Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

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

The adverse impact of the Government’s mining tax on the budget.

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—

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

I know that it sends a little shiver of fear through the spines of the Labor Party when we talk about the Labor Party and mining. There is a rich vein there that only individual members of the Labor Party know how to exploit but, as a collective, they seem to get it wrong—as they have throughout this entire debate. And we saw it again in question time today. The Prime Minister is always keen to give us a sanctimonious lecture about accuracy and facts. Today in question time, in answer to the Leader of the Opposition—the very first question—she entirely confused, and later admitted that she had, the report of Don Argus and the implementation committee with that of a general GST review with the states. So if the Prime Minister does not understand her own mining tax, this is the obvious excuse for her—to renege on a deal, a deal that she did, by her hand, through her negotiations with the chief executives of BHP, Rio and Xstrata on the eve of an election.

I intend to go through a few of the facts today, the irrefutable facts, which the member for Griffith helped to stimulate my memory about in an interview with David Speers today. Imagine that—David Speers! 'What a coincidence you are down here in my office with a camera. What a coincidence that I have a photo of me with the Pope.' How did that happen? You can imagine the phone call: 'David, it's Kevin.' 'Kevin?' 'Yes, Kevin—Kevin Rudd.' 'Kevin Rudd?' 'Yes, the former Prime Minister. You know: Kevin Rudd, I'm on Twitter all the time.' 'Oh, yes, that Kevin.' 'I have a great photo of me with Ben—Benedict. Come down and let's do an interview about how the government's going.' Well, as the member for Griffith so successfully did, he nailed it. He said, 'There was an agreement.' First of all, he identified that there was an original commissioning of a review into taxation by the Treasurer—and that is exactly right: the Henry tax review. And, as the member for Griffith said, that was the Treasurer's own work. Quite right it was! We had to drag that out of the Treasurer, him kicking and screaming. Finally, he released it. He said, 'Great news; we've got this new tax. This new tax, the RSPT, will raise $12 billion over two years.' Wow, that is a hell of a tax. It was such a hell of a tax that the mining industry went bananas, and understandably so. Effectively, it meant that we had become uncompetitive. The Canadians were even advertising that they did not have an equivalent tax. The visceral reaction of the mining industry was such that it brought down the member for Griffith's prime ministership. And the new Prime Minister identified that there were three issues that she was going to address, because she had been a part of a government that had lost its way and she was going to send it on the right course.

At the top of the list was No. 1, the mining tax; No. 2 was carbon; and No. 3 was boats—she was going to stop the boats. She failed on all three. No wonder the member for Griffith is now down to ringing David Speers and asking him to come around for an early morning cup of tea.

I would say to you that the revenue projections from Labor have gone from $12 billion over two years, to $10.5 billion over two years, to $7.4 billion, to $6.5 billion, to $4.4 billion and less.

But the problem is that Labor committed $14 billion of expenditure against the Christmas bonus tax that it has not collected. And these geniuses have used such heroic words as 'redistributing the benefits of the boom' and calling it an 'historic tax'—an historic tax that at its very best raised less than one per cent of taxation revenue. Everything Labor does, everything Labor says, has to be the biggest and the grandest and the most monumental of all. There is no greater reforming government than the Gillard government. There is no greater change that can be enacted for the benefit of the Australian people than that enacted by the Prime Minister and her cohorts. Nothing at all. But the bottom line is on every point, at every station: Labor just exaggerates and gets it dead, dead wrong.

Of course they do not just do it in this place; they do it to their constituents. I have this letter from the member for Lilley, which says:

Dear Daniel,

I was talking to a local resident the other day who asked, 'Wayne, at a time when we are in the middle of a massive mining boom, why aren't people like me sharing more in its benefits?'

Opposition Members:

Opposition members interjecting—

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

No, they are at Everton Park.

… 'Wayne, at a time when we are in the middle of a massive mining boom, why aren't people like me sharing more in its benefits?'

That is a good question. Now we have a mining boom that the Treasurer is so concerned to redistribute, good old Daniel from Everton Park can expect $5.50. Maybe the Treasurer will give him $6 and hope that he can buy himself an ice-cream with the change. But the bottom line is that out of all of this, Labor is now walking away from an agreement with the miners—an agreement that was pretty unambiguous when it was originally stated; it was clear—that all state and territory royalties will be creditable against the resources tax liability, but not transferable or refundable.

That was signed by the Prime Minister, the Treasurer, the minister for resources, Martin Ferguson—who has been very quiet this week—Marius Kloppers from BHP, David Peever from Rio Tinto and Peter Freyberg from Xstrata Coal. By her hand, the Prime Minister said—and it was confirmed by Don Argus in the implementation committee—that all the royalties paid to the states would be rebateable. In fact, the government went further:

Any royalties paid and not claimed as a credit will be carried forward at the uplift rate of [the] long-term bond rate plus seven per cent.

How good is that return? The member for Wentworth would be able to work that out pretty quickly.

The government is not just in a position where it says, 'Don't worry guys, you don't have to pay net any royalties to the state, we'll rebate you', it is also saying, 'But if you do not pay enough mining tax to us, we, the taxpayers, owe you a credit on your royalties at the long-term bond rate plus seven per cent'. That is a fantastic return. I can see every self-funded retiree in the gallery say, 'I want a bit of that government-guaranteed return', which the government negotiated. I thought to myself that is quite a deal that the Prime Minister and the Treasurer did at that time. Even on reflection I thought this was a very generous deal with the miners. And then I saw Gary Gray today—we like Gary because he is very honest and he is very straight—and the minister said on Radio National:

I think it's worth having in mind there were circumstances surrounding the design of the mining tax that meant the government had to do the best job it could do in the circumstances available to it.

So the Prime Minister negotiated this deal after she had dumped Kevin Rudd, and she signed any deal to stop the mining companies from continuing their advertising campaign. I seem to recollect the words 'put down your guns'; that is what the Prime Minister said. She went and did a deal and had all of these expenditure items against that resource that she claimed was coming in to redistribute the benefits of the boom, but the problem is the $14 billion of expenditure are now funded by debt. They are funded by debt, by borrowed money, because the government got it wrong. They have had five versions—distinct versions—of the mining tax, including the resource super profits tax, and the minerals resource rent tax, which the three ministers personally negotiated. In fact, they deliberately excluded the Treasury from being involved in the negotiations, so there were no departmental people. They went into a personal negotiation with three formidable negotiators—Marius Kloppers, David Peever and Peter Freyberg—who negotiate contracts with the Chinese all day long. And guess who won? What a surprise! Like Muriel's Wedding'What a surprise to see you here!' And then it changed again with a policy transition group, then it changed again with a deal with the Independents and the Greens, and then it changed again with the Greens in the Senate.

The government, with all of its resources and all of its words, said, 'Don't worry, we are going to spend this money, because this revenue is coming in', and they made all these heroic promises: company tax cuts, increases to superannuation, payments to low-income people—and gee they are hypocrites in that regard, aren't they? It was Labor in 2009 who cut the support for low-income people on superannuation by $3.3 billion, and they come into this place and give us a lecture about low-income Australians. Fair dinkum—that is pretty rich!

