Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

It is a pleasure to join the debate on the address-in-reply and support the amendment moved by Senator Abetz. The address-in-reply is a rare opportunity to address the entirety of the government rather than any single measure or, in this case, any single failure of a government. Indeed, this is my first opportunity to do so, given that I arrived in this place many months after the 2007 election.

This government provides a wide array of material to work with, but today I would like to skip over many of the specific examples that have been covered in such depth by my colleagues because I want to outline and debate what I consider to be a flaw at the core of this government. All of its failings—its waste, its massive deficit and debt, its raiding of various capital funds put in place by the previous government for future generations of Australia and even its political failures—reflect a weakness at its core. This government suffers from several fatal conceits. It suffers from the conceit that its core functions can be taken for granted as it relentlessly expands the scope of its own activities to suit the desires of its members. It suffers from the fatal conceit that it can tax relentlessly not only to feed its own voracious spending and debt but also to covertly limit the choices of individuals in our society and guide them to what its own members deem to be appropriate behaviour.

This government has no sense of its own limitations, it has no sense of the limitations of the state and it especially lacks a sense of the limitations of the personnel that comprise it. When it is warned about the flaws in its programs it reacts by simply playing the man, to use the football vernacular. History tells us, however, that it was warned about the blow-outs in the school halls and the waste with the pink batts. But this government ignored the warnings and, despite the efforts of the Prime Minister, these failures will follow her in office, whether she is the real Julia or not. This government’s profligate spending has driven our budget into record deficit and, despite all its claims and all its spin, there is one simple economic truth about this matter: debt is simply deferred taxation; it is taxation upon future generations of Australia. As the government seeks to raise taxes now in a desperate attempt to manufacture a tiny surplus for an election several years hence, the Australian people do not trust its motives nor do they trust its management.

One of the major issues of last year, and one of the issues listed by the current Prime Minister as a reason for the removal of the former Prime Minister, was the mining tax. What was a resource super profits tax became a mineral resource rent tax. None of the constitutional or administrative issues have been addressed in either. It was right that this became the subject of debate, despite the verballing of some of the proponents of that debate by members of the government. Thousands of Australians work in this industry and its associated industries. Some work in information technology. Some work in construction equipment. The money flows right through the economy, even to my home city of Melbourne, which is a long way from many of the mining centres. The government justified the tax simply by attacking the profits of those who mine. At a particular low point in the debate, some people also went as far as to attack the nationality of the shareholders or the companies of those who mine, in an appalling, retrograde reminder of economic Hansonism in this country. But only in the world of academic economists, or the Canberra bureaucracy, would a government try to determine what an appropriate profit would be and use that definition to levy nothing short of a punitive tax.

Underlying the whole tax problem in this is a flawed economic assumption about economic rent with respect to iron ore and coal. The truth about these products is that, unlike oil or a precious metal, coal and iron ore are not rare. The capital to get them to market is rare, even though that in itself is being applied dramatically all around the world as we speak. What is rare temporarily is the access to markets of mass quantities of those commodities, and Australia is in a position to benefit from that at the moment. Yet all around the world, in Africa, in South America and in Russia, what we are seeing is a dramatic expansion in the facilities that will bring those products to market. This is only a temporary spike, even though it will probably lead to a long-term increase in our terms of trade.

Ironically, the Labor government of the 1980s introduced the Petroleum Resource Rent Tax. One of the ministers involved was a former senator, Peter Walsh, and it was Peter Walsh who said in his memoirs: ‘There is rarely any economic rent in iron ore.’ That did not come from this side; it came from the person who helped set up the PRRT. Unlike this government, Peter Walsh, who I respect, had a basic understanding of economic principles. Peter Walsh was one of the ministers who took difficult decisions, and later I will go to more of what Peter Walsh did which this government has ignored. That is an important point. When the PRRT, which this government tried to compare the MRRT and the RSPT to, was set up, one of the people involved wrote: ‘There is rarely any economic rent in iron ore.’ But this government would not take notice of such a Labor luminary, and not just because he was one of the first to warn the nation about the rise of green fanaticism and green rent seeking, which this government has been such a part of; he also warned the ALP about the risk the green movement would pose to their political future. But that is not my concern here today.

This government, through taxes like this, seeks to plan our economy by defining what an appropriate profit is. If anyone thinks that the mining industry will be the only industry subject to such a definition then they are foolish. We heard the promise before the election that there would not be a price on carbon, the euphemism used to try and avoid saying what it actually is: a tax. Only days after the election, the Prime Minister not only back-flipped but tried to justify this as some far-reaching economic reform. In 1998 when this side of politics took tax reform to the Australian people we outlined exactly what was involved in that tax reform. It is a cowardly government and Prime Minister that says one thing two days before an election and then tries to hide in the cloak of reform only days after in a desperate attempt to stay sitting on the right of the Speaker in the other place.

But that is only the start. We have the carbon tax. Very soon, despite promises to the contrary, we will probably have a junk food tax of some variety as the government seeks to tell people what they can and cannot eat. In all the papers from all the so-called health experts who seek to tell people in Australia what they can eat and how to live their lives, I am fascinated that the taxes always seem to land on Big Macs rather than on foie gras. But that might be a reflection of the tastes of the people writing the reports.

We have in the Henry review the flagging of a congestion tax. For the first time we are going to try and tax the movement of people in this country. Through the creation of a false market by the effective granting of licences to use roads paved by our grandparents, our parents and people today the governments will seek to institute what 30 years ago was a parody in movies from Hollywood. The government will determine where you are allowed to travel. They may deny it now but they have said that the Henry review on tax was merely an attempt to stake out territory for future government efforts. This side of the chamber will not allow such a regressive expansion of the role of government. This government seeks to make respectable what was once inconceivable. I put to you that, if we went back in time 20 years, the idea that there could be a tax on the movement of people in our cities would have been laughed at.

Like with many others things—such as poker machines—this government seeks to use technology as it was used in 1984. The only thing that George Orwell got wrong was the timing of technological development. The motive of those people opposite is still present. And this government seeks to clothe its intentions in the language of reform. Because of its desperate need to find a purpose, it harks back to the 1980s. But let us measure and compare the differences between the people that sit opposite me today and the people in this parliament in the 1980s and the 1990s who dramatically changed this country for the better.