Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Hansard source

All along the coastline of New South Wales at the moment, ships are lining our shores waiting to pick up their cargo. You see it every day from our beaches. Surfers and beachgoers in the waves seem almost unaware of the ships in line waiting to access the loaders at Port Kembla or Newcastle. These ships are coming to our shores to pick up some of New South Wales's most valuable assets—non-renewable assets—to take them to the rest of the world to markets to be sold and never to be seen again.

The companies that mine the minerals of New South Wales and export them overseas are some of the most profitable companies in Australia and the world. These minerals are our nation's minerals. They are an asset that cannot be replaced. They are a good that is owned by the people of Australia. They are a product whose sale should benefit the nation as a whole. I ask those opposite to stop and think for a moment about how we could make the most of this situation of our non-renewable assets being sold on international markets for superprofits. I ask: how can we make some of the most profitable companies on the planet, who take our non-renewable resources and turn them into giant profits, pay their fair share for the benefit of all Australians? The answer is in the form of the Minerals Resource Rent Tax Bill 2011 and related bills that are before the Senate at the moment—bills that unfortunately are opposed by those opposite.

The minerals resource rent tax and the extension of the petroleum resource rent tax will help create a sustainable economy beyond the mining boom and support investment in infrastructure and in industries to grow jobs in our economy in the future. The revenue from these reforms will assist businesses, particularly small businesses, who are outside the bounds of the mining boom fast lane at the moment, to fund new infrastructure across our nation to drive productivity and growth. The proceeds of the mining tax will enable increased superannua­tion for Australian workers, delivering investment back into Australian companies and Australian jobs.

The way the scheme will work is that the minerals resource rent tax will apply to new and existing iron ore and coal projects, and superprofits will be taxed at a rate of 30 per cent. But there will be an extraction allowance, which will reduce the effective rate of that tax to 22½ per cent. The MRRT will tax profits on large miners only—large miners who make profits in excess of $75 million. We are not talking about small start-up miners or struggling miners, who may not be making superprofits. We are talking about companies who make in excess of $75 million in profit.

The tax is efficient. It applies directly to the resource and excludes the value-add of any end product. The existing projects are protected through a partial tax shield in the form of a starting base allowance, recogni­sing existing investments that have already been paid for by these mining companies in particular areas. For new projects there is a protection, with miners able to immediately write off capital investment and immediately deduct expenses. So no MRRT, no mining tax, will be payable until the project has made enough profit to pay off its upfront investment. Losses on all projects will be carried forward at the government long-term bond rate plus seven per cent and for income tax purposes the minerals resource rent tax is fully deductible. The MRRT also provides a full credit for state royalties.

In all respects this is a fair tax. It is a fair tax to ensure that, given the superprofits of the mining boom being won by large multinational companies, they pay their fair share and some of those resources are diverted back for the benefit of all Australians. These reforms mean that mines such as Bulga, which produces around 8.3 million tonnes of coal per year, and Beltana, which produces about 6.8 million tonnes of coal per year for Xstrata—a Swiss-owned company with its headquarters in Zug—will contribute to a major new tax break for Australia's 2.7 million small businesses as well as a cut in the company tax rate for all businesses, with small businesses getting a one-year head start. The reforms will mean that the Blackwater coalmine, which produces around 14 million tonnes of coal per year, and Goonyella Riverside, which can produce around 14 million tonnes of coal per year for BHP Billiton and Mitsubishi—in a partnership known as BMA—will contribute to a boost in superannuation for 8.4 million Australian workers which will increase the nation's savings pool to $500 billion by 2035. This is a major reform. It means that, at the end of their life as a worker, the average Australian 30-year-old worker on average earnings will retire with an extra $108,000 in their superannuation savings.

