Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to claims by the Hunter Business Chamber, a chamber that represents 1,000 businesses in the Hunter Valley, that 15,000 people are directly employed and another 50,000 indirectly employed in the region’s mining sector and that the Hunter economy is dependent upon the resources sector. Is he aware of a newspaper article on 3 May where it said in the Newcastle Herald that the 40 per cent tax on coal profits has Hunter coal companies ‘up in arms’ over the blatant tax grab and that effects of the super tax touch every level of the sector? The Herald said:

Hunter mines exported about $8 billion worth of coal last year, plus another $1 billion or more in domestic sales, and contributed about $900 million in state mining royalties.

On these figures, the Hunter’s contribution to the new “super tax” could be as much as $3 billion a year.

Prime Minister, what action is your government taking to protect the Hunter from the damage that will be caused by your government’s great big new $3 billion tax on mining industries in the Hunter that will not flow through to other businesses?

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

I thank the member for Paterson for his question, which is presumably why the Newcastle Herald, I am advised, editorialised in support of the government’s proposed tax.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

Wrong, wrong, wrong!

Opposition Members:

Opposition members interjecting—

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

I will stand to be corrected. I have been advised by others that there was a generally supportive approach to it.

Opposition Members:

Opposition members interjecting—

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance.

Opposition Members:

Opposition members interjecting—

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

Order! The member for Paterson on a point of order.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Link to this | Hansard source

The Prime Minister is misleading the House, because the only editorial supporting it was from the Labor members in this House.

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

Order, the member for Paterson is warned!

Honourable Members:

Honourable members interjecting—

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

The finance minister is warned!

Honourable Members:

Honourable members interjecting—

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

Order! Whoever said that is lucky. If they want to own up, they can be warned as well. The Prime Minister has the call and the Prime Minister will be heard in silence.

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

Thank you very much, Mr Speaker. The reason we are engaged in tax reform is because we want to ensure that we have an increase in the overall competitiveness of the Australian economy, and that includes in regions like the Hunter and Newcastle and right across the nation. You do that by making sure that you have got globally competitive tax rates for Australian businesses. You bring down the tax burden for Australian small business. As the finance minister quite rightly said in his response to an earlier question, the contrast now is stark when it comes to the company tax rate. How many companies, for example, in the honourable member’s electorate will be paying the company tax rate? Under this government it comes down to 28 per cent. Under the proposal by the Leader of the Opposition it goes up to 32 per cent. That is a four percentage point difference in the company tax rate for all those companies in the electorate of Paterson.

Furthermore, how many small businesses do we think there are in the electorate of Paterson? A large number, and I am sure the relevant minister will give me the figure before long. Small businesses, in addition, those that are not incorporated, will all benefit from the additional measure of the tax break concerning $5,000 of their assets in a given year.

These are the changes that we make to the economy on the ground. A further change that we make to the economy on the ground in electorates such as that represented by the member for Paterson is an investment in the Hunter Expressway, a very large scale investment in the transport infrastructure of the region—$1.45 billion. I seem to remember that the member for Paterson promised this, and promised this again—and guess what happened? Nothing actually happened.

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. The question was about the effect of the great big new tax on mining on the Hunter. It was not about a road in the Hunter Valley. The Prime Minister—

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

The member for Sturt will resume his seat.

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

Mr Pyne interjecting

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

The member for Sturt is warned! 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. The question from the honourable member for Paterson was about the impact of the government’s tax reform proposal on the economy of his region. That is what I am responding to. The purpose of the government’s tax reform is to make it possible to bring down the company tax rate right across the country to increase our global competitiveness—as opposed to those opposite, who would increase the company tax rate, thereby impeding the profitability of firms across the economy and doing the same to small business. I am advised reliably by the Minister for Small Business, Independent Contractors and the Service Economy that there are 4,194 small businesses in his electorate that stand to benefit from this government’s special tax break on $5,000 of assets in a given year in order to take the burden of tax from small business, so much the engine room of our economy.

