Pat Conroy (Charlton, Australian Labor Party) Share this | Hansard source

The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 is symbolic of the coalition's approach to government. They are saying that the natural resources of this country do not belong to the people but belong to the billionaires—the billionaires that want Australians to work for $2 a day.

The MRRT was a response to the Henry tax review's recommendation of a profit based tax. Labor have a proud history of pursuing profit based taxes. We have supported a petroleum resource rent tax since the 1970s and the Hawke government was successful in legislating one in 1987. The minerals resource rent tax is necessary because, prior to this century, the country received around $1 in every $3 of mining profits. By the end of the boom that occurred last decade, this had fallen to just $1 out of every $7 in mining profits. The tax was a fair policy response to this situation.

The MRRT is generational tax reform—not something that you can evaluate in the first 12 months of its operation, as the government has sought to do. Indeed, it is with hindsight that we can see the value of the mining tax arrangements put in place by other countries around the world, most notably Norway, in the 1970s. Norway's mining tax has not hindered investment in their sector. They have a very strong sovereign wealth fund that they are using right now to diversify their economy for when their minerals wealth ends. It is something that the previous Labor government sought to do and something that I am very proud to be associated with. More importantly, we really need to think about whose resources they are. They are the Australian people's resources. People deserve their fair share of the prosperity that comes from the mining boom.

Learning from the lazy, wasteful approach of Peter Costello, Labor was determined to ensure that the proceeds from this resource boom were shared more fairly. The MRRT did this. It delivered for families with young children, young people, low-income earners and, at    the heart of local economies, small business. It provided investment in infrastructure, particularly in mining affected regions, and gave a boost to businesses in transitional or expansive phases. The repeal of this tax will affect millions of Australia's lowest paid workers. It removes much needed financial support to families, students and the unemployed.

Much to the shame of this government, their legislation attacks small businesses. To attack the most vulnerable in our community is never fair, but to do so while boosting the coffers of the most privileged is simply indefensible. The only people in this place practising class warfare are those opposite. The only people that they care about are the mining magnates who fly them to weddings in India.

I turn to my electorate of Charlton to highlight to the House the real impact of the repeal of the MRRT. This tax was to have provided a significant boost to the people of western Newcastle and West Lake Macquarie. The removal of the low income superannuation contribution, for example, will potentially affect up to 25,000 low-income earners in Charlton alone. Many of these people are part-time or casual workers. Some of these people are starting out in the workforce, others are in low-paid full-time work. The majority of these people are women. By virtue of these circumstances, these workers will accrue very few superannuation contributions. The low income superannuation contribution was an important step towards boosting their superannuation balances. For example, a 30-year-old permanent part-time worker earning a quarter of the annual average wage who received this contribution over 20 years of their working life would have been $13,000 better off. This would have made a massive difference to their quality of life.

Importantly, the low income superannuation contribution also addressed a fundamental inequality in the superannuation tax system that sees workers on low incomes pay up to $500 a year in tax on their superannuation, at or above their income tax rate. For these workers, who started the year thinking that they would have extra money in their super funds, this repeal means that by the end of the financial year they will find themselves short-changed by this government. When you combine this measure with the other regressive measures that the government is implementing—freezing the superannuation guarantee charge; giving a tax cut to the 16,000 largest superannuation accounts, people with more than $2 million in super—it speaks volumes about this government's approach to superannuation retirement income. They are taking it from the poorest people in the community and giving it to the wealthiest. They think the only people entitled to a dignified retirement are millionaires. That is a complete disgrace. It is not just low income workers in Charlton who will suffer. It will be those who are currently out of work and who receive the much-needed income support bonus that will suffer. This is a cash grab that will affect around 8,500 people in Charlton. This is money used by people who are on fixed incomes and who are doing it tough or are in need urgent financial assistance. It is such vital support. Removing this payment risks entrenching poverty and could put up further barriers to workforce participation. It is not the Labor way, and I am very proud that on this side of parliament we will oppose this disgraceful measure.

The other cut that I really want to talk about is the abolition of the Schoolkids Bonus, which is the most deceitful aspect of this bill. Every Labor speaker has made the point that the Schoolkids Bonus is in no way linked to revenue from the resource rent tax. It was a completely separate measure and its abolition will affect 9,000 families in Charlton—9,000 are low or middle income families in Charlton who depend on this assistance when it is time for their kids to go to school. The Schoolkids Bonus, in effect, replaced the under-utilised education tax refund, which began operation 2008—three years before the passage of the MRRT through this place. The government is hiding behind the minerals resource rent tax, trying to conceal the fact they are clawing back a payment that helps families at the start of each school semester.

