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

I have received a letter from the honourable member for Wide Bay proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to consider the impact of its proposed Resources Super Profits Tax on regional Australia

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

There was a time when the Australian Labor Party understood mining. Ben Chifley, one of Labor’s greats, hailing from Bathurst, certainly did. So did John Curtin. Former finance minister and Western Australian Peter Walsh ensured that Bob Hawke did not lose sight of the importance of the minerals sector to this country. Sadly, those days have gone. Today there are no ministers in the Rudd cabinet who care at all about the mining industry. There has never been a federal ministry more removed from the concerns of the mining industry and its workers, and indeed Australian regions, than this government. It is the most city-centric cabinet in our nation’s history. All the cabinet ministers live in the cities and they therefore, it seems, have lost all interest in people who live in other parts.

For example, there is any one cabinet minister, and that is the Minister for Foreign Affairs, Stephen Smith, who has more than one per cent of people living in his electorate working in the mining sector—only one. The man who should be standing up for miners, the Minister for Resources and Energy, Martin Ferguson, has only 0.1 per cent of his electorate in the mining workforce—just 59 people. The member for Watson is kind enough to be in the chamber at the moment and he of course is famous for living in Sydney as the minister with responsibility for agriculture, fisheries and forestry. But he represents fewer farmers, fewer foresters and fewer fishers than any other person in the whole of the parliament; yet he is the one who was chosen for this ministry. But you might also be interested to know that he represents in the parliament the smallest number of miners—just 30 people.

I know that there are not many mines in the capital cities but, in these days of fly-in fly-out, one would have thought that there would be some people with connections to the mining industry who would be at least a bit interested in what is happening to this sector. The Prime Minister, the Treasurer and the Minister for Finance and Deregulation have very few miners in their electorates and it simply shows. It is not the miners’ fault that they do not live in Griffith, Lilley, Watson, Batman or Melbourne, but with fly-in fly-out operations and with capital city offices increasingly earning a lot of wages and other income from the mining sector you would think the cities would be a little more interested in what is happening in our mining sector. Our capital cities are the recipients of the wealth that is created in regional Australia. Perth and Brisbane are growing strongly because of mining in the Pilbara and the Surat Basin. Adelaide’s fortunes are closely tied to what happens in Olympic Dam. Sydney benefits from the coal dug up in the Hunter Valley.

The labours of the miners, who often have to endure heat, dust and remoteness, earn the wealth that builds many of the hospitals, universities, stadiums and theatres that city people enjoy. Yet regional communities do not have these amenities for themselves. Even if the miners do not live locally, cabinet ministers should be seeking them out. They should be asking their opinions, being aware of their concerns, being aware that what is good for the mining industry is also good for the capital cities and the nation as a whole. A complete disconnect has developed between the federal cabinet and the sector that helped save Australia from recession. The men and the women who make decisions about the way this country is run just see the mining sector as some kind of national milking cow. It is milked, milked and milked again until there is just simply nothing left.

The government has chosen to vilify the miners—the people who risked their all, who went out into remote places and helped to build, develop and produce the wealth from the ground. Minerals in the ground cannot build hospitals and schools. The government’s great big new tax will not just hurt successful companies; it is a tax that will affect all Australians. Mining is critical to us all, wherever we live. To tax it until it bleeds, and maybe even falls over, in the belief that somehow or other this might equalise incomes in the grand socialist style where you bring everybody down rather than trying to bring the nation up is a philosophy that is simply folly of the highest order.

There are direct losers from Labor’s assault with its great big new tax on the miners—the workers, the country towns and the Aborigines, who are more engaged in meaningful employment in this sector than probably any other section of our economy. But it is not just the workers; it is also the shareholders and the super funds. The Prime Minister just dismissed the super funds in question time as being without significance but they lost $15 billion from the value of their retirement incomes in the very first week after the government announcement.