They had other things in relation to interest withholding tax, small business instant asset write-offs, and a range of regional infrastructure funds, schoolkids bonus, payments going out to everyone. Guess what? In an election year they get it. And guess what? It is all funded by borrowed money.

So they are borrowing from your children to give money today to those parents as a handout. But it has got nothing at all to do with education—even by their own admission.

On more than 100 occasions my colleague Matthias Cormann in the Senate has been calling on individual ministers and bureaucrats to release the full assumptions that lie behind the claims on the revenue of the mining tax. My colleague here, the shadow minister for resources, has done an outstanding job of asking questions of the government in this regard: 'Give us the facts behind your claims of this river of money on the mining tax.' But what happens? The government does everything it can to block the path, to prevent the truth from coming in—the 'sunlight', as the member for Lyne described it—on this tax and so many others. It was like extracting teeth to get the Treasurer to release the number last week. For crying out loud, on Thursday it was 'illegal' to release the revenue on the mining tax and then he released it on Friday after he heard about our private member's bill to force him to release that information! And over the last two days we have had a conga line of incompetence from the government, waxing and waning about whether they are going to adjust the royalties or whether they are going to respond to the Greens and the member for Lyne, who say the royalty rebate should be changed to increase the total revenue for the mining tax.

This uncertainty and confusion on the mining tax is on top of the disastrous confusion and uncertainty the government has rolled out into this place on superannuation over the last week—the Prime Minister, on the floor of the parliament, changed her policy in relation to people taking their superannuation out over 60 and what tax levels they would pay—and it is on top of the confusion and chaos that the government has gone through in relation to its over 500 promises to deliver a surplus this year. I do not recall any of those promises for a surplus—366 from the Treasurer and 166 from the Prime Minister—talking about conditionality and where the world might go. No, it was emphatic: it was the basis of their own economic credibility by their own word.

We had Senator Evans saying last night on Q&A in relation to the mining tax: 'It's a problem. It's got to be fixed in my view.' And he went on to talk about how he was going to change it. We had the Special Minister of State say today he does not want it redrawn. We had the Prime Minister yesterday saying they want to change royalties. We had the Prime Minister today talking about Don Argus wanting to change royalties. We had the Treasurer today not wanting to declare a position because, if in fact he did declare a position, the truth would be out: the mining tax is a shambles; Labor's rhetoric is overblown. This will be the new benchmark for incompetence. Only Wayne Swan and Julia Gillard could design a tax that does not raise any money and leaves every Australian in debt.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

Today in question time the shadow treasurer confirmed that the coalition, if it wins government, will scrap the increase in superannuation for working Australians from nine per cent to 12 per cent. The shadow Treasurer on Friday, responding to the Treasurer's release of the revenue for the MRRT, said that he would get rid of the tax—that is, he would get rid of the increase in superannuation from nine per cent to 12 per cent. I will take people through what he said. He mentioned the following expenditures to which MRRT would contribute: the superannuation contributions tax, the supplementary income support for low-income earners and the superannuation guarantee increase from nine per cent to 12 per cent. That is a direct quote from the shadow Treasurer.

He was asked in that doorstop interview on Friday afternoon: 'So what would you cut?' The shadow Treasurer said: 'I just outlined them. I can go through them again if you want.' The journalist said: 'So you would cut all those initiatives?' The shadow Treasurer said: 'Absolutely. You can't afford them.' Unequivocally and absolutely the shadow Treasurer said that an incoming coalition government, if it won the election, would axe the increase in superannuation for working Australians from nine per cent to 12 per cent. That was Friday afternoon. National Nine News ran that in the story. At 7.09 pm the shadow Treasurer tweeted in these terms:

Would be nice if Nine News had checked the facts...Coalition remains committed to keeping increase in compulsory superannuation from 9-12%.

That was just hours after the shadow Treasurer said absolutely it would be axed. A little later, Bernard Keane tweeted:

Hockey stumbles on superannuation … good thing there's no election campaign.

The shadow treasurer responded to Bernard Keane:

please just don't accept the False Labor spin Bernard.

The words came out of the mouth of the shadow Treasurer that the nine to 12 per cent superannuation increase would be scrapped by an incoming coalition government. Within two hours he denied twice that he had ever said that. And in question time today, in response to a question from the Leader of the Nationals and would-be Deputy Prime Minister of Australia, I pointed out that the shadow Treasurer had said on Friday afternoon that he would scrap the nine to 12 per cent increase, and twice the shadow treasurer, across the table, nodded and said that is right. So he said that was going to scrap it, he denied that he said he was going to scrap it and now he says that he is going to scrap it. I guess by early evening he will be denying that he denied his denial about his denial and say he never said that he was going to scrap it.

That is why I tabled the screen shots of the tweets. They are the words that came out of the mouth of the shadow Treasurer, and he just looks down the barrel of a camera and says, 'I never said it.' And the journalists in the national press gallery are expected to believe that.

Twice now he has confirmed—on Friday afternoon and again in question time today—that a coalition government would scrap the nine to 12 per cent increase in superannuation for the working men and women of Australia. The reason that they would do that is that they have a $70 billion black hole.

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

Oh, rubbish!

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

I have just heard the shadow minister at the table say, 'Oh, rubbish!' I have also heard the Leader of the Opposition say: 'Well, this $70 billion figure is a fanciful figure. It is plucked from the air by government ministers and I'm surprised you're retelling it to me.' Where did we get the $70 billion figure? Out of the mouth of the shadow finance minister, who said, 'The $70 billion is an estimate of the sort of challenge we will have.' That was on ABC NewsRadio on 16 August 2011. He then said, 'The $70 billion is an indicative figure of the challenge that we've got.' That was on ABC 24 on 18 August 2011. Then, on Meet the Press, a journalist said, 'It's not like a furphy, then?' The shadow finance minister said: 'No, it's not a furphy. We came out with that figure.' We just had the shadow minister for energy and resources saying, 'That's rubbish,' that the shadow finance minister never said that there was a $70 billion black hole. Three times, out of his own mouth, the shadow finance minister said it—'There is a $70 billion black hole', 'It's not a furphy,' and, 'That's the figure that we put out there.' I really do look forward with great anticipation to the shadow minister for energy and resources apologising to the people of Australia for saying that the shadow finance minister never made that statement. They make the statements, deny that they ever made them and then get indignant when they are called to account.

