David Johnston (WA, Liberal Party) Share this | Hansard source

Senator Lazarus, I thank you for that question—because it is a question that, in my home state of Western Australia, we deal with every day. One of the principal reasons for fly-in-fly-out is the taxation regime around the deductibility of infrastructure for housing and for towns. I share your concern, you might be surprised to know. I spent my formative years in the goldmining town of Kalgoorlie and adjacent to that were Kambalda West and Kambalda East, which were developed by Western Mining to exploit the largest nickel deposit in the world. Those two towns were built from scratch by Western Mining at a great and significant cost to the company, because the regime at that time allowed them to deduct those expenses.

We have changed the regime so that the fly-in-fly-out expenses—all of the costs of putting labour on the site—are deductible. Until we can convince central agencies—until we can put a handle on the cost of deducting those infrastructure expenses of capital, housing, hospitals and schools in remote regions—the mining companies really, to be profitable, have no alternative but to go forward with the fly-in-fly-out methodology. This is a huge challenge for Australia because, in order to develop regional Australia, of course we want to see towns in remote parts of our states and our country as a whole. But, in order to be competitive, our miners must take advantage of the taxation regimes as they stand. We want them to be profitable, because they pay royalties to the states and they pay taxes to the Commonwealth.