Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I want every senator who did not understand that it was coalition policy at the last election to repeal the minerals resource rent tax to raise their hand. There are no hands raised. I ask the same question of the Australian public, particularly people in my home state of Queensland and in the state of Western Australia: can you raise your hand if you did not know that it was the coalition's policy to repeal the mining tax. I cannot see them but I am sure there would not be a hand raised anywhere in Australia, particularly in my home state of Queensland or in Western Australia. Why do I refer particularly to my home state of Queensland and to the state of Western Australia? They are the states which contribute most to Australia from mining resources and from the taxes currently paid by the mining industry.

Everyone in Queensland and in Western Australia knew that, if they voted for the Liberal and National parties, the mining tax would go—and people wanted it to go. There were a couple of reasons for that. Perhaps the most important reason was that it discouraged investment in the mining industry. It meant that those international and Australian companies with current investments in the mining industry were drawing back. What does that mean? You do not have to be a great economist to know that, without continuing investment in the mining industry, things start to slow down—and that means jobs.

I know that in Western Australia jobs in the mining industry are so very, very important, as they are in my own state of Queensland. So many of those people of whom the Labor Party allegedly are the representatives in this parliament are the people who are now starting to lose their jobs. They are the people who, thinking that the mining industry had a great future in Australia—before the Gillard government came along—went out and got a good job in the mining industry, in Western Australia or in Queensland. They then, with the expectation of a good income for many years, went out and bought a house, mortgaged to the bank, and set their lifestyle and their business plans for their family on the basis that the mining boom would continue forever.

It is those people who went to the polling booths and said, 'We understand; we can cut through the Labor Party rhetoric, we can cut through the false promises, we can cut through the lies. We understand that the CFMEU no longer looks after our interests. We can work that out.' As I said, you do not have to be an economic genius to see what is happening on the mine site. That is why so many people in Queensland and Western Australia voted for the Liberal and National parties.

Mr Deputy President, I ask you and I ask other senators, because this is the Senate chamber: which states in the last election returned three coalition senators almost on the first count? Was it South Australia? No. Was it Tasmania? No. Was it Victoria? No. It was Queensland and Western Australia who returned three coalition senators. I think in Western Australia Labor got one senator, was it? One senator. In Western Australia, one of those elected in addition to the three Liberal senators was a representative of the Palmer United Party, which at the time had made it very clear that they opposed the mining tax. Now, I am not quite sure where the Palmer United Party is at the moment but I suspect that, if the PUP nominee is returned at the upcoming by-election, he will have his own views. I know he is a person who has been involved in business in Western Australia and understands just how bad the mining tax has been for Western Australia.

I am labouring the point, but I want those opposite to understand that Australians, being in a democracy, have an opportunity to express their view on what is happening—and, when they express that view, you would think that the parliament would follow that view. We are not in South Australia, where you get 53 per cent of the vote and the other party gets to be in government! Nationally, things are not like that. Australians have the opportunity to indicate which policies they want adopted; and, quite clearly, in the last election Australians as a whole but particularly those in Western Australia and Queensland indicated they wanted to get rid of the carbon tax and they wanted to get rid of the mining tax.

I mentioned one of the reasons they voted that way was that they were concerned about their jobs and their mortgages—because they understood that the mining tax was discouraging investment in Australia's mining resources industries. I now know why Paul Howes is resigning from the Labor Party and the union movement today. I assume he is honourably abiding by his promise to resign if just one job was lost. I think even Mr Howes has been able to understand that it is not just one job lost; literally thousands and thousands of jobs have been lost because of the carbon and mining taxes.

That is principally why people voted against the mining tax and for the Liberal senators in Western Australia. But the other reason, of course, was that it was a tax that cost more to collect than it raised. Only the Labor Party and the Greens working in harmony could devise a tax that lost money!

That must go down in the political history of the world, I would say, as a unique situation: the Greens and the Labor Party could devise a tax that lost money.

I have never forgiven Xstrata, BHP and Rio, and every time they come knocking on my door the first part of the conversation is me saying to them, 'I've never forgiven you for how you did that deal with Wayne Swan.' But, in retrospect, I can only think that the three CEOs of those three major international mining companies must have thought all their Christmases had come at once when they were called upon by Ms Gillard, the then Prime Minister, to go and negotiate with Mr Wayne Swan, the then Treasurer, on how to devise a mining resource rent tax. Those three CEOs must have said: 'There is a God. Christmas comes every day when we've been asked to go and meet with Wayne Swan and devise a mining tax.' What happened with their devised mining tax that Mr Swan was lured into? Those three did not pay any tax, but all the other miners ended up somewhere along the line with a tax. Again, only a Labor Treasurer, only a member of the Labor Party, advised by the Greens political party, could possibly have fallen for that trap and devised a tax that simply raised no money.

Mr Deputy President, you have already heard in this debate and you will hear again, but I must repeat, that since 2006-07 the mining industry has paid tax—very considerable tax. In spite of what the Labor Party and the Greens, particularly, say about 'these wealthy miners ripping Australia off and taking their profits overseas', since 2006-07, the mining industry has paid $117 billion in company tax and state royalties, and that is just in company tax and state royalties alone. It does not include the huge amount of tax generated from income and other payments that are made.

I am delighted to see that a council up in the north-west of Queensland, the Cloncurry Shire Council, has come to a good arrangement with the mining companies in that shire so that the mining companies there also contribute quite substantially these days to the community facilities established and run by the Cloncurry Shire Council. All credit to Mr Andrew Daniels, the mayor up there, and his council for the way they have looked after their shire by making sure that all of those working in the shire pay their way. The mining companies in that area, happily, pay a substantial part of the revenue to that shire. But that is just one instance. There are 117 billion other dollars in company tax and state royalties, plus all the tax that those working for the mining companies pay.

Mr Deputy President, you will remember that in its original form the resource rent tax—the mining tax, let me call it—was forecast to raise $49.5 billion in five years from 2012. Not only did it not raise that money but it lost the Prime Minister at the time his job. It cost Mr Rudd his job, as I recall, and the new Prime Minister then, Ms Gillard, said that she would fix the impasse with the resource sector, and the minerals resource rent tax was born. Mr Swan, I regret to say a member from my state of Queensland—I only regret to say it because if people judged Queenslanders by Mr Swan they would have a very low opinion of us—indicated that the tax had raised $126 million in the first six months. Remember that it was supposed to get, in the first five years, $22.5 billion. In the first six months it raised a tiny $126 million, most of which went in advertising the tax, in setting it up and in running this very complex tax system.

I hope there are some members from the Greens political party participating in this debate because I would like them to explain to me how you can devise a tax that actually costs the taxpayer money. I saw at first-hand how the Greens political party initiated an inquiry into Qantas, one of the biggest businesses in Australia, and it was an embarrassment, I have to say, to attend that hearing and see some of the puerile questions from Labor and Greens members trying to tell Qantas how to run its business. I digress, Mr Deputy President, to tell you that one of the Greens or Labor senators—I will not be nasty enough to identify which one—could not work out the difference between cash flow and profit and loss. It was an embarrassment when Mr Joyce, the CEO of Qantas, had to sit down and give senators a lesson on something as simple about economics as the difference between cash flow and profit and loss. So here we are with the Labor and Greens political parties devising a tax which made no money.

Only 20 taxpayers have so far paid the tax over the first year. Those 20 taxpayers paid $400 million—remember, it was supposed to get $22.5 billion over the first five years; so a tiny $400 million has been raised—but 145 other miners have been required to submit all the paperwork associated with the tax. If you wonder why international investment is going to South America and Africa and not to Australia anymore, it is because of the red and green tape, the filling in of paperwork. That is a great example: 20 pay the tax and 145 had to fill in the forms. To set up this tax there was $40 million in advertising. That advertising was mainly to try and convince the Australian public that it was a good idea. It was political advertising paid for by the taxpayer but, in a typical Labor Party way, using taxpayers' money to run election campaign advertising. So some $40 million was spent on that and $50 million was spent on setting up this tax: all the public servants, all the bureaucrats, all the form filling, all the papers, all the expert advice, so-called. So, just to set it up, it was $90 million, almost as much as the tax collected in the first six months. Then, on top of that, there was a conservative estimate of some $20 million a year to administer the tax—to administer a tax that does not raise any money.

My colleagues have spoken on the mining tax, and I refer people particularly to the speech of Senator Back from Western Australia. I urge Labor and Greens members to look at it, because they might learn something if they focus on that speech and understand just how the figures do not stack up. Again, this is so important to my state, and that is why I am taking part in this debate. I hate to admit this as a Queenslander but I recognise that the mining tax has a greater impact on the state of Western Australia because Western Australia eclipses even my state of Queensland as the mining giant of Australia and, indeed, the world. So much of the Western Australian economy depends on the mining industry. So many jobs in Western Australia depend on the mining industry. So many community facilities are built from the royalties and taxes already paid by the mining industry to state and local government. Yet we have seen, lamentably, a downturn in investment in mining.

The Labor Party and the Greens do not understand this. They see an industry doing well for 12 months or 24 months and they think they can tax it. But what they do is tax it out of existence. I hope that the Labor Party are going to follow the promise of the leader of the Labor Party ticket in Western Australia—a Mr Bullock, who I have never heard of, although he has probably never heard of me either. Mr Bullock has promised that they are going to get rid of the carbon tax. On the day he was promising to do that, his colleagues in this chamber voted against the repeal bill. So who knows where they stand? Senator Pratt, who is facing annihilation at the Western Australian Senate election next Saturday, has actually claimed that Kevin Rudd already got rid of the mining tax and the carbon tax. Yet we see the Labor Party, when presented with the opportunity to get rid of the carbon tax just last week, failing to do so.

Neither Senator Pratt nor Senator Ludlam, both Western Australian senators, will be taking part in the debate here in the chamber on this issue of vital importance to Western Australia. They are both over there trying to save their political skins. I hope the Labor Party understand the mandate the coalition were given at the last election to remove the mining tax and I hope they pursue that at the by-election in Western Australia.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I oppose the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. The Australian Labor Party believes in a fair go, equality and opportunity. We believe that the profits of our country's resources, which can only be dug up once, should be shared amongst all Australians, not just enjoyed by a handful of mining magnates. That is why we in government introduced the minerals resource rent tax—to share the wealth and spread the benefits of Australia's mining boom by providing tax breaks for small businesses through the instant asset write-off and the tax loss carry-back, by helping young families through the schoolkids bonus and by assisting low-income earners through the low-income superannuation contribution.

But this government is deadset keen on making cuts. As my colleague Senator Bilyk mentioned the other day in this debate, the coalition campaigned on cutting the mining tax and the carbon tax, but they did not tell the electorate where these cuts would come from. They did not tell the Australian people that they would lose out on assistance that so many of them rely upon. Why are we on this side not surprised? This government has done nothing but cut, cut, cut since it came into office. It reneged on grants by the Regional Development Australia Fund which had not yet reached the stage of contracts being signed. The Australian government cancelled the round 2 grants of the Tourism Industry Regional Development Fund. This program offered matched dollar-for-dollar funding of between $50,000 and $250,000 to assist tourism operators. TIRF grants offered unique opportunities for regional and rural tourism operators to improve the quality of their tourism products and increase the numbers of visitors to their regions. North Queensland, where I have recently travelled, is an area where we particularly need to make sure tourism is supported—not put into mothballs.

Last year the Labor government announced $40 million for the National Crime Prevention Fund to help address gang violence and street crime. This initiative was fully funded in last year's budget. A number of community organisations in areas with high crime rates across Australia received funding based on the quality of their submissions. There have also been cuts to pay increases for the childcare and aged-care sectors. The NBN website was removed. The list goes on. There were cuts to the Building Multicultural Communities Program. Some organisations who had been told they had been successful received letters notifying them that the federal government was withdrawing its funding. In another low blow by Mr Abbott, payments were cut to the children of veterans who had been killed or injured. It only cost the government $250,000 a year to provide assistance to 1,200 children under the Veterans' Children Education Scheme and the Military Rehabilitation and Compensation Act 2004 Education and Training Scheme, yet Mr Abbott still has his mind set on introducing a paid parental leave package to benefit the wealthy.

It is a sad day to be in this place with the government wanting to repeal all these Labor government initiatives so that they can keep their big business and mining friends content—friends like Gina Rinehart, who thinks Australians get paid too much and should 'spend less time drinking or smoking and socialising and more time working'. Ms Rinehart also supports reducing the minimum wage. She told the Sydney Mining Club:

The evidence is inarguable that Australia is becoming too expensive and too uncompetitive to do export-oriented business.

Africans want to work, and its workers are willing to work for less than $2 per day. Such statistics make me worry for this country's future.

Surely we cannot afford to have situations where we have migrants coming to this country willing to work for below the minimum wage and at $2 an hour. That type of mindset is from way back in ancient times.

These comments by someone who inherited her wealth and is worth an estimated $19.89 billion put a knife through the hearts of our working families—families who are struggling with cost-of-living pressures and who were receiving assistance from a Labor government. I am a former union official. Ensuring that workers have a safe work environment, fair pay and overtime conditions and access to leave entitlements is the principle of my working life. Those workers that I represented relied on every dollar they earned to keep food on the table for their families, to pay their bills and to send their children to school, and yet we have people who have no financial woes saying that these workers deserve a pay cut. It is a bit rich.

Ms Rinehart also had no second thoughts on looking down on those who need help most and blaming welfare recipients for receiving government funding, yet she sees no problem in big business and corporations receiving tax cuts or financial assistance. An article called 'Gina Rinehart hits out at welfare recipients and the Left for dragging Australia into debt', on The Daily Telegraph website, indicated that Ms Rinehart had double standards when it came to her views on welfare. It said:

She wants to be a bigger welfare recipient herself … She's against social welfare but she's very much in favour of business welfare for herself … I think that's an appalling double standard, there is no bottomless pit of money and that should apply to Gina as much as the people she's bagging today.

It is important that support is reciprocal, not just directed one way in supporting mining magnates like Gina Rinehart or others. It should be generated through our society to make sure that it gives a fair and equitable system. That was the message and the ideology behind our taxation: to make sure it was spread across our communities.

