Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to Mr Jones, of Merriwa, who wrote to the Prime Minister on 10 May. In his letter he writes:

I am particularly concerned with the tax on super profits for the mining industry … it is not just money at stake, what about employment, housing, and small business viability, they are all at risk … it is bad policy … and one which I cannot support … I am not involved in any way to the mining industry. I am just a simple man who is trying to keep my head above water and looking forward to a happy retirement in 10 years.

Can the Prime Minister assure Mr Jones and the 778,000 self-funded retirees in Australia that the government has done an analysis on how the new mining tax will affect them? If so, will the government release it?

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

I thank the member for Pearce for her question because it goes to superannuation earnings and it goes to the overall performance of an economy upon which those earnings are based. The letter that she referred to from her constituent went to a number of points, one of which was the impact on employment, another was the impact on small business and the third was in relation to superannuation. On the question of employment, to which she referred in her question, can I say to the member for Pearce that the impact on GDP which is projected as a result of the introduction of the government’s tax plan—

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

Order! The Prime Minister will resume his seat. The Manager of Opposition Business.

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 question went to whether the government had done an analysis of the effect on self-funded retirees of their great big new tax on mining. It is not within the—

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

The member for Sturt will resume his seat. In response to the point of order raised by the member for Sturt, I refer him to the matters quoted by the member for Pearce from the letter of 10 May. They form part of the question. At the point at which the member for Sturt interrupted the Prime Minister for his point of order, the Prime Minister was responding to those matters that were quoted from the letter.

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

Firstly, on the question of the impact on employment, if the honourable member reads the documents released by the Treasury, she will see that the analysis contained within them projects an increase in employment as a result of the implementation of the government’s tax measures. The reason for that is that we are boosting the overall cost competitiveness of Australian business at large, and the employment consequences of that across the entire economy are significant, particularly when you look at the concentrations of employment which lie both within and beyond the mining sector. Secondly, she referred to the small business sector. I would have thought that, in terms of the impact of the government’s tax package, the cut to the company rate—30 per cent of small businesses are incorporated—and the impact—

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

Mr Speaker, I rise on a point of order. It goes to relevance. The question was very specific. Does the $9 billion come from profit or does it come from—

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

The member for North Sydney will resume his seat. I hope the member for North Sydney has got the supplement to the question off his chest and feels happy, but it is beyond the standing orders. On relevance, under any version of relevance that is being used: the question quoted a letter and in that letter there was an expression ‘What about certain matters?’—employment and small business were included—therefore the Prime Minister is responding to the question and he is in order. But I simply say to the member for North Sydney that the device of coming to the dispatch box on a point of order and using it to add to the question is not in order.

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

Firstly, the overall impact of the government’s tax reform plan is to increase employment across the Australian economy. Secondly, can I say to the honourable member on the point that she raised from her constituent on the matter of small business, small businesses will benefit first of all—the 30 per cent of them which are incorporated—from the overall two per cent reduction in the company rate and, secondly and most significantly, for all 2.4 million Australian businesses, the impact which arises from the $5,000 each year tax write-off which is possible against the assets which they invest in. Can I say therefore to the honourable member, on the question of the impact on small business, there are two specific measures contained in the government’s overall tax package which assist small business.

The honourable member then goes on to ask about superannuation earnings, in particular for self-funded retirees. All superannuants have an interest in the long-term performance of Australian equities markets and in the other investments which superannuation funds make. Can I draw the honourable member’s attention to what the Treasury’s analysis says about the future performance of the Australian mining sector as a consequence of the broadening of the base of the mining sector which is achieved by these reforms: a 4.5 per cent increase in mining activity and an increase in employment in the mining sector. Over time, you can see that therefore this is a sound set of reforms for the mining industry as it looks to the future.

Therefore, whether it is the economy at large or the mining sector in particular, the government stands by these reforms. They are good for the economy, they are good for growth, they are good for employment, they are good for business and therefore they are good for the long-term investments and therefore returns to Australian superannuants. I conclude by saying this for the millions upon millions of Australian workers who stand to benefit from having their superannuation guarantee level increase from nine per cent to 12 per cent: we stand on the side of better super for working families; the Leader of the Opposition stands on the side of ripping that super away from working families.

