House debates

Wednesday, 13 February 2013

Matters of Public Importance

Minerals Resource and Rent Tax

3:15 pm

Photo of Ms Anna BurkeMs Anna Burke (Speaker) Share this | | Hansard source

I have received a letter from the honourable the Leader of the Opposition, the member for Warringah, proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse impact to the government's management of the mining tax on investment in Australia.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

I think today in question time we had five answers from the government that extensively quoted from President Obama's State of the Union address. It was a very selective presentation, by the government, from President Obama's address.

There was one quite resonant declaration from President Obama, which I would like to share with the House and which, funnily enough, did not make it into anything said by ministers opposite. Let us listen to what President Obama said: 'Our government shouldn't make promises we cannot keep,' and he went on: 'but we must keep the promises we have already made.' Why didn't the government quote President Obama? Let me repeat it: 'Our government shouldn't make promises we cannot keep but we must keep the promises we've already made.'

For the benefit of ministers opposite, let me say that the government did promise $10.5 billion in mining tax revenue—a promise that it could not keep and always knew or should have known that it could not keep. It did promise not to change the mining tax, a promise that it is preparing to break. Haven't we seen this all before, from this government? It makes commitments it cannot keep, it blusters about its ability to deliver and then it betrays people—a consistent pattern of conduct from this government.

The government said the mining tax would raise $10.5 billion, it said it would rebate royalties and it said that the miners could offset the market value of their assets. The tax has not raised the revenue and the government is now preparing to break the deal. Another betrayal is coming up. As sure as night follows day, another betrayal from this government is coming up. It might happen before the election. It will certainly happen after the election, if this government is re-elected. It will gouge the mining industry, as sure as night follows day. Either it will no longer rebate royalties—it will change the basis upon which the tax is calculated—or it will extend the mining tax to more minerals. This is absolutely inevitable. It is absolutely certain, because you cannot fund $15 billion worth of programs with $126 million of revenue. Not even Wayne Swan thinks that sum adds up. It cannot stop the spending so it must raise the tax. It is as certain as night follows day. What is also as certain as night follows day is that this government will never be straight with people about what it is doing.

Almost everything that this government has ever said about the mining tax has turned out to be false. It was going to fund company tax cuts. Remember the company tax cuts that the mining tax was going to fund, that were so important for maintaining investment and so important for preserving the competitiveness of the Australian economy? That lasted about 12 months. The mining tax never funded any company tax cuts. In fact, in a state of cold panic or blue funk at the impact of the carbon tax last year, the mining tax funded, or was supposed to fund, a series of politically targeted handouts.

Then the mining tax was going to raise massive amounts of money. It started at $10.5 billion, before the last election, when the mining tax was announced. By the time the MYEFO for that year was released, $10.5 billion had become $7.4 billion. But then, in the 2011 budget, rescue was at hand. It went up to $7.7 billion. When MYEFO came out—the fourth attempt to estimate the revenue—it was down to $7.5 billion. In the fifth attempt, in last year's budget, it was going to raise $6.5 billion in its first two years of operation. And then, in November last year, when MYEFO came out, it was going to raise $4.4 billion and $2 billion this year.

The great shrinking mining tax eventually became the great disappearing mining tax; just $126 million was raised. Even this information had to be dragged out of the government.

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

It was illegal!

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

It was illegal, the government told us, for weeks. It could not possibly release any information—finally, $126 million or less than 10 per cent of the much reduced estimates. As Dennis Atkins in the Courier-Mail said this morning, with the money raised from the mining tax, they would struggle to cover the hospitality bill at Eddie Obeid's ski lodge!

That is what they have done. Then, by the time you offset the company tax and pay for the administration, virtually nothing has been raised from the mining tax. Finally, the government said that the mining tax was all about 'spreading the benefits of the boom'. Well, $126 million divided by 22 million Australians is just a little more than $5 each—aren't we grateful?

The mining tax was always a bad idea. It was always terrible policy for three reasons: first, you do not speed up the slow lane of the economy by slowing down the fast lane; second, you do not strengthen our economy by weakening its strongest sector; and third—something that members opposite just do not understand—you will never build prosperity by increasing taxes. It was always bad policy. But, if the idea was bad, the execution has been even worse. The minister for resources—and I have to say that, if there is one of the three signatories to the mining tax deal who does have some respect in the sector, it is the minister for resources—had a rare burst of candour in question time today when he said, 'This was the tax the mining industry wanted.' Of course they wanted it, because it was the tax that they never had to pay! It was a tax that they knew they were never going to have to pay. They did not want any new tax but, if there had to be a new tax, let it be one that they did not have to pay!

The truth is that the Prime Minister and the Treasurer—who, let us never forget, personally negotiated this tax; the great negotiator!—personally negotiated this tax. Treasury officials were kicked out of the room. The great negotiator was comprehensively out-negotiated and comprehensively outwitted by the mining bosses. You know, I think she knew she had been outwitted. I am sure she knew she had been outwitted and I am sure the Treasurer knew he had been outwitted, but they did not really care that they had been outwitted because they just needed a deal to take to the election. They needed a deal to take to the election, because do you know what they counted on? Breaking it as soon as the election had come and gone.

There is a pattern of conduct here. This is a government that promises whatever it takes to get what it wants today and breaks that promise to get what it wants tomorrow. It does it again and again and again. The Prime Minister told us before the last election—told the Australian people before the election—that there would be 'no carbon tax' to win the votes of the people, and she promptly broke that promise to get the support of the Greens. The Prime Minister promised that there would be mandatory precommitment for poker machines to get the support of Andrew Wilkie, the member for Denison, and she then promptly broke that promise to keep the support of caucus. The Prime Minister promised that there would be a surplus this year; she made that promise to demonstrate her economic credibility, and then promptly broke that promise to win support from voters so that bribe after bribe could be offered in the run-up to this election. The government promised the miners a tax they would not pay to buy peace before the last election. Now it is going to break that promise so that it can pay for a whole range of pre-election bribes. This is a pattern of conduct from this government.