Now I will have a look at the schoolkids bonus. The Labor Party has always believed in investing in education. With a good education, no matter their background, young Australians can strive to achieve whatever they set their hearts and minds to. In 2009, we invested heavily—$16 billion—in the Building the Education Revolution program to upgrade facilities in our schools and allow schools to build much-needed new infrastructure, including sites—

Helen Kroger (Victoria, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy President, I raise a point of order in relation to relevance. I understand that we are actually debating the minerals resource rent tax, and the good senator has actually said that he is now turning to education. I do not quite see how that is—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Thank you, Senator Kroger. There is no point of order. Senator Furner is relevant.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Deputy President. Once again, we demonstrated our commitment in terms of education, and part of this bill is to withdraw education funding from the schoolkids bonus. I was saying how we had committed $16 billion to the BER program, Building the Education Revolution, updating facilities in our schools. In schools in my seat of duty, I opened around 135, and we saw science labs, language centres, libraries and classrooms rejuvenated as a result of that funding. I have also spoken many times on this topic. I am very passionate about investing in our next generation, and that is why I am disappointed that this government is scrapping the schoolkids bonus through this bill.

There are 1.3 million Australian families who receive the schoolkids bonus; and, of those, 481,588 children are from my state of Queensland. This bonus is worth $410 a year for primary school students and $820 for high school students. Being a father of three I know how expensive it is to send our children to school. Certainly, many of the parents I spoke to when we launched this bonus were very thankful to the Labor government for assisting them in providing the cost of the bare necessities to send children to school. Mr Deputy President Sterle, you yourself would know the cost of sending children to school. It is a costly exercise but well worthwhile to make sure that children are taken care of in their early years and get a great education.

The schoolkids bonus went towards books, uniforms, shoes, music lessons, excursions, school camps, stationery and school fees. It all adds up, as you would know, Mr Deputy President Sterle. It is always great to receive some sort of benefit from a government that is committed not only to children but also to education. While the schoolkids bonus does not cover all educational costs, it is definitely a helping hand, especially over 12 years of schooling—nearly $7,000 per child in assistance that will now be eliminated as a result of this Liberal-National Party government stripping away the schoolkids bonus. Over four years, this equates to $4.5 billion being ripped away from our families. Does that really seem fair to you, Mr Acting Deputy President Sterle? I would not think so. The government provide a tax break to big mining companies but take money out of the pockets of those who need it the most. That is the flip side of this bill.

Turning to small businesses, this repeal bill also leaves 2.7 million small-business owners worse off, taking away a tax break and ripping away $2.9 billion from small businesses over the forward estimates—hardly a helping hand from the party that says it is the party that supports businesses. We increased the instant asset write-off threshold to $6,500, but this repeal bill drops it back to $1,000. I remember speaking to a copious number of small businesses when we introduced that initiative, and they took advantage of it, as it made sure that they could go out and purchase maybe an additional car. Close friends of mine, Nabil and Awatef Karam, with a florist business in the seat of Lilley, on Sandgate Road in Virginia, went out and purchased some additional refrigeration to keep their flowers viable. They keep them in coolrooms to make sure they do not wither and die in a matter of days. So small businesses like that took advantage of that threshold increase, but now it is going to be dropped back to $1,000. In effect, 110,000 businesses will be affected by this threshold reduction from $6,500 to $1,000.

On 5 November 2013, in The Australian Financial Review, the article 'Business challenges tax changes in MRRT repeal' stated that the Australian Industry Group said the small business asset write-off threshold should not be reduced from $6,500 to $1,000 because it would add an extra administrative burden. On 27 November 2013, Dr Peter Burn from the Ai Group told the Senate Economics Legislation Committee during its inquiry into the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013:

Everyone who has been a small business person knows what a hassle it is to trace, over the life of an asset, the deductions that have been made in previous years and the statutory accelerated depreciation rates and to make small deductions over a number of years. Making a single big deduction in the year that it is purchased is simple. It relieves business of all the paperwork, it reduces the costs they have to pay to their accountants and it gives them more time in their businesses—less money to the accountants and more money for reinvestment.

This is another example of not a union but an employer organisation saying to the government: 'Don't do this. This is a silly thing to do in terms of stripping away and reducing conditions for small businesses.'

But there are other commentators as well who are indicating that this government is on the wrong path when it comes to small businesses. On the same day the Australian Chamber of Commerce and Industry's Peter Anderson told the committee:

What it does do is provide the essential lubricant for small and medium business people in particular to be able to grow and expand their businesses, and that is access to a greater degree of cash than they otherwise would. And we should not underestimate that, because if they are not getting cash through a measure like this then most of them are having to go out there and borrow on the markets and pay the relevant interest rates and the like on cash and put up further assets as security et cetera. So, it has a beneficial impact not just in providing a mechanism by which they can fund business growth and expansion; it also avoids those businesses having to further mortgage or further put up security in order to access the cash they need for those purposes.

This bill also proposes to delay the superannuation guarantee. You and I know from our backgrounds, Mr Acting Deputy President Sterle, how important the superannuation guarantee is for workers in many of our workplaces. Dating back to the 1987, when it first came into place, the SGC provided three per cent and over the term of a Labor government that increased from three per cent up to nine per cent. We were at a point where we were proposing an increase to 12 per cent, but we know that is going to be put on hold by this government.

So in order for Australians to have adequate retirement benefits the Labor government passed legislation to allow the superannuation guarantee to increase progressively from nine to 12 per cent. As Senator Wong mentioned earlier in this debate, the current guarantee of 9.25 per cent was supposed to increase to 9.5 per cent in July this year. This bill pushes back that increase by two years—or who knows when? It may even be further. Pushing back this increase saves the government almost $1.6 billion, but what does this mean for our young Australians and our working mums and dads? This might seem like a small amount of money to those opposite, but over the working life of young Australians it can mean a lot to their retirement benefit.

Also, low-income superannuation contributions are going to be targeted. If withholding an increase to the superannuation guarantee was not enough, the government is also getting rid of the low-income superannuation contribution. This will affect 3.6 million low-income workers, who will lose a yearly tax refund of up to $500. This will hit the retail and hospitality sectors the most, those that are most vulnerable in our communities and in their working careers and who need this benefit the most. The removal of the low-income superannuation contribution will also have a detrimental effect on 2.1 million women. Already we know that women retire with less in their retirement benefit than men, usually because they take time off from work to raise children. Taking away the super contribution is taking away $500 from a woman's benefit when a significant number of these women are part-time workers with young children. What makes it worse is that once again Mr Abbott is taking from those who need it the most to provide a boost to others who are not struggling financially: 16,000 of the wealthiest people in Australia who have $2 million in retirement savings will receive a tax break on their superannuation earnings. How is this fair?

On the income support bonus, as part of this bill the government is also taking away the income support bonus which provides $250 a year to eligible singles and $350 for eligible couples receiving assistance through the Abstudy living allowance, Austudy exceptional circumstances payment, Newstart allowance, parenting payments, sickness allowance, special benefit, transitional family payment and youth allowance. This cut will save the government $1.1 billion over the forward estimates, but what about the recipients of this bonus who use it for unexpected bills? What happens to them? Once again, we see an example of the Liberal-National coalition taking away from those who need it the most.

In conclusion, I think we have heard enough reasons to sum up why these Labor initiatives should be sustained. They will assist those in our communities who are worse off and need that assistance in harsh times when struggling with circumstances in their lives. Labor's measures assist them throughout their careers and in raising their families. Using the example of the schoolkids bonus, our initiatives help people to raise their children, get a better education and have a better lot in life in the future as they move towards a career.

The Abbott government have all their priorities around the wrong way. They want to take from those who are struggling the most and give to their rich mates. They want to take away taxes on big businesses and make small businesses and low-income workers pay more. They want to take away school assistance from hundreds of thousands of Australian families but give women earning more than $150,000 a year $75,000 to have a baby. How is it that you can tell a woman who earns $60,000 a year that her baby is worth less than someone else's just because the other earns more money? At least our paid parental leave scheme is fair. It provides the same payment to every eligible woman no matter their salary.

The Labor Party has always believed in a fair playing field. Those who work hard deserve a fair wage. Those who study hard deserve the best education. That is why we oppose this bill here today.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

In rising to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, I pose the question: whom does the mining tax serve? We really need to get to the bottom of the nonsense that we have heard from the coalition that getting rid of the mining tax is somehow going to create jobs and is somehow going to help Western Australia. In fact, when you look at it you see that mining is a massively capital-intensive exercise and it is not the major jobs creator that the coalition pretends it is. In fact, we have had very clear evidence that, as the mining boom continues, the problems that it creates are intense, particularly in a place like Western Australia, where you see that those people who are not part of the mining industry are suffering as a result of very high rents and homelessness.

We are seeing already that this boom has not been used to advance the interests of the whole nation or to build towards a society post the mining boom. The profits have been taken by the companies concerned and have been funnelled overwhelmingly to overseas shareholders. The money has not circulated in the Australian economy to create jobs. Indeed, as Ross Gittins warned recently, mining is 'hugely capital-intensive' and accounts for 10 per cent of GDP but only 'a mere 2.4 per cent of total employment'. He went on to say that, for all the mining industry and government say about this tax being bad for jobs, it is important to remember:

For the income earned by an industry to generate jobs in Australia, it has to be spent in Australia. And our mining industry is about 80 per cent foreign-owned.

…   …   …

For our economy and our workers to benefit adequately from the exploitation of our natural endowment by mainly foreign companies, our government has to ensure it gets a fair whack of the economic rents those foreigners generate.

This, of course, is the justification for the minerals resource rent tax. And the fact that, so far, the tax has raised tiny amounts of revenue doesn't mean mining is no longer highly profitable, nor that the tax isn't worth bothering with.

Because Labor so foolishly allowed the big three foreign miners to redesign the tax, they chose to get all their deductions up-front. Once those deductions are used up, the tax will become a big earner. Long before then, however, Tony Abbott will have rewarded the Liberal Party's foreign donors by abolishing the tax.

This will be an act of major fiscal vandalism, of little or no benefit to the economy and at great cost to job creation.

That is the fact of it. This is fiscal vandalism at a time when we have not an economic crisis or a debt crisis but, if anything, a revenue crisis. We need to be raising money in Australia so that we can spend it on the things that we need that will set up the community and the economy for the future. We need to be spending it on education at every level, from universities right down to schools and early childhood education. Here we have a scenario where the government wants to abolish the mining tax and, at the same time, is not honouring the fifth and sixth years of funding for the implementation of the Gonski reforms in education, which would allow those who are most disadvantaged in Australia to get equal access to education. That is just one area. Another area is the National Partnership Agreement on Homelessness. Why haven't we got money to be able to support the people who are providing crisis accommodation for people when they need it? The plea is always, 'We don't have enough money.' We apparently have no money to support single parents either, and now we hear that the government intends to cut the wages of the lowest paid people in the community—in particular cleaners. We hear all of this, and the reason is that we do not have the money. And suddenly we are prepared to repeal a tax which should be raising money from the miners.

I want to come to that point, because Ross Gittins is right when he says that the fact that the mining tax is not returning much revenue does not mean that mining is no longer highly profitable. Let us go and have a look at the profits of the mining industry just to make the point on the extent to which they are profitable. I will read the figures that have been released recently:

The miners made combined half-year profits of $US14.58bn, compared with $US8.04bn a year earlier, a period in which the iron ore price crashed to as low as $US87 a tonne.

I just want to repeat those figures: after a half-year profit in the previous year of US$8.04 billion, the miners made a combined half-year profit of US$14.58 billion. If that is not a superprofits tax candidate, I do not know what is. They are making megaprofits, and the way they have framed this debate is, 'Oh, the iron ore price is down; therefore we should not have to pay the superprofits tax.' With the iron ore price down, they have almost doubled their profits, and that is in a half-year, not a full year, so goodness only knows what they are going to end up with in terms of that assessment. So never let it be said that somehow they are not making superprofits. They are most definitely making the superprofits which should require them to pay some of that back to the community.

So why aren't they? Originally the tax was meant to be a 40 per cent tax on superprofits above $50 million and applied to all minerals. The tragedy is that it was watered down to an effective rate of 22.5 per cent on profits above $75 million and restricted to only a few minerals. That is where it went horribly wrong, and that is where the mining industry absolutely pulled the wool over the eyes of former Prime Minister Gillard and Treasurer Wayne Swan. There is no doubt about that. They came out of those negotiations with a political fix. They needed a win leading into the 2010 election, and the mining industry needed to get out of paying the superprofits tax, so they went for a deal which said, 'We'll give you a political win in the short term, and we get the long-term win of not paying the superprofits tax.' That is what happened in those negotiations, and Australians have been sold out absolutely by that.

But that does not mean to say that you would get rid of the mining tax just because it is not raising much revenue. What you would do is fix the mining tax so that it is, and the Greens have pushed that all along. We said that in the very first place. When the legislation went through the parliament in the first place, we tried to amend it to make sure that the states could not get away with continuing on the loophole that allowed them to raise the royalties and the Commonwealth to pay it back to them. That was always a stupid move. We tried to get it amended at the time and did not succeed. So we called a Senate inquiry. Everyone who came before the Senate inquiry made it clear that, if you redesigned the tax, you could make more money from it. Going into last year's federal election, we got the assessment of what the mining tax would raise if it were fixed in the ways that we suggested, and of course we got the answer back that we could have raised $21 billion from the mining tax if we had fixed it.

In the light of where we are now, surely we have reached the point where there is an acceptance that we need to raise more money. Everyone from Ken Henry to the former Treasurer and every economist is out there saying: 'If we want to pay for the big reforms that will set up this country post the mining boom, that is massive investment in education, absolutely in our universities, and research and innovation. If we want to drive the low-carbon economy, absolutely make sure that we are competitive in a low-carbon future. If we want to make sure that we have appropriate health care for people to be able to live in a way that gives them a good quality of life into the future, if we are going to adequately look after people as we always have in this country—and that means the poorest and the people most in need of housing and income support at times when they are under pressure—then you have to raise money.' And that is not to mention national disability insurance. Everyone agrees that this is a good social reform for the nation, but it has to be paid for. So let's raise the money.

That is why I am moving a second reading amendment—and this has been circulated—specifically in relation to this:

At the end of the motion, add:

"but the Senate calls on the Government to recognise that the benefits of the mining boom should be enjoyed by all Australian society by:

(a) applying a 40% tax rate to all minerals,

(b) rebating only those royalties that were in place at July 2011, and

(c) allowing depreciation on the book value of the amounts actually spent on mining infrastructure only."

