Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

We will oppose this legislation in the House and we will oppose it in the other place. We will oppose it on several grounds. We will oppose it because we do not believe the minerals resource rent tax should be repealed and we will oppose it because we believe the other measures included in this bill certainly should not be repealed.

This bill is called the Minerals Resource Rent Tax Repeal and Other Measures Bill. It could just as easily be called the 'schools kids bonus repeal bill'. It could be called the 'low-income superannuation contribution repeal bill'. It could be called the 'small business tax increase bill'. It could be the 'abolition of accelerated depreciation for cars bill'. It could be called any number of things. Of course, the government has chosen to call it the minerals resource rent tax repeal bill. I will deal with each of these items in term.

The minerals resource rent tax is, of course, the centrepiece of the bill. On this side of the House we believe that a profits based tax on profits from the minerals sector—minerals which belong to the Australian people—is a good reform. That is not to say that it does not have its challenges in implementation, it does not have its challenges in design. But to say, as those opposite do, that it should be abolished is something we do not agree with at all. Those opposite say, they said, it was a dagger at the heart of the prosperity of Australia. They said that it would raise so much money that it would cripple the minerals sector in Australia. Now they say it should be abolished because it hasn't raised enough. They cannot have it both ways.

Of course, reform is always difficult. Those opposite said that it would make projects unviable. I challenge any government speaker tonight in this debate—or in the vast hour or so that they have deigned to allow for debate!—to outline which projects have not proceeded because the minerals resource rent tax is in place. Name a mining project, name a venture which has not proceeded. I would be very interested to hear from honourable members opposite.

I saw the honourable member for Moncrieff a few weeks ago on telly—on The Nation on Sky—and he said, of course, that the minerals resource rent tax 'has stopped projects proceeding'. I saw David Speers, the host, say, 'Could you name one,' and there was this long, awkward pause we occasionally see on television and then the member for Moncrieff indicated that he did not have one at hand—but he was sure that there was one somewhere.

Reform is never easy. Difficult reforms are always worth fighting for. We have to draw on history. The minerals resource rent tax is not the first time a government has attempted to implement a profits based tax on resources. We saw a previous government, the Hawke Labor government, introduce the petroleum resource rent tax for exploration which occurs off our coast for exploitation of what is also Australia's natural resources by offshore petroleum enterprises. I am going to spend a little bit of time on this because it is instructive.

In this House the Hawke Labor government had to fight very hard to see the petroleum resource rent tax introduced. The Hawke Labor government said that this resource, which belongs to all Australians, should provide a revenue stream for all Australians. I went back and had a look at that debate, because it is very, very instructive. Somebody who then held the office that I now hold, shadow Treasurer, said this:

Nothing could better illustrate the counterproductive nature of the Hawke government's energy policies. The Hawke government's RRT will effectively destroy the incentive for offshore exploration.

That was the then the shadow Treasurer, John Howard, who argued that this resource rent tax would stop ventures proceeding and should not be proceeded with. Then we had the then member for Mayo—that economic genius Alexander Downer!—who said:

The legislation is yet another example of this government introducing new taxes on the few productive industries we have left in Australia, thereby inhibiting their development.

'… the few productive industries we have left in Australia …'. Now there is an optimistic view for you from the future Foreign Minister! If you look through the Hansard of that debate—it was a long and bitter debate—I could have not told you, Deputy Speaker Broadbent, it was from the PRRT debate and you would have thought it was from the MRRT debate. They are the sorts of things that those opposite said at the time about the PRRT that they have said since about the MRRT. Mr Everingham, who I have a vague recollection of and who sat opposite, said this:

This government's determination to find every means to extract dollars from the industry to prop up its disastrous record of economic management threatens the very livelihood of the oil exploration industry.

You see, members opposite at the time said that the PRRT would be such a disincentive for growth that it would destroy the petroleum industry in Australia and they fought it, resisted it, with all the energy a could muster. There was one little problem for those members opposite. It passed both houses at a time. It went on, of course, not to provide a disincentive for investment and has raised for the Australian people in the time since then, in 2013 dollars, $39 billion. Of course we had the Howard government come and go and I do not recall an attempt to repeal the petroleum resource rent tax. We now see the Abbott government in office and I have not seen a bill come before the House to abolish the petroleum resource rent tax—because, of course, history tells us that the petroleum resource rent tax did not have the adverse consequences that Tories at the time said it would. It did not have the chilling effect on investment that they said it would. But it did do this: it has raised for the Australian people $39 billion in 2013 dollars since it was introduced. It was a good reform—a reform that the Hawke government had to fight for, a reform of the Hawke government had to argue for, a reform that was done in good time so that subsequent conservative government could not repeal it. Unfortunately, we see this conservative government repealing the MRRT.

