Steve Irons (Swan, Liberal Party) Share this | Hansard source

Tonight I rise to talk about the resources super profits tax and how it is affecting constituents in my electorate and what it will mean to Western Australia. I recently spoke about this subject in a matter of public importance but, as the third speaker with only five minutes, I was unable to give this matter all the gravitas that it requires.

Before I enter into my grievance I would like to say a special hello to Ann Jones, the wife of John Jones, who was aboard the flight that is lost in the Congo. Ann is a member of my FEC and has worked tirelessly for the Liberal Party for many years and her charity work with animals is second to none. Ann may be listening. Ann, my thoughts and those of my staff and the members of the Swan division are with you and your family. We hope and pray for the safe return of John. It is men like John who have built and been a part of the WA and Australian mining industry that supports many lives and families across our great nation.

Back to the subject: the implementation of the RSP tax by the Rudd government. In the 28 years I have been in business I do not think I have seen a more foolish act besides the disgraceful insulation scheme and the BER. I have heard people say that this will be the killer of the golden goose, but obviously they mean the killer of the goose which laid the golden egg. To put it simply, that is true. Small businesses in my electorate have already been affected and many more across Western Australia will also be hit hard by this tax. There has been much discussion about the RSP tax and the way it was introduced. The government has said it will pay for increased superannuation of three per cent and that all the workers will benefit from that. The employees may be the beneficiaries of this superannuation, but what they must realise is that it is not the RSPT that is paying for it; it is the employers and it will be coming off their bottom line.

So the line that the Rudd government is running out that the RSPT is responsible for the super is just not true. In fact, it is just more Rudd spin. The Rudd gang of four just do not seem to understand the mining industry. They do not understand return on investment and they certainly do not understand financing of the industry or how investment bankers and capital investment groups assess the risks and returns on investments, particularly in the mining industry. To arbitrarily nominate that anything above six per cent is a super profit, again, is just another headline and a load of Rudd waffle. Anyone who has run a business or owned a business knows that if you are going to risk capital you need a decent return. If you can get six per cent from bonds, why would you even bother to take the risk of developing or building up an exploration mine which is so risky? If you knew anything about business—and working for a union does not qualify as a business—you would know that there has to be a reward for risk and effort. This Rudd government has just taken the reward for effort away from the mining industry and the Prime Minister should dump this tax.

I do not know why the Prime Minister so dislikes Western Australia but his actions do speak louder than words. Mr Rudd promised us a fairer share of the GST in the lead-up to the 2007 election but, as a state, we only receive 68c of every dollar we raise in GST. It is just another broken promise. In 2007 Mr Rudd also said he would give us a WA infrastructure fund of $100 million. What is that? It is another broken promise. Why should we now believe Prime Minister Rudd when he says WA should expect—and ‘expect’ was the word—to get $2 billion from an infrastructure fund, raised from the RSPT? Mr Rudd, why should anyone in WA believe that and, to tell you the truth, most people in WA just do not believe you anymore. They have stopped listening to you.

I say to all Western Australians and to anyone who lives in Western Australia: anyone who supports this tax just does not like and does not want to support Western Australia. All the WA members of parliament who support this tax do not have Western Australian interests at heart. All the WA Labor candidates who support this tax and are out there spruiking their support of the RSPT certainly do not have Western Australian interests at heart.

Go out and tell all the families, the workers and the businesses who are supported by the mining and resource sector that you are supporting a tax that is going to ruin their lives. Go out and tell the local printer, the local courier, the local owner of the Telstra shop, the transport companies and the contractors who invest heavily in equipment to earn income from the industry that you support the tax that will ruin their income, their revenues and their lifestyles. And what about all the tradies that those on the other side continually say they support? What will you say to them when exploration in Australia dries up and they have no more work and they hear other people saying that this will not happen? Let me make a prediction, because the Prime Minister just does not get it: this RSPT tax will ruin not only the WA economy but eventually the Australian economy. The only way to stop this tax is to change the government.