That $70 billion black hole needs to be filled. The coalition know that and that is why they are withholding their policies as best they can. They had two policies out last week, one about drawing a line at the Tropic of Capricorn and another about scrapping the increase in super from nine per cent to 12 per cent. Two policies in two days were each repudiated in two hours. When the policy about a line dividing Australia at the Tropic of Capricorn was leaked to the media, the Leader of the Opposition had run away from it by 9 am. The shadow Treasurer ran away from his own statement, within two hours, that they would scrap the nine to 12 per cent superannuation increase. They do not want the Australian people to know where they will cut to fill that $70 billion black hole. We have had confirmation of that from the Deputy Leader of the Opposition, who was asked by Fran Kelly: 'You will have the numbers you need when the budget is released on 14 May, as of budget night. There'll be no excuse, will there, for the coalition not to move on releasing costings for their policies?' The Deputy Leader of the Opposition said, 'Well, that's not correct', saying that there will be an excuse. Fran Kelly said, 'Why not?' and the Deputy Leader of the Opposition said, 'Well, because the full impact of the budget will not be known until 30 September.' What is significant about 30 September? It is after the election. And that is the caper. The coalition, federally, want to do what Campbell Newman and the Liberal-National Party have done in Queensland—conceal the true savagery of their cuts from the Australian people before the election and use the device of an audit commission after an election, after 30 September, to reveal the true savagery of their cuts.

The fact of the matter is that what is happening in Queensland, what is happening in New South Wales and what is happening in Victoria are just the curtain-raisers for the main game, and the main game is this: the Leader of the Opposition has committed to the same device as Campbell Newman—an audit commission, after an election, after 30 September. The Deputy Leader of the Opposition said that is when they will reveal the costings of their promises. That is actually when they will reveal the true savagery.

We saw it again last night, when there was a Senate estimates hearing involving the new Parliamentary Budget Office. As a result of that hearing, lickety-split, as quickly as they possibly could, there was a joint release from the shadow Treasurer and the shadow Assistant Treasurer which said that they have been given the go-ahead by the budget office to withhold their costings until 10 days into an election campaign. They said:

Accordingly, the Coalition will finalise its policy costings after the PEFO is published by the Departments of Treasury and Finance—

that is 10 days into an election campaign—

and will release them in good time before the election.

They want to do exactly what they did last time. The Hansard transcript shows that Mr Bowen, the head of the Parliamentary Budget Office, repeatedly says sentiments such as these: 'We want the PBO's costings as soon as practicable. In these circumstances we encourage senators and members to submit any confidential costings requests that they wish to resubmit to the PBO well in advance of the commencement of the caretaker period.' So we have got the Parliamentary Budget Office saying, 'We're open for business; please submit them so that we can cost them,' and the coalition already manoeuvring so that they do not submit anything or do not release anything until at least 10 days into the election, and actually through an audit commission after an election.

Let us remember what happened at the last election. I was at the Brisbane Broncos Leagues Club when there was a community debate between the Prime Minister and the Leader of the Opposition. At five o’clock I was watching the television and on come the shadow Treasurer and the shadow finance minister and they say: 'We're releasing our costings. Everything adds up.' They say, 'Everything adds up—it's terrific and we know that it's terrific because we got this really reputable accounting firm to audit it.'

Do you know what actually happened to that really reputable accounting firm? I will read the beginning of a press release:

Geoffrey Phillip Kidd FCA and Cyrus Patell CA of Western Australia

The Professional Conduct Tribunal had found a case established that both Kidd and Patell were liable to disciplinary action in accordance with By-law 40(f), in that a report dated 18 August 2010 prepared for the … Coalition parties—

was basically shonky. That is not a legal term. Accountants do not use the word 'shonky'. They were fined $5,000 each. They said this reputable accounting firm audited it; they did nothing of the sort.

Indeed, after the election, when the Independents were able to insist that the policies of both the government and the coalition be properly costed, they were. After the election the departments of the Treasury and finance found an $11 billion black hole. That is just a matter of fact. That is a matter of history. That is not in contention—well, until this morning. Apparently it never happened. Here we have the shadow Treasurer this morning doing a doorstop interview, and the journalist says:

Your costings were wrong before the last election.

Shadow Treasurer:

I don't accept that at all.

JOURNALIST: $11 billion out.

Shadow Treasurer:

I don't accept that at all. Not at all.

It never happened! There was no $11 billion black hole! There was no fine for the accounting firm! None of that happened! The shadow Treasurer last Friday never said, according to him, that they would scrap the nine to 12 per cent increase. He reprimanded National Nine News and Bernard Keane for reporting what he actually said: 'I never said it. I wasn't there. It wasn't me. I wasn't there.' And then in question time today he said, 'Well, we are actually going to scrap it,' and that there will be a release a little bit later denying his denial when he denied his denial. And the press gallery is supposed to expect that this is the consistency and the intellect of the shadow Treasurer, the would-be Treasurer of this country.

The fact is that the MRRT is a profits based tax. So is the petroleum resource rent tax. The coalition has said: 'You must never base expenditure on a profits based tax because profits go up and down as mineral prices go up and down. You should never do it.' The petroleum resource rent tax is a profits based tax on offshore petroleum. The oil price goes up and down. If the coalition has said it is philosophically opposed to a profits based tax, why did it collect $18 billion? Why did the coalition collect $18 billion from the petroleum resource rent tax? Give the money back. You should have given the money back. They campaigned against the petroleum resource rent tax. They said they were philosophically opposed to a profits based tax and much preferred a crude oil levy, much preferred royalties which deter exploration and investment, and never gave the money back.

The fact is that the coalition will do these things. It will restore the tax on superannuation for low-income earners. It now has said that it will scrap the increase in super from nine to 12 per cent. It will, on the tax-free threshold, take it from $18,200 back to $6,000. It will abolish the small business tax break. It will abolish the schoolkids bonus. And all of the rest will be revealed after the election through the device of an audit commission. Shame on you. (Time expired)

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

I must admit I did not learn very much from that. The one thing I did learn, though, was that when we said you cannot rely on income from a profits based tax when you have a royalty system underneath it we were right. We were right. There is no pleasure in saying that we were right except that the government continues to spend money before it gets it. They spend it before they get it. So here we are, six months into the MRRT, $126 million earned—$126 million less the $40 million that the companies would have paid in company tax, less the $50 million that the Australian tax office has already admitted that it cost them to set up this tax, less all the millions and tens of millions of dollars that have been spent by companies on accountants to prove that they do not have to pay this tax—and we have a government that has designed a tax that does not earn any tax.

They brought this tax in in a blinding rush. They were so desperate for money. The world's greatest Treasurer, so-called, decided that the industry would need to pay more tax because, he told the Australian people, they were paying no tax. They are the highest taxed industry in Australia. They pay around 46c in the dollar. They pay royalties of $3.5 billion on top of company tax and on top of payroll tax. What we have seen from this government is, in its rush to grab money because it spends it like it is going out of style, that they have actually designed a tax that does not raise any money.

There are so many flaws in this tax, you do not know where to start. It is a classic, clear example of the complete incompetence of this government when it comes to managing money. How can you fix a mess when you do not even understand how the tax works in the first place? It is a complete dog's breakfast, and the Gillard government has shown it does not understand how royalties work. It does not understand how depreciation works, and it does not understand the cost realities of the resource sector.

