Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

I must admit I did not learn very much from that. The one thing I did learn, though, was that when we said you cannot rely on income from a profits based tax when you have a royalty system underneath it we were right. We were right. There is no pleasure in saying that we were right except that the government continues to spend money before it gets it. They spend it before they get it. So here we are, six months into the MRRT, $126 million earned—$126 million less the $40 million that the companies would have paid in company tax, less the $50 million that the Australian tax office has already admitted that it cost them to set up this tax, less all the millions and tens of millions of dollars that have been spent by companies on accountants to prove that they do not have to pay this tax—and we have a government that has designed a tax that does not earn any tax.

They brought this tax in in a blinding rush. They were so desperate for money. The world's greatest Treasurer, so-called, decided that the industry would need to pay more tax because, he told the Australian people, they were paying no tax. They are the highest taxed industry in Australia. They pay around 46c in the dollar. They pay royalties of $3.5 billion on top of company tax and on top of payroll tax. What we have seen from this government is, in its rush to grab money because it spends it like it is going out of style, that they have actually designed a tax that does not raise any money.

There are so many flaws in this tax, you do not know where to start. It is a classic, clear example of the complete incompetence of this government when it comes to managing money. How can you fix a mess when you do not even understand how the tax works in the first place? It is a complete dog's breakfast, and the Gillard government has shown it does not understand how royalties work. It does not understand how depreciation works, and it does not understand the cost realities of the resource sector.

The Gillard-Swan team, the Prime Minister and the Treasurer, went in and negotiated with three of the largest mining companies in secret. They did not take their own Treasury people with them. They did not understand what was meant when the companies said, 'We want to deduct all state royalties.' They did not understand what was meant when the companies said, 'We want to value our assets at today's market value rather than net present value or depreciated value or book value,' two of which have two different values already. They did not understand what they were doing and they got absolutely skinned alive. The Treasurer went from a swan to a plucked duck in one day—absolutely, totally done over because he did not understand what he was doing. He does not understand what he is doing now. He does not understand the way depreciation works.

This just highlights the overall incompetence—the total incompetence—of this government. They keep saying we are going to have a surplus. Wyatt Roy, the youngest member of the House, is still waiting to see one in his lifetime. The member for Longman is still waiting, in his lifetime to see a surplus from a Labor government. You wonder why these people cannot produce a surplus: you have only to look at the MRRT.

There is only one solution and that is to scrap it. Even the last Prime Minister of this place, the member for Griffith, intimated today that he has no idea how they arrived at this conclusion. No-one knows; there were no officials there. All we saw was a hurried response to get this issue sorted out before the election. And what has happened is that we have a tax that has damaged our foreign investment profile—our foreign investment rating—so much that now we see Mongolia and Mozambique rating on the same level as Australia. That is not an investment rating.

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