I want to say today, a day where this parliament has done great things, that this government is not all bad. We did do something this morning—and the government did something this morning—that we should all respect. But, when it comes to the fundamentals of governing this nation, no government has ever been worse. It is fundamentally incompetent and fundamentally untrustworthy, and the mining tax shambles is an absolute illustration of those facts. The Prime Minister, let's never forget, told us back in June 2010 that 'a good government had lost its way'. That is what she said in June 2010: 'A good government had lost its way.' Well, she never even believed that. She never even believed that it was a good government, because she subsequently told us, to carpet bomb the member for Griffith out of a leadership challenge, that in fact it was a chaotic and dysfunctional government. She said back then in June 2010 that three things would be fixed: she would fix climate change, and she has fixed that by introducing the carbon tax that she said there never ever would be; she said she would fix the border protection disaster, and that is so fixed that we have had 26,000 illegal arrivals by boat on this Prime Minister's watch, the largest influx in our history; and then she said she would fix the mining tax, and she has fixed the mining tax with an act of pure genius—the only tax ever introduced that hardly raises any revenue. It damages investments, it damages jobs, but it does not raise any revenue.

But that is only one half of the dynamic duo now responsible for the stewardship of this nation; what about the Treasurer? He was going to give us a surplus; he promised it on, I think, 366 separate occasions, and now there is no surplus. He promised us that he was going to give us half a million jobs within two years; time is almost up and we have got less than a third of the new jobs promised. Then he promised us, of course, $2 billion in mining tax revenue in this financial year, and we have had less than 10 per cent. Has there ever been a worse government in our history?

I used to think that the Whitlam government had been worse, but that is so unfair to Gough Whitlam, who never sold his soul to the Greens the way this government has.

We have had some remarkable combinations at the top of government in our country. We had the remarkable combination of Bob Hawke and Paul Keating—a great reforming pair at the top of this country. And then we had the remarkable combination of John Howard and Peter Costello—probably the best Prime Minister-Treasurer combination in our history. And what have we got now? This Prime Minister and this Treasurer—Gillard and Swan. No wonder the Australian people cannot wait for an election.

3:30 pm

Photo of Martin FergusonMartin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | | Hansard source

I remind the House that we have again seen the Leader of the Opposition clearly indicate that he has no interest at all in policy development in Australia. That was yet another political speech of no policy substance. The MPI that he requested the opportunity to debate went to the supposed adverse impact of the government's management of the mining tax on investment in Australia.

The Leader of the Opposition simply does not have a case in support of his proposition as reflected in the MPI. The House should appreciate that the government has not walked away, in any way, from its agreement entered into with the mining industry on 2 July 2010 and announced publicly. The MRRT of 1 July 2012 reflects in full the agreement entered into with the mining industry on 2 July 2010. More importantly, as the Prime Minister and the Treasurer have clearly stated on a number of occasions, we have no intention of walking away from that agreement, contrary to suggestions of the opposition.

The MRRT had two objectives. Firstly, and importantly, the objective was to maintain Australia as an attractive place to invest. In clear terms, as is reflected in the statement of the Reserve Bank governor of February of this year, we have achieved that outcome. He said in the media release of 5 February following the independent board meeting of that day:

In Australia, most indicators available for this meeting suggest that growth was close to trend in 2012, led by very large increases in capital spending in the resources sector …

The resources sector has known about the intentions of the government with respect to the introduction of the MRRT—and, I might say, bringing application of the PRRT onshore as requested by the petroleum industry—since early 2010.

Despite the so-called fear campaign of the opposition, the resources industry have continued to invest in Australia. The reason for that is that we have achieved our objective. Our objective was to introduce a resources tax which effectively meant that, during periods of record commodity prices and record profits, the Australian community had an opportunity to get a fair return for the one-off opportunity to develop its natural resources.

We also knew, in developing that national approach to taxation, that we had to make sure that we did not put in place a tax system similar to that put in place by state and territory governments with regard to the issue of the inefficient operation of royalties. The resources sector clearly made it known to us, during the development of the MRRT, that they wanted a guarantee that it was a profits based tax, because they had had a gutful of the royalty system developed historically by state and territory governments.

The resources sector accepted their requirement to give the Australian community a fair return for the opportunity to develop our natural resources—the Australian community's natural resources. And their difficulty with respect to the willy-nilly increases in state royalties has again been on display since the election of coalition governments in New South Wales and Queensland over the last couple of years.

Who would have thought that anyone who has any regard for the importance of the resources sector would willingly increase royalties at a time of declining commodity prices? That increase in royalties has, in turn, had a significant impact on the capacity of the mining industry to continue to invest in Australian places such as Queensland and New South Wales over the last 12 months—and, I might say, to keep open marginal coalmines. A number of coalmines have been mothballed because of the lack of understanding of coalition governments in those states that there could never have been a worse time to increase state royalties on such a fundamental commodity as coal.

As an alternative, we understood that during periods of record commodity prices we had an opportunity to ensure that the Australian community did share in the benefits. But in designing that tax we wanted to make sure that Australia remained attractive for investment. The proof is in the pudding. As reflected on in question time today, Australia has continued to remain attractive. We have remained attractive because, following the announcement of the heads of agreement on 2 July 2010, we also gave a clear commitment to enter into a process of full and proper consultation with the resources sector. That became known as the Argus-Ferguson led process: the transition committee. In addition to me and Don Argus—a highly respected person respect in the Australian business community—we also drew into that process key representatives of the resources sector and leading representatives of the Australian Public Service who have a thorough knowledge of the Australian taxation system and associated systems with respect to maintaining Australia's attractiveness to investors. Following detailed consultations, we presented the Treasurer with a report in December 2010 as to how we believed the government should go about implementing our announcement to develop the minerals resource rent tax in Australia.

Contrary to a number of interjections in the House today, the tax does not apply to Olympic Dam in South Australia.

I simply say that is a deliberate endeavour by the opposition to mislead the Australian public as to why Olympic Dam has not gone ahead; not because of the MRRT, but because of the nature of the resources cycle. Perhaps the Leader of the Opposition should actually take an opportunity to read the BHP announcement of 22 August 2012, because he had to admit in the House the day after that he had not read the media statement in which BHP stated that the decision not to go forward with the investment in South Australia was not related to the MRRT. Instead, they cited market conditions—including subdued commodity prices and higher capital costs—as the reason for the decision not to proceed with the proposed expansion in the near term. Despite that decision they have continued to work with the South Australian government to ensure that when the opportunity arises—there is an increase in commodity prices and they work out a more appropriate opportunity or process to deliver that resource—they will go on with the investment in South Australia. That is the nature of the resources cycle. Companies have to have proper regard for the interests of shareholders in ensuring that investments occur at the time of potential maximum return to their shareholders and the Australian community.

