Senate debates

Thursday, 17 July 2014


Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]

5:06 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

It was then Prime Minister Rudd who, in one of his more erudite moments, made the statement, 'No government should ever make a backward step in pursuit of the national interest.' It is in that light that I speak strongly in support of the repeal of the Minerals Resource Rent Tax Bill

It has hurt Western Australia. It has hurt Australia. We have now seen the repeal of the carbon tax repeal bill, and now is the time to do the same with the minerals resource rent tax

It was Mr Rudd who attempted to bring in the original resource super profits tax that did so much damage to Australia' reputation and constituted a sovereign risk around the world. He failed. In government, Prime Minister Gillard and her Treasurer, Mr Swan, negotiated with the three majors—BHP Billiton, Varley and Rio Tinto—to come up with what is now the minerals resource rent tax. It is interesting that they deliberately excluded Mr Martin Ferguson, a person who had far more knowledge in this field, I think it would be fair to say, than almost anybody else in the Labor government at that time with the possible exception of Mr Gary Gray. It is also interesting that in that discussion they deliberately excluded the small and the mid-cap miners, the exploration companies and, particularly, those involved in magnetite production.

What we ended up with was a tax which we in the coalition at all times said, and as industry said, would not make any money. Labor in government predicted that it would raise $3 billion in revenue in the first year alone and the remarkable figure of some $22.5 billion in the first four years. I will relate very briefly, given the amount of time, what actually happened.

As you and I both know, Acting Deputy President Sterle, it hurt Western Australia badly. It was directed at iron ore and coal, and some 67 per cent of the impact of this tax would have been on our state of Western Australia as indeed, because of the geographic size of our state, the carbon tax was so disastrous for us.

The unfortunate circumstance was that, far from yielding that figure of $3 billion in the first year, we in the coalition were right, industry was right—that is, that it was never, ever going to make any money. In its first year, it took a long, long time—it was like extracting teeth out of a crocodile—to get a statement as to how much it did yield, because we were told originally there would be quarterly reports. Of that $2 billion, it only yielded $126 million. When you take the fact that $40 million was spent in advertising and another $50 million was spent in set-up costs with an annual cost of some $20 million, there is the figure that says it made no money. Treasurer Hockey makes the comment now that once it is scrapped—imagine a tax being scrapped saving money; incredible—it will save some $13.4 billion.

It is a fact that only some 20 companies paid the tax. This was the point that the small and the mid-caps, the explorers and others continually made that it wasn't going to make money. Regrettably—and I think this is the important point—although 20 companies paid some tax, 145 companies invested some $20 million in administrative costs to be able to show the Australian tax office that they would not indeed be paying it. Imagine if that $20 million had gone into further exploration, further development, further employment of people and further opportunities for our mining industry. But, no, it went in administrative costs in the full knowledge that they would never, ever be paying the tax. One company alone paid somewhere between $3 million and $5 million of administrative, legal and other costs to establish that they would not be paying the tax.

The other night I heard Senator Wong, the Leader of the Opposition in the Senate, the former finance minister, go on at length about the various costs that the coalition was ripping out et cetera as a result of this. As we know, the worst feature of all of the predicted $2 billion of profit was that the Labor government then went and committed it and spent it.

All of us in households, residences and businesses would know that you can predict a year coming along: you might do well; you might make money. For farmers in my home state of Western Australia: things are looking pretty good for our cropping season but it is only July. Would any prudent home, business or residence ever go out in the hope that they might make $2 billion and spend the money? That is exactly what Labor did.

The regrettable thing was that the other night Senator Wong invited everybody who was listening to be upset and concerned about what the coalition was apparently doing by way of cutting back on that expenditure—the welfare expenditure that the Labor Party had committed itself to as a result of making money on a tax that they were never going to make the money on. In other words, the circumstances that Labor had put the funds towards themselves were probably laudable—I have no doubt they are—and one day when we reverse the negatives of budget, pay down the shocking deficit and get rid of that billion dollars a month of interest, it will be possible, as the minister finance said, in answer to a question this afternoon, to revisit these areas. When you are borrowing internationally and offshore, what right do you have to borrow money so that people—the children of today, the grandchildren of tomorrow—will have to pay that money back? That is exactly the circumstance.

The Leader of the Opposition in the Senate, Senator Wong, was talking about the superannuation guarantee scheme. She was talking about the effect of the small business instant asset write-off being removed. Let me tell you, Mr Acting Deputy President: the one thing small business is rejoicing about this afternoon is that the carbon tax has been removed—and all of those other concessions at one time in the future might be fantastic as indeed, when he was Treasurer, Peter Costello paid back that $96 billion of debt and relieved Australia of the annual interest debt of $5 billion a year and was able to give tax concessions.

