Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to Penrice Soda, which employs over 300 people at its Angaston mine and Osborne manufacturing plan in South Australia. In the last five years, this company has invested over $130 million in capital projects. I refer the Prime Minister to a letter from Penrice Soda that states:

… the new proposed tax would have a major and immediate impact on the competitiveness of our mining and chemical manufacturing operations … local communities will also be damaged.

Instead of the minor backflips and political fixes that the Prime Minister will announce in the coming days, when will the Prime Minister listen to real people in real businesses and provide real jobs and just dump this tax?

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

I thank the member for Mayo for his question. Part of his question dealt with the competitiveness of the Australian mining industry. I draw the member for Mayo’s attention again to what is happening around the world. Since 2 May, Australian resources have fallen by just under one per cent on the stock exchange here. Canadian resources are down two per cent, Brazilian resources are down 10 per cent and United States resources are down eight per cent. I therefore suggest to the member for Mayo that, when he suggests a particular connection between tax reform proposals here and the confidence of markets in the Australian resources sector, the facts stand in the way of the fear campaign which those opposite are seeking to perpetrate.

Furthermore, I say in response to the honourable member’s question that this government is committed to tax reform and to doing it through a process of consultation and negotiation with the industry. Since the announcement of the tax, the Treasury panel has engaged some 80 companies across the country. On top of that, ministers, including the resources minister, the Treasurer and I, have met representatives of the mining industry on numerous occasions for consultations and negotiations.

The government, as we have said repeatedly, is working to reach a balanced outcome with the industry. A balanced outcome necessarily involves a proper consideration of the national interest. The government is committed to the framework that it has put forward. The framework is a profits based tax, a 40 per cent tax, a tax that also applies to existing projects and a tax capable of delivering the revenue to meet the government’s policy priorities and to broaden the base of our economy.

I have no doubt that many of the big mining companies will not embrace any outcome that would see them paying more tax. No doubt they would be joined by those opposite, including the Leader of the Opposition, who thinks that these companies are paying too much tax already. At the end of the day, the government is interested in a sensible and balanced outcome that supports the future of the industry, that delivers tax reform and that—critically—improves the overall competitiveness of the Australian economy by improving the company rate and the small business rate and by boosting the superannuation earnings of 7½ million Australian workers.

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

I seek leave to table the letter from Penrice Soda.

Leave not granted.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What developments in recent days have provided support for the case for a profit based tax? Why is the government determined to implement a profits based tax on resources despite opponents to reform?

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

A profits based tax is in our national interest. The future of the mining industry is bright. In recent days, we have seen the forecasts from ABARE in their quarterly outlook for commodity exports released yesterday. Minerals and energy export earnings are forecast to increase by 29 per cent, or almost $38 billion, in 2010-11 and hit $170 billion. You would not get a sense of that if you were listening to the scare campaign that is being waged by a few large mining companies. The fact is, there are very bright prospects for our mining industry. That is why we have put forward a very sensible proposition for a profits based tax.

In the last day, the Western Australian Premier has jacked up royalties substantially—to the tune of $300 million. Did we hear anything about that from those opposite? No, we did not. Did we hear anything about retrospectivity? No, we did not. Did we hear anything about it suppressing investment? No, we did not. And that is because our mining industry is very profitable. It is very profitable on an elevated terms of trade that is going to stay that way for some time to come. The Australian people are entitled to get a fair share of those elevated terms of trade. Those opposite just want the profit to walk out the door and to be lost to the Australian people forever. What we want to do with the proceeds of a profits based tax is to invest those in strengthening and broadening our economy, as the Prime Minister was saying before.

Nevertheless, we continue to get these scare campaigns. I see that the Queensland Resources Council is out today predicting doom and gloom. But at the same time the Queensland government is saying that there are strong mining exploration applications and that they have been unaffected by the RSPT. We saw the US coal group Peabody last week talk about a very substantial expansion in Australia. And of course we have seen the Association of Superannuation Trustees blow the whistle on this scare campaign, calling it scaremongering and irresponsible. And irresponsible it is. What gives the lie to that irresponsibility are these forecasts from ABARE. What they demonstrate is the absolute irresponsibility of those opposite, who say that the mining companies are paying too much tax. So we have this ridiculous position where those opposite are saying that the miners pay too much tax while some miners are saying that they could pay a bit more. But of course there are some companies that those opposite are in league with that will never agree to pay more because they are not interested in pursuing the national interest.