Let us go to the facts in terms of the application of the MRRT as it was announced and developed on 2 July 2010. I am pleased to say—unfortunately the Leader of the Opposition is unwilling to acknowledge this—that Australia has continued to have consecutive years of economic growth. I think we should all be proud of that. Everyone in this House, irrespective of their political positions, should be proud that Australia has had 21 years of consecutive economic growth. I might also say that we are exceptionally good on the question of unemployment at 5.4 per cent, inflation at less than three per cent and, I might say, continued investment in terms of $280 billion committed to capital investment in Australia in the resources sector. The Leader of the Opposition wanted to debate the so-called impact of the mining tax on investment in Australia. What he did not actually focus on was the real facts in terms of the performance of our economy and in terms of the resources sector. I acknowledge that the resources sector has been central to the economic performance of Australia over the last 13 years and will continue to be so in future because we have a major investment pipeline.

Let us deal with a few facts. Since the MRRT was announced, the economy has created over 380,000 jobs in total; it has created 67,000 jobs in mining; there has been over $152 billion of capital expenditure in mining; importantly, capital expenditure in mining has increased by nearly 160 per cent since the MRRT was introduced; I also note, the total business investment has increased by nearly 45 per cent. The facts speak for themselves. I also inform the House that the expected mining capital expenditure in 2012-13 is $109 billion which is more than three times what it was before the MRRT was introduced: $35 billion in 2009-10. So much for the facts. It also reflects on why the Leader of the Opposition did not want to debate the issue that he advanced in terms of the request for the MPI. The House should also be aware that resource investment pipeline in terms of what is in an advanced stage of a planned capital investment has more than doubled since the MRRT was announced. It has increased from $110 billion in April 2010 to nearly $270 billion today—that is, $160 billion.

Let us now go to the suggestion from the Leader of the Opposition that the government is seeking to walk away from its commitment of 2 July 2010 to the mining industry. Let us go to the Argus-Ferguson report, something that the Leader of the Opposition wanted to quote in question time yesterday. Let us go to the all-important question of royalties and the endeavour by the opposition to muddy the waters in respect of the government's intentions with respect to discussions with state and territory governments on these issues. Let us also go to the failure of the Leader of the Opposition to speak out in opposition to increases in state royalties such as in New South Wales and Queensland over the last 12 months in the face of declining commodity prices. This was the most inopportune time to actually increase state royalties, because, unlike the MRRT, you pay royalties in both good and bad times, and once you increase royalties beyond the capacity of industry to pay, that is when you get mines mothballed or closed completely and the loss of jobs. It is interesting to note that on the east coast of Australia, in New South Wales and Queensland, in the last 12 months, where state royalties have been increased by coalition governments, we have lost 6,000 to 7,000 jobs in the coal and mining industries. Roughly 6,000 of those jobs were in Queensland where the member for Dickson comes from.

Opposition Members:

Opposition members interjecting

Photo of Martin FergusonMartin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | | Hansard source

The only thing that saved Queensland in terms of those job losses in the coal sector is the fact that we have attracted $55 billion in new investment into coal seam, methane and LNG construction jobs in Queensland during the same period.

That has saved the bacon of Queensland and also saved the bacon of the Queensland government, because it has one of the highest unemployment rates at the moment of state and territory governments because of those foolish decisions. On the issue of royalties, we are not breaking our agreement. This was touched on in full at pages 16 and 17 of the Argus-Ferguson report and I quote:

… the royalties entities pay on iron ore and coal are to be credited against the MRRT liability of a project—

accepted by government. It goes on to say:

It provides a way to meet the needs of the States and Territories and captures more of the profits at the peak of the resources cycle, in a way royalties alone cannot, for the benefit of all Australians.

That is the objective of the MRRT and the PRRT.

Importantly, it says:

Equally, the MRRT should not be used as a mechanism to enable States and Territories to increase inefficient royalties on MRRT taxable commodities—

iron ore and coal—

Accordingly, the PTG also recommends the [Commonwealth], State and Territory Governments put in place arrangements to ensure that State and Territory Governments do not have an incentive to increase royalties on coal and iron ore. This would limit their negative impacts, while allowing the [Commonwealth’s] taxation regime to maximise the return to the community during the highpoint of the resources cycle, so achieving the balanced outcome described above.

That statement from the Argus-Ferguson report says it all. It was well designed and implemented. There is no walking away from the Argus-Ferguson report by the government. It was fully implemented. Now the government is in discussions with state and territory governments about the interface between royalties and the MRRT, as demanded by the Argus-Ferguson policy transition group. Perhaps it is about time that the Leader of the Opposition read this report rather than neglecting it, just like he neglected the BHP announcements of last August about the real reason BHP was not going on with the Olympic Dam expansion in South Australia. (Time expired)

3:45 pm

Photo of Ms Julie BishopMs Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | | Hansard source

After the last election, I met in Sydney with a number of mining and resource ministers from central African states. There were ministers from Chad, Cameroon, the Congo and Burundi. They told me that the reason that they were in Australia was because they were seeking investment from the Australian investment community in their countries because they saw an opportunity to capitalise on the sovereign risk that prevailed over investment in the Australian mining sector. They could relate to me chapter and verse of the impact of the carbon tax and the mining tax on Australia's international reputation as a reliable trading partner and as a reliable place to do business. Does anyone recall the phrase 'sovereign risk' being used in the same sentence with 'Australia' before this lot came into government?

Today the coalition has raised as a matter of public importance the disastrous saga of the latest version of the minerals resource rent tax, the mining tax, and the impact on sovereign risk for Australia. As the Leader of the Opposition so eloquently catalogued it, the MRRT, the minerals resource rent tax, has been an unmitigated disaster for the Gillard government. This tax reminds me of the Cheshire cat, appearing and then disappearing until it just fades away, leaving only the grin. You will remember that in Alice in Wonderland that prompted Alice to think 'she'd often seen a cat without a grin but never a grin without a cat.' Well, we have seen revenue without a tax but never a tax without revenue. This really is like a scene from Alice in Wonderland.

