Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

The purpose of the Uranium Royalty (Northern Territory) Bill 2008 is to establish a uniform royalty regime of 18 per cent for uranium projects in the Northern Territory, thereby delivering some costing certainty to commercial operators who are planning uranium mines in the north of Australia and ensuring that the proposed 18 per cent royalty is consistent with other mineral developments in the Northern Territory. The bill will provide for the Northern Territory government to collect the royalty on behalf of the Commonwealth and will also provide for the Northern Territory judicial system to be used if prosecution or dispute resolution is required.

Before elements of the bill are looked at, it is useful to look at the royalty rates for the states. The difference in royalty rates for the states is staggering, although the way those rates are determined is complex. For most common ores, Victoria has a standard rate of 2.75 per cent of net market value, yet the Northern Territory has 18 per cent of net value as a royalty. Western Australia varies: for bauxite, 7.5 per cent of value; for cobalt, it will depend if it is a concentrate or sold in metallic form or is a by-product of nickel; for copper, five per cent if it is a concentrate and 2.5 per cent if it is in metallic form; for gold, 2.5 per cent of value; for iron ore and lump ore, 7.5 per cent of value; for fine ore, 5.625 per cent of value; for beneficiated ore, five per cent of value; and for kaolin ore, five per cent of value. And on and on the discrepancies go: cobalt is four per cent of ex-mine value in New South Wales compared to a fixed rate of 2.75 per cent in Queensland and 18 per cent in the Northern Territory.

It may be an aside, but the Northern Territory has an enormous royalty on its minerals, 18 per cent, compared with the rest of the states. Manganese, nickel, silver and zinc have a fixed rate of 2.7 per cent in Queensland—though there is also a variable rate—and 2.75 per cent in Victoria, but again the rate is 18 per cent in the Northern Territory. That is certainly a Labor government getting its pound of flesh.

The high royalty rates for minerals in the Northern Territory notwithstanding, the opposition indeed supports the bill. We understand, in current times of some economic uncertainty, that the mining and resources sector is looking for certainty in the way business is conducted. Certainty in this industry is in short supply as far as this government is concerned.

I note that in his second reading speech the Minister for Resources and Energy pointed out that uranium and uranium mining have the potential to make an important contribution to abating greenhouse gas emissions. That is a staggering statement to make considering the rest of the rhetoric the government has rolled out. I would accept the statement at face value, knowing full well that nuclear power provides a huge abatement to greenhouse gas emissions, but Labor’s policy on uranium does not hold true to that statement. In fact, I am a little unsure about what Labor’s policy is, considering the discrepancies between federal policy and that of the states. I will give some credence to the minister; he is right about the importance of uranium—about little else though, I can only surmise.

Uranium is an energy source that will be absolutely critical to the world—make no mistake. It is the only truly clean, low-emission baseload power source available. It is used extensively across the world. There are something like 430 reactors in over 40 countries. I am led to believe that over 35 reactors are now being built in 10 countries. Eighty-five per cent of power in France is nuclear, and I believe the other 15 per cent is power generated by hydro schemes, most of which is exported. I believe the death rate in the nuclear industry is 0.5 per cent of that in the coal industry. Evidence suggests that the cumulative carbon savings from nuclear power over the three decades to 2030 will exceed 25 billion tonnes globally.

One would have thought, with a government minister saying that nuclear power would make a significant contribution to abating greenhouse gas emissions, that we would have had a sensible discussion in this parliament about nuclear power. I see nothing sensible about the current mess that the government has got itself into with respect to the discussion on nuclear energy. Labor has a long and illustrious history of completely stuffing up its policy on uranium mining. We should be thankful, though, that finally in 2007 the Labor Party overturned its ban on new uranium mines after a tortuous process on the floor of its convention. So I acknowledge them coming into the 21st century.

Given that the federal ALP vice-president and South Australian Premier Mike Rann has indicated he is prepared to export more uranium to meet China’s growing demand and that the former Carpenter government’s politically motivated ban on uranium mining has been consigned to the annals of history, there is only one, moribund Labor state government standing in the way of true progress. It would not take a rocket scientist on the Labor benches to work out who it is. After one or two months of saying that they would go full term, that the next election would be in September, Premier Anna Bligh met with the Governor today and there will be a Queensland state election six months early, on 21 March. It is indeed this state, driven by ideological bias, that still will not come into realm and begin to look at mining uranium. It is estimated that Queensland’s vast reserves of uranium would increase export values just shy of $2 billion over the next 20 years. The CO2 emissions that would be saved by using this uranium rather than oil or coal power stations would be immense.

The Queensland Premier will look the Australian people in the eye and talk about how concerned she is for jobs, yet she deliberately stands in the way of the development of the uranium mining industry in Queensland. She had the hide, the effrontery, to stand in front of the Queensland people today and say, ‘We have an election on 21 March. It is going to be about jobs. I am going six months early because we need a stable government in these economically difficult times.’ Yet she stands in the way of thousands of jobs in the uranium mining industry in Queensland. If that is not some form of duplicity, I am not sure what is. May I suggest to the Queensland Premier—and I can only hope she will be Premier till 21 March—that she ditch this hardline stand that is preventing development in the industry and that she come into the real world. Mining jobs need to be safeguarded. Ridiculous policies that seek to stop mining in one state, while other states have it, are ludicrous.

What does the federal minister say on this issue of the intransigence and recalcitrance of the Queensland Premier? You could cut the silence with a knife. At a time when the mining industry is contracting and tens of thousands of jobs are being lost, one of the states richest in minerals, Queensland, is leaving jobs buried in the ground. Labor’s response to uranium and uranium mining is inconsistent. It is not helping development and it is not helping the growth of the great state of Queensland.