Another reason that we are investing in tax reform is to make sure that we can fund the country’s future infrastructure needs. The member for Sturt took a point of order in terms of the relevance of this matter. The funding of infrastructure is one of the core cornerstones of the reason we are constructing this tax reform. We are doing it so that we can fund the nation’s future infrastructure; fund what is necessary for the construction of the Hunter Expressway, a very large project—$1.4 billion. Does he assume that this money grows on trees? It does not. We need to derive this money from the tax base of the Commonwealth in order to make sure that infrastructure is built.

The member for Paterson spoke specifically about the industries within his region: the port and the associated resource industries around coal. We are investing something in the vicinity of half-a-billion dollars through the ARTC to increase the overall efficiency of the rail infrastructure to make that port, the port of Newcastle, as efficient as possible. He asks, therefore, what we are doing for the businesses and economies of his region. I welcome that sort of question from any member opposite, because we are bringing down the company rate, bringing down the tax burden on small business, boosting the super payments for all the workers in your electorate, increasing our ability to invest in projects like the Hunter Expressway and investing in projects like the ones that the ARTC is investing in in terms of the rail efficiency of the port of Newcastle. These are the practical things which make a difference. We believe that this is an absolutely essential reform for the nation’s future.

I say therefore to the member for Paterson that the important thing is to be actually fair dinkum about tax reform. We saw what happened in terms of fair dinkum tax policy from those opposite during the course of last week. They could not render the full gospel truth of whether they thought that there was enough tax, too much tax, just enough tax, or whether anyone should have a tax policy on the benches of those opposite. We have had this change time and time again. But there is more. I have just been alerted to the fact that, on the question of the full gospel truth, we have had another major backflip by the Leader of the Opposition on policy. We have seen it on tax; we have seen it on the party room. We have seen it also in the party room’s deliberations on border protection and the assurances that he gave about shutting the border. This one goes to climate change.

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

Order! The Prime Minister knows that he has to use material that is relevant to the question. If he is going to continue, he must relate his material to the question.

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

Mr Speaker, in the context of the carbon based industries within the region referred to by the member for Paterson, I would assume that those who accept the science would regard the opposition’s policy on climate change relevant to the long-term development of the coal industry in the Hunter. We know that the Leader of the Opposition has famously declared in the past the settled science—he called it ‘so-called settled science’—of climate change science to be crap. That is his word: ‘The argument is absolutely crap.’ But today he has said this: ‘I am confident based on the science that mankind does make a difference to the climate. Almost certainly the impact of humans on the planet extends to climate.’

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

The Prime Minister will bring his answer to a conclusion. The Prime Minister will relate his material to the question. I now ask that he brings his answer to a conclusion.

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

It is a question of whether those opposite are participating in this debate in a bona fide way. Are they fair dinkum? Is this full gospel or not? We have seen a complete backflip on the question of tax policy; we have seen them twist and turn on so many other issues. I will conclude by quoting the headline of the Newcastle Herald to which the honourable member for Paterson referred before. It says—

Opposition Members:

Opposition members interjecting—

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

Order! The Prime Minister will resume his seat while the House comes to order. The Prime Minister—in conclusion.

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

They are very sensitive to what has happened in terms of the twists and turns of their policy. The member for Paterson spoke before about the editorial of the Newcastle Herald. It was entitled ‘Australia’s mining industry can afford to pay more taxes without its viability being threatened’. I think that the Newcastle Herald says it all.

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Competition Policy and Consumer Affairs and Minister for Small Business, Independent Contractors and the Service Economy. How will the government’s tax breaks benefit small businesses and independent contractors? Are there any threats to these reforms?

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

I thank the member for Hasluck for her question and for organising meetings with the Swan Chamber of Commerce and the Kalamunda Chamber of Commerce. That was a very good opportunity to discuss the issues of concern for small business in her electorate. She has always been a strong advocate for small business. Yes, Opposition Leader, that is you and it is coming. You have a very confused look on your head and we will get to that.

