Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Minerals Resource Rent Tax and Other Measures Bill 2013. One of my favourite movies I have enjoyed over the years is National Lampoon's Christmas Vacation. The plot in that movie features the dysfunctional Clark W Griswold. Clark Griswold, in that famous movie, thinks that he is going to get this great big bonus for Christmas. So he goes out and promises his family all the wonderful things he is going to get with the bonus. We see in the movie the complete disarray and the complete dysfunction that the household falls into because they have been promised things, but the income never arrived. This is exactly the same situation we have here with this government, which made all these wonderful promises to the electorate about all these wonderful things they were going to do based on a tax that did not raise the revenue to pay for it.

The former government locked in expenditure and made promises to the electorate about wonderful things they were going to do and about the great benefits they were going to throw upon the electorate because of this tax. They locked in $16.17 billion of expenditure on an underlying cash basis over the forward estimates. Or if you look at all the fiscal basis, $18.4 billion worth of expenditure and promises has been locked in yet so far this tax has only raised $400 million—just a fraction. The government must understand. They ran the four biggest budget deficits in our nation's history. No government can carry on, as they did, running up debt, making promises and having no way to pay for it.

We heard the member for McMahon in his contribution try to pretend that the expenditures and the promises were not linked to the mining tax. I would like to draw your attention to comments by Senator Wong in an interview on ABC Drive in June 2012 where the former government linked the payment of the school kids bonus to the proceeds of the mining tax. Senator Wong said:

I think it's about making sure we use the benefits of the boom wisely.

The government's approach with the mining tax was about making sure the benefits flowed through to families, particularly low- and middle-income families through the school kids bonus, where people got assistance for kids' education. All governments would like to give more money to families but can only do it with the revenue raised in taxes. That is why, unfortunately, this repeal is necessary. The mining tax does not raise the revenue that these promises are based upon.

The member for McMahon, in his speech, would have anyone out there listening believe that our mining companies do not pay any tax and somehow or other these minerals in the ground, that rightly belong to all Australians, are somehow being taken away by these mining companies and they are not paying any tax. I would like to just go through the contribution that the mining industry makes to this country and the amount of tax that it is currently paying.

The place to start is employment—the number of jobs the mining industry contributes. Direct employment in the minerals industry at August this year was 249,000 people. That is up 40 per cent from just three years ago. Of those 249,000 workers in the industry, 95 per cent are full-time employees. And look at the wages that are paid. The average full-time salary in the mining industry is $2,477 a week, which is $128,000 a year. That is the contribution the mining industry makes. If you add those figures up, in one year that is $30 billion in wages that the mining industry pays to Australians. That is approximately $10 billion in personal income tax that the mining companies generate through the wages that they pay.

Then we go to community infrastructure contributed by the mining industry. In the year 2011-12 alone, the mining industry spent $35 billion on community infrastructure, Indigenous contractors and local suppliers. This is what is at risk from his government's tax. Then there is research and development. We know that the mining industry is the largest contributor to research and development in Australia. In 2011-12 there was $4.1 billion at risk because of the opposition's refusal to allow the repeal of this tax. It is not only the amount of tax that is paid that is important; how that tax was increased from the years of the Howard government to the years of the previous Labor government is also important. In the last year of the Howard government, $4 billion in royalties was paid. That is $4 billion into state coffers. In the last year of the Labor government it had doubled to $8 billion. That side over there, who pretend that they were getting nothing from the mining tax, were getting $8 billion in royalties. And that was only a small spit in the bucket compared with what they were getting in company profits. Again, in the last year of the Howard government, mining company profits—the tax paid on profits—were $6 billion. In the last year of the Labor government, that had doubled to $12 billion.

Ms Macklin interjecting—

We hear the member for Jagajaga interjecting. This is what you do not understand: you are putting at risk that revenue that is flowing into the Treasury by trying to burden these companies with yet more taxes. That is the entire problem. That is the danger and the concern that we have, and that is the concern the mining industry have. You are not satisfied with those billions of dollars in tax, and you are putting it all at risk. What you do not understand is that we compete throughout the world to attract investment in mining. We are not the only country in the world that has coal. In fact, our coal resources are a mere seven per cent of the world's total. Ninety-three per cent of the world's known coal reserves are outside of Australia. Countries such as China, the USA, Pakistan, Russia and India all have greater coal reserves than Australia does. There are also large reserves of coal in South Africa, the UK, Kazakhstan, Brazil and Indonesia. We as a nation need to compete with those countries for that limited mining investment.

It is the same with iron ore. We do not have a monopoly on iron ore. Many other countries have large deposits of iron ore. We are competing against China, Brazil, India, Russia, Ukraine, the USA and Canada for mining investment. If we burden mining in Australia with additional taxes above the ample taxes they are already paying, we risk that very investment. We risk the jobs and we risk not more tax going into government coffers but less tax.

The other concern about this completely misguided tax is the red-tape burden that it places on the Australian mining industry. There are around 145 companies that need to go through all the compliance regulations, all the compliance burdens of this mining tax, and do you know how much tax they pay? They pay zero tax. Millions of dollars are being spent on accountants, bureaucrats and people pushing pens without creating one solitary set of wealth for this nation—in order to comply with the red-tape burden of this misguided tax.

The coalition government would like to give as much as we can to our people. But we cannot continue to run the debt up recklessly as the previous Labor government have done. Already the wasteful and reckless expenditure of the previous Labor government has resulted in an interest bill of $10 billion a year that we must now pay. That is an additional $10 billion that we must raise from the taxpayer and that cannot be used for our roads, our schools, our hospitals, our kids with disabilities, our public transport and all the other things we need to do

That $10 billion just pays the interest bill. Worst of all, about 75 per cent of that money we actually have to shift overseas. Because of the debt this government has run up we have to do that year after year after year forever until we start paying back the close to $300 billion that these people have had to borrow to fund their reckless, wasteful expenditure. How can members of the government look at the young people of this country, our future generations, and explain to them the debt burden that they are leaving them to pay? If we put that debt on a weekly basis, it is $200 million every single week that this government now has to raise from the taxpayer and not use on all those services that we need to do. Instead, we have to pay the interest.

We have to stop this. We have to turn the ship around, and that is why not only must we repeal this badly conceived, flawed mining tax, which is actually creating a burden and putting at risk the revenue that we are currently getting from the mining sector, the jobs we are currently getting through the mining sector, the community infrastructure that the mining sector is currently providing, not only putting all that at risk by this poorly conceived tax. That is why this tax has to be repealed, and unfortunately that is why all the spending that goes with it also has to be repealed. We need to start to pay down government debt. We need to start to turn the ship around. Otherwise we are going to burden our children and our future generations of Australians with greater and greater debt burdens than the legacy of this Labor government has already left. I commend the bill to the House.

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