Whilst we acknowledge the importance of this piece of legislation—and the uranium royalty legislation is indeed supported—the Rudd government would have greater credibility if they worked with Queensland to get something done about allowing the resources of that state to be unshackled. They would also have credibility if they moved to allow us an understanding as to why uranium is not being sold to India. They have overturned a decision by the Howard government that would have allowed uranium sales to be made to India for peaceful, low-emission, baseload energy generation. By stopping the sale of uranium to India, it forces India to use a power source that emits more carbon dioxide into the atmosphere. So, rather than seeking to assist in the problem of global warming, this policy by the Rudd Labor government is making it worse. The irony would be incredibly amusing were it not for the fact that, as scientists tell us, global warming is a serious threat to the future of the planet.

I am led to understand that hypocrisy is not a word that is classed as parliamentary. But you would have to suggest that this seems duplicitous at the very best. By persisting in telling India, ‘We are sorry, but we do not trust you to sell our uranium on the same terms and conditions as it is sold by Australia to China under the conditions of the International Atomic Agency inspection project,’ trade is being jeopardised. Cleaner energy is being jeopardised. The abatement of carbon dioxide is being jeopardised. This stance will cost jobs. It will cost export earnings. It will cost investment opportunities at a time when the three biggest concerns for this country are jobs, jobs, jobs.

So whilst this bill is supported with respect to the uranium royalty program, the Labor Party across this country needs to get coherence in its policy platform. The Bligh Labor government of Queensland needs to come to the party and come into line with everyone else by allowing uranium mining and export for the benefit of the people of Queensland. This Labor government needs to permit uranium to be sold to India rather than telling the Indian government, ‘We are sorry, we do not trust you with our uranium. We do not trust you to generate clean baseload power.’ If this government is to be taken seriously with respect to clean power and uranium, it needs to have a sensible debate on the issue, and the policy needs to be coherent across the nation.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

Uranium mining in Australia was a catalyst for the development of sophisticated environmental management—not just in uranium mining but in all mining activity. Early mining projects in Australia did not consider environmental impacts until after the resource had been mined out, if ever. Australia’s first significant uranium mine—at Rum Jungle—was an example of a mine that operated in this way. Many years after Rum Jungle closed, the Commonwealth funded remedial work to make the site safe and to remove environmental risks. I recall visiting Rum Jungle in the early 1980s when I was living in the Northern Territory.

In the early 1970s the Whitlam government were uranium sceptics. Rex Connor strongly supported mining the metal but viewed the six dollars per pound price as too low, and he stopped contracts being made. Labor’s 1973 platform was strongly in favour of uranium mining. Rex Connor dreamed many dreams. Most were impractical or simply bad public policy—buying back the farm, a national gas pipeline from one end of Australia to the other delivering gas at zero transportation costs. Who knew who was going to pay for the pipeline? Of course, no-one was, could or did. He wanted an Australian government owned uranium mining, milling and enrichment industry. The latter dream actually began to interfere with policy making, with not just the price of uranium becoming an issue, but government ownership of the resource becoming an issue too. I will say more about the Lodge Agreement which unjammed that policy mess later.

Uranium mining led the way to world’s best practice in environmental standards. In 1975, the Whitlam government commissioned the Fox inquiry to look at the best ways to structure uranium mining. The Fox inquiry was Australia’s first example of a thorough environmental impact assessment, although at the time it was not known as that. The inquiry found that the hazards of mining and milling uranium, if those activities were properly regulated and controlled, were not such as to justify a decision not to develop Australia’s uranium mines. The hazards involved in ordinary operations of nuclear power reactors, if those operations were properly regulated and controlled, were not such as to justify a decision not to mine and sell Australian uranium, Fox said. Any development of Australia’s uranium mines, he said, should be strictly regulated and controlled and that no sales of Australian uranium should take place to any country or party that was not a party to the Nuclear Non-Proliferation Treaty. Exports should be subject to the fullest and most effective safeguards agreements and be supported by fully adequate backup agreements applying to the entire civil nuclear industry in the country supplied, and Australia should work towards the adoption of this policy by other suppliers, he said.

The inquiry was the direct and indirect impetus for a number of outcomes. Kakadu National Park was formed as a national park with considerable influence on its development from the inquiry’s findings, the Ranger and Narbalek uranium mines were established, great wealth was created and the position of the Office of the Supervising Scientist was created. The research done by the Supervising Scientist at the Ranger mine defines world’s best practice in environmental monitoring. For example, the Supervising Scientist is a leader in biological monitoring of water quality and an acknowledged leader in environmental management, giving public confidence in uranium mining.

There has been a lot of work done in looking at royalty regimes in the Northern Territory and their impact on Aboriginal communities. This work has been done as long ago as the early 1980s. One of the leaders, Jon Altman, from the Australian National University’s Northern Australia Research Unit published extensively in that area. Mining in the Northern Territory today shows little of the great struggle to establish a mining economy and culture that took place through much of the early part of the last century, but by the middle of the last century mining was not just a minor proportion of the Northern Territory economy; it was a minor proportion and in decline—from a low base and in decline. In 1951 the administration of the Northern Territory came under the auspices of the new Department of Territories. In September of that year the Minister for Territories, Paul Hasluck, convened the first Native Welfare Conference in Canberra. At this conference there was a clear change in government policy from protection and preservation of Aborigines to assimilation. In a statement made on 6 August 1952 the Minister for Territories, Paul Hasluck, summed up this policy:

Policy of assimilation and the measures taken for the education and care of natives mean that less dependence is placed on reserves as an instrument of policy than was placed on them in the days when it was considered that the interests of the natives could only be served by keeping them away from white settlement.

In 1951 the Commonwealth Department of Supply and Development expressed interest in encouraging the mining of bauxite deposits in the Northern Territory. The Commonwealth government took a massive and proactive role in considering both the mineralisations of the Northern Territory and how they might be extracted to the national interest. Of course, in the 1950s the national interest of Australia had a much more militaristic view and a much greater focus on how we preserved our resources for our own national advancement than for trade. The Minister for Territories took the view that the intention of the Commonwealth was that the reserve lands were for the exclusive use and benefit of Aborigines, while no individual property rights were actually created. The effect of the reservation system was to give collective rights to Aborigines living on reserves to exclusive use of that land. Hasluck instructed officers of his department that if mining were to proceed then Aboriginal inhabitants of reserves should receive some monetary compensation for the loss of land that had been set aside for their collective use. That was an insightful position from Paul Hasluck at that time.

