Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Yesterday before the business of the House caused me to pause my remarks on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, I was talking about the downside of the mining tax with regard to what is happening in Western Australia. Out on the streets of Cowan and on the streets of Perth, the opportunities for those in the mining sector and the downstream benefits of the sector have been felt for some time. There has been a lot of talk about what has happened with the mining tax and the administrative and red-tape burdens that it has imposed upon so many of the miners. Coupled with the effects of the carbon tax, it has meant that more and more people, including many of the big employers in Western Australia, have been talking of sovereign risk. I have heard it from those in the mining sector who are increasingly looking for opportunities to invest and progress business in Canada and in Africa—and none of that needed to be the case. The people of Western Australia understood this very clearly, and we made it very clear in the election campaign that one of the key planks of our platform was the repeal of the mining tax. So there is no doubt that I endorse this bill to get rid of the mining tax so that we can start taking the brakes off one of the most successful industries in this country.

As I said before, we are talking about big employers, people who provide the livelihoods of people on the streets of Perth and so many other places around this country. Downstream benefits flow into spending in shops, and we should not underrate that at all. That is why it is important that we get rid of this mining tax. There is another element to this as well. This is an important move not just to take the handbrake off the mining tax but also to take away some of the outrageous extra spending that was attached to this tax. As we know, some $400 million has been raised across the life of the various iterations, the suggestions, the policies of this mining tax over the last five years—billions of dollars have been talked about—but of course that has not eventuated. It has been just another one of the stuff-ups of the former government over there.

But what we do know is that back in 2007 when they took over, we were something like $60 billion in the black. The country was in solid shape. Now, according to the Australian Office of Financial Management, we are $292 billion in the red, and there are other bills which talk about the unfortunate need to have to raise the spending cap limit.

One of the reasons it is so important to get rid of this mining tax is that there was some $16.7 billion of spending that was attached across the forward estimates. Again, as I said, that was up against the $400 million that has been raised by it so far. The grand concept of the Labor Party and the former government was to shell out the cash, and they could not even get the tax right. They were hurting one of our most successful industries, imposing huge amounts of red tape on that industry, and then spending money that they did not have, which is eerily familiar across so many portfolio areas—in fact, it was almost the reason for the existence of the other side when they were in government.

I remember when we were doing debates on the mining tax when it was being introduced by the Labor Party, I made some comments at that time about the schoolkids bonus and in relation to that spending. I remember former minister Mr Combet had a big go at me for suggesting that some people out there would actually use the schoolkids bonus for noneducational outcomes.

Following the first payment of the schoolkids bonus, I talked to a number of my school principals, none of whom reported an increase in voluntary fees. That was always going to happen when you have something called the 'schoolkids bonus', which is no longer linked to educational outcomes; you might call it 'schoolkids' bonus but when it does not come down to the fact that there needs to be a receipt for a school uniform or for books or anything like that, obviously people are going to look to the first thing that they need after that. So it really had nothing to do with schools; it had everything to do with just another handout, and a handout from a team that was just living beyond its means.

That is why, as the Australian Office of Financial Management says, that is why we approach $300 billion in debt now. There is a sense from the other side that you can just keep handing it out, just keep pushing it out there—whether it was trying to buy votes or trying to cover up the damage that the carbon tax was doing to the Australian economy and to the cost of living for individuals across this country, it was just a great way as far as they were concerned to mask problems. Some day, someone needs to pay.

The giving out of cash from the nonexistent profits of the mining tax, the borrowing of money to hand out those payments of $800 or $400, depending on whether it was for secondary school or primary school, was just something that one day someone was going to have to pay for. So now the rubber is hitting the road, someone needs to draw a line in the sand and say this country cannot afford this sort of stuff. It would be great if we could just hand out cash all the time and still keep the country in the black. It would be fabulous. We would all like that. But the reality is that it is just not like that and it is not going to be like that for a very long time.

We need to remember how long it took John Howard, Peter Costello and the careful management of the former Howard government to get things back in the black. It was not going to be overnight. Until that time, until this country starts living within its means again, there is going to have to be a downside to that. The piper needs to be paid. And it is important that right now we pass this repeal bill, get this $13.4 billion off the budget sheet over the forward estimates, to try to improve the future for the kids—who might ostensibly be getting things like the schoolkids bonus but as we know there was very little actual benefit for educational outcomes as a result of these handouts. Parents might get it today or last year or earlier this year, but the reality is that someone is going to have to pay, and it will be the taxpayers of the future as we try and get this country back into the black. So I say it is about time we really started by sorting this problem out, getting rid of the mining tax and the expenditure that was associated with it, so that we can start getting this country back living within its means.

I appreciate the opportunity today to make some comments on this bill and I without doubt give my commendation of the bill to the House.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker Mitchell. It is great to be in the House with you. I know we both had tough re-election campaigns. I think yours was a little tougher than mine. But it is good to have you back here; now there is at least one other car enthusiast in the House of Representatives.

This bill demonstrates and illustrates the nature of this government. It is a government of reaction and reactionary politics; not of caution, not of considered thinking, not of liberal thinking, not even of Conservative thinking. This is the party and the government of reactionary politics and it is led by a man who is this perfect political blend of Malcolm Fraser, Richard Nixon and BA Santamaria. That is the nature of this government. It must absolutely gall the two characters down here on the government benches that such a man leads the Liberal Party, because of his nature and because of the damage we see this bill will do to this country. This bill will reduce the taxation of big miners, of capital. It is a rich gift to powerful interests but it is a hit, a slug on battlers and on self-reliant entrepreneurs. It is an assault on family budgets and it is an assault on all of those outside of the metropolitan mainstream, those in regional Australia.

The nature of this bill and of this economic construct reveals the essential character of this government. It is a very early sign that this government simply believes their return to the Treasury benches and the return to conservative rule will lead to some sort of economic confidence and that a tax cut for those who are already, let us face it, obscenely wealthy will lead to economic growth. Time will tell whether these naive beliefs will collide with economic reality.

This bill tells you a lot about the contrast between the Abbott government's character and the Australian character. The government's character is to back the big guy at the expense of the little fella. The Australian character is the complete antithesis of that. This is a party and a government of reaction that given the choice between the boardroom or the shopping mall will pick the narrow interests of boardrooms every time. And that will not do our nation a lick of good.

Early on, we can see the contents of this bill, beginning with superannuation, will affect battlers. We know that superannuation is not just an important mechanism for workers' retirement incomes but, as I said in previous speeches, it is an important mechanism to redistribute wealth at a time in workers' lives when they need it the most: in their retirement years. That is a critical aspect of the superannuation system. The other thing it does is add to our national savings.

So what does this bill do? It removes the low-income superannuation contribution, it increases taxes on one in three of Australia's lowest-paid workers and it cuts the super of millions of Australians earning up to $37,000 a year while boosting the super of those 16,000 people who have more than $2 million in their super balance. It in effect scraps the low-income superannuation contribution—up to $500 for those earning under $37,000 a year—that is currently paid into the accounts of taxpayers. That is a massive hit on Australian workers. It is a massive hit in particular on women. There will be 2.1 million women affected, most of those working part-time in industries like retail and hospitality.

This bill is a massive attack on battlers' incomes. They will not see it today or tomorrow. They will not even see it next week but it they will feel it decades from now, as our nation will feel it decades from now, when we see the combined effects of the abolition of the low-income superannuation contribution and the delay in increasing the super guarantee to 12 per cent, which will reduce our national savings by $53 billion by 2021-22. That will have a massive impact on our nation's economic wellbeing, on our ability to invest in our own country, on our ability to invest overseas and on our ability in particular to invest in infrastructure. On current projections, it will cost some $5 billion in infrastructure spending. So it will have a massive impact on battlers in the future; it is a king hit on their retirement incomes.

The Schoolkids bonus is very important to family budgets. It is a payment of $410 per primary school student and $820 per high school student which is paid to 1.3 million Australian families starting from January next year. They would get this bonus but they will not get it because of this government's character, because of its priorities. Its priority is to give a tax cut to the top end of town while removing superannuation benefits and the Schoolkids bonus for battlers.

Finally, we see the government's character in relation to the income support bonus. The income support bonus is a tax-free payment for over 50s on newstart allowance. Anybody who has been out there doorknocking or talking to people knows that if you get made redundant or if you suffer unemployment in your 50s, it is extraordinarily hard to get back into the job market. I have met many people who have put out literally hundreds of applications only to be knocked back. It is not their skills or their work ethic or their fundamental decency; it is simply their age. That is a great blind spot, I think, with Australian employers. They are wasting a huge amount of economic and social capital. Often these workers are very good workers so it is a terrible thing to get rid of that income support bonus. We all know that the rate of newstart is far too low and we all know that causes massive poverty. To deny people, who have often worked all their lives and who have not made much of a call on the welfare system, this payment is an act of nastiness that reveals something about the character of this government.

We now come to the government's assault on entrepreneurs, on small business. We hear so much about small business from those opposite. They all have a business story way back when in the family. I know the next speaker probably came from small business stock. Indeed, my grandfather was a small businessmen so I know something about his battles with the bank during the recession of the 1960s caused by the Menzies government. We know that being in business is tough, so why would you make it any tougher? This bill does. This bill increases taxes on 2.7 million small businesses. They are going to get a nasty surprise, because they thought it was all going to be Shangri-la when this government came to power. A lot of them have very, very high expectations of you and when they find out that the taxes are being increased, that the loss carry-back scheme is being closed and that 110,000 businesses across the country are going to lose a tax break, they are going to be very, very disappointed indeed. Their expectations will be dashed and they will find their lives harder and that will have an impact on economic confidence, because we know small businesses are extraordinarily important, particularly in terms of employment.

We have got both the Ai Group and COSBOA against this. We have got the Ai Group saying it will add to complexity and compliance costs for small businesses. It is extraordinary supposedly from a government that prides itself on helping small business. It tells us every day it is going to help small business, and here we find them assaulting their interests.

Lastly, we see them making life harder for those outside the metropolitan mainstream. I have an electorate which is the outer suburbs of Adelaide and country towns—one of which I grew up in—and I know how extraordinarily tough it is. You suffer the tyranny of distance. You feel it in just about every way, and the people out there are very self-reliant. They have to be. Those towns have to be, and we know that they do so much to add to the wealth of our country. So why would you make their lives harder?

Flagged in this bill and in the government's plans is the discontinuation of the Regional Infrastructure Fund and the RDA Fund. These funds were very important, particularly to electorates like mine. They helped fund the Balaklava water pipeline, which is going to trigger economic growth in that region; and fund the Barossa Bike Path, triggering that synergy between lifestyle, small business, tourism and the wine industry. We are seeing that terrible assault on regional Australia, and these are all traditional constituencies of this government. To take the bat to regional Australia, to take the bat to small business, is just extraordinary, particularly at a time when their expectations of this government are so high. We know they were never particularly forthright about their plans when they were in opposition.

Inherent in this bill is this idea that we can return to privilege, to genuflecting to the mining squattocracy who are sitting on the nation's wealth, monopolising its opportunities, celebrating themselves and giving each other golfer's claps about any sort of contribution that they might make. That is what we are going to go back to: the golfer's clap. I know the member for Higgins—she is part of the cheer squad; don't worry about that—is very, very against giving the car industry anything but she does not mind giving fairly big tax breaks to the miners. We will see that in her speech today and we will hear about how not much revenue has been raised—just $3 billion over the forward estimates; small change to those opposite. They do not care. What is it likely to be in the long term once commodity prices lift?

When you get right down to it, this is why this is a government of reaction. It is like the Fraser government; it is not like the Howard government. It is not like reforming governments, because what they are going to do is lower revenue and open up a tax loophole for those who are already deriving massive wealth and are not particularly good at distributing that wealth, sharing it or creating other opportunities in the economy.

It is a massive hit on our national savings, on super, and this is our only chance. We hear a lot about foreign ownership in this building but the only way to prevent foreign ownership, the only way to buy back your farm, is to have national savings and that is what superannuation does.

We have got a government that is essentially reactionary in its character and they insist on siding with those who have economic privilege at the moment over people who battle, who work. It does not matter whether they are small businessmen, wage earners or people out there in the regions. They are on the side of the boardroom. It tells you so much about this government. As I said, it is a strange combination of spin and market tested lines—and we know where they come from: out of the focus groups.

You see all this stuff but, deep in its heart, it is led by a man who combines the politics of Malcolm Fraser, Richard Nixon and BA Santamaria. It is a pretty toxic mix in my opinion. In that sense, it is a government that is destined to disappoint, and this bill is essentially the beginning of that process. Once the rubber hits the road, those opposite will not be nearly so arrogant. Once the schoolkids bonus goes, those opposite will not be nearly so arrogant. Once small businesses lose their tax breaks, this government will not be nearly so cocksure. I think we will be able to mark the decline of the policy and political integrity of this government with this bill.

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

I always enjoy listening to the contributions from the member for Wakefield. They are always very comic. I think they sometimes come from a parallel universe not known to the rest of us, but it is a great expression of how those on that side of the chamber simply do not get it. They simply do not get the fact that, if you spend more than you raise you create a black hole—that is the black hole of the previous government's creation and that is why I rise today to speak on the removal of the mineral resources rent tax and associated measures.

There is no better expression of class warfare and the creation of a black hole than the mineral resources rent tax that was brought in by the previous government. There is also no greater example of the dysfunction, chaos and lack of due process in the former government than that of the MRRT and its predecessor, the resources super profits tax. Because of those two bills, we got to witness a tax that raised virtually no money; associated recurrent spending that significantly exceeded the revenue; the introduction for the first time in decades the words 'Australia' and 'sovereign risk' in the one sentence; an industry dependent on long-term certainty having to constantly question what the next announcement out of government was going to be, thus hindering investment; and the ugly and bitter internal politics of the Labor Party. But, most importantly, we learnt a lesson on how not to conduct sensible economic policy.

This is an age-old tale of the emperor and his new suit. We are all aware of this fable and the lessons learnt. The MRRT was the tax that revealed the former Prime Minister and Treasurer to be the economic vandals that we knew them to be. Like the pub with no beer, the MRRT is the tax with virtually no revenue. Putting to one side that the RSPT was forecast to raise in the vicinity of $50 billion, the original prediction for the MRRT was that it would raise $26.5 billion over the forward estimates. This, however, was constantly downgraded at every opportunity by the government, not of course to the surprise of those on this side of the chamber, I might add.

Eventually it was revealed that the tax collected not $26.5 billion, not even $1 billion, but actually $340 million in its first year—significantly less than what had been predicted by the previous government. Meanwhile, it cost the Australian tax office $50 million to administer the tax. It raised $340 million despite the billion dollar predictions and cost the ATO $50 million to administer—talk about a policy that was not well thought through, talk about inefficiency in our tax system. And that is before you even get onto the compliance cost for companies that did not pay the tax. That is not to say that they do not pay tax; they do pay tax. They pay royalties, they pay company tax, they pay payroll tax, they pay a number of taxes. But the compliance cost for companies, for instance, like Fortescue was between $3 million and $5 million, even though they were not due to pay any money under the MRRT. You cannot say that that is sensible. You cannot say that is good for business. You cannot say that is good for the economy. You cannot say that is good for jobs.

Let me move on to the fact that the government projected that billions of dollars of revenue would be collected but spent the money before such predictions came to pass. In the infinite wisdom of the former government, they decided to spend big on money they had not collected. It is like buying a house in the hope of a Christmas bonus to pay for it but that Christmas bonus never comes. It is irresponsible and it is imprudent. The MRRT had $16 billion of recurrent spending associated with it over the forward estimates. That is $16 billion the former government did not have but spent anyway—a cruel hoax on the Australian people.

This will be one of the only cases in Australia's history where the removal of a tax will improve the budget bottom line to the tune of $13 billion. That is right: we are going to get rid of a tax and improve the budget bottom line, because the previous government was so incompetent that it did not bring in as much revenue as it was spending. These savings will be made through the removal of all of the associated spending measures outlined by the previous government and it is done because we need to be responsible in government.

I want to move on to this notion of sovereign risk and how the MRRT was designed. The process of the MRRT was formulated and introduced with one announcement following another, one disaster following another. The first incarnation was of course, and we all remember it, the resources super profits tax. It was announced overnight, without consultation and to the complete surprise of industry. This is completely consistent with the modus operandi of the previous government: make an announcement first, force it on industry and then, after legitimate protest, say that you will consult. This is no way to make public policy and it is no way to design good public policy.

