John Murphy (Lowe, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Why is accurate accounting of proposed budget savings vital to returning the budget to surplus?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Lowe for his question. It is certainly true that accurate accounting for proposals for savings is critical to returning the budget to surplus. Members will be aware that over some months I have been asking the opposition to put forward its savings proposals that would back up its claims to returning the budget to surplus more quickly than the government proposes to do.

Last week, in a highly entertaining three-ring circus, as the Prime Minister described it, we finally got an outcome after the member for Goldstein indicated that the savings would be in the Leader of the Opposition’s budget reply. The Leader of the Opposition then indicated in his budget reply that they would be in the shadow Treasurer’s speech to the National Press Club. Then the shadow Treasurer, at his speech to the Press Club, said they would be in a subsequent press conference from the member for Goldstein. We finally got a statement on proposed budget savings from the opposition.

At first light it had a very big number on it. It had a very big headline number of $46.7 billion. Initially, I was almost impressed by this. I thought, ‘Gee, they have done all right here.’ But, unfortunately, I then started to read the savings proposals and, sadly, they did not stand up to much scrutiny. In fact, if you took that $46.7 billion and rubbed out the ‘4’ then you would still have an overstatement of the net impact on the budget bottom line. You could take out the digit ‘4’and you would still have an overstatement on the beneficial impact on the budget bottom line of the proposed savings of the opposition.

Let me run through a few examples. First—and most egregiously—they quote their proposal to not proceed with the government’s Resource Super Profits Tax as a saving. A small bit of news for the opposition and their economic gurus: when you cancel out tax revenue, that is not a saving to the budget; that is a loss to the budget. So $12 billion straight off the top has gone—dead. Next, we have capital savings. They do concede in the fine print that these do not hit the budget bottom line, so there is a total of $22 billion. These are simply figures that the opposition have made up. There is no substantiation for their proposed sale price for Medibank Private and there is no substantiation for the $18 billion they claim would be removed from the budget by not proceeding with the capital item for the National Broadband Network.

Then we have $3.5 billion worth of proposed savings that have a little asterisk beside them. It is a very small asterisk: it would be about four point. There is a very small note at the bottom that says, ‘These items may be used to finance coalition commitments in the same area.’ In other words, they will not really be savings; they are going to spend the money by rebadging these things or in a different way. Then there is $2.4 billion of claimed savings on interest from the refusal to proceed with the National Broadband Network. This is a figure that has simply been plucked out of thin air—created, fictitious and has no substantiation or reflection in any budget items.

Then we have the proposed freeze on the Australian Public Service. That has morphed around a bit. A few things have been added here and there that would not be subject to the freeze but, allegedly, that saves $3.8 billion. Unfortunately, the opposition neglected to note that when you freeze Public Service numbers in enforcement agencies—for example, people in the Australian Taxation Office chasing tax avoidance activities—you lose revenue. The estimate of the equivalent loss of revenue as a result of cutting back on staff chasing people like tax avoiders and welfare rorters is $2.1 billion in lost revenue. Finally, there are a few classic proposals, a few absolutely sensational proposals, supposedly cutting back on Public Service travel, government advertising and consultancies.

The interesting thing about all these proposals, which add up to about $800 million, is that they are all areas where spending has been cut back very substantially by this government after the massive explosion in spending by the Howard government. The same people who let spending blow out are now claiming that they will be able to reduce spending below the level to which it has already been cut by the Rudd government. The savings package is totally phoney.

I note that I am not the only person who was less than impressed by the performance of the member for Goldstein in presenting this savings package at his press conference. In fact, his own media adviser, who I think is named Nicholas Troja, did not seem to like the proposition much either because he spent most of his time doing this or doing this and turning away. It is on YouTube and it is really worth a look. I am delighted that the member for Goldstein is employing people who are obviously concerned about fiscal responsibility. It is just a pity he is not taking their advice. If the opposition want to be treated seriously on these matters, they have got a lot more work to do.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: I ask that the Minister for Finance and Deregulation table that illuminating document, which without doubt could not have a ‘confidential’ sticker on it.

