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

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

The adverse effect of the government’s Resource Super Profits Tax on superannuants, self-funded retirees and senior Australians.

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—

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to raise this matter of public importance as the Rudd government has deceived the Australian people about the adverse effect of their great big new tax on mining and the effect that this tax is having on superannuants, self-funded retirees and senior Australians. But all those Australians building and relying on superannuation are not being fooled by this fraudulent Prime Minister and this desperate, debt-ridden government. They know the impact of Labor’s great new tax. They know the impact that that tax is having on their retirement savings—not in 10 years, but right here and right now. Yet we have a government in denial. While the rest of the country knows that the uncertainty this government is creating has jeopardised investments, jobs, future dividends and wealth creation, our Prime Minister has his head firmly stuck in the sand about what this great big new tax on mining is going to do to our nation.

The Prime Minister told the House only on Thursday that the opposition was, in his words, ‘wrong, wrong, wrong’ for suggesting that this mining tax had any effect on financial markets and superannuation balances. Let us look at the facts. The facts are that Australian superannuation funds are big holders of mining shares. It is estimated that around 9.2 per cent of all investments made by superannuation funds are in resources stocks. In fact, the biggest industry superannuation fund, AustralianSuper, holds 11.71 per cent of its shareholdings in BHP Billiton, a further 3.12 per cent in Rio Tinto and around one per cent in Newcrest Mining. All superannuation funds have similar holdings.

Since Prime Minister Rudd’s great big new tax was leaked to the media on 13 April, more than $20 billion has been stripped from the mining investments of these superannuation funds and super balances have lost around two per cent in value. But still this Prime Minister chooses to mislead the public and deny that his great big new tax is affecting share value. On Wednesday last week, the member for Pearce asked the Prime Minister about the analysis undertaken by the government on how its mining tax would affect investments of self-funded retirees and their standard of living. The Prime Minister refused to answer the question. He insulted all self-funded retirees by referring to the proposed superannuation guarantee increase as how the government would boost retirement income. But retirees are just that: retirees—they have already retired. As a result of that, they are relying on their investments, much of which is invested in the resource sector. What an insult to ignore their concerns and refer to a policy that does not even affect them.

In fact, he denied the impacts a day later. He said the opposition were ‘wrong, wrong, wrong’ for suggesting that a $9 billion new tax on mining profits would impact on the profits, dividends and share prices of mining companies. The Prime Minister’s comments follow those by the Minister for Financial Services, Superannuation and Corporate Law, who said on Monday last week that any suggestion of an adverse impact on resource investments was nothing more than a scare campaign. Information from the Treasurer last Friday confirmed that the government was aware of the adverse impacts of this great big new tax on mining stocks. As justification for Labor’s emergency advertising campaign on the proposed tax—a waste of taxpayers’ money to the tune of $38 million—the Treasurer stated that ‘the tax reforms involve changes and they impact on financial markets’. But it gets worse. Cabinet documents released yesterday by the Rudd government show that it had planned the advertising two weeks before the Prime Minister announced that great big new tax on mining.

The Treasurer and the Special Minister of State were corresponding about the effect that the tax would have on financial markets well before it was announced. So the Prime Minister has known for months that this new tax would impact on the investments and portfolios of superannuants, self-funded retirees and senior Australians, but he has decided to mislead the Australian public. The Prime Minister cannot have it both ways. Either his government was deliberately misleading shareholders and superannuants in Australia about the adverse impact of Labor’s great big new tax or he deliberately ignored the advice issued by the Treasurer as justification for the government’s $38 million advertising campaign. This is nothing but a tax grab. The government knew in advance what damage it would do to financial markets. It knew it would impact on the shareholdings of self-funded retirees and it knew what it would do to superannuants.

And the Treasurer refuses to apologise for the ads. He told Radio National yesterday that he thinks:

… it’s very important that the public has an accurate view of what the government is planning.

Very important indeed! Well, the public now have an accurate view. What the government has planned is what is already happening: a significant loss in the value of mining stocks. As I have said, superannuants and investors already know this. They only need to look at their super balance to see what this government is doing for them and their retirement plans.

Now the government is further spending their money; it is blowing more dough to convince superannuants and investors that this tax is a good thing. Despite the Prime Minister promising time and time again to abolish government advertising, he is spending another $38 million on his own propaganda campaign. We have the farcical situation where the government is using taxpayer money to convince taxpayers that miners are not paying their fair share of tax. While taxpayers are losing their share of proceeds in their mining stocks being held in their superannuation, they are also paying for it through their tax dollars. This is a government that has already spent money beyond what it is taking from ordinary taxpayers and placed Australia’s budget into historical levels of debt—a debt that is going to peak at $94 billion in 2012-13—and now this Prime Minister and this government are ruining the superannuation balances of taxpayers as a consequence of their tax grab on mining.