As a result of this 'announce first, ask questions later' process, sovereign risk was introduced back into Australia for the first time in decades. It had not been seen since the seventies and eighties where there was strong militancy in the unions that also forced bad policy decisions. It is not just us on this side of the chamber who say so. We saw reports on the front page of the Wall Street Journal. We heard from our business leaders that this was undermining investment confidence. Let me quote from just two. AngloGold Ashanti CEO Mark Cutifani remarked that when he addresses his board of directors he advises:

We have Australia as one of the top sovereign risk countries in the world and places where government policy has demonstrated failure in terms of taxation policy and inconsistency in policy. And that is a real concern for me and our board.

Ivan Glassenberg, one of Australia's most successful businessmen, corroborated this by saying:

Australia does have its risk, yes. We saw the carbon tax, we saw the minerals resources tax. It is a First World country but is doing things that are making people cautious of investing, so Australia is becoming another country where you have to make sure that the rules are not going to change on you.

When we look to expand our operations we do our valuations, we put a certain tax on it and a certain royalty on the valuation and then you invest lots of capital in those countries and you are just never sure but you hope the rules don't change on you.

Australia did send a signal to the world we may just change the rules and it is like other countries.

We hear from these two captains of industry, warning that the previous government, through their actions, was creating Australia as a sovereign risk destination and therefore not a destination for investment.

In its irresponsible, reckless and unpredictable approach to government, the previous government set a very low standard. This coalition government will be very different. This coalition government will take a very different approach to policy. We will not announce first and ask questions later; we will ask questions first, develop policy through a methodical process and only then will we legislate. It is no wonder to me that the relationship between government and business had become so frayed under the previous government that we saw business confidence at such a low.

The change of government has brought with it an immediate boost to confidence because of our difference in approach. The message for industry is once again 'Australia is open for business', business that is based on proper and methodical processes, with no surprises and no sudden shocks.

Finally, it would be remiss of me not to mention the political strategy of the former Treasurer, the member for Lilley, and the class warfare he engaged in in order to push this flawed tax. In my view the attack on individuals in the mining industry was one of the many low points of the previous parliament. The former Treasurer went as far as to say that mining interests were 'a threat to democracy'. The Treasurer, the very person who is meant to be trusted with the management of our economy, who is the conduit between government and the business community, waged a war on the very people who provide jobs, who create economic opportunity and who pay billions of dollars every year in tax.

What the former treasurer failed to recognise in this class warfare attack is that every time he attacked a miner he attacked a fellow Australian. Listening to the former Treasurer with these attacks we could be forgiven for thinking that no miner pays tax, that they do not pay royalties and that they do not pay company tax. And yet this is not the case. The more profitable they are, the more company tax they pay—and we do want them to be profitable, because if they are profitable they are adding to our economy and they are employing Australians.

The former Treasurer would have been better advised to embrace the success of the mining industry, rather than seek to retard it. Even members of his own side—the former member for Hotham—begged the former government to cease its class warfare led by the former Treasurer. The member for Griffith, the former Prime Minister, on his return to the prime ministership was forced to declare the class war over before again engaging in this low and base tactic. Is it any wonder that, again, business confidence plummeted to new lows?

This bill, the repeal of the MRRT, is an example that Australia is again open for business; that the economic agenda is no longer being written by the unions and a government that is antibusiness. It is an opportunity to restore confidence in investment so that people are secure and the rules will not change overnight. We as a government want to develop and build our industries so that we can build further economic prosperity in this country.

The repeal of the MRRT and its associated measures is another way in which the coalition is restoring confidence to the business community and restoring confidence in our economy. When combined with the removal of the carbon tax, a genuine deregulation agenda, reduction of the corporate tax rate and a real motivation to balance the budget, the coalition will maximise the potential of the Australian economy.

The coalition will make tough decisions to get the economy back on track, but it is not a tough decision to get rid of the MRRT with its associated measures. It is an irresponsible tax, a tax that raised less than it spent. That is why I commend this bill to the House and ask that those opposite support us in restoring confidence again to Australia.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I rise to oppose the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. The last speaker spoke about associated measures with the MRRT. I notice that she and possibly other members of the coalition would be very reluctant to mention the fact that one of those measures is the Regional Infrastructure Fund. In talking about the economy and in talking about jobs, those opposite fail to understand that investment in long-term economic productivity of the nation requires investment in infrastructure—not rhetoric on infrastructure, but investment in infrastructure.

With the MRRT design in terms of the Regional Infrastructure Fund, that will be abolished—as has been confirmed in Senate estimates as well yesterday and the day before—the implications are that my former Department of Infrastructure and Transport has no idea which of these projects are going to continue and how they can possibly be funded

It is not like the MRRT was created in a vacuum. Indeed, over a considerable period of time there was concern that during the former coalition government's time in office there were record revenues coming into government coffers but there were also record profits being made and that revenue was not being put back to the benefit of the community. Of course, the minerals are owned by all Australians under our Constitution and legal provisions. Therefore, it is eminently reasonable that Australians receive a share of the benefits of the mining boom. One commentator said this in 2011:

I share the disappointment about how few mining companies contribute to the areas they invade and how little state governments return of the massive royalty incomes they receive to the communities.

They were pretty harsh words, speaking about mining companies 'invading' local communities and not putting anything back. Was it a member of the Greens political party who said that?

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Sounds like it.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

It does sound reminiscent of some of the rhetoric of a Lee Rhiannon or a John Kaye, perhaps, in New South Wales. In fact, those comments were from the now Deputy Prime Minister, the Leader of the National Party. That is what he had to say about that in a speech to the Transport Australia Summit in September 2011. In case you think that was an aberration, it actually was not. It was pretty consistent with a view being put by the now transport minister, the Minister for Infrastructure and Regional Development, member for Wide Bay and Leader of the National Party, but put by local communities as well. In June 2012 he said mining companies:

… could not expect to take away a region's resources without leaving something for the community … and had a responsibility to contribute to the specific infrastructure provided to meet their needs.

That is what he said, and yet he is supporting legislation before the parliament today from the coalition that would lead to not just the abolition of the MRRT but the abolition of the Regional Infrastructure Fund.

There have already been a number of allocations from the Regional Infrastructure Fund to important projects. There has been funding for planning. Firstly, for example, we had $1.6 million for the North Queensland Resources Supply Chain to operationalise MITEZ's 50-year plan. I was there for the launch of that plan in Mount Isa, with the member for Kennedy, Bob Katter. Infrastructure Australia regard the MITEZ plan—the Mount Isa to Townsville Economic Development Zone—as the most comprehensive economic development plan that has been developed for any region in Australia. It was developed with input of industry, local government and the community about how you improve the export potential out of Townsville port, how you have an integrated economic plan maximising employment opportunities in that North Queensland region and how you ensure sustainable jobs and sustainable economic growth over a longer period of time by getting that planning in place. That was funded through the RIF, as was the Central Queensland plan; the regional mining and infrastructure plans covering three geographical regions in South Australia—the Eyre Peninsula, Yorke Peninsula to Braemar and the Upper North; and the $450,000 grant for Infrastructure New South Wales, the body which used to be chaired by Nick Greiner, the former Premier of New South Wales, and RDA Hunter. All of that is seemingly being written off as worthless by the rhetoric of those opposite.

Then there are the projects: the Gladstone port access road in Queensland, being constructed and just about completed; the Blacksoil Interchange, in an area I visited on a number of occasions, that was advocated very strongly by Shayne Neumann; the Townsville Ring Road, one I am sure that the member for Herbert will think is a great project—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Under John Howard—what a visionary!

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

The member for Herbert agrees with me. The nong opposite says it was funded under John Howard. It was funded under the Regional Infrastructure Fund—that was what funded it. It was—

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Peter Lindsay, a great local member. In 1996, mate!

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

funded by the Labor government—funded and built. Then there is the Peak Downs Highway, the upgrade of the intersection of the Bruce and Capricorn highways, the Mackay Ring Road study, the Scone level-crossing study. All of these works are very important projects. We put $400 million, separate from the MRRT, into the Regional Infrastructure Fund and then it was to be topped up as revenue came in. Of course, revenue was dependent upon when the superprofits kick in—a sensible way to deal with things, just as the model for the PRRT operated, and a sensible way forward. There are other projects as well that are now very much in doubt. In New South Wales there is the Bolivia Hill realignment of the New England Highway. We funded the study, firstly, then were to fund the hard infrastructure. This is a vital safety project in the electorate of New England.

I personally visited the site with Tony Windsor, the former member for New England, and I know that the current member for New England, Barnaby Joyce, supports this project because when the media were critical of this project he made it clear to me that he supported it as well. Well, the funding has to come from somewhere and it is reasonable, when the mining industry will benefit so much, that the industry is able to put something back for those local communities.

We allocated $45 million for Scone Level Crossing project. It was championed by the member for Hunter. The Tourle Street Bridge was argued for and submitted for by the New South Wales government with joint fifty-fifty funding—$52 million from each level of government—and this was included in our budget in May this year and announced after that. The funding there was ready to go. We announced funding for climbing lanes and Mount Ousley Road project at the Mount Ousley F6 Freeway junction—$42 million.

In Far North Queensland we agreed to provide up to $210 million to upgrade roads and essential community infrastructure in the Cape York region. It is very important to allow Indigenous communities to have access to employment opportunities in the mining sector. There were upgrades to the road between Yeppoon and Weipa and the road connecting Aurukun to the Peninsula Development Road to an all-weather standard. There were improvements to the Jardine River Crossing, the redevelopment of the Seisia wharf, improvements to the raw water pipeline from Bamaga to Seisia, small scale improvements to community drainage. I announced that funding. Again it was included in the budget in May and then announced up in Far North Queensland on Thursday, 13 June, by me, by the Catherine King as the minister for regional services, and by Jan McLucas, the senator who represents Far North Queensland so well.

Those opposite talk about Northern Australia development. This is what it is about. This is about accessing jobs for Indigenous communities in particular in the resources sector in Far North Queensland, and that is one of the projects, when the now government released its funding proposals in the last 24 hours before election day in September, that was not included. That project was cut.

We have the Warrego Highway upgrades for $317,500 million—absolutely vital. There are further projects: the Yeppen South floodplain upgrade, costing some $236 million; the Mackay northern access upgrade for $64 million; the Mackay Ring Road, for which a further $50 million was allocated in the budget; and the Rockhampton northern access, stage 1, costing $132 million.

And there are projects in South Australia for the APY Lands where the Indigenous local population can benefit from mining and we can improve productivity also. Some $85 million will be ripped out, it would appear, by the incoming government. And of course there are projects in Perth including the Great Northern Highway, $307,800 million, from Muchea to Wubin, stage 2; the North West Coastal Highway, $152 million; and the Swan Valley Bypass, some $480,300 million.

This of course all comes on top of the Gateway WA project. This is a project that is absolutely vital, fixing up the largest-ever road projects in Perth or in Western Australia where the funding is primarily coming from the Commonwealth government. Construction is well underway. But you would think from the rhetoric of those opposite that it is their idea and that they are going to come up with this. Well, construction is underway. Jobs are being created. The first sod was turned some time ago. The contracts are issued and all the work has been done. Again, this was an initiative of the federal Labor government.

Those opposite need to do more than just talk about infrastructure; they need to actually fund infrastructure. With this small-minded proposal they are creating at the very best absolute uncertainty over these projects going ahead. That undermines confidence. It undermines the construction sector. It undermines employment and it undermines the economy. Here we have miners who not only say they can pay more, and who supported the legislation when it went through, while those opposite are saying no, we do not actually want them to make a contribution.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I do appreciate following the member for Grayndler. I do not think that anyone could doubt his passion for infrastructure in this country. The way you are speaking about those figures there is interesting—hundreds of millions of dollars, and tens of millions of dollars, again and again, adding up to billions, to be funded by a tax that has raised $400 million! The federal Labor government was not funding these things; they were being funded by further debt.

I rise to address this bill, the Mineral Resources Rent Tax Repeal and Other Measures Bill 2012, and I would like to start by saying thank you to the Australian Labor Party. In no small measure this bill that they introduced and brought to federal parliament was responsible for bringing me to this House.

I was selling real estate in Townsville. It was a Sunday morning. Everyone knew that the government was thinking about this tax but they had made statements that they would never do anything without consulting the industry. I was getting ready for my morning inspections—Sunday is a big day in the local real estate agency—and the phone was ringing hot. At about 11 o'clock we crossed live to a press conference with then Prime Minister Rudd and then Treasurer, the member for Lilley, Wayne Swan, and they announced the mining super profits tax.

My phone stopped ringing. The phones of everyone who was selling anything in Townsville and regional areas which had significant exposure to the mining industry stopped ringing. In a lot of cases, they have not started ringing again. The Treasurer and the then Prime Minister stood up there and announced the mining superprofits tax and said that they would do that, while everyone in Townsville was aghast.

I was a long way behind in the polls at that stage. Prime Minister Rudd had been riding so high in the polls, and we wondered how he could possibly be beaten. A lot of people were asked to run for the seat of Herbert and they all turned their noses up at it, saying that it could not be done. The Labor candidate for the seat was a high-profile person who had the personal backing of the then Prime Minister. So I put my hand up and I ran.

They introduced the mining superprofits tax. They had already walked away from the greatest moral challenge of our lives, the carbon tax, but I will have more to say about that in a little while. They had already walked away from that one. They brought in the mining superprofits tax. Soon after that, that Prime Minister was gone, dumped, executed, taken out the back and given a real flogging—replaced by another Prime Minister who said she was going to fix the mining tax.

The poor old member for Batman—remember the guy on that side?—Martin Ferguson, who truly represented the interests of the industry, had to stand up there and go to those meetings. He was kicked out. All the Treasury advisers were kicked out. The member for Grayndler said that there were mining companies that were prepared to pay this tax. I do not know whether that is entirely correct. What they were prepared to do was sign up to the tax that they designed. That is what they were prepared to do.

The bosses of BHP, Rio Tinto and Xstrata all got into a room, and they were faced with the omnipresence, the fearsome presence, of the Australian Treasurer. All the Treasury people had been kicked out, so this was a high-powered, high-level thing. And they brought in the mining resources rent tax. It would kick in at certain levels. You would be able to write off against it. You would be able to write off against infrastructure you had already done. You would be able to depreciate further. You would also be able to claim 100 per cent of your state royalties, but, if you did not qualify for the mining resources rent tax, you could bank them up until you were exposed to it, and then you would pay it off after that. The whole thing was that these people were prepared to sign up to this tax because they were never going to pay it. They were never going to pay it. Of course they were going to sign up to it!

The Treasurer came in. He walked in and sat down there, and he said: 'What do I have to do? You guys are putting ads on TV. We can't cope with that because we have our press conferences every 35 minutes, and they're just asking us questions about how this is going to make money and what is going to happen here.' So they folded like a bad hand: 'Anything! Whatever it takes!' They did this.

On 21 August, I was elected the member for Herbert, so in no small way were the actions of that government responsible for inflicting me on this House. I think there are a few people in this place now who would take the Labor Party to task over that.

What I would like to say about this tax and about the mining industry in general is that they do pay tax. They pay company tax. They pay payroll tax. They pay stamp duty. They pay car registrations and vehicle registrations. They pay petrol tax. They pay all those taxes. They are massive payers of tax. And yet the then government were prepared to sit there and smash them over the head, without warning, to bring this in. That was my first problem.

The second problem is that everywhere in the world has iron ore and coal—everywhere. It is about whether you can get it out and the cost for you to get it out. The previous CEO of BHP, Marius Kloppers, said that we used to be a low-cost, high-productivity country to deal with in mining. After Labor came to power, that was exactly reversed. We became a high-cost, low-productivity country in which to deal.

The other thing is that we are very close to our markets. The thing that Australia has always had in its history, as well as low cost and high productivity, is that we are close to our markets. We are close to China. But, with the advent of large ships that can take 400,000 tonnes, the cost of shipment from places in Africa and South America became very much negated.

Capital is a worldwide phenomenon. Capital is very flexible. Capital is very mobile. If you make it hard enough for people to do business in your country, they will take it elsewhere. I was astounded when I was speaking to the then shadow minister for foreign affairs, Julie Bishop, in relation to a conference she went to in Africa. She talked to mining executives who said they would rather deal with the country of Congo because at least what they said before the deal was done was what they stood by after the deal was signed. They could not say that about Australia. I find it the most deplorable situation that we could do that to our customers, because, at the end of the day, it is business. At the end of the day, we are in the business of running a country. We are in the business of sending out the message to our customers that what you say when you shake a man's hand on a deal, when you sign a contract, is what you stand for. And those things did not stand for anything.