Despite the belief that mining development should be beneficial to Aboriginal assimilation, there were two important and complementary innovations introduced in 1952. The first was the proposal that statutory royalties exacted from mineral production on Aboriginal reserves should be earmarked for the collective benefit of Aborigines residing in the Northern Territory. The second proposal was for the establishment of a trust fund into which those royalties could be paid. It seems that the Commonwealth was willing to forgo its right to a royalty from minerals that Australian mining law had determined were the property of the Crown. The fact that royalties were regarded as compensation to Aborigines for the expropriation of minerals from their reserves for the loss of productive lands through resumption or revocation implies that royalties were intended as a form of rent.

Later in 1952 there was a cabinet decision that clearly stated:

Royalties shall be levied on minerals won from mining on aboriginal reserves or from lands resumed therefrom for mining purposes.

It went on to say:

A Trust Fund shall be established into which the royalties will be paid and applied, with the approval of the Minister, for the general benefit of aboriginals as the Minister determines, including the making of grants to Aboriginal institutions.

In that decision you see a deliberate step to create a process whereby mining was both encouraged and enabled but that royalties would be paid, and they would be paid for the benefit of Aboriginal people.

The Uranium Royalty (Northern Territory) Bill 2008 applies a royalty regime to uranium and associated minerals—thorium, specifically—mirroring the existing profits based mineral royalty regime under the Northern Territory’s Mineral Royalty Act 1982 and applying it as a Commonwealth law. This means that royalties on uranium will be consistent with the royalty regime that applies to other minerals in the Northern Territory. The royalty regime would apply equally to products on Aboriginal land, as defined by the Aboriginal Land Rights (Northern Territory) Act 1976, and non-Aboriginal land in the Northern Territory. It would also protect the existing rights on Aboriginal land such that royalty payments made by the mine operator would be passed to the Northern Territory and an equivalent amount would be paid by the Commonwealth into the Aboriginal Benefit Account, which assists Aboriginal people in the Northern Territory. The new royalty regime does not apply to the Ranger mine because it is the only currently operating uranium mine in the Northern Territory and the royalty determination for that mine has been in place since it began operating in the 1980s. Jabiluka would be in the system should it ever be opened. I hope it is opened. I visited Jabiluka in the early 1990s and had a good look around at what was then a surgical mining operation with great potential and great capacity to generate wealth for the benefit not only of the mine operators but also of the people in the surrounding communities.

The Northern Territory Treasury under the new system would administer the royalty regime on the Commonwealth’s behalf to provide consistency with the existing royalty regime for other minerals. Additionally, this royalty regime would obviate any additional administrative complexity for the Northern Territory royalty collection processes, especially for mines that contain a number of different minerals. It should be noted that the actual royalty rate is set by the Northern Territory government and not by the Commonwealth. The regime to be introduced is a profits based royalty regime and is less distorting to investment decisions than an ad valorem royalty, which currently is the case. The NT will also need to enact consequential amendments to relevant Northern Territory legislation such as the Northern Territory Mining Act.

This bill is designed to create an efficient royalty regime and ensure consistency. This reflects the Commonwealth’s desire to streamline regulation, and this bill, which is consistent with existing Northern Territory legislation, is an example of cooperative federalism. The profits based royalty system provides a simple and consistent approach for both business and government. Though less distorting than ad valorem royalties, the profit based royalty is not as efficient or non-distorting as a resource rent tax. A resource rent tax has been applied to petroleum projects in Australia for over 25 years. A resource rent tax is levied on profits over a level defined as ‘adequate’—an ‘adequate’ return from an Australian resource project.

The Rudd government’s tax review, headed by Secretary to the Treasury, Ken Henry, is investigating all aspects of Australia’s taxation system, including how mining companies are taxed. According to an August 2008 Financial Review article that canvassed expert opinion on a resource rent tax:

A resource rent tax is generally viewed as more efficient than a royalty tax because it is responsive to changes in prices and costs and better rewards investment in marginal projects.

In that same article, David Lewis of PricewaterhouseCoopers defined the petroleum resource rents tax as a tax on superprofits and regarded such taxes as being both appropriate and nondistorting. I think that he is right in that assessment, but I doubt that we will ever have a nationally applicable resource rents tax regime—it is simply too hard in a federal structure. But we should aspire to have one.

This bill is also about uranium. The first significant discoveries of uranium in Australia were at Radium Hill in South Australia in 1906, Mt Painter in South Australia in 1910, Rum Jungle, which I mentioned earlier, in the Northern Territory in 1949 and the South Alligator Valley, including Coronation Hill, in the Northern Territory in 1953. In Queensland there was Mary Kathleen in 1954 and Westmoreland in 1956. The Commonwealth Atomic Energy Act 1953 gave the Commonwealth total control over territorial uranium and control over state uranium for defence purposes. An early principal task of the Australian Atomic Commission, which we now know as the Australia Nuclear Science and Technology Organisation, was to locate, mine and supply uranium to Britain and the United States for nuclear weapons production. Rum Jungle in the Northern Territory was the first place in Australia where uranium was produced in quantity and for this purpose.

The Australian Labor Party has had a long history of supporting the development of a uranium mining industry in Australia. One of the earliest mentions of nuclear energy in official Labor history was the foreign policy platform of 1957, which contained the following words:

We urge that nuclear research to hasten the application of atomic power for industrial purposes be encouraged in the development of Australia. Further, we demand the protection and safeguarding of Australia by the retention here of basic raw materials and the necessary manufacturing and industrial processing rights so as to ensure this country’s self-sufficiency in times of emergency or conflict.