And that is what this is really about. A tax on mining is nothing but a tax grab so that this government can fund policies and waste more money on poorly implemented programs. The government want this tax because of blow-outs the Deputy Prime Minister has caused in the Building the Education Revolution program. They want this tax because of the Prime Minister’s home insulation debacle. And why were there blow-outs in these programs? There were blow-outs because this great big new tax on mining was needed to fund their own incompetent programs they could not implement. They were big on promises and very small on delivering.

Let us look at the Home Insulation Program for just a moment. The Prime Minister admitted last Thursday after a question from the member for Flinders that he was warned on three occasions between August and October last year about safety concerns with the insulation scheme. These concerns were expressed by the Minister for Environment Protection, Heritage and the Arts, who fell on the Prime Minister’s sword as a result of the bungled scheme, which caused four deaths and over 146 house fires as a result of Labor’s $2.4 billion debacle. These safety concerns could have been addressed by the Prime Minister and could have been avoided if he did not choose to ignore the advice given to him by the minister for the environment.

There is a dangerous pattern of deceit and incompetence from this government. The Minister for Finance and Deregulation admitted to Sky News in February that this government simply does not ‘dot the i’s and cross the t’s’. As we have seen, it is the Australian public who suffer as a result of the government’s deliberate oversights and incredible incompetence. With the pink batts scheme, it was homeowners who suffered. Now, with the mining tax, it is superannuants and investors who are suffering because the Prime Minister has refused to listen to experts and his own colleagues about the impact that his great big new mining tax will have on financial markets and Australia’s sovereign risk profile. But, if the Prime Minister and the gang of four do not want to believe me about the impact of this mining tax, they should at least start listening to some of their state Labor colleagues—hardly advocates for the conservative side of politics. They are out there in numbers—lining up, expressing genuine concern about what this tax means for jobs and investment and our economy and what impact a weaker economy will have on the wealth of our nation.

I would like to take the opportunity to note in this House some of those concerns. The Rudd government needs to understand that state Labor governments are pleading with the Prime Minister to change the design of his tax, and in fact scrap it altogether. In early May, for example, the Labor Premier of Queensland, Anna Bligh, expressed her concern that the tax would hit investment. The Premier said:

You can’t expect international companies to make those investment decisions unless they’ve got absolute certainty about the costs of doing business.

In Victoria Premier Brumby said just last week:

The two areas that are put to me as needing some fine tuning are firstly in relation to any element of retrospectivity and, secondly, if the 6 per cent rate is the right rate or should it be a higher rate.

These are pretty big and fundamental changes demanded by the Labor Premier of Victoria. The Labor Treasurer of South Australia also said on 11 May:

It is the architecture, the design, the implementation that needs to be fixed, rearranged, readjusted.

If the architecture is no good, the design is no good and the implementation is no good, what else is there? In other words, the whole policy needs to be scrapped. The Prime Minister has accused any critics of this tax as being mouthpieces for the mining industry and involved in a scare campaign. By that measure, the state Labor governments and the state premiers are mouthpieces for the mining industry and involved in a scare campaign.

This Labor government refuses to take criticism. It denies criticism even exists unless it can be used to justify its agenda at some stage in the future. The hypocrisy of this government is breathtaking. On the one hand it proclaims that it is conducting ‘meaningful consultations’ with the mining sector and in the next breath it is out there rejecting everything the sector is saying. The reality is that as far as the Prime Minister is concerned it is his way or the highway. If you do not agree with him he just will not listen. That is what he is like on climate change, and now that is exactly how he and his ministerial colleagues are behaving on this tax. The arrogance of this government is a disgrace and is not in the national interest.

Mining executives are the people who are actually involved in investing in Australia and providing returns to investors and superannuants. Does the government actually believe that mining companies putting investments on hold will be good for superannuation funds? For the government’s sake let me quote what a few of our mining executives think about this great new tax. What does Marius Kloppers say about this tax? He says:

I think that what one can safely say is that if you pay twice the tax in one country that you pay in another for the same product then relatively speaking that other country will become more attractive.

He went on to say:

What I can say though is that there will be an impact on investment, jobs and growth if the tax is implemented in an unchanged form.

These are comments from the CEO of one of the biggest investors in Australia’s prosperity. But do not take Mr Kloppers’s word; why not speak to one of his competitors, Mr ‘Twiggy’ Forrest over at Fortescue Metals. Fortescue has announced that it will put the $10.5 billion Solomon Hub and the $7 billion Western Hub projects, which were set to employ 30,000 people, on hold. I quote Mr Forrest himself:

The uncertainty in the financial markets caused by the proposed tax and the cash impost RSPT payments will place on future business revenue has necessitated an urgent review of the economics surrounding the development of Fortescue’s major projects.

