Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. I refer the Treasurer to his speech on 4 May 2010 in which he said:

… the most significant ‘spend’ in the entire tax package is over $8 billion every year in State government royalties that will be refunded or credited to mining companies.

If the Treasurer is budgeting $9 billion a year from his tax and he is spending $8 billion every year, in his words, on refunds and credits, exactly how much in gross terms and at its peak is the Treasurer expecting to collect each year from his new mining tax?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I would just make the point that the revenue figures take into account the rebating of the royalties. It is obvious to everyone except the member opposite.

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

What is the number?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I am not going into all the details of the funding of it. You have the net revenue. It is there for all to see. It is there for the shadow Treasurer to see. The royalties are rebated—

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

Order! The Treasurer will resume his seat. Has the Treasurer concluded?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Yes.

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

Then I will call the member for Deakin.

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services and Minister for Financial Services, Superannuation and Corporate Law. How will the resources superprofits tax help to grow our national savings and retirement incomes? What impact would blocking this reform have on Australians who are looking to save for retirement? Are there any other threats to Australia’s retirement savings?

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

I thank the member for his question and his long interest in the retirement incomes of Australians. The government believes that Australians who save should be supported. Australians who take the initiative to put money aside should be encouraged, because we believe that saving is good for the individual and good for the nation.

We have backed that belief with action to provide tax relief for people who save through bank accounts, credit unions, building societies, bonds, annuities and other savings vehicles, action to support low-income earners by effectively giving them back their contributions tax on superannuation, action to help people over 50 who want to put a little bit of extra money aside for their retirement, and action to increase the retirement incomes of Australians by increasing the superannuation guarantee.

The costs to the government of these actions are funded by the Resource Super Profits Tax. The budget papers make it clear that the cost of our tax concessions for savers is $950 million over the next four years, a cost funded by the Resource Super Profits Tax. The budget papers make it clear that the cost of refunding the contributions tax to low-income earners is $830 million over the next four years, funded by the Resource Super Profits Tax. The cost of our measures to help people over 50 save is $1.3 billion over the next four years, funded by the Resource Super Profits Tax. This is a key point: the budget papers also make it clear—the shadow Treasurer either did not read them or did not understand them—that the cost to the government of increasing the superannuation guarantee reaches $3.6 billion a year when the superannuation guarantee hits 12 per cent, funded by the Resource Super Profits Tax.

I am asked by the member for Deakin what the impact would be of blocking the Resource Super Profits Tax. I am happy to answer that question, but it is also a question that the Leader of the Opposition might care to answer this evening. He might care to explain, for example, to a 30-year-old on average weekly earnings why he wants to deny them an increase in their retirement income of $108,000. He might care to explain to a 30-year-old woman on average weekly earnings who has two periods of maternity leave and works for a while part-time why he wants to deny her $78,000 from her retirement lump sum. And he might want to explain to somebody over 50 nearing retirement who, now that the kids are off their hands and maybe they have paid off their mortgage, wants to put a little bit extra aside for their retirement. Maybe that is a woman who has missed out on some time at work because she has raised children. He might want to explain to them why he wants to deny them help to boost their superannuation.

While the Leader of the Opposition is on his feet tonight, he might also want to explain his plan for retirement incomes. I shared with the House earlier the Leader of the Opposition’s plan as outlined in his manifesto for the prime ministership, Battlelines. This is his plan to tax people on their superannuation at their marginal tax rate. What would this mean for Australians? The Leader of the Opposition might want to expand on it tonight, but I am happy to provide the House with some information. It would mean, for example, that a 30-year-old who under the current arrangements would retire with a lump sum of $456,000 would, under the Abbott plan, retire with $245,000. The Leader of the Opposition might want to explain why he wants to take $212,000 from an average worker today aged 30 on average weekly earnings.

The Abbott plan would also mean less take-home pay—less pay in the wallets of Australians on a weekly basis. It would mean $1,900 a year less for somebody on average weekly earnings, which is $36 a week less. Well done, Tony! That is his plan, as outlined in his manifesto.

