John Williams (NSW, National Party) Share this | Hansard source

Mr Acting Deputy President Back, how glad I am that you are in the President's chair because you, being a senator from Western Australia, would be very focused on this tax. I see this as a tax on Western Australia. Why? Because Western Australia is a successful mining resources state.

I do not think anyone in Australia would disagree that, in a commodities boom time and with a growing industry, the people of Australia deserve more of a share in the huge wealth cake that is being constructed. The fact is the resources in the ground are owned by the Crown. People in the gallery might ask who is the Crown. The Crown is a state. The state governments own the resources. If we want to see the people who live in those states share in the extra wealth of our mining boom, even though the prices are coming down now and the demand may be a little bit scary in the future when we see the reduction in the economic growth of countries such as China, simply let the states raise their royalties. If there had been some discussions and transparency—COAG meetings for example—the federal government might have said, 'Hang on, here's a resources boom, things are going well.'

We have got trade surpluses after years of importing more than we were exporting. We are now consistently running trade surpluses—and big trade surpluses. We are exporting a lot more than we are importing, thanks to mining and agriculture. Sadly, tourism has taken a huge whack because of the downturn in the world economy, the global financial crisis and that crazy strong Australian dollar that is really hurting rural Australia. You would know that only too well, Mr Acting Deputy President. If we want to share the wealth of those resources then simply let the states raise their royalties and then they would have that money to spend on their hospitals, police, roads, schools. The federal government could have simply said to the states, 'We suggest you raise your royalties and collect some wealth on these finite resources for our people. As a result of that, we will pay you less.'

We know how much money the federal government gives the states, billions of dollars every year. The federal government could have simply said, 'Money saved is money made'. It is as simple as that. But, no, because of the big black hole of debt this government has built, those opposite had to go on a search for another tax to fill a huge deficit. There is now $232 billion of gross debt, which has risen $8 billion in the last four weeks—which is very scary—and it is now approaching the credit card limit of $250 billion. We saw that limit raised from $75 billion. This is all about being able to the Australian people in May, in a couple of months time, 'Look, we've delivered a budget surplus.' As I said yesterday, the figures in the budget to be released by the Treasurer in early May may be in the black on the bottom. It may be a forecast budget surplus, but I will be very interested, come September 2013, when we see the actual spending for the next financial year whether it is in the red or the black. I would favour the red.

This minerals resource rent tax is now going after companies. A deal was done between three big companies, the Treasurer and the now Prime Minister. I have seen the signed agreement. In the Senate Select Committee on Scrutiny of New Taxes, chaired by Senator Cormann, the document signed by the Prime Minister and by the Treasurer was produced. One of the important things in it is that all state royalties will be credited against this tax. There was an argument around what if they raise the royalties? Senator Cameron asked if it was just the royalties up to now? If they raise them, they will not be credited. I asked the witness to take on notice the definition of the word 'all'. 'All' means all. All of the royalties will be credited whether or not they raise them. That is in the signed agreement.

We now have a new tax coming in and we do not know how much it is going to be. But it is amazing that, with the introduction of a carbon tax and this mineral resource rent tax, the federal government is going to be $10 billion worse off. How can you introduce two new taxes on the Australian people, on Australian businesses and on the Australian economy and be $10 billion worse off? You are going to spend $10 billion more than you are going to collect. What sort of fiscal budget future is that? That is simply unbelievable.

For many years I listened to John laws. Some people might not like John Laws, but some people like me do like him. In the shearing shed or in the sheep yard drenching sheep, I got to learn some of John Laws's sayings. One of them was you do not make the poor wealthy by making the wealthy poor. I think that is a very good statement. We have entrepreneurs and we have people who work very hard. We have couples and families who become successful, buy a home, pay for it and buy an investment block. They do it all through hard work, by being cautious with their money and by being smart. That is what this whole society we live in is about when it comes to free enterprise: you may seek wealth in any way you wish so long as it is legal.

There is no doubt that with the growth of China and India, hugely populated countries, there is huge demand for our resources. My colleague Senator Ryan just made the point that these resources are not solely in Australia. There is plenty of iron ore and plenty of coal in underdeveloped countries and on continents such as Africa, South America, Indonesia. Their costs of labour will be lower and their costs of production will be lower. Once they get the infrastructure in place, they will take these markets off us. I remember, prior to the 2007 federal election, when the then opposition leader, Mr Kevin Rudd, said: 'We cannot rely on Australia to simply be an export resource nation. We must change our economy.' What are we doing with this piece of legislation? We are relying on the very things that Mr Rudd said that we should not and could not rely on.

We hear that so much of the money that will be collected from the tax will go to superannuation—public servants' superan­nuation. I do not know the exact figures, but I believe 10 to 20 per cent of mining companies are owned by superannuation funds. In other words, everyday working mums and dads are shareholders in these mining companies. We are going to take money out of those mining companies that would normally be distributed to those superannuation funds for the retirement of those working mums and dads. So we are getting the political spin that this tax is going to be great for superannuation while the government is taking money from the very resource companies that are building our superannuation funds. I find that quite ironic.