The Gillard-Swan team, the Prime Minister and the Treasurer, went in and negotiated with three of the largest mining companies in secret. They did not take their own Treasury people with them. They did not understand what was meant when the companies said, 'We want to deduct all state royalties.' They did not understand what was meant when the companies said, 'We want to value our assets at today's market value rather than net present value or depreciated value or book value,' two of which have two different values already. They did not understand what they were doing and they got absolutely skinned alive. The Treasurer went from a swan to a plucked duck in one day—absolutely, totally done over because he did not understand what he was doing. He does not understand what he is doing now. He does not understand the way depreciation works.

This just highlights the overall incompetence—the total incompetence—of this government. They keep saying we are going to have a surplus. Wyatt Roy, the youngest member of the House, is still waiting to see one in his lifetime. The member for Longman is still waiting, in his lifetime to see a surplus from a Labor government. You wonder why these people cannot produce a surplus: you have only to look at the MRRT.

There is only one solution and that is to scrap it. Even the last Prime Minister of this place, the member for Griffith, intimated today that he has no idea how they arrived at this conclusion. No-one knows; there were no officials there. All we saw was a hurried response to get this issue sorted out before the election. And what has happened is that we have a tax that has damaged our foreign investment profile—our foreign investment rating—so much that now we see Mongolia and Mozambique rating on the same level as Australia. That is not an investment rating.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

Who were those rating agencies?

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

If you want to go out and have a look at some numbers, I will give you some numbers which show that mining investment—

Dr Emerson interjecting—

I am talking about mining investment; if the trade minister cannot tell the difference between mining investment profiles and overall investment ratings, again, I guess it just proves my point.

I will use some stats: mining investment in Australia has fallen six per cent to just under 15 per cent of the world's share of investment in mining since 2008 as billions of dollars of extra capital are invested in Russia, India, China and Africa. This is only one of the many things they have done to destroy the foreign investment profile of Australia's resource industry.

Dr Emerson interjecting—

If the Minister for Trade wants to show me the forward numbers on investment I will be very happy see them, because I have seen them. I have seen the thousands and thousands of jobs that are getting lost in the mining industry, as we speak, as a result of the incompetence of this government.

We have seen a government that has not only introduced a half-baked tax that does not raise any money but, of course, they have introduced a carbon tax which has had a major impact on the mining industry—particularly the coal industry, which has its own issues. This is a tax which they promised. They, the Treasurer and the Prime Minister: the same negotiating geniuses who went in and negotiated a tax with the mining companies that does not raise any money. Those two people, the Prime Minister and the Treasurer, said categorically before the last election there would not be a carbon tax. And of course there is.

There are those over there who think that it is just me saying this about the mining tax. Let me quote to you someone who actually does know a fair bit more about this than me. Paul Young of Deutsche Bank said:

There are so many moving parts in this tax, and so many assumptions about company profits, carrying values and prices, it is near impossible to predict what instalments will be and what the future MRRT will be on an industry wide basis.

He did not have to wait until now to say that. He did not have to wait until February 2013. Paul Young said that in October last year. How right he was. When the Opposition was saying, 'It is reckless and it is irresponsible to be spending the money from the mining tax before you even get it,' we were right; Paul Young from Deutsche Bank confirmed that.

It is not just the damage that has been done to Australia's mining reputation by this tax; it is the damage that has been done to our economy. The government put these figures in its budget. The shadow Treasurer gave the numbers, but it was hundreds of times. Both the Treasurer and the Prime Minister went out there and said we would have a surplus, but of course we have not. Of course we haven't! We know this government can never live within its means. We know this government spends every waking moment working out how it is going to raise more money from taxes so it can make up for its reckless spending.

There is only one solution, and that is a change of government. There is only one solution that is going to restore the confidence of the international resource sector in investing in mining in Australia, and that is a change of government. A coalition government led by Tony Abbott, the member for Warringah, will not only remove the mining tax but will remove the carbon tax. But more importantly we will give investors certainty that every second day we are not suggesting a change to a tax or a new tax. Right now the resource industry is coming and talking to me, not just about the mining tax and what might change there and not just about the carbon tax and what might happen there but they are worried about what taxes may be in the May budget. Will there be a change to the diesel fuel excise rebate? Will there be a change to the thin capital rules? Will there be a change to the depreciation rates on investment assets in resource projects? No-one knows, because whatever the Treasurer says has been shown not to be the case. Whatever the Prime Minister says has been shown not to be the case. Australia and our reputation has been left in tatters by a government that cannot manage money, that cannot even understand how its own taxes work.

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

It is always a pleasure to speak on these MPIs—matters of public importance—to give some balance. You have to do that in this place. Balance is really important, particularly when you hear the non-contributions of a range of members from the other side. They talk about reputation, they talk about the economy, they talk about all sorts of platitudes; just words that are thrown out there, and they are not linked to anything in particular. They do not make any particular sense, they are not in relation to any of their policies—or in fact even to any of our policies—they are just thrown out there in the hope that by saying these words—throwing these words out—it will scare people, that somehow this would frighten people. Somehow we have done damage to the Australia economy in the international eye because we have a minerals resource rents tax. I do not think so, and there are plenty of facts and evidence to actually bear that out.

Before I get into that, let's get into some of the real facts about what the mineral resource rents tax that this government has introduced is really about. What does this tax do? Who does it tax? What does it represent? What will it do in the future?

It is an important long-term investment in all of our futures—for every single Australian in generations to come—because, just like the petroleum resource rent tax, it is a way that ordinary Australians can have something back for that resource which belongs to all Australians. With respect to natural resources—gas, iron ore or coal—you need to have a way for Australians to reap those benefits. And it is done through this type of mechanism—a mechanism that Labor put in place under the Hawke and Keating governments which since then, through the PRRT, has reaped more than $18 billion of revenue for this country. That is revenue that can be spent on hospitals, schools, infrastructure and so forth.

While the other side opposed it tooth and nail all the way through—they were dragged kicking and screaming—and said it was the end of our economy, that it would destroy jobs and be the end of Australia as we know it, when they got to government they did not change it or take it away. They kept the money. It is always good to keep the money! 'We oppose it but we'll keep the money.' That is right; it always works that way.

Guess what?—we have another one. It is called the MRRT, the minerals resource rent tax. It is the same principle. In fact, if you look at the Henry tax review or a review by any economist in the world they will tell you that the most effective, efficient way to collect tax on your resources is through a superprofits tax. Imagine you are a big miner and you are doing pretty well—there are a few names I could throw out there but I will not bother promoting them; they promote themselves enough—and you are making a lot of profit. That is okay. Good on you; so you should. Employ people, make some profit, contribute to the economy. But if you are making a superprofit—an absolute motza—maybe you should pay a little bit more, because that motza you are making is based on resources that ordinary Australians own now and into the future.

What is limited is the resource; what is unlimited is the profit that some of these miners make. So it is a fair thing, and it is known as a fair and efficient tax policy all around the world. From time to time you collect a lot from this tax, when there are superprofits being made. We have all seen the outrageous profits that a handful of people—one, two, three or four individuals—make on the back of resources that belong to you: every single Australian that is out there.

