Sean Edwards (SA, Liberal Party) Share this | Hansard source

I too rise today to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, which will abolish the failed mining tax from 1 July 2014. It is very clear that in Australia we have three very big mining states: Western Australia, Queensland and South Australia. It is very clear now what the Greens' Western Australian Senate election strategy is. It is to tax more. That is what we have just heard from the Leader of the Greens. Their plan is to keep the tax, to continue to run deficits and to maintain the downward spiral of investment in mining in Western Australia, Queensland and South Australia.

Over the last decade Australia has had the good fortune to be able to benefit from the ongoing expansion of worldwide demand for our natural resources, particularly in Asia. While resources long contributed to government revenues under the prudent stewardship of the Howard government, the coalition left no debt for the incoming Labor government. Having eliminated the $96 billion worth of net debt that it had inherited from the previous Labor government, the coalition instead left the Rudd Labor government a surplus of $20 billion and a $60 billion investment fund for the future.

This prudent fiscal management was clearly squandered by the former Labor government, a government that spent more time concerned about their own personal agenda, looking over their shoulders in an effort to head off any leadership coups, instead of properly managing the finances and providing for good governance of our country. Labor's legacy to Australians has been 200,000 more unemployed, a gross debt projected to rise to $667 billion and $123 billion in cumulative deficits. To add to that, there are also the 50,000 illegal arrivals by boat and now the world's biggest carbon tax.

Our promise at the last election, prior to 7 September and during all of those years in opposition—and we were very truthful—was that we were going to repeal the carbon tax and abolish the minerals resource rent tax. That was our promise. Instead there was reckless spending on the other side, and now what have we inherited? A bare cupboard—in fiscal terms, a slow-moving train wreck. We have to arrest this and the policies that go with that slow-moving train wreck. The mining tax is a clear example of poor economic policy and mismanagement. It is a complex and unnecessary tax which struggled to raise the substantial revenue predicted by the former government—a complete embarrassment for them, I would say. It damaged business opportunity and confidence in one of our most important industries and took away likely investment and jobs growth across the nation.

This repeal of the mining tax is significant in safeguarding Australia's economic future. It is about repairing Labor's damage and mending the fiscal destruction Labor inflicted on our finances. The repeal of the mining tax is an important step, in the same way the repeal of the carbon tax is designed to help stimulate economic growth. This is important not just in my home state of South Australia but in Western Australia, where the all-important Senate re-vote is fast approaching, in several weeks time.

Just last week, Labor voted to keep the carbon tax, and we were all here that Thursday. Obviously the Labor Party's No. 1 ticket holder in Western Australia for the election on 5 April is not in concert with his federal parliamentary colleagues, because Mr Joe Bullock proudly declared that Labor was scrapping the carbon tax. That was reported last week, much to the chagrin, I would think, of the Leader of the Opposition, Mr Bill Shorten, because, while Mr Bullock was out there championing that to Western Australians, his Western Australian colleagues were in here voting down the repeal of the carbon tax.

Those in the Labor Party, those seeking to get an advantage from the re-run of the Senate election in Western Australia on 5 April, are out there saying to the Western Australian people the same sort of thing that Julia Gillard said in 2010. She said, 'There will be no carbon tax under the government I lead,' and then she introduced it under the government she led. Now Mr Bullock is out there in Western Australia proudly declaring that they are going to repeal the carbon tax, and they are clearly not going to. So bring on that by-election. The Western Australians, I am sure, in their infinite wisdom, will see the mining industry for what it is in that state, an industry that they want to keep quite vibrant.

Labor continue to join forces with the Greens—whom we have just heard from in this chamber—and voted last Thursday to maintain the carbon tax, that toxic tax. Labor are all about representing themselves as one thing on this issue when it comes to the electioneering that is going on—it happened in my home state of South Australia in the last few weeks and now it is happening in Western Australia—but their representation is somewhat misguided and requires scrutiny from all of those that are looking to vote for them thinking that they are going to do what Mr Bullock has recommended and scrap the carbon tax.

