Senate debates

Tuesday, 22 November 2011

Matters of Public Importance


4:26 pm

Photo of Alan EgglestonAlan Eggleston (WA, Liberal Party) Share this | Hansard source

The dishonesty of Prime Minister Gillard's lie of not having a carbon tax has been extended to secrecy over the assumptions underlying this mining tax. This means the supposed benefits for superannuation, a reduction in company tax and the elimination of the deficit all have to be said to be in doubt. This version of the mining tax was conceived in secrecy as a result of a deal between the three big mining companies—BHP Billiton, Rio Tinto and Xstrata—and it excluded the smaller mining companies represented by AMEC. Those small companies are a very important sector of the mining industry. AMEC rightly complains that this proposal is anticompetitive and, as it stands, the tax will create an uneven playing field between the formative iron ore and coal miners—those trying to cut their teeth in the business—and the large conglomerates. It appears that the Labor Party is happy to be in bed with the big boys: BHP, Rio and Xstrata. So much for their rhetoric. Boy oh boy, what a revelation!

There are estimates, which have varied widely, of how much revenue this tax will raise. Last July, in 2010, we were told the tax would raise an estimated $10.5 billion over its first two years. Strangely, later in the MYEFO document, revenue was downgraded quite substantially by almost $3 billion to $7.4 billion, being the estimate of what this tax would raise. In the May budget this year, however, the revenue from total tax raised magically increased to $7.7 billion in the first two years and then $11.1 billion for the first three years. It seems to me that these figures are as much of a roller coaster as the Prime Minister's polling—up and down, all over the place—and give no real indication of what we can rely on.

The government claims taxes are variable because the prices of minerals vary so much, as do exchange rates. Well, there is some doubt in that. In many ways there are long-term projections made, with future markets and so on. The best that can be said as to the revenue value of the minerals tax is that it is very uncertain if it is based on such uncertain prices and so many uncertainties in the modelling. In the view of the miners who were not consulted, the smaller miners, the AMEC group in particular, this tax will not raise anything like the revenue projected.

Andrew Forrest, the head of Fortescue Metals Group, claims the three big miners who did the secret deal with the government to set up this tax will pay far less tax than the new players and the smaller miners. In fact, it has been estimated that the smaller miners will pay at least four per cent more than the big miners, and that is quite a substantial amount of money. We have to ask whether that is fair. The big miners are well-established big operations, whereas a lot of smaller miners are trying to get their operations off the ground. The concept that they should have to pay more tax is quite unreasonable. It means this tax is actually a discouragement to the future development of the mining industry.

We are told that the revenues generated from this tax will be allocated to improving superannuation, reducing company tax and, most importantly, eliminating the deficit. But, even though the government has these fine ideals, it seems very strange that it is denying the parliament the right to see the modelling underlying this tax. Surely it is reasonable for parliament to have the modelling, if for no other reason than the government's claim that the tax will help it return to surplus in 2014. Yet no information is being provided to the parliament. That has to be a matter of concern to us all.

As I said, the AMEC group of companies and FMG say that this tax was conceived in a secret deal between the government and the big miners—BHP, Xstrata and Rio—and we are told that the modelling was done by BHP. That is another thing which must make us a little bit concerned. BHP is a very large company, having a different set of figures to those of the smaller miners; perhaps modelling done by such a very big company does not translate particularly well into the operations of the smaller miners.

The Gillard government claims to be committed to openness and transparency, but in practice secrecy and opaqueness seem to be the order of the day for this government. Given the Prime Minister's acknowledged record of misleading the Australian people—to put it at its nicest, or lying, as some of my colleagues have said—over the carbon tax, parliament has every right to be rather dubious about the rationale for this tax and the underlying assumptions which have led to this tax being set at the rate that it has been. I think parliament has every right to demand access to the data underlying this tax to test the validity of the government's projections. The government claims that the information is supposed to be in confidence and that the Information Commissioner 'will arbitrate the release of documents to the parliament'. I must say I have never heard of the Information Commissioner before; it is a public office which I was totally unaware of. But here we are—we have got an information commissioner who is going to arbitrate what the representatives of the people of Australia are entitled to know about the underlying assumptions this government made in setting up this tax. In my view it is very important to remember that the parliament and the Senate are the representative bodies of the people of Australia. It is quite outrageous that this government is denying the parliament access to its modelling figures.

The Prime Minister's office claims that the functions of the Information Commissioner do not include 'reporting on or arbitrating disputes between the executive and the parliament'. I come back again to the simple proposition that the parliament represents the people of Australia, and this is one place where the people of Australia have the right to expect answers to questions raised on their behalf. It would seem to flow as a logical conclusion from the government's position that this government does not believe that the parliament should have sufficient information to make an informed decision on this matter.

It is a pretty outrageous and sad matter that we are contemplating, where a government is proposing to set up a super tax which other countries, our competitors, do not have and which will disadvantage our mining industry, making it less competitive. Part of the naivety of this government seems to be its failure to understand that the mining industry is truly international and that the big mining companies in this country can shift their projects and their money to other parts of the world, like West Africa, the gulf, Canada and Brazil, and it is an easy thing for them to do. That is something that this government simply does not understand. It is going to damage the industry which has made Australia's economy so strong.

In conclusion, I return to the fact that the parliament represents the people of Australia and it is the people of Australia to whom the Gillard government is saying, 'We are not going to tell you what the underlying assumptions for this tax were.' That is outrageous.


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