We got a public taste yesterday from the member for Griffith, God bless him, as to the bitterness that resides within Labor on this issue. He wanted Australians to understand, very clearly, that the current fiasco was the idea of the current Prime Minister and her Treasurer. Indeed, former Prime Minister Rudd made a point of noting that the Treasurer deserved to be pinned with the title 'father of the minerals resource rent tax'. According to the member for Griffith, it was the Treasurer's idea from the beginning and as the then Prime Minister he agreed to proceed with it based on the assurances of the Treasurer. But, as former Prime Minister Rudd said in his most understated way, 'It has not collected any real revenue of any significance so far.'

When the whole Kevin thing came crashing down the first time round in 2010, the member for Griffith lost his prime ministership. However—and it is important that my colleagues recall this—the Treasurer, the principal architect of this unmitigated mess, actually got a promotion to Deputy Prime Minister. That is the Labor way: completely mess up a policy and you get promoted.

Photo of Peter DuttonPeter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | | Hansard source

And the treachery.

Photo of Ms Julie BishopMs Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | | Hansard source

Let alone the treachery. I wonder how much longer he will be the Deputy Prime Minister? How much longer will he be Treasurer now that we have a second train crash, with the MRRT? If the member for Griffith were to return to the top job, he would probably last a nanosecond. However, will he last much longer under the present Prime Minister? He can count on her loyalty, of course, can't he? The Treasurer, if he is worried about his position, might find it instructive to talk to the member for Scullin, the member for Barton and Senator Trish Crossin, to name a few. They can all vouch for the Prime Minister's loyalty, can't they? What is going to happen to Swannie? It reminds me of the old Russian tradition of throwing the weakest individuals out of the sleigh as the baying wolf pack gets closer and closer. I wonder who is going to be the next one to be ejected, Wayne? Desperate prime ministers do desperate things and, given this Prime Minister's inability to take responsibility for any of the disasters that she has presided over, there will be a scapegoat. In this case, I cannot think of a more deserving scapegoat than the Treasurer.

Let us look at some of the detail of this mining tax. The government that broke its word on the carbon tax and the surplus is now planning to break its word on the mining tax. The government is desperate for cash following yet another fiasco—the amazing disappearing budget surplus. By the way: thanks for that, Treasurer—that was another one of his disasters. With a non-existent surplus, Labor is now scratching around for some more revenue. It seems that the Prime Minister is on track to rip up her 2010 written agreement with the mining companies in the same way that she ripped up the written agreement with the member for Denison on gambling reform. Now we have the mining tax in a shambles. The only certainty for miners in Australia and for the investment community is that if Labor is re-elected it will increase and broaden the impact of the mining tax after the election. There is no doubt at all that that is the case.

In the event that anybody was under the misapprehension that the mining tax was not in a shambles, think of the message that this is sending to the international investment community. After months of hiding the truth, we now know that the mining tax has raised only a fraction of the revenue promised in the budget and in the Mid-Year Economic and Fiscal Outlook, MYEFO. It has grossed $126 million. But that is not the full story. You see, when you remove the lower company tax payments of about $40 million and then remove the administration costs—estimated by the government to be about $50 million over three years—you find that it has raised virtually nothing.

And yet the Treasurer has linked over $15 billion worth of expenditure to this mining tax and now has no money to pay for its promises. Having raised only a fraction of what was intended, Labor is now indicating that they will grab more money from the states and the mining companies after the election to fill their mining tax black hole. They will take more money from the states and they will take more from companies. Do you know what that means? Fewer services from state governments and fewer jobs and investment in Australian mining companies.

The Treasurer likes to blame iron ore prices for his mining tax disaster, but this claim does not stack up. In the MYEFO, the MRRT was projected to raise $2 billion in mining tax revenue, but since MYEFO was released iron ore spot prices have actually increased by about $30 a tonne. So blaming weak commodity prices for missing his revenue forecasts by 90 per cent defies reason. This is yet another colossal forecasting error by the government. The MRRT failure is the third strike against the Treasurer's economic credibility, and fortunately the member for Griffith is keeping count. The Treasurer promised a surplus, he promised 500,000 new jobs and he promised a mining tax to pay for $15 billion in promises. He has broken all three promises. Labor has a Treasurer with zero economic credibility.

Yesterday the Prime Minister, the Treasurer and the Minister for Trade let the cat out of the bag when they admitted they have a process in place which we know will result in a grab for state government mining royalties as a way of compensating for their failed mining tax and their mining tax black hole. Labor's plan to hit the states with yet another tax grab means less for services for nurses, for teachers, for police and less for infrastructure. In the case of my state of Western Australia and in the case of Queensland this infrastructure is needed to underpin the very mining sector with whom this government is at war. It is not spreading the wealth; it is spreading the pain as state governments are forced to cut back on essential services.

The sovereign risk caused by this return to the MRRT is on top of a litany of government decisions that have tarnished Australia's international reputation. The resources area—remember the hit to condensate. Without any warning to industry they removed a tax exemption on condensate. At the time, we said that it was an absolute smash and grab raid and that it was the equivalent of a drive-by shooting against the oil and gas industry. The other beauty was the infamous decision on live cattle exports that resulted in Australian producers losing potentially half of their market in the long run. In the last 12 months the government has reneged on the purchase of munitions and on the purchase of self-propelled artillery, both to the detriment of a reputable South Korean firm. As a result, the Executive Director of the Australian Strategic Policy Institute commented:

It's a major problem when a big company from a trading partner as important as South Korea chooses not to compete for business in Australia on the basis of 'sovereign risk'—a term indicating a serious lack of confidence in our policy settings.

By the way, Samsung was reported as saying that this government had been disingenuous and dishonourable in its dealings with them. This government is a disgrace, and a mining tax is yet another example of why. (Time expired)

3:55 pm

Photo of Kelvin ThomsonKelvin Thomson (Wills, Australian Labor Party, Parliamentary Secretary for Trade) Share this | | Hansard source

There is plenty of Alice in Wonderland about the opposition's approach to the mining tax. They used to complain that the MRRT would raise too much money and risk jobs; now, they wring their hands and say it collects too little money while ignoring the jobs created. Their only consistency is a determination to see absolutely nothing flow into the pockets of ordinary working people who own the minerals. At the core of the MRRT is the fundamental determination of this government to stand up for the working Australians who own resources.