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

It’s on YouTube!

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for O’Connor will resume his seat. The usual form for me is to ask whether the minister was quoting from a public document.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I think if the member for O’Connor types in ‘Andrew Robb’s staffer’ he would be able to view the video.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Tuckey interjecting

Honourable Members:

Honourable members interjecting—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for O’Connor will resume his seat. The member for North Sydney will get the call when the House comes to order. Not that I wish to set a precedent, but the Minister for Finance and Deregulation was yet again, as he always does, reading from handwritten notes which I take to be private.

Opposition Member:

An opposition member—Are you going to ask him?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

If you want me to ask him. Was the minister reading from a public document?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

No.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

Mr Speaker—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

If the member for Menzies has some guiding light he would like to share with me, I invite him to come to the dispatch box and share his wisdom.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Mr Melham interjecting

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

Mr Symon interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Banks is not assisting and the member for Deakin, I believe, is being chronic today. The member for Menzies.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

Mr Speaker, on a point of order: ever since I have been in this place, the convention under each Speaker has been to ask if the minister was reading from a document and if it was confidential.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Yes, all right. Thank you. We will now go through it. Was the minister reading from a document?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

No.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Was what he was reading confidential?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Yes.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

This is the difficulty we get into if people believe that handwritten notes that the minister writes for himself are a document, yes or no. That is the problem with the procedure that we have used in the past, and that is all I was trying to illustrate, because under no precedent could that document have been tabled.

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

Except for Ian McLaughlin’s notes.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The parliamentary secretary has no right. He should read standing order 65(b).

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

Mr Dutton interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

If the member for Dickson would contain himself, the member for North Sydney might get the call.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to a report by one of the world’s largest investment advisers, Citigroup, and I quote:

The mining industry has one of the lowest dividend yields amongst the Australian industries. Over the last 10 years, mining companies have reinvested around 75 per cent of their cash generation back in country through royalties, taxes or capital investment. Miners reinvest in growth, creating jobs and wealth creation for a country. We believe the proposed resources super profits tax will likely limit their abilities to reinvest.

On what basis does the Prime Minister still believe that this big new tax on mining will create more jobs and more investment?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I welcome the question on the resources super profits tax, because it is a core element of the government’s tax reform plans for better super for working families, lower tax for small business and, of course, investing in infrastructure. The member for North Sydney referred to a research paper; I think it was from Citigroup—is that right, Joe?

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Yes.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Prime Minister will refer to members by their titles.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I am just checking whether it was. As the member for North Sydney would know, there would be a range of opinions on the impact of the government’s proposed taxation arrangements when it comes to the mining sector in particular and the economy in general. I draw the honourable member’s attention to a note released today by Macquarie Research Strategy, by Rory Robertson, which says:

So Canberra’s objective today is not so much to increase taxes on the resources sector as simply to return payments to the public purse from mining company profits to the sorts of shares observed less than a decade ago.

The bottom line is this: when it comes to the return to the Australian taxpayer from the mining sector, 10 years ago one dollar in every three in profits came back to the taxpayer through royalties; 10 years later, one dollar in seven comes back to the taxpayer through royalties. The Leader of the Opposition asked a question about corporate tax—well, come in, spinner!—because if you add the royalties to resource taxes and the company tax rate, in 1999-2000 to 2003-04, you will have royalties, resource taxes and company tax representing 55 per cent in profits and, in 2008-09, you will have royalties, resource taxes and company tax representing 27 per cent of profits.

This is the data contained in this research note from Macquarie Research, which was just put out today. The bottom line is that the total tax take of these companies, including all forms of tax, when measured against profits has halved over the last decade. What we stand for as a government, therefore, is to get a fair share back for the Australian people from a resource which is owned by the Australian people. Miners do deserve a fair share for their investment, and the Australian people deserve a fair share because the resource is also owned by them.

