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

I rise to speak on the Tax Laws Amendment (Disclosure of MRRT Information) Bill 2013, following on from the contribution from two other Queensland members of parliament, the member for Groom and the member for Forde, both of whom have that incredible capacity to simultaneously put forward contradictory arguments and fail to mention that fundamental truth that state governments levy royalties. Neither of them made mention of what state governments have done, both Labor and LNP, in terms of increasing royalties. They talked in their speeches about the incredible impacts of the MRRT legislation on mining but failed to mention the actions of state governments, which is a glaring omission.

The bill before the chamber seeks to change the Taxation Administration Act 1953, which comprises provisions to ensure that information obtained by the ATO in the course of administering our tax laws cannot be revealed such that it could be reasonably capable of being used to identify a taxpayer. So the opposition leader, with this legislation, is seeking to change the law on the basis that the public interest in transparency around the operation of the MRRT—in particular, how much revenue the tax is raising—overrides the interests of maintaining the longstanding principle of confidentiality of taxpayer information as it also relates to large entities rather than individuals. It would likely enable the ATO to disclose information on aggregate MRRT collections on a monthly basis.

But let us be perfectly clear here: this is either political opportunism draped in legislative tinkering or it is those opposite sucking up to the mining magnates in the extreme—or, worse, it is both of these. Only an extreme opposition leader would put his personal lust for power ahead of the national interest when it comes to a profit based mining tax.

However, the Labor government is committed to openness and transparency in the reporting of Commonwealth revenue collections, including the MRRT. Just like the PRRT before it—and I thank the member for Fraser for his contribution in terms of explaining some of the history—another piece of legislation that was opposed by the Liberal and National party opposition, the MRRT is a good sensible policy, and I stress: the MRRT is basically a profit based tax.

So, while spot prices will go up and down and international prices will vary, there are some simple truths. The reality is: we have over one billion people in India, 300 million people in Indonesia, and one billion people in China who aspire to move out into the middle class and their demands for our materials mean that, in the long term, this MRRT will collect profits for the benefit of the nation.

The decision by the ATO to not report collections, following the September 2012 first quarter of MRRT instalments, was based on independent legal advice provided by the Australian Government Solicitor—the same set of legal advice that would be given to any government—and this advice indicated that the collections constituted protected information under the law since they related to a small number of taxpayers and would be reasonably capable of being used to identify some or all of the entities concerned.

This legislation before the chamber is basically a political stunt. Yet again, it shows the failure of those opposite to put the nation's interests first. Obviously, Labor believe in transparency, but this legislation put forward by the opposition is clearly politically motivated—no national regard and no future vision. It is focused on Gina's and Twiggy's bottom line, not on equity and responsibility, which an alternative government is supposed to be considering.

The MRRT collections have been lower than the Treasury initially expected to raise. If those opposite are so opposed to this legislation, I would like to see them commit to paying back every single dollar collected by the MRRT to the mining companies—to Fortescue Metals, to Gina, to these big multinational companies that are doing it so hard. (Time expired)

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Disclosure of MRRT Information) Bill 2013 and, for the first time in this place, I agree with the some of the words of the current Treasurer. I know it is somewhat shocking. But when he says:

… ultimately when it comes to our mining tax reforms, history will judge our actions—

I am 100 per cent in agreement with that statement. And history, dear Treasurer, can be a very harsh critic. History will look back at the mining tax, the carbon tax, the pink batts, the waste in the school halls program, the green loans, the cash for clunkers, the unilateral banning of the live cattle trade, the set-top boxes, the computers in schools, the breakdown in border protection and the $10 billion Clean Energy Finance Corporation—and it will judge. However, I do not share the Treasurer's optimism that it will be judged well.

The MRRT is yet another example of the shambolic nature of how this government governs. It is not the first version of the mining tax. The previous tax, the resource super profits tax, was introduced without stakeholder consultation or a genuine analysis of industry concerns, which is of course very common for legislation introduced by this government.

As a result of the RSPT Australia made it on to the front page of international newspapers, including TheWall Street Journal, for all the wrong reasons. For the first time 'Australia' and 'sovereign risk' were linked in the one sentence.

The very fact that the legislation was scrapped and then rewritten is an admission of how flawed the original tax was. But has the second, third, fourth and fifth attempt at the MRRT been any better? In short, no. Why? When it was first negotiated, it was negotiated with only three companies, without proper transparency and proper scrutiny. We were told that it was an important part of tax reform to have the MRRT and that the tax would in fact fund small business tax cuts and an increase in superannuation from nine to 12 per cent. The government did not keep its company tax cut promise and, according to its own timetable, it certainly cannot afford the increase in superannuation.