The Australian people are entitled to get a fair share of the boom in commodity prices that is going to last for some time. That does bring great opportunities to our country but it also brings challenges. So on our part we are having a sensible discussion and negotiation with the mining industry, because we are determined to get a balanced outcome for a 40 per cent profits based tax—a 40 per cent profits based tax that can deliver the revenue so we can give a business tax cut to all the companies in Australia, so we can do something about investing in infrastructure and so we can do something about boosting our national savings, which is very important for our long-term prosperity. The final word today about a profits based tax comes from the deputy head of the IMF, who said in Sydney today that he ‘supported it in principle’.

Opposition Member:

Do you?

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

Do you? Do you support it in principle? The mining industry supports it in principle.

Opposition Members:

Opposition members interjecting—

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

Order! Those on my left will cease interjecting. The Treasurer will ignore the interjections.

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

They do not have principles, and they are to the right of the mining industry—that is where they are. They are to the right of the mining industry—that is a pretty hard thing to do. But of course it does not surprise me, given the extremism that you have on the opposition frontbench—their desire to bring back Work Choices and their desire to watch this windfall profit walk right out of the door, of no benefit to the Australian people. We will stand up for the national interest in this debate. We will stand up for the long-term national interest of this country. This is what the IMF said. It will stand up for the workers. You on that side of the House have never stood up for the workers. When the workers of this country needed you in their hour of need, you went missing and voted down the stimulus. If you were in power—

Opposition Members:

Opposition members interjecting—

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

Order! The House will come to order.

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

there would be 200,000 more people unemployed in our country. So do not come in here and claim that you stand for employment. Do not come in here and claim that you stand for the workers. You slashed their wages and working conditions. You got right behind Work Choices and, when the workers and small businesses of Australia needed you, you would not support the stimulus. We on this side of the House stand for employment, we on this side of the House stand for jobs and we on this side of the House stand for small business.

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

Order! In reminding the Treasurer to address his remarks through the chair, can I suggest to some in the chamber that they not overly provoke the Treasurer or he will react as he did.

Opposition Members:

Opposition members interjecting—

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

Order! The House will come to order. The Deputy Leader of the Opposition is waiting patiently. I apologise to her because that was not very effective from the chair, but if the House could take things quietly we would be all much better.

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 his previous answer on what is happening in the mining industry around the world. I refer to the comments of Gordon Peeling, Chief Executive of the Mining Association of Canada, who said this week in relation to the government’s great big new tax on mining:

… probably makes Kevin Rudd the mining man of the year in Canada, because he’ll bring a lot of investment our way.

Does the Prime Minister intend picking up his award when in Toronto next week for the G20 meeting?

Honourable Members:

Honourable members interjecting—

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

Order! The Minister for Trade and the member for Goldstein will be able to continue the discussion outside if they continue here.

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

I think the mining man of Australia award goes to the member for Dickson today, because the price that he bought at was $38.59 and today it is $39.12. Hear, hear, the member for Dickson! Here is a man who puts his confidence in the government’s policy—buys in and sees his share price go up. When we look at those opposite, actions always speak louder than words and, secondly, facts also triumph over fear. When it comes to facts and fear, let me draw this to your attention. On the question of Canadian mining stocks, Australian resources, since the 2 May introduction of the government’s tax proposal, have fallen one per cent; Canadian stocks have fallen two per cent.

So, can I say to the Leader of the Opposition, the Deputy Leader of the Opposition and the member for Dickson that we watch very carefully what those opposite do rather than what they say. We watched carefully what Clive Palmer did two days ago, when he initialled an agreement through his representative, in there with the Chinese—for a project of $5 billion to $6 billion, from memory. We also saw initialled, projects involving other Australian companies only two days ago.

Fact and fiction. Fact and fear. I just think we should always observe the behaviour of the member for Dickson. He is a bellwether in terms of what those opposite actually think is going on in the mining industry rather than what they say is going on in the mining industry.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and the Minister for Tourism. Can the minister update the House about consultations with industry on the resource super profits tax.

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

I thank the member for Oxley for his question. In doing so, I am pleased to advise the House that companies in both the petroleum and minerals sectors are seriously engaged in constructive discussions, not only with the Resource Tax Consultation Panel in Canberra this week, but also with the Prime Minister, the Treasurer and me. I say that because they appreciate that megaphone diplomacy is not going to assist in working out the generous transitional arrangements that are available for the purposes of bedding down this major change in taxation in Australia.

We all appreciate, as do many in the industry now, that there is going to be a resource super profits tax in Australia. It is also understood that is going to involve a headline rate of 40 per cent. The focus of these discussions is on delivering generous transitional arrangements that not only ensure that we have a capacity to gain for the broader Australian community a fairer share of the return on their natural resources, but also deliver measures that will broaden and strengthen the Australian economy.

