Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

My question is to the Prime Minister and I refer to this email from Mr Max Mawhinney, who is a beef producer in New South Wales. He states:

Now we have the Rudd resource tax, which will make Ag-lime extremely expensive and significantly reduce the use of this product, in turn reducing the ability of farmers to apply sound management practices to enhance carbon sequestration. Indirectly, it will impact on the cost of food.

Will the Prime Minister apologise to farmers, who will find environmental best practice more difficult to achieve and force up the price of food to consumers as a result of his great big new tax on mining?

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

I thank the Leader of the National Party for his question and I go back to my answer to the previous question which was asked. My answer was that those opposite engage in one thing and one thing alone when it comes to tax reform, and that is a fear campaign. It is a fear campaign in the absence of any form of fact. The Leader of the National Party, if he bothered to read the government’s report, through the Treasury, on the economic modelling for the introduction of the RSPT, would know, from its conclusions, the impact on consumer prices. He would know the impact on employment; he would know the impact on overall economic growth; he would know the impact on the expansion of activity within the mining industry and also on the expansion of investment in the mining industry.

But as he has raised the general question of resource rent tax can I also, for the benefit of the House, refer to an article which has recently been published in the editorial of the Financial Times of London—a leading left-wing journal! It is coloured pink; be very suspicious! It says this in the first paragraph or two:

Miners, like oil men, are a tough lot. They are fighting tooth and nail to derail the Australian government’s plan for a “super profit tax”. But just as oil and gas companies survived when a similar tax was imposed on them, the mining industry has broad enough shoulders to bear the new burden.

It goes on to say:

It will be a long-overdue update of the medieval practice of levying royalties on gross production. Being regressive, royalties squeeze marginal producers while letting those with the most abundant mines keep the largest share of their loot.

Furthermore, the article goes on to say, in response to an observation by Rio:

The charge that it turns Australia into the “number one sovereign risk issue”, made by Tom Albanese, chief executive of Rio Tinto, is absurd.

So says the editorial of the Financial Times yesterday. The Financial Times, I would suggest, is not necessarily a subunit of the Australian Labor Party! It is not a branch of the Australian government; it is the premier financial journal in the world. Its editorial recognises that a resource rent tax is the most effective way of taxing profit rather than volume, profit rather than production.

But then again the Leader of the Opposition does not understand what this tax is about in the first place, because in answer to a question this morning—a very simple and basic question to the Leader of the Opposition, ‘Tony, how does this tax actually apply to this product?’ he could not answer. He could not answer in one sentence, two sentences or three sentences. In fact he said it was just like a royalties tax.

The Leader of the Opposition does not know the first thing about tax policy, nor the first thing about economic policy. The one thing he does know about tax policy is how to jack up the tax rate by bringing in a great big new tax across all Australian businesses that have an over-$5 million turnover—a thought bubble he had one morning without consultation with anyone in his joint party room. This government has the plan for reform; those opposite have a fear campaign—one and all.

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I seek leave to table the email from Max Mawhinney, which is about food prices and—

Leave not granted.