Barry Haase (Durack, Liberal Party) Share this | Link to this | Hansard source

Today I bring the House's attention to the pivotal point we are at in Australia. Well known across Australia and understood by the population is the fact that we are a resource rich country and that, through the process of royalties, we have compensated the people of Australia, in each state, for the value of the natural resources extracted and traded for revenue. At the same time we have created jobs, infrastructure and tax collection opportunities. The return to the Australian people of the value of those resources has been predominantly through royalties, which is a very important point to remember. We are now on the brink of changing the state collection of royalties, whose value compensates for extracted resources, which are distributed within the state by way of the construction of infrastructure. We must also remember that, because of that longstanding process, we have incredibly highly valued, low sovereign risk across the world.

Today one of the most mobile assets around the globe is capital and to extract resources in this country today we need capital—and lots of it. The extraction process and the transportation of raw materials is a very complex and expensive business. Because you need to do a lot of it you need to be exceptionally efficient, and to do that you need to invest capital. That capital comes, in the main, from overseas. If we had 200 million people in Australia it would be less so but we are 22 million people in Australia, which creates a capital flow problem. We have been considered globally to be low sovereign risk to this point in time. With the introduction of the MRRT, we will destroy that low sovereign risk image and say to the world, 'Don't come Down Under; we have the resources, but who knows when you are going to be hit with an additional tax.' And the appeal—especially with iron ore, which we have in abundance in this country—and the attraction will suddenly be in west Africa and the Americas. And exploration for the resources in those countries will become increasingly more attractive, because the capital that is floating around the world looking for a place to land is averse to high sovereign risk. The message we are sending globally right now is, 'Don't come Down Under because we are liable to wake up tomorrow morning with a different idea and dud you, and your investors will not get the predetermined return on their capital and your company will go down the gurgler.'

So we are on the brink of destroying our international reputation, all for the sake of this government's Treasury getting their grubby hands on the dollars from the states. The states I refer to predominantly are of course Western Australia and Queensland, and in Western Australia we have ample need for the investment of capital derived from our royalties. If the people of Western Australia considered that they were not being compensated sufficiently for the extraction of Western Australia's minerals then the answer would be to increase royalties; it would not be to introduce a new tax—especially at this time, globally, when the cost of living is ever increasing and the returns to the individual are reducing.

Capital investment in Western Australia in mineral extraction provides jobs. It provides infrastructure. It provides opportunities for the collection of taxes. But those taxes collected appropriately and efficiently ought to be in the form of royalties. If the royalties collected today are not sufficient then the royalties ought to be increased. It is a very long-standing tradition that it is royalties that compensate the people of Australia for the minerals of Australia that are extracted. To change that is to fly in the face of common sense. The MRRT is a dud.