But, given that the member for North Sydney has asked this question about clarity concerning our tax policy and its impact, it is only fair for me to conclude by asking: what actually is the tax policy of those opposite? Is it Julie’s policy? Is it Barnaby’s policy? Is it Julie’s policy, which says that the mining industry is paying enough tax, or Barnaby’s policy, which says that they should be paying more tax? Maybe what we should do, given this lack of clarity, is get it in writing from the Leader of the Opposition, because we then know it will be the full, gospel truth as to what the tax policy of those opposite is. At present, it is chaos and confusion.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. How does the average tax paid by mining companies compare with that paid by other sectors of our economy?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Corangamite for that very important question because we have been having a discussion about this in various ways through question time today. Of course what the government has done is outlined a plan to modernise our taxation system particularly as it applies to non-renewable mineral resources.

Those opposite do not seem to have the most basic understanding of why a resource superprofits tax should be replacing royalties. They do not seem to understand to begin with that royalties are there as a charge for non-renewable mineral resources. That is, they are 100 per cent owned by the Australian people. That is what is different about royalties; they are 100 per cent owned by the Australian people and they are, of course, a non-renewable resource. Once they are dug up they are gone forever. That is why mining companies must pay royalties. But royalties do not give to the Australian people the value they deserve and they have not been giving to the Australian people the value they are due in recent years.

Even the mining industry accepts that there is a case to increase the charge for the underlying value of those resources that are 100 per cent owned by the Australian people. Even the most extreme elements of the mining industry are acknowledging there is a case for a profits based tax. Even the Minerals Council of Australia acknowledges that. The only people who do not acknowledge that are the Liberal and National parties in this House.

The shadow Treasurer came in before and talked about effective rates across various industries. He does not seem to understand that the only industry in the country that gets access to a non-renewable resource that is 100 per cent publicly owned is the mining industry. It is not the transport industry and it is not the finance industry. None of those industries get their input for nothing and they do not get land for nothing. The shadow Treasurer is so ignorant he does not seem to understand that there needs to be a special charge, which is separate from company tax, that gives the Australian people the value of those resources that they 100 per cent own. Those opposite do not even understand this most basic fact. If they do not understand that fact how could they run an economy or a country? They could not even be held in respect by the mining industry. We know what disrespect they have for themselves because they have sold out to the mining industry on this very question.

The Prime Minister before was talking about Mr Rory Robertson from Macquarie Bank. He has put out a report today which I think is very illustrative, so we might just go through it for a while. This is what he has to say:

Only the most naive investor could have imagined that the final prices the mining sector receives from world markets for publicly owned resources could increase by multiples over a decade. And yet governments effectively would keep selling those same resources to mining companies at the same low prices, at effective prices, that were generally set a decade ago.

So those people opposite want to continue charging the same price that is a decade old because they are not prepared to stand up to mining companies and say the Australian people deserve fair value for their mineral resources which are 100 per cent owned by them and are non renewable.

What this reform is about is economic reform for the future to create prosperity for all Australians—Australians in small business; Australians elsewhere in large business; Australians who want to save for their retirement and Australians who want investment in infrastructure. That is what this reform is about. It is the big economic reform that Australia needs to go forward so we can prosper in the Asian century. But, of course, those opposite do not understand any of that. Then they buy the line that has been given to them by the mining industry; the line that somehow effective rates on the mining industry are as high as the rest of the effective rates across other sectors.