Why are we having the tax? It is simple: the government's debt has been out of control for four years now. It is as simple as that. We have seen the new taxes under this government. There was the alcopops tax. That was going to stop all the binge drinking by the young ones. The government thought: 'They will not go and buy a can of Bundy and coke if we put the price up. That will save those people from binge drinking'—and I do not endorse binge drinking one bit. So what did the young ones do instead? They went and bought a bottle of rum and a bottle of coke and mixed a much stronger drink. We did not drop into this life at 55 years of age or whatever; we actually grew up, and we remember some of those younger days as well. So the young ones have a couple of rum-and-coke drinks. It is a case of: 'Don't worry about the coke; just make it a bit richer.' That tax did not solve the problem.

Then there was the luxury car tax. That was a socialist tax if ever there was one. A married couple work hard. They save their money. They pay for their house. They might build some investments. And they might upgrade their car to one that actually has a fair bit of luxury in it. The government's attitude is: 'Well, you can't have that. We'll raise the tax. How dare you work hard, save your money and buy a luxury car?' What did it do for General Motors Holden as far as sales of their Statesman went? It did not help them one bit. And the industry continues to battle against cheap imports.

And then there is the tax on LPG—liquid petroleum gas. The cleanest fuel you can put through the motor of your car is LPG. It has 13 per cent less pollutants than petrol or diesel. It is Australian produced; it is a local fuel. So what did we get last December? We got a 2.5c a litre tax on LPG. And we have got a carbon tax that we are going to save the planet with. That is a $10 billion a year tax on carbon. But when we go to clean fuel, it is a case of: do not leave the price down; put it up. By 2015 there will be a 12.5c a litre excise on LPG.

If you want to lose an election upset the cabbies. There was a report in yesterday's Northern Daily Leader in Tamworth about them complaining about the increase in the price of LPG. We know that most cabs run on gas and, of course, many private vehicles do as well. It is amazing: the government gave a subsidy to convert our cars to gas; we could buy a new converter that was already set up for gas from the factory or we could convert our cars to LPG. The government said: 'Here is a subsidy. We want you to go onto gas. And now we can up the tax on gas. We'll get it back.' If you want to lose an election get the cabbies offside because they talk to a lot of people every day of the week. Then we had the flood tax. The cheque account was empty, so we brought in a flood tax. Then of course the tax we were never going to have under 'a government I lead'—said Ms Gillard as Prime Minister—was the carbon tax.

And now we have the mining tax. There is one important thing here, and I have stated it before in this place: the private sector creates our nation's wealth. That is where our nation derives its wealth from. The public sector, the government sector—federal government, state government and local government—feed off the private sector. But what all these taxes do is tax the very sector that creates our nation's wealth. As a result of that, we will have a reduction in living standards. The cost of living will go up. And that is what this legislation is all about—this government taxing. This legislation is about getting more revenue to bring about a budget surplus in two months time. We will never see it. You wait: the budget will still be in the red in September 2013.

I want to quote from the dissenting report of the committee. It states: 'The mining tax deal entered into by the Gillard government gives an unfair competitive advantage to the three largest miners who were given exclusive access to secret negotiations on the new tax design. It makes federal budget outcomes hostage to decisions about royalties by state and territory governments and raises serious and unresolved constitutional issues. Alarmingly the mining tax package would significantly worsen Australia's structural budget deficit over time.' The government are going to spend before they collect the money. So, as time goes on, they are going to be spending more than they are collecting. Our budget position is going to get worse and worse as time goes by. What sort of a tax is it that drives us more into the red when our credit card is almost full up at $232 billion? That was the figure reported last Friday by the Australian Office of Financial Management.

The proposed increase in the compulsory super loan will cost more every year once it is fully implemented than the MRRT would raise—this is according to Treasury modelling conducted at the time of the mining tax deal. According to Australian Treasury modelling, the superannuation will cost more than what the whole mining tax will collect. How can you bring in a tax when your budget is going to be worse off? This is typical Labor: spending more than they earn. It is also a tax that divides Australia by exclusively targeting resource rich states with a new Canberra tax grab.

Mr Acting Deputy President Back, you come from Western Australia, where 96 per cent of the iron ore produced in this nation comes from. This legislation is a tax on Western Australia, and no doubt the people of Western Australia will tell us all about that at the next federal election. They are working hard, they are working smart, they are being successful, they are contributing enormously to our nation's wealth and they are going to have 96 per cent of their iron ore taxed. Remember, this tax is on iron ore and coal. It is a tax on those resource rich states: Western Australia, South Australia—there is a lot of mining in that state these days—Queensland and New South Wales. That is where it is unfair. But the main reason this tax is coming in is that this government has simply run out of money. They have wasted it. Remember the pink batts? Remember the school buildings that were outrageously priced? I have been around to the schools and seen them. By the way, I have never been to an opening of one of those school buildings—not one. There was the $900 handout. People had a boom time on the pokey machines and the clubs with that. This is about a tax grab. It is unfair and it will not be supported by the coalition. Hence we will certainly vote against it.