Tuesday, 18 March 2014
Minerals Resource Rent Tax Repeal and Other Measures Bill 2013; Second Reading
I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 and to oppose this bill. This is a bill designed to repeal the mining resource rent tax, or the mining tax as I will refer to it today. The mining tax should not be abolished. Instead, it should be retained and, indeed, it should be strengthened. The Australian Greens supported the Henry tax review, which recommended imposing a tax on mining. We welcomed the tax in its original inception and reluctantly supported it in the form in which it was ultimately legislated, knowing as we did then that it was a shadow of the tax it should have been.
Experts consider a mining tax to be vital for properly distributing the national gains associated with mining in Australia. At the time it was enacted, the Treasurer forecast it would raise $4 billion a year, although in its current form the mining tax is now forecast to raise $500 million this year. In fact, it has only raised $232 million so far this financial year. Despite this, the profits of the three big iron ore companies it applies to—BHP, Rio Tinto and Xstrata—rose by 81 per cent this financial year. Their combined half-year profits are $14.6 billion.
As Ross Gittins, economics writer, said in Monday's Sydney Morning Herald, 'For an industry to truly benefit Australia's economy, its income must be spent in Australia.' Currently our mining industry is about 80 per cent foreign owned, which means that almost all of the profits go to overseas shareholders. As Ross Gittins said, 'For our economy and our workers to benefit from companies extracting minerals, our government has to ensure it gets a reasonable share of the economic rents that these companies pay.' In its current form, the legislation fails this test, and it also fails to tax profits on gold, silver, diamonds, uranium, rare earths, nickel, copper, zinc and bauxite. Instead of repealing the mining tax, the government should broaden it to include all minerals.
So here we have a repeal bill which advantages a small number of big companies. They will be the winners: BHP Billiton, Rio Tinto and Xstrata, among others. On the other hand, it will hurt millions of households, up to 10 million workers and hundreds of thousands of small businesses because the government will, by repealing the tax, willingly forego revenue and it will have to take measures like cutting services to make up the shortfall. The losers from this package are workers with compulsory superannuation contributions, millions of households with children and many small businesses. Instead of cutting taxes on a small number of mainly foreign owned corporations, the government—our government, in relation to our minerals—should be enhancing those taxes to raise revenue.
The passage of the Minerals Resource Rent Tax Bill 2011 inspired a campaign of confected hysteria about sovereign risk and impoverished mining companies decamping to some other mining nirvana. Who can ever forget the images of Gina Rinehart and other exceedingly wealthy mining executives proclaiming the end of the world as we know it with the passage of the legislation? But back here on earth, the act was actually an overly modest means of distributing the vast wealth associated with our precious and our very finite mineral resources in a fairer way.
The Australian Greens supported the legislation—the MRRT—as a first step towards a fairer, more efficient tax system. An optimal tax system would ensure that Australians can have a fair share of the rich mineral wealth that we own in common. The mining tax in its current form has some serious deficiencies and, as I said, ended up being a pale shadow of its former manifestation—the resource super profits tax, which was originally conceived in response to the Henry review. The MRRT contains an effective tax rate of 22½ per cent rather than the 40 per cent that was originally proposed. And, as I said, there is the failure to tax profits on minerals such as gold, silver, diamonds, uranium, rare earths, nickel, copper, zinc, bauxite and coal. This was a major omission. The fact is our mineral resources are finite and non-renewable. They can only be dug up once. So any wealth that we derive from this one-chance mining must be invested in Australia's future. Once gone, they are gone forever. We need to invest in those longstanding public goods—education, health—and in industries that will transition us into a future that does not rely on dig it up, cut it down and ship it away.
To this end, the Australian Greens remained resolute in our position that the mining tax should be strengthened rather than abolished. And we are not alone in this. A poll in January this year showed that 54 per cent of Australians believe that multinational mining companies do not pay enough tax. The revenue from a strengthened mining tax should be invested in things like genuine needs-based education reform so that every child in Australia can be guaranteed of having a quality education no matter where they live and no matter what their background. We should be investing in having a fairer legal system. We should be investing in having a transformed framework for mental health services—there is a crying need for better mental health services throughout Australia. We should be investing in fair and caring entitlements for the veterans who go off and serve in our name overseas, who then come back to experience often significant health and mental health difficulties. These are all key priorities in my portfolio areas of education, legal affairs, mental health and veterans' affairs. The things we could do with that money!
