Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Hansard source

I welcome the opportunity to raise this matter of public importance as the Rudd government has deceived the Australian people about the adverse effect of their great big new tax on mining and the effect that this tax is having on superannuants, self-funded retirees and senior Australians. But all those Australians building and relying on superannuation are not being fooled by this fraudulent Prime Minister and this desperate, debt-ridden government. They know the impact of Labor’s great new tax. They know the impact that that tax is having on their retirement savings—not in 10 years, but right here and right now. Yet we have a government in denial. While the rest of the country knows that the uncertainty this government is creating has jeopardised investments, jobs, future dividends and wealth creation, our Prime Minister has his head firmly stuck in the sand about what this great big new tax on mining is going to do to our nation.

The Prime Minister told the House only on Thursday that the opposition was, in his words, ‘wrong, wrong, wrong’ for suggesting that this mining tax had any effect on financial markets and superannuation balances. Let us look at the facts. The facts are that Australian superannuation funds are big holders of mining shares. It is estimated that around 9.2 per cent of all investments made by superannuation funds are in resources stocks. In fact, the biggest industry superannuation fund, AustralianSuper, holds 11.71 per cent of its shareholdings in BHP Billiton, a further 3.12 per cent in Rio Tinto and around one per cent in Newcrest Mining. All superannuation funds have similar holdings.

Since Prime Minister Rudd’s great big new tax was leaked to the media on 13 April, more than $20 billion has been stripped from the mining investments of these superannuation funds and super balances have lost around two per cent in value. But still this Prime Minister chooses to mislead the public and deny that his great big new tax is affecting share value. On Wednesday last week, the member for Pearce asked the Prime Minister about the analysis undertaken by the government on how its mining tax would affect investments of self-funded retirees and their standard of living. The Prime Minister refused to answer the question. He insulted all self-funded retirees by referring to the proposed superannuation guarantee increase as how the government would boost retirement income. But retirees are just that: retirees—they have already retired. As a result of that, they are relying on their investments, much of which is invested in the resource sector. What an insult to ignore their concerns and refer to a policy that does not even affect them.

In fact, he denied the impacts a day later. He said the opposition were ‘wrong, wrong, wrong’ for suggesting that a $9 billion new tax on mining profits would impact on the profits, dividends and share prices of mining companies. The Prime Minister’s comments follow those by the Minister for Financial Services, Superannuation and Corporate Law, who said on Monday last week that any suggestion of an adverse impact on resource investments was nothing more than a scare campaign. Information from the Treasurer last Friday confirmed that the government was aware of the adverse impacts of this great big new tax on mining stocks. As justification for Labor’s emergency advertising campaign on the proposed tax—a waste of taxpayers’ money to the tune of $38 million—the Treasurer stated that ‘the tax reforms involve changes and they impact on financial markets’. But it gets worse. Cabinet documents released yesterday by the Rudd government show that it had planned the advertising two weeks before the Prime Minister announced that great big new tax on mining.

The Treasurer and the Special Minister of State were corresponding about the effect that the tax would have on financial markets well before it was announced. So the Prime Minister has known for months that this new tax would impact on the investments and portfolios of superannuants, self-funded retirees and senior Australians, but he has decided to mislead the Australian public. The Prime Minister cannot have it both ways. Either his government was deliberately misleading shareholders and superannuants in Australia about the adverse impact of Labor’s great big new tax or he deliberately ignored the advice issued by the Treasurer as justification for the government’s $38 million advertising campaign. This is nothing but a tax grab. The government knew in advance what damage it would do to financial markets. It knew it would impact on the shareholdings of self-funded retirees and it knew what it would do to superannuants.

And the Treasurer refuses to apologise for the ads. He told Radio National yesterday that he thinks:

… it’s very important that the public has an accurate view of what the government is planning.

Very important indeed! Well, the public now have an accurate view. What the government has planned is what is already happening: a significant loss in the value of mining stocks. As I have said, superannuants and investors already know this. They only need to look at their super balance to see what this government is doing for them and their retirement plans.

Now the government is further spending their money; it is blowing more dough to convince superannuants and investors that this tax is a good thing. Despite the Prime Minister promising time and time again to abolish government advertising, he is spending another $38 million on his own propaganda campaign. We have the farcical situation where the government is using taxpayer money to convince taxpayers that miners are not paying their fair share of tax. While taxpayers are losing their share of proceeds in their mining stocks being held in their superannuation, they are also paying for it through their tax dollars. This is a government that has already spent money beyond what it is taking from ordinary taxpayers and placed Australia’s budget into historical levels of debt—a debt that is going to peak at $94 billion in 2012-13—and now this Prime Minister and this government are ruining the superannuation balances of taxpayers as a consequence of their tax grab on mining.

And that is what this is really about. A tax on mining is nothing but a tax grab so that this government can fund policies and waste more money on poorly implemented programs. The government want this tax because of blow-outs the Deputy Prime Minister has caused in the Building the Education Revolution program. They want this tax because of the Prime Minister’s home insulation debacle. And why were there blow-outs in these programs? There were blow-outs because this great big new tax on mining was needed to fund their own incompetent programs they could not implement. They were big on promises and very small on delivering.