So the best and fairest way to do this is to have a minerals resource rent tax. When profits go up the miners pay a bit more; when profits come down they may not pay anything at all. The way our tax is designed means that they may not pay anything all but there are tax incentives to encourage mining development, job creation and wealth, because we want to make sure that that happens.

Let's get this right. This tax is based on sound policy. It is based on sound policy that will carry us through into the next generation—20, 25, 30 years down the track—just like the petroleum resource rent tax. It is not based on one month or one quarter and it is not based on the volatility or fluctuation of a particular resource in a particular segment of the market at any pinpoint moment in time. That is not what the tax is designed to do. But that is what the other side are trying to hoodwink people with. By selectively examining one point in time they determine that this should be the end of this tax and that we should scrap it. We should scrap it in lieu of what? I know for certain that some of the wealthiest people in this country—the multibillionaires, who are becoming multi-multibillionaires on the back of Australian resources—should pay their fair share. PAYG taxpayers pay their fair share. Why can't the billionaire miners pay their fare share? That is what should happen.

This tax policy did not just fall out of the sky. It was negotiated. It was the subject of extensive negotiations with the miners—BHP Billiton, Rio Tinto and Xstrata—and it takes into account when they have good years and bad years. It is designed to bring something back to the Australian economy, and that is what it does. We are going to use the money that is reaped from this—more in some years, less in others but growing over time—to help the Australian economy and to build infrastructure.

That is what this government has been about but the other side are promising a few things really clearly. They are going to get rid of this tax, so that revenue will be gone. It is revenue that has been going up. They are going to get rid of a whole range of other things that we have put in place, including the carbon pricing system, which reaps money for the economy as well. And they are going to take all of those away, and they are going to give more back out. So they are going to take in less—even less than today—but they are going to give even more than is going out today. How are they going to pay for it? The most incredible thing happened last year, when the shadow Treasurer, when pressured on these issues on radio, actually said, 'We haven't accounted for it.' How much was it? It was a $70 billion black hole. That was last year; we have not done the calculations of what they have added on since then.

When the opposition were pressed they said, 'Maybe there are a few areas where we could take some money away.' Where did they start? You would think you would start with some multibillionaire miners, maybe: 'Can we just have a little bit back?' No, they would not do that. Where would they start? They would start with the lowest paid workers in this country. If they are going to hit anyone they say, 'Let's hit the lowest paid.'

Opposition Members:

Opposition members interjecting—

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

It is your policy. You can smile but it is your policy. It has been stated over and over again that the first people who will cop a whack are the 3.6 million lowest paid working Australians in this country. Over two million of those are women. They will be the first to cop the whack—the penalty—and lose at least $500 a year. Five hundred bucks a year may not be a lot of money to a lot of people. I know that it would not give some mining billionaires one second of flight time in their private jets, but to a cleaner $500 a year is a fair bit. It might buy the schoolbooks of one of their children.

On issues like that this government—the Gillard government—understand that cost-of-living pressure are real. We understand that we ought to be doing something about it, and that is what we do. We go out there with the schoolkids bonus, we build better schools, we provide the infrastructure and career development for teachers and we make sure that we are going to be able to compete in the future, and we will not become a nation where a handful of people make the billions while the rest just dig holes or do other things on minimum wage. You get a short boom in the mining industry and people go out and get these fantastic jobs—and they are fantastic—on really high wages. How long do they last? Go and ask people, now, who are trying to get into the mining industry. There are a whole range of associated issues.

The opposition come into this chamber with a matter of public importance trying to say, somehow, that the minerals resource rent tax is a bad thing. They are right on that count, but only in one area: it is bad for just billionaires. That is the only bad thing about this particular tax.

It actually is good for the country. It is good for every single Australian. I am sure six—let's just say there are six—of the great big mining billionaires, the magnates, could do with just a little bit less. Six people versus how many? Twenty three million. What about the other 23 million Australians? I think there is a good case to be made and that case has been made.

We see that the opposition are particularly at war with the facts, they are at war with themselves and they are at war with this struggle to get to an election as quickly as they possibly can. They have been struggling to get to one for almost 2½ years. They are almost foaming at the mouth to get this opportunity. They just want to get there. But, in the run-up to an election, they are not going to get there on the back of good policy or on the back of good, sound economic management principles. They are not going to get there by doing the right thing for the economy going through a GFC or by making sure they actually put in place the tough, hard decisions today so that there is a legacy for the next generation, something left behind, something good. When the globe was facing the problems of the GFC—and they are not over yet—we made the tough decisions in government. We know what the other side would have done because they have already told us. They would have sat on their hands and let the economy just work itself out.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

They were very enlightening words from the member for Oxley; I found them fascinating. Some of the figures you were tossing around were also of great interest. When I was a young man it was understood there were two certainties in life: death and taxes. Since then I have learnt through experience that Labor governments do their very best to ensure that the second of these, taxes, remains an absolute certainty in Australia. But this Labor government is groundbreaking in ways that no other Labor government has been. This government has been the first to prove that there is not necessarily certainty in taxes and that simply introducing a new tax will not necessarily result in government.

Last year the government unveiled what it thought would be its best achievement: tax changes to the mining sector. The mining tax became the Labor government's proverbial crown jewels. This government has had a spectacular fall from grace as it has been announced that its prized reform package has raised a pittance in revenue. Of the mere $126 million raised by the tax—once you take out the $40 million in company tax payments and $50 million in admin costs which have been removed—there is almost nothing left. The whole charade of the mining tax has not been worth the time and the effort that it cost the government to implement. This result is certainly a far cry from the Treasurer's proclamation last year that the 'reforms today' will help deliver the 'prosperity of tomorrow'. He then went on to specifically say the money from the mining tax would deliver the reforms of tomorrow.

Well, if this government is basing its future or basing the funding of any future reforms on a mere $126 million minus $40 million and minus $50 million, the future is looking rather bleak for Australians. This seems to be a case of the Treasurer counting his chickens before they have hatched. What a terrible experience to have to go through. Since the Treasurer finally came to the realisation that his great big mining tax was a great big failure, he has spent months ducking and weaving from the truth. Under pressure, he continues to duck and weave in the answers that he gives.

It was only late last year that the Treasurer was adamant that he would gain revenue from this great big new tax. In his mid-year economic financial outlook, the Treasurer counted on $2 billion net revenue this financial year. But the mining tax has failed to deliver. The Treasurer has missed his revenue forecast by some 90 per cent. Wayne Swan's crowning achievement, the mining tax, has raised only a fraction of the revenue promised in the budget and in MYEFO. We are left wondering how long the Treasurer knew this mining tax would prove to be as hugely unsuccessful as it has been. The signs were there for all to see in June last year when a report predicted a revenue shortfall of more than $8.6 billion. But, although this impending failure was clear for all to see, Wayne Swan has been trying to blame everybody else for the failure of the mining tax. The Treasurer has tried to blame volatility of commodity prices. He has tried to blame the loopholes. I would not be surprised if he even tried to blame the member for Griffith. Since the Treasurer released his budget update, iron ore spot prices have actually increased. It simply defies logic for the Treasurer to blame the commodity prices for the mining tax's failure.

