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

My question is to the Prime Minister. I refer the Prime Minister to the recent statement of the Canadian Minister of Finance, Jim Flaherty, who said of the supertax:

If it is what it appears to be, a significant tax increase, that’s another competitive advantage for Canada.

And I refer to the recent statement of the Chilean mining minister, Laurence Golborne, who said—and I quote from an article headed ‘Chile mining to benefit from Australia tax changes’:

The situation in Australia is a tremendous opportunity for Chile …

When will the Prime Minister back down from his bad tax policy that will damage the competitive advantage Australia has had over its rivals in the resource export sector?

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

I always welcome questions from the member for Curtin. It is of passing interest to everybody that any national government will spruik its national book at a particular time. Of course, what is interesting is how markets themselves behave. I would again draw the attention of the Deputy Leader of the Opposition to what has happened in equity markets in recent times. First and foremost, can I advise the Deputy Leader of the Opposition, who cut a striking figure as a protester over there in Perth, I thought, chanting the revolutionary song, that revolutionary motto, ‘Billionaires united shall never be defeated’—protest by Prada, designer demos; it was good—

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. This is a serious point of order.

Government Members:

Government members interjecting—

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

The Prime Minister was asked a serious question. Rather than commenting on the dress sense of journalists and MPs, he should answer the question.

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

Order! The Manager of Opposition Business will resume his seat. I will give him the call again when the House comes to order.

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

This is a serious point of order. He was asked a serious question. Rather than commenting on the dress sense of journalists and the Deputy Leader of the Opposition, he should answer a serious question.

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

The member for Sturt will resume his seat. The Prime Minister has deflected. It was not his preamble. He will now return to the question. The Prime Minister is responding to the question.

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

Furthermore, I would say in response to the Deputy Leader of the Opposition that she should pay some attention to the fact that Australian resources have fallen by about three per cent, which is less than all comparable resources indices in the world. The Canadian index has fallen by four percentage points, the Australian index by three. This is since the introduction of the RSPT announcement on 2 May.

Also, can I say to the Deputy Leader of the Opposition: I know that facts always create a problem when you are dealing with fear. Facts always get in the road of fear. Not only did Australian resource stocks fall by around three per cent; Australian major banks over that same period of time have fallen by nine per cent. So I would suggest that, when you have got a change in the index—

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

Mr Speaker, I rise on a point of order. I asked the Prime Minister why he was handing a competitive advantage to Chile and Canada—

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

The Deputy Leader of the Opposition will resume her seat. The point of order is on relevance. The Prime Minister is relating and will relate his material to the question.

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

The Deputy Leader of the Opposition asked specifically about Canada and she also asked about Latin America. Can I draw her attention to the fact that Australian resource stocks have fallen by three per cent since the introduction of RSPT announcement; Canadian resource stocks have fallen by four per cent, where there has been no RSPT announcement. I would think that says something by way of a matter of fact. Furthermore, Australian resource stocks have fallen by three per cent in that period of time; general stocks have fallen by nine per cent in that period of time.

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

Mr Speaker, I rise on a point of order. It goes to relevance, about the comments of foreign governments saying—

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

The member for North Sydney will resume his seat. Again, his point of order is on relevance. The Prime Minister knows the requirement to relate his material to the question and he is doing so.

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

Can I also say that against the overall performance of, say, the Australian resource stocks against Canada, which is the point I have just referred to, I have here Brazilian resource stocks which are down nine per cent over the same period of time.

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

What about the Somali stock exchange?

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

Order! The member for North Sydney will cease interjecting, and I implore the Prime Minister to ignore the interjections.

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

I have not yet seen this morning’s report from the Somali stock exchange. Brazilian resource stocks, which are actually host to a company called Vale, in the period since the announcement of the government’s tax reform on the mining industry have collapsed nine points and the Australian resources are down three points. I simply go back to the core question of fact as opposed to fear. It would be very useful if the member for Curtin, the Deputy Leader of the Opposition, actually engaged in a little bit of factual research rather than simply xeroxing the releases that have been produced by others. Again I go back to that great protest in Perth along the lines of: ‘What do we want? Tax cuts for billionaires. When do we want it? As soon as the MCA wants.’

Mr Speaker, you know something, we are actually on about the national interest here. We are on about tax reform for the nation. We are on about how you get better super for working families. We are on about how you bring about tax cuts for 2.4 million Australian businesses. We are on about how you give tax cuts to the corporate rate for 770,000 Australian businesses and we are on about how we deliver infrastructure for the good people of Western Australia, the good people of Queensland and the other resource producing regions of the country. That is what we are on about. Mr Speaker, can I say to the Deputy Leader of the Opposition: just pay a little bit of attention to the facts before you stand up at the dispatch box and seek to promote fear.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and Minister for Tourism. Minister, how is the government supporting mining communities and the resources industry through the regional infrastructure fund?