Everybody in industry knows this one basic fact: that the mining industry does get access to generous concessions. We on this side of the House do not contest that but the mining industry should not claim they do not so that they can run around the country and claim that our RSPT produces tax rates as high as 58 per cent, which it clearly does not. It is true that very profitable companies will pay more and many companies will pay less under our proposal. We have a fair proposal here which will deliver fair value to the Australian people. But those opposite, who have sold out to sections of the mining industry, have yet again demonstrated how they do not understand Australia’s national interest.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to criticism of his big new tax on mining from Mr John Ralph AC, formerly chief executive of CRA, director of BHP, chairman of the Commonwealth Bank, former president of the Business Council of Australia and chairman of the .. Mr Ralph says:

A decision to impose a 40 per cent tax rate on earnings above the bond rate will reduce future investment …

He goes on to say:

Only those projects with a very high projected return would proceed. A suggestion that an increase in taxation would result in an increase in investment could only be made by somebody not living in the real world.

Does the Prime Minister agree with his Treasurer who said yesterday that critics of the mining tax are ‘either lying to you or they are ignorant’. Prime Minister, is Mr Ralph lying or is he ignorant?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I again thank the member for North Sydney for his question on the resource super profits tax, because we all know how important tax reform is for the future strength of the Australian economy and, on top of that, for ensuring that working Australians get better super in the future and small businesses get a tax cut as opposed to a tax rise. Mr Speaker, can I say to the member for North Sydney, as he continues in this debate: it follows .as night follows day that there are going to be a range of opinions from leaders from both within the mining sector and beyond the mining sector in corporate Australia and, depending upon the branch of corporate Australia, their individual views on this will vary. You have seen comments in recent times by Roger Corbett. You have seen comments in recent times by a range of individuals like Bernie Fraser, who is the former Governor of the Reserve Bank and the former Secretary to the Treasury. You have seen a range of comments from all sorts of people engaged in this debate.

But what I would go back to is this: the underlining rationale for a resource rent tax of this nature is to provide an incentive for those companies, particularly those who are less profitable in their early years, to expand the basis of the industry by ensuring that they have appropriate forms of tax write-off for the way in which their investments are handled. That is what the rationale is for a tax based on profits rather than a tax based on volumes. That is why the former Treasurer, Peter Costello, supported the PRRT. Those opposite, led by the member for Groom yesterday, stood up in this place and said that the PRRT was somehow no longer supported by those opposite. They had 12 years to change that tax.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Dr Emerson interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Minister for Small Business.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I needed that.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I could highlight the minister’s presence to an even greater extent, so I would not wish him to express gratitude.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Prime Minister was asked whether he agreed with his Treasurer or not. Is he standing by Swan or isn’t he?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! Incidental to the point of order, if people on my left wish members to be referred to by their parliamentary titles, we should remember that at all stages. The question had a fairly lengthy preamble. It contained argument—I make that by way of observation—which I have allowed because I have been allowing it. The precedent has been allowed. The Prime Minister is responding to the question. He shall relate his material to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Mr Speaker, the question raised by the member for North Sydney went directly to the impact of the proposed tax arrangements on future investment in the industry, and he cited one particular former mining executive, Mr Ralph, as his authority. Various mining executives will express a range of views on this matter. Mr Don Voelte, the CEO of Woodside, has expressed a view in recent times. He indicated that in fact mining companies could pay more. There are a range of opinions within the mining industry; there are a range of opinions within the general business community. But I go back to the former proposition. The first point is: should mining companies be paying more tax? The Deputy Leader of the Opposition says no. The shadow minister for infrastructure says yes. What does the Leader of the Opposition say? We do not know, because their policy flips and flops in between.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

We oppose your tax.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The Deputy Leader of the Opposition may be against our tax. I am not sure that the shadow minister for infrastructure is necessarily of the view that the mining industry should not be paying more. Look at his statements from earlier today. The second point I would make in response to the member for North Sydney’s question is—and he knows this infinitely well—that the whole point of a profits based tax as opposed to a volume based tax is to encourage the expansion of the industry. That is why, if he bothered to search the record of an illustrious predecessor of his—that is, the former Treasurer of the Commonwealth, Peter Costello—and looked at his remarks on the architecture of the Petroleum Resource Rent Tax, he would see that the former Treasurer understands and grasps the core significance of ensuring that it assists industry to expand. Let me quote what Peter Costello had to say:

The idea of the PRRT, when it was introduced—I think it was actually introduced by the Labor Party … from memory—

He is right on that—

it was certainly introduced by the Labor Party—… that the petroleum extractors would be taxed on their profits, except to the degree that they used it for new production or other exploration. In fact, that is a good policy aim.

