Kate Lundy (ACT, Australian Labor Party) Share this | Hansard source

I rise to oppose the Minerals Resource Rent Tax Repeal and Other Measures Bill of 2013. This repeal bill is the latest in a long line of poor decisions made by the Abbott government that will hurt Australians. Ordinary people are struggling under the cuts and mismanagement of the Abbott government, and this short-sighted piece of legislation is no exception. Almost all Australians will have to work harder and longer and have a reduced quality of life in order to subsidise a tax loophole for those already earning super profits. At the core of this bill are the misguided loyalties of the Abbott government. They simply do not believe that these resources belong to all Australians. They do not believe in backing the majority of Australians; instead they believe in helping a couple of massive mining companies, particularly at the expense of small business.

When choosing between big and small business, the Abbott government will pick their big business mates every single time. Let there be no mistake: this bill will not be free. Repeal of the mining tax is a mere slogan, and the Abbott government likes to call this 'a tax repeal bill'. But only the Abbott government could come up with a so-called tax repeal bill that contains so many tax increases. For example, small business will face a tax hike through the abolition of the instant asset write-off. People earning under $37,000 will, through the abolition of the low-income superannuation contribution, face a tax hike on their super. Disgracefully, this will be retrospective and charged tax on contributions that have been made in the past. It also raises taxes on renewable energy and geothermal exploration, denying these industries the same access to tax deductions which were available to fossil fuel explorers. This is just the tip of the unfair and backward-looking and regressive nature of this bill.

This bill will hurt so many Australians and it will mean that Australian families will lose their schoolkids bonus. It will mean that Australian small business will face a tax hike and Australians in regional areas will suffer the loss of the Regional Infrastructure Fund. This leaves even the Department of Infrastructure and Transport in the dark as to which projects will or will not be funded. The bill is also anti-competitive and once again the Liberal Party is putting the interests of the few against many. Small mining businesses do not pay the MRRT and will be impacted by the coalition's new tax loophole for big multinational miners. Those who want Australians to work for $2 a day—incredibly low incomes—will be subsidised by the taxpayer, while everyone else will pay the price, including Australians working for under $37,000, as I said. These are the working poor—people who keep going to work every day supporting our economy for a little more than those who are dependent on welfare—and yet the Abbott government wants to slug them with this increase.

This measure will particularly hurt women who often work in low-paid industries and face a structural disadvantage in superannuation. Imposing a tax increase on 3.5 million low-paid workers, 60 per cent of whom are women, through their superannuation accounts in the low-income superannuation contribution is exactly the sort of mean-spirited action we have unfortunately come to expect from the Abbott government. Remember that it is a government that only has one woman in cabinet and has chosen to rip money out of the pockets of women working in early childhood education.

Working Australians will lose superannuation—the Abbott government will cut and delay the increase in superannuation from nine to 12 per cent. They will ensure that older Australians cannot work to save for their retirement by cutting it out five years earlier at 70. They will also slug those earning under $37,000 with a tax hike, as I said, and this will hurt Australian ownership of business, because superannuation is one of the best Australian investors in Australian businesses we have. It will do double damage by also reducing our national savings. No Liberal government has ever made it easy for Australians to save for their retirement. As such this bill will damage the economy, and, in contrast to the previous speaker, it will hurt government savings. It will hurt national savings by its impact on superannuation. It will hurt the budget, and add to the unlimited debt that the Abbott government has voted itself to have.

When you rip away people's super, especially those who work hard but have low incomes, then you force people onto the pension. This is short-sighted and penny-pinching, and the government knows it will cost more in the long run. It is extraordinary that Labor has to be the party that stands up for people who are saving for their own retirement through superannuation, whereas the Abbott government wants to see people on welfare. The Liberal Party has never supported superannuation, and they voted against its introduction. In 11 years the Howard government never increased it, and now the Abbott government wants to lower it.

The Abbott government makes contradictory complaints about the MRRT in their advocacy for this damaging and irresponsible bill. Look carefully at what previous speakers have said and you will see that, on the one hand, they complain that it will hurt their mates and donors from the mining industry and yet, on the other hand, they complain that the tax does not raise enough money to fund worthwhile services. They cannot have it both ways. On the first point, the MRRT is designed specifically not to hurt the mining industry because it taxes only super profits—unlike royalties in which tax is based on the amount dug out of the ground regardless of the profits that can be made. When things are tough the MRRT raises a low amount, but when things go well it increases. Therefore, the tax does little to harm even those who do pay it. On the second point, the MRRT should be celebrated; it will generate over $3 billion over the forward estimates for essential services. It was implemented by negotiation with industry and generates much needed revenue to fund measures that will boost our economy, superannuation—as I have mentioned—and deliver important assistance to workers and families.