There are numerous other examples across the nation. Mining executives and analysts are forecasting a trail of destruction as a result of this tax. Credit Suisse, for example, says the Whyalla steelworks would be unprofitable because of this tax. Citigroup says that this tax will wipe off one-third of the incremental value of new projects in the Pilbara. What a service to Australia’s future prosperity—taking a third of the value off projects in the Pilbara!

The Prime Minister is ignoring the industry, but superannuants are not. As I said before, superannuation balances have plunged due to a plunge in the value of resource stocks. The superannuants of this country are fully aware of what the Prime Minister refuses to recognise. The superannuants of this country know that this great big new mining tax is decimating their hard-earned savings. The superannuants of this country know, and the self-funded retirees of this country know, just how hard they had to work to build a nest egg for their future prosperity, just how hard they had to work to sustain themselves in retirement, and at one minute to midnight this Prime Minister comes along and rips them off. The superannuants and the self-funded retirees and Australia’s seniors know they are being ripped off by this government, not once but twice—firstly by their resource stocks being decimated as a result of this great big new tax, and secondly as a result of their being ripped off by $38 million in advertising to try to justify the Prime Minister’s sham tax, this absolute blight on investment in Australia.

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

I am very pleased, as the Leader of the House, to respond to this matter of public importance today on behalf of the government and to defend the rights of all Australians to get their fair share of the resources that they own. As for those opposite, the Leader of the National Party once again throws around the phrase ‘slush fund’. It is always the Nats. You love it when the Nats talk about a ‘slush fund’. You just love the sense of irony from the National Party, who established the Regional Partnerships program. The resource super profits tax is a tax that is simply moving from taxing volume to taxing profits. What is more, it is a tax which moves away from a tax on production to one on superprofits. Therefore by definition this is an efficient tax, which is why it has been backed by all serious economists right around the country and indeed internationally, as the Prime Minister indicated today with the Financial Times editorial of this week. The resource super profits tax is also a part of our national tax reform agenda.

It is somewhat ironical also that in today’s MPI debate the issue of the interests of superannuants is raised. This resource super profits tax will allow the next step in the Labor agenda of providing for national savings in the national economic interest and personal savings in the interest of working families retiring in some comfort. The increase from nine per cent to 12 per cent is the next step that would have occurred had the Keating government been re-elected in 1996. Those opposite have never understood superannuation. Those opposite have always opposed superannuation. We now have over $1 trillion in national savings as a result of the vision of the Hawke-Keating government, now followed by that of the Rudd government, and Minister Bowen, who is at the table, has played a critical role in ensuring the next step in this reform agenda. This is why when I attended with Minister Bowen the superannuation industry breakfast after this was announced we found it was so warmly received. It is interesting that the member for Cowper, in order to attack the government’s reform agenda, simply quotes big miners. There was not a single quote from the industry which he has a responsibility to represent and advocate for within the opposition and within this parliament.

But, of course, there is also the reform of company tax. We on this side of the chamber believe it should be reduced by two per cent. Those on the other side of the chamber want to increase it by two per cent. But there is another agenda as well, one that comes in my portfolio of infrastructure. We know that in spite of the tremendous mining boom when you go to regional Australia—whether it is Karratha, Port Hedland, Dampier, Newman, Mackay or Gladstone—you see there is a considerable infrastructure deficit, an infrastructure deficit that the former government was warned about by the Reserve Bank of Australia on 27 separate occasions. This is the infrastructure and skills deficit left by the former government which has been a handbrake on our economic productivity. We on this side of the House are addressing the issues. The member for Cowper spoke about projects being put on hold as a result of the resource super profits tax. Indeed, as a result of his political party’s position in the coalition, what is really under threat are infrastructure projects right around the nation. Firstly under threat is the infrastructure fund that would fix the issues that are raised in these communities. These communities, with their fly-in fly-out workforces, with their lack of housing and with their lack of export infrastructure through ports, roads and rail, all say, ‘How is it that we’ve gone through this enormous boom but we still don’t have enough infrastructure?’ Absolutely extraordinary!

What we know is that the opposition would put under threat not just that infrastructure investment but all infrastructure spending. We know of the shadow minister for finance and debt reduction’s statement on 20 May about the opposition’s commitments that had been made on road and rail infrastructure. He said any other past commitments had been discontinued. In his statement the only new commitment that was honoured by the coalition was the Toowoomba bypass, which has become a footpath because they funded a small amount of the $1.75 billion that is required for that. It took just seven days for this approach to collapse into complete confusion. The shadow finance minister, when asked by the Geelong Advertiser and the Colac Herald how the coalition would fund roads in the area, said they would use Roads to Recovery funding. So every local government area in the country now knows that their future funding is under threat. On the same day the Leader of the National Party, when asked by Australian Transport News, said, ‘We’re standing by all our promises.’ He said that they would take funding from the existing Nation Building Program, that somehow they would squeeze it in. What he ignored was the fact that the Nation Building Program is fully allocated until 2013-14. The $37 billion is the subject of memorandums of understanding with the states—all signed and agreed with work progressing and proper planning of infrastructure development.