Australia's economy stands as a beacon of resilience around the world. Unlike virtually every developed economy, we avoided recession and saved hundreds of thousands of jobs in the face of the worst global economic conditions since the Great Depression. Australia has had 21 years of consecutive economic growth and one of the lowest unemployment rates in the industrialised world. The resources sector has, of course, underpinned Australia's economic strength. Our resources sector accounts for 16 to 17 per cent of Australia's GDP and expanded by around 12 per cent over the last year, and our resources and energy export earnings reached a record high of $193 billion in 2011-12. Mining accounts for 60 per cent of Australia's total exports of goods and services and is the largest share of outbound trade with Australia's largest trading partner, China. As for employment, in 2011-12 total employment in Australian mining, oil and gas extraction sectors averaged around 248,000 people—20 per cent higher than in 2010-11. The figures released by the ABS for the September quarter of last year show mining employment at 270,000 for the quarter—around 2.3 per cent of total employment. The Australian Workforce and Productivity Agency forecasts employment in the Australian mining sector will be over 300,000 by 2017, with a further 280,000 employed in oil and gas extraction.

Because of the profits based nature of the MRRT, the MRRT has had no negative impact on Australia's iron ore and coal industries. This is an opposition at war with the facts. You are entitled to your own opinions, but you are not entitled to your own facts. Facts are things to be shared. So let me share some facts with the House and with the opposition. Since the announcement of the MRRT in May 2010 there have been 50 coal and iron ore projects approved including infrastructure projects worth around $57 billion. The House should not forget that, when the MRRT was announced, those opposite, coming out to do the bidding of the mining billionaires, described the MRRT as 'investment destroying' and 'job destroying'. The shadow Treasurer wanted us to believe that under the MRRT Australian mining had no real place for growth, but in fact each of the major iron ore producers in Australia have spent or are planning to spend billions of dollars expanding their iron ore operations.

Since May 2010 there have been iron ore operations approved, increasing production of iron ore by 55 per cent. And since May 2010 there has been approval for around $24 billion committed to coal projects, including infrastructure.

The investment in coalmines will increase Australia's capacity by 76 megatonnes per annum, an increase of 20 per cent from Australia's 2010 saleable coal production, including both thermal and met-coal but not brown coal. Committed investment to increase the capacity of Australia's mining industry, as at the end of October last year, was a record $268.4 billion, an increase of three per cent from April 2012. In the six months to October last year, 24 resources and energy projects, with a combined cost of $11.9 billion, were completed in Australia. For 2011-12 the Australian Bureau of Statistics reported total exploration in Australia at $7.1 billion, 14 per cent higher than 2010-11. Metals and other minerals exploration expenditure for 2011-12 totalled $3 billion—again, 34 per cent higher than in 2010-12. So the real threat to investment in Australia is not the mining tax; the real threat to investment in Australia is the possible election of a Liberal government which has learnt nothing from the global financial crisis and is hell-bent on slash-and-burn austerity measures.

In 2008 private aggregate demand collapsed and the Labor government had to step in with stimulus to shore up demand—225,000 jobs were created through the government's spending program; and, in fact, since November 2007, Labor has created over 800,000 jobs, including in mining, in retail, in health and in skilled trades. And unemployment is well below the previous Liberal government's average of 6.4 per cent.

The OECD, the Organisation for Economic Cooperation and Development, found that Australia's fiscal stimulus measures were amongst the most effective in the OECD in terms of stimulating economic activity and supporting employment. The Nobel Prize winning economist Joseph Stiglitz lauded the Labor government's spending, saying:

Not only was it the right amount; it was extraordinarily well structured, with careful attention to what would stimulate the economy in the shorter run, the medium term and the long term.

He said:

When I look around the world it was, I think, probably the best-designed stimulus program in the world and you should be happy that in fact it worked in exactly the way it was designed to work.

The global financial crisis wiped a massive $160 billion off government revenues. If we had not implemented a timely and targeted stimulus, we would have experienced a deep recession and much higher unemployment, with all the destruction of capital and skills that comes with that. Such a devastating blow would have set our economy and budget back years. There is no serious issue of public debt in this country, as a result of the stimulus: gross debt peaks as a percentage of GDP at 18.4 per cent in 2011-12 and 2012-13; net debt peaked in 2011-12 at 10 per cent. Our net debt has peaked as a percentage of GDP at almost one-tenth the level of the major advanced economies. In Australia's case, that is like someone earning $100,000 a year owing only $10,000. And our net interest payments for 2012-13 will be 0.5 per cent of GDP. That is like someone earning $100,000 paying only $500 a year in net interest. We are paying down net debt as a percentage of GDP now, and gross debt as a percentage of GDP falls from next year. This refutes the coalition's irresponsible claims that our nation's debt levels are somehow comparable to debt-stricken parts of Europe.

The government's actions in relation to mining, to stimulus, to skills and to renewable energy have ensured that we have one of the strongest economies in the world. We have a AAA credit rating. We have a low unemployment rate—Australia has less than half the unemployment rate seen in Europe and the rate is significantly below other advanced economies. We have, as I have said, an exceptional job creation record. We have contained inflation, with underlying inflation in the middle of the RBA's target band. We have low interest rates—currently at three per cent, lower than at any time under the previous Liberal government, meaning that a family with a $300,000 mortgage is paying $5,000 less in repayments a year; $100 less a week.

The Labor government is building on resilient economic fundamentals that are the envy of the world, solid growth, low debt, healthy public finances, contained inflation, low interest rates, a gold-plated AAA credit rating—one of only seven countries in the world which has that—but we are not done yet. We are investing in labour reforms for the future, the NDIS, Gonski in education, the NBN and renewable energy. We stand for an Australia where every child can get a quality education, where their parents can have a decent-paid job and their grandparents can retire with a dignified income. We are at a critical moment when strong rather than weak Australian government leadership is vital—the kind of strength of leadership that we have shown through the minerals resource rent tax and which we will continue to show.

4:05 pm

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

It is with great pleasure that I rise to speak to this urgent matter of public importance—the adverse impact of the government's management of the mining tax in terms of investment into Australia.