Let us talk about the truth of what the mining tax is. The MRRT is representative of the policy dysfunction of the Rudd-Gillard-Rudd government. They seemed to lose the plot, and the mining tax was just one of many examples of a government just taxing and spending. The mining tax was an attempt to disguise the omnipresent rampant waste and chronic mismanagement of the public purse under the previous government, a regime that squandered the coalition's legacy, which I talked about earlier. Every Australian has now been burdened by the Labor government with record levels of debt. In 2010 the MRRT was forecast to raise $26.6 billion over five years, and the revenue estimates have only been downgraded ever since, and at every opportunity. This of course is of absolutely no surprise to us on the other side of the chamber, who know how fiscal management works.

The MRRT did not raise $26.6 billion. It raised nothing close to this amount. From its beginning, it raised a mere $340 million in net terms. Of most concern, the former Labor government locked in more than $16.7 billion of expenditure on an underlying cash basis over the current forward estimates and $18.4 billion of expenditure on a fiscal basis over the current forward estimates. Of particular significance in this was Labor's rushed commitments to round 5 of the Regional Development Australia Fund. Prior to the election, Labor promised to fund another round of these regional projects, falsely and cruelly raising the hopes of many communities around the country. After the election was held, local governments and regional development authorities all came running. Their greatest fears were realised, because these commitments were made in a caretaker period, with absolutely no hope of being funded by the funds garnered from the MRRT.

Of particular significance to us in this debate is the issue of foreign investment. It must be made clear that the MRRT overlooked the fact that the very strength of the industry is dependent on attracting huge amounts of investment from abroad. Only by complementing domestic investment with that from abroad can Australia fully capitalise on the opportunity of a rapidly rising Asia, hungry for our resources. How can we make use of these opportunities and provide jobs and growth when sovereign risk is at the forefront of everyone's conversation, undermining investment and the investment policy settings that surround it? Under Labor, Australia was not seen as an attractive business destination. Its perception as a place to do business changed, leading to hesitation and concern from investors.

During the inquiries into the mining tax, the CEO of the Minerals Council of Australia, Mr Mitch Hooke, noted how the introduction of the mining tax contributed to increasing the perception of sovereign risk. This same point was made on 26 October 2011 at the Commonwealth Business Forum in Perth, where the chief executive of the South African goldminer AngloGold Ashanti, Mark Cutifani, stated that Australia is:

… one of the top sovereign-risk countries in the world on the basis of government policy and its demonstrated behaviour in terms of taxation policy and its inconsistency in policy.

That is hardly a glowing endorsement of the policy regime that was present at that time. Similarly, in my home state of South Australia, in a submission to the original mining tax inquiry, Business SA stated:

The design of the MRRT is flawed. There will soon be two different types of mining tax regimes in place. Indeed, while companies subject to the MRRT receive a refund from the Commonwealth Government on the State mining royalities that they also pay, the administrative and compliance costs of two different mining tax regimes are far higher than they should be.

This tax has driven foreign investors to question whether Australia is really serious about staying at the forefront of the resources industry. Mining companies already pay vast amounts of company and payroll taxes, and all their employees pay tax. The more employees they employ, the more taxes get paid. In addition to these, there is the rich vein of royalties that keeps the rest of the economy strong. The coal industry, for instance, pays $3.1 billion in royalties to the people of Queensland every year, while those in New South Wales receive $13 billion from their industry. So that is $3.1 billion for the people of Queensland and $13 billion for those in New South Wales.

Now, you might remember that, since 7 September, Australia is now open for business. The coalition is committed to creating and delivering good governing policy to strengthen and build our economy. We on this side of the chamber know what good government policy is. We understand the importance of a strong economic management system and, significantly, the need for proper process—asking questions and then responding methodically and systemically with the formation of good public policy. With the change of government also came, loud and clear, the new message to the world that Australia was, indeed, open for business. Investors can be assured that they are dealing with the grown-ups. I see, Senator Sterle, you are nodding there in furious agreement. This is a government committed to creating certainty and a fair playing field which balances the future interests of all peoples of this nation.

This bill puts confidence back into Australia's economy, both locally and internationally. It will help put doing business in Australia back—