So let us understand some of the key facts. In 2012-13 the MRRT was to bring in around $4 billion of revenue. This was written down in last year's budget to around $3 billion and then again, in MYEFO, the government cut another $1 billion off it to take it down to $2 billion. Of course, we learn that it has, instead, raised only $200 million, a somewhat small differential of around $3.8 billion. But when you examine the picture more closely you will see it is even worse. The government has overestimated exactly how much revenue it is bringing in, because 30 per cent of the revenue from the MRRT is forgone in company tax payments. When you add in the cost of administering the tax it is around $50 million, and the mining company spends around $20 million to comply. So what are you left with? Around 25c for each dollar of revenue.

The government has blamed commodity prices and the high Australia dollar, yet all of this remains virtually unchanged. That is what makes the forecast in the current budget by the Treasurer so inexplicable. He says that this current tax is going to raise about $5.5 billion over the period 2012-13 to 2016-17, down from—let me remind the House—an original forecast of $26.5 billion.

Yet we are also to understand that commodity prices are going down and that the Australian dollar will remain high by historical standards. It beats me how it is that you can increase the revenue on assumptions that are worse. But I suspect that is one of the key reasons why the government refuse to release their modelling. Only this current government can actually turn a tax into a black hole, with expenditure outweighing the revenue coming through the door.

This motion before the House is critical because it will not allow an incompetent Treasurer to hide behind a ridiculous notion that the Australian people should not be told how much has been raised by the mining tax under this figment, this fig leaf, of protecting the privacy of individual taxpayers.

The legislation will allow the ATO to provide aggregate figures so we know exactly how much revenue is coming through the door, rather than relying on the Treasurer's Delphic-like predictions of revenue. We will be able to measure expenditure against revenue. That is why this motion is so incredibly critical and why this House should in fact support the motion.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (Disclosure of MRRT Information) Bill 2013. We are, again, spending time in parliament on another opposition stunt. There is a great new acronym floating around at the moment. It has actually been around for awhile: PEFO—that is, Pre-election Economic and Fiscal Outlook, originally created by Peter Costello to stop incoming governments from using a lack of information about the budget to delay announcing their election commitments. It was a good idea at the time. Unfortunately, it is a good idea gone wrong. We are, increasingly, seeing oppositions use it as an excuse not to release their election costings and that is what we have today. A shadow Treasurer is throwing around as much dust as he can, making accusations about people who work in Treasury and their inability to forecast in order to disguise the fact that they have not released any costings. They are not coming clean with the Australian people on what they intend to do and the cuts they intend to make once they come to government. We have seen this with virtually every incoming Liberal state government in the last year and we can already see the Leader of the Opposition manoeuvring his arguments to engage in savage cuts if he is lucky enough to win the election in September.

I want to start by looking at the arguments to see if there are any grounds to them at all. In order to do that, I am going to go back to a document that was produced by the Minerals Council of Australia in June 2012. It deals with the volatility of resource rent taxes. It deals specifically with the petroleum resource rent tax and compares it to the incoming minerals resource rent tax, and includes some interesting information. When one reads it, one would wonder why the Treasurer believes that the difficulty in forecasting resource rent taxes is so serious that we need to actually change the tax law in such a fundamental way, on the basis that the public interest and transparency around the operation of this particular tax is so important that it overrides the interest of maintaining the confidentiality of taxpayers. It is an extraordinary change to tax laws. One wonders why, if he thinks it is such a big issue, it was not a big issue for the 12 years of the Howard government because according to this report—and the figures are quite clear—the accuracy of forecasts for the petroleum rent resource tax was as much as 40 per cent to 100 per cent out in virtually every budget.

The Australian government had indicated that it expected revenue from the new minerals resource rent tax to be volatile. The government indicated that from the beginning, and the Minerals Council prepared this report in response to the expectation that it would be volatile. They had a look at how volatile it would be and to what extent forecasts could be relied on.

The reason why they are volatile is simple: resource rent tax changes according to global prices, what is happening in other countries of the world, who is growing and who is shrinking—a whole range of things. It also has quite a lag, because capital investment is brought to account. It is extremely volatile and, when you look at the graphs for nominal petroleum resource rent tax revenue between 1989 and 2010-11, it looks a bit like a sawtooth. It goes up and down on a regular basis quite extraordinarily—sometimes going from $500 million to $2½ billion in just one year. It is incredibly volatile compared to the graph of aggregate tax revenue, which tends to be a fairly stable line.

The errors for the resource rent taxes are sometimes three times the magnitude of the errors in the standard tax and, when you look at the actual errors, you find that there were times in the Howard-Costello years when the forecasts were 100 per cent out and many times 40 per cent out. Over the last five years of the Howard government they averaged 27 per cent, but were more than 40 per cent on three occasions. If the opposition believes that the accuracy of the forecasts—which incidentally have been inaccurate now for a long time—is so serious now, one wonders why it wasn't serious when they were in government. (Time expired)

Debate adjourned.