Australia is a very successful country. Despite the government, we are still successful. But the fact is that we have a history that is littered with failures that sometimes we don't really want to talk about too much. It goes back to the long-distance navigational abilities of Burke and Wills; the introduction of the cane toad into Queensland, to try and clean up the mess of grubs eating the cane stalks—

Photo of Dan TehanDan Tehan (Wannon, Liberal Party) Share this | | Hansard source

The rabbit!

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

The rabbit is another one. The development of the Holden Sunbird—I mean, no-one would want to be caught dead being in a photo with that one! In more recent times we have had the iSnack 2.0. I think that lasted four days on the shelves. Click Frenzy, which happened last year, probably did not even last four minutes before the internet system went down and nobody could buy anything. And even Slim Dusty, that great Australian songwriter, put a song together about a failure: the Pub With no Beer, he called it.

But I have to tell you that there is nothing so lonesome, morbid or funny than to gamble your surplus on a tax with no money.

The reality is that we have got another failure here in front of us with this mining tax and it is a failure of epic proportions. The thing about failures is that most people actually learn from them, do something about them and move on. But the government will not even acknowledge its failure on the mining tax front. The Treasurer was dragged, kicking and screaming, to announce to the public that this tax had raised only $126 million in half of a year of its operation—a quarter of what it was predicted to raise. He talks about the need for this tax to spread the wealth and spread the benefits around to everyone. As the member for Casey pointed out the other day, it is spreading $5.50 to every Australia—fantastic! It is not even enough to buy a McDonald's meal.

We have heard the Treasurer and the Prime Minister blame all sorts of different things for the reason this tax has fallen short. We have heard the blame falling on commodity prices. The Treasurer has certainly said that no commodity analysts or economists had forecast the tumble that took place in iron ore prices last year, but the fact is that iron ore prices have actually risen—so that is not a real excuse. But he did say that the resources rent taxes, by their nature, are difficult to forecast and that jumps and falls in the revenue relative to the estimates is to be expected. He is trying to blame it on international pressures on the mining industry or the resource industry and what that does with prices.

But then we have another excuse, and that is that it is the states' fault. This seems to be the Prime Minister's approach, that it is all those terrible state governments—even the Labor state governments—that are doing the wrong thing by having royalties. Royalties are something that state governments have always had and that were in existence for the life of the Howard government, when we did not have great deficits and debt. This is something that has been around for a long time, yet somehow it is the states' problem. Then we had the member Lyne coming in, as part of that menagerie that makes up the government, saying that it is these loopholes that are the flaw in the system and saying that these loopholes allow Rio and BHP to have $1.7 billion credits to buffer themselves from paying the tax—as TheAge put in its newspaper today.

But the thing is that these are not flaws; it was a tax that was actually designed that way. The tax was actually designed to allow the big miners to have $1.7 billion in credits to buffer themselves from paying. It was a deliberate design that was done in the deal that the Prime Minister made with the big three miners after she knifed the member for Griffith and took over his job.

Photo of Dan TehanDan Tehan (Wannon, Liberal Party) Share this | | Hansard source

She did what?

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

She knifed the member for Griffith and took over his job on the basis of doing a deal with the mining companies that has seen this tax be completely flawed and a failure.

I can remember the full-page ad that the former local Labor member put in the Mackay newspaper. It had Julia Gillard smiling and it said: 'The deal is done! We have done the deal with the mining companies.' The Minister for Resources and Energy today said how great it was that this was a tax that was supported by the mining industry. Of course the big three miners would support a tax that they were never, ever going to have to pay. Hell, if you came to me with an income tax deal like that, I would sign up right away! The fact is that we have got more than $15 billion worth of commitments and promises from this government that are linked to this mining tax.

I have got to tell you that, out of that $15 billion, $5.6 billion is tied up in the Regional Infrastructure Fund. That actually makes up more than 95 per cent of that Regional Infrastructure Fund. Out of that is a project on the doorstep of my electorate, which is the upgrade of the Peak Downs Highway. The government said that they were going to contribute $120 million to that. The question now is: where is the money going to come from? For the member for Flynn, who is sitting behind me, the Gladstone Port Access Road was one of the promises that this mining tax was going to deliver. I am not exactly sure how much that was; but, again, where is the money going to come from?

Photo of Ken O'DowdKen O'Dowd (Flynn, National Party) Share this | | Hansard source

It was $25 million.

Photo of George ChristensenGeorge Christensen (Dawson, National Party) Share this | | Hansard source

So $25 million for the Gladstone Port Access Road. For the Townsville Ring Road, which will have to be used by some constituents in the northern part of my electorate and certainly by constituents in the member for Herbert's electorate, $160 million was to be funded out of this mining tax. Where is the money going to come from? Wouldn't you wish for whinging Wendy from the Labor Party ads to turn up right now to front the Treasurer and ask, 'Where is the money coming from?'

The government say that they are not going to touch the mining tax and that they are not going to fiddle with it to increase the revenue. That may be right for now. There are already dogs baying. We had the member for Hunter say last night that the tax should be fiddled with to get more out of the mining industry. We have had the member for Griffith allude to that as well. As sure as night follows day, we are going to see after the next election, if—heaven forbid!—this government is returned to office, that the mining tax will be jacked up and that all bets will be off.

The mining tax has already caused sovereign risk to Australia. The resource industry just simply does not know what government policy is these days. After the next election, there are going to be question marks again. I want to tell you, from my electorate's point of view, what it has done. We have had, according to the Queensland Resources Council, something like 3,200 jobs lost in the last year—and they say there is another 1,000 more on the way. In just one part of my electorate—Mackay—we have 5,412 direct full-time employees engaged in the mining industry. That does not include contractors. In the indirect employment that is generated from mining, we have up to 62,600 employees. These are people actually engaged in mining or in services that flow on from mining.

The mining industry contributes $3.8 billion to that region through voluntary community contributions and the purchase of goods and services from local companies. Yet 3,400 positions were cut over the last six months, and 1,000 more are predicted to go. We have had report after report in local newspapers about this—jobs going at different mines, mines closing down throughout the Bowen Basin, and ancillary companies to the mining industry having to lay off dozens and in some cases hundreds of employees.

Winston Churchill actually said, regarding socialism, 'It's a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.' Well, there could be no better description for the Gillard Labor government and its mining tax. It is a failure of a government. It put in place a tax policy based on envy, ignorant to sovereign risk that it would create and the subsequent impact on mining investment and jobs. The result has been a failed tax spreading a miserable $5.50 per head of population. What a failure of a tax, what a failure of a government, what a failure of a Treasurer. He should stand down; he should resign.

