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

I move:

That all words after "That" be omitted with a view to substituting the following words:

"While not declining to give the bill a second reading, the House recognises the benefits of a strong mining sector, and supports a fair taxation system to share the benefits of our minerals wealth with all Australians."

Labor believes strongly that the mining industry has an important part to play in Australia's economic prosperity. The shadow Treasurer was indeed just commenting to me during the division about his recent visit to the Santos control centre in Brisbane, and I have enjoyed many productive conversations with Australia's miners. Mining constituted 80 per cent of the growth in the last quarter, giving a lie to those who have run a scare campaign suggesting that a profits based mining tax would debilitate the mining industry.

In a recent speech the shadow minister for resources, the member for Brand, gave to the Australian Resource People Summit in Perth, he noted several important facts about the future of the LNG industry:

In the none-too-distant future revenue to the Commonwealth and to the States of Australia from LNG production will be greater than the revenue from iron ore.

Already LNG has surpassed coal.

He said:

Think of LNG prices as one blade of a set of shears and productivity as the second blade of the shear.

The member for Brand also talked about the importance of floating LNG and the innovation that comes from maritime engineering excellence, referring to the embrace of floating oil production in the Timor Sea in the 1980s and discussing the transformation that is taking place worldwide with the United States on the verge of becoming a net energy exporter for the first time since World War II. In South America, the newly widened Panama Canal opens next year, which will provide passage for an estimated 12 million tonnes of LNG a year, a thought no-one had in the planning six years ago when the work to widen the canal began. There are 16 floating LNG projects now—in Israel, Indonesia, Brazil, Canada, Mozambique and the United States.

The mining industry has a strong future and we on this side of the House welcome that. We do, however, recognise that it is important that there a fair tax regime in place. On this side of the House, we have made that case from an equity perspective. Those on the Labor side of the House tend to be more concerned about inequality than those on the coalition benches. But there is also a conservative argument for it, a Burkean argument for it. As Edmund Burke said, we are here not just for the current generation; we are informed by the generations that have gone before us and we need to make decisions for the generations to come. A fair resource tax system for minerals in the ground is absolutely fundamental to that. As Ross Garnaut noted in his excellent new book Dog days: Australia after the boom:

More and more of the load is carried by income taxpayers with limited opportunities for avoiding taxation, and is economically distorting, unfair and probably politically unsustainable.

He pointed out that one of the benefits of carbon pricing was that it lowered the taxes on work while increasing the burden on pollution.

The measure in the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014 is a sensible measure to prevent base erosion within the mining industry. It was first announced by then Assistant Treasurer David Bradbury in the 2013-14 budget. There was an Assistant Treasurer who was serious about tax reform, a man who has now taken up a senior position, not a political appointment but one won in his own right, focusing on taxation in the OECD. Yet, now, this government not only lacks an Assistant Treasurer of that calibre, it indeed has no Assistant Treasurer at all. While Arthur Sinodinos has stepped aside, the government is left with the finance minister sharing the burden of Assistant Treasurer. That cannot be the entire explanation for the government's bumbling and its hapless performance in selling this budget, but the lack of Arthur Sinodinos's voice into the budget preparation is surely part of that. On this side of the House, we support sensible measures to prevent base erosion within the mining industry. We recognise that it is important to protect the concession that allows companies to immediately deduct costs incurred in genuine exploration activity, but that in recent years it has been apparent that companies were using this deduction to claim expenses not associated with genuine exploration activities.

The measures in this bill amount to more than a billion dollars of government revenue over the forward estimates. That is a good thing and is welcomed by this side of the House. What is less welcome is that while the government is closing this particular loophole, it is leaving many other loopholes open. More than a billion dollars has now been forgone in measures that were to tackle base erosion and profit-shifting. More than a billion dollars is around the price of a new hospital; a new hospital that could have been built if this government had been serious about tackling multinational profit-shifting. It is a government that is happy to talk the big talk in the G20. In Davos, the Prime Minister said: 'The G20 will continue to tackle business artificially generating profits to chase tax opportunities.' Fine words, but how have they been backed up in action?