The Ranger mine holds a special place in the consideration of uranium mining in Australia and indeed of mining in general. During the 1970s, the Labor government paved the way for the opening of the Ranger uranium mine with the Fox inquiry. Uranium was discovered at Ranger in 1967, operations commenced in 1980 and reached full production a year later. Today, the mine is operated by Energy Resources of Australia, or ERA, a subsidiary of the Rio Tinto group. When Ranger opened in 1981, it produced a rate of approximately 3,300 tonnes per year of uranium-oxide. Shortly after it was opened I had the pleasure of the first of four or five tours of the mine site. It has since been expanded to a capacity of around 5,500 tonnes per year. Sales are to Japan, South Korea—with some controversy from time to time—France, Spain, Sweden, the United Kingdom, Canada and the United States.

Energy Resources of Australia provides 11 per cent of the world’s production of uranium. According to ERA, the company makes royalty payments to the Commonwealth government of 4.25 per cent of its net sales revenue, plus yearly rental of $200,000 for use of the land. The Commonwealth government distributes this money to Northern Territory based Aboriginal groups, including the traditional owners. An additional 1.25 per cent of net sales revenue is paid to the Commonwealth and distributed to the NT government. In 2007, ERA’s royalty expenses totalled $18.3 million, of which $14.1 million was distributed to Northern Territory based Aboriginal groups.

ERA is situated in the Alligator River region and is the dominant contributor to the regional economy. The company employs more than 450 permanent, full-time and fixed-term contract staff, with an annual payroll in 2007, including contracts for services, of more than $80 million per year. At the end of 2008, the number of Indigenous employees was 95, up 46 per cent from the previous year’s figure of 65 employees and double that of 2006. Indigenous employees work in a variety of roles, from trainees to managers and everything in between. The company has a target of having 20 per cent of their workforce Indigenous. They are currently at 18 per cent but hope to get to 20 per cent by the end of this year. In December 2008, ERA was recognised by the Minister for Trade in the Australian Export Awards with a minerals and energy award.

It is important to consider the changes that have taken place in mining royalties and Indigenous benefits in the Northern Territory over the course of the last 50 years—from an initial assumption by Paul Hasluck that royalties would be paid purely to Indigenous people to a situation today where companies actively employ Indigenous people and pay royalties in addition to that. It is a perfect mix, and a mix which comes atop a policy matrix which has created the best environmental management, the best environmental framework and the best science in the world for ensuring that uranium mining can take place in a safe way, a well-regulated manner and to the benefit of local communities and our nation.

Over the course of the years, the Australian Labor Party has, from time to time, taken positions opposed to uranium mining. It has done that, frankly, because our community is deeply and broadly divided on the issue of uranium mining. The first big division took place in the Australian Labor Party in its 1977 conference in Perth when the then deputy leader, Tom Uren, lead the charge to ban uranium mining—and he was successful. The election that followed, which Labor lost, was an election where Labor attempted to make uranium a central issue. That was not unlike the situation, one might think, in September of last year when the then Premier of Western Australia clearly stated that if elected he would oppose uranium mining. He lost the election.

Some might say that the people of Western Australia voted for uranium mining. The harsh reality is this. On election day an insightful public opinion poll was published by Newspoll. There were 1,802 people interviewed. Forty-eight per cent were in favour of a ban on uranium mining and 38 per cent were against a ban. These figures are important, because they bring to mind observations made by the Western Australian mining minister last week. Norman Moore, the Minister for Mines and Petroleum, has warned companies against speaking out publicly on plans to start uranium mining in WA, claiming it would only heighten community fears about the state government’s decision to lift a uranium ban. In his first address to a mining conference since becoming minister, Mr Moore told the RIU Explorers Conference in Fremantle yesterday that they would need to convince the public that mining uranium was safe and environmentally friendly. I believe uranium mining is safe and environmentally friendly, but we do need to continue public education. (Time expired)

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

I am saddened that the member for Brand did not have more time as he went through the various contortions of the Labor Party over uranium. Dare I say that he, and the Minister for Trade beside him, are some of the more enlightened when it comes to this issue in the Labor Party and I will have more to say on that later.

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I’m glad you recognise the calling!

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

I always recognise talent, Minister. As we have heard, the purpose of the Uranium Royalty (Northern Territory) Bill 2008 is to respond to concerns of the Uranium Industry Framework members. That is a process that I was very involved in previously and one which, as the member for Brand said, establishes and reinforces a framework in which uranium can be mined in Australia in a safe way not only for those immediately handling the ore body but also in terms of its storage, treatment, transport and eventual sale.

The bill also addresses commercial concerns of uranium projects proponents, particularly in the Northern Territory. It seeks to establish a uniform royalty regime of 18 per cent of net value for uranium projects in the Territory, thereby delivering costing certainty to commercial operators in the planning stage. The proposed 18 per cent royalty—and I emphasise that it is 18 per cent of net value— would make uranium development consistent with other mineral developments in the Northern Territory. The bill will also provide the Northern Territory, via the Northern Territory Treasury, the ability to collect the royalty on behalf of the Commonwealth and to provide the Northern Territory judicial system the opportunity to be used if prosecution or dispute resolution is required.

The opposition of course supports this bill. The opposition has always understood that at a time of mining’s importance, it is important to create opportunities, and uranium is no different. Currently, at a time of economic turmoil, for the mining and resources sector in particular, the framework is a way of adding some certainty to what is an extraordinarily difficult situation.

The uranium industry is in fact short of certainty, and that came about in no small part because the party that the member for Brand highlighted had always supported uranium mining but it had on occasions changed its mind slightly, completely, totally, absolutely. As we have seen, with a change of government to the Labor Party comes an added concern from those industries wishing to invest in uranium mining, which, I should point out to the House, which does not always occur in isolation from mining of other minerals. So, whilst the mine mentioned by the member for Brand, that is operated in the Northern Territory by ERA, is a uranium mine, mines such as the Olympic Dam mine in South Australia is in fact a mine that contains a number of other resources, particularly silver and copper. We need to ensure that those companies which are prepared to invest hundreds of millions of dollars—if not billions of dollars, in some cases—have as much certainty as can be provided.

