Senate debates

Monday, 15 November 2010

Minerals Resource Rent Tax


The Clerk:

I present correspondence from the Australian Information Commissioner, Professor McMillan, relating to the examination of orders for the production of documents concerning the proposed minerals resource rent tax.

4:48 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

by leave—I move:

That the Senate take note of the document.

We were told that the Australian Information Commissioner would arbitrate on the release of information which the Labor government wants to keep secret, and which the Senate, or the House of Representatives for that matter, felt needed to be released in the public interest.

When it comes to the mining tax this government have been absolutely desperate to hide every last little detail around it. They have negotiated in secret a deal with the three biggest mining companies, excluding 99 per cent of the mining industry. They have come up with a tax design which is complex, unfair and which gives those three big mining companies an unfair competitive advantage compared to the rest of the industry. Every little bit of detail that comes out about this tax exposes it as an absolute mess.

That is why we understand that the government is desperate to keep information about its mining tax deal secret; it is a dodgy deal which has serious implications for the budget, the economy, jobs and investment in the mining industry, and for states like Western Australia, Queensland and even New South Wales.

The Gillard government promised a new era of openness and transparency. They entered into an agreement with Tony Windsor and Rob Oakeshott in particular—members in the other place—and into a separate agreement with the Greens. In that agreement there is a particular commitment made by the government that in relation to issues of public interest disclosure where the Senate or House votes on the floor against a decision of a minister, they would be referred to the Australian Information Commissioner, who will arbitrate on the release of relevant documents and report to both houses. The Senate has voted twice now against the decision of a minister, specifically Minister Swan, who has refused to provide information sought by the Senate about the mining tax.

I will just go through a little bit of history: the then Prime Minister, Kevin Rudd, announced the resource super profits tax on 2 May 2010. It was a tax which we were told would raise $12 billion. Of course, because it was a bad tax pursued by the government through a bad process, the political fortunes of the government started to decline immediately and we know what happened after that. The then Prime Minister, Kevin Rudd, lost his job and the Treasurer, who was responsible for the tax, not only did not lose his job but got a promotion. Julia Gillard was desperate to enter into a deal with the three biggest mining companies, firstly, to get them off her back politically in the lead-up to an election but, secondly, she was also desperate to ensure that she could maintain the very questionable assertion made by the government of an early surplus. In order to be able to do that she needed to be able to preserve a sufficient level of mining tax revenue for her budget. So what happened is that the government manipulated secret mining tax revenue assumptions. They manipulated assumptions on commodity prices, on production volumes, on exchange rate assumptions moving forward and a whole series of other assumptions.

Dr Henry told a Senate committee that up to 100 assumptions and variables were changed in order to ensure that the government could come up with a $10½ billion mining tax revenue estimate. So, when the tax was first announced, it was going to be $12 billion in revenue. Then it was going to be $10½ billion. The changes in assumptions would have meant that the original tax would have raised $24 billion and, since we have had MYEFO, we are now told that because of variations in exchange rates the mining tax will raise $7.4 billion. You can see how relevant these assumptions are yet this government has kept them secret.

This has gone through quite a process. A committee of the Senate asked Dr Henry when he appeared before it to provide that information. He was very careful. He did not refuse to provide information because he knew that would trigger the standing order in relation to public interest immunity claims. Instead he referred those questions to the Treasurer, Wayne Swan, for his decision. The Treasurer, Wayne Swan, as soon as there was a request for information from a senate committee if he was of a mind to refuse to provide that information, needed, in accordance with our standing orders, to identify the ground for his refusal and to specify the harm to the public interest that could result from the disclosure of the information or document. None of that was ever done.

In fact, prior to a second hearing with Treasury secretary, Ken Henry, I wrote to the Prime Minister on 12 July. I asked her to lift the gag on Dr Henry to enable him to answer some very basic questions about the impact of the mining tax on the budget, on the economy, on jobs and, of course on investment in the mining industry and on states like Western Australia and Queensland. To this day I have not had a response from the Prime Minister. I wrote to her on 12 July and to this day I have not had a response to that letter from the Prime Minister. How arrogant is this Prime Minister in refusing to provide this information and not even having the courtesy to respond to my correspondence in relation to it?