The Prime Minister and the Treasurer, Wayne Swan, were the master architects of the mining tax. We can all recall, in the media reporting that occurred, the role that they played and the prominence of their place in the negotiations. Little effort was put into consulting industry. Only the three big miners BHP Billiton, Rio Tinto and Xstrata were taken into consideration in those consultations and deliberations. No effort was put into engaging with the smaller mining companies and there was no attempt to understand the ramifications that such a tax would place on communities. State governments and the territory governments were not even consulted or informed how the mining tax would impact on them. My home state of Western Australia, which is responsible for about 65 per cent of the mining tax revenue, was left high and dry in terms of what it would be facing under this great big new tax. Even the Independent MPs that the government was courting were left in the dark about the true nature of the mining tax. I notice that the Australian has an article today citing the member for Lyne, who said that he felt duped by the government about this tax.

This Treasurer has no one to blame but himself. What we have seen with the mining tax is merely a symptom of a greater problem in this government. This is a government that is addicted to spending, and addicted to waste and mismanagement. The Treasurer's attempted cash grab with the mining tax was merely an effort to cover up his inability to effectively manage Australia's economy.

This Labor government sees the mining tax as a way to fund its ongoing addiction to spending. The Treasurer is spending money even before he receives it. Over $15 billion worth of expenditure that he thought he would gain from the mining tax has already been promised as spending.

My concern for my state and my community is the actions that this Labor government will take to fill the budget black hole. This is a government that cannot be trusted. Time and time again this government has broken its promises for its own political gain. With such a massive budget deficit to fill, Western Australia is not safe from the grubby fingers of this Treasurer. It would be no surprise to hear that the Treasurer already has plans for the fifth version of the mining tax and the seventh revenue variation. In fact, the Member for New England has welcomed the opportunity to make another raft of structural changes to the mining tax. Who knows what this will mean for Western Australia?

In my community, I have a large population of fly-in fly-out workers. These workers rely on a prosperous mining industry for their employment. These workers will be the unseen casualties of this mining tax if the Treasurer insists on continuing to undermine the mining industry.

There are significant hidden costs of the mining tax that this Labor government is trying to ignore. It is not only the many families in my community who are reliant on the mining sector. Hundreds of small businesses in my electorate directly depend upon the continued success of the mining industry. Whether the Treasurer and his cronies choose to see it or not, the mining tax is making Australia less desirable to invest in. The mining tax has increased Australia's sovereign risk profile. Small and medium mining companies are now facing an uphill battle with the huge wads of red tape caused by the mining tax. The administrative burden that this new tax is putting on smaller companies is not supporting small and medium businesses and it is not encouraging new business. There is no more sure-fire way to undermine an entire industry than to create a great big new tax for it. There is no better way to deter investment in Australia, stall projects or slow our entire economy than to bring in an ambiguous, all-encompassing new tax—and that is exactly what the mining tax is.

Only this Labor government, dysfunctional as it is, could introduce a tax that not only raises a pittance but singlehandedly undermines the entire resource sector in our country. This Labor government has had an expectation that it can rely on one industry to fund a multitude of reckless spending. But the people of Australia are seeing through this careless behaviour and are calling for an end to it. The next election is a clear choice for Australians. It is a choice between the uncertainty of a Labor government that is so desperate to make a cash grab that it is undermining one of our strongest industries; and, alternatively, the certainty of a coalition government that knows how to manage the Australian economy, a coalition government that has a clear plan to get Australia back on track.

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

The MRRT is not a perfect tax; no tax is. Anyone who has been in this place for any period of time surely understands that. It is complex and brings regulatory burden; all taxes do. The arrangement with the states with respect to royalties is untidy, inefficient and, I think, unsustainable. Review and reform will be necessary with respect to this taxation regime. But the MRRT is, unquestionably, a good thing. It is a good thing for the nation and it is certainly a good thing for the Hunter region and, of course, the Hunter electorate. It is a tax, I can assure this place, which enjoys the support of those who live and work in my electorate.

Let us return to the objectives of this tax, because there has certainly been little discussion about that on the other side of this chamber.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

Hear, hear!

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

I acknowledge the minister at the table because he was one of the architects of the Petroleum Resource Rent Tax. As has been the case with the petroleum industry for decades, the MRRT taxes profits above normal, so-called 'super-profits'. It does so for three very important reasons, none of them acknowledged by those sitting on the opposition benches. It does so because the resource being extracted by the mining companies is a community owned resource. It is owned by the Australian people and, when the price goes up to exceptionally high levels, they should benefit in that outcome. It is also important because, once the right to mine is granted, that right is an exclusive one. That company then has a monopoly, if you like, on the right to mine that resource. They secure that right when commodity prices are X and exercise that right when they are Y or, in other words, potentially much higher. Thirdly, it is important to return when prices are very high—and I have touched on this—the dividends to the broader community. That is certainly where my community comes into this debate.

The people in my electorate would resent this MPI and anyone in the electorate listening to the debate will resent it. To them, today's debate is just about politics—pure politics. They just do not understand what the debate is about. They certainly do not understand the opposition's position on the Minerals Resource Rent Tax. One moment they hear that the opposition think it is a terrible tax, that they hate the tax and that they want to scrap the tax. The next minute they turn on their radios and they hear the opposition complaining that the tax does not raise enough money. No wonder my constituents are confused. First the opposition say the tax is going to destroy the mining industry. All my coalmines were going to be closed down when the government announced this tax, according to the opposition, but now they say it has no effect at all. Again, no wonder my constituents are so confused.

Let us go back to first principles. We introduced a tax that, as I said, was to tax super-profits. My constituents thought that was a pretty good idea. At the time, those who sit opposite said, 'It's going to destroy the industry.'

I was talking to many of my constituents on this issue over the weekend, because they have heard the noise coming from the opposition and of course they have heard that in the first two quarters the tax only raised $126 million or thereabouts. I say to them, 'It is a funny thing, isn't it. We said we were going to tax the super-profits. And guess what, coal prices have fallen and there are no super-profits, so we are not getting much tax from the coal mining companies.' Surprise, surprise! Wasn't that our intention? We were never going to destroy the coal mining industry. I am talking mainly about coal, because it is in the interests of my electorate, so I will set iron ore aside. We were never going to tax normal profits. So what is the fuss? I say to my constituents, 'Tony Abbott, the Leader of the Opposition, said we are going to destroy the industry.' We always said, 'No, we are just going to tax super-profits. Coal prices have fallen and there are no super-profits, so therefore we are not raising much tax.' And of course my constituents say, 'That makes a lot of sense,' and they are relieved. They know that we got $126 million more than the Leader of the Opposition would have raised, because he is going to scrap the tax, or indeed would never have had the tax in the first place. My constituents find that a very simple proposition, but they cannot understand the position of the opposition, who seem to change their view about this tax every moment.

