Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 No. 2. I will be kinder on people's eyes by not wearing a very bright jacket and I will also be kinder on people's ears by not blowing their ear-holes out.

This bill clearly demonstrates the policy differences between this cruel government and the Labor opposition. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners—tax cuts for mining companies, tax hikes for small companies; tax cuts for mining companies but benefits cuts for everyday families; tax cuts for mining companies but retirement income cuts for low-income earners; tax cuts for mining companies but cuts to capital works in regional communities; and tax cuts for mining companies but tax hikes for those participating in geothermal exploration.

At its core, this bill is not about defining a taxation regime for mineral resources in this country. No, at its core, this bill clearly defines this government's cruel agenda, an agenda to end the so-called age of entitlement, an agenda laced in disdain for working Australians, disdain for the families of Australia, disdain for Australians living in the regions and disdain for Australians seeking to expand the renewable energy industry. It is an agenda we see on display in this place every day, where the language of many of those opposite shows an utter contempt for Australian workers and Australian families.

This bill clearly demonstrates the cruel nature of the Abbott government. This bill cuts assistance payments to families, to small businesses, to low-income earners and to our communities while at the same time providing a $3.3 billion tax cut to the owners of Australia's biggest mining companies over the next four years, mining companies who are well and truly majority foreign owned—80 per cent, in fact, of the owners of Australia's biggest mining companies are foreign nationals. This bill hurts Australians while providing a tax cut to foreign nationals.

This minerals resource rent tax is a tax, a fair tax on superprofits—yes, the superprofits realised from coal and iron ore mining in this country; a fair tax that has and will continue to realise significant revenue for the budget at a time when this Liberal government seeks to introduce a tax on visits to the GP and wants to increase the company tax on Australia's biggest companies to pay for its unfair, unaffordable Paid Parental Leave Scheme. This company tax increase will lead to increases in the prices Australian families pay for groceries, for fuel, for power, for clothes and for all goods and services supplied and provided by Australia's biggest companies. It is a tax that will be applied regardless of the profitability of the company and it will not even raise the required amount to pay for their overly generous, poorly targeted Paid Parental Leave Scheme. This company tax increase and the Paid Parental Leave Scheme are further evidence of this Liberal government's desire to hit the hip-pockets of low- and middle-income Australians and line the pockets of the wealthiest in this country.

The minerals resource rent tax is a fair tax that only impacts mining companies when its profits less deductions are over $75 million in a year—a tax that is only imposed on coal and iron ore producers in times of profitability. When this tax was introduced in 2011, Australia was experiencing an unprecedented boom in our resources sector, specifically in iron ore and coal, which delivered record profits to mining companies year after year. During the last tenure of those opposite, royalties as a percentage of mining profits decreased from around 40 per cent to about 15 per cent. It works out at about $35 billion that could have been invested for the benefit of all Australians if captured by a superprofits tax.

These mineral resources are nonrenewable. The resources and a large share of the profit are actually shipped off overseas—resources that can only be dug up once, resources that can only be sold overseas once. All Australians should benefit from the sale of our resources not just the few who are directly involved in the mining industry. It is vital that the community who owns the resource 100 per cent gets a fair return on these resources to strengthen our whole economy for the future. Of course, the fact that this tax does not deliver on forecast revenue in its first few years does not make it a bad tax. It is a tax designed to work in perpetuity. When profits are high, the tax will pull in significant revenue. Or when capital works are high and therefore deductions are high, as has been the case for the past few years, the revenue is reduced. Or if profitability is low and a mining company makes less than $75 billion from a mine in a particular year then no superprofits tax is paid.

The tax actually provides an incentive to invest in iron ore and coal mining operations relative to a pure royalties taxation model.

As the mining industry is extremely capital intensive, it actually employs only around two per cent of Australian workers. While profits in the mining industry grew by over 250 per cent over the last decade, the mining industry contributed only seven per cent to Australia's jobs growth over that period. While the manufacturing industry continues the decades-long trend of employment decline, it still employs over four times as many people as the mining industry. The metals manufacturing industry, which includes smelting, refining and producing metal products, has not been a significant beneficiary of the mining boom. Increased competition from Chinese smelters and refineries, high-energy prices and the appreciation of the Australian dollar saw value added in the metals manufacturing sector flat through most of the last decade. The export volume of processed metals fell over the decade with weakness across a wide range of refined metals. This trend will only continue as smelters continue to close. Despite this, there are no proposals from those opposite to assist manufacturing businesses to deal with the high Australian dollar, which has been stuck over 90c for the better part of four years. Where the former Labor government sought to assist non-mining industries through rational, interventionist, government industry policy, this government has a fanatical approach to free-market economics.