We are paying not $5 billion; we are paying $12 billion—a billion dollars a month; a new primary school every 12 hours we are forgoing in this country at the moment, because we are borrowing offshore to pay interest on that debt. All of these concessions that Senator Wong was speaking about—many of them, I have no doubt at all, are laudable—are welfare issues. They are issues that you are able to devote funds to when you are in surplus, not when you have got to borrow overseas for that purpose.

I am absolutely amazed to see my colleague Senator Macdonald—I do not know whether you now think the need for the high visibility dress is the result of the fact that this has become a dangerous place occupationally—through you, Mr Acting Deputy President, to Senator Macdonald—but I assure you it is not.

Let me tell you very quickly about the impact on the mining industry as a result of the carbon and mining taxes. This amazing statistic has been given to me by the minerals exploration council. In 2011, 65 per cent of Australian Stock Exchange listed exploration companies'—these are our companies, our Australian exploration companies—expenditure for exploration activity was here in Australia. One year later, by 2012-13, 65 per cent of the exploration dollars of ASX listed companies was being invested away from Australia. You do not need any other statistic for the impact of the mining tax on Western Australia: one year there is 65 per cent investment here; a year later 65 per cent in west Africa, in Canada, in other countries. I could not give you a more explicit example. It has been a very unfair tax. It has cost some $20 million in administrative fees and $2 million a year for companies to tell the ATO that they will not have to pay the tax because of the way in which it was established.

Mr Acting Deputy President Sterle, I know you, like me, move about the state a lot. I was in the city of Kalgoorlie only two weeks ago. Kalgoorlie is on its knees. I know that is part of the cycle, the boom and bust cycle. Iron ore is important at the moment. The MRRT was only applying to iron ore and coal, but the threat was—and I think it was Senator Ludlam who spelt it out the other day—it was going to be on gold, it was going to be on uranium, it was going to be on other metals. But what it has done is this: each of the 12 or 13 big drilling companies based around Kalgoorlie—they operate around the world; these are massive companies that are very big employers when they are working—probably has eight or 10 drilling rigs and when I was there one of them had one rig working. And we all know that explorations today are the mines of 20 years' time. That is the sort of lag time we are talking about, and that is where the important element comes in.

Karratha, on our north Pilbara Coast, and Port Hedland: I have learnt in the past few days that each of those places has got more than 400 vacant homes at the moment. It is only 12 or 18 months ago, through you, Mr Acting Deputy President, to Senator Macdonald, that rental was $2,500 a week in those places—Karratha and Port Hedland. Both are reliant on the resources sector; both are obviously very severely hurt. That is the circumstance. We were advised yesterday that of all of the competing resource exporting countries, Australia ranked 133rd out of 134 when it came to our cost of production and cost of exploration.

I have been asked to be relatively brief. I am going to conclude with some information. We hear so often—Senator Milne, through you, Mr Acting Deputy President, I know you so often say that the mining industry contributes nothing, that the resources sector does nothing for our economy. Let me tell you this: the single biggest taxpayer in this country today is Rio Tinto. Mining has paid $117 billion in company tax and royalties since 2006-07. Last year alone they paid $21 billion, which was double the 2006-07 figure. It is in excess of 40 per cent, and the other ATO figure I was given is that the effective tax rate, according to the ATO, is now well in excess of 40 per cent. So by the time you take tax, by the time you take the royalties and then, on top of that—as Senator Lines would also know as a Western Australian senator—by the time you include local rates, by the time you include payroll taxes, by the time you include employment—the thing I was very pleased to report about Kalgoorlie was how robust and resilient a community it is. Although it is on its knees, when I asked how many vacancies there are in the schools in Kalgoorlie, I was told there is one vacancy in one school. So they understand the peaks and troughs of mining, and that is where we are. It was claimed the MRRT would somehow or other generate a revenue shortfall of $100 billion. That did not happen. Dr Ken Henry said it would not happen.

We have the circumstance of R&D. We heard the allegation again that mining is just digging holes in the ground and sending it offshore, and of course the industry would very strongly make the point—and I am quoting here from MCA—that 'Australian mining spends more than $4 billion per annum on R&D and that represents about one-quarter of all research and development in Australia.' That is far from the allegation about multinational companies sending it all offshore. We know they invested heavily here and that mining has spawned an Australian mining equipment, technology and services sector worth some $90 billion—I repeat that: $90 billion—and it exports $15 billion worth of goods and services. Forget this nonsense about mining only being a relatively small employer; in this country it directly employs some 245,000 people—a 20 per cent increase since the end of 2010—and RBA research shows that mining employs almost 10 per cent of the Australian workforce.