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

Unlike the opposition the government are committed to ensuring Australia’s long-term prosperity. We also accept, unlike the opposition, that the role of government varies, given the economic challenges that confront the government, from time to time. For the last 12 to 18 months the challenge to government was different to the challenge that confronts Australia at the moment. That related to the fact that we had to manage the Australian economy through a major global financial crisis. I remind the House that, just like the opposition opposed the decisive action we took during that period, the opposition again stands in opposition to major tax reform which is about Australia’s future and managing varying economic challenges in the future.

Coming out of the global financial crisis I remind the House that, because of our action, the unemployment figures of last week were 5.2 per cent. I know the opposition cringes every time we get good employment figures. I also note that, in April, for the first time in 13 months we experienced a trade surplus, which is a further major achievement for the Australian economy. I also acknowledge that from the Australian community’s point of view, when it comes to the resources sector, at times we have booms and at times we have slumps.

That is what this tax reform is about. It is about how we as an economy actually manage those challenges. I refer to Mr Battellino, the Deputy Governor of the Reserve Bank, who said yesterday:

… booms have very significant impacts on the economy and do cause a lot of stresses and strains.

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

Mr Speaker, I rise on a point of order relating to relevance and the question of infrastructure, which was the substantive point. I refer you to page 553 and although you can often accept a tangential touching of the relevance it is no way relevant to the substance of the question. I ask the minister to either be relevant or to sit down.

Honourable Members:

Honourable members interjecting—

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

Order! I thought the member for Mackellar might be interested in the response to the point of order, but she probably is not. If she has a problem with tangential relevance to the question her problem is in the practices of the House and perhaps she can engage in improving that, but that has been the precedent of this place. I would have thought, given this was a question about how the government was supporting mining communities and then went on to talk about the infrastructure fund in particular, that the minister was being relevant. I would also ask the member for Mackellar to refer to page 501 of House of Representatives Practice, which outlines a point made by the member for Barker yesterday that it is also regarded as disorderly to imitate the voice or manner of a member. I would ask that all members would realise that that has been the practice of this place.

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

The deputy governor went on to say:

… the challenge for the Australian economy for the next few years is going to be how to accommodate this mining boom …

That goes to one of the key issues with respect to the tax reform before the parliament at the moment, the key issue of infrastructure and our capacity as a nation to actually invest in infrastructure to assist the mining industry for the purposes of realising all the potential that the Australian mining industry has available.

I remind the House that, over the last decade, that is where the Australian community was let down by the previous Howard government. They were good at spending the benefits of the mining industry’s gains and very bad at investing in the future of the mining industry when it came to infrastructure and the skilling of the Australian workforce. I also remind the House that the Australian community is entitled to a fair return on the development of its natural resources. The mining community appreciates that, when prices are high, it should be expected to pay more out of its profits as a return to the Australian community. But we also appreciate that the mining industry understands that the current volume based state royalty regime, not a profits based tax system, is bad for it during bad economic times. That is why it has historically approached state and territory governments for relief from royalty payments during those periods. The Australian government is therefore absolutely committed not only to putting in a profits based tax system, something that the mining industry has argued for, but also to ensuring that we as a community have the capacity to invest in the infrastructure related projects that are so important to the expansion of the mining industry in the future. I also remind the House that that is also why we made key investments in the skilling of the Australian workforce in the recent budget.

Let us go to the infrastructure fund, a $6 billion fund aimed at trying to assist those regional communities dependent on the mining industry to cope with all the stresses and strains of the boom that is currently underway because of growth in China. We are the beneficiaries of that growth in China, but it is also our responsibility to ensure that on this occasion we regain market share lost under the previous Howard government in a number of key commodities and no longer just live off the back of increases in commodity prices. For those purposes, the House should also not forget that, unlike the opposition, we saw this challenge in the lead-up to the last election. Therefore, in addition to the superprofits tax that we are now considering, we committed up to $100 million a year out of the proceeds of the Gorgon project to the Western Australian government for the purposes of assisting in infrastructure development in those key regions in Western Australia.

But when you come to key infrastructure decisions it is not just about the tax regime and it is not just about the infrastructure fund that we have established but also about a range of other government decisions which go to achieving these major investments. Yesterday, for example, I referred to the potential British Gas decision which is so important to Gladstone in Queensland. I advise the House that I also made a decision yesterday under the National Gas Law to grant a 15-year no coverage determination to the British Gas group’s proposed Queensland Curtis LNG project. The 15-year no coverage provisions in the National Gas Law are designed to bring on efficient investment in pipeline assets. This decision was consistent with the recommendations of the National Competition Council and therefore provides investment certainty for this aspect of the BG Queensland Curtis Island LNG project—another step forward in a range of key decisions with respect to the potential investment decision by BG.