But they are also not just repealing the MRRT in this piece of legislation. They are repealing a whole range of other measures, which I will deal with sequentially. Firstly, we see this government attempting to repeal in this legislation the low income superannuation contribution. More than any other measure, the repeal of the low income superannuation contribution tells us about the priorities of this government. It tells us even more than their priorities. It tells us about their values. It tells us about the values of this government.

As you know, Mr Deputy Speaker Broadbent, most Australians get a tax concession for saving for the future—saving through superannuation—as they should. Most Australians receive it, but not all. High-income earners receive a tax concession for saving for the future, and they should, but in the previous government we thought that it was fundamentally unfair that low- and middle-income earners receive zero tax concession for saving for the future. One in three Australian workers receives not one bit of assistance to save for their future through the superannuation system, and we thought that that was unfair—and we think it is unfair now.

But we did not just think it was unfair; we did something about it. So the low income superannuation contribution effectively means that people earning under $37,000 now get a tax concession for saving through superannuation. They actually get some benefit out of the tax system for putting money aside for the future. I would again invite honourable members opposite who are going to speak in this debate to explain to the House and to the Australian people why they think it is fair that somebody who might be a cleaner or a manufacturing worker or a shop assistant gets no assistance at all to save for their retirement through the superannuation system and the tax system.

It is even worse than that because this government is taking the low income superannuation contribution away retrospectively. Australians who saved money through the superannuation system, put money aside, and got a tax concession are having it taken away by this government. Can you imagine the furore if this government attempted such a measure for high-income earners? If any government attempted a retrospective tax on the superannuation of high-income earners there would be a justified outrage but because low-income earners and middle-income earners have less of a voice in the national debate this government thinks they can get away with it. Well, we are their voice and we will oppose this measure to repeal the low income superannuation contribution.

Low- and middle-income earners have a right to be outraged that the tax concession on their superannuation savings is being ripped away by this government. I said that this tells us about the values of the government, and it does, because not in this step, but in other measures, this government is reversing other tax changes of the previous government. They are providing a tax break for people who have more than $2 million in their superannuation accounts. Good luck to people who have more than $2 million in their superannuation accounts. Good luck! There are people in this House with more than $2 million in their superannuation accounts—good luck to them. They should receive a tax break but not the extraordinarily generous tax breaks that this government intends to give them at the same time as taking away tax breaks from people throughout Australia who are working away quietly in their shops and factories trying to save a bit for the future.

I oppose class warfare in all its forms and this is class warfare from this government, giving a tax break to people with more than $2 million in their superannuation accounts and taking it away from Australians who earn less than $37,000. I do not suggest that they raise the same amount of money because they do not. I do not suggest that if you did not do one you would not have to do the other because that does not equate. But it equates when it comes to values and priorities. It equates when it comes to what is important in this House, and it is important in this House that low- and middle-income earners receive some support for saving for the future.

This tax grab by this government on low- and middle-income earners has a particularly adverse effect on females in the workforce. It is not just because females, even still in 2013, receive a lower average pay than males. It is because females in the workforce have a more interrupted working life and more things that take them out of the workforce, most particularly having children. Even with paid parental leave, many mothers stay out of the workforce for longer than 12 months and therefore they have an extremely interrupted working life. That means they do not have a period in the workforce to build for their retirement. So the low income superannuation contribution is a chance to give them a bit of a leg-up, as they say, for their retirement so that when they hit retirement age they have something to fall back on. What is unfair about that?

I invite, again, honourable members opposite to explain to us why they think that somebody with under $37,000 of income deserves zero support through the tax system to save for their retirement. Zero support—the government are not just reducing the support through the tax system, they are not just taking a bit away, they are abolishing the only tax concession that goes to low- and middle-income workers earning under $37,000. It is not in the national interest when you combine the abolition of the low income superannuation contribution with another measure in this bill, which is to delay the increase in superannuation from nine per cent to 12 per cent. That will reduce our national savings by $53 billion by 2021-22.

We all know that this Prime Minister does not really understand superannuation and does not really support it. He stood in this House, somewhere over here in the opposition, after the increase in superannuation was introduced—he did it in the adjournment debate, as I recall—and called Australia's superannuation system the biggest con job in Australian history. He does not support superannuation. The Prime Minister does not understand that superannuation is the way to remove people from welfare, through their retirement, and give them a chance to save for their future. The Prime Minister fundamentally does not understand that. He said here in this House that he does not really support moving from nine to 12. I hope that this delay does not become a cancellation. When the government says: 'It's all too much harder than we thought. We're going to have to cancel this increase from nine per cent to 12 per cent.' They have done it before. They promised the Australian people in 1996 that they would move the superannuation guarantee from nine per cent to 12 per cent and they reneged on that promise.

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