This bill should be deplored. What it is going to do is lower revenue in order to create a tax loophole for those who are already deriving massive wealth from resources which we believe are owned generally by the community. This loophole is specifically designed to advantage people who have a proven track record of not being particularly good at distributing that wealth, sharing it or creating other opportunities in the economy as a result. The bill will hurt more than 99 per cent of Australian workers, families and small businesses in order to benefit a small number of very high-wealth individuals who have proven that they will claim the tax loopholes but not pass on the benefits.

My constituents here in the ACT will suffer under this unfair bill. They will lose the schoolkids bonus. They will lose their superannuation. We know children of veterans will lose their payments, and ACT small businesses, who are already doing it tough by virtue of the presence of the Abbott government, will face a tax hike. We know low-paid workers in hospitality, cleaning, early childhood education and aged care will have their retirement savings negatively impacted.

Those opposite often like to seek to claim that they stand for hard work and that people can succeed through their hard work. I would like to tell you a story about hard work. Canberra resident Carol is around 47 years old. She has worked hard her whole life to get where she is and is trying to save for her retirement. Carol works as a cleaner, helping to improve other people's lives. She works on the weekend to try and earn a living, a reality which is all too common for those working in the cleaning industry, many of whom are women.

Despite a lifetime of hard work, Carol earns less than $37,000. You would think that she is just the kind of person that this government would support, but if you thought that you would be wrong. Carol will have her super taxed at an increased rate under this bill, not only in the future but also retrospectively. She will see less super coming into her account and also receive a bill towards her retirement from the retrospective taxation measures. This sounds like a cruel joke, but in fact it is deadly serious. There is a tax hit on people like Carol, who can least afford it, and then, breaking all good practices of taxation, they will bill her retrospectively for all payments on or after 1 July last year. This measure will affect 3.6 million low-paid workers like Carol, of which 2.1 million are women.

Not content with simply impacting in this way on the superannuation of low-income Australians, the Abbott government also means to stop them from working to increase their superannuation, moving the age limit up to which contributions are made down from 75 to 70. This bill, rather than rewarding hard work, punishes it and people like Carol in the ACT will stand to lose out at the same time that the Abbott government wants to give more money to mining companies making superprofits. It just does not make sense.

The bill also hides or seeks to hide the repeal of the schoolkids bonus. The schoolkids bonus was a recommendation of the Henry tax review. It was completely unrelated to the MRRT. In my constituency of Canberra, this will mean almost 13,000 families will be without the resources their children need for school after they lose this support. This results in over $6 million of cuts for people trying to raise the next generation and $6 million out of our regional economy. This short-sighted cash grab will damage educational outcomes and therefore damage the economy in these two ways.

Those opposite will try to say that the schoolkids bonus is not educational because it is paid as a lump sum, but that is because they do not believe in choice—another grave inconsistency in their rhetoric. They do not believe in giving parents choice over how they spend that money on their kids, and in this way they are not true liberals. They believe that family budgets should be managed out of the federal parliament. It is an anti-choice agenda which I believe would make the former Prime Minister Robert Menzies ashamed. Their approach to the schoolkids bonus is also against the evidence, which they choose to ignore in their anti-choice stance.

Research on government lump sum payments shows that parents know how to spend this money and that they overwhelmingly spend it on important resources for their children. The Liberal government clearly do not trust parents to help their kids in the right way, and they choose not to help either. That is why they are taking away the schoolkids bonus, which, as I said, will affect 13,000 families here in Canberra and over 1.2 million families across Australia. Next time you hear the Abbott government talking about 'family values', you would do well to remember what they are trying to do to Australian families in relation to the schoolkids bonus.

