Stephen Jones (Throsby, Australian Labor Party) Share this | Hansard source

On 22 August this year a company well known to yourself, Madam Deputy Speaker Bird—BlueScope—announced to the stock exchange and to the Australian public that it intended to restructure its operations at Port Kembla and elsewhere at Western Port, the net result of which would be a loss of upwards of 1,000 jobs and the exiting of the company from the export steel market.

In advising the stock exchange and the Australian public of this decision that company cited the enormous increase that it was facing in input costs, particularly from coal and iron ore, and the great difficulty it was having in competing with imported steel due to the rapid increase in the value of the Australian dollar. It was an announcement that followed about three days after its former parent, BHP, now BHP Billiton, announced to the Australian public and to the stock exchange that it was about to post a record profit of around $24 billion.

In that one week in August the debate around this issue—the debate around the mineral resources rent tax—was crystallised in the minds of people in our electorates in the Illawarra, Madam Deputy Speaker, and also, I think, of the broader Australian public. What you saw in this one announcement was the fact that we have a booming resources sector—a resources sector that is making a lot of money for the companies that are operating in the resources sector. Some of that money is flowing through to others within the community, particularly those who are working in or around the mining industry, but that money and success are not flowing evenly to the rest of the economy. In fact in some sectors, and particularly the manufacturing sector, the success of the mining industry and the enormous prices that it is able to command for the raw materials of coal and iron ore is having an enormous impact on the ability of manufacturers to compete domestically and in their international markets.

The legislation that we have before the House will not address all of those issues, but does go to the very heart of the issue that we here in the 43rd parliament have an obligation to ensure that we can spread the benefits of this wondrous gift that we have—our natural resources—and that we can spread the benefits of the mining boom both here today and well into the future so that we ensure that when the great bounty is no longer attracting the prices that it currently attracts, and when those mineral resources are depleted, there is something left for the rest of Australia and for future generations to enjoy.

It is for these reasons that I am very pleased to be speaking in the House today on this important package of legislation. It will enable the government, on behalf of the Australian people, to obtain a fairer return on our non-renewable resources and to support growth across the entire economy.

This is a good measure. It is good for our economy and it is good for all Australians. It makes good economic sense because as a resource-rich country we have for many years now been talking about the mining boom, the wealth it is generating and how Australia can manage that to maximise the benefits of that extraordinary wealth. But I would have to say that all tiers of government have not done as well as they could have in ensuring that we manage that boom responsibly and into the future.

Our good fortune from our resource riches has been a feature of Australia's social and economic life since we began to develop as a nation. Indeed, many economic historians argue that we largely owe our development as a nation to the very first mining boom that we experienced in the 1850s—the gold rush that started in Victoria in 1851.

That first great mining boom saw the populations of Melbourne, Ballarat and Bendigo swell rapidly as working men from around the country, and then later from around the world, threw in their existing jobs to go and try their luck in the goldfields. Indeed, one of my forebears travelled around the world from Denmark—from Schleswig-Holstein—to try his luck in the goldfields during that period. Before the 1851 gold rush, wages were low and employment was hard to find in areas outside of agriculture. But within a matter of months after the discovery of gold in the Victorian town of Clunes wages had already risen by one-third. During the various periods of the development of the gold and mining industry in Australia, the discovery and exploitation of gold was largely in the hands of individual prospectors. It was not until the enormous scale of the resource discovery had been ascertained that it started to become industrialised.

The former New South Wales statistician who wrote a seminal work in Australian Labor history, Timothy A Coghlan, in his four volumes of Labour and Industry in Australia, talked about the effects of the gold rush on the industrial relations and the economic history of Australia. He talked about how once the swift and easy gains of the early period of gold discovery were over gold mining became an industry and much of the glamour went out of gold prospecting. He also talked about how the gold rush became more streamlined and how working people were concerned to ensure that their new higher standards of living were maintained.