There are some other countries that have tried these giant new taxes on their mining industries. I could mention three: New Guinea, Zambia and Mongolia. But all three have dumped their big new taxes because they did not work. They did not achieve their objectives. It is not often that I would say that President Rupiah Banda of Zambia is a better leader than the Australian Prime Minister. I know we have had a bit of a contest lately about whether Prime Minister Whitlam is the worst prime minister in our country’s history or whether the current Prime Minister holds that honour. Most of them might claim that they have more skills in that regard than President Banda of Zambia, but he gave a bit of advice that I think our Prime Minister and his city-centric cabinet should listen to. He said in commenting on his own government’s decision to dump a super tax on resource industries:

We must ensure that we do not kill the goose that lays the golden egg. There is little point in taking a few million in tax if thousands of jobs are lost as a result.

That was President Banda.

These days, Labor cabinet ministers rarely look beyond their own electorate boundaries. But surely they can listen and take advice from some of the foreign dignitaries that the Prime Minister likes to mix with more than ordinary Australians. He loves to travel to these places. He is happy to give extended aid to African countries. Maybe he might listen to some of the advice that they are giving to him. It did not work in Africa and it will be just as damaging in Australia.

It is bad enough that city-centric cabinet ministers are not concerned about the mining industry, even though what is bad for Kalgoorlie, Hunter or Flynn is eventually going to be bad for Griffith, Lilley and Watson, but there are Labor MPs in this place who do represent a lot of miners. For example, 10½ per cent of the people who live in the seat of Hunter work in the mining industry. Just over 10 per cent of the people of Capricornia are miners. And the figures are similar for electorates like Flynn and Dawson. None of those members sit around the cabinet table. They are out in the wilderness. But surely the city based cabinet ministers should ask the people at the coalface, the people in the mining communities, what their views are on this tax. But, sadly, I fear these members have been completely dumb. I have never heard a word in defence of his own electorate from the member for Flynn or, for that matter, the member for Hunter or the member for Dawson. The reality is that these electorates are going to be grievously hurt as a result of this great big new tax. Yet the people who are within the Labor Party to represent them are not standing up for their own constituents. It seems caucus solidarity and their own jobs are more important than their constituents. They are more interested in looking after their peace and security and the patronage of the Prime Minister than they are in standing up for the people who voted them in—the same people who will vote them out because they have failed to stand up for those who they should be supporting.

Unfortunately, these are the same people who backed the Prime Minister when he wanted to pursue the last great big tax on everything—the Carbon Pollution Reduction Scheme. They were there right till the end. They were not even consulted when it was finally axed. These people backed him. You might forgive them for one lapse, but they are at it again, backing another great big new tax on everything. Sadly, it is their constituents who will be the first to be damaged by this great big new tax. But there will be others as well. It will flow through to the cities; there will be an impact there as well.

We all know that this government has little interest in regional Australia. The first Labor budget stripped more than $1 billion out of regional programs. The second budget took away even more. This third budget now threatens to put a giant new tax on the structure of hundreds of regional towns and cities and the communities they support.

I feel sorry for the minister for agriculture, who sits opposite. He sat during the budget times while the whole department of agriculture was disbanded. It is now simply a branch office of Senator Penny Wong’s environmental monolith. In fact, he has so little interest left in agriculture that he has taken on another job—population. We have only got a part-time minister for agriculture to look after the significant needs of rural and regional Australia.

One thing the government says is justification for its great big new tax is the $700 million that is going to be put aside from this revenue for a new infrastructure fund. However, the government has never said that any of that money will actually be spent in the mining communities or the regions that so need the support and the infrastructure for this industry. Let us look at $700 million in the first place. There is one 10-kilometre road project going on in my electorate that is going to cost that amount of money. It is costing $700 million for a country road. Yet that is the amount for this giant new infrastructure fund this government is talking about. That is all the country is going to get as a result of this giant new tax.