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

Order! The minister will refer to members by their titles. The member for Mackellar on a point of order.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Thank you, Mr Speaker. I would refer you to page 553 of the Practice and I would ask with regard to relevance that the minister be ruled out of order. The Practice states:

… a Minister ‘should not engage in irrelevances’, such as contrasting the Government and Opposition …

I would ask you to ask him to sit down or else answer the question as it was asked.

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

Order! Page 553 goes on to say:

On other occasions such comments have been permitted …

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mrs Bronwyn Bishop interjecting

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

I understand the submission being put to me by the member for Mackellar, but I was illustrating that this is not an exact science. I would hate to give the lecture about the Procedure Committee again, but my concern is that this is in the area where debate is allowed in the answers which is ruled out in the questions. That is how the standing orders and practice stand at the moment, until the House decides otherwise. The minister is responding to the question and I am sure that he is coming to a finale.

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

Thank you, Mr Speaker. To be fair to the Leader of the Opposition, maybe he did not know this was the impact of the Abbott plan when he wrote it in Battlelines. Maybe he did not think it through, because we all know who does not understand economics. That is why one of his former cabinet colleagues told the Weekend Australian:

It always drove us crazy that he is not financially minded. He’d get an idea, which was always big and grand, and he tended to ignore everyone’s objections …

Tonight he has a chance to correct his errors and actually back superannuation for Australians. But I have a feeling that at eight o’clock tonight it will be clear that, when it comes to governments and superannuation, Labor is not the best friend superannuation has ever had; Labor is the only friend superannuation has ever had.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to the comments of Mick Davis, the Chief Executive Officer of Xstrata, who said in reference to his Australian operations:

We have generated total revenues of $44 billion. We have paid expenses of $22 billion, incurred taxes of $5 billion and invested $18 billion over that time. This has required us—

Xstrata—

to inject a further net $1 billion into Australia from cash generated in other regions.

In other words, there has been no leakage of profits from Australia—rather the other way round …

Given that the Prime Minister has said that profits from mining have disappeared ‘out the back door and overseas’, does he have the courage to admit that he is wrong, or is he suggesting that Mr Davis is not telling the truth?

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

I would draw the member for Groom’s attention to the reasons for the government embracing a resources superprofits tax. Firstly, within the mining industry itself, it seeks to reform the way in which this is done—a tax on volume is what underpins the existing royalties regime. We will replace that with a tax on profits because we want to expand the industry over time. Secondly, by bringing the other tax changes into the mining industry we are also expanding the base of the industry by encouraging smaller mining companies to get into their operations earlier and not be slugged with a tax on volumes up front. Furthermore, this also provides stability for the taxation regime long term, as the PRRT regime did 25 years ago.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Infrastructure and Water) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order going to relevance. The question is: does the Prime Minister admit that he is wrong about profits going out the back door and overseas, or is Mr Davis a liar?

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

There was a long preamble question first.

Opposition Member:

An opposition member interjecting—

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

Preamble, quote—there were a lot of words before the last bit. And as I have said before, while those that think that there is a specific way in which questions should be asked, whether they think that it is yes or no, or tick box A or tick box B, that has not been the way in which this place has worked in the past. 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

I would also remind the member for Groom of one core fact: 10 years ago, for every dollar which was collected in mining royalties across Australia, $3 went in mining profits. Ten years later, for every dollar collected in mining royalties, now $7 goes in profits.

I simply draw the attention of those opposite to the fact that what we are seeking to do through this reform is two things: providing a fair return for the mining industry on the one hand, but a fair return for all Australians on the other. That is a fair return for those who legitimately expect decent retirement income through better super for workers—people who also expect a better return when it comes to bringing down the tax rates currently being imposed on all Australian businesses, including 2.4 million small businesses. And, thirdly, making it possible for our economy to grow by building the infrastructure Australia needs for the 21st century. That is the underpinning rationale for what we are doing and, in terms of the particular comments from a representative of a particular company which the member for Groom reflects on, I would say to him again: in a debate where we the government are seeking to tax big mining companies more, they are going to object to it and they are going to complain about it and there is going to be a lot of noise about it. That is inevitable. Our responsibility is to make sure these reforms work for the long-term national interest, boost the competitiveness of our companies overall, boost our infrastructure, boost our pool of national savings. We the government intend to get on with the task.