This is a reform that, unfortunately, the member for O’Connor does not appreciate the significance of. I say that because we are talking not just about a change with respect to the taxation of minerals and petroleum resources in Australia but also about how we as a nation front up to the all-important issues of superannuation payments, how we take pressure off retirement income, and how we lower the burden for Australia’s 300,000 smaller businesses, many of whom are represented by the tourism sector, for which I also have responsibility. When it comes to broadening our economic base, it is also about taking pressure off our resource-rich regions and the difficulties they are now experiencing on the infrastructure front.

In that context, I say to those companies who are engaging in a very professional and constructive way with the government that we appreciate the way in which they are approaching those negotiations. They understand that this is an important reform and that the best way to inform the outcome is to engage in the process of consultation established by the government. They understand that, at the end of the day, there will be a transition, in association with the capacity to further attract ongoing investment with Australia, which will further enlarge the Australian economic cake.

In the context of the discussions I also draw the House’s attention to the huge price spikes that we have seen in recent years in such commodities as iron ore, where the price increases since 2004 have been over 500 per cent; and coal, where the price increases have ranged from 300 per cent to 400 per cent. Also, interestingly, there has been a growth in world demand for petroleum and LNG products.

These commodities will clearly deliver the vast bulk of the revenue under the RSPT and the PRRT. With respect to many other mineral resources, I simply remind the House, in a calm and measured way, they should appreciate that many of them will be better off under the proposed RSPT. Indeed, the RSPT actually involves a revenue loss for government and a tax cut for many companies that are mining less profitable commodities, because those companies will benefit from royalty refunds and the government’s contribution to unutilised losses.

Can I say in conclusion: the government is committed to this fundamental reform of Australia’s resources taxation system. This will deliver not only opportunities for the resources sector but also many significant opportunities through the broadening of the Australian economy, while also taking pressure off the Australian economy for the purpose of future retirement incomes.

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

My question is to the Prime Minister. I refer the Prime Minister to the statement of Reserve Bank board member Professor Warwick McKibbin that—

Government Members:

Government members interjecting—

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

That’s interesting!

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

The member for North Sydney has the call. He will ignore interjections and not be provoked.

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

They are passing a reflection on Professor McKibbin. Professor McKibben said:

The government rammed stimulus measures through the economy even though they were fraught with risk. It wasn’t evidence based policy. They panicked. They put the money into school buildings; they put it into insulation. They put it in stuff that they could never reverse. So they came up with a really badly designed resource tax to try and get the position to look good three years from now.

I ask the Prime Minister, is Professor McKibben, in the words of your own Treasurer, ‘a liar or just ignorant’?

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

Of course, the government welcomes continued debate about the actions the government has taken to keep Australia out of recession. That is why I so much welcome this particular question from the member for North Sydney. He should pose himself some pretty basic questions. Based on the Treasury’s analysis, had we not acted with stimulus, this economy would have gone into recession. Had we not acted with stimulus, 200,000-plus more Australians would be out of work. Had we not acted with stimulus, the impact on Australian small businesses would have been catastrophic, as it has been across the world.

Has the member for North Sydney asked himself this question: why is it that Australia now has the second lowest unemployment rate of all the major advanced economies, at 5.2 per cent? Why is it approximately half that of the United States, and approximately half that of the euro area? Had we generated the same unemployment rate—double-digit unemployment—that we have seen in those parts of the world, do you know how many more Australians would be out of work today? Half a million, Joe—half a million about whom you do not care.

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

The Prime Minister will refer to members by their parliamentary titles.

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

The member for North Sydney shakes his head. If you go from 5.2 per cent, Joe, to 10 per cent, let me tell you it adds up to about half a million more people out of work. Now, you might regard that as a mere piece of collateral damage; we on this side of the House do not. We are proud of the fact that we intervened in the economy. We protected this economy. We made sure it did not go into recession. We acted in a way to keep unemployment low. We have done so with the lowest debt and lowest deficit of the major advanced economies and, on top of that, we have emerged with the second-lowest unemployment level of the major advanced economies.

On the final part of the member for North Sydney’s question—which underlines fundamentally how he has failed to engage in the detail of the debate on tax reform, because we know the member for North Sydney is not big on detail—the tax reform proposal put forward by the government is entirely directed towards the reforms of the taxation system for company tax, small business and investment in infrastructure, and associated measures in superannuation. The member for North Sydney knows that to be true. If he bothered to read the budget papers, he would know it has nothing to do with the budget bottom line; it is to do with tax reform.

