Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

The purpose of this bill is to protect the revenue generated from the Minerals Resource Rent Tax, or the mining tax, from being eroded when state governments increase royalties. Labor's mining tax is a dud. Gina Rinehart is popping the Moet. This tax was born from backroom negotiations where the country's richest miners met with those supposedly representing the Australian public. We now know that Gina Rinehart and the big miners won and that the Australian people were sold out by Labor. Instead of the billions promised by Labor, this tax has only collected $126 million. Labor failed to stand up to big business and is now attacking everyday Australians to balance the budget. To meet the now-abandoned goal of a political surplus, Labor are cutting more from single parents than they have raised from the miners with this tax. It takes guts to stand up to the miners, because they have big money. But slugging single parents is apparently much easier, because they cannot fight back as hard. Labor is attacking some of Australia's hardest-working families while letting big business off the hook. That is gutlessness of the first order.

If we do not fix this mining tax before the budget, expect more Labor cuts, more hits to our science and research sector, and more delays to the much-needed public schools spending boost. The only way that we can fund the services that Australians expect is by taking on big business, that sends most of its profits overseas, and making these mining companies pay their fair share. If we want a more caring society we need a proper mining tax; otherwise, society will become more dog-eat-dog and governments will keep cutting services and making the rest of us pay more.

We also now know that Labor's promise of spreading the benefits of the mining boom is just empty rhetoric. If this is spreading the benefits of the boom, it spreads so thin that everyday Australians will not be able to taste it. Labor is squandering the opportunity of this once-in-a-generation boom. The rhetoric about sharing the opportunity of the boom is an empty slogan. We should be using the revenue of the boom to invest in schools, disability insurance, lifting people out of poverty, and infrastructure for clean energy and high-speed rail. We should also collect more revenue to take some of the heat out of the boom, which has created a two-speed economy and a higher dollar. The boom is devastating some industries, like manufacturing, tourism and education, especially in the south-east of Australia. And we should be using the revenue to invest in research, science, skills and innovation to set us up for life after the mining bubble bursts. Instead, we have billions being siphoned out of the country to overseas shareholders and nothing to show for the digging up of our country's wealth.

After Labor caved in to the big miners, the original estimate of what a mining tax would raise was severely downgraded to around $4 billion. Since then, we have seen further downgrades, with the latest estimate putting potential revenue at just $2 billion. We now know that even $2 billion was a heroic overestimate, with the Treasurer announcing last week that the mining tax had collected a tiny $126 million in the first two quarters. The Greens warned this would happen. We clearly identified the loopholes in this tax and urged the government to close them. They have failed to act and so now we are doing so with this bill. The government’s minerals resource rent tax is a pale shadow of that recommended by the Henry tax review, with its low rate, exclusion of most minerals, and other unjustified concessions, such as accelerated depreciation, conceded by Labor after the mining industry launched a $20-million advertising campaign.

The particular weakness of this tax addressed by this bill is the interaction with mining royalties levied by the states. The government has effectively given the states a blank cheque to raise mining royalties by promising to rebate the cost of all royalties to the mining companies. And I note that Labor routinely, and often rightly, criticise the state premiers. Well, they have just handed them the till to the Commonwealth coffers and allowed them to determine how much this mining tax raises. The Henry review considered crediting companies for royalties paid. It said very clearly, however, that state royalty regimes would need to be fixed at a particular point in time to ensure that the Australian government does not automatically fund future increases in royalties. Under the government’s original RSPT, the refund was limited to royalties imposed at the time of the announcement. The government foolishly moved away from this principle in its negotiations with the big-three mining companies and the subsequent deliberations of the Policy Transition Group and agreed to also rebate any future royalty increases.

The West Australian, New South Wales and Tasmanian governments have already announced royalty increases and the Queensland government increased royalties in October of last year. Under the terms of its current policy, the government will have to refund these additional royalty payments to companies paying them, which reduces the revenue from this tax by billions of dollars. The government has threatened to cut grants to states which increased royalties after July 2011, but this may prove difficult and it may, moreover, be circumvented by the Commonwealth Grants Commission principles of horizontal fiscal equalisation.

This bill presents a better, clearer remedy to this problem of the government’s own making. We had warned the government about this problem at the time, moving an amendment to the MRRT legislation on 19 March 2012. This bill essentially reprises that amendment and will restrict the rebating of royalties to those in place as at 1 July 2011, protecting the Commonwealth’s revenue from erosion by the states. Costings of this measure provided by the Parliamentary Budget Office estimate that, by just closing this one loophole, we would be able to raise an additional $2.2 billion in revenue over the forward estimates and $3 billion by 2016-17. This is $2 billion that could protect the almost 100,000 single parents forced onto the dole by Labor or could contribute to increasing Newstart by $50 a week.

The mechanics of this bill are simple and effective. Item 2 of the bill amends section 60-25 of the MRRT Act to provide that any increase in royalties after 1 July 2011 should be disregarded when calculating royalty credits for the Minerals Resource Rent Tax. Item 3 provides that the bill will apply to MRRT assessments from its first year of operation—namely, the 2012-13 financial year. Item 1 is the consequential amendment to item 2 and amends section 2-1 of the act to clarify that the intention of the act is that mining profits may be reduced by a miner's Commonwealth, state and territory mining royalties amounts in force on 1 July 2011. These three amendments will ensure that any increases to royalties by state governments will not reduce MRRT revenues.

I want to thank my crossbench colleagues who have announced their support of this bill. This bill could pass if Labor has the courage to fix the holes in its failed mining tax. I urge the government to find the courage to make good on the Treasurer’s 'Bruce Springsteen' song-and-dance routine. Have some guts; have some real conviction. Stop playing the Springsteen records backwards and hitting working people while letting the big miners off the hook. If Labor fails to support this bill, the Australian people will know once and for all that all the tough talk about Gina Rinehart is just for show and they will punish Labor for its lack of courage come September. We must pass this bill before the budget, because if we do not the government has only got two other options: make more cuts to Australian working families, like we have seen with single parents, and keep more people in poverty or raise the taxes and the charges that the rest of us have to pay.

This mining tax was supposed to set Australians up for generations. This is a boom that will not come again. We will not raise this much money to secure ourselves for the future, to fund the services Australians expect and to allow us to transition to a clean energy economy ever again. If we do not raise this revenue now, the government will come after everyday Australians to make them pay more or continue to keep people in poverty or make further cuts, including those to single parents. It is appalling that Labor is taking more money off single parents than it has raised from this tax.

The purpose of this place should be to stand up for the Australian public, and if that means standing up to the big miners, who are sending 83 per cent of their profits offshore, so that we get a fairer deal for the rest of us, so that we can fund the services Australians expect, that is what we should do and that is what the public expects from us. I commend the bill to the House.

Bill read a first time.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with standing order 41(c), the second reading will be made an order of the day for the next sitting.