Ewen Jones (Herbert, Liberal Party) Share this | Hansard source

I do appreciate following the member for Grayndler. I do not think that anyone could doubt his passion for infrastructure in this country. The way you are speaking about those figures there is interesting—hundreds of millions of dollars, and tens of millions of dollars, again and again, adding up to billions, to be funded by a tax that has raised $400 million! The federal Labor government was not funding these things; they were being funded by further debt.

I rise to address this bill, the Mineral Resources Rent Tax Repeal and Other Measures Bill 2012, and I would like to start by saying thank you to the Australian Labor Party. In no small measure this bill that they introduced and brought to federal parliament was responsible for bringing me to this House.

I was selling real estate in Townsville. It was a Sunday morning. Everyone knew that the government was thinking about this tax but they had made statements that they would never do anything without consulting the industry. I was getting ready for my morning inspections—Sunday is a big day in the local real estate agency—and the phone was ringing hot. At about 11 o'clock we crossed live to a press conference with then Prime Minister Rudd and then Treasurer, the member for Lilley, Wayne Swan, and they announced the mining super profits tax.

My phone stopped ringing. The phones of everyone who was selling anything in Townsville and regional areas which had significant exposure to the mining industry stopped ringing. In a lot of cases, they have not started ringing again. The Treasurer and the then Prime Minister stood up there and announced the mining superprofits tax and said that they would do that, while everyone in Townsville was aghast.

I was a long way behind in the polls at that stage. Prime Minister Rudd had been riding so high in the polls, and we wondered how he could possibly be beaten. A lot of people were asked to run for the seat of Herbert and they all turned their noses up at it, saying that it could not be done. The Labor candidate for the seat was a high-profile person who had the personal backing of the then Prime Minister. So I put my hand up and I ran.

They introduced the mining superprofits tax. They had already walked away from the greatest moral challenge of our lives, the carbon tax, but I will have more to say about that in a little while. They had already walked away from that one. They brought in the mining superprofits tax. Soon after that, that Prime Minister was gone, dumped, executed, taken out the back and given a real flogging—replaced by another Prime Minister who said she was going to fix the mining tax.

The poor old member for Batman—remember the guy on that side?—Martin Ferguson, who truly represented the interests of the industry, had to stand up there and go to those meetings. He was kicked out. All the Treasury advisers were kicked out. The member for Grayndler said that there were mining companies that were prepared to pay this tax. I do not know whether that is entirely correct. What they were prepared to do was sign up to the tax that they designed. That is what they were prepared to do.

The bosses of BHP, Rio Tinto and Xstrata all got into a room, and they were faced with the omnipresence, the fearsome presence, of the Australian Treasurer. All the Treasury people had been kicked out, so this was a high-powered, high-level thing. And they brought in the mining resources rent tax. It would kick in at certain levels. You would be able to write off against it. You would be able to write off against infrastructure you had already done. You would be able to depreciate further. You would also be able to claim 100 per cent of your state royalties, but, if you did not qualify for the mining resources rent tax, you could bank them up until you were exposed to it, and then you would pay it off after that. The whole thing was that these people were prepared to sign up to this tax because they were never going to pay it. They were never going to pay it. Of course they were going to sign up to it!

The Treasurer came in. He walked in and sat down there, and he said: 'What do I have to do? You guys are putting ads on TV. We can't cope with that because we have our press conferences every 35 minutes, and they're just asking us questions about how this is going to make money and what is going to happen here.' So they folded like a bad hand: 'Anything! Whatever it takes!' They did this.

On 21 August, I was elected the member for Herbert, so in no small way were the actions of that government responsible for inflicting me on this House. I think there are a few people in this place now who would take the Labor Party to task over that.

What I would like to say about this tax and about the mining industry in general is that they do pay tax. They pay company tax. They pay payroll tax. They pay stamp duty. They pay car registrations and vehicle registrations. They pay petrol tax. They pay all those taxes. They are massive payers of tax. And yet the then government were prepared to sit there and smash them over the head, without warning, to bring this in. That was my first problem.