With this second reading amendment, the Senate calls on the government to withdraw the bill and redraft it to ensure that the benefits of the mining boom can be spread throughout Australian society by (a) applying a 40 per cent rate, as applied under the petroleum resource rent tax, and extending the MRRT to all minerals; (b) only rebating royalties that were in place at July 2011, rather than letting state governments raise royalties that are paid by federal taxpayers, not the mining companies; and (c) only allowing depreciation on the book value of the amounts actually spent on mining infrastructure, because that was another one of the absolute rorts in this mining tax.

But also I will be moving another second reading amendment, because one of the things hidden in this package is what it is taking away. Some publicity has been given to the schoolkids bonus, but not a lot has been given to the impact of taking away the low-income superannuation contributions. That again is another attack on the lowest paid people in Australia. We all talk about the gap that there is, particularly the gender gap, in superannuation entitlements and how Australia is going to pay in the future in terms of pensions. One of the ways is to help people make up that gap, and that is what the low-income superannuation contribution was all about. So I am moving another second reading amendment. Again, it has been circulated.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I am sorry to interrupt you, Senator Milne, but I just have to let you know that you have moved one motion. You can foreshadow the second motion.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. I foreshadow, then, that I will be moving a further second reading amendment. I foreshadow that I will move:

  At the end of the motion, add:

     "but the Senate is of the opinion that the repeal of the Low Income Superannuation contributions should not be concealed in this legislation as it will:

  (a) diminish, by around $27,000, the retirement savings of one in three Australians,

  (b) negatively impact on almost one in two working women and 80 percent of women who work part time, and

(c) will place further pressures on future governments due to increased costs to the aged pension."

Having foreshadowed that second reading amendment, I want to go to the particular case of Western Australia.

All the talk relating to the Western Australian Senate by-election has been about what the Liberals' plan for Western Australia is. The plan is: get rid of the mining tax—as if that is going to help people in Western Australia. As I said, it is not helping people in Western Australia when it comes to jobs, because job numbers are falling. The fact that Minister Abetz has tried to stand over the Public Service and make them massage the figures shows you that the government knows jobs are not going to come from mining.

In the midyear economic update, it was forecast that jobs in the mining industry would fall by 4.5 per cent. After you massage those figures to give you what the government wants—that is, the government's so-called one million jobs plan—the fall would be 3.2 per cent. Even with the massage, it is a fall of 3.2 per cent. But that shows you that the government knows full well that getting rid of the mining tax is not going to help Western Australia. We already have a massive fall in job numbers in the mining industry.

In addition to that, when you consider what Western Australians will lose—in particular when you take away the low-income superannuation entitlement—you are looking at significant losses for people in Western Australia. By keeping the mining tax and restoring it, the Greens will save 469,344 Western Australian families $881 million over four years. By not repealing the mining tax, you actually help people in Western Australia. By repealing the mining tax, you do not.

If you look at the savings measures, you see that the government is making a cash grab—to the value of around $27,000, or 15 per cent of expected retirement savings—for the retirement savings of one in three workers. That means that, in Western Australia, 353,613 workers will be punished and that, every single year, $93 million in retirement savings will be lost. That is pretty significant.

In this Western Australian by-election, once again we are back to slogans. What is the government's plan for Western Australia? 'Repeal the mining tax.' What does that mean, though? Nobody has said to the people of Western Australia, 'Actually, more of you will be worse off if you repeal the mining tax, because the low-income superannuation contribution is gone.' That is pretty significant and I think people need to be aware of the extent to which this is hidden in the slogan. It is hidden in the slogan about getting rid of the mining tax that they are also going to get rid of a decent retirement for low-paid workers in Western Australia. That is a message we intend to be out there delivering very strongly to people in Western Australia.

We will not stand by and see those who are currently benefiting so much from megaprofits continue to do so at the expense of the poor in our community. Rio Tinto last year made a profit of $9.5 billion from iron ore and paid no tax. BHP Billiton made an after-tax profit of $6.5 billion from Western Australia's iron ore in its last half-year and paid only a very small amount of tax. Then there is Andrew Forrest's Fortescue Metals. It made $1.7 billion last year but paid no mining tax—and so on and so forth. You get this happening over and over again.

What is clear from talking to people around Australia is that jobs are more important than returning the budget to surplus. They want to make sure that there is a plan for post the mining boom. I can tell you, Mr Acting Deputy President, the Abbott government have no plan for Western Australia post the mining boom. All they see is more mines. They do not recognise that the future for Western Australia is in something very different. That is why the Greens' plan is out there as a very stark alternative, and that is: let us actually use the benefits of the mining boom through the superprofits tax; let us restore the tax and have that money circulating so that we can spend it on the education, research and development that will be necessary to sustain us in the long term.

That is now supported today by a report which has been brought out by Deloitte. It identifies 25 areas that could provide a vital cash injection into the economy and produce jobs to fill the void from the resources boom that is winding down. We do not agree with everything they have said. We certainly do not agree with their idea of next-generation nuclear energy, but we are absolutely on board with solar. Solar energy and the jobs in renewable energy are much more important to Western Australia in the longer term than abolishing the mining tax.

I can tell you, Mr Acting Deputy President Bishop, that the loss of the renewable energy target in its current form will have a mega impact on jobs and businesses in Western Australia. So what we are seeing here is the Abbott government motto: 'Let the rich get richer; let the poor get poorer.' Let those who donate to the Liberal Party get maximum benefit, and those who stand to lose—low-income earners—suffer the most. That is why we should not be repealing the mining tax but instead fixing it so that we get the returns to spend in the community.

Sean Edwards (SA, Liberal Party) Share this | Link to 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—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President Bishop, on a point of order: I was not nodding; I was laughing at the silly statement.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

There is no point of order.

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

Thank you for the protection, Mr Acting Deputy President. This bill puts confidence back in Australia, both locally and internationally. It will help put doing business back on a level playing field. It represents a government that can and will balance its books to balance the needs of all industry. Australian mining tax rates are at a higher level than most other resource-rich countries.

I want to take you to my particular South Australian experience. BHP Billiton's $28 billion Olympic Dam expansion was shelved in August 2012, blamed in part on crippling development costs. Poorly considered government policy makes Australia a high-cost place to do business compared to other resource-rich countries. The decision was a huge loss for the South Australian economy and for the general confidence of the people of South Australia, as the Olympic Dam expansion had been expected to create 8,000 construction jobs, 4,000 permanent jobs and, like all of these things, another 13,000 associated jobs servicing that industry. Olympic Dam is still the biggest mine in South Australia, paying $90 million a year in royalties and spending $664 million on goods and services in the state in 2012-13.

While Olympic Dam was a highly visible loss in South Australia, the Australian Bureau of Statistics figures released earlier this year reveal mining exploration expenditure in South Australia decreased by 53.7 per cent in 2013 from 2012—the worst result in the nation. In the six months to December 2013, mining expenditure in South Australia decreased by 28.7 per cent—the worst result in the nation also. In trend terms, mining expenditure in South Australia has decreased for seven consecutive years. I guess that will be the job of the new Premier of South Australia: to arrest something that has been clearly obvious to those that can read the economic indicators. It will be up to him now, over the next four years, to try and arrest this roller-coaster of economic mismanagement that has beset the South Australian parliament.

There are a string of problems in South Australia in the mining industry as a result of state and federal Labor reckless mismanagement. It includes the closure of the Angas zinc mine near Strathalbyn, the reduction of output and loss of jobs at Honeymoon uranium mine, Centrex Metals' backwards step on the WISCO Fusion iron ore joint venture, the scrapping of the $1 billion Arafura rare earths processing plant and the loss of 61 jobs at OZ Minerals' Prominent Hill site. Labor, at a state and federal level, have mismanaged the economy, hindered exploration and prevented investment in this important mining industry. In a state where 25,000 full-time jobs have been lost since the June 2013 budget and with an unemployment rate of 6.6 per cent—the highest of all mainland states—the importance of supporting what is a job-generating, wealth-creating, globally competitive industry cannot be overstated.

It is time to get Australia back on track and repeal this mining tax. That would be a first step in getting this industry, and confidence in it, back into the focus that is required from all the world's boardrooms and all the world's miners. Repealing the mining tax is something we here can do to help revive investment and exploration confidence in Australia—importantly, in South Australia, Western Australia and those areas that are resource rich. In light of the appetite from around the world for all our rare earths, it is something that we should be embracing, not trying to tax inconsistently. (Time expired)

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Before I make my contribution on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, I think it is absolutely fantastic that senators from every other state want to talk about Western Australia. As a Western Australian, I think we should be talking a lot more about Western Australia. The truth of the matter is, they cannot help themselves. They have been told to get down to the chamber and do everything they can, because of the Senate by-election—even if they know nothing about the mining industry or Western Australia. The dog whistle is out.

I made a contribution in this chamber the other day because everyone wanted to talk about Western Australia. And here we go again. You can see that the campaign by Mr Abbott and the Liberals is all about what they are not going to do: they are not going to have a mining tax, they are not going to have a price on carbon and there is no way known we can let anyone come to Australian shores if they want to seek asylum. That has already been touched on by Senator Macdonald. I listened intently to Senator Milne. I listened intently to Senator Edwards and still scratch my head. He is a very intelligent guy but he is quite way off the mark on this issue.

Senator Edwards talked about sovereign risk and quoted Mr Mitch Hooke, from the Minerals Council of Australia. He also quoted—I didn't catch the gentleman's name—the CEO of AngloGold Ashanti saying that Australia is facing sovereign risk. I think he was alluding to this in the context of having a minerals resource rent tax. This is the South African CEO of AngloGold Ashanti, a gold company. These are misleading comments that come from that side of the chamber in this debate. Gold is not even affected by the minerals resource rent tax. So we do not even have senators making an intelligent contribution on the tax, working out where it is paid or who it affects.

I also heard Senator Edwards talk about foreign investors and that they are frightened off, I think was the context of the contribution. He said, 'The grown-ups are now in charge.' I assume that is a follow-on from Mr Abbott's ridiculous comments after the election about how much we love foreign investment. I am the chairman of the Senate Rural and Regional Affairs and Transport References Committee that deals with agriculture, regional development and all modes of transport—road, rail, sea and air—and I have to listen to this nonsense that the grown-ups are in charge and they love foreign investors. Someone forgot to tell Archer Daniels Midland. Someone forgot to tell Mr Abbott that he did an absolute backflip. The GrainCorp sale came up and was going to be purchased by none other than an American company. We can't have Americans investing in Australia! That is before we start worrying about the Chinese. That was from the other side of the chamber, certainly not from our side. What an absolutely two-faced contribution that was.

This is the problem we have. That side of the chamber pulled a dog whistle. They do not even go to the facts. They cannot tell the people of Western Australia what their plan is. I asked here on Thursday what the Abbott government's plan for Western Australia was. There is no plan for Western Australia. What is the Abbott government's plan for Australian jobs? Wait till we get to the car-manufacturing industry in Victoria and the jobs in South Australia that will be going, and the associated jobs in vehicle components. What about the 5,000 jobs at Qantas? There is another one. The grown-ups are in charge, are they?

The grown-ups have been courted by Mr Alan Joyce, the CEO of Qantas, since December last year. I am told that Qantas visited every backbencher they could get to. They did not come anywhere near me. I wonder why. I know why. It is because Australian jobs are going to be offshored, if Qantas have their way. They come in here and have their cap out. Under the leadership of the chairman, Mr Leigh Clifford, and the CEO, Mr Alan Joyce, Qantas have their begging cap out. They want a debt guarantee. The grown-ups in charge thumbed their noses at them. The grown-ups in charge—and it makes me sick even repeating this line—could not give a darn about Australian jobs. They are happy to see all those Australian jobs go offshore. So, if everyone wants to talk about Western Australia, at least tell the truth. And Mr Abbott—if your advisers are out there, I am only up here on the first floor—what is your plan for WA? You have no plan for WA.

I want to get to the core of the bill. I have some interesting figures here. As you would know, Mr Acting Deputy President Bishop, and a lot in the mining industry know, in 2009 I was fortunate enough to become the Deputy Chair of the National Resources Sector Employment Taskforce. It was chaired by the Hon. Gary Gray. No-one in this parliament would be within cooee of Mr Gray in terms of knowledge and wisdom within the mining industry—no-one. We travelled the country. We went everywhere we could. We talked to miners, we talked to constructors, we talked to educators and we talked to employers and trainers. It was all about the announcement of that fantastic project off the coast of Western Australia by none other than an American company—sorry, Senator Edwards. The company wanted to put $40-odd billion into the Gorgon project. Then we had to work out, for all these projects around the country—not only those in WA: Gorgon, Wheatstone, Browse, Rio's wharf extension at Cape Lambert and associated mines—where we were going to get all these workers. That was the intent. It was a really interesting committee, and I was thankful to be on it.

The mining industry is healthy. If you listen to the nonsense and mistruths coming from that side of the chamber you would think the mining industry was in decline. You would think that in Western Australia the lights were going to be turned off soon because there are no jobs. Unemployment is sneaking up. There is no argument about that. Jobs are being reduced or lost or not replaced in the mining sector, because construction has slowed down.

Production is going full-steam ahead—I will share some figures with the chamber to show how well the mining industry is doing—but the number of construction jobs has reduced. But they have not reduced to the point—which you would believe if you listened to those on the other side of the chamber—where the industry has been destroyed because a small tax has been put on it. And, may I add, it is a small profits based tax.

I was in the chair listening intently to Senator Milne's speech. She made some very interesting points about that profits based tax. A lot of her points I do not agree with; some, I do. The February employment figures show that, while unemployment remains steady at six per cent, 47,300 jobs were created last month across the nation. That is great, but, while the national news was positive, the data was not so favourable for WA. As I said, that was because of the reduction in construction jobs. Our unemployment level has hit 5.9 per cent.

I want to share something that is very important for those who had the misfortune of believing everything that Senator Edwards said. The Wheatstone job is a new gas project off the coast of WA. There are 6,000 jobs to come in the construction of the Wheatstone job. Gorgon is the Chevron Australia project that has been going, now, for four years. Employment for that project peaked at 9,000 jobs, but there are still, now, anywhere between 5,000 and 7,000 jobs there.

We have all heard about Roy Hill. I have not had—and I probably will not have—a lot of good things to say about Ms Rinehart. I disagree with a lot of her positions, but this is one positive thing she is doing for the country. Good luck to those who will be employed on the Roy Hill job. There are currently 5,000 people employed in the construction of the mine and rail at Roy Hill. Employment is eventually going to get to 10,000 jobs. Rio Tinto has three or four more projects about to start. So, regardless of the nonsense that has been coming from some senators on the other side of the chamber, the mining industry is healthy. The mining industry has not shut.

