Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Hansard source

At the outset I would like to take up a couple of points that Labor members have made. First, the member for McMahon stated quite categorically that the MRRT is in no way linked to the schoolkids bonus when in fact former Prime Minister Julia Gillard on 13 May 2012 said:

… the Schoolkids Bonus before 30 June this year and then it can become an (inaudible) part of how they meet the costs of getting the kids to school.

It's part of what we did in the Federal budget to make sure we're spreading the benefits of the boom, spreading opportunity to every part of the country.

Former Minister for Finance Penny Wong on 6 June 2012 said:

I think it’s about making sure we use the benefits of the boom wisely. And I think the Government’s approach with the mining tax and making sure the benefits of that flow through to families, particularly low and middle income families through the School Kids Bonus, where people get assistance for kids’ education costs.

We also heard a couple of doorstop interviews where former Treasurer Wayne Swan informally linked the schoolkids bonus to the MRRT, to the mining boom. Certainly the member for McMahon, who belongs to a party that is a wholly owned subsidiary to the Greens should know that.

I take up a point that the member for Grayndler said when he was arguing you cannot argue job losses and low revenue at the same time. You can argue both because it is called sovereign risk. The damage done by the MRRT to Australia's international investment reputation from the former government's decision to implement a mining tax on an industry completely and unexpectedly scared off visitors—investors, sorry. Well, it did scare off visitors: visitors who were coming here to invest in our mining industries. The coalition supports states' rights to raise royalties.

This bill repeals the minerals resource rent tax and discontinues or rephases measures that the former government introduced following the announcement of the mining tax. Funding for these measures was tied to forecast mining tax revenues which were never realised, forcing the government to borrow billions upon billions of dollars to pay for them.

The failure of the mining tax to generate any meaningful revenue whatsoever, together with the additional expense of the measures associated with its introduction—all those expenditure items that the government promised—poses a significant risk to the budget, not just now but going long into the future. They would pose a risk 'as far as the eye could see,' as the Prime Minister would, quite correctly, say.

The cost of the mining tax and its associated measures will significantly exceed the revenue raised by the mining tax over the forward estimates and way beyond. While the mining tax was originally estimated to raise $26.5 billion by 2016-17, to date it has raised only $340 million in net terms. This is less than $20 per Australian compared to the more than $700 per Australian in linked expenditure over the next three years. The repeal of the mining tax package will contribute more than $12.6 billion to the budget's bottom line, on an underlying cash basis, by 30 June 2017. The repeal of the mining tax represents a significant step towards repairing some—just some, but a significant sum—of the fiscal damage inflicted by the former government on our nation's finances. All Australians know how dreadful that was.

Schedule 1 of the bill repeals the Minerals Resource Rent Tax with effect from 1 July 2014. Repealing the mining tax is an election commitment. The coalition has consistently opposed this tax because it undermines confidence in Australia as an investment destination and as a secure supplier of resources. Mining companies in Australia will continue to pay their fair share of tax through state royalties and company tax, but they will no longer be subject to the unreasonable and unnecessary regulatory and compliance burden that the MRRT imposes on the Australian mining industry.

See this speech in context