When they came into government in 1996, the opposition cut the roads budget by $2 billion over their first eight budgets. The office of the shadow finance minister responded to the Australian Transport News about the Nation Building Program:

You would reprioritise … We would obviously consider all the programs as a whole.

When asked specifically if this review extended to projects due to start this year, the answer was, ‘Yeah, of course.’ So there is no doubt with that statement that the coalition has a hit list. We need to know what is on the hit list. Is it section 4B of the Geelong Ring Road? Construction is due to commence this year of the Kempsey bypass. Perhaps that is on the coalition’s hit list. It was never funded by them. There was no work done by them. Perhaps that is on the hit list. The member for Cowper perhaps is aware that that is the case. Perhaps the upgrade from Woolgoolga to Arawarra on the Pacific Highway is on the hit list. The Hunter Expressway is perhaps on the hit list.

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

They have form.

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

We know that they do have form because in 1996 the Howard government cancelled the Belford Bends project even though construction was about to begin. We know that it was on the hit list then. Perhaps the whole Hunter Expressway is on the hit list. Perhaps the Seaford to Noarlunga rail extension in the electorate of Kingston in South Australia is on it. We know that this is a vital project. We know that we can only trust the opposition when there are carefully prepared and scripted remarks that can be taken as gospel truth. But the fact is that this project has never been supported by those opposite, so perhaps that is on their hit list. The sinking of the rail line at Northbridge in Perth is a project where we have announced a contract is being called. Perhaps that is on the hit list of those opposite.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Because you ran out of funding.

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

The clown opposite says, ‘Because we ran out of funding.’ This is a joint project.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Madam Deputy Speaker, on a point of order: he should withdraw that.

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

I withdraw.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The minister has withdrawn. The minister has the call.

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

The member for Bowman confirms with his interjection that there is a hit list. He says they have run out of money. That is their excuse already for making this hit list. I thank the member for Bowman for his honesty, and we will be reminding people of that. The Dampier Highway in Western Australia, the Great Eastern Highway and the Roe Highway are all funded by this government and construction of all are scheduled to commence. Are they on the hit list? They are all important infrastructure. The Great Eastern Highway and the Dampier Highway are important for developing our productivity agenda. The new Isis River bridge in the electorate of Hinkler is perhaps on the hit list. Construction is due to commence in September 2010. The upgrade of the southern approach to Cairns is perhaps on the hit list—$150 million allocated, construction expected to commence in 2011. For Calliope Crossroads near Gladstone, the upgrading of the southern approaches to Gin Gin, planning is under way and construction expected to commence in mid-2011. All of these projects are under threat because of what the opposition has said.

We know that the opposition needs to come clean about its secret infrastructure hit list. We know that important infrastructure is occurring in Darwin—$50 million for the port of Darwin, vital infrastructure development—

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

Madam Deputy Speaker, a point of order: it would be very interesting if the speaker opposite could return to the topic.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Mackellar will resume her seat. A matter of public importance is always a far-ranging debate. The member for Cowper had fair licence. The minister has the call.

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

The fact is that they do not want to hear about this agenda. They do not want Australians to know. They will not get through an election campaign saying that they are opposed to the resource super profits tax. They are opposed to every initiative that this government has done. They are going to make cuts, but they will not say where the money will come from. They make promises in their electorate that simply do not stack up when it comes to the nation-building agenda of this government.

The member for Cowper has ignored the fact that the Rudd government has committed $3.1 billion to the Pacific Highway. That compares with $1.3 billion during their entire 12 years in office. Almost three times as much in half the time is our commitment. He is opposed to infrastructure spending in his own electorate. It is no wonder that his own electorate is so hostile to his activity. They need to come clean about where these cuts will be, as they have been caught out. They have been caught out trying to say one thing in their electorates and another thing here in Canberra and the different statements of the shadow finance minister make that clear. (Time expired)

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

In listening to that diatribe of nothingness, I cannot help but think that the government has given up even trying to defend its great big supertax on mining. In fact—dare I say it—the great big ‘super’ tax is well named because it is indeed a tax on people’s super. The government’s contrivance is to say that taxing our most important export earning sector is somehow going to help employers find an additional three per cent for the superannuation guarantee charge—which is in fact going be borne by employees, who will have to forego an increase in take-home pay. It is an absolute nonsense. What are they trying to say—that they are going to hypothecate the tax, that it is going to be absolutely dedicated to some purpose? Of course it is not. It is going to consolidated revenue, just like any other tax that they impose.

This tax is simply designed to try and make up for the fact that they have plunged this country into debt and deficit. They were left an inheritance by the previous government of no debt—we paid off their last $96 billion. We had money in the bank. We left them with no deficit—we left them with a surplus. That was the situation when the great financial crisis came upon us from overseas. That is what saved us from going into two quarters of negative growth, a technical—

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

And the mining industry.