Unfortunately, the only action this government have taken on multinational tax integrity is to dump Labor's thin capitalisation reforms and to show strong signs that they are going to backtrack on the transparency measures, measures that would see the largest 200 companies in Australia publish their tax paid. It is a reasonable measure that has been certainly supported by all of the constituents whom I have spoken to about it, and reflects the fundamental notion in integrity that sunlight is the best disinfectant.

The government wants to bring this secrecy back when it comes to reporting tax paid. It wants to dump measures on multinational profit-shifting. To be specific, Deputy Speaker Broadbent, because I know you like the specifics on these things, the government has dumped a measure for reform in the offshore banking unit regime, costing the forward estimates $180 million. It is not going to proceed with legislative elements of the measure to improve tax compliance through third-party reporting and data-matching, costing the budget $113.1 million. It will not proceed with changes that would have applied to multiple-entry consolidated groups, costing the budget $140 million. It will not proceed with the abolition of section 25-90, costing the budget $600 million. It will not proceed with changes to offshore banking units, costing the budget $100 million. The total of all that is $1,133.1 million. Over a billion dollars in measures that protect tax integrity have gone by the wayside from a government who say everyone has to bear the burden.

Everyone is not bearing the burden and Australians will be rightfully outraged when they see that this is a government that is going soft on multinational profit-shifting, so it can go hard on single mums, the unemployed and pensioners. That is not sharing the burden; that is transferring resources from the most vulnerable to the most affluent in the community. It is a government that thinks it is okay to spend $40 million raising the non-concessional superannuation cap on people who put more than $150,000 a year into super. Putting it at 15 per cent a year, we are talking about people with million-dollar incomes. So the government sees fit to put aside $40 million to assist people with incomes of $1 million a year or more, while at the same time saying to unemployed Tasmanians in the north-west of Tasmania, where I visited recently with Senator Anne Urquhart, that they have to wait six months in order to get unemployment benefits—that they are to be punished, effectively, because the unemployment rate on the north-west of Tasmania is higher than the national average. It is a dreadful measure, and one which could have been averted if this government were serious about cracking down on multinational profit shifting.

Honourable Member:

An honourable member interjecting—

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

I hear an interjection across the chamber about the Greens, who, of course, joined with the government to put in place a measure for unlimited debt last year and will join with the government again to put in place an unfair parental leave scheme—tens of billions of dollars going to the most affluent Australians.

These sorts of measures are deeply concerning to the Labor members on this side of the House. The measure that we are debating today is a Labor measure, brought forward by the great tax reformer David Bradbury. And we are pleased to see it implemented—make no mistake. But we want to see the government have as much enthusiasm about closing the other tax loopholes which are currently causing the burden to fall on the most vulnerable Australians.

Compared to the honest benchmark—as the member for Cook noted yesterday, the only honest benchmark—the Pre-Election Economic and Fiscal Outlook, the budget deficit is increased this year, next year and over the forward estimates. This is a budget that breaks promises. Worst of all, it is a budget that is deeply, deeply unfair. We need a government that is serious about cracking down on multinational profit shifting, and we do not have that government today.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

I second the amendment.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I rise today to speak to the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014. This bill limits the immediate deduction for expenditure on mining, quarrying and prospecting rights, and information first used for exploration. The measure will make the cost of these rights and information deductible over 15 years or the effective life of the right or information, whichever is the shorter. This bill is intended to remove the exploration tax concession for trading of late-stage exploration rights and information where the price is expected to reflect the value of resources discovered rather than the right to explore. The measure will improve the focus of the immediate deduction on genuine exploration and on the acquisition of unexplored tenement rights from issuing authorities.

This bill is very important to ensuring that the mining industry—in particular, coalmining—can continue to grow and thrive in the Hunter. The coalmining industry is a source of employment in the Hunter, and the benefits flow on to non-direct mining industries, such as mining equipment sales and manufacturing—even right down to the coffee shop that sells the miners breakfast and lunch. We need to continue to encourage the industry's leaders to search for new territory so that new opportunities can be gained for our residents.

I will turn now to the carbon tax and the mining tax. The Minerals Council of Australia estimates that around 10,000 jobs were lost in the past two years after prices for thermal and coking coal fell by between 50 per cent and 70 per cent. In my area this rings true, and over the past year we have read about hundreds of jobs being shed from coalmining, with only a small percentage being sent to another mine located out of the Hunter. The council also blames the carbon tax, which is an $800 million impost on the coal sector. And not a single competitor abroad pays that tax.

