Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is, again, to the Prime Minister. I refer the Prime Minister to the comments of Rio Tinto chief, Tom Albanese, that Rio would not have invested $38 billion in Australia over the past decade if this great new mining tax had been in place. Does the Prime minister stand by the government’s expectation that mining investment will expand 20 per cent in the next two years?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I draw the Leader of the Opposition’s attention to my answer to his first question, concerning the impact of the range of measures contained in the government’s response to the Henry-commissioned report. They go to preferential taxation arrangements now for the exploration industry, a new tax regime for smaller miners in the sense that they are now advantaged by a tax on profits rather than a tax on volume, as well as the overall impact of the decision to bring down the company tax rate. I would draw the Leader of the Opposition’s attention, again, to the independent modelling commissioned by the Treasury through Econtech, which demonstrates that putting these measures together results in an overall increase in the level of mining activity in the economy. It makes that projection at 5.5 per cent over time. It is done by taking all those individual inputs into account.

The second thing I would say to the Leader of the Opposition is that it is inevitable when you seek to bring about a new taxation regime for the mining industry in Australia, and one that involves higher taxes for a number of participants in that industry, they are going to object. They are going to complain, because they are going to be paying more money to the Australian people via the general revenue. For the overall impact on the Australian community, it is important to bear this in mind. What we are doing is ensuring that there is a fair share for the mining industry but, equally, a fair share for the Australian people, who own this resource.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, a point of order on relevance: the Prime Minister was asked that in light of Tom Albanese’s statements about Rio Tinto not investing $38 billion had there been a mining tax, would he stand by the assumptions in the budget that it would grow by 20 per cent in the next two years?

Honourable Members:

Honourable members interjecting—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The House will come to order. The Prime Minister is responding to the question. The Prime Minister has the call.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The Leader of the Opposition’s question went to the overall impact of this response to the Henry Review on the future of the mining industry and I responded specifically by pointing his attention to the conclusion of the Econtech modelling and the 5.5 per cent increase in mining activity, which results from that.

My second response to the Leader of the Opposition’s question went to the overall impact of what the government seeks to do through this reform. It is to ensure the Australian people also get a fair share from the resources—which, ultimately, they the Australian people own; a fairer share in terms of better superannuation for all working Australians; a fairer share in terms of bringing down the tax rate, including special tax breaks for our small businesses; and, furthermore, ensuring that we use those resources to invest in our country’s future infrastructure needs, in the road, the rail and the port which, everywhere across the country, we hear representations about.

I conclude my response to the Leader of the Opposition in these terms. I understand that yesterday the Leader of the Opposition suggested in question time that the Australian gas company Santos was not proceeding with a $15 billion LNG project in Gladstone because of the resources superprofits tax. I also draw the House’s attention to what the CEO of Santos, Mr Knox, has said. He said, ‘There are all sorts of factors. Obviously, the uncertainty of the supertax is something we are going to have to manage,’ that is true, ‘but I would not directly attribute it to that.’ For transparency and clarity in the debate, if the Leader of the Opposition is going to report the comments of various mining executives around the country, he should do so with accuracy. This is an important debate for the future.

I would also draw people’s attention to what happened in our national debate in the mid-eighties, when we brought in the petroleum resource rent tax. Everyone at that stage predicted doom and gloom and the collapse of the entire offshore mining industry. It did not happen. It has produced, instead, one of the most vibrant exploration and production platforms that we have seen in the Australian resources sector in the last quarter of a century, including our largest resources project, the Gorgon Project—also under a tax at 40 per cent, I would note.

I draw the attention of those opposite to the fact that, when it comes to superprofits from the resource industry, 60 per cent of those superprofits are retained by the companies concerned. I think it is important that we have some balance in this debate as the government seeks, responsibly, to negotiate the detail, the implementation and the transition of this proposed set of new arrangements with the mining industry. This is, however, part of a broader reform for the industry at large and for the general economy.