13, three years earlier than previously anticipated.

The national accounts for the March quarter will be out soon—on Wednesday of this week, I believe. It was this same release last year that revealed Australia had avoided a technical recession, one of only two advanced economies in the world to do so. This achievement sparked a revival in confidence which underpinned a recovery in private demand which would see Australia go on to record growth of 1.4 per cent in 2009 in year average terms and become the envy of the developed world.

So what of the resource super profits tax announced in the budget and now the source of so much shrill commentary by the big end of the mining industry? A whole host of dire scenarios is being presented by the big mining companies, ranging from allegations that they will be the most heavily taxed of all mining concerns in the world to being forced to put projects on hold, the loss of thousands of jobs, and declining returns to shareholders and superannuation recipients. Of course, any evidence that is contrary to these dire predictions is dismissed as untruths. Surely, there could not be a lot of self-interest at play here—surely not!

A local example surfaced in my own daily newspaper today when the editorial writer for the day had this to say in reaction to some negative comments from a mining company and an opposition media release about the RSPT. He said:

I must admit I was initially sold on the whole ‘they take the resources which belong to all of us’ argument, but have soured on it following the reaction from local industry players.

Well, blow me down! Because some industry players do not like the prospect of increased taxes, the government’s rationale for the tax and the Treasury modelled benefits from it do not seem to carry the same weight. Why is this? Laurie Oakes, on 29 May in the Hobart Mercury, put it incisively when he wrote:

The mining industry campaign is certainly over the top, and difficult to counter. When mining companies devalue their own shares by forecasting dire consequences from the tax, people tend to believe them.

In other words, they talked their own share prices down by this ridiculous scaremongering campaign that they have unleashed.

I think Ross Gittins’s piece in the Sydney Morning Herald of 26 May, headed ‘Let’s mine bright ideas and stop being shrinking violets’, goes some way to identifying what the real issue is with regard to the RSPT and the big mining companies’ misinformation campaign against it. Mr Gittins, no favourite or favourer of the Rudd government, argues that the traditional Australian cringe factor lies at the heart of their attack and the hope that Australians and the government will accept this. If the RSPT goes ahead, they argue, they will cancel their projects and take their money somewhere else. Mr Gittins says:

Oh dear, don’t desert us. Please!

Know what their—

that is, the big mining companies—

problem is? Australia, being one of the world’s leading mining nations, is a world leader in designing taxes that increase the public’s take without discouraging mining activity or otherwise damaging the economy.

He goes on:

The resource super-profits tax is a state-of-the-art tax, designed by our leading economists not to do all the bad things it’s being accused of. It’s a close relative of an earlier Australian invention, the resource rent tax, developed by Professor Ross Garnaut and others …

Mr Gittins further goes on:

The big international mining companies are fighting it partly because they fear that, once its success has been demonstrated, it will be copied by other countries. And they’re fighting it by trying to press our cringe button: if no one else is doing it, it must be a dumb thing to do.

As Ross Gittins goes on to show, in so many areas Australia has led the world. And that was no dumb thing to do.

Last week saw some of Australia’s foremost economic authorities endorsing the resource super profits tax and destroying key planks of the scare campaign being run against this important reform. Remember, it is a reform—a reform of the tax system that is long needed. Even the mining industry recognises this. Twenty leading economists published an open letter. They are quite happy to have their names in the newspaper publicly endorsing this scheme, this tax proposal. They described it as a more efficient and equitable system of sharing the value of exploration and mining rights.

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