The government is proud of having intervened to assist the economy to remain out of recession. Many families out there in Australia are still doing it tough and many small businesses are doing it tough, but let me tell you: had those opposite prevailed, with their prescription for sitting on their hands and doing nothing, this country would be in the middle of mass unemployment.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Why is the presentation of costed, detailed policies crucial for Australia’s future prosperity?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Blair for his question. The presentation of costed and detailed policies is crucial for Australia’s longer term prosperity. That is why the government has put out detailed policies—detailed, costed plans—for long-term sustainable growth for Australia’s future, including investment in infrastructure, skills, health reform, deregulation, regulatory reform, the National Broadband Network and of course tax reform. All of these are components of a wider, detailed plan to build long-term sustainable growth for the Australian economy.

Unfortunately, we have not heard a great deal from the opposition by way of detailed, costed policies. We have heard an awful lot from the Leader of the Opposition about what they would undo but very little about what they would do, were they to be elected. We have heard that they would cancel the computers in schools program, they would scrap the trades training centres. They would stop reforms to private health insurance, they would get rid of GP superclinics, they would abandon reforms to e-health that would make our health system more efficient. They would scrap the tax reforms that would deliver a lower company tax rate for Australian businesses, better superannuation, more infrastructure and better tax breaks for our small businesses. It is long overdue that we heard from the Leader of the Opposition what his economic strategy is, what his health reform strategy is, what his education reform strategy is, what his national security policy is. It is long overdue that we actually got some policy.

I do confess that this area is not a complete void; there have one or two things announced—for example, the opposition’s great big new tax to fund its Rolls Royce paid parental leave scheme for people on up to $150,000 a year. Interestingly enough, this tax means that company tax for larger businesses in Australia would go to almost 32 per cent, in contrast to the government’s proposal, which is that it would go to 28 per cent.

Mr Speaker, if you have been watching the media over the last 24 hours, you would have noted that the United Kingdom, under the new coalition government headed by the Conservatives, have just decided to drop their company tax rate from 28 per cent to 24 per cent. What that indicates is that we as a nation do not have the luxury of time in responding to the pressures—that have been there for some time and that were put on hold for a period because of the global financial crisis—about the headline rate of company tax. It is a very important reform to reduce the headline rate of company tax. This government is doing that. The opposition proposes to increase that rate. That is just one item.

The second item I noticed over the past 24 hours was the Leader of the Opposition announcing the creation of a parliamentary budget office. This triggered some vague memories in the back of my mind, and I discovered that it was remarkably reminiscent of some very interesting email exchanges that occurred last year between Godwin Grech and various Liberal luminaries. It would appear that Godwin’s ghost lives on! He is still drafting strategy for the opposition. Also, the Leader of the Opposition is out there making commitments for the period after the forward estimates end. Whether it is about road projects or pension indexation, he is out there saying to people, ‘Look, we’ll do something about that beyond the forward estimates.’ That is 2014. So what he is effectively saying is, ‘You’ve got to elect us twice before we deliver on our promises.’ These are policies on lay-by. You front up and commit initially and then you have to be voted in again before people actually get delivery! I am sorry, but this simply is not good enough. This is not good enough. We are within months of a national election. The Australian people are entitled to serious, detailed, costed positions from the opposition that they can form a view about and so they can make a decision about whether or not they want to take the risk of this erratic opposition leader running the Australian nation and our economy. That is a risk they cannot afford to take.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to the statement by the minister for small business this morning on Radio 2UE: ‘Governments can have a bit of an influence on restraining price rises.’ Given that in the last 12 months electricity has increased in price by 18 per cent, will the Prime Minister guarantee that the cost of electricity will not go up further as a result of his great big new tax on mining?

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

I endorse the remarks made by the minister for small business, and the reason I endorse them is that they go to the impact of competition policy—what can actually occur out there in the marketplace. I imagine, knowing the minister for small business very well, that he would have been talking about competition policy, because that is how you keep competitive pressures in the economy and keep prices low—and that is one of the principles for which we stand.

A second way in which you can actually contain price rises is through effective consumer protection laws. I note the efforts recently by the minister for financial services to make sure that we have got proper consumer credit protection laws, the first national consumer credit law in the country, which brings together the conflicting jurisdictions of the states into a single form, enabling consumers to have enhanced rights to deal with any exploitative behaviour towards them on the cost of credit and the conditions associated with credit. On the question of the impact on prices associated with the introduction of the government’s proposed tax reforms, once again I would refer the member to the detailed findings and conclusions of the Treasury modelling.

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

Are there no further questions? I call the member for Wakefield.

Opposition Members:

Oh! Oh!

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

Order! I may regret later on that I did not just present my audit report and then go to business. Nobody was too quick off their feet. I have given the call to the member for Wakefield because he sought it. I call the member for Wakefield.

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

What’s happening over there, Albo?

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

Order! The member for Sturt might find out what is happening by watching on television.