Senate debates

Thursday, 13 May 2010

Questions without Notice: Take Note of Answers


3:01 pm

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Innovation, Industry, Science and Research (Senator Carr) to questions without notice asked by Senators Colbeck and Williams today relating to the proposed tax on the mining industry.

There is really only one constant in the debate surrounding this great big new super resource tax by the Rudd government, and that one constant is that the Prime Minister, in promulgating and advancing this tax, has not been honest with the Australian people. Further to that, he has absolutely no understanding of the mining industry.

This government, right around Australia, are on the nose with the electorate. After 2½ years, they find themselves in a most perilous position. Everybody on this side of the chamber senses it. There are baseball bats waiting for these Labor candidates in the next federal election, particularly in my home state of Western Australia. The workers, the shareholders, the fund managers, the airlines and the indirect industries maintaining equipment, supplying equipment and providing transport—all those support industries—are all waiting with baseball bats for these Labor candidates.

This Prime Minister has not been honest. These ministers have not been honest. They are advancing that this tax is like the petroleum resource rent tax. What an absolute disgrace! It is a misrepresentation—and, quite frankly, it is unworthy of them holding a position in this chamber. The petroleum resource rent tax is six per cent plus five per cent plus depreciation and there is a delayed timeline before it kicks in. This Rudd government’s crazy super tax on the mining industry of this country starts straightaway—it is almost retrospective. The Prime Minister knows that. Minister Carr knows that. Minister Sherry knows that. Why would they seek to mislead people? Why would they seek to try to fudge it?

This tax is a thought bubble from this Prime Minister when he could not get his emissions trading scheme through. He has had to fill a deep hole in his budget forward estimates and he has thought, ‘Where can I go that has some revenue, some cash? I will go to the miners.’ This tax is on top of state royalties—unlike the petroleum resource rent tax. Why would you misrepresent that? Why would you be dishonest about that? This tax is for existing mines, as has been established. Why would you misrepresent that it is like the petroleum resource rent tax? It is totally different.

Mum and dad shareholders who have invested good money through their own super funds or through their own cash in mining companies onshore—as we would want them to do to support our own people—have had the goalposts moved. Our sovereign risk is now looking absolutely trashed on world markets. The dishonesty has been exampled by Senator Conroy and finance minister Tanner, when talking about the National Broadband Network, in saying that the whole scheme would return a modest six or seven per cent—yet for miners, six per cent is a super profit! Coalmining in Queensland and in New South Wales is clearly for the chop. Electricity prices in Victoria are going to go through the roof when the value of coal put into the boilers is actually deemed a super profit. The mining companies of this country commit company tax, state royalties, native title payments, payroll tax and superannuation to the national good. This tax is going to take them up to about 60 per cent.

I say again: there are baseball bats waiting for these Labor ministers. State member McTiernan—running against our candidate Randall in the seat of Canning—has been begging Joe Bullock to go to Hasluck. She has seen the polling and said, ‘Get me out of this; I do not want not to go down the gurgler.’ We have heard nothing in Western Australia about health, given the Prime Minister’s grandiose spendathon on health. But I would also say that none of the other states have heard anything about health. There is no detail. There is nothing. There is just a doorstop and no delivery. There is a doorstop from this Prime Minister and no delivery. You have heard this from me first: it is bye-bye Gary Gray; it is bye-bye Stephen Smith; and it is bye-bye Glenn Sterle.

3:07 pm

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

I appreciate the forward warning that seems to be coming from the other side. I think it is much more tainted with optimism and hope about what will occur rather than any general advantage. Nonetheless, this tax is about having a fair taxation system in our country. This is an area which is looking at a fair contribution. That is all that is being asked. We are looking at profits that are super profits and we are looking at getting a fair return on the resources of our country.