As I bring my contribution to a conclusion, I am obviously a very proud Western Australian—a state that contributes so much through its resources sector to the national economy. It provides the opportunity for states like Tasmania and South Australia, and after the natural disasters in Queensland, to be able to share that wealth nationally. Yes, we get a very low percentage of the GST; yes, we do want a lot more back; and, yes, we do want other states to endeavour to put their shoulders to the wheel more—and we know they will into the future. I just urge that people strongly support the repeal of the MRRT bill.

5:21 pm

Photo of Sue LinesSue Lines (WA, Australian Labor Party) Share this | | Hansard source

Boy, what a spray we have just heard from the government—isn't it amazing? If they are successful in repealing the minerals resource rent tax at some point I am wondering what they will blame then. Everything they have talked about today they did so in such broad sweeping statements—lots of figures coming from the government but nothing in evidence about the minerals resource rent tax. It was all just a big spray like the big spray on the carbon tax—untruths and generalisations. On and on it goes. If they are successful in repealing this bill they are going to be exposed for the mean-spirited, no-new-ideas, backward-looking government that actually are.

The Australian public have already woken up to that fact. We have the harshest and most cruel budget on record I would suggest before us and all they can do is look backwards and take away every single positive, forward-looking idea and policy that Labor put into place. The truth is heading towards them, because suddenly they are going to be in the glare of the spotlight and they will not have anything to blame Labor on anymore. They will have to start to stand on their own two feet—unlike the spray that we heard just then from the government with big numbers all apparently related to the MRRT but nothing specific.

What this repeal by the Abbott government confirms is that the government are introducing a retrospective tax grab on millions of Australia's low-paid workers. Just for once I would really like to hear the Abbott government sticking up for ordinary, everyday Australians. They stick up for their rich mates, their rich mining mates, they stick up for the big banks. Last night we heard them sticking up for the big shipping companies. I have yet to hear them actually stick up for Australian workers—from low-income earners. Not from this government. Their mates, we know, are at the big end of town, raking millions and millions off Australians through the resources boom that has been going on that apparently Australians should not be allowed to share in.

It is a retrospective tax grab on Australia's low-paid workers. Not words you would hear from the government, though. The reason for doing this—and from a government who pledged to govern for all Australians? I heard our Prime Minister, Mr Abbott, say that the night he won the election: 'I'm here to govern for all Australians.' Australians are still waiting. Australians are not going to be fooled anymore, because what the Abbott government is doing is simply governing for big business in this country. It has nothing to do with 'all Australians'. It is taking directly from the poor and giving to the rich. How is that governing for all Australians?

It is also taking money from school students. When the Abbott government tells us it has a commitment to education, those are just weasel words. As the government has confirmed, it will rip payments of $410 per primary school students and $820 per high school student from a 1.3 million Australian families who will have children starting school in January next year. I can tell you as a parent who, when my children were at school, was on a single income that I struggled in January to find money for books and school uniforms to make sure that my kids were the equivalent of other kids they attended primary and high school with. It was a struggle because it is a time of the year when you have just had Christmas and children are holidays. Every cent of my income was taken up and it was a struggle to find $200 or $300 for books and uniforms. That is what this government is doing. That schoolkids bonus money assisted families with school fees, textbooks and uniforms. The government will simply take that away when it abolishes the schoolkids bonus.

What dishonesty we have heard around the schoolkids bonus. It will be interesting to hear if the government mentions it today or whether they will just continue sticking up for their big mining mates. This payment is not linked to the MRRT. There has been this dishonest statement from government from day one that somehow it is. It is not. The Australian public will not be fooled, despite the government's rhetoric that somehow the schoolkids bonus is linked to the MRRT. When families have to scrimp and save, as I had to, and miss out on events or on going out with their children because of this slash and burn to the schoolkids bonus, those Australian families—1.3 million of them—will know that it is the Abbott government who put a hole in their pockets. It will be the Abbott government who has forced them in December and January to wring their hands, to worry, to scrape money together to make sure that when their kids start school in late January or early February they and have the same books and uniforms as the other children they are attending with.

Taking away the schoolkids bonus is a big slug on top of the Prime Minister's already harsh and cruel budget. It is absolutely targeted at ordinary, everyday Australians. They are hit with a GP tax; they are hit with a whole range of increases. On top of that, come January, there will be no additional money for families to support them to get their kids to school. The loss of the schoolkids bonus will add pressure on families at a time when families can least afford it. Finding that money to get kids ready for school, after Christmas and the school holidays, is a stressful burden on families. I can speak of that from firsthand experience. The loss of that bonus will hit 1.3 million families because the Abbott government wants to look after its rich mining mates.