If I can turn to another part of the hypocrisy of those opposite in this place: they claim to be the party of small business, but what they are doing through this bill is attacking small business. They claimed at the last election that they would 'lower small business taxes' but this bill represents an increase in the taxation burden on small business. They are repealing the tax carry-back which, for the first time, is helping businesses at the time of losses, rather than making them wait till their profits return. For some businesses, this could mean the difference between trading out of bad times or taking a short-term hit for the sake of expansion of their business. They are also slashing the amount businesses can claim through the instant asset write-off and motor vehicle deduction. When combined with the repeal of further measures included in the carbon price package, this government is reducing the amount a small business can claim through an instant asset write-off by a massive $5,500. I have spoken to businesses in my electorate, and they are incredibly disappointed by this measure. These are businesses that have to scrape together every cent they can to make small capital purchases—whether it is a tradie needing a new ute, a hairdresser looking for a new basin or a cafe looking a new coffee machine. They need this funding. I spoke to one local cafe who was greatly delighted when Labor took a policy to the last election of a $10,000 instant asset write-off. Not only will they not be getting their $10,000 instant asset write-off, but they will lose what they are currently entitled to. That is a complete shame and it will inhibit small business growth in Charlton and the broader economy. What would you expect from a government that when in opposition voted against a reduction in the company tax rate? This is simply another case of the government bowing to the demands of large mining companies at the expense of small businesses.

This bill also represents an attack on regions affected by mining. I am proud to say that Charlton is a region built on coalmining. I am also proud to say that there are still six coalmines in operation in Charlton and we have the largest power station in Australia. We are a region that is used to cohabitating with mining. We know the important role the sector plays in our community. We are really proud that our mining companies are good corporate citizens. It is very important that resource regions benefit from the profits derived from the resources extracted from their land. They are making the greatest sacrifices in terms of truck movements, coal dust, infrastructure needs from the use of mining and it is their right to enjoy the super profits that arise from that mining. That is why Labor implemented the Regional Infrastructure Fund. This was to deliver major infrastructure funding to those communities that support the mining sector. The rift through its three investment streams promised unprecedented opportunity for investment in areas such as the Hunter Valley. The new government's attack on the Regional Infrastructure Fund demonstrates that all their talk about supporting regions is just that—talk. They would rather give a tax cut to billionaires than help working people in the regions.

My region knows all too well the cycle of mining booms. They know that mining booms always come to an end and we need to work on supporting the next boom and diversifying the local economy so that it can survive the ups and downs associated with mining. I am proud to say that Newcastle is a shining example of an economy gearing up for the future, having transformed itself from the 'Steel City' of old to a hub of clean technology research and development. Newcastle is home to the CSIRO Clean Energy Research Centre, the Newcastle Institute for Resources and Energy and is the pilot site for the $200 million Smart Grid, Smart City initiative. This is in thanks to massive investments by the former Labor government that Newcastle is now a place where clean energy technologies grow from a good idea into a practical reality. But they are an overlooked victim of the repeal of the Mineral Resource Rent Tax, as there are provisions in the repeal bill to promote the exploration and development of geothermal energy. This soon-to-be-scrapped deduction enabled communities and companies to immediately offset the cost of exploration or prospecting for geothermal sites against assessable income. It is a small but unsurprising part of this repeal, and it speaks volumes about the coalition's approach to clean energy. They seek to destroy the carbon price in favour of subsidies to polluters, and they want to hinder burgeoning renewable energy businesses in favour of a tax cut for big miners. I note that the previous speaker's logic was rather torturous. She was saying that geothermal was getting harder and therefore government should make it even harder by cutting an instant deduction for geothermal exploration. The logic there is astounding—only a member of the Liberal Party could come up with such logic.

In conclusion, Labor is proud of introducing the mineral resource rent tax. It was a genuine effort to ensure that the people of Australia shared in the super profits from mining booms. After all, it is their resources that are being exploited, not those of mining companies. The MRRT is a smart way of managing the profits of a mining boom in the interests of all Australians, not just mining executives and their shareholders. When income is pouring in Australians quite rightly expect their government to spend and invest the proceeds wisely and not allow them to be frittered away, as the Howard-Costello government did.

A profits based tax is not only economically efficient it is also an equitable way of sharing the proceeds of the boom. Fundamentally, this is the difference between those on this side of the House and those on the opposite side. We support giving a fair share to working families and all Australians. They support giving the proceeds to the billionaires who fund their election campaigns. Our vision is for a prosperous future for all Australians, not just wealthy miners. Our vision considers those in our communities who are struggling and need a little help. Our vision supports small businesses and regional community infrastructure.

I will note in closing that they are very confused, even on the economic front of this debate. On one hand the government is saying that the minerals resource rent tax is not working because it is not making any revenue and then on the other hand they are saying it is killing the industry by taking too much out. You cannot have both at the same time, yet they are trying just that. It demonstrates, yet again, the hypocrisy of those opposite.

I am incredibly proud that the last Labor government implemented this reform. It built on our work in the offshore petroleum industry in the 1980s. I am deeply opposed to the repeal of this legislation, because it is working Australians who will suffer and those on fixed incomes: those who suffer; those who have very low superannuation; those who depend on the emergency payments associated with this; those in regions affected by mining, who would have benefited from the infrastructure; and struggling small businesses, who were really looking forward to using instant asset write-offs. So I think this bill is symbolic of the government's warped priorities of supporting those who need help the least and attacking those who need help the most. I am very proud to oppose this bill.

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