There have been nonsense comments from gold CEOs. I take that back; I am only assuming that the AngloGold Ashanti CEO made a comment in terms of the MRRT. That could just have been Senator Edwards's bent on what was said.

We also have an unprecedented amount of exploration occurring in Western Australia, especially in oil and gas. In the Kimberley, which you know very well, Mr Acting Deputy President Bishop, we possibly have one of the greatest deposits of LNG, shale gas and oil in the Canning Basin. This is the next big thing. I think the Canning Basin is predicted to be about four or six times the size of the Browse Basin.

The comments coming from Liberal Party members because of this election campaign do really frustrate me. I would like to talk about the state Liberal contribution—the Barnett government's contribution—to mining. The Barnett government has been a shocker. It has been attacking everything that comes from Canberra. Whenever any issue was raised in Canberra the Barnett government extended the rabbit-proof fence in case the eastern-staters got there. The Barnett government knocked every project. Well, Mr Barnett, it ain't working any more, because they are your mates who are in power federally.

Mr Barnett's contribution to the mining industry in Western Australia must be told in this chamber. Western Australians have to be reminded of Mr Barnett's spectacular contribution. Let us talk about what happened when he nailed his colours to the land based Browse Basin project, which was going to be developed somewhere outside of Broome. Woodside was the proponent along with, I think, five other companies—including BHP and Mitsui. Negotiations were going on. I was an avid supporter of a land based gas facility. I still am. I wish it were going to happen. Unfortunately it did not. There were a number of reasons why the costs did not stack up.

Mr Barnett charged in over the top of the Aboriginal people—the Goolarabooloo Jabirr Jabirr people—who were negotiating up there with Woodside. He told them that he knew what was best for them. He rode over the top of their negotiations and chose the site. The rest is history; nothing has happened. This was the major thing Premier Barnett was going to do for Western Australia. Failed.

Another major Barnett proposal was the Oakajee port. For those outside Western Australia, Oakajee port was going to be built north of Geraldton. Geraldton is some 430 kilometres north of Perth. It was a port that was going to be built in partnership with government and private money. The Japanese—oops-a-daisy, that's another foreign investor; fancy that!—were going to build this big port because the next big thing for WA, apart from the Canning Basin in the Kimberley, is magnetite.

So all those mid-west miners around the Geraldton and Ashburton region needed to get the ore to the port. That was another spectacularly failed project under the hand of no less than the Western Australian Liberal Premier, Colin Barnett. Everything has gone off the rails; it has all collapsed. He has gone to one election—he was very quiet at the second election—saying that this project would be going ahead.

Here is another fantastic contribution from the Barnett Liberal government in WA to the mining industry! I am referring to the Muja AB power station refurbishment. For those who do not know, Muja is at Collie, and Collie is about a two-hour drive south of Perth. Coal has kept that town going since its inception. It is a well-known coalmining area. Mr Barnett, as the leader of the government, promised, I am told, that $100 million was to be spent on reconditioning the power station and bringing it up to meet modern environmental standards for a coal fired station. In an article in a newspaper on 11 May 2009, he said:

Can I stress that $100 million will be private sector investment, not State Government or taxpayer funded.

So what happened? Now we find that at least $280 million of taxpayers' money has been sunk into a bungled refurbishment of the 47-year-old Muja AB power station, which was supposed to cost $100 million, funded entirely from the private sector.

So you see there is a trend. Under the leadership of Premier Colin Barnett, the Western Australian government talks up the good fight, talks up the great talk, but, when it comes to delivering for Western Australians or delivering in the mining industry, his history is pretty abysmal. The scare campaign was an absolute media attack. When former Prime Minister Kevin Rudd announced the proposal for a profits based tax, if you came from another country you would have thought, 'How the heck did this mob ever get out of the Dark Ages?' It was all about rich miners, billionaire miners, whingeing because they possibly had to pay—and I want everyone to understand this—a profits based tax. Once you earned $75 million profit you were expected to pay a tax. For the life of me, I still struggle to see what is wrong with a profits based tax.

I know thousands of workers—I represented 2½ thousand owner-drivers at the TWU when I was there, after I gave up my own small business and my trucking career—and they pay tax every week. Out of every pay packet they pay tax and no-one whinges. You get the odd gripe down at the pub when someone says, 'Crikey, I've lost a little bit more in tax this week; it wasn't worth working those extra four hours,' but billionaires took out full-page ads on the front page of the paper and cried that the Prime Minister would not return their phone calls and that they might have to contribute something back to the Australian taxpayers. This resource is not renewable. One day it is going to go.

Do not get me started on Aboriginal Australia. I have to tell you, our Aboriginal people have not done all that well. When you see what goes on in places like Canada, where the indigenous American Indians have successfully gained employment and business opportunities, we should hang our heads in shame. I can talk from experience as a truck driver, driving through Karratha. I can talk as a truck driver who took the first load of furniture, desks and chairs, to Hearson Cove for Woodside's first office in about 1981 or 1982. The North West Shelf is an absolutely magnificent achievement for our country. It is a fantastic advertisement for what we can do. We should be a leader in the world in oil and gas—there is no argument—but then you drive some 45 kilometres out of Karratha to Roebourne and any self-respecting Australian should feel absolutely disgusted when they see the Third World living conditions in Roebourne. Fortunately, Roebourne is now starting to pick up. I will give credit where credit is due. Roebourne Aboriginal people are now getting gainful employment in Fortescue Metals Group. I take my hat off to Mr Andrew Forrest. I have criticised him up and down dale, but when I actually went there and saw what he is doing for Aboriginal people it was fantastic.

Let's not forget: once you have made $75 million, what is wrong with some contribution back to the Australian people? There are a number of speakers coming after me. For those who may be listening out there or those who may have nothing better to do tonight than read the Hansard, I will stand in this chamber, put my hand on my heart and apologise if at least one more of them does not get up and throw in Mr Joe Bullock—who is our No. 1 Senate candidate—saying he mentioned abandoning the carbon tax, which is not the case, or if they do not somehow weave in asylum seekers. This is the Abbott Liberal government's plan: pull out the dog whistle and not talk about what they are going to do for Australian jobs. How dare they insult the Australian people, saying that the grown-ups are in charge—the grown-ups who do not want to talk about foreign investment, the grown-ups who are happy to see our grain rail in Western Australia closing down as we speak. Tier 3 grain has been cut.

They do not have a plan. They have no plan for this great country. They have no plan for Western Australia. Mr Abbott and the Liberals see WA as the cash cow, and I will tell you why: WA has delivered 12 seats out of 15. I am embarrassed that the Labor Party only has three—I really am—but they do not have to worry about WA. WA will return the seats to them. It is the safe seat scenario. So, Mr Abbott, the challenge is there. I do not know how many times I have to ask: tell us your plan for WA. You have no plan for WA. You have no plan for Australian jobs. I do not support the bill.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Repealing the mining tax would destroy a precious opportunity that we have, not only to help vulnerable Australians now but also to set the scene for the future, to ensure that we have a strong, safe, sustainable community that shares in the profits from our resources. The government would have you believe that this is about the economy and jobs, but this is really about allowing their big business mates and their big mining mates to make more and more money from our resources and to send more of it overseas. These resources are finite; once they are dug up we do not get a second opportunity to dig them up. We will have wasted the opportunity to ensure that the benefits from those resources flow to all in our communities, not just to the government's big mining mates and not just to the big end of town. Once the profits from those resources are shipped overseas, communities will not benefit and a section of our Western Australian community has not been.

The government keeps saying that miners have been hurt by this and that it is affecting our economy. We need to bear in mind that miners have hardly paid anything. In fact, they have not been hurt by this tax because they have not been paying this tax. The mining tax is a mechanism for the people of our nation to gain from the exploitation of our resources. In fact, the government wants to get rid of this tax just as it is starting to make money. It is no wonder it is in such a big rush to get rid of it: so it can help its mining mates. The mining boom is in the process of transitioning from the capital intensive phase to the production phase. That is beginning now. Of course, this is just when the superprofits will occur. The revenue from production will rise while they are less able to deduct capital investments off what they should be paying.

Mining companies have been able to price their assets using today's inflated market values and then claim massive annual deductions under this amount, not what they are actually spending on capital investment. Once again, another reason they have not been paying the mining tax is that they are able to write down those capital investments. But now, as we move more to a production phase, they are not going to be allowed to do that.

As Senator Milne outlined, we proposed amendments to the previous government's weakened mining tax. In fact, we would have had much more benefit if this chamber and the government had accepted our amendments to that mining tax. Nevertheless, this tax is important to Australia. It is important to Australian communities and particularly the most vulnerable communities. As Senator Milne pointed out, mining companies are largely foreign owned—83 per cent—so the money that is made from our resources is largely benefiting shareholders overseas. The profits are being exported along with our natural resources. Rather than addressing this, unfortunately the ALP weakened the previous version of the mining tax and caved in to the mining industry. The tax's loopholes and weaknesses have seen this policy fall well short of what it could have delivered. Rather than fixing it, however, Tony Abbott is moving yet again in favour of businesses and overseas shareholders to get rid of this tax, and that is at the expense of the Australian people.

This repeal will significantly hurt low-income earners and the most vulnerable in our community. It is unfortunate that yet again the interests of big business are being put ahead of the environment and the Australian people. Rather than better schools and universities and help for Australians living in poverty—better housing and infrastructure—cuts are being proposed and made across the board. We know from the government's hyperbole that there will be more cuts in the Commission of Audit, cuts which this government refuses to articulate before the Western Australian by-election on 5 April. Maybe on 6 April, after Western Australians have voted, the government will release what they intend to do with the budget—what cuts they intend to make, how they intend to further hurt Western Australian families. But, of course, we will not know that until 6 April or beyond.

The government is giving tax breaks to these big companies at the same time that they are slashing necessary supports. This bill contains measures that affect the schoolkids bonus, a payment that families rely on. People in Western Australia do not live in the land of milk and honey as some would like to think we do on the back of the boom. Try buying a house in my home state of Western Australia. If you want to find an affordable rental, or buy a house, it is further and further out of the reach of people on low incomes. Look at the increasing number of homeless people in Western Australia and the unending disadvantage of Aboriginal people in Western Australia. They are not the people who are making money from the boom; they are the people who should be helped by a mining tax. In Western Australia we have squandered some of the benefits of the boom. Many people are hurting and we have a dual economy; there are those who have been able to gain from the boom and those who have not been able to. The benefits of the boom have not been shared. We need a mining tax so that we get better sharing of the benefits of our resources.

Some Western Australians have seen some benefits from the boom, but not all have benefited equally. The state's lowest income households are falling further behind the rest of the WA population. The mining boom has driven up the disposable income of some Western Australians. But, as I said, not everyone has been gaining those benefits. A Curtin University report called Sharing the Boom, released just recently, showed the distribution of income and wealth in WA. It shows the gap between the rich and the poor, and that it is growing. The wealthiest 10 per cent of households earn up to four times as much as the poorest. The report's author, Alan Duncan, says the mining boom improved the circumstances of many households in Western Australia but there has been a rise in income and wealth inequality: The 'The gap between the richest and poorest households in WA rose consistently since the acceleration of the mining boom in 2003-04 to its peak in 2009-10 and at a greater rate than the rest of Australia. The highest-income households are getting richer and the medium-income households are also earning substantially more. But the lowest-income households in the state are falling further behind. Income growth across the boom period has created a greater gap between high- and low-income households both in terms of income and wealth and low-income families in WA have failed to share the benefits of the boom at the same rate as higher income households, which emphasises the need to support those people on low incomes, who may not benefit from the same standard of living increases experienced by the rest of the population.' That is what a mining tax is for: to help the people who are not benefiting from the massive profits that the mining companies are making from the boom.

And then there are the impacts on other industries in Western Australia such as agriculture and other sectors. For example, the aged-care industry cannot compete with the higher wages that are paid by the mining industry. Of course, areas such as aged care and the community sector have been highlighted in the Deloittes report, released today, about where our new jobs are going to come from.

The repeal cancels some important payments and supports that are offered to vulnerable people across Australia, who I have just highlighted as having not benefited from the resources boom. These are important payments for people in Western Australia. This tax should be about sharing more equitably the benefits of our resources. The government says that it cannot afford to increase Newstart; that it cannot return single parents to the parenting payment; that we need to slash the number of people on the disability support pension; and that we have to raise the pension age, because there are too many older Australians. It says we cannot afford this but, apparently, we can afford to get rid of a tax that is about sharing the benefits of our resources.

If we had a proper mining tax, we could afford to raise Newstart and help single parents and people with disability. Then of course we would not be denigrating those people with disability, which is what this government is trying to do in order to justify cutting funding for them. And we would not be condemning older Australians to living on Newstart, because we want to raise the pension age. We would be able to afford to look after our fellow Australians, those who are doing it tough and who are the most vulnerable in our community.

Let us have a quick look at the mining tax. The combined half-yearly profits of the big mining companies are $14.6 billion. Without the MRRT in place, their profits would be $14.81 billion. While, in the scheme of things, that difference is a lot of money, they are not paying enough to the Western Australian community. They make $14.6 billion after the mining tax.

The government, instead of fixing the mining tax, want to repeal it. They want to make Australians pay to go to see their GP rather than standing up to the mining industry and making them pay from their superprofits, which is a lot of money. What we have made from the mining tax is a small amount, because the mining companies browbeat the previous government and have now talked to their mates in government and want to pay nothing rather than the small amount they have paid—out of what, by anybody's standards, is a large amount of money.

The mining industry oppose this tax. Basically, they do not want to pay anything that they do not have to out of their superprofits on the resources that belong to every Australian—and from which, as I have articulated, every Australian should benefit, not just some, as is happening in Western Australia.

Let us look at some of the programs that will be cut because the government wants to support its big business mining mates. Firstly, the schoolkids bonus. This will impact most significantly on low-income families and single parents. Single parents who have already suffered blow after blow and who live in poverty have been dumped onto Newstart. This will make it even harder for kids to do well at school. Kids cannot do well at school if they are living in poverty.

Then there is the low-income superannuation contribution. At the same time the government talks about the need to increase the retirement age, because Australia cannot afford it, this government is making a cash grab on retirement savings of one in three workers, to the value of around $27,000, or 15 per cent of their expected retirement earnings. Again, get it? Low-income superannuation! In other words, this is about some of the most vulnerable workers in our community. This measure was designed to help those on low incomes and those on fixed incomes under $37,000 a year build up a modest amount of money for their retirement.