4:15 pm

Photo of Andrew LeighAndrew Leigh (Fraser, Australian Labor Party) Share this | | Hansard source

There is a lot of overheated rhetoric and debate around the mining tax, so I thought it might be useful to the House to return to the origins of the mining tax that is being discussed today: the Henry review's extensive report into the Australian taxation system. It discussed the principles behind a profits-based mining tax. It said:

The finite supply of non-renewable resources allows their owners to earn above-normal profits (economic rents) from exploitation. Rents exist where the proceeds from the sale of resources exceed the cost of exploration and extraction.

It goes on to say:

In most other sectors of the economy, the existence of economic rents would attract new firms … However, economic rents can persist in the resource sector because of the finite supply of non-renewable resources.

That is the underlying reason a profits-based tax is a more efficient tax in the mining sector.

We have had profits-based taxes in other contexts as well, the petroleum resource tax introduced by the Hawke government being the classic. When that was announced back in 1987, industry members took out front-page ads. We said back then that a profits-based tax would be anti-capitalist, and those on the conservative side of politics opposed a profits-based tax for the petroleum sector.

But what has been the history of that? Under the PRRT there have been substantial increases in production in that sector. Crude oil levies and royalties were hurting the sector, because when the price was low the tax impost became unsustainable. Now more than 20 years of oil production and 30 years of gas production remains in Bass Strait. But the PRRT revenue is volatile. We saw PRRT revenue drop by two-thirds during the global financial crisis. Profits-based taxes are inherently volatile taxes, but they ensure that Australians get a fair share, and they do so without decreasing the incentives to invest in the mining sector. Before the last mining boom, Australians were getting $1in every $3 of mining profits through royalties and resource charges. But as mineral prices went through the roof, in some cases increasing 10-fold, the share of mining profits that were being collected in tax went down to one dollar in seven. Profits went up by $80 billion, but the government only collected another $9 billion in revenue over the period 1999-2000 to 2008-09.

It was in that spirit that the government took on the recommendation put forward by the Henry review for a profits-based mining tax. It was backed by many sensible economists from widely across the political spectrum. As members of the House with an interest in US politics will recall, Sarah Palin made a name because as Alaska governor she introduced a petroleum profits tax. So in order to oppose a profits-based mining tax you have to be to the right of Sarah Palin. Indeed, it was the Minerals Council of Australia who, in their submission to the Henry review, said that Australia ought to have a profits-based tax on minerals. They argued for a shift from royalties-based to profits-based taxation in their November 2008 submission, because they recognised that that was the right way of taxing minerals.

Now, some of those opposite will say: 'What about company taxes? Aren't company taxes enough?' But when the House Economics Committee considered the mining tax in late 2011 we had Fortescue come to see us, and I asked executives from Fortescue how much company tax Fortescue had paid, and the answer was zero—none at all; not a cent. So, when those opposite speak in their opposition to the mining tax, they are effectively saying that when world prices go up Australians should not get more. They are on record. The shadow Treasurer said, on 25 May 2010, when asked about mining company tax, 'Well, I think they pay a fair share.' The Leader of the Opposition said, on 26 May 2010, that mining companies 'are paying more than their fair share of tax'. Despite the fact that commodity prices had gone through the roof and mining profits were going through the roof, the Leader of the Opposition thought mining companies were paying too much tax.

And then in 2010 we had this overheated rhetoric, reminiscent of what was said before the introduction of the carbon price, about what a profits-based tax would do to the industry. The Leader of the Opposition said it would 'threaten thousands of jobs in Western Australia and threaten investment'. The shadow Treasurer said it would 'discourage investment and cost jobs'. The Leader of the Opposition described the mining tax as a 'penalty tax almost guaranteed to kill the mining boom stone dead' and said that 'it will kill the goose that's laid the golden egg for Australia'.

Let us see what has happened to that mining boom—to those golden geese. Since July 2010 the Australian economy has created over 380,000 jobs in total; 67,000 jobs in mining. There has been over $152 billion of capital expenditure in mining. Capital expenditure in mining has increased by nearly 160 per cent. Total business investment increased by nearly 45 per cent. Expected mining capital expenditure for 2012-13 is more than three times what it was in the year before the MRRT was announced and the resource investment pipeline has more than doubled since the MRRT was announced. It is difficult to see a mining boom that has been killed stone-dead. It is difficult to see a goose that has been killed. In fact, the only geese appear to be those who are honking the interests of the mining magnates.

Getting a profits-based tax in place is not only economically efficient it is also an equitable way of sharing the proceeds of the boom. Fundamentally, the difference here is that those on the conservative side of the House believe that the minerals belong to those who have the mining licences. But that is not the case. These minerals are owned by all Australians. When the world price goes up it is not going up because of the sweat of the brow and the ingenuity of Australia's mining magnates. Whatever else you can say about Gina Rinehart or Clive Palmer, you cannot seriously argue—no-one in this House has seriously argued—that they are responsible for increases in the world price of commodities. Therefore, the question is: when that world price goes up—in some cases tenfold—shouldn't you maybe increase the rate of tax which those firms are paying? Wouldn't it be fair to increase the rate of tax those firms are paying? That is fundamentally what we are debating here in this House.

Those opposite argue against the mining tax. They argue that it ought to be scrapped, despite the fact that none of their prophecies of doom have come to pass over recent years. Yes, mining tax receipts will be volatile. That is because commodity prices are volatile. It is also—and I think this is a point that is too rarely acknowledged in this debate—because profits in the mining sector depend on the investment stage. So as we move through the three stages of the mining boom—that price boom through to the investment boom through to the output boom, which we are now seeing, in which total extraction is significantly above what it was—we are going to see different levels of profits. At a stage when firms are doing significant investment, we are going to see lower profit levels. At a stage when volumes are up, we are going to see higher profit levels.

The question for all of us here in the House is: if we believe the minerals are the birthright of all Australians, if we believe that the world price is not set by any of us here, then surely we should believe that a profits-based mining tax is the right thing to do—a profits-based mining tax that is backed by economists across the political spectrum, just as a price on carbon pollution is backed by economists across the political spectrum. It is a good tax, and one of which I am proud.

