Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Hansard source

I too rise tonight to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No.2]. Labor believes that all Australians own a share of our mineral resources. Labor believes that all Australians should share in the profits that come from extracting our natural resources. That is why Labor, when in government, introduced the MRRT.

Those opposite are seeking to repeal this tax. The Abbott government is happy to see all these profits go straight into the pockets of just a few people. This government is beholden to the special interests of big business and the super rich. This government, by its first budget, has clearly shown that it does not understand the pressures facing low- and middle-income Australians.

To justify the repeal of this tax and the so-called related measures in this bill, those opposite rely on two contradictory arguments. Firstly, they argue that this tax is hurting industry. Secondly, they argue that it is not raising any revenue. They cannot have it both ways. In addition to repealing the MRRT, the bill before us today axes a variety of government payments, support bonuses and tax breaks that benefit Australians. These are initiatives, introduced by the Labor government, that make life a little easier for families, schoolchildren, retirees and businesses. But now those opposite want mining companies, making superprofits, to pay less tax and they want small businesses and the lowest paid workers to pay more tax. This legislation is a retrospective tax grab, which will hit millions of Australians—low-income earners, families and small businesses—and will give a tax refund to large mining companies. That is why Labor will again oppose this bill, the removal of the minerals resource rent tax and associated measures.

I wish to speak further about some of the associated measures. The first of those measures in the bill is the schoolkids bonus. Many in this chamber will remember that the Treasurer, Mr Hockey, put out this legislation to the public late last year, on a Friday. Attached to this piece of legislation, to many people's amazement, was the repeal of the schoolkids bonus.

This payment currently benefits over 2.2 million school-aged children across the nation. It is a payment that is not linked in any way with the MRRT, despite the government's rhetoric. This is a vital payment that helps low- and middle-income families ensure that children are equipped and ready to engage in school. According to evidence given by ACOSS to the Senate Economics Legislation Committee inquiry into the Minerals Resource Rent Tax Repeal and Other Measures Bill, one in six children in Australia is living in poverty. That is over half a million children whose families may be unable, without the schoolkids bonus, to buy them school shoes or books. These are the very same families that have been hardest hit by the vicious cuts in the Abbott government's budget.

Evidence has been provided to me by the President of the Tasmanian Association of State School Organisations, Ms Jenny Eddington, who has indicated quite strongly how important and effective this particular payment is to families to enable them to provide the necessities that children need to be able to go to school.

Earlier this month about 1.3 million families welcomed the July instalment of the schoolkids bonus. This instalment of $205 per primary school student and $410 per high school student will help families—and it has been shown that it has been effective and is helping families—with the cost of school uniforms, shoes and sports equipment. In my home state of Tasmania more than 35,000 families received this payment. Many of these families have contacted me to tell me how important this payment has been to them, and just recently we tabled a petition in the Senate asking that the schoolkids bonus be spared from the Abbott government's axe.

The Tasmanian Association of State School Organisations President Jenny Eddington told me that the surveys they have conducted show that families rely heavily on this payment to properly equip their children for school. She said: 'It's important we keep this bonus. It's one of the single most valuable payments that has been made in recent years.' School associations have told me that, since the schoolkids bonus was introduced, there have been more children arriving better-prepared to start the school year and there are fewer parents taking out payment plans to pay off their levies.

I know that those opposite do not understand this. They do not understand the financial pressures facing families, or they would not be taking this measure. They do not understand how important this payment is to help families meet the cost of their children's education. It is a fair and reasonable payment that has helped many Tasmanian families, especially those on low and middle incomes. But as we have seen in the Abbott government's first budget, they do not understand or do not care about—I prefer to believe they do not understand—the financial pressures facing low- and middle-income families. We need to ensure that our kids are as well-equipped as possible to be able to get a great education. It is a real kick in the guts for hardworking families putting their children through school.