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

I am coming to that. That saved us from going into two quarters of negative growth and going into technical recession.

The fact is that this government has done nothing but accrue debt, accrue deficit, and embark upon a great gouging of taxation to back up its profligate spending. If the real answer to solving an economic crisis was debt and spending then Greece would be in great shape. The bottom line is: you never learn. Every time we get a Labor government we get debt and deficit, and we have to come back in and fix it up. Then, because we have made it look relatively easy, it looks like a good opportunity for a change. So Mr Rudd was given a go. Well, he has had his go—now it is time for him to go. This country deserves better.

If we look at the way in which this great big new tax on the mining sector is going to impact upon seniors, upon superannuants and upon retirees generally, we will see the attitude that this government has to senior Australians. They use words like ‘burden’, ‘problem’ and ‘challenge’. They want to find a solution—’How dare they grow old!’ They are taxpayers. They are the people who built this country, and all you want to do is insult them. Here they are—

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

We are looking after their pensions—

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

I hear the word ‘pension’ mentioned. Which party insisted that there be an increase in pensions for single pensioners? It was the opposition; we forced the hand of the government. We were the people who made MTAWE the index factor, not the government who, before that, had been in for 13 years. Do not give me that tired old argument. The fact is that we put the pensions on 25 per cent of MTAWE, when it is higher than the CPI. We are the people who have looked after people’s retirement incomes—not you. You simply regard them as a burden and you disparage them. That is the difference between us.

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Mr Hale interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Solomon might be better off outside the chamber.

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

This great big tax that is imploding upon our superannuation means that people who are receiving their superannuation right now have had their investment devalued, their stream of income lessened. Yet this is a tax that you have said you will not implement for how many years? Well past the next election. Furthermore, when are all the other bits and pieces that you say are tied up with it to come in? A couple of years after the next election?

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

In 2020—some of them.

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

In 2020. At the same time, they ask taxpayers to fork out $38 million to pay for an advertising campaign to try and convince good, sensible Australians—who may have more sense than the government, I suspect—that somehow this new tax is good for them.

It is no wonder that this government has succeeded in exempting itself from its own guidelines. First of all, I would point out that under both governments there were guidelines for how advertising campaigns had to be conducted. The department of finance oversaw all three sets of guidelines—the MCGC set, the Auditor-General set, and the watered down Allan Hawke set. All of those are written by the department of finance, and the department’s opening words are the same for all three sets. But what is different is that under the MCGC guidelines, under the previous government, there was no get-out clause. Any advertising campaign—it did not matter what it was—had to go through the system in order to go to air. But even under the Auditor-General’s so-called guidelines there was a get-out clause. It is no wonder that you wanted to get out of complying with the guidelines as set down, because they say:

Campaign materials must be presented in objective language and be free of political argument.

I do not think you have met that guideline. The guidelines state:

Campaign materials must not try to foster a positive impression of a particular political party or promote party political interests.

The guidelines say campaign materials must not:

… directly attack or scorn the views, policies or actions of others such as the policies and opinions of opposition parties or groups;

Goodness me—are we not disparaging and scorning mining companies? That would not comply with these guidelines. They then say campaign materials must not:

… be designed to influence public support for a political party, a candidate for election, a Minister or a Member of Parliament …

My gosh—no wonder you needed a get-out clause. When you should ask—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Mackellar needs to remember the use of the word ‘you’ is inappropriate and she needs to speak through the chair.

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

Through you, Madam Deputy Speaker, I would say that the bottom line is simply that their campaign could never have got through the guidelines as set down by the Auditor-General and then watered down under Allan Hawke.

As I said, the bottom line at every turn is that this big new supertax is adverse to the interests of senior Australians. It is a tax on super. If you tax something, you get less of it. Every dollar that goes into Mr Rudd’s pocket is one dollar less in superannuation recipients’ pockets—

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Like the mining families.

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

Of course, and mining families. But if you look at Mr Henry’s performance in estimates, his statement was that it really would not make any difference whether the tax was 50, 70 or 80 per cent—it would still be the same outcome; investment would still go on in this country. When he was asked how it would go at 100 per cent he backed off a tiny bit, but not entirely. He even pointed out that a totally government owned company in Norway was happy to pay out 95 per cent of its earnings to the government—that is, the government paying itself.

What we have to recognise with the impact of this tax is that any deferral in investment is what is important here. If a company has to make the decision about whether or not to go ahead with a mining development in this country, which was profitable when the tax was predictable—as it had been over the usual time frame—as against an investment in another country, which will come in and make more profits in light of the proposed tax here in Australia, then in fact we get a deferred investment and it goes off to another country, and we are the poorer for it.

