Julian McGauran (Victoria, National Party) Share this | Hansard source

From the government side, I should add, of course. Falling short of an argument five minutes into her 10 minutes, the previous speaker broke into what Labor have been breaking into for the last month or so when defending this tax: a class war, talking about mountains of cash rolling in and how we are defending the big boys. But you in no way addressed the matter of public importance before the Senate today about small mining industries and small quarries. You conveniently avoided that.

I think you started to quote some figures you got off the internet. From what I could gather, you glanced over, saying that the smaller quarries were getting returns of something like 40 per cent. That is absurd. You say that this tax is not designed to capture those smaller quarries. There happen to be 42 around the Bendigo area alone in Victoria. Are you telling me that this tax is not designed to capture those small quarries and those small companies—in Ballarat and Bendigo alone? That is what you said. What an absurdity. Your idea of supertax—the cash rolling in, as you say—is anything above the risk-free rate, the bond rate, of six per cent. That is your idea of supertax. That is why, after five minutes, you lapsed into the old class war. That is the sum of the defence for introducing this tax.

What an unhappy time the three senators opposite have had in government. What a wasted experience you have had in government. You have spent months defending this tax. Prior to that you spent months defending the pink batts scheme, months defending the emissions trading scheme, another supertax—if you fail in one supertax try and try again—and months defending your budget. You need not worry. It will all be over soon. What an unhappy, miserable time you have had in office while the kitchen cabinet runs this government, and you have no say in it at all.

Whatever trust the Australian people put in electing the Rudd government has been crushed in just one term alone. Nothing cements the disappointment more than the introduction of this tax. It epitomises and brings to its very point that disappointment and the incompetence and deceit that surround the government. The government brought in this tax without consulting with their own party let alone with the industry. It has no detail and no design at all. There is no understanding of the cascading effects of the tax. What is more, it is a policy cooked up just to cover over a short-term problem that they have in their budget. In no way did the previous government speaker—I expect no more from government speakers that will follow—address the core issue.

It is worth reading out the core issue of this matter of public importance submitted to the Senate for discussion:

The impact of the Government’s ill-considered Super Tax on small quarries, and on the cost of living.

The previous speaker avoided it meticulously. She was unable to address how this tax is going to affect small and medium operations. It is because the Treasurer and the Prime Minister—and the Treasury, as our lead speaker rightly pointed out—had no concept of how this tax was going to affect businesses, from large to small, from auxiliary to household. For example, Selkirk bricks in Ballarat, where I have an office, are a family company some hundred years old. They do not know whether they are caught up in this tax or not, but if they are they will close. They are greatly affected. There is a cloud over them. They do not know what the effect is but it is not good at all. What about the cement works in Geelong or all the quarries that surround the township of Bendigo?

This is nothing short of a tax grab. This is not tax reform. This was laid out to be a tax grab on BHP and Rio Tinto. Not even a thought was put into this; there was not even any knowledge of these smaller operations. That is what we are debating today. Yes, it is going to hurt Rio Tinto and BHP, but what of the hundreds and hundreds of smaller operations? Those opposite have reverted to a class war and that is a very brittle strategy that is not working out with the public. It is not even working with your own supporters. The pawns walk in here and repeat that argument. It is outdated, divisive and false.

The truth is that this tax will cut a swathe through family businesses like Selkirk, through medium-sized businesses. We already know that there has been a downgrading of many investments, a cut in many investments—Xstrata, for example. In Stawell, a small township outside Melbourne, a mining company is now reviewing its operations, which means job losses. Gekko in Ballarat, which supplies mining equipment, has already laid off six workers directly because of this tax. The uncertainty is now cascading through the share market, affecting the value of these companies and future investment. We heard today at question time that our main competitors, like Canada and Chile, are salivating at the chance to grab some of our markets.

There are three falsehoods spun by the Labor Party. One is that this is in fact tax reform. It is a tax grab to prop up an ailing budget. When you had to abolish your emissions trading scheme—that other supertax—you had the audacity to introduce this tax and you further have the audacity to have Senator Wong stand up in question time to defend it. Her previous failure was the emissions trading scheme tax.

The second falsehood is that this is a tax on superprofits. It is in fact a supertax on profits, as it kicks in at the six per cent bond rate. No mining company is going to sit there and expect returns of six per cent. They outlay hundreds of millions of dollars. It is the most risky business of any industry or sector.  It is a supertax on profits—on the most minimal, risk-free profits, in fact. Because of this tax, the extension of the Olympic Dam project in South Australia is also now under a cloud.

The third falsehood is that the mining industry should pay a fair share. There is the class warfare again. There is the beat-up again. They are paying a fair share. Senator Sherry ran that through question time over and over again. Company tax is progressive. When their profits go up, so does the tax. They are the greatest contributors to the Treasury coffers. They got us through the global financial crisis. It is acknowledged. You don’t think the pink batts scheme got us through, do you? You don’t think the building revolution got us through—that sort of wasted money! It was the mining industry that got us through.

Time does not permit me to source my references, but it is well known that the tax rate of the companies averages out at 41 per cent. That is royalties and company tax. That is before you even get to payroll tax or any local government taxes that are placed on this industry. They pay more tax than any other industry. They contribute more to the Treasury than any other group.

You ought to start listening, not just watching the polls and getting nervous about it all—which you should be and which Gary Gray is as he jumps up and down in his seat in aeroplanes back to Perth. You ought to start listening to people who have some experience and wisdom, not the boys that run the Prime Minister’s office. Start listening to the likes of Rod Eddington—who has your interests at heart, believe it or not, seeing as you gave him a job—and David Murray, the chairman of the Future Fund. Today we heard from the chief of the Wesfarmers, Mr Every. I know what the next person will get up and say— (Time expired)