Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

I thank the member for Oxley for his question. In doing so, I am pleased to advise the House that companies in both the petroleum and minerals sectors are seriously engaged in constructive discussions, not only with the Resource Tax Consultation Panel in Canberra this week, but also with the Prime Minister, the Treasurer and me. I say that because they appreciate that megaphone diplomacy is not going to assist in working out the generous transitional arrangements that are available for the purposes of bedding down this major change in taxation in Australia.

We all appreciate, as do many in the industry now, that there is going to be a resource super profits tax in Australia. It is also understood that is going to involve a headline rate of 40 per cent. The focus of these discussions is on delivering generous transitional arrangements that not only ensure that we have a capacity to gain for the broader Australian community a fairer share of the return on their natural resources, but also deliver measures that will broaden and strengthen the Australian economy.

This is a reform that, unfortunately, the member for O’Connor does not appreciate the significance of. I say that because we are talking not just about a change with respect to the taxation of minerals and petroleum resources in Australia but also about how we as a nation front up to the all-important issues of superannuation payments, how we take pressure off retirement income, and how we lower the burden for Australia’s 300,000 smaller businesses, many of whom are represented by the tourism sector, for which I also have responsibility. When it comes to broadening our economic base, it is also about taking pressure off our resource-rich regions and the difficulties they are now experiencing on the infrastructure front.

In that context, I say to those companies who are engaging in a very professional and constructive way with the government that we appreciate the way in which they are approaching those negotiations. They understand that this is an important reform and that the best way to inform the outcome is to engage in the process of consultation established by the government. They understand that, at the end of the day, there will be a transition, in association with the capacity to further attract ongoing investment with Australia, which will further enlarge the Australian economic cake.

In the context of the discussions I also draw the House’s attention to the huge price spikes that we have seen in recent years in such commodities as iron ore, where the price increases since 2004 have been over 500 per cent; and coal, where the price increases have ranged from 300 per cent to 400 per cent. Also, interestingly, there has been a growth in world demand for petroleum and LNG products.

These commodities will clearly deliver the vast bulk of the revenue under the RSPT and the PRRT. With respect to many other mineral resources, I simply remind the House, in a calm and measured way, they should appreciate that many of them will be better off under the proposed RSPT. Indeed, the RSPT actually involves a revenue loss for government and a tax cut for many companies that are mining less profitable commodities, because those companies will benefit from royalty refunds and the government’s contribution to unutilised losses.

Can I say in conclusion: the government is committed to this fundamental reform of Australia’s resources taxation system. This will deliver not only opportunities for the resources sector but also many significant opportunities through the broadening of the Australian economy, while also taking pressure off the Australian economy for the purpose of future retirement incomes.

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