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
I rise tonight to discuss what sort of future we aspire to have in this country, because, whilst the specific is the Minerals Resource Rent Tax Bill 2011 and associated legislation, the context in which we are debating this tax is what sort of vision do we have for Australia in the next 20, 30 or 50 years. How you raise the money and where you spend it will determine that kind of country, because the future is actually an extension of the present and it is shaped by the decisions and actions we make.
When I go around Australia and talk to people, they say they want Australia to be a clever country. They want Australia to be a country in which people are well educated and have equality of opportunity, where everybody can aspire to good health care—including good dental health—where there is a sense of social cohesion, because we are an equitable and egalitarian nation and we are happy people. That is the kind of nation that people talk about aspiring to.
We are talking about that vision for Australia in the context of the major crises facing the nation now: the global climate crisis, the global energy crisis—including peak oil—a food security crisis and a water crisis. All of those things are coming together and every nation, including Australia, has to face up to them. The challenge here is how to deliver this clever, equitable, well educated, healthy, socially cohesive country in the face of those challenges. The clear answer has to be that we cannot continue on the path we are on. One option for Australia is to continue the current economic strategy of digging up, cutting down and shipping away, of failing to invest in education and innovation. It is, as Ian Lowe once said, the 'steady as she sinks approach'. In the steady as she sinks approach, you have a situation where people start to grasp for the returns that they can get while they can get them without thinking about what that means for the nation in the longer term. In that scenario we will continue to sell our resources, sell our industry and even sell the land itself, and with the land its water resources.
We cannot have that. We do not want to become a bleak backwater of big holes in the ground, married to a strategy of driving increased greenhouse gas emissions through massive increases in coal mining with declining commodities prices over time, a loss of cohesion in community and a willingness to see a declining number of tourists come here as our natural resources decline in the face of the crises that I am discussing. We need to make sure we maximise the benefits of the mineral exports boom that we are experiencing and invest those profits in making Australia the clever, equitable country that we want it to be as we move into this century.
In order to do that we need to maximise the amount we raise from our resources and not just give it back willy-nilly in tax cuts, as the Howard government did in the midst of the last boom. In 2006 I stood here in this Senate saying that it was disgraceful to be giving back in tax cuts all over the place the benefits of the boom in what was described as 'manna from heaven', 'rivers of gold' flowing out into the community via tax cuts, but at the same time failing to invest in education, training, innovation and research. During those years we lost some our best young people overseas and risked losing our intellectual property in the longer term. It was a bad way to go and we do not want it to happen again.
At the moment we are facing unprecedented growth in China with its re-engagement with the global economy and that has led to huge commodity prices, but, as I indicated in the Senate today, that is not likely to continue. We need to recognise that China is an incredibly clever country in that they are investing in the low-carbon economy and those new technologies. They are going to cap coal in 2015 and that sends a very strong signal about where we will be wasting money if, for example, we go massively into spending public money in supporting infrastructure development in an industry which has such a limited life in the face of global warming and peak oil.
We have a windfall gain now and that has led to huge increases in mining profits, but there has not been an exceptional increase in production and productivity has actually fallen. Most of the mining profits that are generated are going to shareholders overseas as the mining companies are predominantly around 80 per cent foreign owned. The benefits of the mining boom have been the subject of rather exaggerated claims about the economic benefits, but if you consider the nation as a whole a lot of people are hurting around Australia because of the impacts on our economy of the mining boom. Mining itself only employs about two per cent of the workforce, far less than agriculture and a quarter of manufacturing. The mining boom has led to an appreciation of the Australian dollar, higher interest rates, and shortages of labour in certain regions and particularly in certain skills. We know that a number of skilled workers have left the manufacturing sector to try to maximise their incomes in mining towns. These impacts are leading to lower profits and lower returns to shareholders and fewer jobs in other industries, such as manufacturing and tourism. The mining boom is also having adverse implications for greenhouse gas emissions, both during the mining in Australia and when the exported coal is burnt overseas. It is extraordinary that the expansion that is to be generated in the Galilee Basin in Queensland, for example, is going to wipe out the emissions reductions from our clean energy package by a factor of at least two or three. This is an absolutely shocking trend in terms of where we are with the global environment, with the State of the climate report 2012 from the CSIRO and the Bureau of Meteorology coming out yesterday pointing out that, with greenhouse gas emissions rising, it has to stop. Yet we are driving those global emissions with those coal exports.