These reforms also mean that the Hail Creek mine, which produces around eight million tonnes of coal per year, and the Clermont mine, which produces around 12.2 million tonnes of coking coal per year for Rio Tinto, will contribute to critical investment in roads, bridges and other infrastructure, particularly in some of those mining regions which are struggling to cope with the boom in population and excess capacity. It all means that these and other great mining projects that operate across the country will contribute to a much-needed extra superannuation contribution for 3.6 million low-income earners, worth a total of $900 million each year. It means that more than 1.1 million people in New South Wales who are currently entitled to superannuation will receive this contribution to add to their super.

The gradual increase in superannuation from nine to 12 per cent will, of course, be phased in. From 1 July 2013 super will rise by one quarter of a per cent. From 1 July 2014 the second increase, of a quarter of a per cent, will take effect, with further rises in each year until 2019, when the superannu­ation guarantee reaches 12 per cent. So it is a phased-in approach with a long lead time, allowing employers to plan for their future. And, of course, employers can factor in the additional costs over a long period of time. Small businesses will get some relief, however, because they will be able to offset small labour cost increases by the instant asset write-off initiative on any single asset up to the value of $6,500. So let us look at this for a moment. Any business with a turnover of less than $2 million can now buy new computers, new machinery, new furniture or new tools for their job up to the value of $6,500 and depreciate it immediately in the first year as a result of these reforms, providing much-needed relief for those operating in the sectors of our economy that are not seeing the gains of the mining boom. There is no limit on the instant asset write-off initiative for small businesses.

The government will also be allocating revenues from the MRRT to great regional infrastructure projects through a regional infrastructure fund which will be worth $6 billion. It means that infrastructure, the great forgotten word under the former Howard government, will be built in places like Western Australia, such as the Gateway WA project. Infrastructure projects such as the Scone level crossing on the New England Highway will be given a fair hearing under these reforms. This is critical investment. This is putting back into mining commu­nities when so much has been taken out, particularly at times when a lot of these communities have been struggling, when residents have been struggling with the cost of higher rents and when residents have been struggling with their roads and with inadequate investment in infrastructure. These reforms are a chance for Australian communities to be built and for the prosperity of the mining boom to pave the way for future generations when the boom times come to an end.

So here we have a tax that taxes the superprofits of our mining companies above a level of $75 million per year, a tax whose revenue will be used to boost the retirement incomes of Australians, to reduce the company tax rate for small businesses in particular in this country, to fund the instant asset write-off to ensure that small business­es get some relief for purchases of machinery and equipment in their first year, and to build important rural and regional infrastructure. We are spreading the benefits of the mining boom, not squandering the benefits of the mining boom. It is an initiative through which all Australians will benefit.

Unfortunately, the view of those opposite is to oppose these reforms. They are opposing them on a number of interesting grounds, but I do wish to draw to the attention of the Senate the grounds which Senator Mason put in his opposition to these reforms yesterday. I have a lot of respect for Senator Mason, particularly for the passion with which he deals with his portfolio of education, but on this particular issue Senator Mason is way off the mark. In his speech on this legislation, Senator Mason referred to none other than American journalist Rush Limbaugh. Senator Mason said in his speech yesterday:

As American journalist Rush Limbaugh famously said, no country in world history has taxed itself into prosperity …

Those were Senator Mason's words yesterday. I must say I had never heard of Mr Limbaugh. I did not know who he was, and I would guess that most Australians, particularly those sitting in the gallery, might not know who Mr Limbaugh is. So we did a bit of research. Mr Limbaugh is a conserva­tive radio talk show host in the United States. He has an interesting record, I must say, when it comes to social issues. He is particularly under fire in the US at the moment for his comments regarding a young woman who gave evidence to a congress­ional hearing regarding contraception in America. This is what Rush Limbaugh said:

What does it say about the college co-ed Sandra Fluke, who goes before a congressional committee and essentially says that she must be paid to have sex, what does that make her? It makes her a slut, right? It makes her a prostitute. She wants to be paid to have sex. She's having so much sex she can't afford the contraception. She wants you and me and the taxpayers to pay her to have sex. What does that make us? We're the pimps.

But that was not enough for Mr Limbaugh—that was not enough for him, no.