The reality is that this is more likely to turn into yet another Labor slush fund to be handed out at election time in city electorates. The cat was well and truly belled at the Urban Local Government Association Conference in Mackay in Queensland today when Professor Peter Newman, who is a board member of the government’s Infrastructure Australia, confirmed that the current set-up for the $700 million infrastructure fund to come from the Resource Super Profits Tax will not return dollars specifically to the regions where the resources were produced in the first place. In fact, he suggested that just 20 per cent of the $700 million should be put aside for a regional cities infrastructure fund. He thought that would at least be something so that the non-capital cities, where none of the cabinet ministers sit, actually get some crumbs out of the $700 million infrastructure package. They could at least get 20 per cent. Frankly, the whole lot of it should be spent in the regional communities that are producing the wealth, the regional communities where the jobs will be lost as a result of this tax and the regional communities that will have to pay additional costs as a result of the introduction of this tax.

As I said before, it is not just those people directly involved in mining who are going to be affected. This great big new tax, like Labor’s CPRS, will put up the cost of everything that we do in every part of the country. Building costs will go up because the cost of bricks, cement and other building materials will rise. Road-building costs will go up because the costs of quarrying for gravel and road base material will rise. Electricity prices are certain to go up. The minister at the table might be somewhat concerned about that because city electricity prices will go up as well, beyond the $918 a year that has already been predicted in New South Wales by the Independent Pricing and Regulatory Tribunal.

I was amazed to hear the Secretary of the Treasury saying yesterday in Senate estimates, ‘I learnt in high school when studying economics that a profit based tax cannot affect prices.’ I know I went to a poor disadvantaged country school, but I certainly did not learn that at the school I went to. It is inevitable that the higher taxes will be passed on to consumers or that the industry will simply close because it will be unprofitable to undertake the investment and there will be no reason for the industry to operate.

These prices will be passed on. There will be higher costs for all Australians as a result of this great big new tax on everything. There will be higher costs particularly for regional Australians because they will lose their jobs on top of having increased costs. That is why this tax is so bad for Australia. It is bad for the regions, but it is bad for the country because it will damage our capacity to be truly competitive in the years ahead.

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I understand I have been given about 2½ minutes to talk on this MPI, so I will try to make it compelling.

Opposition Members:

Opposition members interjecting—

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I acknowledge the interjection and remind the member to refer to the fact that, year on year, money for Landcare continues to go up. If there is ever something extraordinary to hear in this chamber, it is the Leader of the National Party being critical of slush funds.

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

Mr Truss interjecting

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

He will interject anything other than the words ‘regional partnerships’. He will not interject the words ‘regional partnerships’, because he knows precisely where that will lead. I appreciate that he said he felt sorry for me. I can assure the Leader of the Nationals that the pity is reciprocated, but perhaps for different reasons.

The arguments that have just been put to the chamber against the Resource Super Profits Tax were based on one assumption—that there is no such thing as royalties. All the arguments that the Leader of the Nationals put to the chamber just now presumed that there is no such thing as royalty payments, presumed that we currently do not have taxes based on volume and presumed that the tax being introduced based on profit is not replacing a tax based on volume. As long as the Leader of the Nationals wants to keep the debate within that frame, he knows he is characterising something in a way that is not true—not true at all. One critical part of the Resource Super Profits Tax is that it is a tax on profit not on volume.

They also at the same time decided to ignore what the tax will be used to pay for. You will never hear the opposition say that their stance is preventing a reduction in company tax. There is a reduction in company tax on the table, from 30 per cent to 28 per cent, and a head start on those reductions for small businesses. You will not hear them say a word about the general tax relief which is available as a result, nor will you hear them refer to the instant write-off of assets of up to $5,000 or to the infrastructure fund.

You will not hear the opposition refer to the benefits that are available as a result, because they want to characterise this debate with something which they know full well is untrue. We have seen this in their characterisation of fertiliser prices. They pretended that there is no such thing as a world fertiliser price. They pretended that prices would be passed on to farmers. They knew that was untrue.

Debate interrupted.