It was also heartening to note that, in his second reading speech, the Minister for Resources and Energy acknowledged the potential for uranium to make an important contribution to abating greenhouse gas emissions. That is something I would have liked to have heard more of from the member for Brand and perhaps the Minister for Trade, who has now left the chamber.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

Mr Gray interjecting

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

I would have moved a motion for extra time if I had thought the member for Brand was going to provide an honest opinion of his thoughts on how uranium could be used more, particularly here in Australia, to abate greenhouse gas emissions. But it was enlightening. It is enlightening, it is heartening to see there are some on the other side who, though stifled, though gagged, show glimpses of an understanding of what uranium could do to lower Australia’s greenhouse gas emissions.

One of the huge issues currently facing Australia, and one which the Prime Minister has continued to highlight in this chamber and wherever he goes, is the importance of lowering greenhouse gas emissions. Unfortunately, when it comes to actually doing something about it, with a technology that is already proven, the Prime Minister and many of his colleagues—in fact, all of his colleagues—suddenly go silent or are vehemently opposed to any discussion on the use of uranium here in Australia.

Perhaps the minister for resources, who does show a candid moment from time to time and did so on Fuelwatch, could do the country a favour by sending the cabinet a frank memo in relation to the use of uranium in Australia, as he did on the failure of Fuelwatch, which, as we have seen in recent times, has gone by the way.

The member for Brand spoke eloquently, as he always does, about Labor’s policy on uranium. I could not actually see a fundamental thread of consistency in what he was describing. I would have to say that the Labor Party’s policy on uranium would be better described as ramshackle and an ad hoc mess that fails to recognise not only the greenhouse savings that come from uranium mining but the value of the mining itself. One can never be sure—and certainly at a state level in the future the opportunity remains—but one would hope that the Labor Party does not kneecap the industry again.

We have seen all sorts of variations on policy. We have seen a three-mines policy, which basically said, ‘You can mine as much uranium as you like in three mines, but don’t try and open a fourth.’ That one was changed. We have seen policies where you could have the existing mines but not open any more. Even in the Northern Territory, when I was the Minister for Industry, Tourism and Resources, we saw the then Chief Minister, Clare Martin, decide that she would not approve any new mines—an extraordinary policy, I must admit. I think it was some relief to her then minister, Kon Vatskalis—who I see is now the Minister for Primary Industry, Fisheries and Resources—when I was forced to go to Darwin and explain to the Chief Minister that in the end she did not have to be in the equation and that, as the federal minister, I was happy to approve new mines. Of course, I would give them the money and I would consult with them. But this legislation, with the sands of time, now sees the Northern Territory as a staunch supporter of uranium mining.

That said, I am delighted that we are tonight discussing a framework which will enable uranium mining to be done, as has been said, in a safe and sustainable way. Uranium is an important energy source that will be absolutely crucial in supplying large amounts of low-emission, reliable baseload electricity, particularly for the world’s most populous nations. Evidence suggests that the cumulative carbon savings from nuclear power over three decades to 2030 will exceed 25 billion tonnes—25,000 million tonnes—of CO2, saved as a result of uranium mining. That has to be put into the context in Australia where you see that we have 40 per cent of the world’s known low-cost reserves.

Whilst we have a long way to go in terms of an open and honest discussion of nuclear power and the use of our uranium domestically, I think it is fair to say that, along with the Labor Party, the community at large have turned the corner in their view on uranium mining. I do not dispute the figures presented by the member for Brand. There is certainly the opportunity for those who wish to do so to influence those who are unsure in relation to public perception on uranium mining. Where you have a Premier, a so-called leader, speaking out so vehemently and so strongly against uranium mining, as was the case with the now departed Premier Carpenter, from Western Australia, I think the community does swing back a little, away from supporting uranium. That said, I think that we will see a growing support for uranium mining, a growing support for the sale of that uranium overseas under the strictest of safeguards in the world and, hopefully, an end to the politicking that goes on in relation to uranium mining, at least at a federal level.

There have been some standouts on the Labor Party side in relation to uranium mining and their support of it, although their hypocrisy then lets them down when they support uranium mining and the selling of it to our friends and our trading partners but refuse to consider using it themselves. I will not stray too far into that. But can I say that, in his time, Premier Mike Rann has indicated repeatedly his preparedness to develop uranium in that state and also his preparedness to meet the uranium needs of China’s growing demand. I guess, if I were close to Mike Rann—and I am not close enough to give him advice—I could suggest to him that, if he were in the mood for giving advice, he should go up to Queensland right now before Anna Bligh locks the Queensland Labor Party into a policy that would leave Queensland as the only state with sizeable uranium deposits that will not be exploited, were she to win government.

This is a position not sustained by any scientific fact. Premier Bligh’s position is an ideological bias. It has nothing to do with a real-world understanding of the resource sector or of the uranium industry or of the need to support the resources sector at a time of extreme difficulties. It is estimated that Queensland’s vast reserves of uranium would increase export values in that state alone by $1.9 billion over the next 15 to 20 years. On top of that, it would avoid CO2 emissions equivalent to the beautiful state of Queensland being carbon free for more than five years. Queensland Premier Anna Bligh claims to be concerned about jobs in the resource sector, yet she bans uranium mining and thus puts a distinctively hollow ring to the claim that she is supporting the resources sector. In fact, of course, she is deliberately standing in the way of the development of the mining sector in Queensland.

It is also disappointing, I have to say, that there are so many on the other side of this chamber who support uranium mining but are not prepared to speak out about this ban in Queensland. When you are a national leader or when you are a representative of the community and come to this place, with that comes a responsibility to ensure that you say what you believe in and what you know to be right. I do not think that during this debate—unless we have a sudden regression by one or two members, and I shall not name them—anyone on that side of the House is going to speak against uranium mining. I would suggest that they be honest with themselves, with this chamber and with the Australian people and, having decided that this legislation is worth supporting—and they will all vote for this legislation when the vote comes, as will we—they carry that message to the people of Queensland, particularly to the current Premier, Anna Bligh. We cannot afford to be hypocritical about this. The Labor Party cannot afford to be inconsistent or destabilising on this matter any longer. I know it is a big ask but it is one that is very necessary, and I would urge the member for Brand to carry the message back to his colleagues as to just how important it is to be consistent and forthright when it comes to the importance of the resource industry and every part of it, including the uranium industry.

