Wednesday, 16 June 2010
Questions without Notice
My question is to the Prime Minister, and I refer the Prime Minister to statements about his great big new tax on mining. Here is David Murray:
‘My view is that the tax has to be changed or abandoned.’
Here is Lindsay Fox, who says:
I reckon they probably went the wrong way …
Here is Sir Rod Eddington, the Prime Minister’s hand-picked business adviser, who says:
… the policy making process to date leaves a lot to be desired.
I ask the Prime Minister: when will he listen to the real concerns of these serious people and just dump this really bad tax?
I thank the Leader of the Opposition for his question. Equally, we could talk about the interventions of the likes of the former leader of the Liberal Party, John Hewson, who recommends a profits based tax. We could also talk about the contribution to the previous debate on a profits based tax by the former Treasurer of Australia, Peter Costello, and the former leader of the National Party, Tim Fischer. We could also go to the comments from a range of contributors to this debate who have all argued that we need a profits based tax for the future. The member for Goldstein is entering the chamber; he has argued for one. The member for Wentworth has argued for one.
There is a very clear fault line in this debate and it is as follows: we on this side of the House support tax reform based on profits in the mining industry rather than production in the mining industry. That is the core point of this reform. And the reason we argue for it is that a profits based system adjusts itself to rises and falls in commodity prices over time. So the Australian community benefits from the rises, but at the same time we understand that mining companies pay less when commodity prices come down. That is the core rationale for this reform, and the second one is this: to assist initial companies who are out there investing in the mining industry to undertake their corporate activities without being slugged with a flat, volume based tax in their first years of operation. That is the economic rationale for this reform.
What we have here is a very clear alternative. The government, together with many in the mining industry, including Twiggy Forrest, Marius Kloppers, the MCA and many other leaders in the mining industry such as Don Voelte, say that we need to bring in a profits based tax for the future. There are only two voices in this nation that oppose this form of reform, a profits based regime, and that is the Leader of the Opposition and Clive Palmer. They are the two who stand opposed to this fundamental reform. I say to the Leader of the Opposition, on these questions, that the business of reform is always a tough business. He says he is opposed to the question of reform and he says he is opposed to the type of reform we have put forward, but I always look at what the opposition do rather than what they say.
We go back to the good old member for Dickson; how are his shares performing today? When he bought his BHP shares on 4 May, two days after the government announced its tax reforms, BHP shares were trading at $38.53. Today they are trading at $39.20. Well done, Member for Dickson! He has done well. So worried was he about the impact of the government’s profits based tax that he ripped in and spent $2,000 on BHP shares two days later. I always think actions speak louder than words. But, from listening to those opposite, presumably they would have invested in mining companies elsewhere. Had the member for Dickson invested on the same day, 4 May, in Brazilian mining companies like Vale, which we talked about yesterday, he would have seen the shares fall by four per cent in value. Old Pete Dutton could have invested in some Canadian mining shares! Cameco is down two per cent since 4 May, Teck Cominco is down six per cent since 4 May and, worse still, London Mining is down 18 per cent since 4 May. He got just one thing wrong, though: I am told that in the last week BHP is up 1.5 per cent, but—guess what?—I am told Rio is up five per cent. Mr Speaker, keep your investments onshore! So terrified are those opposite by the real impact of the government’s proposed tax reform that they went in there and put their own money on the line and bought those BHP shares. Actions speak very much louder than words.