There are of course implications of our removing this tax, and some of them are very, very uncomfortable, but we were also very, very clear with the people of Australia in the lead-up to the 7 September election as to what was going to happen. The then shadow Treasurer, now Treasurer, JB Hockey, has been very, very clear about this and the implications of a tax that has raised $400 million but where spending of over $16 billion has been locked in over the forward estimates. It is just not sustainable.

There are lots of people in my electorate who really like the schoolkids bonus. That they do not have to spend it on schoolkids and do not have to spend it on educational facilities or educational tools is immaterial. The former government changed it. What the coalition did was that you could claim school expenses on your tax with receipts that were paid, so you could make sure that it was. The schoolkids bonus was a bribe to the Australian people. It was almost a payoff for the carbon tax. But you cannot pay $16.7 billion worth of outgoings with $400 million worth of income. It is that simple.

There are some serious implications of this. We will have to withdraw the schoolkids bonus. We are very up-front about that. We are borrowing money to pay for it; that is the problem. I was talking to a parent in Townsville this morning. She asked me if we were going to get rid of the schoolkids bonus. I said, 'Yes, we will.' She said she was very disappointed. I said, 'Well, at the end of the day, you won't be paying for it, because, if we keep it going, your kids will be paying for it, because that's who has to pay it back.' We cannot continue to keep on borrowing and making our kids pay for what we want now. We cannot turn our kids into the purveyors of our lifestyles.

The low-income superannuation contribution has to go. But I can tell you, in relation to the low-income superannuation contribution, that over five years repealing the measure—the refunds of up to $500—will save the budget $2.7 billion over the forward estimates. But over the last five years Labor has increased taxes on superannuation by almost $9 billion and cut superannuation benefits to lower income earners by more than $3.3 billion. So, please, only the impotent are truly pure.

I would also like to talk about the repeal of the Regional Infrastructure Fund and the Regional Development Australia Fund. The coalition went to the election with a series of promises. We will honour our promises and keep our commitments, unlike the Labor government that had phantom funding. Some of the things they handed out on the RDA were absolutely garrulous and scandalous. The coalition's $1 billion National Stronger Regions Fund is fully funded and accounted for as part of the budget. The funding is guaranteed.

We stand by our regions. You can tell by the number of Liberal and National Party people who were elected by the regions in Queensland that we own the regions because we stand for the regions, we mean business in the regions and we represent the regions. We do not make glib statements. We do not put in bits and pieces. We will do these things.

I want to say that putting in a $5 million road is not the development of northern Australia. The development of northern Australia is a serious project and it should be given the due deference that it needs. I stand by this commitment to repeal the minerals resource rent tax. It is important that we do go through with this. Labor should respect the mandate we have been given in relation to the minerals resource rent tax and the carbon tax. When Labor won the 2007 election on the basis that they would repeal Work Choices we stood aside and let that go through as a matter of course because that was the right thing to do. Labor should stand aside and let Australia get on with business and send the message that we are open for business and that we will do the right thing. I thank the House.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

The Labor opposition are determined to ensure that all Australians share in the profits of our rich non-renewable mineral resources—we were in government and we are in opposition. That is why we brought in the minerals resource rent tax. The Henry review released on 2 May 2010 included a discussion of the non-renewable resources and several recommendations for replacing existing resource-charging arrangements with a uniform resource rent tax imposed and administered by the Australian government. Lest anyone think that this is a new thing from Labor, we actually had a policy for this type of thing back in 1977. The Hawke Labor government introduced this in relation to the PRRT. That is what we did in relation to offshore petroleum. So we have had a longstanding commitment to this sort of economic policy. The Henry review commissioned independent research, which included a paper on non-renewable resource taxation prepared by the Australian Bureau of Agricultural and Resource Economics.

The MRRT had a long and rather convoluted history, we accept that, but there was much community consultation. The Policy Transition Group was led by Don Argus and the then minister for natural resources Martin Ferguson. In fact, as we did in so many other areas, the MRRT was developed in partnership with business and industry, particularly BHP Billiton and Rio Tinto, just to name a few in the resource sector. The MRRT was designed to apply to all new and existing iron ore and coal projects at a rate of 30 per cent. An extraction allowance of 25 per cent reduced the effective rate of the MRRT to 22.5 per cent for projects with greater than $75 million per annum income.

The MRRT was about superprofits. It was about making sure that we as a country extracted our fair share of the wealth of all Australians owned by Australians for the benefit of Australia. It resulted in an effective company tax cut provided this year, a new tax break for up to 2.7 million small businesses from 1 July 2012 and investments in all regions through the Regional Infrastructure Fund and the Regional Development Australia Fund. We did not discriminate; we provided assistance through every community and every council in the country.

The coalition's own fiscal budget impact statement that they released a couple of days before the election indicated that the MRRT would raise $3.7 billion over the forward estimates. The coalition cannot have it both ways. They cannot say that the MRRT is not working because it is making no revenue while at the same time say it is killing the mining industry, as we have heard on many occasions this morning and elsewhere. There is a certain degree of inconsistency between their positions in that regard.

The MRRT made a big difference and would make a big difference in the mining states of WA and Queensland. I noticed that the member for Grayndler mentioned the Blacksoil Interchange in my electorate, which was funded from the Regional Infrastructure Fund. The Blacksoil Interchange is the most notorious intersection in South-East Queensland. It was at the top of the list of infrastructure and road projects for the South-East Queensland Council of Mayors. We put $54 million into that project and the previous state Labor government committed $16 million. I am pleased that the current LNP government in Queensland partnered with us and it is currently under construction. It is being built by Fulton Hogan and will be opened late next year. It is a really important project. There are 300 people working on that project. It is funded by the revenue received from the MRRT. It is an important project. It shows what this sort of funding can do. In the first six months the MRRT raised $126 million. That is $126 million of funding that the government can use for the benefit of all of Australia.

I congratulate the many people opposite who have made their first speech. It is a great experience, opportunity, honour and privilege to be here, but they are about to be mugged by the political reality when they go back to their communities. They are going to have to explain, as the so-called champions of small business, why they are voting for a reduction in the small business instant asset write-off threshold from $6,500 to $1,000 for the 2.7 million small businesses.

Those opposite are about to have to explain to their local communities why they will be voting to get rid of the loss carryback for companies with up to a $1 million threshold. Those opposite are going to have to explain to small business why they are voting for the repeal of the accelerated depreciation of motor vehicles—an instant asset write-off of $5,000 for a new vehicle purchased by a small business—and the repeal of geothermal exploration provisions. Those opposite are going to have to explain why they have voted to delay or defer the increase in superannuation. This will mean, for example, that a 22-year-old shop assistant in my electorate—and in all of their electorates—will lose $100,000 by the time they retire at 67 years of age; a 35-year-old plumber will lose $74,000 by the time they retire. This will be the direct result of the decision that those opposite make either today or sometime later this week on this bill.

Those opposite will reduce the financial security of people in their electorates by the vote they make. Those opposite are going to have to explain to millions of low-income and middle-income Australians why they are being hit by the loss of their low-income superannuation contribution. I cannot understand how those people opposite have the temerity to come into this place and criticise us about class warfare when they think it is okay to give tax breaks to the 16,000 wealthiest superannuants in this country, with assets of more than $2 million in superannuation, and yet slug those people earning less than $37,000 a year with $500 in tax every year. In my electorate there are 20,900 people who will get slugged. Those opposite are also going to have to explain why they will cast their vote in support of young people, single parents and unemployed people losing their income support bonus—$210 a year for singles, $350 for couples. My electorate might be typical; 8,300 people will lose that income support bonus. They are the most vulnerable, disadvantaged people and yet those opposite have the gall to talk about class warfare.

Those opposite will also be voting against the Schoolkids Bonus. Those opposite supported the education tax refund. I could never understand why they voted against the Schoolkids Bonus when we brought it in. Before the bonus mums and dads had to keep all receipts—put them on the fridge with a fridge magnet—and so we decided to make it easier for them. So $410 per child for primary school children and $820 per child for secondary school children for eligible families—more than 9 out of 10 families in my community were eligible. In my electorate that means if you send your two children to Raceview State School and then Bremer State High School, the two biggest primary and high schools in my electorate, you would lose $15,000 over the educational life of your kids. I give this illustration because my two daughters went to both of those schools.

But the thing about this that really irritates me is that the MRRT legislation we passed had nothing to do with the Schoolkids Bonus—absolutely nothing! It was not linked in any way, shape or form, but by stealth and covert measures, in a really disingenuous and deceptive way, those opposite have linked those two things together. And now those opposite are going to have to go back, as the member for Herbert said, to their electorates and explain why they voted against that funding. We are talking about funding for 1.3 million Australian families. Those opposite should hang their heads in shame.

There is something else that really gets to me. I am someone who ran a small business. At 26 years of age I put up my own shingle and ran a small business. I did it for about 25 years, before I was elected, and built it into a multimillion dollar business, but those opposite have the gall to say that no-one on this side of the chamber has any experience in small business. They say this as if they are some sort of paragon of small business advice and gratitude and as if they really know everything, so I cannot get over the fact that they are going to punish small business operators and punish entrepreneurs in their electorates. Those opposite pose and preen and parade themselves as the champions of small business but, through their votes in this place, they are going to gut small businesses. Small business is really going to face reality with this government. Those opposite have raised expectations, but small business owners and entrepreneurs are about to find out, when they go to see their accountant or their auditor, about this stuff. They will discover that the LNP member that they voted for, the one who they just elected, actually cast a vote in this place to support the cuts to their business to make it harder. How is that going to help with the red tape et cetera? Those opposite should be supporting small business. We took a policy to the last election to raise the write-off from $6,500 to $10,000 in relation to small business. The vote of those opposite will create devastation for communities, individuals, the small-business sector and for the smaller regions.

We heard the member for Herbert talking about the regions. In terms of infrastructure, the coalition is anti-council, anti-community, anti-regions and anti-rural. Again and again in this place, in the six years I have been here, those opposite have come into this place and voted against funding for their communities. They are happy to go back to their communities and say, 'Isn't this a good project', but there are consequences. I say to those new members opposite: there are consequences to the way you vote. Trust me, your constituents note it. They will note that you voted against Regional Infrastructure Australia funding. They will note the fact that you voted against the Regional Infrastructure Fund. The councils know it, the communities know it, the businesses know it and the individuals know it. You might be feeling the great warmth of the love of your family now, after your first speech, but when you go back to your communities after you have voted they know that you voted against them and they will note it. So your arrogance might have been on display over the last few days, but I tell you what: when you go back to your communities you will find out what is what if you are going to support millionaires and mining companies and not individuals and the most vulnerable and disabled, people in the most difficult circumstances, in your communities.

Let us talk about what might happen. Let us talk about regional infrastructure. I mentioned the mining states—Queensland and WA. There are road projects everywhere which are funded not only through the MRRT but also through Regional Development Australia.

I mentioned in the Federation Chamber this morning two projects that will no longer be funded that were funded under this legislation. There was the Lowood pool upgrade and the Willowbank hard stand upgrade in the most popular motorsport precinct in South-East Queensland. There is also the $2 million flood evacuation centre in my electorate. I represent 70 per cent of Ipswich. I have the Somerset and Wivenhoe dams in my electorate and it has been flood central in the last few years. Thirty thousand people in Ipswich were left without a proper flood evacuation centre. We funded and budgeted $2 million for a proper upgrade to St Joseph's Catholic primary school hall to make sure 30,000 people in Ipswich would get proper evacuation and recovery facilities. The coalition will vote, when they vote on this bill, to take it away from them. They will take it away from my constituents who are flood affected. We had thousands of people in my electorate who were flood affected and they are going to vote to take it away from every single one of them.

What about the AFL? What about the Brisbane Lions—a $60-million relocation project, actually not in my electorate but in the electorate of the member for Oxley. There was $15 million budgeted for to relocate a centenary sports hub in the western corridor between Ipswich and Brisbane, making a big difference and hundreds and hundreds of jobs being created. These are the important things that we are funding. This is what this Labor Party supports—what we did in government, what we budgeted for. The coalition is taking it all away. So do not come into this place with your highfalutin terms and say you support the regions, you support the councils, you support the rural areas, because you don't. You are going to vote against it.

The MRRT is good policy because that wealth belongs to all of us, not just to the mining magnets who fund your campaigns. It is important for all of us. It is important to regional Queensland, which I represent. It is important for flood affected areas, which I represent. You are coming into this place to take it away from. This is one of the most important pieces of legislation this parliament will deal with in the next three years. There are consequences and in three years time your electors are going to look at it, members opposite, and look at how you voted. There are consequences and you will rue the day you voted for this legislation.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker Craig Kelly. It is a welcome sight to see you in that chair. Congratulations.

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. It was interesting to listen to the member for Blair—who is just leaving the chamber—stating quite vociferously that the projects in his electorate that they had budgeted for, that their government had funded, were going to be taken away. That is the whole crux of the problem here. They may well have budgeted for them but they were not funded. They were not funded because the tax that the previous Prime Minister, Julia Gillard, drew up in 2010 did not raise any money. That is the crux of the whole problem. We are presented with a whole range of the previous government's spending commitments but no income to pay for those commitments.

It takes a genius—perhaps a whole pack of geniuses—to design a mining tax, to design any tax, that does not raise any money! It also inflicts a compliance burden on the costs of all players. Even though currently they may not be subject to the tax, they actually have to account under a new accounting formula to show at what time in the future they may have to pay the tax. Of course, any company that is trying to develop a project has to write in the cost of that compliance burden into the development of the project. I will come to some of those costs in a little while.

The mining tax, of course, originally the resource super profits tax, was estimated to raise almost $50 billion over five years. By the time the minerals resource rent tax was implemented in 2010, that was down to $26½ billion. It is estimated now that it might raise a little over $4 billion over that five years. In fact, in the last 12 months it has raised just $400 million. The problem is that the previous government committed $18.4 billion worth of expenditure against that income. For the $400 million so far raised, that is around 40 times as much expenditure committed as the tax itself will raise.

I was speaking about companies which may be looking forward to mining. I have had a look at the figures in my electorate. We have one significant iron ore miner and one significant coalminer to power the power station at Port Augusta—Alinta. As far as I know, neither company has contributed to the small amount that has been raised by the mining tax over the last 12 months, but they would have met the accounting procedure. There are 20 companies Australia wide that have paid the tax but there are over 145 that have had to submit MRRT instalment notices.

I think South Australia and particularly my electorate is on the verge of a great growth in mining. In fact, we need it very badly. We have the poorest performing state economically on the mainland. Only Tasmania is performing worst than South Australia. As I look around South Australia and the possibilities and opportunities for us to raise our economic activity, most of them are in the resource industry. Not all of them—we have a very strong agricultural sector, which I am very confident will grow in the future and improve its performance—but the opportunities in South Australia will come from the resource industry. As my electorate covers over 90 per cent of the state it stands to reason that over 90 per cent of the action in the resource industry will be in my electorate.

The minerals resource rent tax does not target mines—for instance, such as the Roxby Downs mine, even though there was certainly some unease under the previous government that they may in the future extend the tax—other than iron ore and coal mines.

We have very significant coal deposits in South Australia but they are not of a high standard and there is a lot of work being done at the moment around hydrocarbon extraction—both underground gasification and above-ground liquefaction—and we are now finding that we have very large resources of iron ore. We could easily run an iron ore industry of 60 to 80 million tonnes a year for export. That is not the Western Australia standard but it is pretty big That is 60 to 80 million tonnes a year that South Australia may be capable of for 50 to 100 years. There are very significant deposits on Eyre Peninsula. The company Iron Road in particular has over three billion tonnes of iron ore proved up. There are a number of other operators in that area. There are significant deposits; some are currently being mined in the Woomera region. There is also a very large line of deposits in what is called the Braemar region, which runs roughly from Peterborough in the north-east to Broken Hill.

At this stage the South Australian government has granted major project status to no less than four different developments in Spencer Gulf to load iron ore. Currently iron ore is being shipped directly out of Whyalla on a barging process. There is another proposal up for a place called Lucky Bay, which would be a different type of barging process, and then there are four others that have major project status. One is the development of a slurry pipeline from the Braemar deposits to the eastern side of Spencer Gulf. There are another two down on the western side of Spencer Gulf between Tumby Bay and Port Neill and then there is one at Whyalla. It seems to me that not all four of these will ever be built, and I am concerned about the planning process. From my point of view, I would like to see one significant port built and then the enabling rail and transport networks put in place to make sure that we have a port of world significance and all the efficiencies that come with that.