During the recession our mining and minerals companies underpinned our economy—not in terms of the so-called employment factor but in terms of the actual value of the exports. These are the things that the government wishes to sweep under the carpet, but these are the things that the Australian people, and particularly senior Australians, are a lot smarter about. They will see through the subterfuge of the government and they will be—(Time expired)

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

One month after this government announced the biggest reforms to superannuation since the introduction of compulsory superannuation in Australia, we finally have the opposition talking about superannuation—not talking about the reforms, not outlining their position, not responding; but at least they are mentioning the word ‘superannuation’. We have had two contributions from those opposite. We had the member for Cowper, the shadow minister against superannuation, and I welcome him back to the debate. He has been in the witness protection program for a month: not a word from the shadow minister against superannuation about the reforms, not a word about their plans for superannuation. Then we had the member for Mackellar, a symbol of all that is wrong with the opposition, a symbol of all that is wrong in relation to superannuation—a member of the other place and of this House who opposed the introduction of superannuation tooth and nail in this country, who railed against giving working Australians and working families a chance to save for their own retirement, who railed against giving them tax concessions so they could have a dignified and comfortable retirement and who is still opposed to superannuation so many years later. So we had the shadow minister against superannuation, and the shadow minister for seniors, who is meant to actually care about Australians retiring for their own incomes, and all they did was rail against superannuation.

What we have is an opposition not willing to talk about the serious reforms to superannuation. Well, we will talk about them, and we will also talk about the scare campaign that the opposition is so grievously running. Superannuation, for the record, despite the opposition of the shadow minister for seniors, despite the opposition of the Leader of the Opposition and everybody who sits opposite, has been a good thing for Australia. It has been a very good thing for Australia. It was introduced by a Labor government against vociferous opposition from those opposite. Its benefits have been many. It has created a pool of funds for infrastructure investment. It has created a pool of funds at the disposal of the economy, which was very important in terms of getting through the global financial crisis. But, most importantly of all, it has improved the capacity of Australians to save for their retirement.

When Australians put money into superannuation, it gets invested. And since compulsory superannuation was introduced we have had returns of 7½ per cent a year, as opposed to an average inflation rate of four per cent a year—so Australians having the chance to become self-funded retirees, with the support of the Australian tax concessions. This was a visionary plan, but not all saw the vision of the Labor government introducing superannuation. The member for Warringah told the House on 25 September 1995:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

And he has not changed his spots. He went on to say:

I say to the voters of Australia—

you can just hear him saying this, can’t you—

‘Beware! There is no pot of gold at the end of the superannuation rainbow. Any money you put in is your money and you are certain to get back less than you put in.’

Now, I know the Leader of the Opposition is bored by economics. We know he does not understand economics. But I would have thought he would at least understand the principle of compound interest and return on investment, and understand that if you put money into superannuation and invest it over your working life you have a chance of a dignified and comfortable retirement—something he opposed, but something I do not think he even understood.

But it is time to rejuvenate the financial system. It is time to rejuvenate superannuation and make it even better, to build on the reforms of the previous Labor government, to deal with the savings gap, which has been assessed by the Investment and Financial Services Association at $690 billion. It is time to deal with that by increasing the superannuation guarantee from nine per cent to 12 per cent, by dealing with the equity of taxation treatment of superannuation.

As I said in the House yesterday, superannuation is taxed at a flat rate of 15 per cent. That is very attractive if you are on the top marginal tax rate. It is quite attractive if you are on the second-top marginal tax rate. It is even very attractive if you are on the next marginal tax rate. But it is not attractive if you are on the lowest marginal tax rate in Australia. If you are one of the lowest paid workers in Australia, if your income is under $37,000, there is no incentive for superannuation—and the opposition just do not care. They rail on behalf of mining companies. They are a lion when it comes to defending mining companies. They are a mouse when it comes to defending low- and middle-income earners in Australia, with not a word to be said—and, worse, they actively oppose our plans to introduce more equity into superannuation in Australia. They rail against it and they actively oppose it. They will vote against it, they will campaign against it, and that shows their true colours.

The other thing we have done is improve the tax concessions for people over 50—something I thought the member for Mackellar, as the shadow minister for seniors, would have supported. It was something the shadow minister for superannuation did support before he got rolled. On 19 April, to a great fanfare, he announced opposition policy, which would be to allow people over 50 to make more tax concessional contributions to their superannuation accounts. It was a written speech, carefully scripted—gospel truth. It lasted a month. It lasted a month before the shadow minister for finance announced it had been discontinued.

The shadow minister for superannuation got rolled and he should hang his head in shame that he has let down, and his party has let down, people aged over 50 who are trying to save for the future. What the opposition has instead done—in this MPI and in so many other places—is engage in a scare campaign. They do it so well. I say you have to stick with what you are good at in politics—and they do it so well. They did it on the petroleum resource rent tax. They did it on national superannuation. They did it on Mabo. They did it on the CPRS and now they are doing it on this. They love a good scare campaign.