Let us turn first to education. There is no question that education is opportunity. For some kids it will actually be the best opportunity they will ever have to be able to move beyond the difficult circumstances in which they may live and into which they may have been born. So ensuring that our education system is fair and is available to every child no matter what their background is the single best way to fix disadvantage in Australia. With a good education they can then move into employment, and we know how important jobs and employment are for people.
The Gonski Review of Funding for Schooling remains the single most relevant reform, as a pathway to ensuring this equity that will give every kid the fighting chance that they need to be able to reach their potential. We know the coalition government talked the talk on having a 'unity ticket' on Gonski funding, but events since the election have shown that they are failing to follow through on that in government. So the no-strings-attached deals with five of the eight states and territories mean that many of our school systems will not guarantee a needs based funding system—no different to what has gone before.
The Greens believe in a future where every child can have a world-class education, no matter what their social background or the degree of their family's wealth. We cannot do this without money. A society's values can actually be judged by the choices it makes. There is money for the diesel fuel rebates for wealthy miners, but, at this stage, we are told there is not enough money to guarantee that we can actually invest in education in the way that all the research indicates we need to and that the Gonski review recommended. Critically, school funding must include the extra funds for disability that the Gonski review earmarked. A needs based, sector-blind system is the only way to deliver this for all Australian students, but we need to take steps now to make our economy work for people and not the other way around.
We cannot let this government's strategic distractions in education policy dissuade us from the crucial reforms we need to make. So the political and premature review of the Australian Curriculum and Minister Pyne's rough draft on the back of an envelope of an independent public schools system are nothing more than distractions and red herrings. They will do nothing to improve outcomes for our kids.
Australian public schools in particular have been underfunded for too long, creating one of the most inequitable school systems among our peers, right here in the land of the fair go. Creating a great school for every kid will cost money. It has to cost money, because a great school for every kid involves providing the relationships within schooling that children need to be able to reach their potential. It is money that pays great teachers. It is what builds classrooms. It is what pays for special literacy and numeracy programs. It is what pays for computing equipment. We will not fall for the minister's distractions, because a school funding model that targets disadvantage will remain the most pressing issue in our schools. Better revenue from the mining tax could ensure equity in our schools system.
Let me turn to legal affairs. There is no doubt that the state of access to justice in Australia is in a crisis. The Attorney-General cites a limited funding bucket as the reason he wants community legal centres, for instance, to move away from advocacy and reform of systemic issues which affect many people, to focus only on so-called front-line services. Of course, there is an efficiency in challenging systemic issues rather than fighting matters—the myriad of injustices that these systemic issues cause—on a case-by-case basis. I believe that restricting an organisation's ability to do advocacy is always ideological. The restrictions are not just policy based, though; they also relate to resources. So while Aboriginal and Torres Strait Islander Australians are grossly overrepresented in prison populations—they are some of the most imprisoned peoples in the world—the organisations who provide their legal assistance are being defunded. And why? We are told there is not enough money.
The general legal assistance sector has been struggling to meet need for some time. This manifests as community legal centres who need to turn clients away, and legal aid commissions whose eligibility guidelines have become stricter and stricter. We also know—all the evidence shows—that, unless we properly resource justice now, we will all pay for it down the track because the costs associated with unmet legal need flow on to loss of productivity, to housing and homelessness, to mental health issues and the family support services that are needed to support families under pressure. We cannot afford to underfund legal services now, because it simply represents deferring the costs to society until later.
Let me turn now to mental health. We could invest revenue from a decent mining tax—a tax over the mining of our shared resources—in proper reform of mental health services. Decades of underinvestment in mental health have left us with an inadequate mental health system which is cracking under the pressure of increasing demand. Around 20 per cent of Australians will experience a mental health issue in any given year—one in five of us. Many of these people will not have access to suitable services. I know that this is particularly the case in rural areas, where people with mental ill health are not able to access the help they need in a timely fashion. In some cases the services are not there. In some cases people need to travel large distances. As a result, we have far more people reaching crisis than there would be if we were to provide those services in a timely way.
