Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

As Senator Joyce noted, he has found himself many times at odds with Treasury advice and it seems not to have occurred to him that he might be wrong. I would back the expertise of the economists in Treasury over Senator Joyce any time and it appears that Mr Tony Abbott would too because he has stripped Senator Joyce of any responsibility for finance. But I have come prepared to talk about the resource super profits tax. Senator Joyce apparently did not because he spent most of the time addressing a political take on it—his own political take on it—and not the tax at all. I think that illustrates how little the opposition choose to understand this tax. Whether it is a deliberate omission or simply ignorance I do not know, but let us talk about the resource super profits tax and let us talk about how it will affect smaller miners and quarries. Let us take a look at some facts rather than standing on our soapbox and talking generally about things.

I turn to the profitability of mining companies in the first place and I refer to an excellent couple of articles on the pollytics.com website about an analysis of the profitability of mining companies. The conclusion was that:

Only 51.2% of all mining firms were actually profitable in 2008/9—the lowest of all industry classifications—even though the industry wide aggregate profit margin for mining was the highest for any industry classification in Australia, coming in at a whopping 37.1%, and where the aggregate profit margin for large mining firms was an even larger 46.1%

It goes on to say:

It would be accurate to say here that a majority of firms—and probably a very large majority of firms at that—would actually be better off under the proposed RSPT than the existing regime.

They are facts and the facts are that some mining companies are making a very handy profit indeed, in the order of 46.1 per cent. That is because the price of some ores and commodities has gone up to exceptionally high levels. This is at a time when Australia needs to address the infrastructure deficiencies that were left to us as the legacy of the Howard government, and the government is proposing to do something about that.

We look at the scare campaign which is being conducted by businesses and we find that in Australia there are a large number of commodities in which we hold a substantial share of the world’s resources: over 20 per cent, for example, of silver, cobalt, brown coal and zinc, and over 30 per cent of lead, uranium, zircon, rutile, nickel and tantalum. And we have mining companies saying that they will get up and leave, that they will not invest in Australian resources anymore! As the Pollytics blog says:

When mining companies … say that their investment … will cease … as a result of the RSPT, they are effectively stating that their firm will not exploit these immobile, finite resources which make up to nearly 40% of the total global supply of these minerals.

That of course is a nonsense. So the question becomes: how do we, for the future, best take advantage of these scarce resources which belong to Australians? What the tax has been carefully designed to do is not disadvantage those smaller companies, the small mines and small quarries, which are not making these superprofits. Where quarries or other mines do make the superprofits, why shouldn’t they be taxed at that rate? Why shouldn’t they contribute more to the future of Australian society?

It has been bandied around quite often that the Henry review said that we should not tax quarries, which is not accurate, as so many of the arguments are not from the opposition and other mining interests. What the Henry review said was:

The resource rent tax should be applied to non-renewable resources other than those expected to generate low rent where the administration and compliance costs are likely to outweigh any gains from a rent-based tax …

That is, the recommendation is that where the administrative costs outweigh the benefits of the tax then it might not be a sensible thing to do. There was no recommendation at all that these resources should not be taxed in line with other resources. This is all part of the negotiation which the government is conducting at the moment and which the government has always said that it would conduct.

Finally, I would like to address the ‘disaster’ that Senator Joyce talked about, this idea that if the bosses of the big mining companies like Gina Rinehart and Andrew Forrest do not continue to receive their income then Australia will be in huge economic trouble. I would like to quote from an article written by Vanessa Cicchini in the Australian late last month. She said:

Lately, barber shop talk has revolved heavily around the tax and my anecdotal surveys have all reaped similar results. People in the western suburbs—

that is, the western suburbs of Perth—

staunchly oppose it. Those with the wrong opinions are infidels.

Here lies my gripe. This small but wealthy section of Perth with its vitriolic hatred of this proposed tax are also the most vocal and are viewed almost unquestionably as the authority on what’s best for the west.

But did they ever get out of their social-business circles to consult with people from other areas, let alone those more socioeconomically challenged? Hell no!

The mining boom has not rocked everyone’s world. Here in WA it has made day-to-day living hideously expensive, with most transactions tantamount to extortion. The social aspect is just as grim. Putting aside the muted phenomena of the “cashed-up bogan”, there really is a huge gap between haves and have-nots.

This is what the Labor government intends to address. The opposition, of course, listen to big business all the time. They listen to those people who have vested interests in making sure that the mountains of cash keep rolling in. But the Labor government wants to make sure that some of that cash reaches other people in the community in the form of improved superannuation payments and also lower company tax to stimulate further productivity improvement in our economy. That is what the Rudd Labor government is all about. The opposition are about kowtowing to their big business mates.