During the global recession, the Rudd Labor government supported small businesses through the stimulus package and through a special small-business tax break. We think they behaved magnificently, keeping people on, although perhaps reducing hours. We want to thank them and support them during the recovery phase through small-business tax breaks. There are two major tax breaks. The first is that for every one of Australia’s small businesses, 2.4 million of them, there would be instant write-off of the value of assets up to $5,000. That has been strongly welcomed by the Council of Small Business of Australia. Contrary to assertions from the opposition, it applies to every small business in Australia.

The second tax break is a reduction in the company tax rate from 30 per cent to 28 per cent. That is a head start reduction—that is, starting on 1 July 2012. That is great news for small business as well—great news if we can get the legislation through the Senate, but the bad news is that the opposition has already indicated that it will block the small-business tax breaks. What has the opposition got against small business? The member for Herbert will have to explain to the 11,133 businesses in his electorate why he is denying them a tax break and, if he does not, we will. So, for the member for Herbert there are 11,000. The member for Hinkler is here. The member for Hinkler will need to explain to the 10,000 small businesses in his electorate why the coalition would deny them a small-business tax break and, if he does not, we will.

The member for Ryan will not be explaining anything and he is not here today, but the candidate for Ryan—and I am reliably informed Councillor Jane Prentice from the Liberal-National Party is looking good there at two to one on—will have to explain to the 12,500 businesses in the electorate of Ryan why she is denying them a small-business tax break. I saw that my friend the member for Dickson was having a chat with the member for McPherson. It is not too late. You can make the move to McPherson, but, if you do not get the nod there, if you cannot convince the existing candidate, then the member for Dickson will have to explain to 11,900 small businesses why he is denying them a tax break. Why would you do that?

The member for Bowman is not here. I think he is into the party pies early. He has gone. A total of 11,676 small businesses will be saying, ‘Why am I being denied a small-business tax break by the Leader of the Opposition and the member for Bowman?’ The member for Gilmore will have to explain to 8,000 small businesses. The member for Greenway will have to explain to 12,960 small businesses why she is denying them a tax break. I see the member for Hughes. The member for Hughes will have to explain why 12,000 small businesses in her electorate are going to miss out on a tax break if her leader gets his way. The member for Macarthur, if he still has any interest in the matter, will have to explain to 8,400. The member for Paterson has 4,194. That is a big job. Go around door-to-door and explain. He can also explain why he cannot read the newspaper that editorialised in favour of the resources tax, in favour of the mining industry paying more tax.

The member for McEwen was formerly the Minister for Small Business and Tourism. Why wouldn’t a former small business minister go to the opposition leader and say, ‘Don’t do it, Tony, please don’t do it, because I will have to explain to 12,000 small businesses why I am denying them a small-business tax break.’ There are 5,175 small businesses for the member for Sturt. The member for Swan—

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

On a point of order, Mr Speaker: is this not needless repetition and could it not be solved by—

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

Order! The member for Hinkler will resume his seat.

Opposition Members:

Opposition members interjecting—

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

Order! In dealing with the member for Hinkler’s contribution, which was not a point of order, I tried to get him to resume his seat to save him from himself.

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

On a point of order, Mr Speaker: I again draw your attention to page 49 of the Practice, and the comments emanating from the 1976 report of the Royal Commission on Australian Government Administration, which says:

The responsibility of ministers individually to parliament is not mere fiction.

Is the minister quoting numbers of incorporated businesses, which are the only ones that will get the tax deduction?

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

Order! The member for O’Connor will resume his seat. The member for O’Connor was seeking the call to supplement the question and that is not permitted. He knows the intent of his contribution. He will sit there quietly. The Minister for Small Business—

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

and silly walks.

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

The member for Flinders is not helping by any form of encouragement like that, so I think he should there quietly, too. The minister will resume but contemplate that the conclusion of his answer is now getting near.