I know many in the community want to know about what is happening with share prices in Australia. They want to know about what is happening to the impact on share prices. So let us just go through it for the benefit of the House. From 30 April this year the Australian Stock Exchange 200 Materials Index that covers mining companies has fallen by 6.3 per cent. That is what enables the shadow minister for superannuation to get up here and say, ‘$20 billion has been wiped off the value of Australian mining stocks, and it’s all due to the resource super profits tax.’ Well how about the Standard and Poor’s 500 materials index, which covers the United States: a 9.7 per cent reduction. In Brazil—the home of Vale, one of the world’s biggest miners—the materials index showed an 11.2 per cent reduction. Clearly they are very worried about the resource super profits tax in Rio!

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

They are reading the Australian!

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

They probably read the Australian in Brazil; I am sure it has a very wide readership! In South Africa the mining index has fallen by seven per cent. They are all indices which have fallen by more than the Australian materials index between 30 April and 1 pm today.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

They’re investing in Australia, as well.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

The member for Bowman says that it is because these companies invest in Australia, as well. That’s a good one! Well done, and thanks for coming, the member for Bowman!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The member Bowman will have his chance in a few minutes; otherwise he will not have a chance.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

Please explain why the South African, Brazilian and American mining indices have all fallen. He says it is because those countries invest in Australia. Well, maybe that would explain why the Nikkei index has fallen by 12.1 per cent, why the Standard and Poor’s 500 has fallen by 8.2 per cent and why the UK FTSE has fallen by 6.6 per cent, compared, in Australia, to the ASX 200 falling by 8.6 per cent.

So let us have less of the scare campaigns from the opposition. I welcome the opposition debating superannuation in Australia. I would welcome their response to our plans for superannuation. I welcome the member for Goldstein, who rolled the shadow minister for superannuation and discontinued his policy to support people over 50. But why don’t they start by saying what their plan is? They could start by disavowing the Leader of Opposition’s plan in Battlelines. In the Leader of the Opposition’s book—carefully written, scripted, gospel truth—he laid out his plans for superannuation. He wants fewer self-funded retirees. He wants fewer superannuants. He wants to abolish the tax concessions on superannuation. Now, a 30-year-old in the workforce today, under current arrangements, would have a retirement lump sum of $456,000.

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

Mrs Bronwyn Bishop interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The minister still has some time.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

We would add $108,000 to that. The Leader of the Opposition would take away $211,000. (Time expired)

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

There are few things more dangerous than a government in hegemony with a ton full of cash inherited from a previous Treasurer. In fact, there is only one thing more dangerous, and that is a government on the skids, with ashen faced government MPs watching as their popularity plummets, with no money left in the kitty to continue the spin. I, for a moment, want to acknowledge the staff in the Prime Minister’s office watching this debate today, with a far more difficult job to do. They have no money left and they are still trying to maintain their boss’s desperate spin.

We have had two government speakers. The first of them was reading out a stump speech about investment in major infrastructure. The second was this member of the government talking about compulsory superannuation when the debate today is about superannuants—a slightly different suffix. Superannuants are mostly individuals, in this country, who are self reliant and hardworking. They have had a career of saving and they are watching it being wiped out by a Prime Minister desperate to cling to some flotsam to protect his political career.

All this Prime Minister wants is an exit strategy and I feel for those on the other side of this chamber—intelligent, hardworking MPs—hoping to be able to see their policies become reality but watching those policies erode in front of them. We just need a little bit of factoid here, don’t we, because what we are talking about is a mineral tax that is wiping out the wealth of superannuants in this country. What we are talking about is a mining sector that knows full well that it is an internationalised sector. They rely on the investments of large companies that Ian Harper from the Melbourne Business School will tell you are subject to internal price transfer. And the tougher you make it for them here in Australia the more they will invest in their mines in Chile or Africa.

There has been a distortion in the debate that these are somewhat non-renewable resources slipping through our fingers like sand and that we have to grab a few dollars for our labour base before it all disappears. The argument is complete froth and bubble, because these minerals are going to be there for decades to come. What we need is some form of security and sovereign knowledge that there is security to invest in Australia. That has been eroded in weeks, and that is shown in the stock market—through shares, dividends and superannuation values—and it is shown in the attitude of ordinary Australians towards our Prime Minister.

In areas with little to do with the mining sector, Australians will tell you they are nervous about this supertax grab. And they are nervous because they know deep down there are superannuants who invested in a block of land at Emerald in the hope that they might be able to build there and solve the housing crisis, but they have had contracts fail. They are nervous because they have invested in this sector and just hope for a stable return that the coalition offered them over 12 years, a stable fiscal base—not this ridiculous policy plinth that is simply a grab at tax, as if it is the only way to fund this government’s foolish spending.

