Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Disclosure of MRRT Information) Bill 2013. We are, again, spending time in parliament on another opposition stunt. There is a great new acronym floating around at the moment. It has actually been around for awhile: PEFO—that is, Pre-election Economic and Fiscal Outlook, originally created by Peter Costello to stop incoming governments from using a lack of information about the budget to delay announcing their election commitments. It was a good idea at the time. Unfortunately, it is a good idea gone wrong. We are, increasingly, seeing oppositions use it as an excuse not to release their election costings and that is what we have today. A shadow Treasurer is throwing around as much dust as he can, making accusations about people who work in Treasury and their inability to forecast in order to disguise the fact that they have not released any costings. They are not coming clean with the Australian people on what they intend to do and the cuts they intend to make once they come to government. We have seen this with virtually every incoming Liberal state government in the last year and we can already see the Leader of the Opposition manoeuvring his arguments to engage in savage cuts if he is lucky enough to win the election in September.

I want to start by looking at the arguments to see if there are any grounds to them at all. In order to do that, I am going to go back to a document that was produced by the Minerals Council of Australia in June 2012. It deals with the volatility of resource rent taxes. It deals specifically with the petroleum resource rent tax and compares it to the incoming minerals resource rent tax, and includes some interesting information. When one reads it, one would wonder why the Treasurer believes that the difficulty in forecasting resource rent taxes is so serious that we need to actually change the tax law in such a fundamental way, on the basis that the public interest and transparency around the operation of this particular tax is so important that it overrides the interest of maintaining the confidentiality of taxpayers. It is an extraordinary change to tax laws. One wonders why, if he thinks it is such a big issue, it was not a big issue for the 12 years of the Howard government because according to this report—and the figures are quite clear—the accuracy of forecasts for the petroleum rent resource tax was as much as 40 per cent to 100 per cent out in virtually every budget.

The Australian government had indicated that it expected revenue from the new minerals resource rent tax to be volatile. The government indicated that from the beginning, and the Minerals Council prepared this report in response to the expectation that it would be volatile. They had a look at how volatile it would be and to what extent forecasts could be relied on.

The reason why they are volatile is simple: resource rent tax changes according to global prices, what is happening in other countries of the world, who is growing and who is shrinking—a whole range of things. It also has quite a lag, because capital investment is brought to account. It is extremely volatile and, when you look at the graphs for nominal petroleum resource rent tax revenue between 1989 and 2010-11, it looks a bit like a sawtooth. It goes up and down on a regular basis quite extraordinarily—sometimes going from $500 million to $2½ billion in just one year. It is incredibly volatile compared to the graph of aggregate tax revenue, which tends to be a fairly stable line.

The errors for the resource rent taxes are sometimes three times the magnitude of the errors in the standard tax and, when you look at the actual errors, you find that there were times in the Howard-Costello years when the forecasts were 100 per cent out and many times 40 per cent out. Over the last five years of the Howard government they averaged 27 per cent, but were more than 40 per cent on three occasions. If the opposition believes that the accuracy of the forecasts—which incidentally have been inaccurate now for a long time—is so serious now, one wonders why it wasn't serious when they were in government. (Time expired)

Debate adjourned.

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