I quote directly from his second volume of this seminal history, where he says:

From 1851 to 1862 Australian society had undergone violent changes. The diffusion of wealth, the rapid changes of fortune, had overthrown all the old ideas of class stability; the inrush of population had entirely obliterated bond labour as an economic factor in the country, and the change in the constitution and the wide extension of the franchise had prepared the stage for the entrance of democracy. It is the gradual and somewhat timid appearance of democracy which is chronicled in the period now under review.

The swift and easy gains of the gold period had gone. After 1861 the El Dorado dreams of that era gradually faded from men's minds, and, although large discoveries of gold were made in the 'sixties and afterwards, the impulse towards gold-seeking never again became the dominating passion among any large part of the community.

You can well imagine that those gold seekers of the early 1850s thought that this was a boom that would never end. They thought that the rivers of gold, the great luck that they were then enjoying, would continue to flow, if not for decades then perhaps for the century to come. Of course, that was not to happen.

I argue that there are great parallels between the gold rush enjoyed in Victoria in the 1850s and the resources boom that we are now encountering here in Australia in 2011. It is important that we in this generation ensure that we learn from the mistakes and do not repeat them, and that we learn from the good things that occurred during the development of the gold rush and the gold industry in Australia in the 1850s. We need to do this because we all know that we can only dig these resources up once. There needs to be a lasting benefit from what this generation is currently doing.

That is why this government is so focused on delivering on its commitment to spread the benefits of the mining boom to all Australians. That is why Labor believes in the mining tax—to ensure that all Australians can benefit from the mining boom and not just the very profitable mining companies. The mining tax will mean that the Gillard government can use the revenue gained from the tax on extranormal profits to boost superannuation savings for our lowest paid workers.

Our overall superannuation reforms will mean that a 30-year-old worker on average earnings will retire with an extra $100,000 of savings. They also mean that we will be able to give a big tax cut to 2.7 million small businesses, many of them struggling in our patchwork economy. They mean that we can give a business tax cut to all Australian businesses, including those that are not in the mining boom fast lane of our economy. Perhaps even more importantly than each of these initiatives, the revenue gained from the MRRT will enable us to invest in infrastructure in our great mining communities and elsewhere, in electorates such as yours and mine, Madam Deputy Speaker, to ensure some of those long-hoped-for and much-needed large-scale infrastructure projects can move from the dream to the plan and to the reality.

There have been many claims, including the claims now made by the member for Paterson in this debate, that somehow this tax is going to lead to the death of the mining industry. It is not a claim that is given any credibility inside the industry itself and coming from mining districts such as yours and mine, Madam Deputy Speaker Bird, where recently we attended the expansion of a mine in your electorate and witnessed and have heard stories about the expansion of a mine by the same company in my electorate. These are mines that were mothballed a few years ago and are now being brought into new, renewed and energised production, including the installation of new longwalls because the proprietors of those mines know that there is a strong and robust demand for the excellent, high-quality coking coal that resides in the foothills of the Illawarra. That is a demand that will exist and persist despite this tax and will persist for many years to come.

Indeed, since the government announced its mining tax reforms, mining investments have skyrocketed from $35 billion last year to $47 billion this year and are expected to grow again between 2011 and 2012 to $82 billion. These figures are not disputed by the industry. I took the opportunity during the recent inquiry into this legislation by the Economics Committee of this House to put these questions to representatives of the mining industry, and they confirmed the fact that, far from there being a flight of capital, there is a rich, strong and exciting pipeline of investment into the resources sector that will not be persuaded because the Australian government, on behalf of the Australian people, has decided to put in place legislation which will give the Australian people a greater share in the wonderful returns from these resources that are owned by all Australians.

This is good legislation. It is Labor legislation. It is the sort of legislation that you would expect Labor governments to introduce. Many on the other side of the House might deride a Labor member for standing in this House and making that statement, but it is actually one that I am proud of. I am a proud member of the Australian Labor Party, which is able to bring legislation into this House which helps redistribute the wealth that is generated from these resources that are owned by all Australians and put that money to better use. And what better use could there be for that money than to build a new Australia through fantastic infrastructure projects, to ensure that Australians have a decent retirement income by assisting them with their superannuation and to provide tax cuts to literally hundreds of thousands of businesses throughout Australia? It is great legislation. I commend it to the House.

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