This government has turned its back on Tasmania. The coalition government was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election has been nothing but a complete failure. Last week, the member for Franklin and Shadow Minister for Regional Development and Local Government, Ms Julie Collins, released a report card on the Abbott government's Economic Growth Plan for Tasmania. Of the ten major proposals in Prime Minister Abbott's Economic Growth Plan for Tasmania, only one has been completed. All of the others are well off track. The Abbott Tasmanian file shows that the status of the Tasmanian Major Projects Approval Agency is 'announced', but it only began meeting with stakeholders last month and no board appointments have been made as yet.

The next project is the Tasmanian jobs program. The status is that 60 positions have been created since 1 January 2014. The coalition government's target was 2,000 positions over two years and there has been a cut in funding from $6,050 over a six-month period to only $3,250 over the same time. The next project is the Hobart International Airport, with a $38 million runway extension and the promise of 200 jobs. The status of that is that there is no start date, no international carrier and no details around the design of the runway. The next project is a centre for Antarctic and Southern Ocean research funding boost. The status: 18 CSIRO jobs have been lost in Hobart. The next project is the fruit and vegetable industry task force. The status is that it was announced in March, it was to have had its first meeting in April, and a similar organisation already exists in Tasmania.

The next project was a the Productivity Commission report into Tasmania's shipping costs. The status of that is that the coalition government has yet to formally respond and has had the report since 7 March 2014. The next project is support for the forestry sector. The status is that only eight projects have been announced from Labor's $100 million Jobs and Growth Plan. The eight projects total only roughly one-third of the total amount allocated. Meanwhile, businesses are waiting to co-invest hundreds of millions with government to create jobs in Tasmania. The next project is the Midland Highway $400 million upgrade. The status is that $100 million was cut from Labor's plan and construction work is yet to start. The next project is Sense-T. The status is that funding was announced on 12 June 2014. This is one project where the commitment has actually been met. So that is good news. The project to revitalise Work for the Dole was started on 1 July 2014 without any coordinator in place for Tasmania. All of Braddon, all of Bass and a good proportion of Lyons are to be covered under the one Work for the Dole program.

It is clear that this government has turned its back on Tasmania. The coalition was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election we have seen nothing. A recent article in the Burnie Advocate highlights the discontent from a senior Tasmanian entrepreneur and key Tasmanian jobs adviser to Prime Minister Abbott. The coalition's Economic Growth Plan for Tasmania also included the creation of the Prime Minister's Joint Commonwealth and Tasmanian Economic Council. The Prime Minister's co-chair, Mr Dale Elphinstone, has said that the council's processes are running a little slower than he would have liked—as in: it has not even formally met yet. The council is also meant to include the chair of the Tasmanian Major Projects Approval Agency, but the chair has not yet been appointed. The council is due to meet next week and I hope that the senior ministers who are listed as members, including Prime Minister Abbott, Treasurer Hockey and Industry Minister MacFarlane, all make the trip to Tasmania and attend this meeting. It is interesting to note that the Minister for Employment, Tasmanian Senator Abetz, was not included in the council.

While the senior ministers are in Tasmania, I hope they reflect on their cruel and unfair budget. In particular, I hope they reflect on this debate and on the cruel and unfair measures that they are proposing in this bill—cruel measures that will actually leave many Tasmanian families much worse off. I call on the government to reflect on the impact of their proposal to repeal the schoolkids bonus—a cut that will cost the average family $15,000 over the period of their children's primary and secondary education and a cut that is not related to the mining tax as it was not enacted by the MRRT bill. Further, it existed as the education tax refund before the MRRT was introduced. The government now plans to scrap the schoolkids bonus and not even reinstate the education tax refund. This secret cut will impact over 32,000 Tasmanian families. Around 60,000 Tasmanian children will go without the payment.

The schoolkids bonus delivers parents some extra help to meet the large costs associated with sending their children to school. When the schoolkids bonus was introduced, those opposite opposed it because they claimed it was not specifically targeted to education. They called it a cash splash and they did not trust Australian families to spend it on educational needs. They said the education tax refund was a better way—despite the fact that millions of families were not getting their full entitlement—and promised to increase it. The mums and dads that I talk to spend the money that they get through the schoolkids bonus on essentials: on uniforms, on excursions, on footy boots, cricket bats, guitars and recorders. It is clear that those opposite do not care about supporting families. I am heartened to learn that there might not be enough support for this measure in the Senate.