Scrapping the schoolkids bonus means the average Australian family with two kids will be $1,230 worse off every year and $15,000 worse off over the life of their child's education. It is a cruel and underhanded move by the Abbott government which will hurt families who are already struggling. Not only is this government ripping off Australian families, it is trying to fool them about the reasons why. Those opposite claim that the schoolkids bonus was paid for by the MRRT. It was not. It has nothing to do with the minerals resource package, and those opposite know it. The schoolkids bonus replaced the education tax refund. The education tax refund was introduced in 2008 to help families cover the cost of educating their children. However, more than 80 per cent of families did not claim the full amount they were entitled to and 20 per cent did not claim anything at all. Some families lost their receipts, or simply did not keep them, or were unable to afford to pay for their children's school uniforms or other education costs first up and then wait months, or even up to a year, for a reimbursement on their tax. The schoolkids bonus simplified the process by making two up-front payments to parents when they needed it most. This government is trying to play Australian families for fools by repealing the schoolkids bonus as part of this package and as part of this bill.

This government seem intent on misleading the Australian people by blaming the minerals resource rent tax for cuts that have absolutely nothing to do with the tax. When the Prime Minister visited Tasmania he said regional development funding would be scrapped because it was paid for by the minerals resource rent tax. Here is what he said at his press conference in Wynyard in north-west Tasmania when asked about a Regional Development Australia Fund grant budgeted in May for the redevelopment of the Royal Hobart Showgrounds at Glenorchy in the electorate of Denison:

[It was] associated with the mining tax. Because we are abolishing the mining tax, we would abolish the programs and funding associated with it, unless we specifically committed to it ourselves. Sure, the [Labor] government announced the money for the showgrounds out of those funds. We didn't match it, so we are not committed to it.

So Mr Abbott is trying to use the minerals resource rent tax as a front to scrap vital infrastructure funding for Tasmania—a job creating project. It showed the Prime Minister clearly had not done his homework and clearly had no regard for jobs in Tasmania. The money for the showgrounds was not a part of the minerals resource rent tax. Labor put this money in the budget under the Regional Development Australia Fund. Despite the fact that Mr Abbott had his wires crossed and had not done his homework, his statement clearly shows that he would rather line the pockets of big mining companies than help communities like mine create jobs and growth.

I would now like to talk briefly about the low income superannuation contribution. The low income superannuation contribution, which helps one-third of the Australian workforce, is also on the chopping block here tonight—and Mr Abbott's government plans to implement that retrospectively. The low income super contribution currently benefits almost 3.6 million Australians who earn up to $37,000 per year by refunding their superannuation tax by up to $500 each year. We should not penalise the lowest-paid workers in our society for saving for their retirement, and certainly not retrospectively. Those hurt most by losing their low income super contribution are those who can least afford it.

Analysis done last year showed that 87,000 Tasmanians would benefit from the low income superannuation contribution. And now checkout operators, office cashiers, childcare employees, hairdressers, hospitality workers, midwives, receptionists and many others will lose this support. Part-time workers, young workers, older workers and half of the female Australian workforce will be hit by this move. Women face many challenges when saving for their retirement. We are paid less on average, often leave the workforce temporarily to have children, are over represented in lower-paid jobs and face barriers later in life. It is sickening that Minerals Resource Rent Tax Repeal and Other Measures Bill, which puts more money in the pockets of the big miners, penalises half of the female workforce in this country. It goes completely against the Australian values of equality and fairness.

The ABC has reported that, according to Industry Super Australia, this action by the coalition, those opposite, would cut as much as $27,000 from the retirement savings of almost 3.6 million Australians, and mostly—I will repeat for the benefit of those opposite—women and young workers. This is according to the body representing industry funds, Industry Super Australia. Industry Super Australia's chief executive David Whiteley says the changes are unfair and unsustainable. The ISA's submission also says the changes will disproportionately affect four in 10 regional and rural Australians. Mr Whiteley said the changes leave low-income workers without a tax concession on their superannuation, while those on high incomes already receive concessions. To quote Mr Whiteley: 'We would be very keen to see that this committee recommends to the parliament that every option is exhausted to make sure that all Australians are getting access to tax concessions on their super.' The ISA warns axing the rebate will undermine efforts to improve half of working Australian women's retirement savings, including 80 per cent of female part-time workers—all this as Mr Abbott's government plans to roll back the proposed 15 per cent tax on superannuation earnings over $100,000 a year.