The problem we have—and I come back to the mining resource rental tax—is that many of these companies are not cashed up. They are trying to get their projects over the hump, as it were. The Association of Mining and Exploration Companies states:

AMEC conservatively estimates that the minimum accumulated total setup costs in the first year for all iron ore and coal smaller miners and junior exploration companies(excluding large miners) is estimated to be over $20 million in the first year, and an ongoing annual administration and compliance cost in excess of $2 million.

I was speaking earlier about the company Iron Road. They have recently raised over $50 million in the stockmarket. That is a significant cash-raising. But with respect to their project development costs, they would have to build in another $20 million and yet they may not be liable for the current tax for many, many years to come. So it is just an added burden. Maybe to some people $20 million does not sound all that much. Maybe to BHP it does not sound all that much; but it sounds like a hell of a lot of money to me, and these are the burdens that go on these junior explorers and miners—and let me tell you that Iron Road is far more cashed up than many of the others—that they do not need. The very way the tax was designed was punitive on those who were likely, perhaps, in some cases, never to pay it. It is fundamentally flawed and there is no bigger flaw than the fact that, at the end of the day, it raises no money.

My understanding is that no-one has paid the tax in Grey, and it would seem that Australia-wide no-one has paid too much at all, full stop. The member for Blair was talking about the government spending that will be axed and pulled back in as a result of cancelling the mining resource rental tax. He ran through a whole list and I could do exactly the same, but there is one in particular that cuts quite close to home. I admit it is not easy telling some of the news in some of the local projects, and that brings me to the Regional Development Australia Fund. This fund was meant to have $952 million in it, and the member for Blair was only recently telling us that it was committed, it was budgeted for and it was funded, but we know it was not funded, because the tax did not raise any money.

By the election time in 2013—and this project was only one-third of the way through—$916 million of that, 95 per cent, had already been committed. It is worth noting that, in the last 3½ months leading up to the election, almost two-thirds of that fund—$608 million—was committed in what was really the rundown time of the government. It was a time when contracts could not be written, when the money could not begin the stream of being spent in the local electorate—so none of this stuff had happened and it was just the most outrageous example of pork-barrelling coming into an election. There were four rounds announced in the last three months; there have been six rounds altogether in the Regional Development Australia Fund. Round 3 had $50 million for towns of 30,000 or less. I might say that these projects are not necessarily unworthy projects. Many of them are very worthy, but the problem is: there is no money. So for towns of less than 30,000 there was $50 million—all announced on 9 May. Round 4 was open to community groups and councils and $195 million was announced progressively from 31 May. Round 5—and we really are getting into the days just before the election—was $150 million allocated for councils based on the Financial Assistants Grants, on a formula of $30,000 per council. There was no justification of this expense, and certainly every council would be pleased to get a $30,000 cheque in the mail, but that was just in the lead-up to the election and councils were required to identify projects for assessment with their funding envelope, and of course the 558 councils put through 910 projects. They were all very excited when they got news that their projects had been funded. But of course they were not funded; they were only 'approved'; they could not be funded, because there was no money.

Round 5B was the corker of the lot: over $200 million, by invitation only. That was projects that had been previously knocked back by RDA Australia—so were seen to be wanting—but it was: 'Get your money in now; get your quotes in now; get your bids in now; there is plenty of money to go around'. That was the news coming from the government. 'There'll be plenty of money for everything.' There were plenty of promises for everything; but there was not plenty of money. Unfortunately, when a responsible government got back in power, there were some difficult decisions to be made.

There is nothing more important in Australia. One of the central issues that we have been put in power to achieve is to pull the Australian federal budget back into line, to get expenditure and income aligned in the budget, to pull Australia back from the brink, to pull Australia back from the already $300 billion worth of debt that was accumulated in just six short years. It is a responsibility we take very seriously.

Certainly there is no fun in coming into government and being the bearer of harsher news for the electorate. I said, in the lead-up to the election in our party room, that I think Australians generally—even if they do not have an interest in politics, even if they do not have an understanding of economics—know in the fibre of their being that Australia could not continue on the path we were on before September 7. They would know that where we were was an unsustainable place, that expenditure was widely out of step with income, and hence the rising debt. So, if there is one thing this government must deliver on—and we will be judged on our performance in this area in three years—is fiscal responsibility; bringing the budget back to order, binging the projects back under proper order, not just approving projects willy-nilly in the lead-up, in a few days, without proper examination.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker Vasta. I congratulate you on your election to your position. It is a pleasure to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, because it gives me an opportunity to highlight some of the failings of this government already, and some of the very serious things that are contained within this bill.

If this bill were just about the minerals resource rent tax, you might be able to side with government and say, 'Okay, if there is no revenue coming in, there is certainly no burden to anybody; certainly not to mining with no revenue'—as we have just heard from a number of members. You might think that it was something they could argue. I may not agree with it—but I might be able to understand. But they do not seem to understand the purpose of a minerals resource rent tax as a market based, profit based system and mechanism, which in the past perhaps the Liberal Party would have supported—or even thought of themselves—as the best and most efficient way to tax.

You do not just tax on the tonnage that comes out of the ground; that is very inefficient. It does not account for whether you make a profit or make a loss; it just means you are continually paying this royalty based on the amount you extract from the ground. The best way, just like the petroleum resource rent tax, is to actually say to those involved: 'We will not tax you. We will only tax you when you make a profit, particularly a superprofit. That is when you ought to be taxed.'

Let's just remember—and we should absolutely acknowledge this—those resources are owned by every single Australian. And what should come back to every single Australian is some sort of benefit to them from the once-off use. Once it is out of the ground and used, that is it; it is gone. That resource should be for the benefit of all Australians. So there is no great magic around a minerals resource rent tax as compared to a petroleum resource rent tax which works exactly as intended. In the good years when profits are made, tax is paid. When superprofits are made, a little bit more tax should be paid. These the big mining companies or big petroleum organisations, and they should be able to pay those taxes. So on one hand we have the government saying we need to get rid of this tax that no-one collects; it hasn't raised any revenue and it is such a burden. Who is it a burden to if it is not raising any revenue?

If it was just those arguments, I might maybe just allow the government to have some sort of leeway on this issue. But it is not that that I am concerned about. It is what they have put into this repeal bill which really concerns me. You cannot possibly come into this place and talk about cost-of-living issues and pressures on families and then at the same time in this bill repeal the schoolkids bonus.

I can remember and recall a long time ago, people in my electorate—and I am sure it was the same in other people's electorates—families, mums and dads coming up to you and saying: 'Is there anything you can do for our family to actually reduce our cost-of-living burden, give us a little bit of hand through the tax system?' It is only on what they spend, just to help with the schoolkids, with the books with uniforms, with excursions, with a whole range of costs associated with educating your children.

We know from research done today, regardless of what school kids go to, there is an enormous cost attached for families in terms of educating their kids. Labor agree with them. We figured there was a really good way that we could help with the cost of living and with families, and that is to give them a schoolkids bonus.

It is modest, but it is fair. We were giving $410 a year for every primary school student and $820 a year for every high school student. That helped 1.3 million Australian families get a better start at the start of the school year, making sure they got that bonus so they could make sure their kids did get all the school uniforms, that they had all the books; maybe they had to buy an iPad or a laptop—all the things that modern education requires of young people today.

That is what upsets me the most about this bill. If they had just done the MRRT and said let's have a debate—let's have an argument, let's have a go at each other over a minerals resource rent tax. The Liberal side of the chamber wants to give a tax break to big mining companies? Let them pursue that course and argue and debate that merits of that. We say we think the big mining companies, if they extract an Australian resource, should share a little bit more of that with all Australians. I am happy to debate that with anybody anywhere. I think on that course of action we are right.

It has also never been the case that a minerals resource rent tax is meant to deliver everything to all people on day 1. It is not there for the next six months to raise money; it is there for the next generation. It is there for our future and for the future of this country. You get the settings and frameworks right, and it delivers. Maybe it is not raising the revenue that it was hoped it would raise today because we have seen a down turn in the mining industry, not in demand but in revenue, and so nobody is paying it. It is pretty hard to complain about a tax you do not pay but it seems to be the case that that is exactly what the government is doing. The government never misses the opportunity to back big business over small business, the big guys against the little guys. It is always the case that they are on the side of the big mining company or the big petroleum company. When it comes to the ordinary Australian family, 'let them fend for themselves' seems to be the mantra that we get.

If it was just the schoolkids bonus, maybe they could have an argument. I do not think that taking away the schoolkids bonus for 1.3 million families is a good thing to do. We should remind the government and we should remind those 1.3 million Australian families every single week that this government slugged them with an extra tax of $410 per primary child and $820 for every high school student.

It goes further. We know those opposite never supported superannuation for ordinary working people. It is okay for public servants, it is okay for high-end managers and it is okay for mining executives to have super. I think it is okay too, by the way. I do not dispute that anyone should have superannuation. But it took a Labor government, Hawke and Keating, to come up with the outrageous plan that ordinary people should get superannuation as well. How dare we think that an ordinary worker should have a little bit saved up for retirement as well? It was audacious.

We were fought tooth and nail, day and night, kicked almost to death on the issue of superannuation from people like that now Prime Minister Tony Abbott, who said absolutely categorically said on the record that he was supposed to it and thought it was the biggest con job this country had ever experienced. You would change your tune today when you see that national savings through superannuation are now at about $1.6 trillion. Apart from the good work that the Labor government did during the global financial crisis, we had this massive national savings pool of $4.6 trillion which helped underpin our economy.

No one would argue today that superannuation and the super guarantee was a great thing to do, even though a whole range of people today who go along with it opposed its introduction. Today they get their opportunity to go and damage it. They did not like it a little over 20 ago and they do not like it today, although they give it a bit of lip service every once in a while. What can we do to hurt the superannuation guarantee for ordinary working Australians? They go 'we will delay the increase'. So a part of this bill delays the increase that Labor put in place from nine per cent to 12 per cent, which everyone in the industry agrees is where it needs to go over time. A little bit at a time, it needs to go from nine per cent, which is inadequate, to 12 per cent and perhaps in the future even higher. We will talk about that at some later stage.

The first act of this government is to say 'workers need to wait'. They are going to have to wait two more years. Ordinary people, mums and dads, whether they are in a small business or whether they are working for somebody else, are going to have to wait two more years to get the super guarantee increase that Labor put in place. It is not just our view on this. The Association of Superannuation Funds of Australia also agrees. They have attached some numbers to this and said how much this delay will cost the people.

A whole range of other associations and bodies have come out slamming the new government and saying: this is not in the national interest; this is not good for the economy; this is not a saving to government but a cost to government. This is actually really bad for working people. It is also bad for the economy and bad for government but ideology seems to have taken one little extra step forward. When it comes to good economics and good policy, ideology seems to win out, and that I cannot support or agree with.

The government does not rest there. They put more of this stuff in here. They want to make it hard for us to be able to vote for or against things by lumping them all in together. The low-income super contribution that Labor put in place fixed an anomaly where if you earned $37,000 a year or less you effectively paid more tax on your superannuation contribution than you did on your salary or your income. Let me tell you, $37,000 is not a lot of money. Ask anybody who is on an income of $37,000 a year or less how tough it must be for them.

It was agreed across the sector that this was a good move, a good thing. It was worth about $500, not a lot of money but it makes a big difference if you are on a low income. Labor put into place a measure that removed that tax called the low-income support contribution. Millions of ordinary working people, particularly two million women—because they tend to be the ones to return to the workforce late after raising a family or are in and out of the workforce or work part-time—are affected by this.

When we talk about particular issues, about who we want to help, about decisions to put money on the table, Labor has made it clear: we want to help ordinary people get just a little bit ahead. Five hundred bucks a year extra in their super is going to make an enormous difference to them when they retire, worth a substantial amount in today's dollars. Why would you rip it away from them? Why would you take it away from those two million low-income earners, particularly women? If it was just that, you might say 'okay, we get it'. But at the same time as they do that—you are not going to believe this—they are going to reduce the tax paid by people who have got more $2 million in their super accounts. The Liberal government says it is happy to take away from the lowest-income earners but if you have more than $2 million in your super balance then it will give you a tax break because it reckons you are probably doing it tough and you need it. I do not think that I can support that either. I think it is quite shameful to do the two together. Maybe the government could have been smart and separated the measures out and done them in different places so we might not notice but it has done them together, which I think is just wrong and tragic.

These changes mean there will be less benefit to our economy by $53 billion. A number of people have done some research work on this and estimate that the removal of the low-income support contribution will reduce national savings by $53 billion by 2021. It is not that far away but $53 billion is a substantial piece.

I want to end my remarks by drawing to the House's attention the fact that this government always claims Liberal governments to be the best friends of small business, the party of small business and that they want to help small business. Let me tell you what we did in government. We put in place a whole range of packages directly to assist small business worth in the many billions of dollars. The first act of this government to thank small business for their election is to take it away from them. What they are going to repeal is the increase in the instant asset write-off from where we had it at $6½ thousand dollars, uncapped, unlimited, for small business. They are going to peg it back to a thousand bucks, because they do not believe small business needs a break or that small business should get a bit of shot at trying to make life easier for them when they buy assets.

Labor, on the other hand, actually supports small business and our policy coming to the election was we would increase it from $1,000 to $6½ thousand, which we did which was already being used and it benefited small business. We said we would take it to $10,000, because we realised that, when the economy is doing it a little bit tough, you need to support small business and that is what we should do. This mob on the other side are taking it all away from them, so it is pared back to just $1,000.

We also put into place, recognising that small businesses from time to time might actually make a loss or could rearrange their tax affairs in a particular year, Labor's tax loss carry-back worth up to a million dollars. So if a small business wanted to rearrange its tax affairs, buy particular assets and make a loss in a particular year, we said, 'You could carry that back to tax you had already paid in the past up to a million dollars and we will refund the money back to you.' Because we wanted to be generous to small business and help them out, so the tax loss carry-back: a million dollars. The Liberal Party says to small business, 'Thanks for the votes during the election, but we are going to take that off you as well. Sorry, we're going to take that off you.' I am sure you going to be happy with that. These increases to tax, because that is what it is for small business, are really going to hurt them.

This Liberal government is also going to change the way that we help to accelerate depreciation for motor vehicles: $5,000 instant depreciation. We tried to make it as easy as we could to give a hand-up to small business. We understand they are hardworking people and often they are just ordinary hardworking people who are really making a go of it, whether they employ their family, a friend or anybody else; whether they are a one-person business or employ more people. Labor wants to support you. We did that through a whole heap of direct cash assistance.

What this Liberal government is doing is taking that away. So throughout these bills, what we see is, first, the misconception that there is a tax that is not raising any revenue which is a burden and kills big miners so therefore we should get rid of it. I am happy to have that debate and argue that quite separately, but don't include in here that you are going to delay the nine to 12 per cent increase in superannuation. Don't make it harder for hardworking Australians on $37,000 a year and don't hurt small business. Give them back the direct cash assistance that we provided to them while we were in government.

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

On 7 September we had the federal election. We went to that election saying that we would chop the carbon tax, get rid of the mining tax, restore confidence to small business, get rid of red tape, and once and for all make business welcome in Australia again. This has been neglected over the last six years. Businesses had no confidence. Businesses had no guidelines. The goalposts kept moving.

We come to the mining industry: where do they sit now in Australia? In my state of Queensland and particularly Flynn, we have the Bowen Basin, the Galilee Basin and the Surat Basin. These areas have been hard hit.

What is a fair share tax? I have never heard the opposition tell me what a fair share tax is. Is it 50 per cent? Is it 30 per cent? Is it 80 per cent? They have not said. They might be surprised to know that the mining companies do pay a lot of taxes and, when I say a lot of taxes, I mean a lot of taxes. They pay corporate tax of 30 per cent. They pay payroll tax. They pay superannuation to their employees. They pay very good wages to their staff, and no-one denies miners the pay they get. I have been on several mine sites and I can tell you the miners work hard for their money and are thoroughly deserving of their pay. But their pay is very good pay compared to a policeman, a schoolteacher or a Woolworth's worker, and they enjoy the benefits of their hard work.

Mining companies also pay GST, and I do not know whether the opposition know but the mining companies are also very good community minded corporations. They help out in big and small communities in all sorts of different ways. They support doctors in mining towns. They support doctors in communities like Emerald and Biloela They do a lot of things. They put Christmas parties on for the kids, not just for their own employees and their kids but for the whole town. They are good corporate citizens.

In days gone by we used to welcome mining companies starting off in our region. I know there have been issues—miners versus farmers—but a lot of work has been done to improve the relationship between mining and agriculture. I can tell the House that it is going the right way. There is a saying in a town in my electorate called Rolleston that a successful farmer is one who works four days a week in the mines and the other four days on his property.