This will particularly affect women and young people and those who are employed on a casual basis. Industry Super Australia has said that axing the rebate will affect around two million working women, including 80 per cent of female part-time workers. Getting rid of this measure will deplete the savings of one in every two working women. This is hurting Australians. These are the people who should be sharing in the superprofits made from mining our resources. Older workers, particularly women, already face discrimination in the workplace and I have spoken on that issue in this place many times. They face a variety of obstacles to improving and expanding their superannuation. This measure makes it even harder. This contribution attempts to redress the inequities in our superannuation system, which favours high-income earners but does not significantly help low-income earners.

Repealing this contribution will place a greater burden on future governments by increasing the reliance on the age pension. Of course the government wants to increase the pension age and keep these people in low-income situations and poverty even longer. This is a stupid measure. The message is: if you are on a low income, particularly if you are a woman, this government does not care about you; it cares more about facilitating its big business mates.

The government are also getting rid of the income support bonus. This was put in place to help those on certain income support payments prepare for unexpected living costs. The payment is $105.80, if you are single, and it is paid twice a year. You may not think that this is a significant amount of money, but it is if you are living in poverty on Newstart. It is important. It can make the difference between being able to pay a bill or not or being able to meet a rent payment or not. It is important to the most vulnerable in our community. Taking away what, to them, is a relatively small amount of money—but to vulnerable Australians, every cent counts—is cruel and mean. That money counts.

These are just the payments that will be cut when this bill is repealed; but then there are all those programs that will not be funded—for example, what about the National Partnership Agreement on Homelessness? In Western Australia, we have 9,592 people who find themselves homeless every night. Of these, 15.6 per cent are under the age of 12. People in Western Australia find themselves homeless for many reasons. But the fact is that rents are high, so affordable housing is impossible to find, as the cost of housing has been driven up by the boom—the benefits of which, again, have not been shared equally, with the gap between rich and poor having increased. This is another program that may not be funded by this government because, they say, they do not have the revenue. Here is a mechanism to raise that revenue and to share the benefits of our resources in a more equitable way.

We have the government talking about making a two-tier system for people with disability: there will be the deserving people with disability and the undeserving people with disability, who may be stuck on Newstart for an exceedingly long time. Again, the government says, 'we are doing that because we do not have the revenue'. And what about the NDIS? The government is dropping hints all the time about slowing down the rollout because there are problems with it—but it is not just about that; it is because they do not want to pay for it.

We have people living in poverty on Newstart. The government will not even give them a modest increase of $50 a week—which does not even cover half the difference between Newstart and the age pension. The government says the age of entitlement is over—but not if you are in the mining industry or if you are a big business. The mining industry does not want to pay its fair share for our resources—money that will help the most vulnerable in our community and will also help people plan for the future. The government seems determined to make the lowest income earners and the most vulnerable members of our community pay for the fact that it wants to give big miners tax breaks. Once again, the government is making it clear that those people are not important.

The Greens plan would have made significantly more money out of the mining tax. But, by not repealing this, we help 469,344 Western Australian families and we help them keep $881 million over four years—by not repealing this tax. Repealing this tax is a bad move. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. I have just spent 20 excruciating minutes listening to Senator Siewert redefine failure in terms of the Greens' perspective on things. It is worth reminding this chamber that we have this mining tax, and we have a whole bunch of other failed and dreadful taxes, because of the alliance between the Greens party and the former Labor administration—an alliance that so maladministered our government and our nation's finances that it has put us in this position where we have to repeal a tax in order to save taxpayers' money. It is an extraordinary circumstance. The great brains trust of the Greens party got together with the Labor Party and cooked up a tax that costs more to administer, and costs more in the largesse that supposedly flows from it, than it is actually going to take in. Only the Greens and the Labor Party could concoct such a failed scheme. And yet here they are—and Senator Siewert picked it up, redefined it as a great success and spoke about how it was going to provide all this largesse. The reality is that it is not. The reality is that this mining tax is an abject failure. And Senator Siewert and her team have redefined it.

One of the most startling things in her speech—and I am not sure if Hansard has recorded my interjection—was that Senator Siewert committed that Gillard-esque failure of pronouncing hyperbole as 'hyperbowl'. In the Greens-Labor alliance, maybe the hyperbowl is some sort of American football game where they hype each other up about what a great success they are, but that is not it. Hyperbole is about exaggeration. When I mentioned that to Senator Siewert, what did I hear from Senator Rhiannon? 'You can say it however you like.' This is The Magic Pudding; this is the Alice's Adventures in Wonderland of the Greens—that is, 'it means whatever we want it to mean'. This is nonsense. They overturn basic economics. They overturn the normality of the English language and they say that whatever they say can mean whatever they want it to mean, notwithstanding convention and facts.

I would suggest to the people of Australia that the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 is a great leap forward. It is a great leap forward that is being ignored by the economic Luddites in the Labor Party and in the Greens because they refuse to accept that their Marxist rhetoric—defending bigger taxes and irresponsible spending—is sending this country broke. And they are standing in the way of the mandate that the Australian people delivered to the Abbott government to repeal not only this pernicious tax but also the carbon tax, and to make the changes that are absolutely important. The minerals resource rent tax is the penultimate failure of mismanagement by Mr Kevin Rudd, Ms Julia Gillard and the previous Labor-Greens alliance. It encapsulates their complete incompetence and their inability to manage taxpayers' money. It reminds us of the burdensome excessive taxation which came to characterise Labor's time in office, as well as the reckless spending measures of the last six years. The repeal of the mining tax is just one of the steps that the coalition is taking in order to put Australia back on the right track. We should be grateful—and I know the Australian people are grateful—that the highest-taxing government, and the most irresponsible government, in Australia's history is finally gone.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Always so factual, Cory!

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Yes, we can talk about facts, Senator Lundy; I noticed the interjection there. It is the highest-taxing government. When a government borrows money, it is taxing future generations. And the former Labor government borrowed hundreds of billions of dollars, basically stealing—robbing from our children and robbing from tomorrow's taxpayers—to prop up their spendthrift ways.

Senator Lundy is well known as the minister responsible for signing off on $16 million worth of grants for karaoke machines and various other things in the hours before the caretaker motion went up. There was $16 million for home gym equipment, karaoke machines and coffee machines. There was not even a whiteboard in sight to determine who was going to get them. It was an abject disgrace and an example of the irresponsible spending that has robbed taxpayers of prosperity into the future because the former government could not bear to make the difficult decisions.

But thank you for your contribution, Senator Lundy. I look forward to you explaining to the parliament exactly why you thought it was okay to overspend with your grants on karaoke machines, coffee machines and home gym equipment just to prop up Labor electorates. It was a disgrace, Senator Lundy. I know you are embarrassed about it. I know you are, but, nonetheless, you should have had more dignity as a minister than to fall into that trap just moments before the caretaker provisions came in. That is simply illustrative of the spendthrift nature of the former government.

It is important that we recognise now that the new government understands that businesses create employment and promote economic growth. The government can provide the economic environment for that to take place. The fulfilment of these objectives is significantly impaired when government makes it harder for businesses to employ people by imposing an unreasonable level of taxation. The coalition is acting to reverse the infiltration of the draconian taxes that Labor implemented during its time in office.

Not only would I suggest that this tax we are dealing with is harmful to our economy; the revenue it has raised is severely—and I am being very charitable there—below the estimates. The fact that revenue projections have been trending downwards since 2010 indicates the minerals resource rent tax's failure as a revenue raiser. Since the Labor-Greens mining tax was implemented and, prior to that, the idea of a resources super profits tax was first floated those opposite would routinely remind us that mining companies should have to share the fruits of their labour with the Australian people. This is another example of the left of the political spectrum redefining reality to suit whatever position they have themselves.

The former government claimed that a legislative response was necessary to ensure that miners paid their 'fair share' to spread the benefits of the mining boom. But they conveniently ignored our Constitution, which states that state governments have ownership of the minerals and resources that lie under our ground. The royalty system implemented by state governments is a means of charging for that one-off extraction and use of those minerals and resources. This has been around since well before the Commonwealth. This has been the responsibility of the states. The Commonwealth got its share of the benefits from the profits that were generated. The states would receive revenue from the mining royalties in place and the Commonwealth would receive it from companies' tax.

But apparently somewhere in those clearly delineated responsibilities and rights the former Commonwealth government decided they wanted more than their fair share and were prepared to penalise the states in order to get it. It was a ridiculous idea, quite frankly, that suspended the understanding that has operated in this country for over 100 years. It was drawn up by the Australian Labor Party so that they could get more of the money in their hands than the states. Of course, it left the states in an unenviable position. It was ill-considered policy. It was typical of the last six years of government in this country before the previous election.

The ability of the states—and this is important to remember—to levy mining royalties is well established. It is established through the Constitution. It is recognised that the states own the minerals beneath our land, and yet that was not good enough for the former government. They could not have consciously overlooked this; they chose to proceed with the implementation of this ill-conceived tax in spite of this. I feel that that is a betrayal of the states and our system of Federation.

The question then is: why did the former government feel they needed to double up on a policy which was already being implemented effectively by the states by way of their royalty schemes? The answer, of course, is money. With Labor, it always comes down to their irresponsible spending of taxpayers' money. In their desperation, they cast their eyes around to look for whatever cash they could get their hands on. The mining tax was simply another tax grab from Labor, who desperately needed the money because of their reckless spending. I will remind this chamber and the Australian people that they had half-built school halls that cost billions of dollars more than they were scheduled to, they had bungled home insulations which cost billions of dollars more than they were meant to and, regrettably, cost four lives as well, and they carelessly and recklessly borrowed hundreds of billions of dollars.

By virtue of their economic illiteracy, they cast their eyes around, desperate for something to bring money in, because Mr Swan—'the world's greatest Treasurer', as was trumpeted for a while—promised time and time again to deliver a surplus. So they looked towards the cash cow and golden goose of the mining industry in this country. They found an industry they could exploit and they cooked up a tax that we will refer to as the mining tax. The Labor Party needed a budget fix, so they looked to the easiest possible solution. That solution was reckless. It was to place an additional tax on the mining industry, an industry which played an instrumental role in saving this country from slipping into recession.

This tax is not about spreading the benefits of mining to the Australian people; it is just another one of Labor's great big taxes that go out of their way to punish successful businesses and enterprises. When families are succeeding, Labor makes it harder for them with things like the carbon tax. When small businesses are prospering, Labor makes it harder for them by introducing bureaucracy and red tape. They followed this traditional formula in coming up with a mining tax in order to punish the mining industry. The class warfare rhetoric about billionaires and people being in their pay, in their pockets, and all of these sorts of things are testament to the fact that success is coveted and loathed in equal measure by the other side. It is okay when one of them makes a success of themselves, but woe betide if someone outside of their little cabal makes some money and provides employment and things for this country. That is when they become a target.

That is what has happened. The Labor Party and the Greens have decided to punish the successful entrepreneurs who were investing hundreds of millions or billions of dollars in this country, as well as the many small shareholders who invest in their companies. Labor and the Greens do not care about the mining tax, they do not care about the mining industry in this country and they do not care about the shareholders. We heard Senator Siewert talking before about how they are foreign shareholders and how some of them are not paying any tax. Quite frankly, we would not get projects that generate huge levels of employment off the ground in this country without foreign shareholders. It is a xenophobic characterisation.

Do Labor and the Greens not want foreign investment in our country? Without foreign investment in this country, we would not have Roy Hill going ahead. That was announced the other day by Ms Rinehart. Roy Hill is going to employ 3,600 people on site next year. That is $8 billion worth of foreign investment from financial institutions, plus $3 billion from foreign corporations—investing in something that is going to provide hundreds of millions, possibly tens of billions, of revenue and taxation proceeds for this country. Yet somehow the Labor Party and the Greens just do not see it that way. They see it as some sort of betrayal of our system.

This is what I think worries the Australian people. They cannot believe that we are confronted with such tribalism and such class warfare rhetoric from 50 years ago. I would expect it from some on the other side who are true to their socialist roots. Senator Cameron, I will acknowledge your consistent advocacy in this. You probably should be sitting with elements of the Greens; I know how close you are to them. But the simple fact is that the country has moved on. The country needs foreign investment. We need jobs and we need investment in this country.

When you penalise successful businesses with ill-conceived taxes, they go and look elsewhere. They look for where else they can invest their money. There are mineral resources right around the world. It is a global industry and they can choose to put their money where they want to. That is what we have seen, unfortunately. We have seen exploration and investment taking place in other countries while we are try to get rid of this tax.

Just as with the carbon tax, the Labor Party have not considered jobs, they have not considered the fallout on Australian families and they have not considered the fallout on investment in this country. This tax has not only damaged us economically; it has added a level of sovereign risk—because, if you change the rules halfway through a project, it does damage credibility. But it has been an absolute, abject failure. This is not only a toxic tax; it failed to raise anywhere near the revenue that they promised it would. Frankly, we cannot trust the Labor Party and the Greens to implement a tax when it raised just a fraction of what it was supposed to raise. It is an extraordinary reflection of just how mired in hopeless lack of vision they are.

We were told initially that mining tax was going to raise $49.5 billion. Then Ms Gillard created the new mining tax, after leaving everybody out except for the three largest miners in the country. This was forecast to raise around $26.5 billion. The question I would posit for the Australian people is this: how much did it actually raise? It did not quite raise the $26.5 billion. In the first six months, it raised $126 million. In net terms, it has raised a grand total of $400 million. Once again, Labor have overpromised and they have grossly underdelivered. I am happy, quite frankly, that they have underdelivered on their taxes, because I think Australians and Australian companies pay too much tax already. I think government should cut its cloth to fit the taxation system that we have and we should not be imposing new taxes.

As part of Labor's record of economic mismanagement and financial incompetence, despite the fact that this tax has failed to raise money on the revenue side, they actually linked it to billions of dollars' worth of extra spending. Unfortunately, this spending will not be able to be offset by the mining tax because of the abysmal lack of revenue that the tax has raised and that, on all indications, it is going to continue to fail to raise. On a fiscal basis over the current forward estimates, the Labor Party is committed to $18.4 billion worth of spending against a tax that has to date raised only $400 million.