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

My list is complete, but I will remind the member for Hinkler that, for him, it is 10,086. He was not listening the first time. The member for O’Connor’s point is the repetition of a completely false statement. The coalition have been saying that only incorporated small businesses will get the $5,000 instant write-off. We just heard it from the member for Mackellar. The truth is that they have no idea about tax. Every one of Australia’s 2.4 million small businesses will get this tax break if the Rudd Labor government can get this legislation through the Senate, because it applies to sole traders, to partnerships and to companies.

I will just complete on this point. This is a very important book, I think the opposition leader would say.

Opposition Members:

Opposition members interjecting—

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

Order!

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

It is a very important book about his views on small business.

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Abbott interjecting

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

Order! The Leader of the Opposition should contain himself. The minister has the call.

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

Do you know how many times he mentioned small business in his very important book? He did so four times. It was four times. One mention was on a tax loss carry back, which was euphemistically ‘discontinued’ only a week ago; two mentions were on unfair dismissals, and they would remove the protections for millions of Australian workers; and the other mention was on page 102, on his great big new tax on everything you buy. The truth is this. He says that if it is written down it is gospel truth. Do you know what he says about the great big new tax on everything you buy? He says small business should pay. That is what he says on page 102.

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

Order! The minister has concluded. He may have had a finale, but he has had a good time.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Mr Windsor interjecting

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

I appreciate that the member for New England is trying to cheer me up, but he has to be careful too. I think he was being very harsh.

Margaret May (McPherson, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. I refer the Prime Minister to the loss of up to 70 jobs in Mount Isa and Cloncurry directly and indirectly as a result of the suspension by Xstrata of its copper exploration program in North Queensland due to his great big new tax on mining. What impact will these job losses have upon these local communities and how many more job losses will these towns have to endure as a result of his great big new tax?

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

I thank the member for McPherson for her question. It goes to the mining industry and it goes to the implications of the proposed introduction of the government’s RSBT. I would say to the member for McPherson to look carefully at the projections by Treasury of the impact of the government’s overall tax reform on employment for the economy and for the mining industry as well. In fact, when it comes to employment for the mining industry, from recollection, the Treasury analysis says that you would look at about a 4.5 per cent increase in activity, I think a 5.5 per cent increase in investment and over time a seven-point increase in employment. I would suggest that the honourable member for McPherson reflect on those figures contained within the Treasury’s projections.

I would also remind the member for McPherson, given the nature of the seat she represents, of the large number of small businesses within her electorate that would be directly benefited by the tax reforms the government foreshadows. I think the Minister for Small Business, Independent Contractors and the Service Economy just recently—and eloquently, if I might say—ran through the implications for small businesses individually in electorates right across the country. On the Gold Coast there are a great stack of small businesses, which frankly would benefit from being able to—

Margaret May (McPherson, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order going to relevance. The Prime Minister is not addressing the two towns that are affected by the 70 job losses.

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

Order! The member will resume her seat. The question went to a policy item of the government as well as to the relationship to the two towns. The Prime Minister is responding to the question.

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

Ms Julie Bishop interjecting

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

I enjoy also the continued interjections from the Deputy Leader of the Opposition, because she has distinguished herself so greatly during the course of this week.

In response to the question of the member for McPherson, I go firstly to the overall employment impacts of the government’s proposal, secondly to the mining industry and thirdly to the working families and small businesses of McPherson. They will benefit under this proposal from an increase in super for all working families, and she is voting to block that. There will be a reduction in the tax burden on the small businesses in her electorate, which she is voting to block. And there will be a tax reduction for all companies in her electorate, which she is voting to block. I would suggest to the member for McPherson that in standing up for the interests of her constituency she should bear in mind the burdens borne by small business—eloquently underlined just now by the minister for small business. If she had some concern for her local economy, she would stand up in this place and back the interests of the small businesses of McPherson.