It has not taken long for the Abbott government to show its true colours; it has not taken long at all: taking from the poor, taking from Middle Australia and giving to the most wealthy, whether they be mining companies or rich Australians—as long as they are rich, the Abbott government will look after them.

The Abbott government will not just stop at the schoolkids bonus. There is superannuation. It is a time when all sensible governments—which the Abbott government likes us to think it is—should be encouraging Australians to save for retirement and doing what they can to support those savings. But what does the Abbott government do? It slugs low-income Australians again—Australians earning just $37,000 a year. Perhaps the Abbott government has never met a cleaner, a hospital worker, a hospitality worker or a low-paid manufacturing worker. There are many hundreds of thousands of Australians out there who scrape by on $37,000 a year—mere pocket money for their rich mates in the mining industry.

If only the government cared to do a little research to establish some facts—something it does not do. It never has any established facts that it can share with the Australian community to show that, perhaps, 'We need to pull our belt in here or there.' No, it just goes on in a broad generalised spray about how evil everything Labor put in place was and how everything we put in place that supported Australian families and low-income earners somehow has to be ripped away. The Abbott government wants to pull that rug from underneath the feet of low-paid, ordinary working Australians. And for what? To reward its rich mining mates in this case. That is what it is doing.

Let us have a look at superannuation. The Abbott government is quite happy to deliver to the rich, boosting the superannuation of just 16,000 people. Sixteen thousand people—you could almost count them! These are people who have staggering super balances—balances of over $2 million in super. If you put aside for just a moment the fact that the Prime Minister promised to implement no adverse change to superannuation—yet another broken promise on the long, long road of broken promises—the removal of the low-income superannuation contribution is a telling move. This move will increase super taxes in one out of every three of Australia's lowest paid workers—not a bad move from a party which purports to be a low-taxing government.

This bill, if it gets up, sees the government scrapping the low-income superannuation contribution, which sees the equivalent of the superannuation tax up to $500, which is not very much, paid by a low-income earner earning up to $37,000 per year, which is a very low income, and paid into their balance. This measure was important for a number of reasons, and if the Abbott government had stopped and looked at the facts, it would have worked this out for itself. For high-income earners—the rich mates of the Abbott government—superannuation can be concessional. For low-income earners, there are no effective incentives for them to contribute to their superannuation. This measure, Labor's measure, addressed that very issue. It tried to just make the field a little more even.

The removal of the low-income superannuation contribution hits women particularly hard. Our Prime Minister purports to be some new-wave male equivalent of a feminist. He is the Minister for Women, and this is what he does to low-income earners—2.1 million of them against his 16,000 rich mates that he wants to reward. He is going to punish and make life difficult for 2.1 million low-paid women. If he just stopped and had a look at the balances of the cleaners, the hospitality workers, the care assistants, the hospital orderlies and all of those low-income earners, he would see that their balances are very low. If it was a government that was, as it says, sensible and methodical, and was committed to looking to the future instead of spending its time looking in the rear-vision mirror, it would see that these are the very people it needs to support. But, of course, it does not because it is too busy supporting its rich mates at the top end of the town.

What about those 2.1 million workers that our Prime Minister—our Minister for Women—seems to completely ignore? A significant percentage of those women are mothers working part-time and looking after young children—our future generations of Australians. It is this time that is exactly the part of a woman's career where an additional $500 a year going into super will be the most benefit for building savings for their retirement. Everyone knows that you need to put the money in early to allow it to have the opportunity to earn interest over a very long time.

Of course, our other major concern with the bill's removal of the low-interest super contribution is that it is an example of a retrospective tax measure—a fact confirmed by the Parliamentary Budget Office's checking of the coalition's election costings. Low-income earners—2.1 million of them women—entered the 2013-14 financial year with a different understanding. It was an understanding that they would be refunded their super tax. Part way through the financial year, the government has changed the rules on taxpayers. Luckily, we are where we are in the cycle. But the benefit that ordinary low-income Australians, many of them women, were budgeting for and looking towards the future for, will be ripped away from them again if this bill is repealed. Again, the Abbott government rips that rug from under their feet.

