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

My question is to the Treasurer. Yesterday the Treasurer in this place declared the effective tax rate for the mining industry at the moment to be 17 per cent, and he said that on eight separate occasions. That was based on a flawed US university graduate paper. I draw the Treasurer’s attention to his own economic note of 9 May in a table on page 3, which states the current effective tax rate is up to 45 per cent; between 35 and 45 per cent. Treasurer, which of the figures is correct? Is it what you advised the House yesterday of an effective tax rate of 17 per cent, or is it what is in your own publication—an effective tax rate of 45 per cent?

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

This is very sloppy work, Joe. You are out here all the time comparing apples and pears.

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

The Treasurer will refer to members by their parliamentary titles.

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

Sometimes it is oranges and apples. He is just flip-flopping all over the place. Let us just go through a few of the basic facts. We have been having a debate about effective tax rates for companies. Those opposite have sided with the mining industry who are claiming an effective rate for the mining industry of something like 27c when the headline statutory rate is 30c. What has really stung them is that there is a Treasury study that points conclusively to the fact that the effective tax rate for the mining industry is 17c in the dollar. What he wants to leave out in all of these comparisons in his usually sloppy way is the fact that mining companies get very, very generous tax concessions. So he does his calculations based on taxable income—that is, taxable income after they have had all of those concessions. Their effective rate is 17c in the dollar. It does not matter how much you want to flip-flop all over the place and change the tax basis to make your point—

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

It’s your own paper, you fool!

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

Order! The member for North Sydney will withdraw.

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

I withdraw.

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

I thank the member for North Sydney.

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

They are very touchy, Mr Speaker, because they ought to be.

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

The Treasurer will go to his answer.

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

Yesterday we had the Leader of the Opposition saying that the mining companies in this country were paying too much tax. That is what he said. This is a severe embarrassment for them because not even the mining companies have the gall to say that they are paying too much tax. Perhaps not even Clive Palmer, who sponsors them, would ever say something so stupid or so extreme. This is what the Leader of the Opposition had to say yesterday: the mining companies were paying too much tax.

How do we get to the bottom of this case about how much tax they are paying? Let us go back to the one basic fact that they have not been able to refute. It is very simple. At the beginning of this decade, mining companies were paying one dollar in three in terms of their profits in royalties and other charges, and by the end of the decade that had got to one dollar in seven. What that demonstrates—

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

Mr Speaker, I rise on a point of order which goes to relevance. I asked him about his own document—35 per cent to 45 per cent for effective tax rate. Which is right?

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

The Treasurer will relate his material to the question. The Treasurer has the call.

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

Mr Speaker, I have been making a point about effective tax rates, but it is not something that is well understood by the member opposite. When it comes to company tax, the mining companies are paying an effective rate of 17c in the dollar as measured against the 30c headline rate. How does that compare with other industries? In transport it is 27c. In finance it is 29c. This is very important to understand because what is the environment we are having this debate in? They are currently opposing our proposal to cut the company rate by 2c. They are opposing that. What they are proposing to do is to increase the company rate. What we have is a situation where they want to increase company tax for all companies with a turnover of over $5 million, so they have to concoct a figure that the effective rate of company tax for mining companies is 27c instead of 17c. This is the very basic point.

They are now so acutely embarrassed because they have jammed themselves into a corner where they are saying that the companies should not pay more tax. Not even the companies are arguing that. When there is an effective rate of 17c for company tax and when they have not been paying their fair share of royalties, the case is there. It is very clear. They can pay more tax, which is why we are going to modernise the tax system and make sure that those that are very profitable do pay their fair share so we can cut the company tax for all companies across Australia.

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

Mr Speaker, I seek leave to table the Treasurer’s own note from 9 May, which says the effective tax rate is 35 to 45.

Leave not granted.

Everyone should see this—table it.

Honourable Members:

Honourable members interjecting—

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

Order! I remind members that to interject and interrupt is outside of the standing orders. If they are going to talk to themselves, could they do it more quietly—on both sides.