In other words, Mr Costello, the then Treasurer of the Commonwealth, was saying that a tax on profits is in fact a more rational approach and a more efficient approach to the taxation of the sector—that is, a tax on volume. That leads me to the third point: the modelling produced through Econtech contained in the Treasury’s report on the day that the tax policy was released was of a type which concluded that the overall activity in the mining sector would increase by 5.5 per cent over time as a consequence of the total tax package which is being introduced. No. 1: we have a clear tax policy. The opposition currently have three tax policies on the run at once. No. 2: we believe the mining industry should pay more. We do not know where those opposite stand on that particular question. No. 3: we believe that the best way of taxing the mining industry is on profits rather than volumes because it is the best way to generate future growth and expansion in what has been and what will be a great industry for Australia.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I seek leave to table the article by Mr Ralph titled ‘Retrospective tax a risk to national sovereignty’.

Leave not granted.

Joel Fitzgibbon (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy. Minister, how does the proposed resource super profits tax ensure that Australians get a fairer return from the resources industry and how does this differ from existing royalty regimes?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I thank the member for Hunter for the question. His question goes to the heart of this debate. It is about how we as a nation put in place a modern resources tax system for a modern nation. The real debate, as I said yesterday, is about how much tax we collect, who collects it and under what system it is collected. The Australian community—unlike the opposition—understands that the time has come for this debate. The Minerals Council of Australia is also, as I have indicated to the House previously, up for this debate—unlike the opposition. It argued in its submission the Henry tax review that, ‘There is strong argument to reform the basis of determining royalty regimes to a profit based criteria from a revenue based system.’ I say that because it is well understood that the existing type of royalty scheme as applied currently in the mining sector creates a lose-lose situation for industry and for the Australian community. The royalties framework is bad for business and potentially worse for the Australian community.

During difficult times—and let us be frank—it has and could continue to send companies to the wall. In good times such as over recent years when prices were high, the community missed out on the benefits of the boom because royalties remained fixed and stuck in the past—just like the opposition led by Tony Abbott is stuck in the past and unable to front up to the hard and tough debate on tax reform.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The minister will refer to members by their parliamentary titles.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

The government is simply proposing to put in place a stable fiscal regime, a regime that is much fairer to industry and certainly much fairer to the Australian community. I ask the House to think about the operation of this royalty regime in past years. Let us think back to the start of this century, when we had a royalties regime in place—

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

Mr Hunt interjecting

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

It is not that long ago in terms of the time horizons of the member for Flinders. Let us go to the application of state royalties across a range of state and territory boundaries. Time and time again we had resource companies approaching state and territory governments for holidays from payment of royalties or potentially time for them to pay off their royalties because times were tough. One example that springs to mind is a project that Andrew Forrest was once involved with, the Murrin Murrin project. They approached the Western Australian government for royalty relief. I have no doubt that a profit based system would have been beneficial to that project. The industry has acknowledged that it is time for reform. They want a profit based system. They have had enough of the royalty based system. And that is not just my view; it is also the view of the broader Australian community.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Ms Julie Bishop interjecting

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

The industry also appreciates that they have a capacity to pay more tax. That is not just my view—I notice that the member for Curtin has a little bit to say, and I will come to her in a minute—but also the view of the Western Australian Premier. Perhaps next Saturday when she drops into Peppermint Grove for a cup of coffee she should talk to the Western Australian Premier about his view. I am well informed that the Western Australian Premier proposes to take from Rio and BHP in the next financial year something in the order of $800 million in increases in royalties. That amounts to about $3.2 billion over the forward estimates. But what is the opposition’s view? The Western Australian Premier has pretty fixed views. I will take the House to the Hansard of the Western Australian parliament of 25 February. He said:

As members are aware, I have put it to both BHP Billiton and Rio Tinto that I believe time is now overdue and that they should be paying full mining royalties on the many hundreds of millions of tonnes of iron ore that they produce.