Brett Raguse (Forde, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, why are profit based taxes like the Resource Super Profits Tax superior to production based taxes like state resource royalties?

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

I thank the honourable member for Forde for his question, as I know he is concerned about his local small business community and his community in South-East Queensland. I note in passing to the member for Forde that the secondary schools in his electorate stand to be directly punished as a result of the opposition’s policy to cut funding to trades training centres. In fact, there are a number of secondary schools in his electorate which stand to be punished as a result of that.

Opposition Members:

Opposition members interjecting—

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

I notice from the reaction of those opposite that there is a degree of sensitivity about the cuts to trades training centres in schools.

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

Twelve out of 2,650!

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

The member for Sturt has finished? I hope so.

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

The strength of the Australian economy depends on three core factors. One is keeping this economy out of recession, and that is what we have done together as a nation in response to the global financial crisis. The second is bringing the budget back to surplus, back in black, three years early, three years ahead of time, and in just three years time, and halving the net peak debt of Australia. The third is a program of economic reform. That is where tax reform comes into play.

This government is committed to the importance of tax reform, because this package of measures boosts Australia’s global competitiveness because of the reduction to the company tax rate and the assistance to small business. Secondly, it boosts Australia’s level of overall national savings some $85 billion over the decade ahead. It boosts the individual retirement incomes of working Australians to the tune of some $108,000 in the case of an average 30-year-old worker and it also boosts our investment in infrastructure—rail, road and ports.

On the question of a profits based tax regime, can I say to those opposite and the parliament at large that this government is committed to the principle of bringing in resources tax reform because we believe this principle is right. Firstly, it is right as we move towards a system of resource taxation which taxes profits, not production. The existing system of state royalties is inefficient. Royalties tax production unfairly disadvantage miners who have high costs upfront, in particular high extraction costs. Furthermore, the proposed Resource Super Profits Tax, as a tax on profits, shares the risk between companies and the government.

Let me go to what that means in particular. The government effectively contributes 40 per cent of the cost of the investment through deferred tax credits—that means to offset the initial investments by a company. Furthermore, as that company goes through its initial years of operation this deferred tax credit continues to be drawn upon. If for whatever reason the venture fails, then the company in question can transfer that to a further project or have the remaining amount refunded by the government. Furthermore, the government then takes 40 per cent of super normal profits to the extent that those super normal profits exist. Finally, and most critically, the government then fully refunds the existing state production based royalties. This is the core architecture of a profits based regime. That is what the government is seeking to bring in.

What is the overall effect on the economy? Why is this a worthwhile reform? Firstly, it means less profitable mining companies will actually pay less tax. For example, Treasury modelling indicates that, for a typical project, a company earning less than 10 per cent returns will pay less tax. Secondly, it is a flexible system because, as commodity prices change over time, a company will pay more during boom times and less as commodity prices moderate over time. The crude blunt instrument of a volume based tax does not do that. Thirdly, what we have also is a system which enables companies to rely upon a tax system which replaces the patchwork quilt of an inefficient existing state based royalties regime. That also enables companies not to be subjected to individual decisions by state governments to jack up royalties regimes in a manner not consistent with the profitability returns of the companies in question. That is a further reason why this is a good reform for the economy. Finally, this system would introduce minimal distortions to production decisions by companies developing their resource simply because it is a tax on profits and not a tax on production. It is for these reasons that, under an RSPT scheme, mining investment is projected in the Treasury’s modelling to rise by 4.5 per cent, jobs within the sector by seven per cent and mining production by 5.5 per cent, because this is an efficient tax based on profit, not on volume.

Others who are engaging in this debate have seen the merit of this. I referred yesterday to comments by the former Treasurer, Peter Costello. I referred to comments by the former Leader of the National Party, Tim Fischer. Even the Minerals Council of Australia has come out today and accepted the logic of a profits based system. It said:

We in fact put on the table through the course of the Henry review there was a view that let’s move from the inefficient and complex set of royalties that exist across states to a profits based system where the risk and reward is shared between the state who owns the minerals and the companies that develop them.