Furthermore, we are seeing appalling dredging operations to expand the ports in the Great Barrier Reef. That increased shipping is damaging the Great Barrier Reef and the marine environment, and the implications are not just for tourism and fisheries but for the intrinsic value of the reef itself. The Australian Great Barrier Reef is of world heritage significance, it is of outstanding universal significance to humankind, yet we are prepared to dump the spoil from dredging in Gladstone Harbour and into that reef and destroy those areas forever. That is what I mean about saying we are not a clever country if we are prepared to damage biodiversity, damage the reef and damage our global status in terms of world heritage simply to rush the facilitation of a huge expansion of coal mining. I see today that the companies are calling for an acceleration of the infrastructure build in Queensland to get that coal out of the country faster, get those ships turned around faster and drive greenhouse gases faster. That is the current scenario.
We are also seeing coal and coal seam gas putting at risk quality food-producing land and water supplies. We are witnessing what is going on with farms, farm income and the appalling depression in a lot of farming communities as they see land which they have nurtured and cared for over generations, and water supplies, being compromised by this absolutely mad rush for expanded coal and coal seam gas. It is also damaging community cohesion. As I mentioned before, there have been lots of local government people in the media talking about the lack of cohesion in some of the communities in which the mining boom is occurring as we see the increasing use of fly in, fly out workers and a lack of support for community services in the towns themselves.
Australians have led the world in thinking about the impacts of resources booms and have looked at the optimal taxation treatment of them. We should be setting an example to the world in the implementation of an efficient tax to ensure that people get a fair share of the returns from their natural resources. That is why the Greens have said that we should have a sovereign wealth fund. As I said, if your aim is to use the boom to actually make the transition to the low-carbon economy, to make this investment in education, to make the investment in national disability insurance and to actually change society to get it to where you want to be, then you need to maximise your returns in the national interest and invest them wisely. That is why in the original Henry review there was a proposal for the resources superprofits tax and that is why the Greens supported it. We wanted to see Australia have the capacity to make the transition that we need to have. But, under duress from a ferocious and misleading advertising campaign by the large mining companies, the government replaced the superprofits tax with this minerals resource rent tax, which is a severely compromised version of what we should be achieving and will raise around $100 billion less over the next decade than the superprofits tax would have done.
The Greens are totally opposed to forgoing, largely into the pockets of the overseas shareholder base, that $100 billion which could be invested in education, health, disability, dental care and so on. Over $80 billion of the lost revenue will go to those overseas investors, and much of the other $20 billion will go to the wealthier members of the Australian community. This is money that could fund initiatives in all the areas I mentioned, including public transport and the very fast train. Can you imagine what a different society Australia would be, what level of excitement there would be in the community, if we actually saw a real return from the resources boom being invested in a very fast train, in dental care, in a modern public transport system—if we actually saw our cities become competitive and productive again instead of being congested and losing a lot of their liveability because we have failed to invest in decent public transport?
Whilst the mining industry are running a scare campaign about the impact on them of paying more tax, their actual and planned investment and spending on exploration continues to reach new record highs. The Greens want to see some improvements in this bill. We want to restore the mining tax to close to the level recommended by the Henry review. We want to make sure that the mining companies pay their fair share of tax for the resources that are owned by all of us. This is in the national interest. These resources belong to the people of Australia. They do not belong to a few wealthy people, a few companies and a whole lot of other overseas shareholders. They are our resources; they are non-renewable, and therefore they need to be used in the national interest. At an absolute minimum, the goldminers, who are garnering windfall profits from an unanticipated near-record price for gold, should be brought under this tax along with coal and iron ore miners. This change alone would add almost $2 billion over a decade and, better still, it would be able to restore the coverage to most minerals, including copper, nickel, rare earths and uranium.