He then went on to say:

I have to say that a few people who work around the mining industry came up to me over the summer and said: ‘By the way, Colin, the mining companies are getting away with murder. They are not paying enough.’ A number of people who work in the mining industry have said that.

That is what the Premier of Western Australia said. That takes me to where the opposition are. What a mess; what a dog’s breakfast we have on the other side of the House at the moment with respect to this complex and important debate. Let me start with the Deputy Leader of the Opposition, who once held the exalted position of shadow Treasurer. Opposition representatives like the member for Flinders and the member for Dickson soon saw her off. I refer to what the member for Curtin said last night. She said, ‘I believe they are paying a fair amount of tax.’ Perhaps she should convey that to the state member for the seat in which she lives, the Western Australian Premier and Treasurer, Colin Barnett.

Then we have yet another position, that of my dear friend the member for Groom. What did he have to say both yesterday and today? He said, ‘If there needs to be a royalty change, it should be done by the states.’ So he is up for higher tax, unlike the member for Curtin. That is exactly what the Western Australian Premier and Treasurer is arguing and exactly what the current government is arguing: the mining companies have a capacity to pay more tax and the Australian community need to get a fair return for the development of their resources. But it gets better. Perhaps Colin Barnett has been listening to Senator Joyce, someone who the member for Goldstein likes to ridicule on a regular basis. Let us go to what Senator Barnaby Joyce had to say on Sky television at lunchtime.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. This answer has now been going for over seven minutes, which seems completely excessive. How could it still be relevant? If the minister cannot answer a question in four minutes, he needs to get out of his—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Sturt will resume his seat. In a general sense, if there were less interjecting perhaps the minister would ignore the interjections and the answer would not be as long. On the matter of relevance, he is responding to the question, but I am sure that he is bringing his answer to a conclusion. .The minister has the call.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Absolutely, Mr Speaker. It actually takes some time to go through all the different policy positions on the other side of the House. But let us go to Senator Barnaby Joyce: ‘I’m prepared for the people to look at the mining sector to pay more tax.’ I must say I am starting to try and think through what is the opposition’s real position. What is the gospel truth? Do these views all represent considered views drafted by the Leader of the Opposition, as he stands there checking the weather vane to assess where to jump from day to day on what is a complex tax debate.

Clearly, the opposition is totally focused not on a policy debate that we have to have. It is unprepared to accept the view of the government that there should be a reasonable super profits tax put in place. The headline will be 40 per cent. The tax will also ensure Australia gets a fair return on our precious non-renewable resources and that we put in place a tax system that further encourages investment. I simply say in conclusion: what we have is an opposition that has sold out lock, stock and barrel to some sections of the mining industry because it is more focused on a return to its own pockets in the form of donations than a complex debate.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The minister will resume his seat. The minister has resumed his seat. Whether he decided to do that himself or as a result of my asking him to is debatable.

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

Mr Speaker, on a point of order: yesterday you ruled the minister’s concluding comment out of order and asked him to withdraw it. It is offensive and I ask him to withdraw it.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I understand that. I remember that and, as much as I could through the hubbub, I attempted to listen carefully to the concluding remarks that I then decided I would shut down. But I think I would allow the words that were used on this occasion to go through as a debating point rather than something that was over the top.

