Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

I rise to speak on the Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill 2013 and the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013, conscious that the time I have to deal with them will be truncated by the issues raised by Senator Smith. What we have experienced this week is something that I did not think I would experience in my time here, especially when I heard the preaching and the bleating from those opposite and those in the corner two parliaments ago when there was a short period of a coalition majority in the Senate. I have sat in this chamber and been responsible for bills on behalf of the opposition for which not a word has been spoken either on the bill or the second reading response by the opposition or any of the amendments moved, so I suppose that I am actually expressing my gratitude today that I am being given a chance to address these bills.

These bills are emblematic. They are symbolic of the tax chaos that has been created by this government. There has never been a period, in my knowledge of Australian political history, where there has been such chaos in the design and administration of our taxation system. I want to commence by referring to the provisions in the Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill. Schedules 5 and 6 of the bill are indirectly funded, through consolidated revenue, by the mining tax. The whole experience of the mining tax, which is just over three years old, represents worst-case practice for the design and implementation of any taxation system. We had, first of all, the RSPT, which, as well as being responsible for bringing down a Prime Minister, was one of the most poorly designed and poorly conceived models of a tax that this country has ever seen. It was based on flawed information and an overly theoretical view of the world.

There is a reason that a so-called 'Brown tax' has never been implemented anywhere in the world: what works in a Microsoft Excel spreadsheet, what works in theory, does not work in practice. The designers and conceivers of it sought to put this into place without any genuine consultation with the sector or with experts in the field, whether they be people that work in tax in this sector or people that—as Senator Smith outlined—took risks with their own capital to undertake investment in our critical resources sector. These people suffered from that fatal conceit that they could actually design the perfect world, and that the tools of tax and economics could be used to assume away all the problems of human nature and all the imperfect knowledge that exists—especially in resource exploration and development—and come up with a taxation system that ensured, in effect, that the Commonwealth government became a shareholder in Australia's resources sector.

Let us put aside for one minute the implications of that for our federal constitutional arrangements, which I know do not matter to anyone on the other side of this chamber, be it in the corner where the Greens party sits or opposite with the Labor Party. Let us put aside the fact that the Commonwealth government and parliament have no legal interest in the resources that are properly held by the Crown for the people of the states. They are not the property of states such as Western Australia. They are held in trust by the Crown for the people of those states. That is a critical part of our Constitution. Let us put aside the fact that this particular attempt to seize the royalty regimes of the states was in fact a massive Commonwealth revenue grab. As I have outlined before, I come from a state without a large mining sector, at least in this century. A century and a half ago my state was the home of Australia's mining industry.

What the government and the advocates of the mining tax do not tell you is that, through our fiscal equalisation arrangements, the dollars raised by the royalties in Western Australia for iron ore and the dollars raised by coal in Queensland and New South Wales are, within three years, distributed to every citizen of this nation. The citizens of Victoria through our fiscal equalisation arrangements and especially the citizens of Tasmania—which I note for Senator Milne, the Leader of the Greens, who is in the chamber—all benefit from royalties collected by the states. This has, in fact, been a source of some contention for many decades in this country, because my home state of Victoria has always been a net contributor. We are, of course, seeing stresses placed on this at the moment because of the unique mining boom over the last few decades. It is putting stresses on our fiscal arrangements, with Western Australia's share of the GST falling to levels that have not been seen before. What that guarantees is that the benefits are being spread. What that guarantees is that Tasmanians, Victorians, South Australians and even people in the ACT, jurisdictions with no mining sector, and their nurse, police and teacher wages and their public sectors are stronger because of the royalties being collected by primarily the mining states.

Before the mining companies had the better of our elected officials, the arrangement sought to take the whole pool of resource revenue out of the state funding pool into which the GST and other state taxes go, which is then distributed amongst the states based on the cost of providing services. That was an attempt by the Commonwealth to grab that revenue which would have left every citizen in every state worse off. That is what people around this country need to know. What the Commonwealth government was trying to do was to make every state worse off.

The RSPT, that flawed tax, that constitutionally invalid tax, that misdesigned tax, brought down a Prime Minister. Then we were left with the MRRT, which allegedly funds many other measures. We have heard about measure after measure that is allegedly funded by the MRRT. The problem is that the MRRT collects no revenue. How can you have a tax that funds measures but does not collect any revenue? It is collecting 90 per cent less than was forecast. I do not know of a single private sector area where someone would keep their job if they forecast that wrongly and that soon on a tax designed by the same person making the forecast.

This government has no understanding of the pressures on the private sector, so it will make assumptions, it will print budget estimates and it will print budget forecasts to justify the measures it wishes to implement. It sees the world the way it wishes it was rather than the way it is. We have constant revisions downward. The problem is that when those forecasts are originally made there are plenty of people who say that those forecasts are rubbery. That has happened budget after budget, but this government does not listen.

The opposition will not support measures that are not sourced from MRRT revenue; they are sourced from borrowings and they are sourced from placing a further burden on future Australian taxpayers. We do not shy away from the need to put our fiscal house in order as a priority of the government of this country. The sad thing is that there was once a Labor Party that believed in this as well. Unlike those on the other side, the people on this side have always given credit to previous Labor governments when they have taken the right decisions. John Howard was always supportive of measures that were introduced under the prime ministership of Bob Hawke or even Paul Keating when they sought to liberalise our economy or when they sought to strengthen our economy. None of that has happened under this government.

We have seen tax after tax, rubbery forecast after rubbery forecast, downward revision after downward revision, and only a handful of years later we see the work of decades undone. The regulations, red tape and debt are at levels that, if they were predicted in 2007, those opposite would have laughed at. Those numbers are going to hang around the neck of the Labor Party for generations, as they should. This country has been through a unique period of a resource boom. We have had a unique period of revenue upswings, but none of that was put to use by this government. None of that was invested. None of that was put aside to pay for liabilities like superannuation run over decades like the previous government did. So—in my last few words before another guillotine comes down on the coalition's neck—we will stand by a balanced budget.