Mining companies are a great benefit to our area, our regions and the Australian economy. We do not need to chase these miners to other parts of the world, and that is exactly what is happening today. There are many Australian listed mining companies on the ASX that do not even mine in Australia. Over half of the ASX listed mining companies are not in Australia but in places like Africa, Mozambique, Mongolia and South America. They are not encouraged to invest in Australia. The rewards are few and the pain is great.

Productivity in Australia is not the best and by far the worst in the world in the coal and gas sector. Compare the wage of a coalminer in Indonesia with one in Australia. Twenty years ago, Indonesia did not export one tonne of coal. Now they export more than Australia—more than 30 per cent of the world's thermal coal. We used to export over 30 per cent of the world's total exports of thermal coal, but now we have slipped under 30 per cent. An Indonesian coalminer earns US$12,000 a year and I would hazard a guess that Australian wages are more around $150,000 a year.

We do need encouragement for mining companies to still feel welcome in Flynn and it will mean a lot in towns like Emerald, Capella, Moura, Blackwater and Tieri. Those towns have suffered since the mining tax was introduced and of course commodity prices have dropped and the Australian dollar has not helped things. All these costs impinge on an industry that is having a good look at its costs and finding out which mines will stay open and which mines will close, which contractors it will keep and which contractors it will let go. This is evident when I go to places like Springsure, Capella and Emerald, where back in the good old days I would have to book accommodation at least three weeks out, but now I can go to any one of those towns and readily get accommodation. Once upon a time, you could not rent a house in those towns and If you were lucky enough to, you would pay through the nose for it.    That has all changed. Contractors have left in their droves.

Regarding small business versus big business, I find that small business relies heavily on big business. If you do not have big business in a town, you do not have small business. Small businesses rely heavily on support from big industry in towns like Gladstone and Emerald—and, believe me, I was one of those small businesses. It is foolish to say that we only look after big business and not small business. That is a load of hogwash. We look after all businesses and that is why we pledged in the election campaign to reduce red tape on small business and in fact every other business that exists in Australia—from government business to councils to big and small business, including the mining sector. It was ridiculous getting an EIS through under the previous government. It took up to three years and sometimes longer than that. That is totally unacceptable. At the end of those three years, a company has either lost interest in the project or moved on, and in a lot of cases has moved overseas to start business elsewhere.

When it comes to superannuation, I heard what the previous speaker said, but I think it would also be a good idea if the employees were to put some money along with the employer's money into a superannuation fund. That would be another way of giving the workers on retirement a decent superannuation income that they could life off. Living longer, living better, as they say, would be enhanced if they were to contribute some of their own money into their superannuation fund. I objected to the way the opposition when in power could pilfer money from superannuation funds and from bank accounts. I think that is a travesty of justice and is not acceptable.

I listened with interest to the member from Grayndler, the former minister for infrastructure. He spoke about many projects that were delivered under the mining tax. What caught my attention was when he mentioned Gladstone, which of course is very dear to my heart. He said the port access road was virtually completed, with $50 million of the mining tax money—which of course never eventuated. I have to inform the House that the port access road stage 2 has not even been started, yet he said it is nearly completed. I have asked in the House and I have asked the then minister for infrastructure: where was the $50 million for the Gladstone port access road stage 2? I got no answers. I went to the main roads department and they told me that they have not seen the plans. I went to the local council and asked them if they had seen the plans for the Gladstone port access road stage 2. The answer was no. Yet, the former minister said in this House an hour ago that the road was almost completed. I would like that to be explained because there are no plans and there is no road. So I question all the other projects he mentioned in and around Australia.

I do question the former minister's grasp on his job. He came to Gladstone during the election and promised $10 million for the Kinkora intersection, or roundabout. He promised $10 million—it took him a couple of minutes to do that—and then spent the rest of his spiel to the media criticising me and my government for a lack of funding, lack of submissions, lack of promoting our area, and accusing me. I inform the House that as far as the Bruce Highway is concerned, there is work being done there at the Calliope Crossroads, the Yeppoon roundabout and Gin Gin north and south. But when the Leader of The Nationals Warren Truss and our team of Nationals went for a trip from Brisbane to Cairns on the Bruce Highway what did the then Minister for Transport and Infrastructure do? He laughed at us and said, 'It's a waste of time. I'm running this show, not you blokes.' Then he accuses me of not putting in any submissions to either him or the then Treasurer Wayne Swan.

It has been a continual battle to find out what projects are on the board and what projects have been properly funded. When it boils down to the real facts, with the Gladstone port access road stage 2 and the Gladstone-Kinkora roundabout, they have not consulted with the Queensland government. I was responsible for negotiating with Campbell Newman the other $12½ million of state government money to match the $12½ million of federal money to get the project underway. I could not believe that a minister of his experience could promise a project and less-than-half promise a project without liaising with his counterpart in Queensland.

All these things add up to a mining tax that does not produce sufficient money to keep it going. It is wrong. In my idea of running a show that is give and take, a show that will encourage people to come, the mining companies in Australia do pay sufficient tax.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Mr Deputy Speaker Vasta, I think it is the first time I have been before you as a member of the Speaker's panel, so congratulations on that elevation, while it was some time ago. I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 and oppose it. This bill has some very nasty measures which, once the Australian people fully understand the implications of such measures, they will be, like the opposition, concerned about the enactment of this bill.

The bill seeks, at least ostensibly, to primarily repeal the minerals resource rent tax. We oppose the repeal of that tax and we do so on a number of grounds, which I will go to. But we also oppose this bill because of its position on a number of measures that have been helping ordinary working families in this country. For example, we are concerned that this bill will repeal the schoolkids bonus. The schoolkids bonus provides relief to families in a timely way in order for them to alleviate cost of living pressures when they need it most. They need it, sitting around the kitchen table, when school expenditure is being considered and how they are going to buy the kids some school shoes and how they might buy the books and uniforms. That schoolkids bonus has been well received and, indeed, has been provided to many, many families in this country. Now it is going to be taken away. It is going to be ripped away from families even though the basis upon which it is being taken away, as asserted by the government, is not true.

The minerals resource rent tax was not put in place to provide the revenue for such expenditure. The schoolkids bonus was not derived from that source and therefore it is entirely improper to suggest, as the government does, that we need to repeal that benefit to families because we are looking to repeal the minerals resource rent tax. We oppose the repeal of the minerals resource rent tax because we believe that a profit based tax on profits from the minerals sector, minerals which belong to the Australian people, is good reform and is the best way to tax that very important sector in our economy.

That is not to say that there have not been some concerns about the way it has been implemented. We concede that. But this is a far more efficient and reasonable approach to taxation in that sector than the royalties that are imposed by state governments, and we still hold that view. We also think it is in the interests of that sector that you pay the most tax when there are the highest profits and that that tax abates, indeed, recedes when there are fewer profits. That is good for the sector, good for the companies and good for our economy in general. We continue to support that approach.

The government cannot have it both ways. They like to say the tax has been so great that it is wreaking havoc on investment in the sector. At the same time, the Treasurer says, 'You haven't retrieved the tax you would say that you have and the tax receipts have been a paltry sum.' The fact is the tax will fall when profits fall and the tax will rise when profits rise. It is exactly the mechanism that we prefer because of, as I say, the way it responds to the needs of companies in that sector.

But let there been no mistake: this is not about the repeal of the Minerals Resource Rent Tax alone. This is about taking away from families the Schoolkids Bonus and removing from millions of Australians the tax concessions on their superannuation. That is what is happening if this bill were to be enacted. For example, this bill would ensure that there would be an increase in superannuation taxes on one in three of Australia's lowest paid workers, which would be devastating for those workers. Within weeks the government has sought to cut the super of millions of Australians earning up to $37,000 per annum whilst boosting the super for a mere 16,000 who have $2 million in superannuation balances. That is how stark the government decision has been in relation to super since they were elected. They have not been elected for longer than a few months and they are taking tax concessions from more than three million of the lowest paid superannuants and at the same time providing a bonus to 16,000 of the richest superannuants. That exemplifies this government's approach to looking after those who are at the higher end of income at the expense of the many who are on low incomes.

This bill sees the government scrapping the low-income superannuation contribution which sees the equivalent of superannuation tax up to $500 paid by a low-income earners up to $37,000 paid into the superannuation account of the taxpayer. The measure was important for a number of reasons. For high-income earners superannuation can be concessional; for low-income earners there are no effective incentives to contribute to their superannuation. This measure addressed that very issue. I might add that the removal of this contribution hits women particularly hard, with 2.1 million women affected by the removal of this concession. A significant percentage of these are mothers working part time while looking after young children. That is exactly the part of a woman's career where an additional $500 a year going into super will be of most benefit for building savings for their retirement and indeed for their family.

The other major concern about this bill's removal of the low-income superannuation concession is that it is an example of a retrospective tax measure, a fact confirmed by the Parliamentary Budget Officer's checking of the coalition's election costings. Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. Part-way through this financial year the government has changed the rules on those taxpayers. Industry Super Australia estimates that, when combined with the proposed delay that has also been put forward by the government in increasing the superannuation guarantee to 12 per cent, the removal of the low-income superannuation concession will reduce national savings by $53 billion by 2021-22. This means a reduction in available capital for infrastructure investments by around $5 billion based on current industry-wide asset allocations. And this is at the time when the government is looking around for funding streams to finance new infrastructure projects. These are bad policy decisions which will have implications for this nation's savings. This will have implications for the capacity to find capital to invest in infrastructure and, as I said, it will have implications for millions of workers on lower incomes, particularly women who go in and out of the workforce when they are the primary carer of their children. These are some of the reasons that we cannot support the bill that is before the House.

The other concern I have as a former minister for small business is that this government's legislation will increase taxes on over two million small businesses and indeed close the loss carry-back scheme, taking away tax breaks for up to 110,000 businesses in this country. It should be no surprise that just a few weeks ago we saw a commission of audit outsourced to big business, the big business lobby group, chaired by Tony Shepherd. He may well be a reasonable man and have a particular perspective but he definitely represents big business. It should be no surprise that with no small business representation at all on that commission of audit we see a tax hit on millions of small businesses. Interestingly, the coalition's plans to remove these small business investment incentives has united big and small business in opposition, with both the Australian Industry Group and COSBOA speaking out against their removal.

As minister I was honoured and happy to be able to announce with the Treasurer at the time the introduction of the instant asset tax write-off, bringing forward the capacity for getting depreciation on assets purchased of up to $6,500 for each and every asset for small businesses, cutting red tape, removing the requirement of putting in these depreciation schedules year after year and being able to do it in the first 12 months, getting the windfall in one year rather than over four years. This is something that was welcomed by the small business community, the small business sector, by COSBOA, the peak body. I was very happy to be associated with that initiative. That will be taken away by the Treasurer and by Prime Minister Abbott by enacting this bill. Enacting this bill will see the end of that depreciation, those tax concessions and that cut to red tape that small business enjoyed because of that initiative introduced by the previous government.

Here we have a government which like to talk about small business, say they are the party of small business, say they are going to remove red tape and say that they are going to provide tax concessions to small business. What do they do with the first bill in this place on these matters? They remove the tax concessions for small business and they, indeed, increase the compliance on small business. In other words, they bring back red tape and remove the tax concessions available for millions of small businesses around this country. They should hang their heads in shame, because that is entirely contrary to what this Prime Minister said when he was making his comments on these matters before the election. He said one thing before the election; he has done another thing since the election. This is not the government that the Australian people thought they were getting when they voted on 7 September and this bill, more than anything else, has underlined that reality.

The bill also includes the abolition of the income support bonus, a tax-free payment, which came into effect earlier this year to help people prepare for unexpected living costs. If the proposed abolition is successful, then people aged over 50 who are on the Newstart allowance will lose the payment. The income support bonus provides $210 extra a year for single people and $350 extra a year for couples, to assist them in meeting unforeseen costs, such as medical expenses or car repairs. Some might say that $210 or $350 a year is not a lot of money. It may not be a lot of money to everybody. But this money is vital for those people currently in receipt of it, who need it when times are tough, when their income is constant but low and when they have some surprise bills in their letterbox and need to respond to them. That measure was there to provide relief. It will be removed by this heartless government, which is touching people's super by cutting millions of superannuants' tax concessions and, indeed, is now looking to remove this bonus.

We oppose this bill because we believe the minerals resource rent tax is the right approach to taxation. But, most fundamentally, we oppose this bill because it removes the schoolkids bonus, which will hurt families, it will remove concessions on superannuation and, indeed, it will attack all the concessions and allow the red tape that we removed for small businesses. It is a bad bill. It will not be supported by this opposition.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

It is not often that this House, in debating the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, can debate the removal of a tax that will actually make the Australian budget better off. Such has been the mismanagement of the Rudd and Gillard, and Rudd Labor governments that we find ourselves in exactly that position. The budget bottom line will be improved by some $15 billion over the current forward estimates with the passing of this repeal legislation.

The mining resource rent tax, introduced by Labor, actually damaged international investor confidence in Australia and, in particular, the energy and resources sector. We have seen so many projects shelved or put on hold over the last couple of years. This measure was very clearly an attack on Western Australia by the Labor government. The iron ore industry in Western Australia was clearly one of its primary targets. Iron ore remains Western Australia's highest value commodity, accounting for $56.4 billion or 73 per cent of the state's total mineral sales.

So, once again, like the carbon tax, the MRRT was not only an attack on WA. Even worse, it was a direct attack not only on regional Australia and regional Western Australia where the resources and wealth are generated but also on the service sector where the people who work in the mining sector live—the fly-in fly-out workers—in parts of my electorate around Busselton, the Margaret River and the south-west. At least 3,000 of these people live within about 100 kilometres of Busselton airport and they, along with the other companies which actually supply the resources sector, were all directly impacted, particularly by the government's first announcement.

Mineral and petroleum exports, in total, comprise 89 per cent of Western Australia's state total merchandise exports and provide the major contribution to WA's 47 per cent share of the nation's total merchandise imports. Have no doubt that the mining tax was a direct assault on Western Australian by the then Labor government.

The repeal of this tax will provide a desperately needed boost for the mining industry and is a strong step towards repairing the perceptions that international investors have formed about Australia since Labor came to government in 2007: the sovereign risk issue, the long-term investment risk issue.

The original mining tax, the resource super profits tax, was expected to raise $49.5 billion over five years. In July 2010, the RSPT tax proposed by Labor was replaced with the minerals resource rent tax and the extension of the PRRT to onshore projects.

While the original resource super profits tax and mining resource rent tax was at that time forecast to raise around $26.5 billion over five years, MRRT revenue estimates have since been progressively revised down: 'It wasn't going to do what we thought it was going to do. We got it wrong yet again—more numbers we got wrong again.'

Since its commencement, the MRRT has only raised $400 million in net terms, yet the former government has locked in more than $16.7 billion of expenditure on an underlying cash basis over the current forward estimates or $18.4 billion of expenditure on a fiscal basis over the current forward estimates.

The repeal of the MRRT and its associated expenditure will improve the budget bottom line by $13.4 billion over the forward estimates on an underlying cash basis and $15.1 billion over the forward estimates on a fiscal basis. The repeal will also save millions of dollars. This is the issue for the mining and resource sector as well as having to pay: it is the compliance expense for small, medium and large mining entities, many of whom are centred in Western Australia, with the iron ore industry in the north-west. For example, around 165 miners have been required to submit MRRT instalment notices, yet fewer than 20 of these have actually contributed to the net $400 million raised by the MRRT to date. They have spent millions of dollars doing this work to find out they do not have to pay the tax. So we have added to their cost of doing business, for no benefit. The remaining 145 have had masses more Labor red tape to deal with, while making no net payments. It just does not add up. It is just incredible, a disaster.

The mining tax, along with the carbon tax, has inhibited a range of the junior miners. There were those that said to us: 'Our companies would never have got off the ground at all in the environment of the Labor government. We would not have been able to generate the income for the state and the nation if we were trying to start out now, under these circumstances.' We know that Labor have no understanding of the resources sector, otherwise they would not have done this, and Labor certainly have no understanding of exploration costs and long-term financing requirements.

As you know, Mr Deputy Speaker Vasta, we said that we would do this from the time that Labor applied this tax. The electorate were in no doubt. They went to the election knowing that we had said we would repeal not only the carbon tax but the mining tax, and this is a government that keeps its promises, unlike Labor. We promised to repeal the mining tax, and that is what this legislation does. We mean what we say, and that is exactly what we are doing. This commitment goes back years, and it is a policy that has never changed. The electors knew that. The electors of Forrest knew that. We have been entirely transparent. The government of the day fought the repeal of the MRRT at both the 2010 and 2013 federal elections.

