Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

Deputy Speaker, I do expect them to sit silent in the House but I do not expect them to sit silent in their electorates. They should be out there fighting for local jobs; they should be out there, like the member for Paterson, defending local industries. Access Economics estimated that a carbon price of $26 a tonne will cost 126,000 jobs in Australia by 2020. We are seeing jobs disappear every day. And while those jobs, it could be argued, are not directly associated with the imminent introduction of the carbon tax, I cannot believe that people are not considering the impact of that carbon tax in their decisions because you do not make an investment decision today, whether it is to open or close something, without thinking about what your prospects are over the next 20 years. Not many on that side have been in business—I understand that. It is a given: you have to be in a union if you want to sit on that side. But those of us who sit on this side have been in business and know that when you make an investment decision you make it for 20 years. In imposing tax after tax after tax—like this condensate tax, the carbon tax, the mining and resource rent tax, any new tax they can think up at any time—all you are doing is chasing that investment away. I cannot believe that we have a government that, despite all of this and the economic insecurity in international markets, is still charging blindly into putting in place more taxes, in particular the carbon tax.

Along with the carbon tax are the financial and the investment insecurity produced by the MRRT. The government's mismanagement of this issue and the RSPT, the resource super profits tax, that came before it and was such a disaster means that the energy sector has little or no faith in the direction this government is taking. The signature policy that underpins this budget, the minerals resource rent tax, continues to fall apart. It continues to build in a deficit that could occur at any time. It could not make the budget more uncertain if it tried. Treasury figures show that with the MRRT the current Prime Minister's backdown will translate into a $60 billion hit to the budget bottom line. This certainly will build in a structural deficit by having this government relying not only on the prices of the resource but also the currency fluctuations. How the Treasurer can sit in this House and say he can budget with those sorts of questions hanging over his head is beyond me. This perhaps again highlights the incompetence of this government.

If the government persists with the flawed MRRT not only it is going to put the budget stability at risk but also it is going to show this government is rolling the dice on questions of energy security and future mining investment. Sudden changes such as the condensate tax which we are talking about continue to reinforce that instability and that impact on investment security. The government constantly changing the rules of the game for investments is jeopardising Australia's once gilt-edged sovereign risk profile and making Australia a less attractive place for investment, particularly in the energy generation sector. The coalition believes that decisions about taxation paid by the mining industry should be done under the existing regime of state based royalties because the resource belongs to the people of that state. It does not belong to the Commonwealth. It should be a decision made by the state. It has worked well in the past and will continue to work well once the coalition is re-elected and we rescind the MRRT.

All this taxation—tax and spend, tax and spend; putting new taxes on the oil and gas industry, putting new taxes on the mining industry, changing those taxes—sends a simple message: other countries that are our main competitors are better investment options. The real impact of the Gillard government's carbon tax, the mineral resource tax, the change to the condensate tax, the change to excise regimes in relation to fuel is on the mining industry, which has been singled out by this government to pay the carbon tax on fuel straight up. No industry or group will pay the carbon price on fuel except the mining industry. Why doesn't the Prime Minister just stand up at that box each day and say to the oil and gas industry and the mining industry, 'We hate you and we're going to tax you out of existence'? That is what she is trying to do. She is trying to get as much money as she can from the sector that is holding our economy together.

We have seen recent examples of even Australian based resource companies deciding that they no longer want to invest here. David Flanagan of Atlas Iron, a self-made man, put his and his wife's money at risk; he took the big dive to build up a company and get it rolling. He is going to be taxed on that at a level never seen before and at a rate far higher than his bigger competitors BHP, Rio and Xstrata. David's company's response to that is to make an investment in Brazil of $18.7 million that will not be invested in the resource sector here and will not give Australians the opportunity to have jobs. It simply has got far too hard.

The Prime Minister can expect to read plenty more about companies choosing to invest in projects in other countries, given the damage this government has inflicted on the sovereign risk profile of Australia's energy and resources sector. As it stands at the moment, the series of taxes including this condensate tax undermines Australia's energy security and risks international investment in the vital energy and resources sector. Coming at a time when the economy is also being slugged with a carbon tax, these policies show how poorly this government understands the contribution of the energy and resources sector and how ill equipped the government is to handle the economy.

In conclusion, this government has been digging deeper and deeper into the pockets of Australian workers and businesses. Every day it discovers a new way to tax people, like the quarter of a million Australian families who are now going to be taxed on the LPG they use in their family motor cars. Introduced by the Howard government, an incentive has been paid to these families to convert their cars to LPG. But like a honey trap, this government gets them into that position where they rely on LPG and then it taxes it. They cannot get away—unbelievable. But that is just part of how this government operates. It operates in a policy vacuum—no energy white paper, no direction to industry on how it is going to be done, no backdrop of how energy and resources investments should be made. The only messages that come out are: 'Here's a new condensate tax; here's a new carbon tax; here's a new LPG tax; here's a new tax on resources.' The energy and resources sector is constantly being used as a cash cow for this big-taxing, big-spending government that cannot control its own finances.

The energy and resources sector, including the oil and gas and the mining industries, is one of the driving forces behind the Australian economy. At the moment, it is sustaining the economy at a time of global difficulty, and when the manufacturing sector faces difficulties in competing with the very high dollar and the imports that are coming in. But we have a government, as I have said repeatedly and will continue to say both in this House and outside, that has no qualms about taxing this industry whenever it can.

The coalition will not object to these bills, but the Gillard government should stand condemned for its continued and comprehensive mismanagement of policies that apply to this sector and its high-taxing, high-spending regime that is hitting all sectors of the economy.

I move:

  That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) objects to the Government's repeated attacks on the resources sector, in particular its decision to impose a $2.5 billion tax on condensate on the North West Shelf in 2008, a decision which has made it necessary for this legislation attempting to clarify confusion created about taxable areas;

(2) notes the Government's comprehensive failure to provide leadership for the energy and resources sector, most grievously by its failure to deliver an Energy White Paper;

(3) expresses concern about the Government's decisions to put more pressure on all sectors of the economy by inflicting taxes such as the condensate tax, carbon tax and minerals resource rent tax;

(4) calls on the Government to scrap its destructive high taxing regime which is inflicting damage on the energy and resources sector, which is one of the most profitable sectors of the Australian economy."

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