There are, of course, other inconsistencies with regard to uranium when we talk about the Rudd Labor government. They want us to believe they understand the importance of uranium—the importance of it as a resource to Australia and the importance it plays in reducing greenhouse gas emissions—but the real issue is to not watch what Labor say but what they do. One of the first actions of this current government was to overturn the decision made by the Howard government to allow Australian uranium sales to India for peaceful energy-generating purposes. If we are selling uranium to China—supported by the Labor Party and by the coalition—it makes sense to sell it, under the same conditions and the same guidelines and under the same inspection regime as the International Atomic Energy Agency, to a nation of 1.3 billion people or more all aspiring to a better standard of living, all driving demand for more energy and all relying heavily on fossil fuels. Australia cannot pick and choose on this issue. You need to be consistent, and if you are going to abate greenhouse gas emissions there is no better place to start than India. China is already heavily committed to a nuclear industry, and that industry will be supplied by Australian uranium, as are many power stations around the world. But, when it comes to India, this issue is tied to a technicality. India has no record of proliferation. It has no record of selling nuclear secrets or of giving nuclear secrets to rogue states. It has accepted a set of conditions that are as stringent as the conditions we laid down for China, and to refuse to sell uranium to India highlights the fact that the Labor Party still cannot get their minds around the whole issue of uranium. Worse still, it highlights that they do not understand the issue of trade.

I am disappointed that the Minister for Trade has left the chamber, though I am sure he had a good reason, because I would have liked to have asked him what sorts of discussions he has when he goes to India and says, ‘We see you as an emerging nation; we see you as an incredibly important trading partner’—and India is all of that—‘but we will not sell you everything. We are happy to sell you our coal, our diamonds, our natural gas and perhaps our copper or whatever; we sell all those things to China and we sell China uranium as well, but we will not sell it to you.’ I wonder what the reaction of the Indian people is. I can guess that this issue is jeopardising Australia’s entire trade and investment relationship with that country. Not only is it doing that but it is costing Australians jobs. It is costing us export earning opportunities and it is costing us investment opportunities at a time when the resources sector most needs it.

Do not think that this ideological stance will prevent India from getting uranium. They will simply get it from another country, and they will probably get it under terms and conditions far less stringent than Australia’s. I am sure that were we to take a far more realistic approach to this we could not only service that market, create jobs for Australians, reduce emissions in India and ensure that there is a very stringent regime of inspections done by the IAEA but also ensure that the uranium industry develops internationally.

The uranium industry in Australia is an industry which has more potential than it has so far realised. It is an industry that has from time to time suffered, as I have mentioned, from political vagaries. As ERA would point out, it also has to contend with some extraordinary effects of nature. ERA’s mine was flooded a little over two years ago and a force majeure declared. That mine, like most mines in the resource industry, whether or not they are for uranium, has been able to bounce back from that, and it was pleasing to see that ERA posted very healthy production and profit figures over the last 12 months. If the industry is to have confidence and to continue to invest, and if the industry is going to be able to seek out and exploit markets overseas, then we need both sides of this House to take a practical, careful and particular but realistic approach to uranium policy.

This bill goes some way to doing that. I am hoping that, with the passage of this bill and those opposite voting for it, we will see a greater commitment to not only the uranium industry but the use internationally of uranium as a fuel which will lower greenhouse gas emissions and therefore be to the betterment of mankind as a whole. I commend the bill to the House.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Uranium Royalty (Northern Territory) Bill 2008. On the surface this bill may appear little more than a sensible rearrangement of royalty regimes in the Northern Territory. This would not normally be seen as having any great impact on the country. However, this bill does in fact have several extremely significant wider ramifications, of which I shall speak.

Firstly, there is the signal of the growing independence of the Northern Territory. There has always been an idea that somehow the Territory is a poor relation of the other states and somehow less able to run its own affairs. This is highlighted in the issue of uranium. When the Commonwealth government granted the Northern Territory self-government in 1978 there were some areas of control kept by the federal government, one of which was the ownership of uranium. This meant that royalty arrangements were made on a case-by-case basis, making it almost impossible for there to be any coherent and accurate assessment by companies as to the viability or otherwise of potential projects in the Northern Territory. Anyone who knows anything about developments, especially on the sort of scale needed with these projects, understands that the more certainty companies have, the more likely the project is to proceed. It is also often the case that mineral deposits are not just uranium. In some cases there are other deposits as well—copper, for example. Therefore, freeing up these deposits of uranium may well enable other valuable mineral resources to be mined as well, further adding to the wealth of the region, which is even more important than ever in these times of economic gloom and doom.

Therefore, this is quite a watershed moment for the Territorians. The first consideration is: what sort of revenue are we talking about? Energy Resources of Australia, ERA, produces about 11 per cent of the world’s uranium oxide, coming entirely from the Ranger mine in the Alligator River region of the Northern Territory. It is sold only for the generation of electricity under strict international safeguards monitored by the Australian Safeguards and Non-Proliferation Office and the International Atomic Energy Agency. The Northern Territory has also given the green light for exploration on the Angela and Pamela prospects, which are said to contain more than 12,000 tonnes of uranium oxide, worth up to $2.5 billion. Of course, as world demand for uranium increases, the price is driven up. One source says that, after a three-year low of around US$40 a pound in early November 2008, the uranium price has soared to US$53 a pound only two months later. Long-term prices are expected to be around US$65 a pound.