Now they have moved to the royalties question. I have acknowledged that the royalties question is a difficult one, because the states have chosen to abuse that arrangement. The states now think they can just keep raising royalties and the companies would be rebated back. The problem in that for my constituents, in addition to all the obvious problems, is this: the mining tax is going to be in part returned to my local community to fund infrastructure in my communities, which is necessary because of the impact of the mining industry—the traffic jams and the like, the rail needs et cetera. But if New South Wales Premier Barry O'Farrell keeps raising his royalties and on that basis forces us to give more of the mining tax back, then, instead of the money being spent in the Hunter Valley, it will be spent in Sydney. I apologise to my Sydney colleagues. I will let them look after their interests and I will look after mine. I want the money coming from the mining industry to be spent in the mining region, the region I represent. That is the big difference between Barry O'Farrell taking the money and the Commonwealth taking the money. It is a big difference and it is very important to my constituents.

The mining industry has brought great wealth to the Hunter. We welcome the mining industry. It is a great job creator and a great driver of higher wages. But it also brings problems: pollution, air quality, water quality, traffic jams, higher prices in the supermarkets as prices chase wages and childcare shortages. The list goes on and on. It is a challenge for us to get the balance right. You let mining go to super-profits it will just run away. Governments will take the revenues and we will end up with too much coal mining in a region like the Hunter Valley. In fact, it is arguable that we already have too much coal mining in the Hunter Valley.

Just yesterday I saw an extraordinary piece in the Newcastle HeraldI will cite it as a report, because I have not had a chance to check the facts—where the Anglo company, which is proposing to establish the South Drayton mine, is objecting to a tourism development because it is fearful that the tourism development will be impacted upon by the South Drayton mine. It is going to be impacted upon, according to the report, because they expect to exceeded their EPA guidelines on a regular basis. They are admitting that they fully expect to be emitting more dust pollution than they are allowed to, and on that basis the tourism development should not be approved. That is pretty extraordinary stuff. I am a great supporter of the mining industry, but we have to get the balance right. We cannot allow shorter-term industries like mining, as important as they are, to threaten sustainable industries, industries that are going to sustain us for centuries to come: agriculture, viticulture and thoroughbred breeding. These, too, are very important industries in my electorate, bringing great wealth in their own right and employing a lot of people in their own right.

So it is about balance. I remain a supporter of the industry. I want the industry to continue, to thrive and to keep bringing wealth to the valley. I want it to continue employing lots and lots of people directly and indirectly. But I also want there to be balance. I want to protect the sustainable industries. In many ways in economic theory the MRRT is an excellent way of helping to strike that balance. The opposition needs to get back to the facts, get back to first principles, and explain to the Australian community, the community of the Hunter Valley, and in particular my community in the Hunter electorate, what they are going on about in this debate today. Do they support the tax or not? Do they want it to raise more? They do not want it to raise anything. They are going to abolish it and in doing so they are going to abolish the Infrastructure Fund, the small business tax cuts, the super increase for low-paid workers and all those good things that are attached to this tax. They need to explain to the Australian people what they hell they are on about.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I rise to talk about the adverse effects of the mining tax on the Australian economy and the budget. On royalties, for a start the Queensland government brought royalties in—they were quite within their rights to bring royalties in—and they moved them from 10 per cent to 12.5 per cent. This put the coal mining companies in a situation where they knew exactly where they stood. They did not have to employ a team of accountants to calculate how much tax they would have to pay or not pay under the MRRT.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

What did the LNP object to? When Fraser did that they objected to it.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

To the peanuts on the other side who do not understand the economics, if you can explain to me why your budget—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Flynn will resume his seat. The Minister for Trade and Competitiveness on a point of order.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

Ordinarily I would not be talking about this sort of language, given that I serve up a little bit myself, but I think that was out of order and he should withdraw.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Flynn would assist the House if he withdrew the reference to members on the government benches.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

It is very disappointing that they cannot explain their budget—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I would ask the member to withdraw.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I withdraw. They cannot explain why before Christmas they had a surplus budget but after Christmas a deficit budget.

They cannot explain why they have never had a surplus budget since 1989. So—shock, horror—they had to introduce a mining tax. They did not calculate that the miners have got better accountants than the Treasury or the Treasurer; they did not realise that. And they got skinned—in fact, our Treasurer became a stuffed duck burnt to cinders with plum sauce poured all over him.

The Treasurer has nowhere to hide. What can he do next? He has pulled all his Houdini tricks out of the bag. Now he is going to have a deficit budget and his surplus is gone. And the mining tax that he relied on so heavily to bring about $15 billion worth of expenditure is no longer there. He based his calculations on the fact that he was going to make all this money out of the mining companies, and that did not happen.

In fact, the mining companies do pay a lot of tax. They pay corporate tax. They pay superannuation to their employees—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

It's not a tax!

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Well, call it what you like, mate! It's money in the bank for workers.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! Remarks will be through the chair—and that goes to both sides.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

It is money in the worker's pocket at the start of his retirement. And there are other taxes mining companies pay. They pay payroll tax. They pay carbon taxes. They pay a renewable energy tax. And of course they pay the highest wages in the industry in the world, and not only coal wages but iron ore wages. And in the last six months, as to MYEFO, iron ore prices have actually gone up by 30 per cent—well over the $120 a tonne benchmark.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Spot prices!

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Spot prices—call them what you like; the price has gone up 30 per cent. You cannot deny that. But, if you listened to Mr Swan, you would think that commodity prices had really tumbled through the floor.

Look at the coal mining industry in my electorate: coal mines have closed down; coal mines have been put up for sale. BMA have only just put Gregory Crinum on the map to sell off. If this keeps going, all our mining personnel will end up working in places like Mongolia, Mozambique and Africa. Take Ken Talbot, who used to live in my electorate, and who was unfortunately killed in Africa in a plane crash—his whole team were over there investigating new mining ventures.

So if we keep on killing the goose that lays the golden egg, we will have nothing left. Our manufacturing industry is on the ropes. Retail businesses are not doing well. And, apart from that, it is the foreign investment in Australia that we must continue to attract. Otherwise, we will end up in a situation where we are left as a Third World country, and no-one here would like to see that happen. But if we keep taxing the mining industry, as our Treasurer intends to do, that is what will happen, and you can see it happening at this very moment. Add a carbon tax to a mining tax, and you get businesses like Rio Tinto—who, in Gladstone, employ 6,000 people—starting to look at their balance sheets and asking, 'Do we need this business or do we divest?' of things like the Boyne smelter.

That is what we are faced with as Australians. A lot of our good expertise in the mining industry has gone to places like Mongolia. When I was last speaking to the Ambassador for Mongolia he said: 'We love Australians; their expertise is helping us to expand our coal industry. You know', he said, 'we will soon be in a position to send our coal by rail into China and Russia; at the moment, we are doing it by truck.' So that tells you something about what is happening. Twenty years ago, Indonesia did not export one tonne of coal; now it is a bigger exporter than Australia. Indonesia exports over 30 per cent of the world's coal. We were over 30 per cent; we are now under 30 per cent. So you can make up your own mind. Even blind Freddy could see that.

