Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Hansard source

I rise today to speak to the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014. This bill limits the immediate deduction for expenditure on mining, quarrying and prospecting rights, and information first used for exploration. The measure will make the cost of these rights and information deductible over 15 years or the effective life of the right or information, whichever is the shorter. This bill is intended to remove the exploration tax concession for trading of late-stage exploration rights and information where the price is expected to reflect the value of resources discovered rather than the right to explore. The measure will improve the focus of the immediate deduction on genuine exploration and on the acquisition of unexplored tenement rights from issuing authorities.

This bill is very important to ensuring that the mining industry—in particular, coalmining—can continue to grow and thrive in the Hunter. The coalmining industry is a source of employment in the Hunter, and the benefits flow on to non-direct mining industries, such as mining equipment sales and manufacturing—even right down to the coffee shop that sells the miners breakfast and lunch. We need to continue to encourage the industry's leaders to search for new territory so that new opportunities can be gained for our residents.

I will turn now to the carbon tax and the mining tax. The Minerals Council of Australia estimates that around 10,000 jobs were lost in the past two years after prices for thermal and coking coal fell by between 50 per cent and 70 per cent. In my area this rings true, and over the past year we have read about hundreds of jobs being shed from coalmining, with only a small percentage being sent to another mine located out of the Hunter. The council also blames the carbon tax, which is an $800 million impost on the coal sector. And not a single competitor abroad pays that tax.

The fact that the carbon tax is still crippling the economy astounds me. Does the Labor Party want to stifle Australia from keeping its AAA credit rating and stop Australia succeeding in the global marketplace? The coalition government has introduced legislation to repeal the crippling carbon tax and the massive mining tax. The carbon tax is stifling Australia's economy, and we have been charged with the job of getting Australia's economy moving and improving. The Labor Party needs to get on board and repeal the crippling carbon tax and the mammoth mining tax to reduce the cost pressures on mining and mining related businesses. These businesses can expect costs to fall by around $87.6 million per annum as a consequence of just repealing the carbon tax.

The carbon tax removal legislation has already passed this House. There is only one person standing in the way of getting it through the Senate, and that is the Leader of the Opposition, Bill Shorten. He and his Labor senators have refused to listen to what the Australian public have said. So Bill Shorten needs to make a decision: does he stand up for those jobs in the mining industry or the interests of the green movement? Repealing of these taxes will boost business confidence and assist in growing the economy.

There is no doubt that mining is important to the Hunter. To demonstrate the effect of the mining industry in my area, I would like to call upon a report from Deloitte Access Economics, Prospects and challenges for the Hunter region. This study found that 40 per cent of the state's coal resources are located in the Hunter Valley. It also found that the mining industry accounts for almost a quarter of the Hunter's economy. That makes it the major direct employer, with the industry employing around 17,700 full-time workers. This figure represents about 7.2 per cent of the regional workforce. The report predicts that the Hunter's mining sector is expected to expand over the next 20 years or so, with additional coal production and the emerging coal seam gas sector. The mining sector is projected to contribute 24.2 per cent of the total regional output in 2036, representing an increase of almost two per cent from 2012. With that expected increase in coal and coal seam gas production, we need to stop red tape getting in the way of future Hunter mine owners finding the product. We need to cut the red tape getting in the way of opportunity and increasing Australia's economy.

The nondirect mining industries of construction, transport and wholesale trade that contribute to the Hunter coal supply network rely on this industry continuing its success. The workers in these mining related industries constitute around 15 per cent of the economy, and employ around 37,400 full-time workers.

To bring it home, recent job cuts in the mining sector have seen unemployment creep up to 5.5 per cent. The mining downturn in the Hunter and the recent closes of Glencore and Integra coal mines have had an impact. In the Hunter we have witnessed the recent job cuts in the mining sector. In March Australian coal mines succumbed to the cuts pressures in the industry, with mining giant, Glencore Xstrata, announcing the closure of Ravensworth Underground Mine in the Hunter Valley. With thermal coal prices slumping close to a four-year low, the Hunter Valley mine was no longer profitable and will be closed by September. This closure will affect around 130 workers at the mine and it follows several other coal mine closures and deferrals of new coal mines over the past two years.

The Glencore Xstrata statement blamed the closure on low coal prices, high mining costs, the higher Australian dollar and geographical constraints. The closure has been coming for some time, as the mine had previously shed 35 workers late last year. And the carbon tax and the mining tax are all cost imposts on the mining industry.

Glencore Xstrata is the world's biggest exporter of thermal coal. It has already reduced its Australian workforce by more than 10 per cent over the past 18 months in a bid to improve its productivity and its profits. Then, just last month we learned that Integra is to slash 500 jobs from the Glennies Creek underground mine and the Camberwell open-cut mine near Singleton in the Hunter Valley—again, blaming coal prices. Integra told employees that although operations would be shut down, facilities would be maintained. It has also blamed poor coal prices for its decision. However, the good news is that the mine will still be maintained and only closed until profitable again.

