House debates

Thursday, 3 November 2011


Minerals Resource Rent Tax Bill 2011, Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Bill 2011, Minerals Resource Rent Tax (Imposition — General) Bill 2011, Minerals Resource Rent Tax (Imposition — Customs) Bill 2011, Minerals Resource Rent Tax (Imposition — Excise) Bill 2011, Petroleum Resource Rent Tax Assessment Amendment Bill 2011, Petroleum Resource Rent Tax (Imposition — General) Bill 2011, Petroleum Resource Rent Tax (Imposition — Customs) Bill 2011, Petroleum Resource Rent Tax (Imposition — Excise) Bill 2011, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Superannuation Guarantee (Administration) Amendment Bill 2011; Second Reading

11:32 am

Photo of Joel FitzgibbonJoel Fitzgibbon (Hunter, Australian Labor Party) Share this | Hansard source

I have known the member for North Sydney for a long time. We were both elected to this place in 1996. He is a nice guy. I have never seen him so angry. I ask myself, 'Why is the member for North Sydney so angry?' It is simply because he knows that this tax is right, he knows that this is a good tax and he knows that this is a well-designed tax. But, more importantly, he knows that this is a tax which enjoys the support of the Australian community. That is his concern.

He talks about sovereign risk, yet never has the investment pipeline for the mining industry in this country been so strong. In my own electorate of Hunter the debate is not about how we attract more mining investment, it is about how we put a brake on mining investment. There are many in my communities who are concerned that we have too much mining in the Hunter Valley, with all the implications that has for air and water quality and many other issues.

This is the right thing to do. This represents a set of bills which has been agreed between the government and the mining industry after months and months of consultation and, after that, agreement. The member for North Sydney would have the House—and anyone listening to this debate—believe that we are rushing bills into this place that have not been duly considered and which have not been considered properly by the opposition. That is not true. They need no more time on this issue. They have had plenty of time on this issue, and it is time we got on with the debate. Forget about the stunts, like the one we got from the member for North Sydney. It is time we got this important legislation through both this place and the Senate.

These bills not only enjoy my support, I am very confident that they are supported by the people who make up the communities in my electorate. My communities are welcoming of the mining industry. The mining industry has brought great wealth to the Hunter Valley. It has raised average incomes and it has spawned many mining support industries around it. Many of my constituents have enjoyed standards of living they could only have dreamed of were it not for the mining industry. Many of my constituents know that their children have a bright future because of the existence of the mining industry in my electorate, and they are not going to be conned by people like the member for North Sydney. They are never going to be persuaded, because they live with it. Many of them work in the industry. They understand the industry. They are not going to be persuaded that this tax is going to be the ruin of the mining industry.

They believe—and I have consulted widely—it is only fair and right when companies are enjoying super profits as a result of higher coal prices and commodity prices more generally that, given that they are a community owned resource, a greater dividend of that production comes back to the broader Australian community, including, of course, mining communities.

As I said, the mining industry is welcome in the Hunter but it does bring some negatives. I mentioned air and water quality. By definition I should also mention that flowing from that are potential threats to industries that have sustained us for a couple of hundred years and, hopefully, will sustain us for thousands of years into the future if we protect them properly. Mining brings road congestion. It brings an inability to find child care. It brings capacity constraints in housing. If you go to Woolworths in the town of Singleton in my electorate, you will find that you will pay maybe 10 per cent more—I am making the figure up; I must admit I forget exactly what it is—on average for your goods than you would pay in Cessnock, for example, which is half an hour down the road. Why? Because of the existence of the mining industry. The supermarket chains move to the price signal. They will charge for their goods what they believe the market can sustain.

The mining boom is not all good news. While that price difference does not cause a lot of pain for those working in the mining industry, who can afford it, it does cause pain for people who do not work in the mining industry and do not enjoy the high salaries which flow from it. It does not help pensioners, for example, on fixed incomes—as much as this government has done to help them in recent years. They do not enjoy the benefits of the mining industry but they still suffer the congestion, the implications for air and water quality, and the high prices that companies are able to charge for retail goods as a result of the high average wages in that industry.

So it is not all good. My communities say, 'Well, if these guys are making superprofits from resources which, at the end of the day, we own, some of that dividend should come back to us.' Not too many of my constituents will understand the complexities of the tax, but I do not think they have any doubt whatsoever in their minds that the government is sensible enough to make sure this initiative is not going to have severe adverse impacts on the industry. They know, and they read about it all the time, how many mining companies are currently knocking on the doors of the Hunter shire councils, the state government and others looking to either establish new mines or to expand existing mines—notwithstanding the fact that the mining companies, at least some of whom, after all, have been involved in these negotiations, are fully cognisant of the fact that the supertax on mining is coming.