Before the election, Treasury predicted that the mining tax would raise just $4.4 billion. Even at that level, there is still a $12 billion black hole that we will save the Australian people by repealing the minerals resource rent tax. It is clear that the mining tax and associated expenditure would put this budget further into deficit over the long term, courtesy of the Labor-Greens alliance and its path of making the next generation pay for the mistakes and indulgences of today.

It must be repealed, along with the other spending measures, to ensure that this does not continue to occur. This tax is so useless that less than 20 miners have actually paid it. If you contrast this with the 145 mining organisations that are forced to comply with the legislation—who submit all the paperwork but do not actually have to pay it—that is 145 mining operations caught up in the red tape and compliance costs associated with the mining tax when they are not making any contribution to it.

Thanks to the Labor-Greens brain trust, they managed to come up with a tax that (1) was unnecessary in the first place, because it ignored our constitutional conventions; (2) raised just a fraction of what was to be expected, despite the ongoing promises; and (3) imposed an onerous regulatory burden on those who did not even have to pay it. It is a rare trifecta of failure.

Repealing the mining tax will mean that businesses, whether they be small, medium or large, will see millions of dollars' worth of compliance costs reduced. Not only is this tax placing an unnecessary burden on mining companies to comply with legislative requirements but to collect it will mean spending millions more. If Australia wishes to have a prosperous economy it is absolutely essential we get rid of the destructive legacy of the Labor-Green government. It needs to be done away with. Part of this involves repealing the mining tax, making sure our mining industry is competitive and willing to expand and, consequently, employ more people. This tax is merely an attempt by the Labor Party to forcibly put its hands in the pockets of businesses that facilitate the growth of our national economy.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I rise to oppose the Minerals Resource Rent Tax Repeal and Other Measures Bill of 2013. This repeal bill is the latest in a long line of poor decisions made by the Abbott government that will hurt Australians. Ordinary people are struggling under the cuts and mismanagement of the Abbott government, and this short-sighted piece of legislation is no exception. Almost all Australians will have to work harder and longer and have a reduced quality of life in order to subsidise a tax loophole for those already earning super profits. At the core of this bill are the misguided loyalties of the Abbott government. They simply do not believe that these resources belong to all Australians. They do not believe in backing the majority of Australians; instead they believe in helping a couple of massive mining companies, particularly at the expense of small business.

When choosing between big and small business, the Abbott government will pick their big business mates every single time. Let there be no mistake: this bill will not be free. Repeal of the mining tax is a mere slogan, and the Abbott government likes to call this 'a tax repeal bill'. But only the Abbott government could come up with a so-called tax repeal bill that contains so many tax increases. For example, small business will face a tax hike through the abolition of the instant asset write-off. People earning under $37,000 will, through the abolition of the low-income superannuation contribution, face a tax hike on their super. Disgracefully, this will be retrospective and charged tax on contributions that have been made in the past. It also raises taxes on renewable energy and geothermal exploration, denying these industries the same access to tax deductions which were available to fossil fuel explorers. This is just the tip of the unfair and backward-looking and regressive nature of this bill.

This bill will hurt so many Australians and it will mean that Australian families will lose their schoolkids bonus. It will mean that Australian small business will face a tax hike and Australians in regional areas will suffer the loss of the Regional Infrastructure Fund. This leaves even the Department of Infrastructure and Transport in the dark as to which projects will or will not be funded. The bill is also anti-competitive and once again the Liberal Party is putting the interests of the few against many. Small mining businesses do not pay the MRRT and will be impacted by the coalition's new tax loophole for big multinational miners. Those who want Australians to work for $2 a day—incredibly low incomes—will be subsidised by the taxpayer, while everyone else will pay the price, including Australians working for under $37,000, as I said. These are the working poor—people who keep going to work every day supporting our economy for a little more than those who are dependent on welfare—and yet the Abbott government wants to slug them with this increase.

This measure will particularly hurt women who often work in low-paid industries and face a structural disadvantage in superannuation. Imposing a tax increase on 3.5 million low-paid workers, 60 per cent of whom are women, through their superannuation accounts in the low-income superannuation contribution is exactly the sort of mean-spirited action we have unfortunately come to expect from the Abbott government. Remember that it is a government that only has one woman in cabinet and has chosen to rip money out of the pockets of women working in early childhood education.

Working Australians will lose superannuation—the Abbott government will cut and delay the increase in superannuation from nine to 12 per cent. They will ensure that older Australians cannot work to save for their retirement by cutting it out five years earlier at 70. They will also slug those earning under $37,000 with a tax hike, as I said, and this will hurt Australian ownership of business, because superannuation is one of the best Australian investors in Australian businesses we have. It will do double damage by also reducing our national savings. No Liberal government has ever made it easy for Australians to save for their retirement. As such this bill will damage the economy, and, in contrast to the previous speaker, it will hurt government savings. It will hurt national savings by its impact on superannuation. It will hurt the budget, and add to the unlimited debt that the Abbott government has voted itself to have.

When you rip away people's super, especially those who work hard but have low incomes, then you force people onto the pension. This is short-sighted and penny-pinching, and the government knows it will cost more in the long run. It is extraordinary that Labor has to be the party that stands up for people who are saving for their own retirement through superannuation, whereas the Abbott government wants to see people on welfare. The Liberal Party has never supported superannuation, and they voted against its introduction. In 11 years the Howard government never increased it, and now the Abbott government wants to lower it.

The Abbott government makes contradictory complaints about the MRRT in their advocacy for this damaging and irresponsible bill. Look carefully at what previous speakers have said and you will see that, on the one hand, they complain that it will hurt their mates and donors from the mining industry and yet, on the other hand, they complain that the tax does not raise enough money to fund worthwhile services. They cannot have it both ways. On the first point, the MRRT is designed specifically not to hurt the mining industry because it taxes only super profits—unlike royalties in which tax is based on the amount dug out of the ground regardless of the profits that can be made. When things are tough the MRRT raises a low amount, but when things go well it increases. Therefore, the tax does little to harm even those who do pay it. On the second point, the MRRT should be celebrated; it will generate over $3 billion over the forward estimates for essential services. It was implemented by negotiation with industry and generates much needed revenue to fund measures that will boost our economy, superannuation—as I have mentioned—and deliver important assistance to workers and families.

This bill should be deplored. What it is going to do is lower revenue in order to create a tax loophole for those who are already deriving massive wealth from resources which we believe are owned generally by the community. This loophole is specifically designed to advantage people who have a proven track record of not being particularly good at distributing that wealth, sharing it or creating other opportunities in the economy as a result. The bill will hurt more than 99 per cent of Australian workers, families and small businesses in order to benefit a small number of very high-wealth individuals who have proven that they will claim the tax loopholes but not pass on the benefits.

My constituents here in the ACT will suffer under this unfair bill. They will lose the schoolkids bonus. They will lose their superannuation. We know children of veterans will lose their payments, and ACT small businesses, who are already doing it tough by virtue of the presence of the Abbott government, will face a tax hike. We know low-paid workers in hospitality, cleaning, early childhood education and aged care will have their retirement savings negatively impacted.

Those opposite often like to seek to claim that they stand for hard work and that people can succeed through their hard work. I would like to tell you a story about hard work. Canberra resident Carol is around 47 years old. She has worked hard her whole life to get where she is and is trying to save for her retirement. Carol works as a cleaner, helping to improve other people's lives. She works on the weekend to try and earn a living, a reality which is all too common for those working in the cleaning industry, many of whom are women.

Despite a lifetime of hard work, Carol earns less than $37,000. You would think that she is just the kind of person that this government would support, but if you thought that you would be wrong. Carol will have her super taxed at an increased rate under this bill, not only in the future but also retrospectively. She will see less super coming into her account and also receive a bill towards her retirement from the retrospective taxation measures. This sounds like a cruel joke, but in fact it is deadly serious. There is a tax hit on people like Carol, who can least afford it, and then, breaking all good practices of taxation, they will bill her retrospectively for all payments on or after 1 July last year. This measure will affect 3.6 million low-paid workers like Carol, of which 2.1 million are women.

Not content with simply impacting in this way on the superannuation of low-income Australians, the Abbott government also means to stop them from working to increase their superannuation, moving the age limit up to which contributions are made down from 75 to 70. This bill, rather than rewarding hard work, punishes it and people like Carol in the ACT will stand to lose out at the same time that the Abbott government wants to give more money to mining companies making superprofits. It just does not make sense.

The bill also hides or seeks to hide the repeal of the schoolkids bonus. The schoolkids bonus was a recommendation of the Henry tax review. It was completely unrelated to the MRRT. In my constituency of Canberra, this will mean almost 13,000 families will be without the resources their children need for school after they lose this support. This results in over $6 million of cuts for people trying to raise the next generation and $6 million out of our regional economy. This short-sighted cash grab will damage educational outcomes and therefore damage the economy in these two ways.

Those opposite will try to say that the schoolkids bonus is not educational because it is paid as a lump sum, but that is because they do not believe in choice—another grave inconsistency in their rhetoric. They do not believe in giving parents choice over how they spend that money on their kids, and in this way they are not true liberals. They believe that family budgets should be managed out of the federal parliament. It is an anti-choice agenda which I believe would make the former Prime Minister Robert Menzies ashamed. Their approach to the schoolkids bonus is also against the evidence, which they choose to ignore in their anti-choice stance.

Research on government lump sum payments shows that parents know how to spend this money and that they overwhelmingly spend it on important resources for their children. The Liberal government clearly do not trust parents to help their kids in the right way, and they choose not to help either. That is why they are taking away the schoolkids bonus, which, as I said, will affect 13,000 families here in Canberra and over 1.2 million families across Australia. Next time you hear the Abbott government talking about 'family values', you would do well to remember what they are trying to do to Australian families in relation to the schoolkids bonus.

The bill is also poorly thought out. As I have said, it impacts on small business by removing the instant asset write-off right at a time when the understanding of the role that small business plays is at its zenith. A lot of lip-service was paid by the Liberal government to small business in the last election campaign and has been since. We know that small business is the engine room of the economy. We know that Australian small businesses have an enormous role to play and we know that, with the trepidation about our economic status both now and in the future, the worst possible thing you could do would be to disadvantage small businesses, inhibit their cash flows and deprive them of that instant asset write-off—a measure which encourages businesses to buy new plant, to buy new assets and to invest in themselves. It helps businesses become more innovative, allows them to move with the times. These are all worthy objectives that were served by the instant asset tax write-off, but that will go.

It is also a time when there are many changes taking place in the manufacturing sector. I will not go into it now, but with the chronic and blatant neglect of our manufacturing sector by those opposite you would think that they would be somewhat sensitive to the needs of small business, regardless of what sector. Again, this is a measure that is there for all small businesses. It does not discriminate between sectors. Whether they are businesses in a small regional economy or in outer metropolitan areas or indeed new companies in busy CBDs, this instant asset tax write-off was seen as a terrific measure to stimulate the activities of small businesses in Australia.

The other issue I would like to raise is the role of the National Party. I think those in the Abbott government should note that the Leader of the National Party, Barnaby Joyce, said in June 2012 that mining companies:

… could not expect to take away a region's resources without leaving something for the community ... and had a responsibility to contribute to the specific infrastructure provided to meet their needs.

And yet the National Party is supporting this destructive bill, a bill that will mean that Australians do not get a fair share of the use of their resources, even when superprofits are being extracted from them. It will also mean that people living in mining communities will not see the infrastructure that would help their economies grow in a more balanced way. This will prevent the raising of their standard of living.

This is exacerbated by the ripping up of the Regional Infrastructure Fund. I call on those opposite to appreciate the impact of the ripping up of the Regional Infrastructure Fund on those regional areas. It was one way in which the MRRT could make a direct contribution to those communities, who often struggle. Those challenges are well documented in this place. Mining communities often grow very fast and become very expensive to live in, while having a real paucity of the social infrastructure needed to ensure that families can have a quality of life.

This bill conflicts with statements of the National Party leader and, I suspect, of many representatives and supporters of the National Party. We hear much of the Howard government Treasurer, Mr Peter Costello, but we know that Mr Costello supported the super increase from nine to 12 per cent—the same super increase that this bill will take away from working Australians.

The issue at stake here is quite simple. We had a tax, the MRRT, recommended to the former Labor government by Ken Henry, a respected leading Australian who conducted a comprehensive review of the taxation system. His conclusion, quite rightly, was that a minerals resource rent tax designed in the way that the final tax was designed would serve a very specific and important purpose in taxing the superprofits of mining companies and would allow that revenue to go to incredibly worthy nation-building initiatives—from infrastructure to superannuation, to regional infrastructure, to giving a tax break to small business. All of these elements of our economy combine to be quite a potent and significant contributor to our future economic growth.

The people of Australia own the resources that are in the ground. This kind of notional ownership is about sharing the wealth derived from this collective national asset. I am not being ideological about this. It is quite well known that, if there is a natural resource in a country, there ought to be a mechanism by which that wealth is shared and distributed in some way. The MRRT was almost a humble way of acknowledging the entitlement to that shared wealth. It did not seek to change the structure of the industry. It did not seek to do anything radical. It sought to respond to some very thoughtful recommendations of a comprehensive tax review, and putting it in place was negotiated with the industry. But, even so, the new Abbott government cannot come at supporting this tax.

If this short-sighted bill passes, it will mean that the benefits of having had these resources dug out of the Australian ground will not be able to be passed on, and in this way the coalition government will have debased a very important principle. It will drain many aspects of our economy, from superannuation to the schoolkids bonus, to instant asset tax write-offs for small business. The former education tax refund also will not be restored.

The Abbott government, which has brought this bill to the Senate, has proven that it is lacking in moral substance, particularly in the misleading way it is presenting its case. We heard from previous speakers their contentions around the former government's economic management and the reduction of debt. But I notice very few of the opposition speakers go to the actual measures they are seeking to repeal; they rather keep their arguments and rhetoric at a high level, trying to perpetuate the falsehood that the former government was not a great economic manager. In fact, the former Labor government saw Australia through a significant global financial crisis and did so with the creation of jobs and keeping our economy buoyant. That is what governments do. The former Labor government was a nation builder. The Abbott government, the government now, is of course a nation wrecker. This is part of the wreckage that we are dealing with today.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Today's debate, on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, is a debate about our national priorities. It is a debate about the sort of country we want to be. It is a debate about fairness. It is a debate about the power of vested interests. It is a debate about courage or the lack of it in our Australian parliament. The history of this tax represents everything that is wrong with Australian politics. The genesis of this tax, a tax that was proposed by the former Rudd government, is instructive, and it is worth reflecting on that. The original resource super profits tax was a good one. It was an important reform. It was a reform that this country desperately needed. It would have raised billions of dollars that could have been invested in vital infrastructure, in critical health services, in funding our public education system. It was a fair tax. It was a tax based on the resources that are owned by each and every one of us. It was a tax that said, 'You are a beneficiary of the Australian wealth that lies beneath our feet, and, as a beneficiary of that, you, too, must contribute to the great Australian story.' It was fair, and it was equitable.