I raise these issues to remind the House that we are absolutely committed to putting in place the necessary parameters to maintain the strength of the Australian economy, just as we did through the global financial crisis. Just as the opposition opposed our action then, so they now oppose the introduction of a new tax system which is to the long-term benefit of the mining industry in Australia during booms and slumps. We as a government are committed to an outcome that will provide the certainty investors require whilst also ensuring the Australian community gets a fair return from the development of its resources. Unlike the opposition, we are about developing policy, taking hard decisions, pursuing reform and investing to ensure Australia’s long-term future. The opposition, as usual, remain opposed to any major reform in Australia because they stand in support of their own self-interest and against Australia’s national interest.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to this letter from Wesfarmers, Australia’s largest private sector employer with more than 200,000 staff and in excess of 500,000 shareholders. The letter warns ‘the proposed new super profits tax would not only make Australia less competitive in the global resources industry but also have significant flow-on effects for the broader economy and society’ and ‘is clearly a threat to the level of dividend we’—that is, Wesfarmers—‘can pay’. When will the Prime Minister back down from this bad tax policy that will damage the income of 8½ million superannuation holders in Australia?

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

I thank the member for Groom for his question. He refers in particular to correspondence from Wesfarmers. As I have already indicated in today’s debate in the House on the future of tax reform in Australia, there will be claim and counterclaim by a whole range of Australian corporates, many of whom have come out in strong support of the government’s tax reform proposals.

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

Mr Abbott interjecting

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

The Leader of the Opposition asks us to name some. I draw his attention to the range of financial services companies in Sydney. I also suggest to the Leader of the Opposition that he reflect upon the contributions to this debate by a whole range of corporates, particularly those associated with the financial services sector, who understand one of the impacts of these reforms—namely, that the flowthrough impact on super is to boost the overall supply of national savings for the Australian economy.

Furthermore, can I also say to the member for Groom that the letter he refers to goes on to the question of the impact on earnings for superannuants. Can I draw attention to the fact that the performance of the Australian Stock Exchange, which is one of the principal sources of earnings for superannuants, has outperformed most other bourses across the world. Furthermore, could I say this in response to a debate which has much claim and counterclaim associated with it: before, the Deputy Leader of the Opposition in making her very cogent point to this place referred to the Chilean mining minister, Laurence Golborne. It always pays to do your research, because we have a report from Bloomberg today, which is that they are having a debate on mining tax in Chile as well. It said that Chile’s mining minister, Laurence Golborne, urged the congress of Chile to approve the proposed changes in the mining laws of his country. It also said that the government of President Pinera, which took office in March, is seeking to introduce an optional sliding tax rate on profit and to deliver $700 million in additional revenue next year and in 2012. The bill says that it is very good for the country because it does not hurt investment and allows the government to cash in when economic cycles are benefiting miners. The Deputy Leader of the Opposition—

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. This question is about the income of 8½ million shareholders and superannuation holders in Australia.

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

Order! The member for Groom will resume his seat.

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

Therefore, when the Deputy Leader of the Opposition interjects in this debate that mining companies around the world are somehow immune to tax changes in other jurisdictions, she is wrong. Furthermore, in the country that she specifically refers to, there is a debate right now in the Chilean congress to introduce a profits based tax, and the question of optionality goes to the rate of such a tax. Can I say to those opposite, therefore, that when they engage in—

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

The Manager of Opposition Business on a point of order.

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

Yes, Mr Speaker, and I am trying to help the House and the Prime Minister. He is answering a question about the RSPT and talking about the Chilean earthquake tax. I think you might want to stop him from doing so.

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

The member for Sturt will resume his seat, and he is warned.

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

Furthermore, the report says that, in Chile, mining companies will likely reject the tax increase. This debate is universal. Mining companies around the world do not want to pay more tax. In this country we believe that mining companies should pay more tax when prices are high for a resource owned by the Australian people. We believe the Australian people deserve a fairer share. We believe they deserve a fairer share for better super for working families, a fairer share for small businesses and their tax concerns and a fairer share for the regions that need infrastructure invested in them. This is a debate between those who support the reform and those who oppose the reform. Those who support the reform believe a profits based regime for the future is the right way to go.

The Leader of the Opposition stands with his new best friend, the pin-up boy of the Liberal-National Party, Clive Palmer, as the two voices out there opposed to any profits based reform in the mining industry. There will be a range of claims and counterclaims. You will have people right across the industry commenting on it. You will have people like Roger Corbett who came out quite rightly and said as a director of Fairfax Media and Wal-Mart—and he is also on the Reserve Bank—that these are resources owned by Australians and that Australians should extract from those resources the best possible advantage that they can. In principle, he supports a resources tax.

Therefore, those opposite will simply take a position in this debate which is subservient to the likes of Clive Palmer in pursuit of a sectional interest and in pursuit of an individual who bankrolls the Liberal-National Party in Queensland to the tune of nearly $1 million. They do not stand for the national interest; they stand for a partial interest; they stand for an individual corporate interest. We are about the business of tax reform for the nation. We stand on one side of the debate prosecuting a hard debate on tax reform. Those opposite have evidenced no spine for tax reform whatsoever.

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

Mr Hockey interjecting

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

Mr Robert interjecting

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

The members for North Sydney and Fadden are warned!