Anne Ruston (SA, Liberal Party) Share this | Hansard source

I possibly will not be worrying to download Senator Whish-Wilson's contribution, despite the fact that he would probably like me to. Before I rose today, I read through some of the contributions that have been made by people in this chamber. A comment was made by Senator Eggleston which I thought was particularly interesting and probably a tiny bit humorous, despite the fact that the matter that we have before us today is far from humorous. Senator Eggleston referred to the minerals resource rent tax as being akin to a pinata. Many of us who have children have been to a birthday party where kids start smashing the hell out of a pinata, a kind of stuffed animal, trying to get the goodies out of the middle of it. Senator Eggleston pointed out that, like a pinata, the mining tax is one of those things which you can give a good old whack no matter which direction you are coming from. Sadly, we are here today trying to repeal this particular tax because it has taken a huge amount of hits from every corner because plainly it is not working.

When the Leader of the Opposition recently went to Western Australia—obviously in the lead-up to the Senate by-election in Western Australia on 5 April—it was widely reported in the press. It was interesting that, the closer he got to Perth, the further he was moving away from the minerals resource rent tax. It seems bizarre that we could have the opposition in this place, and their supporters the Greens, refusing to allow the repeal of this tax; and yet, when the Leader of the Opposition gets close to Western Australia, all of a sudden he wants to distance himself from the fact that the opposition are trying to block the repeal of legislation that has extraordinary impacts, particularly for Western Australia.

One thing we need to remember is that Western Australia is part of Australia and deserves the same level of recognition and support as the rest of Australia. As commented on by many of the people from Western Australia who have spoken on this matter, nearly 100 per cent of the revenue generated from the minerals resource rent tax so far has come out of Western Australia. No wonder the Leader of the Opposition chose to distance himself from this particular tax when he went to Western Australia. The cold hard fact is that we are being prevented from repealing this tax in this place. I think Mr Shorten needs to come clean with the people of Western Australia. Despite his fluffy words when he was there a few weeks ago, the fact is that he has instructed his people in this place to make sure this tax is not repealed.

We have heard it a million times before: no economy has ever taxed its way to prosperity. The more you tax an economy, which slows it down and prevents it from generating economic activity, the less revenue it ends up delivering to you. I will quote some statistics. I am sure these statistics have been quoted many times before, because we have had so many speakers on this particular piece of legislation—because obviously we do not want to go to a vote on it too soon! The mining tax has yielded $126 million in its first six months and $400 million for the first year. Apparently it has been paid by only 20 companies. It is conveniently forgotten that there was $40 million in advertising costs for this campaign espousing the great virtues of this tax, $50 million in set-up costs and $20 million to administer it. So what we have really got here is a tax that is costing the Australian public money instead of generating the so-called income and economic activity and providing the money that Senator Cameron was talking about.

Senator Cameron, in his contribution a short time ago, commented that he would rather see the $400 million or thereabouts that has been generated by this tax in its first 12 months being spent in the community than nothing at all. Many of us would be reasonably happy spending money that has been generated by a legitimate tax on community projects. But the point that needs to be made here is that, when this tax was first introduced, it was supposed to generate billions and billions of dollars. Senator Cameron can talk about the $400 million he would like to see spent in the community. The fact is that we have received only $400 million from this tax but the community has been promised billions of dollars that the tax has never been generated. Whilst Senator Cameron's talk about the $400 million is very easy to reconcile, Labor in government spent well in excess of this tax and projected the income in forward estimates. And now they want to prevent this fiscally responsible coalition government from stopping much of the spending of that money that has never been received.

This has had significant impacts particularly across regional Australia, which is where I come from. In the lead-up to the election, when Labor thought they had the goose that lays golden eggs, there were all these promises made in the wider community about projects that were going to be undertaken through regional development infrastructure projects and RDA. So hundreds of communities across the country have been promised a whole heap of money for local projects based on funding they thought they were going to receive from the mining tax. That is fine, but because this tax has failed to deliver any real revenue—certainly nowhere near the amount of revenue that would be needed to meet the commitments made to these projects—there are all these people out in the community who have had their expectations raised. And we the coalition now have to explain to the people of rural and regional Australia that, whilst we would love to be able to provide the projects and developments that they were expecting, we simply cannot afford to because the money is not there. And now, when we want to repeal this ridiculous tax and get back on to a more sensible and strong-footed taxation regime, we are going to be blocked from doing so by the pig-headedness of those opposite, who refuse to accept that this particular tax plainly is not working anyway.

We live on the river corridor and $1 million was allocated via this fund towards assisting projects with the transition because of the impacts of water reductions from the Murray-Darling Basin Plan. The sum of $25 million had been put aside in South Australia for this particular process. In the period during the election campaign—during the caretaker period—the then minister for regional development announced $25 million worth of projects along the river corridor in South Australia.

Senator McKenzie interjecting—

I am sure the same thing happened in Victoria, Senator McKenzie, and also in New South Wales. Of course, we all know that if you make a promise during a caretaker period, then it is nothing more than an election promise; it does not actually have any validity in the budget process within government. But the people in those communities do not know that; they do not understand that. So when somebody rings you, and says, 'Mr Business, in the community, we are going to give you $2.5 million towards the economic restructuring of your business or to assist you in building or upgrading assets or to undertake some sort of transitional projects to enable you to better meet the challenges of the Murray-Darling Basin Plan,' they think they are getting the money.