The fact that the carbon tax is still crippling the economy astounds me. Does the Labor Party want to stifle Australia from keeping its AAA credit rating and stop Australia succeeding in the global marketplace? The coalition government has introduced legislation to repeal the crippling carbon tax and the massive mining tax. The carbon tax is stifling Australia's economy, and we have been charged with the job of getting Australia's economy moving and improving. The Labor Party needs to get on board and repeal the crippling carbon tax and the mammoth mining tax to reduce the cost pressures on mining and mining related businesses. These businesses can expect costs to fall by around $87.6 million per annum as a consequence of just repealing the carbon tax.

The carbon tax removal legislation has already passed this House. There is only one person standing in the way of getting it through the Senate, and that is the Leader of the Opposition, Bill Shorten. He and his Labor senators have refused to listen to what the Australian public have said. So Bill Shorten needs to make a decision: does he stand up for those jobs in the mining industry or the interests of the green movement? Repealing of these taxes will boost business confidence and assist in growing the economy.

There is no doubt that mining is important to the Hunter. To demonstrate the effect of the mining industry in my area, I would like to call upon a report from Deloitte Access Economics, Prospects and challenges for the Hunter region. This study found that 40 per cent of the state's coal resources are located in the Hunter Valley. It also found that the mining industry accounts for almost a quarter of the Hunter's economy. That makes it the major direct employer, with the industry employing around 17,700 full-time workers. This figure represents about 7.2 per cent of the regional workforce. The report predicts that the Hunter's mining sector is expected to expand over the next 20 years or so, with additional coal production and the emerging coal seam gas sector. The mining sector is projected to contribute 24.2 per cent of the total regional output in 2036, representing an increase of almost two per cent from 2012. With that expected increase in coal and coal seam gas production, we need to stop red tape getting in the way of future Hunter mine owners finding the product. We need to cut the red tape getting in the way of opportunity and increasing Australia's economy.

The nondirect mining industries of construction, transport and wholesale trade that contribute to the Hunter coal supply network rely on this industry continuing its success. The workers in these mining related industries constitute around 15 per cent of the economy, and employ around 37,400 full-time workers.

To bring it home, recent job cuts in the mining sector have seen unemployment creep up to 5.5 per cent. The mining downturn in the Hunter and the recent closes of Glencore and Integra coal mines have had an impact. In the Hunter we have witnessed the recent job cuts in the mining sector. In March Australian coal mines succumbed to the cuts pressures in the industry, with mining giant, Glencore Xstrata, announcing the closure of Ravensworth Underground Mine in the Hunter Valley. With thermal coal prices slumping close to a four-year low, the Hunter Valley mine was no longer profitable and will be closed by September. This closure will affect around 130 workers at the mine and it follows several other coal mine closures and deferrals of new coal mines over the past two years.

The Glencore Xstrata statement blamed the closure on low coal prices, high mining costs, the higher Australian dollar and geographical constraints. The closure has been coming for some time, as the mine had previously shed 35 workers late last year. And the carbon tax and the mining tax are all cost imposts on the mining industry.

Glencore Xstrata is the world's biggest exporter of thermal coal. It has already reduced its Australian workforce by more than 10 per cent over the past 18 months in a bid to improve its productivity and its profits. Then, just last month we learned that Integra is to slash 500 jobs from the Glennies Creek underground mine and the Camberwell open-cut mine near Singleton in the Hunter Valley—again, blaming coal prices. Integra told employees that although operations would be shut down, facilities would be maintained. It has also blamed poor coal prices for its decision. However, the good news is that the mine will still be maintained and only closed until profitable again.

Coal prices have dropped more than 30 per cent over the past two years, forcing many companies to reassess their operations to ensure that they are economically viable. The company had been planning to start a new longwall operation at the Glennies Creek mine, but that project is now uncertain.

That is over 600 workers in the Hunter alone. We need to help the industry to become profitable again. We need to cut the red tape and repeal the mining and carbon taxes so that we can be competitive in the global marketplace and increase employment in the area.