Wasteful Wayne has wasted the dollars and is trying to get them back through the industry, but—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

It's 'the Treasurer' or 'the Deputy Prime Minister'.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Yes, that is right—he is the world's best treasurer; the record is there for everyone to see. He calculated, in last year's budget, a $13 billion deficit; it rose to a $22 billion deficit and ended up at $44 billion. So, yes, he certainly is living up to his reputation.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I am just asking you to call him by his correct title.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

Yes, it is the Treasurer. He is a Queenslander, too, unfortunately. But he was a good kid at Nambour. He did not go on to great things at school, but he has certainly gone to great heights with the Labor Party. He will be remembered for a lot of things, but not really for his ability for accounting when it comes to the budget he produces. I think that is all I have to add.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Surely the people of Flynn are truly blessed to have such a unique representative! I would have thought that a person who represented so many coalminers would be loathe to say that his constituents are paid too much. I would have thought that a representative who had the Gladstone harbour and seen so many coal ships turn up would have actually understood how those ships are filled with coal, and what impact spot prices actually have on the long-term contracts that are made with coalmines. Considering this gentleman has been here for two years that is an amazing contribution.

We are talking about a serious piece of legislation, a serious matter of public importance: the MRRT and its relevance for Australia. I am glad we are doing this with the member for Rankin, the Minister for Trade and Competitiveness, at the table. I know that he was involved with those PRRT discussions way back—I will not say how far back, not that long ago. However, I imagine that if we went through the Hansard of the day, it would be deja vu all over again. The arguments were incredible. It was going to be the end of this industry, but it has returned billions and billions of dollars to Australia. At the time, it was argued by those opposite that this tax would be the end of that industry, and we have seen the same in the last few years.

Ever since the member for Warringah was elected as the Leader of the Opposition in December 2009 there has been the suggestion that any tax on superprofits would be the end of the mining industry. We heard from Mitch Hooke from the Minerals Council. I saw the Leader of the Opposition and the deputy leader wearing the white T-shirt saying, 'Keeping mining strong'; that the Labor Party would see the end of this industry. That has turned out to be complete rubbish.

How do we know it is complete rubbish? Let us look at the investments in mining, let us look at the Australian Stock Exchange and how it has behaved since the mining tax and the carbon tax have come in. Since the carbon tax was introduced, the ASX has added $260 billion. Yet it was supposed to be the end of things. In my register of interests, anyone can see that I have shares in mining companies. I am yet to get any notices from mining company, though I do not flick through every prospectus, saying how the MRRT is going to have an impact on their business.

Before I was elected to parliament, I worked at the Queensland Resources Council, the peak mining body in Queensland. I do have an understanding about the mining industry, particularly royalties. As anyone in the mining industry knows—and we are not talking about exploration; exploration is a different process altogether—when it comes to developing a resource from a development and production licence, obviously a royalty is a hit right from the word go, from when you cannot afford to be paying royalties. When that first shovel basically goes into the ground, before the mine has properly been developed, before you have even sent off coal to a company overseas to be tested, you still have to pay royalties to the Queensland government or the relevant government. The reality is royalties are an inefficient tax. A profit based tax is much more logical, especially in terms of making sure that the Australian people receive a return on their minerals.

I know that it is a part of the opposition plan to just say 'no', to be negative. Rather than spending their nights arguing policy and the like, when you walk up and down the corridors of Parliament House, all you can hear is champagne corks popping, champagne being put on ice and arguments about what portfolio they will have. The arrogance of this opposition. Rather than the hard work that comes with government or with prospective government, supposedly the alternative government, instead they just say 'no'—that's it.

In one of the arrows the member for Flynn tried to fire, he made a point about the Queensland government and raising royalties. I do remember that. That was a Labor government. It was Treasurer Fraser who did that. It was sprung on the mining industry in Queensland. I remember at the time hearing from some of the mining companies about the impact it would have on their future developments. Obviously in Queensland there has been significant investment since then with coal prices, especially coking coal prices, still holding up reasonably well, not just on the spot prices but in long-term investment.

That is why this attack on the MRRT is just a political tactic rather than a fair dinkum analysis of the policy. There is the heartlessness that underpins this attack, the heartlessness because of the consequences and what the shadow Treasurer said again today. The member for North Sydney reiterated his commitment about who be in the crosshairs, the people who would suffer the most—and, fair enough, small businesses would miss out on some of the advantages that we have given them because of the MRRT. However, to make the commitment that the lowest paid people in Australia would be the people who would suffer first and foremost was most surprising to me, especially when 2.8 million of the lowest paid workers are women. To attack them is quite amazing.

We go back to the realities of this MRRT and what will happen. I am not sure if Sportsbet are taking bets this far out, but we know the odds they would give on a coalition government scrapping the MRRT would be phenomenal. There is no way that the MRRT will be scrapped, especially when we look to the next quarter as, thankfully, iron ore prices and coal prices are holding up. When the prices are higher, the profits obviously will flow through and the next quarter will be a much rosier story, I am sure.

Of course, there will not be a correction from those opposite. There will not be an MPI, saying: 'We need to correct the record because we, unfortunately, confused the Australian public or created an atmosphere of fear about this tax.' There will not be a correction then, just like there was no correction after the carbon tax fear campaign, when Henny Penny on steroids was running around the country, at every factory gate, saying, 'Doom is here, doom is here. Come 1 July 2012 the world will end for Australian manufacturing. Towns will be wiped out and coalmines will be closed down.' Every small business was living in fear in case the Leader of the Opposition rocked up at their front gate. He never went through the front gate. He never actually did a fair dinkum talk and sat down with the battlers and the workers of Australia, the people who sit down in their workplaces and actually make a contribution. Instead, it was a case of: quick, photo grab, photo opportunity, rock up for the cameras, take one question and 'I've got to go—I'm out of there.' He never had enough time to stop and answer serious questions and the small target seems to be getting smaller and smaller.

And today we saw it again—they are prepared to trot out this rubbish, this furphy about the MRRT. We know that these profits will increase and mining companies will move through the investment stage to the production stage. There are costs associated with setting up these significant industries. There is one-quarter of $1 trillion-worth of investment taking place across Australia, much of it in Queensland and Western Australia and Northern Australia, but many of these plants are not yet at the production stage. But get up to Toowoomba, to Roma and the Western Downs and look at some of the CSG facilities. Go up around Gladstone and look at what is going on in Gladstone Harbour. There is incredible growth, where they are sending out scouts to do the prebuilding before the builders can be put in for some of these facilities. You cannot get a hotel bed in some of these towns or within 100 kilometres of them.

This is a growth time coming for some parts of Australia, particularly for Queensland. The reality is that the MPI today was a complete furphy. (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! The discussion is now concluded.