The rate of the tax should be restored to the 40 per cent proposed in the Henry tax review, rather than the 22½ per cent in this minerals resource rent tax. That would double the revenue raised. The OECD commented that the proposed tax is set at a relatively low level and therefore the taxation of profits of mining companies is likely to remain much lower than before the mining boom. That is worth considering in the context of what we are doing here.
The federal government also cannot continue to provide a blank cheque whereby state governments raise royalties and then the federal government refunds the companies. That is the most ridiculous part of what has occurred with this tax. Giving the states the capacity to keep raising their royalties—and expecting the Commonwealth to refund that—while not being able to fund in the national interest the Gonski review findings of putting $5 billion into education and our National Disability Insurance Scheme and Denticare because we are giving it back to the states are all flawed parts of this. The other changes incorporated in the tax, such as the higher uplift rate and other generous provisions, also need to be reviewed.
In relation to the company tax rate the Greens have made it very clear that we do not support tax cuts for big business. We have made that extremely clear. That would be one way the Greens would fund these initiatives in the public interest to get the clever country to fund innovation in the way that is necessary and to fund education and training. We are the only party in here saying, 'We are prepared to impose that higher level of taxation during the boom so that we can fund education, disabilities and Denticare'—unlike the coalition's aspirations. They would rather not give that money to the Australian people. They would rather give it back to the mining companies concerned.
The Greens recognise that, if you are going to fund the $5 billion additional funding for Gonski—and everywhere I go people want money spent on schools—$3 billion going into public education would make a massive investment in the future. It would also make a massive investment in equity in Australia—equitable access to education—and that is essential. The high-speed rail link from Melbourne to Sydney to Brisbane would connect 18 million people. As I indicated, the National Disability Insurance Scheme needs to be funded—as does the sovereign wealth fund that we have suggested—so that we can start making long-term plans to deal with our future.
In terms of superannuation and how the government intends to spend this money, the Greens have indicated on several occasions that the miners are now saying that they want some of this money back for infrastructure projects. They complain about paying the tax but they have their hand out for everything from accelerated depreciation to massive investments in their infrastructure—and that is unacceptable. Infrastructure should be in the public interest, not to subsidise the profits of mining companies when they are not even prepared to pay the tax as is recommended.
Yes, the mining tax will allow an expansion of the superannuation scheme by covering the additional costs to revenue that result from the tax concessions offered to super contributions and earnings. The Greens are supportive of the superannuation increase but we want to take this opportunity to address the inequities in those tax concessions. Those concessions should not be giving the same benefits to high-income earners as they do to low-income earners. The Greens propose replacing the flat 15 per cent tax on superannuation contributions with a tax at the employee's marginal rate, less a fixed amount of around 15 percentage points. The best technical approach for doing this should be recommended by the superannuation roundtable.
We are also interested in the recommendations that came out of the tax summit last year and the working group that is now looking at other ways to support small business. If the parliament would take up the Greens' view that we give the tax cuts to small business but not to big business then we would have $4.3 billion to further facilitate these outcomes including supporting the backbone of the economy, which of course is small business.
I return to where I began. We will support this tax, recognising that it could and should have been a much better outcome for Australia. The disappointment I have with it is that there is no vision surrounding it. There is no articulated vision for what sort of country we want Australia to be in 2050. How are we setting in place, now, the kind of investment that will lead to that future? If we are to increase productivity in Australia, we will not do it through use of more oil, more resources, more land and more water. We will do it by investing in education, innovation, science, research, maintaining our own intellectual property and selling services around the world. That is the way we will do it. We will do it by getting to the low-carbon economy with all the enormous innovation and opportunity we see, and we will do it by investing in public transport, the very fast train and Denticare. Through all of those investments we will have a happier, more equitable, better educated, healthier country which has a vision of itself as a clever country, a wise country, connected in our region and connected globally by the strength of our intelligence, and all that comes from that, with the kind of intellectual input that I am suggesting. We will not get there through digging more holes, cutting down more trees or giving out the money to everybody to buy votes in the short term and ending up without the clever— (Time expired)