So says the MCA. On the merits of a profits based tax system, these individuals are not alone. Enter the member for Tangney. The member for Tangney was asked this very basic question this morning—I notice he is not seeking to engage our attention here: ‘But economically it is more sensible to have a profits tax rather than a production tax. I mean that’s just economics 101, isn’t it?’ The member for Tangney’s immortal reply was:

Well, the point is … ah. I won’t go into arguing the specific merits of that … ah I mean, yeah, there is potential that taxing profits is better than simply taxing volume.

In other words we have from the great state of Western Australia over there the member for Tangney endorsing the fundamental tax principle which underpins this government’s proposed tax reform. But there is more. Enter the shadow minister for finance. This was pretty interesting. What we have from the shadow minister for finance is a statement which says:

This debate has never been about the design of the tax … The debate is all about the size of the tax grab.

In other words, from the shadow finance minister and the member for Tangney we have a fundamental endorsement of the principle of a profits based tax system. Can I say to those opposite that this actually raises a deep question for the Leader of the Opposition. He has had three different tax policies in three days: on Monday it was ‘There was just enough tax’, on Tuesday ‘Not enough’ and on Wednesday his policy was that there was far too much. Does the opposition leader support of shadow minister for finance in embracing a profits based tax regime? We are all ears.

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

Order! The Prime Minister will resume his seat. Has the Prime Minister concluded?

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

Yes.

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

Mr Speaker, on a point of order: I ask the Prime Minister to table the speech from which he was reading.

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

Order! Under standing order 201, the Prime Minister can be asked to table a document relating to public affairs.

Philip Ruddock (Berowra, Liberal Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

Mr Ruddock interjecting

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

I will get around to the side titles. Whilst I know that the member for Berowra is taking the advice of somebody that he respected very much in parliamentary life to try to get my notice, and I usually try to ignore him, his interjection relates to a standing order that does not exist. Was the Prime Minister quoting from a document relating to public affairs?

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

Yes.

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

Is the document confidential?

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

Yes.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

My question is also to the Prime Minister. I refer the Prime Minister to the government’s decision not to adopt the Henry review recommendation to exempt dozens of quarry and mining products extracted by small and family business operations from its great big new tax on mining. Does the Prime Minister agree with the respected financial journalist Ross Greenwood and his assessment that the Rudd government’s great big new tax on mining will ‘hit quarries and other basic businesses that mine and make a profit’ and that:

… from building materials, to roads, farms and even the baby’s bum (talc) the Super Profits Tax is again snipping away at your cost of living.

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

I thank the member for Dunkley for his question. The government’s tax reform plan is clear. There is a consultation process underway. It will deal with detail, it will deal with implementation and it will deal with transition arrangements. We have said this from the beginning. We continue to engage in that consultation with all firms, and that process of consultation is working effectively, including in relation to the matters just raised by the member for Dunkley.

Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What have some of Australia’s most respected economists had to say in the last 24 hours about the importance of the resources super profits tax to the future success of our economy?

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

I thank the member for Flynn for his question. The answer is that 20 of our most respected economists have had some very sensible things to say overnight about a resources super profits tax, and I will talk about that in a moment. But there has also been some more commentary today, particularly from the Leader of the Opposition. The Leader of the Opposition said today on Alan Jones’s program that miners were paying ‘more than their fair share’—more than their fair share. Now, we have been talking about this for about a month. There has been a vigorous debate about modernising our tax system when it comes to the mining industry. There is a vigorous debate about the tax, about its rate and about its design. But I think there is now one thing that almost everybody in the debate—except the Leader of the Opposition, Clive Palmer and one or two others—accepts, and that is that there is the capacity in the mining industry to pay more. It is universally recognised that the mining industry should be paying more because it has not been paying its fair share.

Stuart Robert (Fadden, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Mr Robert interjecting

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

Let us just go back and look at the figures. At the beginning of the decade, one dollar in three—

Stuart Robert (Fadden, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Mr Robert interjecting

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

was paid in royalties and charges out of mining profits—

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

The member for Fadden is warned!