Yet what we saw was a concerted campaign from the mining industry. Terms like 'sovereign risk' were thrown around. There were claims that the industry would move offshore if this reform were introduced. It was nonsense, of course, because the mining industry in this country has it very good. We have a very stable political environment. We have an environment that is good for international investment. There are protections under the rule of law that do not exist in many other developing economies where mining is so important. The mining industry also has it very good because they have unprecedented access to the decision makers in this country. Every day, walking the corridors of this place, there are lobbyists or representatives from those industries—those rent seekers—who seek to influence decision makers, because they are pursuing their own interests ahead of the national interest. Through this debate we saw not just lobbyists but also members of staff and, in some cases, members of parliament doing the bidding of the industry. In the face of threats of an advertising campaign against the legitimately elected government of the country, we saw our politicians go to water.

It is very easy to look at this reform simply as though we were facing a contest that was inevitably going to result in a win to the mining industry. But this is not just a story about the power of vested interests; it is also a story about the lack of political courage that now infects the Australian parliament. It is impossible to carry a reform that might impact on a particular industry or business group. We saw it through the reform on poker machines, where a modest reform that would have helped put food in young kids' mouths, that would have stopped relationships from being torn apart and that would have stopped people from losing their homes was defeated, again, by a very powerful lobby group.

That power only exists because we give it to them, because we capitulate and because we do not have the strength to stand up and say: 'No more! We are the democratically elected people of this place, and we make the decisions, not you.' What we saw was the death of a reform that would have guaranteed funding for vital infrastructure, funding for health services and funding for public education. What do we see now, sometime later? The minister who had been responsible for oversight of that reform is now a paid-up mouthpiece of the petroleum industry and is launching a broadside attack on the workers of this country—a former member of the Labor Party is claiming that the union movement has gone too far in protecting the rights and conditions of workers.

This is a very, very sad day for the Australian parliament because we are reflecting on a reform that would have meant that people right around the country would have benefited from the wealth that belongs to each and every one of us. What do we have in its place? We have a Commission of Audit that says we can no longer afford those things, and what we need to do in order to bring our debt down is to start cutting those things—cutting health care, cutting jobs in the public sector and ensuring that the national disability insurance scheme will be delayed. That is the consequence of the lack of courage that has been demonstrated right through this debate.

We are getting a confected story that was constructed through a set of terms of reference given to the commissioners who are charged with looking at the nation's finances. We are getting a confected story that is telling us that we need to make cuts because we are spending too much. The truth is very different. Government spending is under control. For two decades, Commonwealth spending has been stable. Far from being bloated and inefficient, our public service is one of the most efficient and one of the leanest government sectors anywhere in the world. Government spending as a proportion of GDP is lower than it has ever been in the nation's history and lower than it is in most countries that can be compared with ours. We are told we are a high-taxing country when, again, the opposite is true. Government revenues have fallen. We are one of the lowest-taxing countries, as a proportion of GDP, anywhere in the world, and, in fact, we are being taxed at a far lower rate than we were under the previous Howard government. That is why this reform is so important, and that is why the original mining tax would have been such a magnificent reform for this country.

It is important to note that this is very much a debate about the sort of country that we want to be. Are we going to continue to allow big business to dictate the terms on which this parliament acts, or are we prepared to say that, as the democratically elected representatives of the people of Australia, it is we who will decide the priorities for this nation and the level of investment in services that the people of this country want—a decent health system, a decent education system, funding for vital infrastructure—or will we continue to allow these rent seekers to name the terms of debate?

The Greens will not stand for it. We are here because we believe that society can afford—and, in fact, has a right to—adequately funded health care. Rather than cuts, we want to see investment in health; rather than cuts, we want to see investment in education; rather than stripping away protections for our environment, we want to see those protections strengthened; and rather than politicians caving into the big end of town, time and time again, we need to take a stand. There is no more important issue on which to take a stand than ensuring that this country has the revenue to fund the things that all Australians want and deserve.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I rise to oppose the coalition's proposition to dismantle the minerals resource rent tax. It is a tax designed to deal with profits. There is clearly a proposition, which has widespread support, that the profits of mining companies should be shared by the community in a whole range of areas. Senator Bernardi, in his contribution, performed his usual trick. He said it was Marxist rhetoric, in taxing the mining industry, to say that the Australian public should get their fair share of the superprofits miners make out of the resources that belong to the Australian community. That is the test Senator Bernardi sets in relation to whether the Australian public should get their fair share. The test is: if you want a fair quid out of the mining industry then you are engaging in Marxist rhetoric.

He could not resist going even further, describing a tax on the mining industry as class warfare. How could it be that simply saying to a multinational company you require them to make a financial and social contribution to the Australian economy and Australian community is class warfare? Where does this nonsense come from? If that is what the coalition are making their assessment on—that is, Marxist rhetoric and class warfare—no wonder we have propositions coming from them that say, 'Forget the Australian public, forget their rights, forget that they own the minerals, and just let the mining companies claw every cent for their shareholders and transfer some 80 per cent of the profits overseas.' He then said it was tribalism. Where does this nonsense come from? To get a fair share of the profits from the mining companies is suddenly about tribalism.

He talked about there only being $400 million raised. I would rather have $400 million being spent in the community on issues of importance to the community than have the mining companies make even more profit. He went on to say that we should cut our cloth to fit the taxation system. That seems to me to be coalition code for saying that we will cut investment in the community. What investment in the community is Senator Bernardi talking about cutting? We know what Senator Bernardi and his team on the other side want to cut. They want to cut education, they want to cut health and they want to cut investment in jobs. It is really good that Senator Bernardi opens up all of these issues in this straightforward and honest way. It was a straightforward and honest contribution from Senator Bernardi.

I do not agree with anything that Senator Bernardi has said. I see him sitting in the chair, so it is a good time to deal with Senator Bernardi's issue, but at least Senator Bernardi has been honest about what this is all about. It is about allowing the miners to get more of their profits sent overseas, to get more of their profits for a small group of shareholders, not to put the profits back into the community and not to get a fair share from the community. We have to cut our cloth to fit the taxation system. If we cannot afford to provide decent health care and if we cannot afford to provide decent education systems, because we are not prepared to tax the mining companies effectively and appropriately, then so be it. That is the message from Senator Bernardi.

It is not just a message from Senator Bernardi. He advocates the view that is a common position amongst the coalition party. Some of them have more sophisticated ways of saying it, but it means the same thing. Some government senators try and hide what Senator Bernardi has just said, and try and fill their speeches with rhetorical nonsense. But Senator Bernardi has cut to the quick on this. He says that we must cut our cloth to fit the taxation system: we cannot change the taxation system. He says that we cannot change the taxation system, even if there are major multinational corporations making superprofits and sending the profits overseas. He says that we have to cut our cloth. That does not seem to me to be an appropriate way forward in this country.

Let me to go to the issue, as argued by Senator Bernardi, that we should not tax mining industry companies because they saved Australia during the global financial crisis. Nothing could be further from the truth. I happened to be on the economics estimates committee. We had more than one contribution from officers of Treasury outlining the contribution—or lack of contribution—of the mining industry during the global financial crisis.

Dr Ken Henry, in addressing this argument that the mining industry saved Australia from the global financial crisis, outlined what had actually happened in the mining industry during the global financial crisis. The mining industry cut jobs quicker and deeper than most other industries. In the vehicle industry—the industry that the coalition have abandoned and told, 'Go back to wherever you want to go because we don't want a car industry here'—the union movement and the companies sat down and looked at how they could be flexible in responding to the challenges of the global financial crisis. Workers took unpaid time off. Workers took annual leave. Workers were more flexible in their whole approach. That is what happened in the manufacturing sector across the board during the global financial crisis.

But what did the mining industry do? The mining industry turned up at mining sites around the country and told contractors, 'Pack your bags; you're finished.' Workers were sacked unceremoniously in the mining industry. Dr Ken Henry pointed to the fact that if everyone had behaved the same way as the mining industry behaved then there would have been 18 per cent unemployment in Australia. That was the great save by the mining industry of the Australian economy! So no-one should ever buy this rhetorical point that the mining industry saved us from the global financial crisis. What saved this country from the global financial crisis was government intervening in the economy and making the appropriate investment of government money to keep people in jobs. It was done in a timely, targeted and temporary manner, and it was seen around the world as the appropriate thing to do.

So do not buy the rhetoric from those in the coalition who try and pretend that the mining industry saved this country from the global financial crisis. They did not. It was government intervention—the government stimulus packages—and the unions and employers working together to try and keep jobs and keep communities afloat. That is what helped to maintain growth in the Australian economy when growth was declining everywhere else around the world. It was not the mining industry. In fact, they acted in a way that would have seen 18 per cent unemployment.

So I take the view that you must not listen to this rhetoric about Marxism, class warfare and tribalism. If you consider tribalism, class warfare and Marxist rhetoric in relation to this tax, you should realise that the people who led the charge on this tax were those on the Henry tax review. That review comprised some of the most prominent business leaders and the Department of the Treasury looking at what are the important issues for Australia into the future. The Henry tax review said that there was an abundance of non-renewable resources and that prices would stay high—and that that would be driven by demand from China and India. Nothing has really changed in that regard.

The Henry tax review came out in 2009. They said, 'You have to deal with this.' It was not a Marxist approach. They were not loony left wingers who were out there saying that the community should get their fair share. The leaders of business and the tax department said that the community, through the Australian and state governments, own the rights to Australia's non-renewable resources, and that we should seek an appropriate return for allowing private firms to exploit these resources. I do not think that is Marxism. It is not Marxism to say that if you own something you should get a proper return. I think that is more a capitalist approach, Acting Deputy President Bernardi, than a Marxist approach.

The argument is that the Australian people want their resources to have a proper return. What the Henry review went on to say was that current charging arrangements—that is, the royalty system based in the states—fails to collect a sufficient return for the community because they are unresponsive to changes in profits. It wasn't Karl Marx writing this. This was the business leaders and the tax department. Further, it says:

The current … arrangements distort investment and production decisions, thereby lowering the community's return from its resources.

So what the Henry tax review was saying is that the proposed system, rather than being a disincentive to investment, would actually help investment because you would not be taxing companies at the start of their endeavours. The royalties would not be kicking in early. You would not be getting that tax disadvantage early in investment. If you then recoup your return on the investment further down the track through a profit based tax system, that would be a good approach to ensuring that start-up companies get their business in place without distorting taxes such as royalties early in the tax cycle.

The 'Marxists' of the Ken Henry tax review said, 'The current arrangements should be replaced with a uniform resource rent tax using an allowance for corporate capital method, and the tax should be imposed and administered by the Australian government.' The Henry tax review went on to make a number of other recommendations in terms of the report to the Treasurer.

Remember that the Henry tax review called for submissions. One of the submissions that I always find interesting was from the Minerals Council of Australia. Over a period of time, the Minerals Council went from being a supporter of a profit based tax to an avid opponent of a profit based tax, because they were being encouraged by the opposition not to pay a fair share of their profits to the Australian community. They were encouraged by the opposition. They laid the political framework for the Minerals Council to move away from their position.

Let's hear what the 'Marxists' in the Minerals Council said about mining royalties. They said that they advocate 'for a further debate on appropriate changes to the state based royalty systems, particularly around the appropriateness of profit based royalty schemes'. So the miners themselves said, 'We need to look at the appropriateness of royalties.' They actually point out some of the problems with royalties being paid immediately you set a company up and start to develop the company rather than having a profit based tax. So it is not really a Marxist approach, as Senator Bernardi would have people think; this is mining companies themselves talking about what should happen into the future.

Interestingly, in their submission to the Henry tax review, on page 3 they say there are a number of ‘big picture tax issues' that should be dealt with. Firstly, there is the development in what are known as the 'BRIC economies'—that is, Brazil, Russia, India and China. We need to look at the opportunities there and we need to look at the capacity and competitive challenges arising from the BRIC communities. That was their first point. These are big global changes and you need to look at them. The second was the ageing population in Australia. This is not Marxist rhetoric; this is big business saying you have to look at an ageing population. How do we deal with an ageing population? You need more money to help an ageing population when they are ill; you need more money to help an ageing population when they end up in care; you need more money to support an economy with fewer people paying in. So there are huge issues. Somebody has to make the contribution. If there are superprofits being made, it should be the mining industry. They said that the third area is 'efficient allocation of resources'. And let's hear this from the Minerals Council: the fourth big challenge is climate change—you know, the climate change that Senator Bernardi does not believe exists. They said:

Both externally and internally, climate change is widely regarded as both a serious and inherently intractable problem.

So there was the Minerals Council in 2009, looking at tax and recognising that there are problems funding aged care, health and education, and they were saying, 'Let's have a look at a profit based tax.' They actually said there are problems with climate change—something that they seem to have changed their mind on many times.

These are the big challenges for Australia—challenges that the coalition have failed to deal with. The minerals industry said that they would enter a debate on tax reform on the basis of 'transparency, clarity, certainty, efficiency, fairness and equity'. Those issues are not dealt with under the coalition's proposal to get rid of this mining tax. We should make sure it stays and make sure every company in every industry pays their fair share to build a good society within Australia. (Time expired)

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

Acting Deputy President Bernardi, I must say that I was not privileged to be in the chamber when you gave your speech that has obviously generated such interest and excitement from Senator Cameron. So, straight after I have made my contribution I will look at it, because obviously it was quite a significant contribution, given the interest.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I wouldn't bother. Don't waste your time.

Anne Ruston (SA, Liberal Party) Share this | Link to 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.

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. We on this side—Labor—have a fundamental view that Australians deserve to share in the benefits of minerals that we all own. The MRRT enables the benefits from mining to be shared across the Australian community, while minimising market distortions. It is, fundamentally, good public policy and good economics. The repeal of the associated measures contained in this bill will hit Australians right across the board, especially those who can least afford to be hit, and it will attack all corners of Australian society. That is what this government is proposing to do with this repeal bill.