The mining downturn affects other industries, all the way through hospitality, manufacturing and even medical. The effects of the mining downturn do not stop at the mine workers. The effects flow down through the nonmining related businesses that supply the mines, their workers and their families. The Newcastle Herald's Ian Kirkwood recently profiled three Singleton businesses. Mr Kirkwood profiled Singleton contract company, Pit Patrol, Hunter Valley Glass and Windscreens and the Coal Rock Coffee and Cafe. Pit Patrol's general manager, Aaron Goadsby, said:

Pit Patrol began in 1993 with a single utility servicing the Camberwell mine.

Now, the company did courier work for most of the region's mines, and had two dozen utes and a dozen trucks, with subcontractors' vehicles taking the fleet to 50.

Like a huge range of Singleton and Muswellbrook businesses, Pit Patrol is feeling the pinch from the mining downturn.

The article continues:

At Hunter Valley Glass and Windscreens, David Flynn said he supplied to "everyone in the community from a mirror in a house to multinational coal companies".

With 14 employees on the books, he, too, had avoided the need to reduce his staff, but he acknowledged that mining companies had "asked for efficiencies" from suppliers like him.

And finally:

At Singleton's Coal Rock Coffee and Cafe, Donna Valentine said things were very quiet early in the week.

"It's very hard to make it balance on Mondays, Tuesdays and Wednesdays" …

She said that due to the miners' anxiety regarding job cuts that there had been a downturn in spending:

… they put off buying that takeaway coffee or that sandwich."

That was a report written by Ian Kirkwood.

I want to turn to WesTrac and their factory partial closure. WesTrac make mining equipment, and they laid off workers from my electorate in Paterson. This was despite receiving a federal grant of $6 million for the facility at Tomago. The 630 job cuts announced by Caterpillar Earthmoving Equipment agent, WesTrac, last year made my electorate of Paterson an indirect victim of the slump in the coal-mining industry. Many of my constituents made up the workforce at the new Tomago headquarters. The Tomago workers were the hardest hit, with an estimated 210 jobs going from the firm's Hunter workforce of around 700.

This employer was one of the mining related businesses in the Hunter region which was reacting to the end of the investment phase of the mining boom. Unfortunately, it will not be the last. This particular business' job cuts came as a surprise to my electorate, following a significant investment by the federal government into that business back in 2007. But that is the impact that the coal-mining industry has had on the community in the Hunter as a whole.

It also further added to the issues of youth unemployment in Paterson, as half of the job losses were apprentices. These young men and women began their apprenticeships in the belief that they were pursuing a steady, lucrative and responsible career path. The youth unemployment figure in my electorate of Paterson is nothing to celebrate. The Australian Bureau of Statistics estimates that the unemployment of 15 to 24-year-olds sits at around 7.1 per cent, and if the industry stays in this state of downturn it is a figure that will only increase.

There is no silver bullet to fix this problem, and we need to save them from a life on welfare dependency and get them into our workforce. We can do this by cutting the red tape and allowing new employers to enter into the area, and by allowing the spirit of opportunity to take hold. As I have said before, I believe that anyone can succeed with opportunity, enterprise and ambition. The question I ask is: why are we still stifling entrepreneurial Australians from achieving their maximum potential? The answer is: Bill Shorten.

The former Labor government left us with a big financial debt—a massive debt. And we are charged with the responsibility of cleaning it up. They recklessly overspent and under planned. It is we, the coalition, that have brought responsibility back to spending. It is we, the coalition, that have begun cutting bureaucratic red tape. It is we, the coalition, that are trying repeal the crippling carbon tax and the monstrous mining tax. It is we, the coalition, that are standing up for sustainability and for Australian jobs.

We need the Labor Party to help push these bills through so that Australian businesses are placed back into a position where they are able to thrive, invest and create jobs with confidence. I pledge my support for this bill in its original form. I hope it will inspire those with an interest in coal mining, quarrying and prospecting to take an opportunity and dare to dream. And, by taking that chance, declare to the world that Australia is indeed open for business and a player in the global market.

I commend the bill in its original form to the parliament. I reject the amendment moved by the previous speaker, Dr Leigh.