The second problem is that everywhere in the world has iron ore and coal—everywhere. It is about whether you can get it out and the cost for you to get it out. The previous CEO of BHP, Marius Kloppers, said that we used to be a low-cost, high-productivity country to deal with in mining. After Labor came to power, that was exactly reversed. We became a high-cost, low-productivity country in which to deal.

The other thing is that we are very close to our markets. The thing that Australia has always had in its history, as well as low cost and high productivity, is that we are close to our markets. We are close to China. But, with the advent of large ships that can take 400,000 tonnes, the cost of shipment from places in Africa and South America became very much negated.

Capital is a worldwide phenomenon. Capital is very flexible. Capital is very mobile. If you make it hard enough for people to do business in your country, they will take it elsewhere. I was astounded when I was speaking to the then shadow minister for foreign affairs, Julie Bishop, in relation to a conference she went to in Africa. She talked to mining executives who said they would rather deal with the country of Congo because at least what they said before the deal was done was what they stood by after the deal was signed. They could not say that about Australia. I find it the most deplorable situation that we could do that to our customers, because, at the end of the day, it is business. At the end of the day, we are in the business of running a country. We are in the business of sending out the message to our customers that what you say when you shake a man's hand on a deal, when you sign a contract, is what you stand for. And those things did not stand for anything.

There are of course implications of our removing this tax, and some of them are very, very uncomfortable, but we were also very, very clear with the people of Australia in the lead-up to the 7 September election as to what was going to happen. The then shadow Treasurer, now Treasurer, JB Hockey, has been very, very clear about this and the implications of a tax that has raised $400 million but where spending of over $16 billion has been locked in over the forward estimates. It is just not sustainable.

There are lots of people in my electorate who really like the schoolkids bonus. That they do not have to spend it on schoolkids and do not have to spend it on educational facilities or educational tools is immaterial. The former government changed it. What the coalition did was that you could claim school expenses on your tax with receipts that were paid, so you could make sure that it was. The schoolkids bonus was a bribe to the Australian people. It was almost a payoff for the carbon tax. But you cannot pay $16.7 billion worth of outgoings with $400 million worth of income. It is that simple.

There are some serious implications of this. We will have to withdraw the schoolkids bonus. We are very up-front about that. We are borrowing money to pay for it; that is the problem. I was talking to a parent in Townsville this morning. She asked me if we were going to get rid of the schoolkids bonus. I said, 'Yes, we will.' She said she was very disappointed. I said, 'Well, at the end of the day, you won't be paying for it, because, if we keep it going, your kids will be paying for it, because that's who has to pay it back.' We cannot continue to keep on borrowing and making our kids pay for what we want now. We cannot turn our kids into the purveyors of our lifestyles.

The low-income superannuation contribution has to go. But I can tell you, in relation to the low-income superannuation contribution, that over five years repealing the measure—the refunds of up to $500—will save the budget $2.7 billion over the forward estimates. But over the last five years Labor has increased taxes on superannuation by almost $9 billion and cut superannuation benefits to lower income earners by more than $3.3 billion. So, please, only the impotent are truly pure.

I would also like to talk about the repeal of the Regional Infrastructure Fund and the Regional Development Australia Fund. The coalition went to the election with a series of promises. We will honour our promises and keep our commitments, unlike the Labor government that had phantom funding. Some of the things they handed out on the RDA were absolutely garrulous and scandalous. The coalition's $1 billion National Stronger Regions Fund is fully funded and accounted for as part of the budget. The funding is guaranteed.

We stand by our regions. You can tell by the number of Liberal and National Party people who were elected by the regions in Queensland that we own the regions because we stand for the regions, we mean business in the regions and we represent the regions. We do not make glib statements. We do not put in bits and pieces. We will do these things.

I want to say that putting in a $5 million road is not the development of northern Australia. The development of northern Australia is a serious project and it should be given the due deference that it needs. I stand by this commitment to repeal the minerals resource rent tax. It is important that we do go through with this. Labor should respect the mandate we have been given in relation to the minerals resource rent tax and the carbon tax. When Labor won the 2007 election on the basis that they would repeal Work Choices we stood aside and let that go through as a matter of course because that was the right thing to do. Labor should stand aside and let Australia get on with business and send the message that we are open for business and that we will do the right thing. I thank the House.

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