Tuesday, 22 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
because of the carbon tax and the mining tax—and, as the member for Riverina says, 'in the back'. Here we are with the two-faced Labor-Greens taxaholics imposing exactly that: a carbon tax and a mining tax on the Australian people, who are not so dumb that they cannot see the self-defeating nature of these two taxes. The general public has enough nous to know that this mining tax—a deal done with the three biggest miners in this country—is unfair and discriminatory.
Even today they are still chopping and changing what the tax is and how it works. In the Australian today we find out that an attempt to raise the threshold to $75 million was another failed attempt to cover up a botched plan. It is a dog of a tax, and putting a different collar on it will not stop it from being a dog of a tax. The small mining companies, the ones not allowed to have any input, do not care what colour the collar is, because they know that they will be getting it in the neck.
We can be sure that the big three miners will be gaining a competitive advantage out of this deal. They will have made sure that their hide is looked after. The combination of the mining tax and the carbon tax will make Australia the highest taxed mining industry in the world. That will make Australia about as attractive to mining companies as broccoli to five-year-olds.
Mining companies are global concerns, and there are plenty of countries in the world where they will not be taxed to death. An interesting report came out in September from Deloitte Access Economics, suggesting that a more 'creative' method of calculating tax was used by Treasury to back their claim that the mining industry paid just 27 per cent tax. That was the claim Treasury made during the debate over the failed superprofits tax. The Deloitte report found that the minerals industry paid an average tax rate of 41.5 per cent between 2007-09 and 2009-10, and that should scare off most of the potential investors.
Even China is scared. Chinese diplomat Ouyang Cheng warned, in the Age on July 7 about the difficulties this mining tax would impose on Australian-Chinese economic cooperation:
''There are some worries from the Chinese mining enterprises regarding newly released MRRT [minerals resource rent tax] bill,'' he said.
This government has been warned, and the warnings are coming from people who know far more about mining and far more about economics than anyone in the Labor Party or the Greens will ever know. They have been warned.
But this muppet government presses on. This furry Labor glove with a green hand inside and a couple of limp independent strings attached is trying to tell us that this tax is about fairness and equity. They would have us believe it is about 'spreading the wealth'. They froth and bubble about our 'patchwork' economy. They had to stop talking about a 'two-speed' economy because it did not fit the story they wanted to tell. So now it is about a patchwork economy because—surprise, surprise—different industries are in different cycles. I have got news for this government. There has always been a 'patchwork' economy in this country. We have just never had a government so addicted to tax that it sought out any industry rising to the top of its cycle so they could tax it into the ground.
Here is a question: what happens when the cycle turns, as it inevitably will? How will this government fund the milk and honey they are promising when the well runs dry? Which industry is going to be next? The Leader of the Nationals was in this place earlier, posing the same question. If agriculture—an industry that has been flogged around the bottom of a cycle—were to come good and somehow start to make good profits, would this government introduce a great big farming agriculture tax? Absolutely, because there is no tax that the Labor Party does not like.
But while the small miners and the Chinese investors are worried, perhaps the Treasurer and, for that matter, every taxpayer should be worried as well. This mining tax is supposed to raise $11.1 billion over three years, and of that this government is going to spend every penny and a few billion more.
Only the Labor Party could introduce a whopping great tax that actually costs more money than it is going to make. They did it with the carbon tax and now here they are doing it again with the mining tax. But it is going to get worse because the mining companies are saying that they are not going to pay the tax if they can help it. So the $11.1 billion is at the mercy of the accounting policies of the very large mining companies, who have a duty to their shareholders to deliver as much post-tax profit as they can get. Certainly, we know that the big three are not going to pay any tax at all, and the government has let that happen.
But it will get worse. The state governments are going to raise royalties, and some already have. They have to, because this Labor government flatly refuses to fund vital infrastructure where it is needed. We have seen Western Australia and New South Wales make their moves, and now South Australia is going to follow no doubt. When the big one, Queensland, follows—that will probably happen with a change of government—we will see. But I tell you that the states are moving. They raise just nine per cent of state revenue through royalties in Queensland, compared with WA, which raises 20 per cent of state revenue through royalties. When a fair dinkum government comes in to clean up the mess in Queensland, there will no doubt be an increase in those royalties. Or, maybe the Bligh Labor government will come to itself and raise the royalty stakes right now, all of which the federal government will have to refund to the mining companies. So the mining tax is suddenly turning into this bigger and bigger loss. The $11.1 billion is suddenly dwindling—going down and down. But it could become a lot worse, because the world is facing a new financial crisis brought on by excessive government debt—something this government should be very acutely aware of.
Another economic global concern will affect demand for resources and therefore profits. Where will the money come from then? Remember that these guys are promising milk and honey will rain down on the land from this mining tax. Superannuation is going to be increased from it, they say. They seriously think that people will suddenly think taxing an industry will make us all the more wealthy because their superannuation contributions will be increased. 'The roads will be paved with gold,' they say. 'We are spreading the wealth,' they gush, 'to businesses not in the booming resource industry.' Let us take a closer look at that plan. It is not the government that is going to be paying increased super. It is businesses that are going to pay increased super. Far from spreading the wealth to businesses outside the resource boom, this government will be, effectively, taxing them. That is right: they will manage to smack down the booming industry, while still managing to smack down other industries and small business as well.