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
If I could only draw closer across the chamber to the Labor members who have spoken in this debate, I am quite certain that I would see little dollar signs flashing in their pupils as they talk covetously of the dollars which this mining tax is going to raise. Already we have heard Labor senators dishing out the benefits of this so-called mining tax to various objects and causes from Western Australia to Tasmania to every corner of the country. If this were some kind of bonanza for the Australian community based on tapping into some untapped resource that Australians had hitherto not gained any benefit from, I would sort of understand the dewy-eyed optimism which they have demonstrated with respect to this new mining tax that they are seeking to impose on the Australian community. But harder, more determined scrutiny of this tax demonstrates very much that that is not the case.
Let us be clear. The Gillard Labor government did not foreshadow this mining tax prior to the 2007 election when it went to the community promising to leave taxation arrangements pretty much the same as they were. At least it did not, as in the case of the carbon tax, expressly promise not to have a tax of this kind, but there was no indication before the 2007 election of a great big new mining tax. This government has now introduced this tax which will operate as a divisive, complex, unfair, fiscally irresponsible and distorting tax that will damage that part of the Australian economy which at the present time is doing extraordinarily well and without which Australia would be in a very much more parlous economic circumstance than it is today. When, during the life of the Howard government, the Labor opposition used to claim that we were not doing enough to capitalise on the mining boom, little did Australians realise—and little did Australia's mining sector realise—that what it meant was that there needed to be new taxes on the mining sector.
Let us be absolutely clear about this. The mining industry is already taxed. Like any business, it pays company tax. Like any business, its employees pay income tax on the money that they earn from being involved in that business. Unlike other businesses, the mining industry pays royalties to state and territory governments for the minerals that are dug up. So when mining companies are successful and make profits which are taxable under the normal arrangements, they are subject to processes which deliver a proportion of those profits to the Australian people. What this government wants to do is to add a new burden on those successful enterprises to create a tax grab which equivalent successful industries elsewhere in our economy do not face.
I pose this question which I hope one of the government speakers can answer for me: why do we have a mining tax on super profits, if you like, by mining companies but no equivalent tax on banking companies that make enormous profits? We have all seen those extraordinary profit statements from Australia's leading banks describing billions of dollars worth of profit from time to time. Why do we especially target the mining industry for this kind of treatment and not other highly successful areas of the Australian enterprise system? There is no logic to this. It is the politics of envy. It is about plucking figures out of the air to justify the sense of envy that some people in the community obviously feel towards the great profits made by the mining sector at some times in its history and at some points in their profitability, without acknowledging that this sector makes enormous losses for long periods of time before it is able to produce those profits.
There are very few sectors which require such enormous and sustained investment in unprofitable activities for such a long period of time before they produce the kinds of profits which can produce benefits to the taxpayer when taxes are paid on those profits. By taking this new approach, which specially targets the profits of this industry and penalises it for making those profits, in a way which we do not penalise other sections of the economy, we run the risk of reducing the likelihood of incentive in the mining sector when times are not as good as they are right now.
There is no question that the Australian minerals and mining sector is extremely successful at the moment. You could probably dramatically increase taxation levels and there would still be incentives to go out and mine. But that may not be the case into the future. When, for whatever reason, some propositions become more marginal and there is a high-tax regime applying in Australia while, in some other countries that are effectively competitors to Australia that kind of regime does not apply and taxes are not prohibitive, Australian industries will miss out. Australian companies will not get the investment in them which they deserve. The Labor Party will have left a legacy which will effectively kill the goose that lays the golden egg.
I do not feel envious of these companies at all. I feel proud of these companies for the investment that they make in the future of this nation. I know that if we allow them to be profitable, to be enterprising and to drive into markets not yet fully developed, then we will have a successful mining sector into the future and it will benefit all Australians. This tax, which serves no purpose other than to retard them in that process and reduce potential investment in the sector, makes absolutely no sense whatsoever.
I think that the Senate should consider very carefully whether it is damaging, at this crucial point in our history, one of the most successful parts of the Australian economy in a way which can only lead to long-term loss of profitability in this key sector.