Let us look at the Home Insulation Program for just a moment. The Prime Minister admitted last Thursday after a question from the member for Flinders that he was warned on three occasions between August and October last year about safety concerns with the insulation scheme. These concerns were expressed by the Minister for Environment Protection, Heritage and the Arts, who fell on the Prime Minister’s sword as a result of the bungled scheme, which caused four deaths and over 146 house fires as a result of Labor’s $2.4 billion debacle. These safety concerns could have been addressed by the Prime Minister and could have been avoided if he did not choose to ignore the advice given to him by the minister for the environment.

There is a dangerous pattern of deceit and incompetence from this government. The Minister for Finance and Deregulation admitted to Sky News in February that this government simply does not ‘dot the i’s and cross the t’s’. As we have seen, it is the Australian public who suffer as a result of the government’s deliberate oversights and incredible incompetence. With the pink batts scheme, it was homeowners who suffered. Now, with the mining tax, it is superannuants and investors who are suffering because the Prime Minister has refused to listen to experts and his own colleagues about the impact that his great big new mining tax will have on financial markets and Australia’s sovereign risk profile. But, if the Prime Minister and the gang of four do not want to believe me about the impact of this mining tax, they should at least start listening to some of their state Labor colleagues—hardly advocates for the conservative side of politics. They are out there in numbers—lining up, expressing genuine concern about what this tax means for jobs and investment and our economy and what impact a weaker economy will have on the wealth of our nation.

I would like to take the opportunity to note in this House some of those concerns. The Rudd government needs to understand that state Labor governments are pleading with the Prime Minister to change the design of his tax, and in fact scrap it altogether. In early May, for example, the Labor Premier of Queensland, Anna Bligh, expressed her concern that the tax would hit investment. The Premier said:

You can’t expect international companies to make those investment decisions unless they’ve got absolute certainty about the costs of doing business.

In Victoria Premier Brumby said just last week:

The two areas that are put to me as needing some fine tuning are firstly in relation to any element of retrospectivity and, secondly, if the 6 per cent rate is the right rate or should it be a higher rate.

These are pretty big and fundamental changes demanded by the Labor Premier of Victoria. The Labor Treasurer of South Australia also said on 11 May:

It is the architecture, the design, the implementation that needs to be fixed, rearranged, readjusted.

If the architecture is no good, the design is no good and the implementation is no good, what else is there? In other words, the whole policy needs to be scrapped. The Prime Minister has accused any critics of this tax as being mouthpieces for the mining industry and involved in a scare campaign. By that measure, the state Labor governments and the state premiers are mouthpieces for the mining industry and involved in a scare campaign.

This Labor government refuses to take criticism. It denies criticism even exists unless it can be used to justify its agenda at some stage in the future. The hypocrisy of this government is breathtaking. On the one hand it proclaims that it is conducting ‘meaningful consultations’ with the mining sector and in the next breath it is out there rejecting everything the sector is saying. The reality is that as far as the Prime Minister is concerned it is his way or the highway. If you do not agree with him he just will not listen. That is what he is like on climate change, and now that is exactly how he and his ministerial colleagues are behaving on this tax. The arrogance of this government is a disgrace and is not in the national interest.

Mining executives are the people who are actually involved in investing in Australia and providing returns to investors and superannuants. Does the government actually believe that mining companies putting investments on hold will be good for superannuation funds? For the government’s sake let me quote what a few of our mining executives think about this great new tax. What does Marius Kloppers say about this tax? He says:

I think that what one can safely say is that if you pay twice the tax in one country that you pay in another for the same product then relatively speaking that other country will become more attractive.

He went on to say:

What I can say though is that there will be an impact on investment, jobs and growth if the tax is implemented in an unchanged form.

These are comments from the CEO of one of the biggest investors in Australia’s prosperity. But do not take Mr Kloppers’s word; why not speak to one of his competitors, Mr ‘Twiggy’ Forrest over at Fortescue Metals. Fortescue has announced that it will put the $10.5 billion Solomon Hub and the $7 billion Western Hub projects, which were set to employ 30,000 people, on hold. I quote Mr Forrest himself:

The uncertainty in the financial markets caused by the proposed tax and the cash impost RSPT payments will place on future business revenue has necessitated an urgent review of the economics surrounding the development of Fortescue’s major projects.

There are numerous other examples across the nation. Mining executives and analysts are forecasting a trail of destruction as a result of this tax. Credit Suisse, for example, says the Whyalla steelworks would be unprofitable because of this tax. Citigroup says that this tax will wipe off one-third of the incremental value of new projects in the Pilbara. What a service to Australia’s future prosperity—taking a third of the value off projects in the Pilbara!

The Prime Minister is ignoring the industry, but superannuants are not. As I said before, superannuation balances have plunged due to a plunge in the value of resource stocks. The superannuants of this country are fully aware of what the Prime Minister refuses to recognise. The superannuants of this country know that this great big new mining tax is decimating their hard-earned savings. The superannuants of this country know, and the self-funded retirees of this country know, just how hard they had to work to build a nest egg for their future prosperity, just how hard they had to work to sustain themselves in retirement, and at one minute to midnight this Prime Minister comes along and rips them off. The superannuants and the self-funded retirees and Australia’s seniors know they are being ripped off by this government, not once but twice—firstly by their resource stocks being decimated as a result of this great big new tax, and secondly as a result of their being ripped off by $38 million in advertising to try to justify the Prime Minister’s sham tax, this absolute blight on investment in Australia.

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