For all Western Australians who may be listening, I am pleased to note today that the Premier of Western Australia announced that after 12 months of discussions and negotiations the state government has reached a historic—and I will use the word ‘historic’ because it seems to be used around here all the time—new agreement with BHP Billiton and Rio Tinto to amend iron ore rates payments from 1 July 2010. I quote from the Premier’s press statement. He said:

From July 1, BHP Billiton and Rio Tinto’s royalty rates will change from 3.75 per cent to 5.625 per cent to bring them into line with other iron ore producers and the companies will be able to integrate their Pilbara operations.

This will apply to all production by the companies and will generate an additional $340million in State royalties for the 2010-11 financial year—

which will benefit Western Australians. He goes on:

Under the Heads of Agreement signed today the companies will also make a joint one-off payment to the State of $350million—

another benefit to Western Australians. He said that there will be a one-off payment of $350 million to consolidated revenue when the bills reach royal assent, which will be placed in a special account for a new children’s hospital due to begin construction in 2012 and be completed by 2015. Overall, the new royalty rates are forecast to generate an additional $340 million in 2010-11 and $1.06 billion over the next four years. This is a good result for Western Australia, a win-win, as the Premier describes it. It was brought about by 12 months of consultative and open negotiations with the two mining organisations. The way the Premier has handled these negotiations could not be in greater contrast to the way the Rudd government has handled the resource rent tax announcement.

The Rudd government announced this policy without any real consultation and then proceeded to set up a sham consultation process whilst making the key element of the tax non-negotiable. This is a government that refuses to consult—not when taxing industries employing thousands and not even when changing flight paths over people’s homes, as we saw when the flight paths changed from and into Perth Airport in November 2008. Fortunately we were able to get up a Senate inquiry into that debacle as well, which the government senators voted against. This afternoon in this place I heard the member for Holt, the Parliamentary Secretary to the Prime Minister and Cabinet, talk about openness and transparency. Why did the Labor senators vote against a Senate inquiry into Airservices Australia that sought the truth? ASA declared at the Senate hearing in Perth that the noise issue was only a perception. The people of Swan, Pearce, Canning and Perth know that the aircraft noise caused by the flight path changes is not a perception. At a hearing two weeks ago in Perth, even staff from Stephen Smith’s office admitted that there was an issue with noise in Western Australia, particularly in Perth, from aircraft noise.

I go back to consulting. No consultation was done by the Rudd government with the mining industry, and that gives bad policy outcomes. The gang of four running this country at the moment are certainly no experts in business, yet they are making business decisions without seeking advice from or consulting with the people who know. This is no way to run a country, and their approach is doing enormous damage to Australia’s reputation overseas.

I will finish with some quotes from the industry, which I hate to admit is the usual form from the government to support their weak arguments on bad policies. Firstly, I will quote Anna Bligh, the Queensland Premier, who said:

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

Herb Elliott, another famous Australian, who is Chairman of Fortescue Metals, said:

We now have a huge new tax on the mining industry that will ultimately decimate future investments in new projects and have a negative impact on the value of your investment in our company …

He goes on:

It’s now clear that this means they have dropped on the Australian people a socialist-style funding and tax device where the government is now your silent partner … the keystone of this tax rests on a Government guarantee to refund 40 per cent of any losses not rebated through the tax system. It waits until a project has failed or reached the end of its life without having redeemed the tax credits. It is of course theoretical nonsense. Who believes that companies could fund 40 per cent of an investment on the strength of some future unbudgeted Government tax credit after it failed? No bank wants to fund a failed project on the premise that 40 per cent can subsequently, perhaps, be reclaimed through tax …. Jobs will be denied to tens of thousands of Australians who would have been employed on new projects.

Minara Resources have stated:

Under the new proposed tax, if the rules come in, it would be much more favourable to look at investments offshore.

With that, I will close and again congratulate the Premier of Western Australia for doing a consulted, negotiable, historic agreement with the mining industry.

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