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Tax and Superannuation Laws Amendment (2014 Measures No. 3) bill 2014. The changes to immediate deductibility that the bill seeks to enact were committed to by the Gillard government in March last year and legislated by the coalition this month as part of a package of bills to restore simplicity, fairness and integrity to the Australian tax system.

This bill seeks to better target tax deduction on expenditure granted to the taxpayer to 'genuine exploration activity' in the procurement of mining exploration rights and information.

In order to give my fellow members background to the concerns which gave rise to the bill, I quote from a statement by the Gillard government Treasury on the 14th of May 2013:

Some taxpayers are claiming an immediate deduction for mining rights and information purchased at a late stage, after natural resources have effectively been discovered. If the purchaser then undertakes some limited additional 'confirmatory' activity, they can claim an immediate deduction for the full purchase price. This means that the immediate deduction is effectively claimed for the value of natural resources that have already been discovered.

The Gillard government announced in mid-2013 that it would legislate to revoke immediate deductibility for assets first used in mining exploration, with the exception of mining rights acquired from the government and farm-out arrangements.

In recent years, concerns have arisen that immediate deductibility was being taken advantage of in cases where no 'genuine exploration' is intended, such as the case in which a taxpayer who is already aware that a commercial opportunity exists in the area targeted for exploration. The imaginary scenario provided in the previous government's proposal paper outlined a situation in which initial mining rights by Explorer Coalition. are met with an immediate $10-million deduction after Explorer Coalition. carries out significant exploratory work on a site at considerable cost.

However, Explorer Coalition. goes on to sell mining rights to the same site to Miner Coalition. for $300 million. Now, Miner Co. may carry out some minor 'confirmatory' exploration work in relation to the same site, which had already been subject to exploration by Explorer Coalition., but is essentially already aware that the site contains the resources which are being sought for commercial exploitation.

But Miner Coalition. goes on to claim an immediate deduction of $300 million for the cost of acquiring the mining rights, despite carrying out only cursory 'confirmatory' exploration work. This scenario is the essence of the integrity and tax erosion concern that the government has and provides a clear example of the way in which industry practice is going beyond the original policy intent of the Income Tax Assessment Act 1997.

To summarise the purpose of this bill, I quote from the explanatory memorandum:

This bill is an integrity measure which is designed to ensure that the immediate deduction for rights and information fulfils its original purpose of encouraging genuine exploration. There was evidence that the immediate deduction was being used to obtain a deduction for the value of resources already discovered rather than for the right to search for yet to be discovered resources. This is outside the policy intent of supporting genuine exploration.

Therefore, these changes were announced by the previous government with the aim of protecting the tax base from erosion and restoring integrity in taxpayers' deductibility claims for the purchase of mining rights and information from another taxpayer. This is an intention to guide tax policy which the coalition fully supports and is now implementing. Once the legislation is in effect, expenditure on assets used in exploration by taxpayers will depreciate over the life of the asset or over fifteen years, whichever comes first. The initial acquisition of mining rights and information from government issuing authorities will not be affected by the changes, as it is industry practice in acquiring exploration rights from other taxpayers that is presenting an integrity concern.

The components of the bill also still provide immediate deductibility to expenditure incurred following the generation of new mining information or the acquisition of geophysical or geological information data packages.

Furthermore, co-exploration agreements or farm-in farm-out arrangements, which often involve small explorers, will not be affected. These arrangements grant third party access to a mineral interest for the purposes of testing, drilling or exploration. It is also important that the government will continue to provide immediate deductibility for the costs incurred by a taxpayer themselves in generating new information or improving existing information.

All of these exceptions demonstrate that the bill does not seek to merely protect the tax base or save money by removing concession measures. Rather, it seeks to provide tax concessions for genuine exploration activity. There are a number of benefits to the mining sector, the government, and the Australian people which we will gain as a result of passing this legislation. Firstly, projected revenue in excess of $1 billion over the forward estimates will be credited to the government from reduced or targeted tax concession to the acquisition of mining rights and information.

Secondly, this is an integrity measure, and as such an essential in protecting the tax base from erosion by overuse and misuse of tax concessions. Just as one duty of government is to provide tax concessions to activities and initiatives which benefit the Australian community or take the strain off the public sector, it is an inherent obligation of government to protect the tax base from misuse and to preserve concessional tax measures for the purpose for which they were originally intended. It is only by preserving the tax base that the government can continue to incentivise those activities which provide significant spill-over benefits to the economy.