When I talk about what happens in regional areas, I look at my electorate and the first iteration of the mining tax. Three months into that, I went and talked to businesses—including small businesses and individuals—in my electorate, because a lot of them supply and service the mining sector, from the south-west into the north and more broadly. The tax affected the fly-in fly-out workers, because some of them were not sure whether they were going to have jobs and what the tax would do to them. I went and talked to small businesses in the retail sector. For so many of them their income flat-lined because their customers were the fly-in fly-out workers, who put their hands back in their pockets because they did not know if they were going to have a job. I went and spoke to a fencing contractor who worked for the magnetite sector, and he said, 'I used to have months of work lined up well ahead, because there was confidence in the industry to do the exploration.' As a result of the tax, he was down to two workers, and he said: 'I've got two weeks of work left. I've put off eight people.' So, if you think this sort of decision by government does not have an impact in a rural and regional area, it certainly does. There was a direct impact. And two of those retail outlets that I went to visit who had seen such a significant drop are no longer in business.

I want to talk about the resources in my electorate. In the south-west we manufacture 22 per cent of the global supply of alumina, which a lot of people do not understand, so the decisions are very relevant. The entire national supply of silicon is processed in the south-west, and we are a key source of lithium as well. The mineral sands miners and processors are internationally significant suppliers and they employ thousands of people throughout the electorate, along with Iluka Resources, which has the largest synthetic rutile plant in Australia in my electorate. And of course we have significant coal deposits and we generate nearly half of the state's power supply. This bill will repeal a range of the expenditure measures for these businesses, and that will save billions.

There is no choice, because you cannot spend money you do not have, but that is what Labor were doing. They did not have the income that was supposed to be generated by the mining tax. However, they were still spending it. We know that, in time, that Labor spending will incur a bill of $10 billion a year in interest alone. And we know that we are going to punch through the debt ceiling in the not too distant future—$320 billion worth of debt. The government have to make the decisions that we said we would and we have to give confidence back to the mining and resource sector. Those projects are on hold, and some of them unfortunately have been abandoned.

I want to talk briefly about schedule 5 of this bill, the provisions that mean expenditure on geothermal energy exploration is not immediately deductible. There are very real reasons for this. In the decade from 2000 to 2010, and probably more around 2005, there were a number of companies, some in Western Australia, that thought geothermal was a real option, and vast areas of the state were open for exploration to develop geothermal assets. However, over time, given the costs involved in this work, although there are companies that are still looking into the process, there is probably less commitment to this than there was previously and, clearly, geothermal will not be the great panacea that some of the early thoughts suggested. And there are significant costs to the power generation from this resource. Certainly geothermal is a cheap and reliable resource in areas where volcanic rocks can be tapped as a heat source to impart the energy into the water, producing the steam for the power generation. Countries like the Philippines and parts of New Zealand have made good use of this.

However, pumping water thousands of metres underground to be heated by volcanic rocks is an entirely different matter, with vastly more problematic economics. That is what it gets down to. This is not to say it will not play a future role in our energy mix but simply that it will be less prospective in the short term than perhaps the early predictions suggested. So the repeal of this part of the MRRT is therefore understandable.

As I said when I started my remarks, we had no doubt in Western Australia that the mining resource rent tax was a tax that deliberately targeted Western Australia; it targeted regional Western Australia. I have explained some of the impacts of that. It was simply another way of taking funding away from the west to buy good will and, ultimately, votes in the east. It was a very cynical process. Western Australia will be relieved to see the back of this tax.

I congratulate our government for keeping this key promise. The people who voted in Western Australia were in no doubt that this is what we said we would do and that we would do it. Basically, as a very early order of business, it is exactly what we are doing. For several years, this is what we told you we would do and this is exactly what we are doing.

It is very reassuring for people out in the electorates to see sound process, good governance and good government. This reassures business, industry, families and people who live and work in regional Australia. We do know that the iron ore industry is the backbone of Western Australia today and that it is a major contributor to the national economy. It has been shifting from exploration, to development, through to production; however, its contribution will continue to be massive. But it is not seen—and it should not be seen by the Labor Party—as simply a cash cow to be milked by Labor for political gain.

I commend this bill to the House and the government that was wise enough to present it.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 is symbolic of the coalition's approach to government. They are saying that the natural resources of this country do not belong to the people but belong to the billionaires—the billionaires that want Australians to work for $2 a day.

The MRRT was a response to the Henry tax review's recommendation of a profit based tax. Labor have a proud history of pursuing profit based taxes. We have supported a petroleum resource rent tax since the 1970s and the Hawke government was successful in legislating one in 1987. The minerals resource rent tax is necessary because, prior to this century, the country received around $1 in every $3 of mining profits. By the end of the boom that occurred last decade, this had fallen to just $1 out of every $7 in mining profits. The tax was a fair policy response to this situation.

The MRRT is generational tax reform—not something that you can evaluate in the first 12 months of its operation, as the government has sought to do. Indeed, it is with hindsight that we can see the value of the mining tax arrangements put in place by other countries around the world, most notably Norway, in the 1970s. Norway's mining tax has not hindered investment in their sector. They have a very strong sovereign wealth fund that they are using right now to diversify their economy for when their minerals wealth ends. It is something that the previous Labor government sought to do and something that I am very proud to be associated with. More importantly, we really need to think about whose resources they are. They are the Australian people's resources. People deserve their fair share of the prosperity that comes from the mining boom.

Learning from the lazy, wasteful approach of Peter Costello, Labor was determined to ensure that the proceeds from this resource boom were shared more fairly. The MRRT did this. It delivered for families with young children, young people, low-income earners and, at    the heart of local economies, small business. It provided investment in infrastructure, particularly in mining affected regions, and gave a boost to businesses in transitional or expansive phases. The repeal of this tax will affect millions of Australia's lowest paid workers. It removes much needed financial support to families, students and the unemployed.

Much to the shame of this government, their legislation attacks small businesses. To attack the most vulnerable in our community is never fair, but to do so while boosting the coffers of the most privileged is simply indefensible. The only people in this place practising class warfare are those opposite. The only people that they care about are the mining magnates who fly them to weddings in India.

I turn to my electorate of Charlton to highlight to the House the real impact of the repeal of the MRRT. This tax was to have provided a significant boost to the people of western Newcastle and West Lake Macquarie. The removal of the low income superannuation contribution, for example, will potentially affect up to 25,000 low-income earners in Charlton alone. Many of these people are part-time or casual workers. Some of these people are starting out in the workforce, others are in low-paid full-time work. The majority of these people are women. By virtue of these circumstances, these workers will accrue very few superannuation contributions. The low income superannuation contribution was an important step towards boosting their superannuation balances. For example, a 30-year-old permanent part-time worker earning a quarter of the annual average wage who received this contribution over 20 years of their working life would have been $13,000 better off. This would have made a massive difference to their quality of life.

Importantly, the low income superannuation contribution also addressed a fundamental inequality in the superannuation tax system that sees workers on low incomes pay up to $500 a year in tax on their superannuation, at or above their income tax rate. For these workers, who started the year thinking that they would have extra money in their super funds, this repeal means that by the end of the financial year they will find themselves short-changed by this government. When you combine this measure with the other regressive measures that the government is implementing—freezing the superannuation guarantee charge; giving a tax cut to the 16,000 largest superannuation accounts, people with more than $2 million in super—it speaks volumes about this government's approach to superannuation retirement income. They are taking it from the poorest people in the community and giving it to the wealthiest. They think the only people entitled to a dignified retirement are millionaires. That is a complete disgrace. It is not just low income workers in Charlton who will suffer. It will be those who are currently out of work and who receive the much-needed income support bonus that will suffer. This is a cash grab that will affect around 8,500 people in Charlton. This is money used by people who are on fixed incomes and who are doing it tough or are in need urgent financial assistance. It is such vital support. Removing this payment risks entrenching poverty and could put up further barriers to workforce participation. It is not the Labor way, and I am very proud that on this side of parliament we will oppose this disgraceful measure.

The other cut that I really want to talk about is the abolition of the Schoolkids Bonus, which is the most deceitful aspect of this bill. Every Labor speaker has made the point that the Schoolkids Bonus is in no way linked to revenue from the resource rent tax. It was a completely separate measure and its abolition will affect 9,000 families in Charlton—9,000 are low or middle income families in Charlton who depend on this assistance when it is time for their kids to go to school. The Schoolkids Bonus, in effect, replaced the under-utilised education tax refund, which began operation 2008—three years before the passage of the MRRT through this place. The government is hiding behind the minerals resource rent tax, trying to conceal the fact they are clawing back a payment that helps families at the start of each school semester.

If I can turn to another part of the hypocrisy of those opposite in this place: they claim to be the party of small business, but what they are doing through this bill is attacking small business. They claimed at the last election that they would 'lower small business taxes' but this bill represents an increase in the taxation burden on small business. They are repealing the tax carry-back which, for the first time, is helping businesses at the time of losses, rather than making them wait till their profits return. For some businesses, this could mean the difference between trading out of bad times or taking a short-term hit for the sake of expansion of their business. They are also slashing the amount businesses can claim through the instant asset write-off and motor vehicle deduction. When combined with the repeal of further measures included in the carbon price package, this government is reducing the amount a small business can claim through an instant asset write-off by a massive $5,500. I have spoken to businesses in my electorate, and they are incredibly disappointed by this measure. These are businesses that have to scrape together every cent they can to make small capital purchases—whether it is a tradie needing a new ute, a hairdresser looking for a new basin or a cafe looking a new coffee machine. They need this funding. I spoke to one local cafe who was greatly delighted when Labor took a policy to the last election of a $10,000 instant asset write-off. Not only will they not be getting their $10,000 instant asset write-off, but they will lose what they are currently entitled to. That is a complete shame and it will inhibit small business growth in Charlton and the broader economy. What would you expect from a government that when in opposition voted against a reduction in the company tax rate? This is simply another case of the government bowing to the demands of large mining companies at the expense of small businesses.

This bill also represents an attack on regions affected by mining. I am proud to say that Charlton is a region built on coalmining. I am also proud to say that there are still six coalmines in operation in Charlton and we have the largest power station in Australia. We are a region that is used to cohabitating with mining. We know the important role the sector plays in our community. We are really proud that our mining companies are good corporate citizens. It is very important that resource regions benefit from the profits derived from the resources extracted from their land. They are making the greatest sacrifices in terms of truck movements, coal dust, infrastructure needs from the use of mining and it is their right to enjoy the super profits that arise from that mining. That is why Labor implemented the Regional Infrastructure Fund. This was to deliver major infrastructure funding to those communities that support the mining sector. The rift through its three investment streams promised unprecedented opportunity for investment in areas such as the Hunter Valley. The new government's attack on the Regional Infrastructure Fund demonstrates that all their talk about supporting regions is just that—talk. They would rather give a tax cut to billionaires than help working people in the regions.

My region knows all too well the cycle of mining booms. They know that mining booms always come to an end and we need to work on supporting the next boom and diversifying the local economy so that it can survive the ups and downs associated with mining. I am proud to say that Newcastle is a shining example of an economy gearing up for the future, having transformed itself from the 'Steel City' of old to a hub of clean technology research and development. Newcastle is home to the CSIRO Clean Energy Research Centre, the Newcastle Institute for Resources and Energy and is the pilot site for the $200 million Smart Grid, Smart City initiative. This is in thanks to massive investments by the former Labor government that Newcastle is now a place where clean energy technologies grow from a good idea into a practical reality. But they are an overlooked victim of the repeal of the Mineral Resource Rent Tax, as there are provisions in the repeal bill to promote the exploration and development of geothermal energy. This soon-to-be-scrapped deduction enabled communities and companies to immediately offset the cost of exploration or prospecting for geothermal sites against assessable income. It is a small but unsurprising part of this repeal, and it speaks volumes about the coalition's approach to clean energy. They seek to destroy the carbon price in favour of subsidies to polluters, and they want to hinder burgeoning renewable energy businesses in favour of a tax cut for big miners. I note that the previous speaker's logic was rather torturous. She was saying that geothermal was getting harder and therefore government should make it even harder by cutting an instant deduction for geothermal exploration. The logic there is astounding—only a member of the Liberal Party could come up with such logic.

In conclusion, Labor is proud of introducing the mineral resource rent tax. It was a genuine effort to ensure that the people of Australia shared in the super profits from mining booms. After all, it is their resources that are being exploited, not those of mining companies. The MRRT is a smart way of managing the profits of a mining boom in the interests of all Australians, not just mining executives and their shareholders. When income is pouring in Australians quite rightly expect their government to spend and invest the proceeds wisely and not allow them to be frittered away, as the Howard-Costello government did.

A profits based tax is not only economically efficient it is also an equitable way of sharing the proceeds of the boom. Fundamentally, this is the difference between those on this side of the House and those on the opposite side. We support giving a fair share to working families and all Australians. They support giving the proceeds to the billionaires who fund their election campaigns. Our vision is for a prosperous future for all Australians, not just wealthy miners. Our vision considers those in our communities who are struggling and need a little help. Our vision supports small businesses and regional community infrastructure.

I will note in closing that they are very confused, even on the economic front of this debate. On one hand the government is saying that the minerals resource rent tax is not working because it is not making any revenue and then on the other hand they are saying it is killing the industry by taking too much out. You cannot have both at the same time, yet they are trying just that. It demonstrates, yet again, the hypocrisy of those opposite.

I am incredibly proud that the last Labor government implemented this reform. It built on our work in the offshore petroleum industry in the 1980s. I am deeply opposed to the repeal of this legislation, because it is working Australians who will suffer and those on fixed incomes: those who suffer; those who have very low superannuation; those who depend on the emergency payments associated with this; those in regions affected by mining, who would have benefited from the infrastructure; and struggling small businesses, who were really looking forward to using instant asset write-offs. So I think this bill is symbolic of the government's warped priorities of supporting those who need help the least and attacking those who need help the most. I am very proud to oppose this bill.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, and just from listening to the previous speaker, I am glad that I am.

About the comment that the resources belong to all Australians: I think there are a couple of little imaginary lines drawn on the map of Australia—we call those places 'states'! I think they have an inherent right to call those resources their own. We could get a challenge on it through the courts for a determination on who they are really owned by. The whole principle of the state royalty provisions is to provide that the ownership of those resources sits with the states.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

They belong to the people!

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

Don't let the facts get in the way of a good story!

They came into this place and spoke about how proud they were of the minerals resource rent tax. I just want to find out how proud they are of which version? I was here for the last term and I saw five versions of the tax. There were more starts on that tax than Phar Lap had. Dead set.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Is it a Phar Lap tax?

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I can only make the sweeping assumption that the last version is the one that you settled on. Again, like most pieces of legislation brought by this government last time, it was some thought bubble brought up on the back of—heaven forbid!—someone making a profit. Those on the other side of the House will always have socialists who make the point that 'profit' is a dirty word, and anyone who makes a profit must be evil.

Later on during my speech I will make a particular note of the comparative tax rates of our mining sector here in Australia—the sovereign risk issues—and how we compare with other mining investments right around the world. We need to be competitive as a nation. I do not believe it for one moment when the member who spoke before me—the member for Charlton—spoke about going into a small business and that they were devastated they had lost their tax benefit. Did he manage to bring up the bit about the superannuation with them, because it is small business that actually paid the increase?

When this bill was brought before the House, the government was spruiking about the increase in superannuation. All economic theorists agree that superannuation does need to go up—absolutely. With cost-of-living pressures, it does need to go up. But it needs to go up in a way which is sustainable. It is no good speaking to someone in the street who is unemployed. This is where it is going to get to, if you speak to someone in the street who is unemployed: 'Mate, what do you do for a living?' He will say, 'I'm unemployed. But I tell you what, if I was working I would get 12 per cent.' It is better to have a job and to be picking up your nine per cent and let your business grow for a couple of years. We, as a conservative government—the true party of small business—will come to the rescue of business and save them, as only we can and as the history books tell us that we do.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

You've never voted for any superannuation increase ever!

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

On the back of your comments, I want to have a chat about Norway. Norway is quite a peculiar country. They have a number of oil reserves and they have been putting away reserves similar to what we had in the Future Fund. We thought that what Norway was doing was not a bad idea, so we started to do that as well. We called it the 'Future Fund'. The Labor government got into power and spent the money! If it is a Future Fund for the future and if you aspire to the same benefits as Norway in economic credibility you need to remember that we had a Future Fund that was quickly depleted when Labor got into government.

The previous speaker spoke about billionaires. I know billionaires—they are good people—same as the other side knows union bosses. They know the Eddie Obeids and those HSU bosses. They know those guys, so they should not come in here and be provocative about someone having a relationship with a billionaire being a bad place to be and that everything done on the other side of the chamber is good and righteous.