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

Mr Speaker, on the point of order: the precedent for this was set by your predecessor. When I made a comment in regard to the unions having their hands in the pockets of the then trade minister, I was asked by the Speaker to withdraw it. This is the same type of comment.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! I have noted the submission to me by the member for Groom, but I am not changing my position.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to criticism of his great big new tax on mining from former Queensland Labor Treasurer Mr Keith De Lacy, a man well known to the Prime Minister from his former life. Mr De Lacy has stated that the Treasurer’s claims that the mining sector currently only pays 17 per cent tax are ‘plain wrong’ and, ‘I don’t know where Mr Swan gets his figures from but they don’t bear any resemblance to reality.’ Does the Prime Minister agree with the Treasurer, who said yesterday that critics of the mining tax are ‘either lying to you or they are ignorant’? Is Mr De Lacy lying or is he ignorant?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the Leader of the National Party for his question. As far as Mr De Lacy is concerned, my recollection is that he is Chairman of Macarthur Coal. I seem to recall that, when the Queensland government last increased coal royalties, the Chairman of Macarthur Coal objected to that as well. You would expect the chairman of any resource company like that to have a problem with an increase in tax because he would be out there arguing the interest of his particular view and people in industry are doing that at the moment.

The other part of the Leader of the National Party’s question goes to the overall incidence of taxation. I draw to his attention the contents of the Treasury minute to the Treasurer which notes that the average company tax rate in the mining sector was 17 per cent in the decade of 2004-05, comparing it to construction at 19 per cent, transport at 27 per cent and finance at 29 per cent. One of the reasons—I say this to the member of the National Party in particular—why he should be getting behind this proposal is that a tax on profits is in fact the right way to go. In fact, he could reflect on some of the observations of one of his illustrious predecessors, Tim Fischer, a former Leader of the National Party, in the debate on the resources rent tax back in the nineties. Tim Fischer announced that a coalition would not be opposing the RRT legislation. He went on to say:

The clear advantage of an RRT over the old excise and royalties system must be carefully weighed but it is nevertheless an advantage which allows investment decisions to be based more on the quality of the resource.

So said Tim Fischer about the RRT back then; so said Peter Costello about the PRRT back then. I say to the Leader of the National Party that when he embraces this position of opposition to an RSPT he is standing in the way of tax breaks for small business, he is standing in the way of better super for the working people in his electorate and he is standing in the way of funding infrastructure. I know how keen the Leader of the National Party is on infrastructure because the Minister for Education, the Deputy Prime Minister, has just given me some happy snaps of the Leader of the National Party—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, a point of order on relevance: the Prime Minister was asked a question about whether Mr De Lacy was a liar or whether he was ignorant. These photographs he wants to wave around in his juvenile and pathetic props display should not be relevant to the question.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The member for Sturt will resume his seat. The Manager of Opposition Business has not helped his case. The Prime Minister has the call.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Thank you very much, Mr Speaker—

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

Mr Speaker, on a point order: the Prime Minister’s photographs have nothing whatever to do with the mining tax. They are irrelevant.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Leader of the Nationals will resume his seat. With the House now having come to order, I will observe what use is made of props in this answer. I would suggest to some people that the banter they have is just not helpful at all. The Prime Minister has the call. He understands the requirement to relate the material in his answer to the question.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The Leader of the National Party’s question went to Macarthur Coal, it went to comments by Mr De Lacy, it went to the whole question of the RSPT as proposed by the government and therefore the purposes to which the revenue obtained by the RSPT would be put. I would simply say to the Leader of the National Party: it is important to be consistent in public policy. You either stand for the proper funding of future infrastructure or you say one thing in Canberra, which is to oppose infrastructure investments of the type contained here at the St Helens primary school in his electorate, and then go back to the electorate and show up bright eyed and bushy tailed for the school opening. I think the Australian public would expect better of the Leader of the National Party on a policy approach to a resource rent tax based on profits rather than volume. I would draw his attention to one of his predecessors, the previous leader of the National Party, Tim Fischer. Can I suggest again that those opposite should actually engage in the policy of this debate, rather than engage in what they are now doing, which is yet another re-run of an ancient fear and scare campaign, which they are highly accomplished at.