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
Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source
I proudly rise to voice my strong support for the economy-building, future-proofing Minerals Resource Rent Tax Bill 2011 and related bills before the House. It is always good to hear from the member for Goldstein. He has certainly had a tough time lately. I remember the budget reply speech from the Leader of the Opposition, who said: 'Sorry, I didn't actually do the budget reply speech. I'm going to give that to the shadow Treasurer.' The shadow Treasurer then came out and said: 'Sorry, I didn't actually get around to doing my budget reply speech. I'll ask the shadow finance minister.' It was amazing. As a teacher, I have heard a lot of excuses about why homework was not done, but that was the first time I ever heard anyone say, 'The dog did my homework.' I have never heard that before. It was amazing.
Some Australians are getting very rich from the mining boom, especially very profitable mining companies. Obviously the Labor Party is not concerned about profits—we support profits—but we are concerned when many Australians are left out. While some Australian small businesses are happy just to break even, our biggest miners are generating phenomenal profits. Mining profits for the year ending 30 June 2011 were a massive $93 billion with $430 billion of further investment in the pipeline, so to speak. So much for the member for Goldstein saying that investment in mining is about to dry up. That is ridiculous.
I say again that there is nothing wrong with big profits. Profits are good for shareholders, they reward workers, they help fund future investment and they stimulate our economy. But where we are seeing such enormous profits from the mining of our coal and our iron ore—Australians' coal and Australians' iron ore—much of this money goes overseas. A responsible government, a sensible government, must ensure that Australians are getting a fair return for our resources, which can only be mined once.
The minerals resource rent tax will apply to all new and existing iron ore and coal projects, and it will apply at a rate of 30 per cent. Only coal and iron ore producers generating an annual profit of more than $50 million will pay the tax. I repeat this for those opposite—you must be making an annual profit of more than $50 million before you have to pay this tax. State mining royalties will be fully credited back to the company, whether that state government is a Labor government or a Liberal government. The tax is expected to raise about $3.7 billion in 2012-13, $4 billion in 2013-14 and $3.4 billion in 2014-15, subject obviously to the variability of long-term international commodity prices. Over 10 years the mining tax, it is expected, will deliver an extra $38.5 billion to Australians.
The Gillard Labor government is determined to share these benefits with all Australians. How will we do this? Firstly, employer superannuation contributions will rise from nine per cent to 12 per cent, giving a 30-year-old worker on average earnings an extra $100,000 of savings.
Secondly, we will also give small business a take in the cut. They will be able to write off every asset worth up to $6,500. Who in this chamber would not support small business receiving such a benefit? You would have to be crazy not to support such a cut.
Thirdly, we will slash company tax to 29 per cent from 1 July 2013. All Australian companies—small, medium and large—will go from 30 per cent down to 29 per cent. In contrast, those opposite plan to effectively increase company taxes with their clumsy two per cent paid parental leave tax.
Fourthly, we will simplify personal tax by introducing a $500 standard deduction from 1 July 2012 and a $1,000 deduction from 1 July 2013.
Fifthly, we will reward personal saving for more than five million Australians with a 50 per cent tax discount on up to $500 of interest income from 1 July 2012.
Sixthly, the government will direct more investment back into mining communities through a regional infrastructure fund.
How could a wise man vote against such a tax? Well, I have heard that the honourable Leader of the Opposition does intend to change his name by deed poll to Joseph Wiseman because, as all film buffs would know, that is the actor who played Dr No in the James Bond movie. That is the only way we would be able to have a Wiseman voting against this incredibly sensible policy.
These projects will boost productivity, they will support jobs and they will look after our hard-working mining communities. I do find the opposition's position on this completely perplexing. The opposition climate change spokesperson told Sky Agenda on Tuesday:
… let me say that the mining tax is a bad idea. The reason it's a bad idea is because capital is mobile in this world, that companies and investors have a choice as to where they set up their mining activities.
Obviously, he is half right: capital is mobile and companies do compete in the global mining market. But mining companies do not easily take their capital and just go to any other country to mine immobile resources. They come to Australia not just because of the present tax arrangements but also—wait for it—obviously because we have some of the best minerals in the world. We are blessed geologically. The competitive edge of Australian mining is not only our lean tax regime but also the abundance of these high-quality minerals and natural gas deposits beneath the ground.