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

At the end of the decade, that has fallen to one dollar in seven. So just about everybody in the community accepts that the mining industry can pay a bit more—except the Leader of the Opposition, who does what he is told by the likes of Clive Palmer. Some of those mining companies walked into his office in week one, told him what to do, and he has been singing their tune ever since then.

There is a wider debate happening in the community, and those 20 respected economists have gone to the core of why we do need change, fundamental reform, in this area. They are respected Australians: Professor Allan Fels, former head of the ACCC; Michael Keating, former head of the Australian Public Service; and the list goes on. They make some very sensible—

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

The list goes on? Go on. Keep going.

Tony Smith (Casey, Liberal Party, Shadow Minister for Broadband, Communications and the Digital Economy) Share this | Link to this | Hansard source

Who are they?

Opposition Members:

Opposition members interjecting—

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

I am going to go on. Professor Quiggin—it goes on and on. Let us go into it. What do they say?

Opposition Members:

Opposition members interjecting—

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

Order! The Treasurer will resume his seat.

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

He’s even worse than Ken Henry.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Outrageous.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mrs Bronwyn Bishop interjecting

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

Often I adopt the attitude that members have to stand by their statements. When there is a vacuum, it is not necessarily the best time to fill it. The member for O’Connor should be careful.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Mr Albanese interjecting

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

There is nothing to withdraw, Leader of the House.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

Tony Abbott should distance himself from that remark.

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

Do you back that?

Opposition Members:

Opposition members interjecting—

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

Order!

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Mr Speaker, on a point of order—

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

The Leader of the House on a point of order.

Opposition Members:

Opposition members interjecting—

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

Order! I am happy for the Treasurer to have the call—but the Leader of the House has a point of order?

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

Yes, Mr Speaker. I think, to suit the decorum of the House, as a matter of common courtesy such an attack on the Secretary of the Treasury—

Opposition Members:

Opposition members interjecting—

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

Order! The Leader of the House.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The comments by the member for O’Connor, backed up by the member for Mackellar, are not acceptable, in that it is an attack on the Secretary of the Treasury, in this House. Mr Speaker, I would ask that you provide them with the opportunity to do the right and decent thing and withdraw.

Opposition Members:

Opposition members interjecting—

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

Order! Order! While it is not a point of order, I indicated that individual members, even when they are interjecting, should be very careful about the statements that they make and they have to stand by those statements. But on this occasion, as the person that has been mentioned is not covered by the standing orders, there is no action that I can contemplate and will take. The reason for me inviting the Treasurer to pause was that the level of interjection was not, by any standards, ‘robust’ or in any way respectful. I think that members should really just think about the way in which we engage with each other in this place. I am happy to have the contest of ideas; I am not happy to have the contest of personalities. The Treasurer.

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

I was talking about the views of 20 respected economists and I wanted to go through some of those views. This is a very important debate for Australia—for how we reform our economy as we go forward, for how we grow our economy, for how we invest in our businesses, for how we invest in infrastructure and for how we grow our national savings. Those 20 respected economists treat this issue very seriously, and it is worth while debating it in this House. I want to quote from them. This is what they say:

… it is desirable to levy a charge for access to publicly-owned mineral resources, in addition to normal corporate income tax.

                  …              …              …

… this is an appropriate time for them to adjust to a more efficient and equitable system of sharing the value of those rights.

Yesterday we were talking about the fact that these minerals were non-renewable, that they could only be mined once. What we have to do is extract the maximum value for the Australian people as we go forward—to reform our economy, to invest in our economy and to ensure our prosperity as we go forward. This is a very serious issue and it should be treated seriously by those opposite. The economists go on to say:

There is no reason to expect a net contraction in mining over the longer term as a result of replacing royalties with the proposed resource rent tax.

This is because a tax on economic rent of non-renewable resources is a more efficient revenue than taxing mining production.

These are very serious points, but they do not seem in any way to be accepted by those opposite.