It is this government that wasted so much debating time in this chamber saying that in some way this is funding the superannuation increase from nine to 12 per cent. Let us be honest. It is a $9 billion tax grab to fund $200 million of tax concessions, and the rest just feeds its spending addiction. It is a spending addiction on that side of the House that must be stopped somehow. What we have is a denial about reality. There is no willingness on that side of the chamber to talk about company tax. There is a simple rule in business: if you make more money as an entity you pay more company tax. You cannot get away from the fact that mining taxes have gone from $2.6 billion to $21.9 billion over the past decade.

This is not a debate about whether mining companies can pay more tax or not. This is a debate about confidence in this government to run our economy, and that is why it is in so much trouble. The pure fact is Australians do not trust a government advertising campaign that cannot even be honest that these mining companies pay company tax. I would be deeply disturbed if I were an Iluka shareholder being misrepresented on Q&A by the Minister for Finance and Deregulation, Lindsay Tanner, that they will somehow be better off under this tax. I would be concerned about companies like Fortescue, if I held shares in them, predominantly Australian based which has little option to do what large multinationals do and that is shift effort internationally. And I would be worried about Mount Gibson and Atlas and other firms that thought they had sovereign stability but instead have Rudd sovereign risk.

Australians were yearning in 2007 for some form of spin instead of substance, for some promises without delivery, and of course for rhetoric without action, because they had not had that for 12 years. They have had two years of that now and look where it has left us. It has left us with uncontrollable, unaccountable spending and a Rudd government on the slide. (Time expired)

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I certainly welcome the opportunity in this matter of public importance debate to talk on the resource super profits tax and superannuation, especially following the member for Bowman. Let us talk about some ‘factoids’, shall we, that the member for Bowman referred to. The fact is that the Rudd government’s tax reforms will broaden and strengthen the economy, ensuring all sectors grow in a sustainable way that benefits all Australians. The proceeds will be invested in superannuation savings, new infrastructure and tax cuts that will create jobs and help small businesses grow and thrive, and this will add 0.7 per cent to GDP and boost wages by 1.1 per cent. But I welcome the opportunity to speak on this MPI for another reason, and that is to debunk the misleading campaign that we hear from those opposite and from the mining sector.

Let us talk about the Liberals’ campaign—this latest scare campaign. If we go back a bit, the opposition opposed the petroleum resource rent tax. This was going to destroy the resource sector. They opposed national superannuation, and the Leader of the Opposition has said in the past that compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people. This is how serious he is about protecting those most senior in our community. The Deputy Leader of the Opposition has said that the state mining industry is paying its fair share of tax. The opposition leader is now saying that the mining industry is paying more than its fair share of tax. Now we have Senator Barnaby Joyce, the shadow infrastructure spokesperson, saying the mining industry could pay more tax. The member for Bowman has just said that it is a distortion to say they are not renewable resources. I am looking forward to hearing further explanation of how the mineral resources in this country are renewable—because somehow it is a distortion, according to the member for Bowman. So I look forward to hearing that into the future.

Let us look at the mining industry’s campaign. I think we have heard it before. The opposition said that the country would collapse if Work Choices was ripped up, yet here we are still standing with the economy still thriving. The mining industry is claiming that it is putting on hold all new investments and it will walk away from existing investments. Let us look at this claim, shall we. In Queensland, a consortium of coal-mining firms has put in a bid of $4.85 billion through the Queensland Coal Industry Rail Group, which comprises 13 coal producers, to purchase the Queensland coal track network. Does this sound like the actions of an industry that says it is no longer going to proceed with investments and is going to pull out of current investments? Let us look at these companies. Are we talking about small companies that are wanting to make these investments? No. Let us look at some these 11 coal producers: BHP Billiton, Ensham Resources, Macarthur Coal, Peabody Energy, Rio Tinto Coal, Xstrata Coal, Wesfarmers Resources. These are big mining companies. Why have they put this bid forward? Because, as the Queensland Coal Industry Rail Group has said, the offer would encourage fair and open access, optimise network performances, enable early system expansions and encourage rail haulage competition. This is not what an industry does if it is about to walk away and go overseas to Africa, as we have just heard, or Chile or wherever else the member for Bowman tries to claim.

Let us have a look at the alternative that the Rudd government is putting forward. Australians will get a fair share of their non-renewable resources. They are owned by the Australian people. This is a tax on profits, not production—a concept the Leader of the Opposition appears yet to grasp. It is a fairer tax for all. It ensures that we restore what this country was getting from the resources sector a decade ago. Ten years ago, Australia was getting $1 for every $3 of mining profit from royalties and charges. Now it is getting $1 in $7.

We deserve our fair share. That is what this resource super profits tax will do. It will provide company tax cuts, small business company tax cuts, small business instant write-offs, an increase in the super guarantee to 12 per cent, super for low-income earners, more generous super caps, a rise in the superannuation guarantee age from 70 to 75, 50 per cent interest deductions up to a $1,000 limit and optional standard deductions. These are the some of the things that will eventuate from this tax. (Time expired)