Coal prices have dropped more than 30 per cent over the past two years, forcing many companies to reassess their operations to ensure that they are economically viable. The company had been planning to start a new longwall operation at the Glennies Creek mine, but that project is now uncertain.

That is over 600 workers in the Hunter alone. We need to help the industry to become profitable again. We need to cut the red tape and repeal the mining and carbon taxes so that we can be competitive in the global marketplace and increase employment in the area.

The mining downturn affects other industries, all the way through hospitality, manufacturing and even medical. The effects of the mining downturn do not stop at the mine workers. The effects flow down through the nonmining related businesses that supply the mines, their workers and their families. The Newcastle Herald's Ian Kirkwood recently profiled three Singleton businesses. Mr Kirkwood profiled Singleton contract company, Pit Patrol, Hunter Valley Glass and Windscreens and the Coal Rock Coffee and Cafe. Pit Patrol's general manager, Aaron Goadsby, said:

Pit Patrol began in 1993 with a single utility servicing the Camberwell mine.

Now, the company did courier work for most of the region's mines, and had two dozen utes and a dozen trucks, with subcontractors' vehicles taking the fleet to 50.

Like a huge range of Singleton and Muswellbrook businesses, Pit Patrol is feeling the pinch from the mining downturn.

The article continues:

At Hunter Valley Glass and Windscreens, David Flynn said he supplied to "everyone in the community from a mirror in a house to multinational coal companies".

With 14 employees on the books, he, too, had avoided the need to reduce his staff, but he acknowledged that mining companies had "asked for efficiencies" from suppliers like him.

And finally:

At Singleton's Coal Rock Coffee and Cafe, Donna Valentine said things were very quiet early in the week.

"It's very hard to make it balance on Mondays, Tuesdays and Wednesdays" …

She said that due to the miners' anxiety regarding job cuts that there had been a downturn in spending:

… they put off buying that takeaway coffee or that sandwich."

That was a report written by Ian Kirkwood.

I want to turn to WesTrac and their factory partial closure. WesTrac make mining equipment, and they laid off workers from my electorate in Paterson. This was despite receiving a federal grant of $6 million for the facility at Tomago. The 630 job cuts announced by Caterpillar Earthmoving Equipment agent, WesTrac, last year made my electorate of Paterson an indirect victim of the slump in the coal-mining industry. Many of my constituents made up the workforce at the new Tomago headquarters. The Tomago workers were the hardest hit, with an estimated 210 jobs going from the firm's Hunter workforce of around 700.

This employer was one of the mining related businesses in the Hunter region which was reacting to the end of the investment phase of the mining boom. Unfortunately, it will not be the last. This particular business' job cuts came as a surprise to my electorate, following a significant investment by the federal government into that business back in 2007. But that is the impact that the coal-mining industry has had on the community in the Hunter as a whole.

It also further added to the issues of youth unemployment in Paterson, as half of the job losses were apprentices. These young men and women began their apprenticeships in the belief that they were pursuing a steady, lucrative and responsible career path. The youth unemployment figure in my electorate of Paterson is nothing to celebrate. The Australian Bureau of Statistics estimates that the unemployment of 15 to 24-year-olds sits at around 7.1 per cent, and if the industry stays in this state of downturn it is a figure that will only increase.

There is no silver bullet to fix this problem, and we need to save them from a life on welfare dependency and get them into our workforce. We can do this by cutting the red tape and allowing new employers to enter into the area, and by allowing the spirit of opportunity to take hold. As I have said before, I believe that anyone can succeed with opportunity, enterprise and ambition. The question I ask is: why are we still stifling entrepreneurial Australians from achieving their maximum potential? The answer is: Bill Shorten.

The former Labor government left us with a big financial debt—a massive debt. And we are charged with the responsibility of cleaning it up. They recklessly overspent and under planned. It is we, the coalition, that have brought responsibility back to spending. It is we, the coalition, that have begun cutting bureaucratic red tape. It is we, the coalition, that are trying repeal the crippling carbon tax and the monstrous mining tax. It is we, the coalition, that are standing up for sustainability and for Australian jobs.

We need the Labor Party to help push these bills through so that Australian businesses are placed back into a position where they are able to thrive, invest and create jobs with confidence. I pledge my support for this bill in its original form. I hope it will inspire those with an interest in coal mining, quarrying and prospecting to take an opportunity and dare to dream. And, by taking that chance, declare to the world that Australia is indeed open for business and a player in the global market.

I commend the bill in its original form to the parliament. I reject the amendment moved by the previous speaker, Dr Leigh.

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