After the election, all of a sudden we realise that we have had a change of government. I suppose I should not question it but I really wonder whether, had the election gone a different way, the money would have been available even under the other government. I do not know where they were going to get it from, because they have not raised the money from their mining resource rent tax, which they said they were going to use for these projects. I draw the attention of the chamber to the massive negative impact and the blow to the confidence of rural and regional Australia when, having been promised something, they did not get it. It is a pretty cheap and nasty trick. I think those opposite should be held to account for doing that and for thinking that it is okay to play with the lives of people who live in regional Australia, in carrying out some sort of pathetic attempt to get re-elected on the back of a tax that did not raise any money. I draw the attention of the House to those issues. There could be nothing more significant or more important than trying to instil confidence in our communities and our economy.

Interestingly, when listening to Senator Di Natale's contribution in this place, I noted he pooh-poohed the issue of sovereign risk. To disregard or underestimate the impact of sovereign risk, one would have to be living under a rock. Australia, particularly Western Australia, had a really booming mining industry coming into the early 2000s. Uncertainty is built up in the minds of these businesses, when they are happily going along under one set of rules and conditions under which they signed up to undertake these massive projects—and we are talking of multibillions of dollars that are being invested in the Australian economy by these multinational companies, money that is not always available within Australia to undertake these projects—and then, part way through a project that has obviously a lifespan built into it, the then government all of a sudden just decides it is going to lob a hand grenade into the middle of things and say, 'With respect to the rules that you thought you were operating under and the assumptions on which you built your business model and your decisions about coming to Australia, we've actually changed our minds on those and we are now making it less economic for you to undertake the same activities you were undertaking when you first signed up to do these projects.'

It is that level of uncertainty and nervousness that the major companies obviously take into account. There is probably a very good reason why we saw a significant slowdown in mining exploration and, in the case of our home state, Mr Acting Deputy President Bernardi, the decision by BHP Billiton not to continue with the expansion at Olympic Dam. As you and our other colleagues from South Australia would well know, the impact on the confidence within the South Australian economy when the decision by BHP Billiton was made not to continue with that expansion was absolutely massive. At the risk of carping on about the importance of rural and regional Australia, particularly of the regional communities in our home state of South Australia, Mr Acting Deputy President Bernardi, we do not have any other economic generators, apart from agriculture and mining.

When I speak of agriculture, obviously I include our fantastic fishing industry in South Australia. Half of the economic generators in South Australia have been taken away—and subsequent to this tax coming in, we have seen so many of our small exploration companies not being prepared to continue with their expansions or their explorations—so you get the idea that it has had an amazingly detrimental impact on the South Australian economy.

I stand here today and plead with those opposite to stop blocking everything that the coalition went to the election on. There was absolutely no doubt in the electors' minds when they went to the election on 7 September that the coalition sought to repeal a number of taxes—the carbon tax and the mining tax, two very large taxes. We had promised the Australian public we were intending to repeal those. We are now a number of weeks into the new parliament, the 44th Parliament, of this country and it seems quite extraordinary that last week we saw the opposition and the Greens oppose the repeal of the carbon tax. If my predictions are anything to go by, we are obviously heading for a loss with respect to the repeal of the minerals resource rent tax.

The Australian public told the parliament that they had voted in a government that went to the people with these two particular taxes on the chopping block for repeal, so why are we wasting so much time in this parliament and this place arguing that we should not be repealing them, as those opposite are arguing? Couldn't we be doing something more useful by actually getting on with the job of stimulating the Australian economy?

As I said earlier, the Minerals Resource Rent Tax raised very little money. The fact is, if you read any economics textbook—and I am sure that you will agree, Mr Acting Deputy President Bernardi, given the comments in your speech which were referred to so many times by Senator Cameron—it is clear that more often than not the best way to stimulate an economy is to stimulate economic activity. And if you stimulate economic activity, then—if you have your taxation settings in the right place—you will end up generating more income. And if you generate more income, you will pay more tax. And if you pay more tax, then the government will have the resources to be able to provide all of those social benefits which Senator Cameron spoke about so passionately this morning. But if you keep shrinking the size of the pie—by scaring business away from generating the economic activity that they need to be able to generate in order to actually pay the legitimate and fair taxes—then all of a sudden you are going to end up with a situation where there is no money left in the kitty to pay for these things. And surprise, surprise: this has been the result of the last six years of fiscal management by the Rudd-Gillard-Rudd governments.

I would implore those in this place to start taking a more sensible economic approach to some of these things. There are a whole heap of things that I would love to see us able to provide to the people of our community across Australia. I would love to see better health care; I would love to see more social services; I would love to see a fully funded NDIS scheme. I would love to see lots of things, because I think that is what makes Australia such a great place—that we have not only such an extraordinarily high level of living but also such an amazing set of social amenities which sets us apart from many people in other parts of the world. You only have to see the numbers of people who want to come to Australia—refugees and people who seek to migrate to Australia—to realise that we do have a fantastic social and economic base. But if we continue to put tax upon tax, and if we continue to scare away investment in productive industry in Australia, all we serve to do is reduce the capacity of governments to generate the revenue or to collect the taxation from the revenue that is being generated from these operations.

It comes back to the old economic argument. You can take the socialist approach, Mr Acting Deputy President, but there are not too many people wanting to migrate to countries with socialist and communist regimes; they all want to come to countries that have capitalist approaches to their economies—because the simple economic fact of the matter is that if you generate good economic activity in your economy, you will be able to provide these social benefits.

In conclusion, I would like to say that the repeal and abolition of the mining tax, along with the carbon tax, will be of extraordinary benefit to Australia and most particularly to our regional communities. The Leader of the Opposition in the other place perhaps, particularly in the lead-up to the Western Australia election, needs to clarify his statements as to his true feelings and his true intentions in relation to this tax—so that when the people of Western Australia go to the polls on 5 April, they can go knowing full well that his intention is to keep this tax and to keep taxing Western Australia in an unfair and disproportionate way compared to the rest of Australia.