Australia has 10 per cent of the world's coal resources, and most of this is top quality black coal like we have in Queensland—with no disrespect at all to the Victorians who are here. We have some of the top coal in the world, with higher energy burns and lower emissions. Australia has 47 per cent of the world's uranium. So this idea that miners will easily just move their capital around the world and mine somewhere else is quite ridiculous.
Let us have a look at the proposed projects. I will go through some which are on the horizon or have already been announced for new investment or CAPEX. Fortescue has a US$8.4 billion expansion in the Pilbara. Xstrata, to name just a couple of their announced projects, has $270 million in the McArthur River lead/zinc expansion, $1.4 billion in the Ravensworth North open cut coking coal project in New South Wales, $234 million in the George Fisher zinc mine expansion at Mt Isa, US$1.1 billion in the Ulan West underground thermal coal mine in New South Wales and $6 billion in the Wandoan coal mine in Queensland. Rio Tinto has US$6 billion in the Pilbara, $803 million in the Argyle open pit transition and $1.78 billion in the Hope Downs iron ore project. BHP Billiton has US$7.4 billion in the Jimblebar mine development in the Pilbara and US$5 billion in the Bowen Basin. These sums are all in US dollars, which I suppose is at approximate parity at the moment. Woodside has $14 billion in the Pluto project. The Woodside Energy joint venture with BP, BHP Billiton, Chevron and Shell has $30 billion in the Browse Basin LNG project. The Chevron, Shell and ExxonMobil joint venture has $43 billion in the Gorgon LNG project. Santos has $16 billion in the coal seam gas in Gladstone and Curtis Island. BG Group has a $15 billion LNG plant on Curtis Island and in the Surat Basin, Queensland. Origin Energy and ConocoPhillips have a $35 billion LNG project at Gladstone. Royal Dutch Shell has a $11 billion LNG project.
These are just a few of these mining projects that are supposed to be drying up! It is ridiculous that those opposite can actually stand up and seriously argue that we are threatening the mining industry in Australia with this tax. Australia's resources are finite and precious. Australians own them, and the Gillard Labor government understands the responsibility we have to future generations to ensure that all Australians get a fair return—everyone today, everyone tomorrow and those who are not even a twinkle in the eye today. They all need to have a share in the finite resources that we own.
Speaker after speaker from the opposition got on the protest bandwagon and claimed that this tax would all but bring mining to its knees. I remember the member for Warringah wearing his Mitch Hooke-provided white T-shirt. The jeremiad went like this: 'Investment would end, jobs would go and mines would close.' That was only a year ago. That is what the Henny Penny on steroids, aka the Leader of the Opposition, would have us believe. But the reality looks nothing like this. Since we announced the MRRT, mining investment has soared and stronger growth is coming over the horizon, as I detailed. It has grown from $35 billion in 2009-10 to $47 billion in 2010-11 and will nearly double to $82 billion this financial year. Employment in the mining industry has also advanced rapidly. Just go to regional Queensland and you will see that. Go to Western Australia and you will see that. More than 44,000 new jobs have been created, an increase of nearly 25 per cent. The towns in these areas know that. There is absolutely no sign that the mining tax will damage mining investment.
The Labor government has built a strong economy. We have created 700,000 new jobs—140,000 of them in the last year alone. We have more Australians than ever before in traineeships or apprenticeships. Unemployment is at 5.2 per cent. We abolished Work Choices and restored unfair dismissal protections for 2.8 million workers, and we have slashed income taxes for everyone.
The Labor government is standing between the future prosperity of Australia and the road that the Liberal Party want to take us down, which is a US style economy where one per cent of the population controls 42 per cent of the wealth; where the latest data shows that instead of there being 13 per cent of the population living in poverty it has gone up to 15 per cent; where there are more unemployed people than there are union members. That is the sort of economy those opposite would like here.
Australians have confidence that the Labor government will make the tough and necessary decisions to protect jobs and to manage our economy sensibly. The mining tax will deliver for all Australians and help keep our economy strong into the future. I commend the bill, proudly, to the House.