I call on the government to reflect on the impact of their proposals to stall the increase in the superannuation guarantee and to scrap the low-income superannuation co-contribution, backdated to July 2013. It is clear that the government does not care about support for low-income Australians who are saving for their retirement. The Minister for Finance, Senator Cormann, recently told ABC Radio:

For somebody who stays on the lowest income tax bracket for their whole working life, all the way through, I think you'll find that they will have the ultimate safety net. They will be supported by the aged pension once they reach retirement.

Minister Cormann just does not get it, because the measures they are imposing through the budget will actually reduce that income for pensioners.

The coalition government, and particularly Minister Cormann as finance minister, want to push the retirement age to be the oldest in the world, at 70. I challenge Minister Cormann to look a cleaner in the eye and say that his government is ripping money out of their superannuation to give to big miners. I challenge Minister Cormann to look an early childhood educator in the eye and say that he thinks the pension is the ultimate safety net. I challenge Minister Cormann to look current pensioners in the eye and tell them that cutting the indexation will keep the pension as the ultimate safety net.

The purpose of superannuation is to provide relief to the age pension system and to provide all Australians with options in their retirement. If the coalition get their way, people earning $37,000 or less will lose the tax incentive to make personal contributions to their superannuation. This measure effectively reduced the tax rate on personal superannuation contributions to zero. The coalition do not just want to reintroduce this tax on low-income earners saving for their retirement; they actually want to back date this measure, hitting the 3.6 million Australians, including 2.1 million working women, with an increase in their tax this year if they made personal contributions to their superannuation. These people entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. This goes against all standards of responsible economic management. Again, I am heartened to learn that there is not enough support for this measure in the Senate.

This bill would also abolish the income support bonus, a tax-free payment to people on payments—including Austudy, Newstart, the parenting payment, and the children of our veterans who were killed or injured in action—to help with unexpected living costs, such as medical expenses or car repairs. If the proposed abolition is successful, around 1.1 million low-income Australians will lose the payment. It was introduced in early 2013 'in recognition of the fact that the current rates of income support allowance payments are manifestly inadequate'. The bonus provides $210 a year to single recipients and $350 a year to most couples, where both partners are eligible.

The Australian Council of Social Service has estimated that 57 per cent of parenting payment recipients and 28 per cent of Newstart allowance recipients could not afford to pay their utility bills on time, compared with 12 per cent of all Australians. That is what this government is about: in every way possible, unashamedly attacking Australians who are doing it tough. Once again, this has failed the fairness test in the Senate. I am proud to stand with the senators who will not be supporting this measure.

This government is even attacking its supposed base—2.7 million small businesses—by slashing the instant asset write-off from $5,000 to $1,000. The 'other measures' component of the bill will also close the loss carry-back scheme utilised by up to 110,000 businesses to smooth their tax over the good and bad years. Just like the 'other measures' in this bill, it has no friends outside of the coalition party room, with the Australian Industry Group and the Council of Small Business speaking out against the removal. The AiG said that the existing arrangement provides a very important boost to a company's cash flow 'at a time when they need it most and at a time when it is going to be most critical in ensuring the survival of that business'. Further, the AiG warned that the Australian economy faced a 'large gap in investment, particularly outside the mining sector' and that removing the instant write-off facility for small business would have a material effect on them and would 'decrease investment at the time it is needed most'. It is disappointing that it appears that not enough of the crossbenchers will vote to support small business in this way.

The 'other measures' in this bill also impose extremely negative effects on geothermal energy exploration. Under current arrangements, geothermal energy exploration and prospecting expenditure is deductible in the income year that the asset is first used or the expenditure is incurred. Under the new legislation, this expenditure would not be immediately deductible. The Australia Institute has observed that 'if this measure is repealed geothermal exploration will not have the same incentives as any ordinary explorer looking for fossil fuels'.

I conclude my remarks by restating that the MRRT has seen and will continue to see the benefits of mining shared across our community. I am pleased to speak against a bill that clearly demonstrates the policy differences of this cruel government and the Labor opposition. It is not an indecent proposal to provide transitional support for businesses and workers in industries hampered by the sustained strength of the Australian dollar. It is not an indecent proposal to impose a superprofits tax on coal and iron ore mining companies and to use that revenue to assist families, low-income earners, small businesses, regional communities and those exploring for commercial geothermal energy. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners. (Time expired)