What happened then is that the Senate passed three orders of the Senate on two occasions. They were broadly around three issues. They were around the issue of assumptions that were used by the government to estimate the revenue from the original mining tax, the RSPT, and from the revised mining tax, the minerals resource rent tax. In a separate order we sought details on the secret negotiations and deal entered into between the government and BHP, Rio and Xstrata. In a third motion we sought information about how much of the mining tax revenue would come from individual states and territories and how much would come from respective commodities.

It is important to note here that Treasury took questions in relation to this on notice on 5 July at a hearing of the Senate Select Committee on Fuel and Energy and to this day these questions remain unanswered. Even more concerning is that in its response to the orders in relation to these matters the government has arrogantly completely ignored the questions about where the revenue from the mining tax is supposed to come from. David Parker, who is the executive director of the revenue group in Treasury, has said that Treasury has already assessed how much mining tax revenue is expected to come from each commodity yet so far we have not been provided with that information. He also said that it would not be very difficult to come up with the information in relation to how much of the mining tax revenue would come from Western Australia, Queensland, New South Wales and so on.

I would also put on record here that the Western Australian Treasury has put forward very transparently its methodology and its assumptions which led it to the conclusion that up to 65 per cent of the revenue from the mining tax would come from Western Australia. That was back in the middle of July 2010. Nobody from Treasury and nobody from this federal Labor government has had any conversations at all with the Western Australian government either to say that it is wrong or to address any of the concerns that were raised in relation to this. There is serious concern in Western Australia that the mining tax is a tax on Western Australia because 98 per cent of iron ore production across Australia comes from WA and most of the revenue will come from WA.

To cut a long story short, this is an arrogant, secretive government which has repeatedly refused to answer questions and which has not taken seriously orders of the Senate. In fact they have taken them so not seriously that they actually refer to them as ‘a motion made by Senator Cormann on 29 September 2010’. It was not a ‘motion made by Senator Cormann’. It was an order of the Senate. I might have moved the motion in the Senate but it is an order of the Senate. Then they gave us two paragraphs of information that is clearly publicly available in the budget papers, which we did not seek, and they refused to address the information that has been sought.

We were told that the Information Commissioner would be able to review this sort of refusal by government to provide information. The Independents and the Greens presumably—and I am sure they did—entered into this agreement with the government in good faith. It was all about the government clinging on to power and convincing the Independents and the Greens to come on board with them. We now hear from the Information Commissioner that he does not actually have the power under his act, under the legislation that governs his operation, to do what the government promised that they would get the Information Commissioner to do. It is an outrage.

4:58 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | | Hansard source

I would very briefly like to support Senator Cormann in what he has said. It does again highlight the absolute arrogance of this government in dealing with parliament. I rise simply to draw the attention of the chamber to the absence of the Greens in this debate. The Greens went into an arrangement with the Labor Party—into a coalition one might almost say—to keep Ms Gillard in power as Prime Minister, to keep all the Labor front bench in the ministerial leather, so to speak, and the quid pro quo for that was supposedly greater accountability and openness.

As with most things with the Greens, we know that they are not really what they seem to be. They are not an environmental party at all; they are a radical socialist party. With one or two exceptions, most of their current senators are more interested in radical socialism than they are in the environment. But I would have thought that this would be the sort of debate where the Greens would be here in force. In fact, I would have thought that this would be the sort of issue where the Greens would be saying to Ms Gillard, ‘If you want our support in parliament, you have to make sure that this information that is ordered by the Senate is made available.’ So I totally endorse Senator Cormann’s comments, possibly with one exception, and that is that a lot of the mining tax revenue comes from my state of Queensland. But we will not argue over trifling issues. Certainly Senator Cormann is right, and I had hoped that by this time the Greens might have come down into the chamber to also support Senator Cormann in what is a very, very important issue for parliamentary democracy.

Question agreed to.