Jan McLucas (Queensland, Australian Labor Party) Share this | Hansard source

I will go back to that, although I did explain. They are profits above what a competitive business would normally expect to return. As I said, 10 years ago $1 in every $3 of profit was returned to Australians from rental on a non-renewable resource. Today it is $1 in $7.

Profit based taxation does work. For example, the 40 per cent petroleum resource rent tax has existed for over 20 years. The $50 billion Gorgon project was approved under the 40 per cent petroleum resource rent tax. To say that it does not work is simply a furphy. In fact, I encourage leaders of the large mining companies and LNG producers to work with our government to roll out the delivery of the resource superprofit tax for our community.

It is important to remember also that there have been many economists who do not oppose the introduction of this tax. I look to Professor John Quiggan’s commentary on this issue. He goes through a range of arguments about why it is a good idea—a sensible, fair and equitable idea—to introduce a profit tax rather than user royalties and excise. I think his most compelling argument is where he says:

The political economy argument. Ever since I can remember, and probably before that, mining companies have been threatening to pack their bags and go overseas. They’ve made these threats when they were upset about tax policy, about environmental restrictions, about Aboriginal land rights, about union wage demands and work practices and when they were in a bad mood for no particular reason. But, even though lots of Australian industries have disappeared, or contracted drastically for a range of reasons, the miners are still here. The reason is obvious. They can leave but they can’t take the minerals with them. It’s precisely this immobility that underlies the case for—

as he describes it—

RRT—

that is, a resource rent tax. (Time expired)