Thirdly, by limiting tax concessions to genuine instances of exploration, the government will provide incentive measures for genuine exploration while resolving significant integrity concerns. By changing concessions to the mining sector from immediate deductibility to depreciation over the shorter of fifteen years or the life of the asset, this bill ensures that while concessions remain they will be better targeted to the original intent of the concessional measures.

It also ratifies the original policy intent of the measures, which should always be in mind when governments amend legislation, and ensures that tax concessions are only granted for activities which legitimately benefit the Australian community and economy, not exploration rights sought for the purposes of deductibility.

Ultimately, the bill restores and maintains the integrity of the tax system and mining sector interaction with the system. In legislating in this area, the government is remembering how important it is to continually re-evaluate how taxpaying bodies interact with tax concession schemes to better target those activities which have spill-over economic benefits for Australia.

A further benefit which was at the forefront of the government's mind when introducing this suite of legislation was certainty. When business is met with instability and hesitation in projected legislation, it is afflicted with operational uncertainty. This was the case in this area of legislation. When the coalition assumed government last year, we found that as many as 96 measures in the area of taxation and superannuation reform had been announced or proposed and then never legislated. Some of these announcements dated as far back as March 2001; a case of governmental procrastination which had become unacceptable, given the impact that such announcements have on the business community and the decisions it makes about how it is to operate.

Operational uncertainty is one of many consequences of unstable and irresponsible government which paralyses the market. By finally legislating in this area and providing business with certainty as to government policy, the coalition is providing certainty to businesses and consumers, boosting consumer confidence in a new way.

I want to speak briefly about the coalition's appreciation for the mining sector. The government supports the mining sector because the government wants to see a strong Australia and a strong economy which produces jobs for Australian workers. Indeed, the mining sector has provided Australia with one of the most significant areas of economic and jobs growth that we have seen over the past twenty years. Our minerals and resources sector has been the great wave of growth that our country has ridden into the 21st century. It is a cause of great national pride, and government should not seek to hinder or clamp down on the productivity of the sector.

However, the government's strong support for the mining and exploration sector does not mean the government will sit back and relax about tax-base erosion or integrity concerns. It is because we support mining activity to such an extent that we have to safeguard the sustainability of the sorts of tax concessions we provide the sector. If we continue to see the sort of tax-base erosion that has been produced by the increasing number of deductibility claims in this area, the government will be unable to deliver on its intention to provide tax concessions. Put simply, threats to Australia's tax base are ultimately a threat to Australia's sovereignty. Our aim entering the election period was to restore integrity and fairness to the Australian taxation system, and this bill is one measure which goes towards fulfilling this aim. Furthermore, we are resolving the legislative backlog which resulted from years of governmental procrastination and stagnation. Such backlogs produce operational uncertainty in business, in this case within the mining sector.

Ensuring the compatibility of the Australian tax system with a productive private sector, especially in the case of Australia's signature resource sector, has always been a priority of the coalition. However, it must be fair and simple, and any amendments must be delivered with legislation so that we do not cause unrest or uncertainty for business. This commitment is in line with our pledge to provide stable and predictable government.

Restoring integrity to our tax system and resolving the legislation backlog left by our predecessors is an ongoing task. However, the progress on these goals accomplished by this legislation is significant, and this is a bill worthy of your support. Thank you.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I would like to start by thanking all those that have contributed to this debate—in particular, those on the coalition side who made a contribution that I thought was appropriate; they recognised the bill that is before the House. It stands in stark contrast unfortunately to the pious amendment that has been moved by the shadow minister at the table. I have to say that is entirely consistent with Labor's failure to recognise the results of the last federal election and entirely consistent with Labor's ongoing commitment to their mining tax. The amendment moved by the shadow assistant Treasurer once again attempts to portray Labor's failed mining tax as in some way being a fairness tax or a benefit to Australia and to her people.