The MRRT damaged international investor confidence in Australia, has damaged the mining industry and subsequently had an impact on our nation's economy. The lead-in time for mining investment is about five years, so by the time they do their first geo inspections and get all their state and federal preapprovals in place we will not see the effects of this tax for another couple of years. But we are seeing the financial impacts straight away, because we were supposed to have a bucket load of money—and I will run through those numbers later on. It was a bucket load of money that was supposed to be generated out of this tax. But that never happened. Counting numbers is not the Labor Party of Australia's strength. Nearly every line item or portfolio that these guys have previously presided over have been absolutely diabolical.

The MRRT has proved a monumental failure when it comes to raising even half the forecast revenue—revenue which the previous government had already spent. That is the clanger. No-one would expect a small business or a medium-sized business in Australia to operate under the conditions under which the previous government set this up. Fair enough if the government had said, 'This is the revenue, we'll wait till it comes in and then we'll invest that into our nation.' But, no, there was an election cycle on. The Left and the Right were at each other's throat. It was like coming to work each day and wondering: who are Labor going to have as their Prime Minister this week? Who are they going to have as their immigration minister? Who are they going to have as their small business minister? It was like a turnstile of revolving personalities in this parliament. As a result of them not being able to get their act together, Australia as a nation was the lesser for it.

Comments were made in this House that the Australian people have spoken overwhelmingly. We now have what one would consider a legitimate mandate. One only needs to have a look at the chairs in this parliament. For the benefit of the Hansard, the chamber we stand in is a U-shaped horseshoe and the coalition numbers consume over half, whilst on the other side, outside of the numbers on its front bench, the Australian Labor Party is flat out getting to the first aisle on that side. What significance has that for Australia? It just means that, for each population block of 90,000, each member has been sent here with a majority from their electorate. Not that the Australian Labor Party is great at listening to the Australian people: one only needs to have a look at the election of their leader, where one gets 18,000 votes, the other one gets 12,000, and the bloke who gets 12,000 wins. So it is not as if they have a great track record at having an acute ear to the Australian public—nevertheless, all that aside.

The mining sector is cyclical. We have spoken about the lead-in time, the five years that it takes. Sometimes it takes longer: we have got coal interests in Queensland which are trying to get up at the moment and they are going to be closer to eight and in some instances 10. Talking about the lead-in times, the coal reserves at one particular lease in Queensland that is being looked at have the capacity to generate out of the Galilee Basin an equal amount of coal to the complete amount generated by the Bowen Basin at the moment. That is the next wave of the resources sector that has the capacity to come on. By comparison, in Mongolia there are Australian companies that have chosen, under the political climate set by the previous government, not to invest in the future of the Australian coal sector. Because it was seen to be a lesser risk, they have chosen to take their investment to Mongolia. The production costs in Mongolia are nearly half ours; their transport costs are half—they are landing it on the Chinese border for around $80 a tonne. How do we compete with that by, as a government, having our hand in the mining companies' pockets? The MRRT is bad for investment in one of our most important industries. Arguably, this is the worst time to be looking to stick on an additional tax.

A comment was made by the previous speaker as to what the problem was about having a tax if you just let it sit there and no-one is paying it. In theory, that is probably not something that needs to be challenged. The problem, fundamentally, is that you have gone and spent the money that was supposed to be generated. You spoke about the schoolkids bonus and how atrocious it is that we are taking away the schoolkids bonus. All you have done—not through you, Deputy Speaker; I do not impugn the chair—all the Australian Labor Party have done, when they talk about the schoolkids bonus and how we have to look after this generation but as a government had this tax, is shackle our next generation of children to debt.

I will put that into perspective, in terms of when this debt is going to be paid down. The current debt ceiling is $300 billion. We are going to have a look at trying to increase that. If we go back into the history of Australian surpluses on both sides of the House and took the highest surplus we have ever had, for the coalition to emulate the best surplus Australia has ever had, given that the economies of the world are very cyclical, we would have to emulate that record surplus for 18 consecutive years to pay down the $300 billion worth of debt. That is what we would have to do. Talk about the schoolkids bonus and talk about looking after the future of the next generation—the best way we can look after the next generation is to stop shackling them to debt. If it is good debt—investment in ports that create revenue, good debt that builds hospitals—so be it, but not debt that has been wasted and squandered.

Mining is one of the biggest contributors to the Australian economy. This tax has translated to fewer jobs in engineering, retailing, finance, accommodation, travel—in fact, every sector of business. I do not have any mining in my area. I am on the Gold Coast hinterland, going up to the top of the Toowoomba range, and it is predominantly an agriculture and tourism sector. But even though I do not have mining in my sector, things are tough. As a result I have fitters, truck drivers, mining engineers and mining bosses who choose to live in my electorate and fly in, fly out, and the number of people coming to me of late and raising concern about the future of the industry is concerning. They no longer have jobs. Is that completely attributable to the MRRT? It would be irresponsible of me to link those two. However, with the Chinese economy softening, coming off the boil, and the Australian dollar having an impact, taking away our competitive strength in global markets once we hit parity, other levers have had an impact in terms of retarding the industry. Has the mining tax contributed to providing confidence in the sector? Most definitely it has not. Most definitely the mining tax has had a negative confidence effect on investors in this sector.

Evidence of that is the amount of new investment coming into the sector. Evidence of that is the amount of current investment now leaving Australia, going offshore. Ratings agencies out of London are now saying that you can buy money to go and invest in a coal mine more cheaply outside Australia then you can in it and they are citing that because of the sovereign risk issues. As a government we should be hanging our head in shame.

I have got figures here which pertain to the forecast revenues that this bill was supposed to bring in—$26 billion, then $11 billion dollars and then downgraded to $10.6 billion. It was downgraded again in the 2012-13 MYEFO to $9.1 billion. Finally in 2013 in the PEFO documents, it is down to $4.4 billion, generating only $400 million. A disgrace. I keep on bringing it to the fore when it comes to economic credibility that the previous government has shown time and time again that it could not hit the side of a barn with a forecast. It is continually out in nearly every facet by roughly around $20 billion.

However, it gets worse. The previous government committed the cardinal sin again of spending the money before they earned it. Small businesses cannot afford to do that. If they do, they put it on an overdraft that becomes an expense. In the same terms, what we have now is an enormous amount of debt, money that has been spent that is going to be shackled to our next generation. To look after our future generations we need to make sure that they have got jobs and that cost-of-living pressures are low. We need to make sure that they have got great education opportunities and, as a coalition and as a Liberal Party member, I accept the mandate that we have to pursue the repeal of this ridiculous minerals resources rent tax.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I oppose the Minerals Resources Rent Tax Repeal and Other Measures Bill 2013 because, quite simply, it is one of the most illogical and short-sighted pieces of economic policy that I have ever seen in my time in the parliament. Australians and their families and, indeed, small businesses are working harder than ever before. They are working longer hours, they feel more under pressure, they are spending less time with their families, and the cost of housing particularly in my electorate is skyrocketing.

The Minerals Resources Rent Tax was a carefully crafted piece of policy aimed at not only relieving pressure for families but also delivering a brighter future for our nation. It came about as a result of the Henry tax review, a careful consideration of the balances required for a future taxation system. The Henry tax review determined that some of our large mining companies were earning economic rents. They were earning superprofits from resources that are owned by the Australian people. I must laugh at the former member's comment that these resources are owned by the states. That are not owned by the states at all, they are owned by the people of Australia. The people of Australia own the resources that are in the ground and once you dig them up and once you sell them—predominantly overseas—that economic benefit is lost and it is lost forever. It is not something that can be picked up by the next generation, it is lost forever. That contribution from the former member typically highlights the approach of those opposite to this particular issue and the policy approach that they are taking in repealing this important legislation. This bill is probably the most abysmal short-sighted piece of policy work that I have witnessed in my time in parliament.

This bill will benefit three large multinational mining companies. Three large multinational mining companies will benefit from the repeal of this legislation, but every single Australian will lose. Every single Australian, except for those three mining companies, will lose under this bill. The great irony is that even those small mining companies that do not have a liability under the minerals resources rent tax, that blindly followed their industry group and were hoodwinked into funding a campaign against the tax, are going to lose. They are going to be worse off. They put their money into a campaign that will make their companies and their shareholders worse off, and they campaigned against the minerals resources rent tax. Incredibly, they paid for a campaign that will make them worse off. It is a laughable irony. It would be comical if it were not so serious: that small mining companies paid for a campaign that makes them worse off, that reduces their profitability. It is incredible. It is laughable.

But what is not laughable is the additional pressure that this decision puts on households and small businesses. The tax breaks and the support for families and small businesses that were funded by the minerals resources rent tax revenue are abolished or put on hold by this government. The minerals resources rent tax and the revenue raised would have funded a number of important progressive policies in our economy, most notably, the increase in compulsory superannuation contributions from nine to 12 per cent.

We have an ageing population. The biggest pressure that is going to come for our economy in the future is not the condition of international relations or the international economy, it is the ageing of our domestic population. At the moment for every 10 people who are over the age of 65 in Australia, there are 52 Australians in the workforce, 52 Australians working and paying taxes to fund our social security, our health and our aged-care system. Within the next 40 years that number will almost halve. For every 10 people over the age of 65 in our nation, there will be only 27 Australians in the workforce. That is going to put massive pressure on our social security, on our health care and on our aged-care systems. We must be encouraging Australians to save more and to build up a nest egg to fund their own retirement. That is the philosophy behind the increase in superannuation contributions from 9 to 12 per cent. It is a simple one, a foresighted one, and it is one that was backed by the former Treasurer Peter Costello in the Intergenerational report.

But because of this bill, because of the repeal of the minerals resource rent tax and the lack of that revenue which funded that policy, we are going to see that increase in superannuation payments from nine to 12 per cent delayed. And you can bet your life, Deputy Speaker, that it will not only be delayed; it will never happen. It will never happen under a Liberal government that they will increase compulsory superannuation contributions. When the Howard government came to office in 1996, what did they do? They instituted a Commission of Audit. Does that sound familiar?

Mr Chester interjecting—

Does that sound familiar, Parliamentary Secretary? It does, and they are going to do it again—another Commission of Audit. And guess what that Commission of Audit will find? I would not mind putting a few dollars on the fact that the Commission of Audit will find that the increase in superannuation contributions from nine to 12 per cent is unaffordable, and it will not go ahead. It will be stopped by another Liberal government, and the opportunity for us as a nation to plan for the future, to put in place an economic policy that ensures that Australians can save for their own retirements, will be lost again. It will be lost again until a Labor government comes to office.

This policy not only funded the increase in superannuation contributions from nine to 12 per cent; it also funded a raise in the compulsory age at which compulsory superannuation contributions cut out. We were increasing that age from 70 to 75, again because of the changing nature of the workforce and the increasing pressure on families to work longer to be able to fund their own retirement. A sensible, foresighted policy again will be lost under this government because of this decision.

I noticed some younger Australians in the parliament earlier, watching from the galleries. They stand to lose quite a bit under this policy because the effect of not increasing compulsory superannuation from nine to 12 per cent is that the average male Australian who is 30 years old, working over the rest of their life, would have had an extra $105,000 in their superannuation account when they retired. So they will end up with $105,000 less in their superannuation account if the increase in superannuation from nine to 12 per cent does not go ahead.

This policy also assisted those on low incomes in Australia. Anyone who was earning less than $37,000 was paid the low-income superannuation contribution, and there was good philosophy behind that policy. It was to ensure that there is an incentive for those low-income earners to remain in the workforce, that they are not crowded out by the effect of welfare payments, in that welfare payments become more attractive than staying in work, because a lot of those people were losing most of their superannuation contributions in taxation. Labor relieved that by introducing the low-income super contribution—gone because of the repeal of this legislation.

Under the original proposal for the minerals resource rent tax, companies would have been better off through a 1½ per cent cut in the company tax rate. Those mining companies that funded that campaign would have had a 1½ per cent cut in their company tax rate had they not taken a negative approach and funded that campaign. They would have also benefited from a resource exploration rebate, which would have refunded some of their costs, those initial lumpy outlays in investment that many burgeoning mining companies have to undertake when they are beginning projects, when they are exploring. They would have got a rebate for that under the original philosophy of the minerals resource rent tax. That was later abandoned; there is no doubt about that. But, again, if it were not for the campaign that they funded, it might not have been the case. So again they did themselves out of some advantages when it came to economic policy.

Small businesses have lost the instant asset write-off, the ability to claim up to $6½ thousand worth of assets and immediately write them off. That was a big boon for many small businesses. I visited a local pub in my electorate last Friday, and I met with the publican. He told me. He said, 'Mate, that instant asset write-off is a great piece of public policy,' because it allowed him as a publican to refit all of the refrigerators in his pub with the assistance of the government. That meant that they were emissions friendly, so he was reducing his carbon liability because he was installing cleaner technology in his business. It was supporting the environment, making our environment cleaner, supporting small businesses and making them more profitable into the future—again lost under the review of this legislation.

It is only three big mining companies that are going to win from the repeal of this legislation, and every other Australian loses. There is no better example of the priorities of those opposite when it comes to economic policies: tax breaks for the big end of town, for the mining companies, for those with superannuation balances over $1 million that are earning a revenue above $100,000. It is beyond me how on earth you can justify that and how you can cut the superannuation tax breaks for those on less than $37,000 and then give a massive tax break to those who have more than $1 million in their super accounts and are earning over $100,000 in revenue from those.

These are resources that are owned by the people of Australia. They are not owned by the states. They are not owned by the mining companies. They are owned by the people of Australia. And these mining companies were earning economic rents from them. It is not unfair for us as a nation, given that these resources do not continue forever and a day, to make a fair return from them and to redistribute some of that revenue to ensure that our economy is sustainable into the future. That is what this policy was all about. It is going to be lost because of the intransigence of those opposite. Imposing a tax increase on 3½ million low-paid workers, 60 per cent of whom are women, through their superannuation accounts in the low-income superannuation contribution is nothing short of scandalous.

Some other speakers from the other side have mentioned royalties and the states imposing royalties. This is the other great irony of this debate. We are going to get rid of a tax which is only paid by companies once they make a profit—above $70 million, I might add. We are not talking insignificant profits here; we are talking about companies that make a profit above $70 million. We are going to get rid of that tax, but we are going to allow states to increase their royalties on those mining companies, not only those that made above $70 million worth of profit but every single one of them, every single mining company, regardless of whether or not they make a profit at all. So here we have a system that we are encouraging by repealing this legislation, in which, if you make a loss as a mining company—you have been working hard all year but you make a loss—you will pay the tax through royalties. You will pay the royalties. What does that do for investment in that particular business? What does that do for job creation in that particular business? That is not exactly government encouraging growth, encouraging exploration and encouraging jobs in that particular industry. It is imposing an inefficient tax.

We propose to replace those inefficient taxes, those royalties that are paid regardless of whether you operate at a profit or not, with a much more efficient tax, one which is paid only once the company earns more than $70 million profit. Yes, for the last year only three mining companies had a liability, but that shows you how fair the tax is. It shows you that only those that are making superprofits, that are making those economic rents identified by Ken Henry, will pay the tax. If you do not make a profit, you do not pay the tax. Those opposite are encouraging a system where if you make a loss you will continue to pay the tax. That is not exactly promoting the interests of business, investment and jobs growth in a very important sector of our economy.

So what do we have? We have a system in which three big mining companies are going to be let off the hook. They are going to pay no taxes under this once it is abolished and every other Australian is going to be worse off. Low-income workers are going to be worse off because the low-income superannuation contribution is removed. Small businesses are going to be worse off because they lose the instant asset write-off. They have lost the opportunity at a reduction in the company tax rate, so those small mining companies that were not even paying the liability for the tax are going to be worse off. Millions of Australians are going to be worse off and three big mining companies are going to be better off. That says everything about the priorities of this government and why this piece of policy, this bill, is so twisted and why I am opposing it.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The member for Kingsford Smith, who has just addressed the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, comes to this place from the Senate. I know he means well. I know that in the Senate they do things differently than we do in the House of Representatives. He talked about investment, jobs creation and growth. What he perhaps does not realise, because he has been in the upper house, is that all we ever saw in this place from his government in the last term and the term before that was wrecking and vandalism of investment, jobs creation and growth. His party, which sat on the treasury bench, did everything they could to stunt growth, to rid particularly rural and regional Australia of jobs and to drive investment overseas. The MRRT sent a message to overseas companies—and the Nationals are in favour of good foreign investment—and so much potentially good foreign investment was driven to countries such as Africa because Australia's wealth creation ability was put at risk by the Labor government. Shame on them for doing so!