The bill is also poorly thought out. As I have said, it impacts on small business by removing the instant asset write-off right at a time when the understanding of the role that small business plays is at its zenith. A lot of lip-service was paid by the Liberal government to small business in the last election campaign and has been since. We know that small business is the engine room of the economy. We know that Australian small businesses have an enormous role to play and we know that, with the trepidation about our economic status both now and in the future, the worst possible thing you could do would be to disadvantage small businesses, inhibit their cash flows and deprive them of that instant asset write-off—a measure which encourages businesses to buy new plant, to buy new assets and to invest in themselves. It helps businesses become more innovative, allows them to move with the times. These are all worthy objectives that were served by the instant asset tax write-off, but that will go.

It is also a time when there are many changes taking place in the manufacturing sector. I will not go into it now, but with the chronic and blatant neglect of our manufacturing sector by those opposite you would think that they would be somewhat sensitive to the needs of small business, regardless of what sector. Again, this is a measure that is there for all small businesses. It does not discriminate between sectors. Whether they are businesses in a small regional economy or in outer metropolitan areas or indeed new companies in busy CBDs, this instant asset tax write-off was seen as a terrific measure to stimulate the activities of small businesses in Australia.

The other issue I would like to raise is the role of the National Party. I think those in the Abbott government should note that the Leader of the National Party, Barnaby Joyce, said in June 2012 that mining companies:

… could not expect to take away a region's resources without leaving something for the community ... and had a responsibility to contribute to the specific infrastructure provided to meet their needs.

And yet the National Party is supporting this destructive bill, a bill that will mean that Australians do not get a fair share of the use of their resources, even when superprofits are being extracted from them. It will also mean that people living in mining communities will not see the infrastructure that would help their economies grow in a more balanced way. This will prevent the raising of their standard of living.

This is exacerbated by the ripping up of the Regional Infrastructure Fund. I call on those opposite to appreciate the impact of the ripping up of the Regional Infrastructure Fund on those regional areas. It was one way in which the MRRT could make a direct contribution to those communities, who often struggle. Those challenges are well documented in this place. Mining communities often grow very fast and become very expensive to live in, while having a real paucity of the social infrastructure needed to ensure that families can have a quality of life.

This bill conflicts with statements of the National Party leader and, I suspect, of many representatives and supporters of the National Party. We hear much of the Howard government Treasurer, Mr Peter Costello, but we know that Mr Costello supported the super increase from nine to 12 per cent—the same super increase that this bill will take away from working Australians.

The issue at stake here is quite simple. We had a tax, the MRRT, recommended to the former Labor government by Ken Henry, a respected leading Australian who conducted a comprehensive review of the taxation system. His conclusion, quite rightly, was that a minerals resource rent tax designed in the way that the final tax was designed would serve a very specific and important purpose in taxing the superprofits of mining companies and would allow that revenue to go to incredibly worthy nation-building initiatives—from infrastructure to superannuation, to regional infrastructure, to giving a tax break to small business. All of these elements of our economy combine to be quite a potent and significant contributor to our future economic growth.

The people of Australia own the resources that are in the ground. This kind of notional ownership is about sharing the wealth derived from this collective national asset. I am not being ideological about this. It is quite well known that, if there is a natural resource in a country, there ought to be a mechanism by which that wealth is shared and distributed in some way. The MRRT was almost a humble way of acknowledging the entitlement to that shared wealth. It did not seek to change the structure of the industry. It did not seek to do anything radical. It sought to respond to some very thoughtful recommendations of a comprehensive tax review, and putting it in place was negotiated with the industry. But, even so, the new Abbott government cannot come at supporting this tax.

If this short-sighted bill passes, it will mean that the benefits of having had these resources dug out of the Australian ground will not be able to be passed on, and in this way the coalition government will have debased a very important principle. It will drain many aspects of our economy, from superannuation to the schoolkids bonus, to instant asset tax write-offs for small business. The former education tax refund also will not be restored.

The Abbott government, which has brought this bill to the Senate, has proven that it is lacking in moral substance, particularly in the misleading way it is presenting its case. We heard from previous speakers their contentions around the former government's economic management and the reduction of debt. But I notice very few of the opposition speakers go to the actual measures they are seeking to repeal; they rather keep their arguments and rhetoric at a high level, trying to perpetuate the falsehood that the former government was not a great economic manager. In fact, the former Labor government saw Australia through a significant global financial crisis and did so with the creation of jobs and keeping our economy buoyant. That is what governments do. The former Labor government was a nation builder. The Abbott government, the government now, is of course a nation wrecker. This is part of the wreckage that we are dealing with today.