Mr Quiggin went on today to make this observation, which was very pertinent to some of the points that were made in earlier questions. He said:

… there’s no reason at all to think that the tax is going to affect world prices of these minerals and therefore that that’s going to feed, in any way, into Australian consumer prices.

On the other hand, there’s potentially some benefit for consumers in the offsetting reductions in the general rates of company tax.

So it certainly is depressing to see this kind of scare tactic put up. It really is just to shorten the debate.

Those opposite do not want to acknowledge that we are also moving to a corporate rate tax cut. It is very embarrassing for the Liberal Party to be in this House opposing a corporate rate tax cut whilst at the same time wanting to impose their own. It is very embarrassing for the party that is supposed to be representing business in this House to be opposing sensible reforms to the taxation system for corporates and, most particularly, for small business. But it is more embarrassing for them because they are out there on their own—with Mr Palmer—opposing the fact that we need this profits based tax in the first place.

There have been some spectacular interventions in this debate, and probably none more so than the one this morning from the Leader of the Opposition where he said that they should be paying less tax. That is a view that is not shared by many. It is not even shared by the Minerals Council of Australia. Mitch Hooke said this morning, ‘The concept of a profits based tax is absolutely a tick.’ So even the Minerals Council of Australia is in the cart for a profits based tax, but of course the member for Groom is not and the Leader of the Opposition is not. It just shows you how short-sighted they are, how negatively political they are and how they are not interested in our national interest. They are simply stuck in the past and incapable of coming to grips with the big economic challenges facing this nation. We on this side of the House will do everything we can to ensure that Australians get a fair share of their non-renewable resources so we can invest in jobs, growth and prosperity for Australia.

Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, Miriwinni Lime is a North Queensland, family owned, agricultural mining operation that extracts limestone, dolomite, gypsum and calcium silicate to supply a range of industries across Queensland like the sugar, banana, pineapple, mango, peanut, avocado, maize, dairy, beef, potato and poultry industries. Prime Minister, I refer you to this letter from Russell Wilkins, Director of Miriwinni Lime. He states:

If a 40 per cent mining super tax is extracted from the profit we make, the added cost of our products would impact greatly on the consumer.

Prime Minister, why do you want to impose a great big new tax on Miriwinni Lime, given the impact it will have on this business, the industry it supplies and consumers right across Queensland?

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

I thank the member for Herbert for his question. On the consultations at present between companies and the Treasury panel, they cover businesses from right across the mining spectrum. I would encourage the honourable member to ensure that the company in question is fully engaged with the consultation panel. Secondly, the member for Herbert asked a question about the impact on cost of living of the government’s overall tax reform proposal. I would draw his attention again to what is contained in the Treasury’s analysis of the overall impact on consumers and, furthermore, to the analysis just referred to by the Treasurer in his response and particularly to the comments today by Professor Quiggin on the question of the overall impact on prices.

When it comes to prices, as the honourable member would be aware, the changes to the company tax rate and for small businesses also will have an impact on how profitable those businesses are overall. Can I say also that the profitability of those firms, particularly if they have a turnover in excess of $5 million, is directly affected negatively by the Leader of the Opposition’s great big new tax on every business in the country turning over more than $5 million. The flow-through impact on cost of living for bread, milk and other basic grocery items right across the food chain is significant, as many people from the corporate sector very plainly pointed out when the Leader of the Opposition announced that policy only a couple of months ago—a policy he continues to support. I would also encourage the member for Herbert to encourage his constituent to directly engage with the Treasury panel and to ensure that the concerns raised by them are effectively addressed by the Treasury.

Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I seek leave to table the letter from Miriwinni Lime, which the Prime Minister requested.

Leave not granted.

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. Perhaps the Leader of the House did not hear, but during the Prime Minister’s answer he asked the member for Herbert to give him the letter from Miriwinni Lime. He is tabling it so that the Prime Minister can get it.

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

I am unclear what the point of order is, because I am obliged to ascertain whether the House will give leave for a document to be tabled. If it has passed people by, it only requires one person to deny leave. There was no point of order.

Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and the Minister for Tourism. Minister, how will the resource super profits tax assist the Australian small business community, particularly tourism businesses?

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

I thank the member for Longman for the question. He, like I, appreciates the importance of the tourism sector to his electorate, especially the fabulous tourism opportunity at Bribie Island. He, like I, was amazed to hear the Leader of the Opposition this morning talking about tax reform. Yet again, the Leader of the Opposition has shown how out of touch he is with the Australian community when he said on radio: ‘Any fair-minded analysis would suggest that mining companies were paying more than their fair share of tax.’

This is not just about taxation reform to the resources sector in Australia; this is also about a fair return to the whole Australian community. This is about supporting households and businesses and, very importantly, it is also about supporting small and medium sized businesses in Australia, which are so vital to the tourism sector. I was therefore astounded to hear the comments of Senator Barnaby Joyce on Lateline last night. I remind members that he is not just a Queensland senator; he is also the shadow minister for regional development and infrastructure. This is what he said about the importance of the tourism sector in Australia, of which the restaurant sector is a vital component: ‘The mining sector is slightly more important to us than the restaurant sector.’ As the Minister for Resources and Energy and the Minister for Tourism, I simply say that they are all important sections of the Australian community. Perhaps the member for Moncrieff ought to give his close mate, Senator Barnaby Joyce, a lecture on the importance of the tourism sector to the Australian community, especially the importance of the small business sector to that industry. For example, the tourism sector is worth $41 billion per year. It accounts for 3.6 per cent of Australia’s GDP. It employs half a million Australians directly and just under a million Australians indirectly. From an export point of view, it accounts for just over 10 per cent of Australia’s exports—our largest services export sector.

In terms of the restaurant and catering sector, I remind the House that it was the opposition who last year sought to deny giving them assistance in the middle of the global financial crisis. I also bring to the attention of the House what the Restaurant and Catering Australia has said on a number of occasions. It credits the government’s decisive action with injecting at least $80 million into restaurant and catering businesses during the global financial crisis and with assisting them in getting through that very difficult challenge. But, yet again, we find the opposition dismissing the importance of the small and medium sized business sector of the Australian community. Having sought to deny them assistance during the global financial crisis, they are again seeking to deny them assistance out of a broader tax reform package. By way of example, the opposition is seeking to deny the 93 per cent of tourism businesses that are small to medium sized businesses the cash flow benefits of an instant write-off of assets worth up to $5,000. For tourism businesses that is important. It represents the potential immediate write-off of such assets as IT equipment, refrigerators, beds and other items of furniture that are very necessary for the purposes of refurbishing their businesses in a very tough competitive world.

The opposition is also seeking to deny an annual saving of $94 million to the accommodation and food services sector from the potential reduction in the company tax rate from 30 to 28 per cent. The opposition is therefore effectively seeking to deny one or both of those benefits to 93 per cent of tourism businesses throughout the length and breadth of Australia. Many of them are in regional Australia. You would think that the shadow minister for regional development would have a better understanding of the importance of tourism, a better understanding of the importance of the restaurant industry and a better understanding of the importance of the small business sector to the Australian community. But, then again, I should not be amazed because I think he, like the Leader of the Opposition, has decided that this is not about tax reform in Australia. He has assessed that, from their point of view, there are bigger donations to come from the mining sector than from the small and medium sized business sector of the Australian community.

The government will push on with this debate. Yes, there is a bit of rough and tumble but we are committed to winning through because this is about broad tax reform. This is not only about a fair return to the Australian community for the development of its resources; it is also about a helping hand, and appropriately so, to small business operators—and many of them are in the tourism sector that was so dismally dismissed by the shadow minister for regional development last night.

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

Will the Prime Minister confirm that the North West Shelf gas project, excluded by the Hawke-Keating government from the Petroleum Resource Rent Tax, will now be included in the government’s great big new tax on mining and will therefore be taxed at a higher rate than all other offshore gas fields being developed in Australia?

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

The member for O’Connor rightly points to those which are operating under that particular regime. That is why they are currently engaged in detailed consultations with the Treasury panel and that will continue.