4:26 pm

Photo of John AlexanderJohn Alexander (Bennelong, Liberal Party) Share this | | Hansard source

Thank you, for the opportunity to contribute to this matter of public importance about the adverse impact of the government's mismanagement of the mining tax on investment. As has been eloquently said by my colleagues before me, our nation's wealth is built on strong economic management that provides the stable and certain conditions essential to attract investment. It is our nation's great misfortune that this stability and certainty has been progressively undermined by five years of economic and policy ineptitude under this Labor government.

Over a very long period of time our nation has earned the highest reputation of one that could be depended upon, of a people whose hand you could shake, whose word could be given and trusted. This reputation was built under fire on foreign battlefields as the staunchest and most heroic of allies. This reputation has been built during peacetime, with relationships based on the foundations of integrity and trustworthiness with our trading partners—sometimes with the same countries against whom we have endured conflict. This reputation has been developed through generosity for those in need in times of disaster or hardship, or through assistance to build a better future. We have shared our good fortune. This reputation has been built on the sporting fields of the world, not just through our successes, but through our willingness to compete against the odds, try with our all and, if defeat visits, smile, shake hands and look forward to the next opportunity to compete. Reputations are so hard won but so easily tarnished. Values of honesty, integrity and trustworthiness are not fashions that may come and go. They are the essential building blocks for a country building a great future to establish and demonstrate in every endeavour and at every dealing.

Today's MPI topic of the adverse impact of the mismanagement of the mining tax on investment is representative of the past five years under this Labor government. Unfortunately, day after day in this place, and in every home, and the places we visit in our electorates, there are questions about this government's values, their honesty, their integrity and their trustworthiness. Time and again we have seen calculated promises, made in the heat of an election campaign, that put politics above policy. We have seen deals done with Independents to negotiate power and paid for with our dollars—politics above policy. There were promises broken and deals reneged upon. How far does this sad characteristic extend and what are the consequences? We all saw the choices made in the face of the GFC: pink batts, school halls that were overpriced and often not needed and $900 cheques dispersed. These initiatives were plagued by rorts and rip-offs, high cost and more debt and were for no benefit. Surely we can do better. Sovereign risk had never been a label attached to Australia. Sadly now it is, and there are consequences as collateral damage manifests.

This mismanagement of the mining tax is just the most recent example. Prior to that, we saw the memorandum of understanding with the pharmaceutical industry, where the government promised certainty through the PBAC process for PBS inclusion in return for the industry forgoing significant revenues.

Not even 12 months had elapsed and the government backed away from their agreement through cabinet deferrals of PBAC recommendations. Tremors reverberated around the pharmaceutical world, and Australia and sovereign risk were mentioned in the same sentence for the first time. Export income of $4 billion, more than the car and wine industry, $1 billion in research and development and huge current and future investment in this sector were put in peril.

Just like with this mining tax fiasco, this mismanagement of economic policy does not just affect the companies but also affects the people we are here to represent. In my electorate of Bennelong there is a company that has developed the first innovation in over 50 years in medical treatment for stroke in atrial fibrillation, replacing the use of warfarin, a type of rat poison, as a treatment of this life-threatening condition. This innovation has passed our TGA and PBAC processes. Even our neighbour New Zealand has listed this medicine, but not us. Instead, this government, in a move that only creates uncertainty for investment in our nation, has decided for the first time ever to conduct a lengthy and costly review of the medicine before it is even listed on the PBS. Also, in a reply I received last week to a question on notice to the Minister for Health, the minister could not even commit that they would not have yet another review of this medicine prior to its listing.

Another example of poor government policy impacting on investment was the response to the ABC Four Corners story regarding live cattle exports to Indonesia. Policy decisions made in haste to grab a headline and appease certain interest groups served only to damage our nation's standing in the international community, devastate our relationship with our closest neighbour and destroy an industry that generated over $700 million in foreign income per annum and happened to be the biggest employer of Indigenous people in the region. Australia was again cited as a nation of sovereign risk.

The reason cited by Prime Minister Gillard for her challenge against the former Prime Minister Rudd was that he had lost his way—the government had lost direction. The first course of action was to meet with the mining industry and mend the Minerals Resource Rent Tax. It was claimed that in six days, working tirelessly with the Treasurer, this was done. In conflict with this claim, if I recall correctly the Treasurer's first responsibility under the government of Gillard was to replace the deposed Prime Minister and attend the G20 meeting in Canada for a two-day conference. If you add travel time—one day there and one day back—that left only 2 days to work out the new MRRT. Jet lag is well known to reduce your ability to calculate complex equations. Possibly this is where the problem lies in the failure of what was negotiated to deliver what was promised. Whether it was jet lag, incompetence or simply being outmatched by skilful negotiators on the other side, the result is undeniable.

The mining world, which has delivered such wealth to us, was traumatised by these events, and all for no benefit. The mining industry now risks investment in war-torn Africa in preference to the risks involved in doing business in Australia under this government. This represents the gravest consequences produced by sovereign risk. This has occurred because this government does not have the timeless building blocks based on the values of honesty, integrity and trustworthiness.

Great damage has been done, but for what benefit? The MRRT was projected to generate more than $10.5 billion to fund programs that included the National Disability Insurance Scheme and the education reforms recommended in the Gonski report. However, in the first 6 months only $126 million has been received. When this is impacted by implementation and administration costs of some $50 million, and lost tax revenues, which are in the vicinity of $40 million; this conspires to make a most worrisome situation. Short-term thinking may just rack this shortfall sum up on the national credit card, but it must be widely recognised by now that debt is simply future taxes.

Yes, there will be those with short-term selfish views: yes, slug the big miners and give us a share. You may be distressed to learn that when $126 million is impacted by the setup costs and the loss of revenues, you will get only about a dollar each. Responsible government should behave differently and place policy above short-term cheap politics. The building of industries and relationships with our trading partners must be based on trust, on certainty and on stability. If a government is unstable, it is very hard to produce stable government.

It may not be in fashion to adhere to such values, but when you are entrusted with the responsibility of protecting our wealth, our future and our reputation, only these values, which we have fought to establish as core to the Australian character, will suffice. Values that establish honesty, integrity and trust must replace the political expediency that has so tarnished our reputation with the words 'sovereign risk'.

Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

Order! The time allotted for this discussion has now expired.