The minerals resource rent tax was flawed from the outset. From its inception in the final days of the first tenure of the member for Griffith, Kevin Rudd, at the helm of the Labor government the MRRT was poorly implemented. It was a haphazard policy. We all know that. Labor know that. They understand it but for political reasons they are now pushing to stop us from carrying out our mandate. We went to the 7 September election seeking a mandate to repeal the carbon tax—and Labor is all against that—and to repeal the mining tax—and Labor is all against that. We need to get on with the job of removing the debt and the deficit that Labor has saddled this country with. The member for Canberra is nodding. She understands that that is what we are about and that is what this country needs. It is desperate for us to get rid of the mess that Labor has placed us in.

For this reason the coalition are now keeping our promise. That will be news to Labor, who do not keep their promises. We on this side, on the coalition side, do keep our promises to the Australian people. We will abolish the mining tax and get rid of the toxic carbon tax and put downward pressure on the costs of living for average Australians, Mr and Mrs Average, families, small businesses, medium-sized businesses and large businesses. Do you know what the definition of a 'small business' is, Member for Gippsland?

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

No. What?

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

A small business is what a medium- to large-sized business was before Labor came to power. Now, because of everything Labor has done, those businesses have turned into small businesses. We do know that good small businesses are the engine room of the Australian economy. Unfortunately, under Labor they have been saddled with so much debt.

We all remember that it was the mining tax in its first form that brought down the prime ministership of the member for Griffith. We all know that. On 23 June 2010 he was tapped on the shoulder. The mining tax was a huge issue. That was one of the critical significant factors that brought about the end of the first tenure of the member for Griffith. In typical Rudd government style the mining tax was a thought bubble, designed probably on the back of an envelope and implemented for a headline without due consideration to the ramifications of its implementation. So rushed was this policy that the mining sector mounted a successful campaign for change. It, along with many other factors, brought down a Prime Minister. Even when the member for Lalor, then Prime Minister Julia Gillard, negotiated the MRRT it was still a flawed model that had a flawed outcome for the Australian economy—an outcome that meant that investment was going to be smaller and that meant it was going to cost jobs, security and safety for Australian businesses, certainly Australian mining companies and those mining companies that wanted to invest in Australia.

Despite Labor's talking points saying that the MRRT was about Australians reaping the benefits of our natural wealth, the MRRT allowed the nation's three biggest mining companies to write their own law. It was a rushed policy for the sake of a headline. We all know that Labor were very conscious to make sure that they got good headlines and good press. That, along with GetUp! and all the social media outlets, was what was ruling this country. It was not Labor; it was what the media wanted and what Labor wanted to get out in the media and the social media.

The MRRT disadvantaged what I will call the junior miners—the small businesses, such as the Lake Cowal goldmine near West Wyalong in my electorate in the north-west of the Riverina—and allowed the big miners' profits to continue to grow. This sent a message to the rest of the world, like most of the Labor Party's policy initiatives, that the Labor government was more interested in a news grab than it was in sensible, methodical or strategic governance—and isn't that so true of the Labor government?

That is why it was not surprising to the coalition that in late October last year, the MRRT, the key policy of the Labor Party, which was about sharing the wealth and investing in the regions which produce that wealth—and there is nothing wrong with that—had raised a mere fraction, a smidgen, of what was initially promised. No rivers of gold; no promised dividend from our important national resources; no budget surplus on time as promised. But we all know this landmark policy that Prime Minister Gillard and the then Treasurer, the member for Lilley, told this parliament on so many occasions was supposed to deliver a budget surplus on time as promised was a fallacy. It was flawed policy from the start; that announcement just proved Labor's lack of policy nous.

Unfortunately, the Labor announcements for the sake of headlines did not stop there. Rural and regional members in this place will be well aware that the Regional Development Australia Fund, or RDAF, which was supposed to fund projects in our electorates, including many in the Riverina, was entirely reliant on revenue from the mining tax. I know that in the Riverina $3.2 million in federal funding was promised, and the 13 local government areas that I represent were told that if they got their applications in there would be all sorts of projects that they could fund. I know Wagga Wagga City Council was promised $668,888, and it went right down to Murrumbidgee shire with $123,664. The other 11 local government areas in my electorate were also all promised things in RDAF round 5, which became A. Then the regional development minister, the member for Ballarat, came into my electorate on the Monday of election week and promised half a million dollars for post school options at Griffith, as well as a youth outreach service for Narrandera and five trade training centres. Now I am certainly all in favour of trade training centres; I think they are fabulous. I think this parliament needs to recognise that a trade certificate is just as important, just as valuable, as a tertiary qualification, a degree. Both sides of this parliament have probably not recognised the fact that we need more electricians, more plumbers, more people who have trade qualifications, and that those qualifications are every bit as important as having letters after your name.

Certainly I am very much in favour of these trade training centres. In fact I opened a hospitality trade training centre at Gundagai High School just the other day. They were very much impressed with the facility they had, and I will acknowledge that that money was probably from a Labor government. I am all in favour of trade training centres, but we have upset so many of the other schools that Labor promised it would deliver trade training centres to. I can name them: Batlow Technology School, Tumbarumba High School, Ardlethan Central School, Barellan Central School and Ariah Park Central School. And you could probably throw Temora High School into the mix there as well. They are good schools and they are good kids and they deserve every bit of success, but so many of these projects that Labor promised were not delivered because there was no money there. There were no rivers of gold from the MRRT. Labor came out and said, 'Look, we're going to fund all these projects', but there was never any funding there. Labor promised; it said: 'It's already allocated in the budget. It's already there. The money's good.' But it was not good because it was reliant on a flawed tax, and there was no money—there was never any money.

As far as the RDA funding is concerned, the scheme was supposed to go to financial year 2017-18, and yet as of the 2013-14 financial year all the money has just about been allocated. Labor are carrying on about funding their promises—we are expected, now we have come into government, to fund all Labor's promises—when they did not even intend to fund them themselves! There was no money to do it, so I do not know exactly how they were going to fund all of these projects!

Nobody criticises the projects in the 13 local government areas I represent. Certainly the trade training centres throughout the schools I represent, and certainly the Griffith post school options for disabled people and their families who really desperately need that care and those options for after-school training and initiatives, and certainly the youth outreach centre at Narrandera—I am really angry about it because they are good services, but we cannot fund them because there is no money there. Labor has absolutely spent the lot. That is also why we have to raise the debt level ceiling, because we cannot continue to spend that which is not there.

Riverina families understand it; Riverina businesses understand it: you cannot keep spending money that you do not have. Anybody who has ever been in business, anybody who has ever had to put in a BAS, anybody who has ever had to make sure that they feed their families knows that you cannot spend more money than you earn. The trouble is that when you looked across to the opposite side—and I looked at them in the last parliament when the numbers were very even—you could see people who had not been in business. They were all from the union sector. There is nothing wrong with that. I was in a union myself once upon a time, for 21 years, which is probably longer than many of the Labor members; I was in a union myself, so I recognise the role they play. But I was also in business; I ran a business for eight years. It was tough work; it was really hard work.

Ms Brodtmann interjecting—

The member for Canberra says that she ran a business for 10 years, and good on her. I am sure it was highly profitable. But I am sure the member for Canberra would not have spent more money than she earned because, if she had, she would have been out of business; if she had, she would have been out of a home; if she had, she would not have been able to feed herself—and that is the critical thing. You cannot keep spending more money than you earn. The whole problem with the MRRT was that it never raised the money, the rivers of gold, that Labor said it would, that Labor promised it would. But we all know that Labor promises are always empty. They never deliver on what they say they are going to do, and it is such a shame.

In his farewell speech last week, the member for Griffith said that politics is all about power. Unfortunately, we have seen for the past three years particularly, and probably going back over the last six, that for Labor politics was all about power. But it should not be about power; politics is about people. The people of Australia matter and they need to know that they are going to have a good, sensible, methodical, adult government. That is why, on 7 September—the last time I looked the election result was 90 seats to the coalition, 55 to Labor, one Green, one PUP, one Katter Party and two Independents so that makes it 90 to 55.

The people of Australia have spoken. They gave us the mandate to repeal the carbon tax. Yet that side is fighting so hard and so desperately and using all sorts of excuses to stop that mandate that we have got, both here and blocking it in the Senate, which is just mischievous. I think a Prime Minister once called it 'unrepresentative swill'; I wouldn't be so unkind as to call it that, but in some ways Paul Keating was right. He was probably standing right here where I am now when he made that comment. We have been given a mandate to repeal the carbon tax. We have been given a mandate to absolutely repeal the mining tax—and we will do it, because that is what the Australian people want us to do. That is what the Australian people said when they went to the ballot box on 7 September.

The member Canberra knows that, the member for Throsby understands that, and the member for Kennedy understands it. They know that this government was put into place to get rid of that toxic carbon tax. They know that this coalition government—this Liberal-National government, this Tony Abbott-Warren Truss government—was put into place to absolutely get rid of the mining tax. Because politics is about people. It is about serving the people who elect us to do the best of our abilities. Keeping the promises we make to the Australian people is at the heart of everything we will do over this term of government of the 44th Parliament.

It is why we are moving to abolish this mining tax today—a national mining tax which, for all its promises, for everything Labor said it would do, it never did because it was a flawed policy. It never realised and reaped the benefits that Labor said it would. That is so typical of Labor—they go out there, they try and sell something, they half do it and they cock it up. That is why the people spoke on 7 September, that is why the people have put us into government and that is why we will get rid of this dreadful mining tax.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I sit under a large picture of John McEwen. For those of you who have had the intelligence and intellectual curiosity to read my history of Australia you will see the pivotal role that McEwen played in the history of this country. No sooner had Bob Menzies become Prime Minister for the second time than he announced a revaluation of the pound. Jack McEwen two days later announced a devaluation of the pound. He was not leader of the Country Party in those days, but I think he was titular leader of the Country Party. Two weeks later the pound was devalued. In the first trial of strength Jack McEwen proved to be the person that was the more powerful one in the governing of Australia.

The party that I represent proudly carries the banner handed down from those people. We are the only party that carries that banner. The party that I represent has a direct line back to the Country Party that three times brought down the government by taking a stand for the people that they represented. On two occasions, I would argue, that was a battle over revaluation or devaluation. The National Party in this place sat back supinely and did nothing about the dollar being driven up by Peter Costello from 52c to over 90c, which halved the income for every single mining company in Australia. They had their income halved because the dollar had doubled in value. I hope the members of the opposition are not preening themselves, because that mob had 12 years and the ALP only had six years. But they were able to drive it up another 50 per cent in the six years that they were there, leaving, of course, mining on its knees in Australia.

Another body blow was the mining tax. I would agree with the previous speakers on the government side in saying that it had a disastrous and unexpected—in fairness to the government of the day—consequence. The Ernest Henry mine in Cloncurry—one of the four or five biggest copper mines in the country—immediately closed. The Treasurer, quite rightly, said , 'They're playing games,' and I quite rightly pointed out that it was not a marginal operation; it was a less than marginal operation. It was kept going to ensure the copper stream at Mount Isa kept going. If you cut off Cloncurry there is a question mark hanging over your copper operations in Mount Isa. Therein lay the very real, immediate and cold face problem that was created by the mining tax. I thank people in the two major unions, the AWU and the CFMEU in this area, who exerted tremendous pressure. I regret, obviously, that that pressure resulted in Kevin Rudd being thrown out as Prime Minister of Australia.

There is a curiosity in Australia. The newspapers and the media say, 'We have a trade surplus. Isn't this wonderful.' Well, it is. I would love my country always to have a trade surplus, and we really haven't had one for about 40 years—certainly 30 years. So this trade surplus is a magnificent breakthrough. But I would be far more interested in a current account surplus. I don't think anyone has ever heard that phrase before—'current account surplus'. We have a massive current account deficit. In fact, this country, every year becomes five per cent poorer—in the money going out and the money coming in there is a five per cent deficit. So each year Australia becomes poorer. If you are a person operating a business the business is going backwards if each year you are making a five per cent loss. That is the situation in Australia. Each year we make a five per cent loss. The debt is just accumulating, worse and worse and worse, the greater the pile of debt.

Our curiosity should be piqued. How can you can have a trade surplus but a current account deficit? The trade surplus comes from the massive increase in coal and iron ore sales overseas—and now, to some degree, gas. I might mention aluminium, copper, silver, lead and zinc. But the massive production in these areas has resulted in us getting a trade surplus. Agriculture counts for nothing. In 1990 the world's greatest treasurer, Mr Keating, deregulated the wool industry. Wool was bigger than coal, but Mr Keating—with his clever deregulation, which was followed by the LNP, who deregulated every other industry in Australia—completely wrecked the wool industry, as you would be well aware, Mr Deputy Speaker Scott.

Why have we got this current account deficit when we have this huge amount of money in from coal, iron ore, gold, aluminium and gas? It is because it is all foreign owned. The money comes into Australia and then just boomerangs back out again, because we do not own BHP. There are those who will argue that we still have an Australian majority shareholding. I would argue that we do not. In any event, BHP in many areas is in partnership with other people, and that most certainly waters down any Australian ownership. We can thank Marius Kloppers, I think, for keeping BHP in Australia, but I do not know for how much longer. Mount Isa Mines was Australian owned, BHP was Australian owned, Western Mining Corporation was Australian owned, Normandy was Australian owned and CRA—whilst it was not Australian owned—most certainly was an Australian-run company. CRA now does not exist. Conzinc Riotinto Australia is now Rio Tinto, a foreign-owned corporation; Normandy has broken up and is completely foreign owned; Western Mining Corporation has broken up and is completely foreign owned; Mount Isa Mines is completely foreign owned; and BHP is predominantly foreign owned. But 83 per cent of the mineral resources of this country are now foreign owned. So if you want to look for the answer as to why our current account deficit is the way that it is—each year 50 or 60 thousand million dollars is bleeding each and every year. To put that in perspective, when the much-maligned Fraser government left office, I think the current account deficit was around two or three thousand million. I say 'much maligned' because I think it was a very unfairly maligned government. They held the dollar on restraint and they restricted down the value of the dollar. God bless them.

The current account will get worse and worse and worse, because Australia does not own anything. We do not own any of the dairy factories. We do not own any of the sugar mills. We do not own any of the mining companies. We do not own any of the gas resources. What the hell do we own? What is left in this country that we do own? I think it is just very, very little. The reason for the current account is: we are a country that is completely out of step with the rest of the world. I enjoy coming into this place so much because I can say, 'Yes, I am out of step with everybody in this place'—there is no doubt about that—but I happen to be in step with the rest of the world. The rest of the world has interest rates of 0.2 per cent. The OECD average for the last three years, the last time I looked, was 0.2 per cent. The last time I looked we were on 2.7 per cent. If you are on 2.7 and the rest of the world is on 0.2, everyone is going to be putting their money into Australian dollars. And when they do, the dollar goes through the roof. You do not have to be Albert Einstein to work this out. That has been the death knell of agriculture in this country. Very few people are aware that we are not a mining country anymore. A mining country is a country that digs it up out of the ground and sells the metal. We are not a mining country; we do not do that. We dig it out of the ground and we sell the ground. We are a quarrying country. There is a huge difference.

I worked in the lead smelter at Mount Isa mines, and there were many more people working in the processing plant than working underground. So the mining part of it—or the quarrying part if you like—was small compared with the processing element. And the processing element is lost to us. The cost of gas is one thing. Fertiliser manufacturer Incitec are watching their gas prices go from $2 to $3 to $9.50. It is a diammonium phosphate plant. Ammonia is what you get from gas, and gas prices have gone up 300 per cent in the space of two years. Things are going to be very, very difficult for them. We saw the stupidity of the ALP government in Queensland in putting a gas-fired power station into Mount Isa to supply all of our mines, and our great fertiliser plant, the biggest in Australia at Mount Isa Mines—was put on gas-fired electricity, which has put the price through the roof. In any event, the reason that we secured the aluminium industry in Australia was that the Queensland government built the biggest power station in the world at Gladstone. It is state of the art, state of the technology, and the biggest—economies of scale. But the important issue was that it was fuelled on free coal. We had a reserve resource policy.

I would plead with the current government to do what the West Australian Liberal government has done and have a reserve resource policy with gas so that they can have cheap electricity. When we had the super-cheap electricity in Queensland, we got the aluminium industry. Tasmania did the same with the hydroelectricity. We had super-cheap electricity, so we got an aluminium industry.

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

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The member for Kennedy will have leave to continue his remarks should he wish to do so.