It will remove the Schoolkids Bonus—this will hit families when they need help most of all, and will not help them in their fight against the pressures of rising costs of living. This bill, if passed, will hit low-income earners; and women will suffer disproportionately from the removal of the low-income superannuation contribution. Children, including children who have been orphaned, of ADF veterans who have been killed or injured will have their payments cut. Small businesses will suffer from increased taxes and increased compliance costs. And over-50s on the Newstart Allowance who require income support to deal with unexpected living costs will also have their assistance cut.

This legislation—and the approach this government has adopted since taking office—says a lot about the values the government holds. It confirms that the government wants a retrospective tax grab on millions of low-paid Australian workers—to give, mind you, a tax refund to large mining companies. The MRRT and the associated measures are not the results of short-term thinking. They were put in place for now and for future generations.

The MRRT is a tax which is noted for its economic orthodoxy. Tax theory is simple on this point: it is desirable to avoid taxes which distort the market and which prevent efficient utilisation of resources. The MRRT is non-distorting and encourages the efficient utilisation of Australia's shared resources, especially by smaller mining companies which invest and explore in Australia. Remember, it is a tax for the big, entrenched miners—it is those with profits above $75 million who pay this tax.

I would like to suggest, boldly, that the government are hypocritical in their refrain with regard to the view that they have taken of the MRRT. The government makes two claims. First, they claim that the MRRT is not working because it is making no revenue. We have heard that. Second, at the same time they are saying it is a cost burden and killing the mining sector. Both of these claims cannot be correct. In fact, neither are correct. The MRRT will gather $3.3 billion by the government's own estimates and even more for future generations. Taxing rent profits means that when mining companies are investing, exploring and taking risks they do not pay. The MRRT does not tax the entrepreneurial spirit of mining companies at all. When profits are lower—for example, when mining is in the construction phase of the boom or feeling the heat of the high Australian dollar or fluctuations in commodity prices—of course the MRRT revenue will be lower. That is how the tax works.

The mining industry, as we know, has been going through a transition. The investment and construction phases are coming to completion. The longer term extraction phase is beginning. Taxing the inputs to mining will not result in the revenues the government has gathered during the construction phase. The MRRT is an almost textbook example of the best practice for raising government revenue in a way that minimises the distortion to the market and encourages the best utilisation of Australian resources.

The MRRT should be uncontroversial, quite frankly. But, to this government, sensible economic reform is an anathema. The repeal of the MRRT has taken us to a new chapter in economics. This chapter is about rent seekers and their distortions to sound government. Special interests and rent seekers came out of the woodwork after the election to get their pound of flesh not from the government but from the Australian community. The MRRT was not put in place for the short term. It was not for the next six months. It was put in place for the next generation. The government is determined to be more short-sighted than Mr Magoo when it comes to tax reform. Even in this government's deeply political MYEFO they could not hide the fact that the MRRT was raising revenue. The MRRT has little effect on mining investment and it is forecast to gather $3.3 billion by the government's own numbers.

The repeal of the MRRT and associated measures, however, if it is successful, will have a large and damaging impact. Consider who pays this tax. A person with a family does not pay this tax. A pensioner does not pay this tax. A truck driver does not pay this tax. A farmer does not pay this tax. So who pays? Who is the government going in to bat for? Which deserving group benefits from this repeal? The only group that pays this tax are mining companies with a profit over $75 million. The tax only kicks in on profits above $75 million.

It is worth contrasting those who will benefit from the repeal of the MRRT with those who will suffer. Those who will benefit from the MRRT repeal are a small number of mining companies with projects whose profits are above the threshold of $75 million—fewer than 20 companies in 2012-13. The ones who will suffer from the MRRT repeal are a more diverse bunch—small businesses, parents, school children, people saving for their retirement, those on low incomes, those exploring geothermal energy and the children of war veterans. The Australia Institute stated that their view is that:

… this package as a whole transfers income from something like 10 million Australians, including the poorest … The main beneficiaries … are a handful of foreign owned corporations that are collectively worth $200 billion.

This is the coalition's form of class warfare—taking from small businesses, retirees, parents and school children an increase in the rent extracted from our shared resources by a select few companies earning profits over $75 million.

The fundamental disregard for those negatively affected by the repeal of the MRRT is illustrated by the MYEFO itself. This government acknowledges that the reduction in revenue which will result from the repeal of the MRRT is $3.3 billion. But in MYEFO the government balances that against a $10 million reduction in MRRT compliance costs. But what of the losses to the government? We effectively have a circumstance where this government literally and simply wants to rob Peter to pay Gina, a friend of this government. The 20 big miners are going to get a gift of $3.3 billion. What are ordinary Australian taxpayers and businesses going to lose? These are the measures the government is going to implement: discontinuing the very good initiative of company loss carry-back; reducing the instant asset write-off thresholds from $5,000 to $1,000; discontinuing vehicle accelerated depreciation; amending geothermal exploration treatment; rephasing the superannuation guarantee increase; abolishing the low-income super contribution; abolishing the income support bonus; abolishing the schoolkids bonus; and cutting payments to children of ADF veterans. That is what this government is going to do with the repeal of this legislation. Quite frankly, this frames this government for what it is. This is the frame for what it is supporting and what it is arguing for. The repeal of these measures underpin and highlight how bad a government it really is.

The company loss carry-back provisions have the rare distinction of being supported by both businesses and unions. The Australian Industry Group said that the loss carry-back provides a very important boost to their 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 the business.

Under this repeal, this helpful measure is being wiped away. Prior to the election, the coalition spoke about the cost of living and bringing down prices. It was almost a chant. In government, the story changes. A short walk and they completely backflipped with a piece of legislation that looks to hit families early next year. Right when they need to buy clothing, shoes, text books and study supplies for their children, they are going to remove the schoolkids bonus.

This bill will rip payments of $410 per primary school student and $820 per high school student from 1.3 million Australian families, starting from January next year, through the abolition of the schoolkids bonus. It is telling that the government is not debating this measure on its merits, because they are not. How could they? There is no merit in this repeal bill whatsoever. How could they justify cutting the schoolkids bonus, increasing cost-of-living pressures, at a time when families can least afford it?

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

Why don't you pay for it!

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Order!

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

These measures are fully costed. Why do you not ask your Treasurer? The schoolkids bonus is a good policy. I am sorry, Acting Deputy President—I was encouraged to take that interjection. Cutting the schoolkids bonus will hit families hard. It really has not taken very long for this government to show its true colours. Whether it is cutting school funding under their Gonski backflip or cutting the schoolkids bonus, the Liberals are not the government they promised the Australian people they would be. They have come into government on a simple lie and they do not like it now.

The Australian people are seeing the real coalition government at its best—how to cut services, how to cut to the bone. The removal of the low-income superannuation contribution is a telling move from the government. It is being done despite a promise by the Prime Minister to not implement adverse changes to superannuation. The Australian superannuation model is another example of good economic orthodoxy. Helping Australians save for their retirement should be a fundamental goal of government. The MRRT repeal will increase superannuation taxes on one in three of Australia's lowest paid workers.

This is a particularly hard move by this government. The Liberal Party has always said that it is a party of lower taxes, which is arguable, but in this instance it wants to do the reverse. It said one thing to the Australian people, it got into government and it is now singing from a different song sheet. Saving for retirement is essential for individuals in the country. These savings and money invested in super funds drive investment in infrastructure in Australia. Industry Super Australia estimates that, combined with the proposed delay in increasing the superannuation guarantee to 12 per cent, the removal of this measure will reduce national savings by $53 billion by 2021-22. This is another hit to Australia's bottom line to benefit only a very small number of big mining companies. This reduction in national savings means a reduction in the viable capital for infrastructure and investment by around $5 billion, based on current industry-wide asset allocations.

This is at a time when the government is scratching around for funding streams to finance new infrastructure projects. It is there to be used. What of the effects on individuals? The government has sought to cut the super for millions of Australia's earning up to $37,000 while boosting the super for 16,000 people who have over $2 million in super balances. Shame on this government. The bill sees the government scrapping the low-income superannuation contribution, which sees the equivalent of superannuation tax—up to $500 paid by people with an income of up to $37,000—paid into the superannuation account of the taxpayer.

This measure was important for a range of reasons. For high-income earners, superannuation has tax advantages. However, for low-income earners, there are not effective incentives to encourage superannuation contributions. This measure addressed that very issue and stopped low-income earners being at a disadvantage when it comes to savings. The Financial Planning Association was clear on this point. They said that repealing this provision will disproportionately affect already disadvantaged members of Australian society and dissuade low-income earners from engaging with their superannuation.

The removal of the low-income superannuation contribution hits women particularly hard, with 2.1 million women affected. A significant proportion of these are mothers working part time while looking after young children. This is exactly the part of a woman's career where an additional $500 a year going into superannuation would be of the most benefit for building savings for their future retirement. If the government had consulted, they would have known that this measure would affect women particularly hard. If they had asked the Financial Services Council, Financial Planning Association, Industry Super Australia, ACTU or Women in Super, they would have learned of the effects of the low-income super contribution on women. When all of these groups are against your repeal, perhaps you might want to reconsider and admit when you are wrong about something. That would be a mark of a good government, but I do not think you will do that. I do not think you will be able to admit when you are wrong.

Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their super tax; part of the way through this financial year the government has changed the rules for taxpayers. A major concern in the removal of this is that it is an example of a retrospective tax measure, a fact confirmed by the Parliamentary Budget Office when it checked the coalition election costings. But that is not going to deter this government. This government seems wedded to bad policy. It has championed itself as the friend of small business, but not here. The coalition in this bill is saying, 'We don't like small business at all.' The government's legislation will increase taxes on up to 2.7 million small businesses and close the loss carry-back scheme, taking away tax breaks for up to 110,000 businesses. That is what this government is standing for.

Who is going to benefit? I think it will be a big business lobby group with no small business representation that will benefit out of this. It is also running the Commission of Audit. It is no wonder that we are seeing a tax hit on millions of small businesses, when you see a government engaged in those two processes—on the one hand, big business benefits out of this repeal; on the other hand, big business runs the Commission of Audit. It is worth looking back at the deliberative and consultative process that led to the MRRT. The MRRT legislation was based on the Policy Transition Group, which was established back in August 2010 and chaired by the former chairman of the board of BHP Billiton, Mr Don Argus. All of that has been swept aside while this government crusades on a path of transferring wealth from low-paid small businesses to the big end of town miners. That is where their interests lie. Where their interests do not lie is in ensuring fairer outcomes for small businesses, for families—which they all promised before the election— (Time expired)

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Mineral Resources Rent Tax Repeal and Other Measures Bill 2013. The mining tax clearly has its problems, but these problems should be solved by strengthening it, not by ripping it up. When something is broken, you fix it; you do not throw it out. The fact that we must speak today against the repeal of the mining tax is testament to the fact that this government is totally in the pocket of the big mining companies. In fact, it is a wonder that this government does not just abolish the parliament entirely and put Xstrata, BHP and Rio overtly in control of the country, rather than just covertly in control. Only this government would say that we have a budget crisis and then seek to axe a revenue-raising measure. I must have missed that memo which said that black was in fact white. I certainly missed the memo that said, 'Even though the government contends that the mining tax is not working, somehow it is also simultaneously hurting the mining companies.' I clearly missed the memo which said that the government is smarter than all of the expert economists who say that we do need a mining super profits tax. Prime Minister Abbott and his associates must somehow know better than all the experts; perhaps they have attained infinite wisdom somewhere along the way.

Just last week economics editor Ross Gittins pointed out that most of the profits—more than 80 per cent of the profits—generated by the mining industry flow overseas to foreign shareholders. Those profits are not spent in Australia, and that means, of course, that the mining industry adds surprisingly little to the domestic jobs market. Despite the potential of a mining superprofits tax to reinvest the wealth that is generated by mining back into the Australian economy, the all-knowing coalition MPs remain steadfast in their opposition to it. Their stubbornness is an inspiration to mules, to grease stains and to rusted window latches everywhere. Congratulations, guys. Now that the government knows everything and no longer needs to listen to the advice of experts, I look forward to a neoliberal utopia, where the rich get richer and where our children cannot afford to buy a house. I think the mining industry themselves deserve congratulations. Over the past year mining companies operating in Australia have received billions in direct government subsidy and tax concessions. Congratulations, Gina! Congratulations, Clive! Congratulations, Twiggy!

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

You should refer to members in the other place by their appropriate titles, Senator Waters.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. How could we forget? Congratulations, Mr Palmer! I know it was not much of a surprise since your industry receive several billion dollars of subsidies in government support every year, but on the plus side all of that free money will make it easier to justify buying your fifth private yacht. I should also congratulate you on your success as salespeople.

Government senators interjecting—

I can see that we get under the skin of the government here. The mining industry has sold the Australian public an utter falsity. Somehow you have convinced us that your economically unsustainable industry deserves billions of taxpayer dollars to prop it up but that, when you make billions of dollars, you deserve to keep it for yourselves instead of paying back that money for the mineral resources that we the Australian people have given to you. Congratulations! If home shopping companies were half as good at self-promotion as the mining industry, every household in the country would have a kitchen full of wonder knives and an ab swing in the lounge room. Congratulations! Private investors are reaping the rewards of our resources boom and money that should have been used to build railways and hospitals will instead be used to pay for private jets and replicas of the Titanic.

The current government's approach to mining is short-sighted and economically unsustainable. Foreign owned companies are trashing our natural environment, selling our resources and leaving us with very little in exchange. The experts say that a mining superprofits tax would actually promote job creation. The moguls who run the mining industry are not putting the Australian public before their own private interests. That is our job as representatives of the people here in parliament. Until this government removes the charade by abolishing the parliament and putting BHP, Rio and Xstrata in charge of everything, we Greens will continue to fight for a fair share for the people of Australia from the resources that they indeed own. The foreign owned mining companies are frankly ripping us off, and this government is letting it happen. That is how the tax was designed—it was designed to fail because the mining companies wrote it that way. After an advertising campaign which toppled a Prime Minister and shredded the resource superprofits tax, the big mining companies wrote their own tax rules. If individuals could write their own tax rules, the country would not have any money. Xstrata, Rio and BHP, as we know, wrote their own rules and so they changed the 40 per cent rate to an effective 22½ per cent rate. They changed the minerals to which the tax would apply to just coal and iron ore—no word of any of the other minerals that the Henry tax review had originally recommended should be covered by this tax. If these companies are not making superprofits then they will not pay the tax.

Debate interrupted.