How are we going to use this tax to spread the bounty amongst the broader community? It is very simple, and it has been spoken of already this morning. We are going to use it as an opportunity to finally increase superannuation contributions, from nine per cent to 12 per cent—something which is absolutely necessary. This is not just part of a wish list. We know the Australian demographics, we are familiar with the ageing of the population and we know the constraints and pressures that are going to be put on the transfer system in the future. We need to reassure ourselves that, in the future, people will have a proper level of retirement income saved. It is a very important and necessary initiative.

We will of course provide significant tax cuts for small business, the primary employer of people in this country. As a former shadow minister for small business and a former small business person myself, I know all the challenges small businesses face, but I also know how important they are to the Australian economy. This is a very important and good initiative for small business.

Very importantly for me—and I know for you, Madam Deputy Speaker Bird—is the way in which this tax will return some of that bounty to mining communities themselves by way of community and economic infrastructure, so critical for all the reasons I have just articulated. When you have a mining boom in your community, despite all the benefits, there are some adverse effects. Road congestion is one of them and the ever-increasing rate of coal rail traffic is another. In my electorate, we have a very long list—as I am sure you do, Madam Deputy Speaker—of infrastructure projects which in reality could never hope to receive the sort of investment from government that is needed to knock them over.

In my electorate, we have projects like the Muswellbrook bypass, the Singleton bypass and a number of black spots along the New England Highway. In Scone we have the ridiculous situation where people are having to wait up to eight minutes to continue their drive through the main street because of the level railway crossing there. Can you imagine, Madam Deputy Speaker, a town being cut in half for eight minutes because of the passage of a coal train? That is unacceptable in convenience terms and unacceptable in economic transport terms, but it is also unacceptable in safety terms. We need between $20 million and $30 million for an overpass on that site so that the vehicle traffic is not disrupted. There could be no more perfect an example of an infrastructure problem being created by the mining boom than that. The coal trains are getting more regular and much longer, and cutting off that road for a much greater period of time.

This is a problem directly caused by the coal boom in the Hunter. So it makes absolute sense to take this new tax initiative and use that money to invest in that rail overpass, and there are many similar examples in my electorate. Broke Road, which runs through Hunter wine country—the jewel in the tourism crown of the Hunter Valley—is the worst road in the Hunter Valley. It is frequented by miners travelling to work each day. Undoubtedly, the mining traffic on the road is even heavier than the tourism traffic, given it is a seven-day thing. No doubt that mining traffic is largely responsible for the state of that road. No-one seems to have the money to fix the problem. That is another example of a problem directly created by the mining boom, by the traffic caused by the mining boom, a good example of an infrastructure project which now will stand a much greater chance of being funded as a result of our decision to ensure that, when the mining companies are making huge superprofits because of high coal prices, the local communities—who, yes, benefit, but also have to put up with the negatives which flow—get some relief by sharing in the bounty of those high coal prices. This is not rocket science and that is why people in my communities support this tax. The opposition has a bit of explaining to do. The opposition has to explain to the Australian community why they should not be receiving these benefits. I have spoken in this place on a number of occasions and I have had guarantees from the responsible ministers that, like your electorate, Madam Deputy Speaker Bird, my electorate will receive its proportionate share of the dividends which flow from this tax. At the next election, the coalition—no doubt represented by the National Party in my electorate—will have to explain to my communities why that money should not be returned to the communities from which it comes. That is the explanation they will need to have ready for my constituents and, no doubt, constituents in your electorate, Madam Deputy Speaker.

I want to say one last thing. I want to talk about other threats to this initiative. There is the big threat on the other side from those who are going to deny this, cosy up to the coalmining companies, let them make their super profits and deny the Australian community their share, but there is another threat and it is called the New South Wales government. Critical to this arrangement is an agreement that the states will be rebated on the royalties they would have received as a result of their old system and that they would not seek to further increase those royalties. Surprise, surprise—and I think the same is the case in Western Australia—New South Wales has reneged on that deal, which means that we will have to rebate them more money for the increase in royalties they would have received as a result of the decision to increase their royalties. What does that mean? That means that we are giving more back to the state government and we have less money to share the wealth with communities, including mine and yours, Madam Deputy Speaker. This can become very complex but it is also very simple.

People who live in my electorate can do two things: they can give more and more royalties from their resource to Barry O'Farrell so he can spend the funds on roads in western Sydney or they can pay less in royalties to Barry O'Farrell and let us retain more of the tax which flows from this initiative so that we can spend the money on infrastructure in the Hunter Valley. It is a really simple thing, as complex as the arrangements are. Barry O'Farrell can collect more royalties so he can spend the funds in Sydney or he can keep his royalties where they are and get rebated that amount from us and we will have what we should have, having collected the wealth from the Hunter community—more money to spend in Hunter communities. That is another thing that those who sit opposite will have to explain. I have no doubt that those who sit opposite are talking to Barry O'Farrell because they do not want this to happen. You have seen it today. They will run interference on this at every opportunity, which takes me back to where I began: why? Because they know this is a good initiative which is supported by the Australian community. (Time expired)


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