During my rural mental health tour in 2012, I travelled to some of Australia's faraway places to talk to people about what mental health services and support looked like in their towns and regions. Rural Australians have unique pressures affecting their mental health and are often at serious risk of becoming socially isolated if they live in remote areas and do not get the assistance they need. Wherever I went, I heard about the desperate need for community based solutions to take the pressure off crisis driven services. As one service provider told me, 'We need a mental health safety net, not an ambulance.'
By investing in mental health we could make this safety net a reality. We could increase resourcing for community based mental health and wellbeing centres. We could strengthen civil society and therefore the resilience in those country areas by supporting neighbourhood houses. We could roll out a national social inclusion campaign to tackle the stigma surrounding mental health—one of the most significant barriers preventing people from getting the help they need. We could establish a national institute for mental health research to put Australian researchers at the cutting edge of innovative mental health treatments and to transform the research into practical assistance for people living with mental ill health right now. We could choose to support mental health nurses by increasing funding to the Mental Health Nurses Incentive Program. They play a pivotal role in improving access to primary mental health care and promoting mental health and wellbeing in the communities they serve. We could reintroduce the option of six extra exceptional circumstances sessions in the Better Access scheme, so that people can actually access the psychological assistance and continue with the treatment they need. More than 30,000 Australians were affected by the removal of these sessions and many are no longer receiving the care and assistance they need to help them live full and happy lives.
We could invest in a suicide prevention campaign and implement reforms to improve the accuracy of suicide statistics, as recommended by the Senate Community Affairs Committee in its 2010 report, The hidden toll. Why do we need this? Because, tragically, six Australians take their own life each day, leaving families, loved ones and entire communities bereft. This money that we could get from an adequate mining tax on our shared resources so that those profits are not solely going overseas would be an investment in life, in wellness, in potential, in restoring hope. These are lives that could be changed through proper reform of our mental health system. Imagine the difference this kind of investment could make.
Let me now turned to veterans' affairs. Revenue from an adequate mining tax could be used to introduce a fair and equitable system for veterans' pensions. As well as indexing veterans' pensions fairly, we could invest in their wellbeing, because we know that veterans and their families suffer from a range of physical and mental impacts as a result of their service. If we are willing to send these men and women away to serve on our behalf, the least we can do—the only fair, right and proper thing to do—is to adequately look after them when they return. We could use the mining tax revenue to fund a range of innovative programs to support the wellbeing of not only veterans but also their often long-suffering families, who are incredibly supportive in difficult circumstances.
A classic and topical example is payments under the Veterans' Children Education Scheme and the Military Rehabilitation and Compensation Act Education and Training Scheme. These payments, for children of defence personnel following the death or incapacity of a parent who has served overseas, amount to about $211 a year. There are about 1,200 children around Australia who are eligible for these payments. The government announced on Monday, 17 March that these payments, costing $260,000 annually, will end as soon as it repeals—yes—the mining tax. The government states that the money is not there—or it will not be anymore once the tax is repealed.
We could use the money to fight stigma associated with mental illness and mental ill health in the services, which is particularly prevalent in the military community, and to enable veterans to get the support they need and deserve. We could be investing in research into the unique needs of female veterans to ensure that we adequately care for this growing group of people.
Revenue from a strong mining tax could be used to appropriately recognise all those who have served our nation—groups such as the British Commonwealth Occupation Force, the Women's Land Army, and the nurses who served in Vietnam as part of the Southeast Asia Treaty Organisation. These are all people who served in difficult circumstances on our behalf but who are at this stage not eligible for the assistance that they need.
We could see our injured service personnel appropriately looked after, addressing the current inequity whereby ADF members are financially worse off if injured during deployment, because of the vagaries of our taxation system. As I said, we could invest in adequately supporting veterans' families.
In conclusion, the Greens' position on the mining tax has never wavered. We believe it is the only way to ensure that all Australians get a stake in the resources boom that we have seen and in the minerals that we collectively own in this nation. We believe it should apply in the form it was recommended by the Henry review. We believe that instead of repealing it at the behest of big business, this tax should be strengthened. The economic benefits of Australia's resources should be distributed more fairly than just amongst a few multinational corporations. We could invest the proceeds in our future in my portfolio areas alone—in education, in legal need, in mental health services and in veterans' wellbeing—and there are many other areas of need in Australia. That way we would ensure that the resources 'rush' of the early 21st century in relation to our finite resources does not pass us by and does not leave us with nothing but environmental impacts and stranded infrastructure.