As our population gets older, how on earth can it make sense to gut the superannuation savings of ordinary, working Australians? Surely the government would want retirees to prepare for an independent retirement? But here Mr Abbott is hacking away at the superannuation savings of low-income earning Australians to line the pockets of big miners. It is bad enough to ramp up taxes on workers who can least afford it, but making the new rules retrospective is cruel.

The Liberals have never supported the superannuation guarantee. Mr Abbott is on record as saying to parliament as far back as 1995:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

And in 2012 he stated:

We have always as a Coalition been against compulsory superannuation increases.

This is a government that is against helping out hardworking Australians on lower incomes—all the while shovelling money back onto the pile of money the big miners are already in possession of. It is not how the resources of our country should be used. The benefits they bring should be shared by all of us, especially those in our workforce. But this sort of mean-spirited move is, after just a few months, already becoming Mr Abbott's government's trademark.

I will take a few months to comment on the changes to the instant asset tax write-off and the loss carry-back tax incentives. These changes show that it is not just workers who are in Mr Abbott's sights; the leader of the Liberal Party, the so-called friend of small business, plans to make life tougher for small business as well. The Prime Minister plans to axe Labor's increase to the instant asset tax write-off, which saved businesses thousands of dollars at tax time. Under Labor's initiative, small businesses were able to write-off depreciating assets that cost less than $6,500. Those businesses have now been given until 1 January to make their purchases before the figure reverts to the former Howard government figure of $1,000.

The loss carry-back tax incentives allowed businesses to spread up to $300,000 as a refundable tax offset via the carry-back provision for the previous two years. Mr Abbott's cutting of the loss carry-back will hit more than 100,000 companies and will tear more than $900 million from the Australian economy. This was a law that allowed businesses to adapt to changing business and economic conditions. Similar schemes are in place in other developed economies, including the United Kingdom, France, Germany and the United States. These 100,000 companies have been given less flexibility, making it much harder to do business. How can that be good for businesses? It does not seem to matter to this government or Mr Abbott—as long as those big miners get their money.

Mr Abbott's push to strip back the minerals resource rent tax and to cut tax concessions, payments and bonuses is not only unfair but is also unpopular. In an article in the Australian on 4 November the headline rung out 'Business takes aim at MRRT repeal'. The article by Sid Maher said:

A TOP business group has attacked Tony Abbott's plans to scrap nearly $4 billion in tax concessions for mainly small businesses as part of the axing of the mining tax, arguing that it will permanently increase compliance costs and cut investment returns at a time when business is struggling.

The Australian Industry Group has told the government that its plans to reduce the thresholds available under the small business asset write-off regime from $6,500 to $1,000 'will add complexity and compliance costs for eligible small businesses'. Ai Group chief executive Innes Willox said in a submission:

It will subtract from their cash flow over the next few years at a time when many small businesses are struggling and it will reduce the return on new investment at a time when there is weak investment outside of the mining-sector.

The Liberal Party, the so-called friend of business, is so clouded by its determination to give money to the miners that it will hurt businesses. At a time when this country needs to be encouraging small business and diversifying the economy, Mr Abbott simply wants to rip money out of the economy and place it back in the pockets of the big miners. Schoolchildren, families, workers and business all will cop it so the miners get their money. It is a growing list of people who are unhappy with the Abbott government's move. But there is more. Australians on a raft of allowances are also set to suffer, with the loss of the income support bonus. This payment provides $210 extra per year for singles and $350 extra per year for couples. I have not much time left to me, but I will repeat: this bill before us is set to hit workers, families and businesses. It is an unfair bill. It is a bill that only benefits the big miners and it rips money from those that can least afford it to give back to the big mining companies.