What is not surprising—and we are absolutely prepared for it because we have seen it over generations—is that whenever there is the introduction of a new tax there are the grim forebodings of the future and the outrageous statements about what will happen. We will hear that the sky will come tumbling down and the quarries will be filled in. What we are talking about is ensuring that in this country there should be a fair return to this country and the people living in the community for the resources with which we know we are deeply blessed with. We are not asking anything more than that. What we are talking about is that people are part of it.

We hear about the fact that there is no knowledge of the industry but the industry is involved in the process. We have a situation where now, after due process, the government makes a budget decision and decides that this is one way of taxation for our community. It is not an unusual process. It is one that has been used by many governments over many years. The Treasurer and the industry are going to set up a process where the detail will be worked out and where people can be engaged in the area so that it will not be imposed on them arbitrarily.

Companies that are making profits out of the mining industry in this country will have clarity about the tax they will pay and they will have clarity about what constitutes royalties and what does not. We consistently hear about this confusion. The process will be that the new tax will be introduced; no one has hidden from that. There is almost a proposal that this is a hidden tax—it is not. It has been clearly put forward. There is one industry that will be affected and the process will be there to work out and clarify these details.

I certainly heard the minister say on a number of occasions in answers to questions today that the KPMG modelling was looking at what this would bring into the country in the future: it would help the mining industry; it would help our community. Some of the profits that will be coming out of this taxation will be reinvested into important things in the community, such as the infrastructure processes. It is very important to the regions about which we are speaking, and to the regions I look after in Queensland, that they have absolute assurance about the road process and the improvement in rail. I know that my comrade Senator Hutchins will be concentrating on this area.

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

Yeah, ‘comrade’ is right.

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

He is absolutely always a comrade. We have never been afraid of that term. We do not see it as a difficulty. We see it as something that we use quite openly. We are following through on the ongoing aspects. The people on the other side will continue to cry gloom and doom as they always do—it does not matter what initiative comes up or what proposal comes up in the budget—and they will be beating their hearts while saying that this is something that will destroy the economy.

We are hoping that we will be able to move forward through this quite fair process and have an actual engagement with the community when looking at how profits can be effectively reinvested into our community. It is a fair aspect of taxation and a fair understanding of responsibility. The actual income that comes from this reinvestment will benefit the whole community. It will not be just sent overseas or taken into some other area but it will be reinvested into the areas which share in the profits of our community. It is a fair process. It is not dishonest. It is not hidden. It is something that will take us from 2012 onwards.

3:12 pm

Photo of Barnaby JoyceBarnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | | Hansard source

It is very interesting today—I have been trying to work out where Mr Rudd got this idea from. It has fascinated me to find out where Mr Rudd got this idea from. Now I have found it. I looked up ‘Hugo Chavez’ and I found that in Caracas in Venezuela on 27 February 2007 it was reported that Venezuela’s President Hugo Chavez signed a decree to nationalise the oil industry—the sixth-largest in the world. The decree allowed Venezuela’s state oil company to take a 60 per cent stake in the oil industry at the time. It seems surprising that the tax that will now be on Australian miners is 58 per cent. He is out by two per cent but he has arrived there. The article goes on to quote Chavez:

The privatization of the oil sector to overseas companies in the 1990s was ‘disgraceful,’ said left-wing populist Chavez at the signing ceremony in Caracas… ‘The privatization of oil is over,’ Chavez said. ‘This is the last space that was left for us to recuperate’…

So well might you call your friends ‘comrade’, Senator Moore, because comrades they obviously are. This is the most bizarre piece of politics that has happened to Australia for so long—the nationalisation of the mining industry. That is exactly what you have done. You are taking 40 per cent of the profits, putting the corporate rate of tax on the remainder and you are absorbing 40 per cent of the losses. You have nationalised them to exactly the same extent—bar two per cent—that Hugo Chavez did in South America. Is that where our nation has now been delivered? It is not Henry’s view. This is something that comes from the peculiarity of the Labor Party.