One wonders how long Labor will keep up the charade of being supportive of a mining tax that has some $16 billion or so of expenditure associated with it, but in reality—as we saw in yesterday's question time answer from the Treasurer—placed Labor on a platform where it missed the projection by some 97 per cent. I think the Treasurer described it as a 'once-in-100-year event'. But the most telling aspect of it is that the Australian Labor Party—still, on a bill like this—attempts to make mischief and attempts to hold out that the mining tax is in some way in the interests of the Australian people. The amendment that was moved underscores yet again how completely out of touch the Labor Party is. Frankly, it baffles me how a former government, a now opposition, could continue to pretend that this tax—which has failed to make 97 per cent of its forecast revenue, and is being thrust once again before the House as part of the national debate about the future of our country—is in any way, shape or form a positive step.

I would have thought that any sane person, having put forward a policy initiative and having seen that policy initiative raise three per cent, approximately, of its forecast revenue—a policy initiative that is responsible in part for some of the significant tens of billions of dollars of debt this country faces—would run a mile from it. But, instead, the Australian Labor Party actually puts it up as a pious amendment to the bill that is before the House as some kind of pathetic, desperate grasp to say, 'Don't worry about the actual results; let's just keep all the discussion about principle. Don't worry about the fact that the execution of policy by the former Labor government yielded a spectacular failure. Don't worry about facts like that; let's just talk about why we believe as a matter of principle this should be done.'

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The member for Moncrieff is to sum up.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I am speaking to the amendment, Mr Deputy Speaker.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I do not think so.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The amendment, Mr Deputy Speaker, with all due respect, says:

That all words after "That" be omitted with a view to substituting the following words:

"While not declining to give the bill a second reading, the House recognises the benefits of a strong mining sector, and supports a fair taxation system to share the benefits of our minerals wealth with all Australians."

I would seek your direction, Mr Deputy Speaker, but I would have thought that my comments about Labor's approach with respect to the mining tax fall completely within the pious amendment.

But there is good news. Maybe some good news is what the Deputy Speaker needs—and there is some good news, Mr Deputy Speaker. The good news is that not everyone in Labor is adhering to their failed approach. I will give you some good news. The member for Perth—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

What does this have to do with the bill?

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I can only refer the member for Jagajaga, once again, to the amendment that has been moved by the Australian Labor Party. The member for Perth has made it clear—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Order! The parliamentary secretary will resume his seat. Member for Fraser, I hope this is reasonable.

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

Mr Deputy Speaker, the parliamentary secretary is defying your excellent ruling.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

There is no point of order.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The good news is that the member for Perth, according to media reports, said, 'We've got to get rid of this damn tax.' That was reported as her comments to caucus yesterday. This is the 'damn tax'—to use her words—that the former Treasurer referred to as 'an historic reform'. This is the damn tax about which the former Treasurer, the member for Lilley, said, 'The mining tax linked investments cannot be made without mining tax revenue'—this is the $16 billion of associated expenditure—which, by this very amendment, the Labor Party is attempting to drag back onto the floor of the chamber and to defend as being in some way a step in the right direction, as being in some way a policy initiative that ought to be supported, and highlighting, again, that apparently that Labor's failed mining tax supports 'the benefits of a strong mining sector, and supports a fair taxation system'.

Even though corporate miners in Australia are among some of the biggest taxpayers in the nation, even though corporate miners in Australia pay significant amounts of royalties to state government and even though corporate miners in Australia pay substantial amounts of payroll tax, the Labor Party runs the line that in some way the mining sector is not making its fair contribution to Australia. On each of those fronts, let me make it clear that the coalition does not support the amendment that was moved by the Australian Labor Party. We do not support it and we do not support Labor's failed approach.

Specifically, this bill—that is, not the amendment; the bill that was moved by the government—is an integrity measure that is designed to prevent the immediate deduction for mining, quarrying and prospecting rights first used for exploration being used outside its intended purpose. The measure is necessary to ensure the sustainability of this concession over the long term. The cost of mining, quarrying and prospecting rights first used for exploration will be deductible over the shorter of 15 years or the effective life of the right or information.

The government is continuing to work with industry to address concerns around permits acquired through farm-out arrangements and interest realignments, which will remain immediately deductible. This will protect the acquisition of rights and information for genuine exploration by ensuring its tax treatment supports the acquisition of unexplored tenements. We do not support the amendment. I commend the bill to the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Order! The immediate question is that the amendment be agreed to.

Question negatived.

The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.