The second important aspect of this bill is the revenue flow to local Aboriginal communities. I think it is fair to say that in the last few years there has been more scrutiny than ever of Aboriginal communities—how their people live and how royalties can be used to provide real benefits for their people. These royalties can be used to provide essentials such as better housing, good quality water and other important services such as education, health and community services. Hopefully, the mistakes of the past will remain in the past and this new opportunity will be taken with both hands by local leaders and provide palpable and permanent benefits for the local Indigenous population. There are also other benefits. A recent newspaper article said that ERA employs approximately 500 full-time employees, with 18.5 per cent being Indigenous employees, a figure that has nearly doubled in the past two years. The company also promotes indirect employment opportunities, facilitates skill development and supports Aboriginal business enterprises.

With the change in the WA government, local Indigenous leaders held a conference late last year. This was aimed at educating traditional owners and industry on uranium issues, the environment and native title implications. Hopefully, in the near future, WA Indigenous communities will start to reap the benefits which will soon be flowing to the Northern Territory people. This revenue flow and the employment and other opportunities that come with it hold great potential for Indigenous people. It should provide an encouraging and inspirational showcase of what can be achieved when people of goodwill get together and work for the benefit of all. As I said in my speech of a year ago, we need to break the cycle of dependency, vulnerability and despair pervasive in some Indigenous communities. These royalties could be the circuit-breaker, enabling the next generation of Indigenous Australians to reap the benefits of mainstream Australian society.

The third important aspect of this bill, and possibly the most significant, is the realisation by most members of the government that nuclear power is again being seen as the energy saviour of not just developed but developing countries. For far too long Labor Party policy on uranium mining has been at best contradictory and illogical and at worst detrimental to the nation’s economy. Its intellectually incongruous three-mines policy put the intelligent, pro-resource development members of the Labor Party at constant odds with ideological Luddites who are still carrying banners and mouthing slogans of the Cold War. Thankfully, sanity has prevailed, due in no small part, I suspect, to several sensible senior ALP figures who realise the three-mines policy is untenable and ludicrous. Their force of argument has finally dragged most of the rest of the ALP into the 21st century

South Australian Premier Mike Rann has moved to end uncertainty over the Olympic Dam project with an expansion worth $7 billion to produce copper, gold and uranium. The Premier said the mine was valued as a ‘trillion dollar resource’. Of course, Mike Rann as ALP president pushed hard for Labor to scrap its ‘no new mines’ policy last year.

There is still the recalcitrant rump of naysayers in the WA Labor Party but, thankfully, we now have a Liberal-National government there, which has wasted no time fulfilling an important election promise and opened up my home state to the huge potential which uranium mining presents. Current WA ALP leader Eric Ripper had his ears well and truly pinned back by the federal Minister for Resources and Energy, who accused him of patently false and irresponsible scaremongering on the issue of uranium mining. This is the same minister who was in the Northern Territory about 30 years ago working for the union representing uranium miners.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

He was pro-uranium.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Exactly. That is precisely what I was saying. This was about the same time that Midnight Oil first started haranguing Australians about the evils of uranium.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

They were not pro-uranium.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Definitely not. Those personal histories must add a bit of spice to Labor cabinet meetings.

The Australian Workers Union also savaged WA Labor over its ideological opposition to uranium mining and urged it to fall into line with current federal ALP policy. Secretary Paul Howe said:

It’s not the 1980s. Labor in WA needs to demonstrate they are interested in developing the economy of the state.

This ideologically atavistic position of WA Labor is very damaging, as Paladin MD John Borshoff said:

You can’t operate in a regime where you have to ignore the policies of an elected government for fear of what a change in government would bring—that is the very definition of sovereign risk and the behaviour of a Third World country.

Then there is the implication of the energy future for many countries, especially in Europe and Asia. There has been a growing realisation in Europe and Asia that for a variety of reasons—some valid and others less so—nuclear energy is the only solution to a series of problems.

The Weekend Australian recently heralded the return of Sweden to the nuclear family. New reactors will be built there for the first time in nearly 30 years. This is despite Sweden having extensive hydro-generating capacity. According to the report, even after the four-party coalition was split three to one, the dissenting party leader still supported the move to nuclear energy:

I am doing this for the sake of my children and grandchildren.

The article noted that there is the added concern ‘about the reliability of Russian-supplied fuel after Moscow’s gas dispute with Ukraine last month’. Poland is planning on having its first nuclear plant by 2020 and Britain has decided to replace its ageing reactors and create new sites. France, which is the nation most dependent on nuclear energy—about 75 to 80 per cent of France’s energy is nuclear generated—has ordered its 61st nuclear generator. Finland is building the largest reactor in the world, a third-generation pressurised water reactor, which is expected to open in 2011.

China indicated last month that it may consider increasing nuclear generation capacity from nine gigawatts to 70 gigawatts by 2020—an enormous increase. An MIT report said China may have to add as many as 200 nuclear plants by 2050 to meet its energy needs. There is also a huge market in India, which has been a contentious issue that Australia cannot ignore. That was pointed out by Greg Sheridan nearly four months ago when he noted:

A single statement in support of uranium sales by the Opposition’s new foreign affairs spokeswoman, Helen Coonan got substantial press coverage in India.

This new economic giant has 15 operating nuclear power plants and seven under construction. India knows that the only way to enhance the lives of its people is via access to power. Currently an estimated 400 million Indians still have no access to electricity. Nuclear power can change that dramatically.

As you would know from my past speeches, I am not a particular fan of Tim Flannery and his opinions about climate—neither is the Parliamentary Secretary for Regional Development and Northern Australia, I presume. However, it is interesting to note that in the Australian of 5 February 2009, Flannery ‘accused Australia of taking an immoral position by exporting polluting coal to India but refusing to sell it uranium to help it establish a cleaner power-generation industry’. He continued:

Australia’s moral position of selling them coal, which is a bloody poison, but not selling uranium doesn’t make any sense.

The Greens are now the only party which is refusing to acknowledge reality. But what is new?