So well may they call themselves ‘comrades’, because comrades they certainly are and that is exactly what we have here. Australia went down this path briefly—a bit of insanity back in 1949—when Labor decided to nationalise the banking industry, but we thought we had moved on from that. But the man who dwells at the philosophical brothel of ideas, our dear Prime Minister, had to try to endear himself back to the left wing after he completely deserted them over the ETS—after he left them behind. He tried to recant from it on The 7.30 Report last night but, because he had to try to endear himself back to the left wing, he came up with one of the nuttiest policies that this nation has ever seen. It is startling that I can read something about Hugo Chavez and see awful similarities to exactly where our nation has gone now.

They say that nothing is going to change. We have already heard Tom Albanese saying they are shutting down projects. In my state of Queensland, as we speak, they are reassessing projects. They are shutting down projects; people’s jobs are threatened. You have given up on the people of Dawson and you will lose the seat of Dawson. You have given up on the people of Flynn and you will lose the seat of Flynn. The fly-in, fly-out workers in Leichhardt are not going to vote for you. This is something that is absolutely peculiar.

Then we had one of the most pathetic performances I have ever seen by a minister in this chamber when Minister Kim Carr had to turn around on a question and on microphone say, ‘Has anybody got anything on that?’ For one of his answers, he had to turn around and ask, ‘Has anybody got anything on this?’ Why? It is because this policy has risen up from hell and it has arrived on their desks and there it is. They do not care. They are quite happy with this ad hoc approach.

They completely and utterly burn Minister Wong and they have treated her like an oily rag. Why? It was because it was convenient. At the philosophical brothel, the dispensation of virtues comes at random. As long as the price of popularity is right, you can do what you like. Now will come the reshuffle. Now we have the nationalisation of the mining industry—our major exporter. That you would take our nation to this position is perverse. If that is what we have to come in this nation under the guidance of the Labor Party, it is perverse. It will put up the price of bricks, it will put up the price of quarrying, it will put up the price of cement and it will be part and parcel of you driving our nation into the dirt.

3:17 pm

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

And the sky will fall in. Maybe I should just remind the opposition that in this tax we are referring to the resources of this country. They do not belong to BHP; they do not belong to your paymaster Clive what’s-his-name Palmer. They do not belong to Tom Albanese; they belong to the Australian people. This tax has been discussed by a number of people over some time. I might run a guess who. First of all, just guess who—

Photo of Eric AbetzEric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

Senator Abetz interjecting

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

That is right, Senator Abetz: guess who. We are talking about increasing the taxation on resources that are owned by this country. On 25 February this year in a parliament on the other side of the country—in fact Senator Johnston’s parliament—there was a question asked in relation to what discussions had been underway in relation to royalties. In relation to the royalties increase, guess who said this:

The mining companies are aware of it, and some of them have expressed their views. I have to say that a few people who work around the mining industry came to me over summer and said,—

and I am going to have to give it away now—

“By the way, Colin, the mining companies are getting away with murder, they’re not paying enough.” A number of people working in the mining industry have said that to me.

As I said I did give it away—it was the Liberal Premier of Western Australia, Mr Colin Barnett. That was what Mr Barnett said. Let me just tell you what the independent assessment of the government’s resource rent tax by KPMG said. This is what they have published and you can see it if you wish to, Senator Abetz. They said:

Introducing the new tax modelled as a resource rent tax has zero economic costs. Further, effectively abolishing the crude oil excise and state royalties leads to an economic gain because it encourages activity in the mining sector. Further, the cut in the company tax rate stimulates investment across the whole economy also relating to economic gain.

They further went on:

It will increase GDP by 0.7 per cent and increase employment in those industries.

You have the courage, Senator Abetz, when the budget comes in to the Senate, to vote against it, because we have made it very clear that three things are going to be attached to that resource rent tax. The first is infrastructure, the second is relief to small companies and the third is in relation to increasing the superannuation contributions. Do you have the courage to vote against that?

