Thursday, 15 March 2012
Minerals Resource Rent Tax Bill 2011, Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Bill 2011, Minerals Resource Rent Tax (Imposition — General) Bill 2011, Minerals Resource Rent Tax (Imposition — Customs) Bill 2011, Minerals Resource Rent Tax (Imposition — Excise) Bill 2011, Petroleum Resource Rent Tax Assessment Amendment Bill 2011, Petroleum Resource Rent Tax (Imposition — General) Bill 2011, Petroleum Resource Rent Tax (Imposition — Customs) Bill 2011, Petroleum Resource Rent Tax (Imposition — Excise) Bill 2011, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Superannuation Guarantee (Administration) Amendment Bill 2011; Second Reading
The coalition opposes this raft of bills. This raft of bills, the Minerals Resource Rent Tax Bill 2011 and related bills, will strike at the very heart of the Australian economy. This package of bills will seek to legislate the sort of politics of envy that those on the other side revel in. Make no mistake: Australia has benefited very greatly from the resources boom. We happen to call it the 'resources boom' because we accept that this situation will not last forever. Indeed, the resources sector is well known for its cycles—for its downs and its ups. There is no doubt that at the moment Australia is benefiting from one of the up cycles. But as a result Australia is getting a huge dividend via company tax and via royalties. And this is the important thing here: the states are entitled to the royalties. The value of the minerals actually belongs to the states in our federal system, and the mining companies do the bargaining with the states in relation to the royalties. After that is done, the profitability of the company is taxed via Commonwealth legislation.
The Commonwealth legislation is appropriate to have a company tax levied on the profitability, but this concept of a superprofits tax is once again an indication of the thinking of the Greens-Australian Labor Party alliance that you can dumb down the economy, that anybody that makes a profit above whatever predetermined rate it may be should be taxed extra hard and more heavily. Are we going to start applying that to our banks and financial institutions? Are we going to start applying that to the local corner store? Are we going to start applying a superprofits tax to other areas of the economy? Why would we seek to levy an extra tax on those businesspeople who are able to run their companies and businesses more efficiently and effectively than their competitors down the road? If we start taxing innovation—if we start taxing the entrepreneurial spirit—it will simply dumb down the Australian economy. And of course that is what those with a socialist bent on the other side, being the Greens-ALP alliance, actually believe in. We in the coalition do not. We do not want to see the killing of the goose that is laying the golden egg for the Australian economy.
And make no mistake: the buyers of our resources as we speak are looking to South America, are looking to Africa and are looking to Asia to source these raw materials. Why are they doing so? Because, once the Australian government started signalling quite heavily that they were going to levy an extra tax, why would they bother to continue to invest in Australia? Sure, the impact of this may not necessarily be seen in the Australian economy tomorrow, the next day or, indeed, next year, but in a decade's time people will start asking, 'What happened to the once-proud Australian resources sector?' They will be able to look to Brazil in South America. They will be able to look at the continent of Africa. They will be able to look at Asia and say all the people decided that they would invest in those continents because, believe it or not, Indonesia now boasts less sovereign risk for resource companies than Australia courtesy of this mining tax.
One of the reasons we as a coalition oppose this mining tax is that it was a deal struck by the government with the three largest miners. There are 3,000 Australian mining companies. This is another example of big government doing deals with big unions and big business and small business is simply trampled on, forgotten, dismissed as being of no consequence. We as a coalition say those other 2,997 smaller miners were entitled to be heard, were entitled to be listened to—but for the Greens-ALP alliance they are of no consequence.
Out of this terrible economic policy that is the mining tax the government is seeking to make a virtue by saying small business will get a tax reduction. But let us analyse that. No. 1, tax reductions are not really tax reductions if you are taxing somebody else. One of the things that you learn, I would have thought, in Economics 101 is that, if you want to pay something to somebody, you have got to take it off somebody else in the first place. This is not about reducing taxes; this is simply about taking it off one to pay another. The myth that small business will benefit is exploded when you have a look at the beneficiaries of these so-called cuts. It is companies and companies only. Seventy per cent of small businesses that are sole proprietorships or partnerships miss out on this so-called tax deduction for small business. Yet we had Senator Wong and Senator Lundy during question time today delivering answers asserting that which is false: that small business generally would get these reduced rates of taxation. It is only those in a company structure. What it suggests is that these companies are making substantial profits as we speak.
There was the excellent question from Senator Scott Ryan, who I know has a passion for small business. He was able to provide to Minister Lundy the horrible, horrible statistics of small businesses going bankrupt in Australia as we speak—one of the highest rates of bankruptcy. Those that are not going bankrupt are struggling. They are not making much of a profit; therefore, they are not paying much of a tax. Therefore, promising them a decrease in their rate of taxation, when they are running at a loss, is of cold comfort to them. What these small businesses would like is a dynamic resources sector that is able to pay and play into the wider Australian economy. That is the way you share the wealth. You do not share the wealth by having government scooping it away from business and then redistributing it and saying, 'What jolly good fellows we are.'
We know that the dead hand of government, in taxing enterprises, does not assist the economy. It does not assist, especially when this is all about a redistribution of wealth—as is, might I add, the carbon tax. This is a government that is addicted to big spending and to big taxes. We now have a huge list—quite frankly, I could not even remember them all now—of all the extra taxes this government has levied on the Australian people since it came into office. There is the carbon tax, the mining tax, and, of course, there is now, in effect, the extra tax in relation to private health insurance that the Senate so shamefully passed just a few minutes ago—and that was in circumstances where the Prime Minister herself said, 'I'm sick of saying this: we will not fiddle with the private health insurance rebate.' She has and she has broken yet another promise.
The Australian Labor Party and the Greens are trying to make a virtue of the suggestion that they are redistributing the wealth within Australia because mining companies are making big profits. As I understand it, the three big companies that they dealt with may well not be paying any for quite some time, because they are still in the investment stage. I have a funny feeling that these companies are having a bet both ways; many a company unfortunately does this. They are willing to say to the current government, 'Yes, we'll sign off on this', knowing they will not need to pay for a year or two and hoping that there will be a change of government, which will see the repeal of this legislation. As a result, they sort of win both ways and keep faith with both the opposition and the government. But can I say that, in having signed off with the government, those three big companies did a huge disservice to the other 2,997 mining companies. I believe they betrayed those companies in that deal, and the government also betrayed those companies by doing a deal only with the three big players.
We are told that somehow out of this mining tax the Australian population will get an extra superannuation dividend. That is also false. We are told that small businesses are going to get a reduced rate of taxation on their company tax, so that it is only that 30 per cent, to help offset that which they will have to pay in increased superannuation contributions. Make no mistake: not one red cent of the minerals resource rent tax will go to assist any private business in paying that extra superannuation levy, because every single company that is struggling as we speak, without making a profit, will have to pay that extra superannuation levy without any assistance from government whatsoever.
This is where Labor is yet again engaged in spin and deceit, where this government seeks to make a virtue out of that where there is no virtue but is, in fact, riddled with deceit and deception. This extra superannuation levy will not be funded by the mining tax; it will be funded out of the pockets of the businessmen and women in Australia. Let us be quite clear on that, and I trust that government senators will come clean during this debate rather than simply mouthing the mantra that the minister's office has undoubtedly given to them all for their speaking notes. I trust that they will come clean and not simply dutifully read out that which they have been told to read.
On behalf of the coalition, can I indicate our very strong opposition to this legislation. It is short-sighted and it will do untold damage to the long-term welfare of the Australian economy.
Sitting suspended from 18:30 to 19 : 30