Going right back to the early history of mankind, each significant advancement in our civilisation has gone hand in hand with new energy sources. The initial use of fire enabled early humans firstly to live more comfortably with fire for heating and cooking and then to advance by producing bronze and then iron and other metals. There were gradual developments in our civilisations over the following centuries but the next enormous, exponential leap in the development of human society, especially in the West, was the Industrial Revolution. That advance would have been impossible without a quantum leap in the development of energy sources—specifically, using coal to make steam, which literally drove the Industrial Revolution. Thus energy became once again the literal driver of man’s incredible advances over the last couple of centuries. And now once again energy is front and centre in the deliberations of many governments.

The economic benefits to Australia of this initial step by the federal government, together with a welcome policy change in Western Australia, will also be huge. The mantra over the last few weeks has been the importance of keeping jobs in Australia to try and insulate us as much as possible from the disasters befalling the world economy. New projects, such as the expansion of current mines and the opening up of new ones, will provide the very best economic stimulation possible. This means real jobs, real and significant infrastructure, real earnings from real wealth and, most importantly, creating wealth instead of borrowing it from future generations of Australians.

Finally, there is the ultimate flow-on effect from this and other similar arrangements which will surely come in the near future. Although European countries are now expressing renewed interest in nuclear power, there is one principal problem associated with this reawakening. There was flourishing nuclear science going in parallel with the development of nuclear power in the fifties and sixties. Then, with the realigning of ideology to fit in with the antiprogressive theology of extreme and almost unquestioned green politics, these nuclear programs became unpopular in some countries. Germany, the UK and others, which had once embraced the new technology, were browbeaten by the disingenuous scare tactics of the Left to start winding back their nuclear programs. They started decommissioning nuclear power stations and basically recanting on their faith in nuclear power, on which they had previously relied to provide non-fossil fuel power for the future.

France, of course, was an exception, because it had no natural energy resources of its own. Not surprisingly, France did not want to be totally beholden to other countries for gas or oil, so the preference for nuclear energy was easy. As the French said about nuclear power: no oil, no gas, no coal—no choice. Now the other countries are coming around to their previous position and looking once again to nuclear power. They realise that nuclear power can carry them over at least the next century while new energy sources are being investigated and developed. The big problem is that, while their nuclear programs were up and running, they had the expertise to run these programs. With the winding back of nuclear energy programs, there was little or no renewal of this expertise. As the nuclear industry was diminishing, the men and women who were highly trained in this area were getting old and retiring. Thus, just when they are so badly needed, where are the nuclear scientists and technologists who will be needed to back up the increased demand for this energy?

We saw in last year’s budget the very short-sighted reduction in funding for organisations such as ANSTO, reductions which I spoke strongly against on 3 June and 23 June last year and again in the most recent sitting week. With the very welcome change in the mindset of the federal Labor Party on the issue of uranium mining, here is the perfect opportunity to see the opportunities this provides down the line. Here is the opportunity to really become the ‘really clever country’. The United States realised the huge potential for computer technology, and Silicon Valley came into being. We can have our own uranium based version of Silicon Valley right here in Australia, geared to nuclear science and technology. Instead of reducing funding for nuclear technology, what a really forward-thinking government would do is seize this opportunity. Australia can become a centre of excellence for training the many scientists and technicians who will be needed in the coming decades to run the proposed new plants. This is a total win-win for Australia. We would be servicing both ends, if you like, of the nuclear process: providing the raw material with which to drive the new plants and also providing educational facilities at which the next generation of staff could be trained.

In summary, this bill could not have come at a more opportune time. One could almost say that the nuclear planets are aligning—with the realisation that nuclear power is an important part of many nations’ energy mix, with a welcome change in uranium policy within the Labor Party, with renewed interest in funding progressive programs for local Indigenous communities and with the real prospect that Australia can become a world leader in nuclear technology. The potential benefits exist not just for the Northern Territory and Indigenous Australians but for the whole country and our trading partners. We are at a crossroads with regard to energy right now. We can stick our heads in the sand and pretend we can somehow make do without nuclear energy, as the extreme so-called environmentalists do, or we can admit that energy is the key to the world’s future, stop kidding ourselves about pie-in-the-sky energy sources and get real. Let us take this once-in-a-lifetime conjunction of events and make the most of it.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

I am pleased to speak on the Uranium Royalty (Northern Territory) Bill 2008. This bill is generally on unifying the mining royalty regime. It provides consistency for this industry in difficult financial times. As we have heard, presently uranium royalties are worked out on a case-by-case basis as a result of the Commonwealth-Territory arrangements in place at the time. This legislation will see government royalties set at 18 per cent. This is in line with other mineral royalty regimes in the Northern Territory. It will allow the industry to grow with certainty, and the coalition commenced these changes in 2005, led by a previous speaker this evening, the Hon. Ian Macfarlane. The House of Representatives Standing Committee on Industry and Resources reported on this issue in 2006. The committee report was led by the chair, the former member for Forrest the Hon. Geoff Prosser, and it had some great recommendations.

Australia has one-third—some say even 40 per cent—of the world’s medium-cost uranium reserves and seven of the world’s 20 largest uranium deposits. The Ranger mine in the Northern Territory is the only one currently operating; however, this legislation will apply to Jabiluka as well. Uranium moves the world towards cutting emissions. If the world were not using nuclear power, CO2 emissions would be 2.5 billion—not million but billion—tonnes higher per year. Australia’s known uranium deposits have around two million tonnes of uranium oxide in ground resources. Currently Australia exports around 10,000 tonnes of uranium—in other words, yellowcake—a year, which puts $900 million into the domestic economy and saves 400 million tonnes of greenhouse gases each year. So on an annual basis the collective amount, as I said, to this date has been 2.5 billion tonnes.

Interestingly, the Labor Party have got a real problem with this, because they are so divided on it. They have been running their three-mines uranium policy for many years, which is the height of cant and hypocrisy. There are three mines in the policy: Olympic Dam and Beverley in South Australia and Ranger in the Northern Territory. In other words, as somebody said to me, uranium in the Northern Territory and in South Australia is okay, but in Western Australia it is bad. Alan Carpenter had this problem at the last state election. He thought that he could run some very clever ads saying—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! It being 8.30 pm, the debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The member for Canning will have leave to continue speaking when the debate is resumed.