As my comrade Senator Moore said, you have been very optimistic about these things. You go and tell people in the budget that there was $4.2 billion put forward for road projects over 2010-11. Let me just go through a few of them. There is the Hunter Expressway, New South Wales; the Kempsey bypass, New South Wales; and the Sapphire to Woolgoolga project, New South Wales. In Queensland there is the Cardwell Range realignment. In Victoria there is the Kings Road interchange and the duplication from Waurn Ponds to Winchelsea. In Western Australia there are four projects and there is one in South Australia. Of that money, the government is going to put forward $59.5 million to eliminate 320 road black spots over the next year.

Then we can go on to a number of other things, particularly the magnificent investment that is going to occur in rail over the next few years to fix up 10,000 kilometres of track and to make sure that there are a further 235 kilometres constructed and that 3,771 kilometres will be upgraded. That is what you have to risk when you vote against it. (Time expired)

3:22 pm

Photo of Helen KrogerHelen Kroger (Victoria, Liberal Party) Share this | | Hansard source

What Comrade Hutchins and Comrade Moore, the self-declared comrades over there, are suggesting is that they realise Tuesday night’s budget was built on a house of cards and that this resource mining tax is the only way in which they are going to bankroll what they need to undertake in the next 12 months.

Photo of Steve HutchinsSteve Hutchins (NSW, Australian Labor Party) Share this | | Hansard source

Our resources!

Photo of Helen KrogerHelen Kroger (Victoria, Liberal Party) Share this | | Hansard source

They are not your resources; they are the resources of all Australians, who have been and who are the recipients of the benefit of the mining boom over the last few years.

Senator Fielding has already indicated that he is not likely to support such an irresponsible and knee-jerk measure, and neither will this coalition be as irresponsible as you are. The Rudd government resource mining tax is nothing more than the Labor government’s desperate search to feed its spending addiction. That is all we have seen for the last two years. The amount of waste is criminal. In case those senators opposite are wondering why my colleagues and I get so upset about their needless spending, it is because it is because it is hard-earned taxpayers’ money that they are spending in such a fraudulent and outrageous way. It is money provided by hardworking mums and dads who are under increasing pressure to make ends meet. Labor has wasted billions of dollars in taxpayers’ money over the last two years and we know they cannot be trusted with the public purse.

For the benefit of the chamber, let me remind you of the litany of this waste. Labor promised computers in schools for every year 9 to 12 student. So far, only 220,000 of the one million computers promised have actually been delivered, and I might add that the budget blew out by $1 billion. They promised to cut spending on consultancies, but what did they do? They broke their promise and instead have awarded another $1.1 billion in consultancy contracts since coming to office. They promised broadband for a mere $4.7 billion, but broke that promise and replaced it with a $43 billion plan. In the process they wasted $20 million on a cancelled tender process and spent $25 million on another report by consultants.

They claimed to have all the answers on climate change and the environment. We know that in the Prime Minister’s own words he described it as ‘the moral challenge of our times’. But they have squibbed on the ETS, wasting hundreds of millions of dollars in the process to date. We have seen $50 million spent on climate change advertising and paid 150 public servants to administer the ETS. We saw 68 delegates sent to Copenhagen at $1.5 million, the solar panel blow-out of $850 million and the Green Loans Program cancelled after $175 million was spent. The list just goes on and on. They promised to cut the cost of living but we have seen that prices have continued to rise. And we have seen the millions wasted on the abandoned GROCERYchoice and Fuelwatch programs. Labor continues to struggle on basic sums, but one equation is very simple: that is that waste increases debt and puts upward pressure on interest rates. When Kevin Rudd makes promises at this year’s election, we know that his track record says he will fail to deliver and will waste significant amounts of taxpayer money in the process. Australia cannot afford three more years of Labor’s waste and mismanagement.

In conclusion, it is clear that this government is desperate to find money to pad its spending splurge. It has turned its sights on the tobacco industry and turned its sights on the mining sector, and, in the shadow Treasurer’s words, ‘This is a tax on hope,’ and on the future of all Australians.

Question agreed to.