What does Industry Super Australia estimate? It says that when combined with the proposed delay in increasing the super guarantee to 12 per cent—we know our Prime Minister is not going to increase that—the removal of the LISC will reduce national savings by $53 billion by the year 2021-22. That is a truly staggering amount of money. Again, a sensible and forward-looking government would say, 'This is exactly where we want to be; this is exactly what we are building for the future.' But, no, we have a government that is always looking in the rear-view mirror, a government that has no idea how to plan for the future. All it ever talks about is a debt burden on young people into the future. Well, what is it doing? It is ripping potentially massive savings, billions of dollars of savings, out of our combined wealth without a care in the world. It has no idea and no plan. It is not saying, 'Labor's plan wasn't bad but we thought we could build on it.' No, it just wants to rip it down and pull that rug out from under everyone's feet. What does that mean? It means there will be a reduction in the available capital for infrastructure investment of about $5 billion, based on current industry-wide asset allocations. This is at a time when the Abbott government says it is looking around for new funding streams to finance new infrastructure projects. Here are some funds it could have called on, but it does not want to. Why? Because it has an ideological hatred of any plan that Labor put together. The Abbott government is certainly not governing for all Australians.

Let me put Labor's view on the record. Labor's view, and it is a fundamental view, is that Australians deserve to share in the benefits of the minerals we own. This is not something we heard from the government opposite. All we heard was: 'No, it's the mining companies' and they pay a bit of tax and we should all be grateful and thankful.' The minerals belong to Australians collectively, therefore Australians should share in the overall benefit from them. The MRRT is a profit based tax. This means that when profits are high, revenue is up, and that mining wealth can be shared by all Australians. The MRRT was not put in place for the next six months, it was a long-term approach. Labor was a forward-looking government, looking at what was going to set Australia on a good solid path that would build for our future and make sure our children and our grandchildren continued to benefit. That is what Labor was, a forward-looking government. This government is a backwards-looking government. It has just taken us back to the dark age with its repeal of the carbon tax today and it will continue to take us back to the dark age. Its other message to Australians is: 'Hey, you're on your own. Don't expect anything from the Australian government.' It is not the Australian government's job, according to the Abbott government, to help you along the way. No, you have to get there yourself. You have to scrape and beg and borrow and work two or three jobs if you are a low-income Australian to make your own way in the world, because everything Labor put in place to support our community the Abbott government is ripping up.

The MRRT was there for the long term, as I said. It was put in place for the next generation. That is something the Abbott government goes on about, but a smart government would not abolish the MRRT. A smart government that did more than look after its rich mates would be keeping it in place so that future generations could share in the wealth generated through mining, not just a handful of rich mining companies. But, of course, the Abbott government wants to continue to deliver to its rich mates. We know the MRRT will work into the future. That is how it is designed; it is not about 'let's get it done now'. The Abbott government is attempting to repeal yet another forward-looking, progressive policy.

5:42 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

I rise this afternoon to oppose the repeal of the minerals resource rent tax and to reflect on where we have been on this issue of raising revenue from the mining industry over recent years. It is extraordinary that on the day that the Treasurer stands up and says there is a revenue crisis in Australia and then lambasts the Senate for not passing his cruel budget measures, this is the biggest giveaway of a government that you could ever have seen. In one day they want to give away more than $20 billion worth of revenue over the forward estimates: $18 billion on carbon pricing and between $2 billion and $3½ billion—so you could get it up to $21½ billion—on the mining tax. How extraordinary. It is the best example yet of cost shifting, of saying to the big end of town, the big miners, the big polluters: 'Wink, wink, nudge, nudge, you gave us the money through your donations, you backed us in opposition, we are in government and now you can maximise your profits and send it out to your shareholders'—the overwhelming majority of whom, 83 or 84 per cent, live overseas—'Send that profit to them, don't you worry about it. We will go and take the money out of the pockets of the Australian community to make up the shortfall.'

That is what is going on here, the most mega shift: robbing the pockets of the community to put it into the profits and give it to the overseas shareholders of the big polluters and the big mining companies. That is exactly what is going on here. I find it extraordinary that a Treasurer would have the temerity to say to Australians: 'We want to hit the unemployed even harder, we want to make people pay more to go to the doctor, we want to deregulate universities and make life harder for university students who have to pay more, we want to make it really bad for women in the workforce who have no superannuation—all of that because we want to give Gina and Clive and Twiggy and all the rest of them as much as we possibly can.' That is what is going on here. It is extraordinary that we get a 'budget emergency' talked up when we have the big give-away in town: 'Here're the dollars, boys. We got elected for you and we're giving them out to you.' That is what is going on here.

Let's have a look at the history of this. How did we get into a situation where, at a time when the mining companies are making mega profits, so little is being returned in this mining tax? And why has there been such a reluctance, to fix it? Let's go back. There has been a bit of looking back, today, with respect to the carbon price. People with a bit of political memory might recall that coming into 2010 the expectation was that the then Prime Minister Kevin Rudd would call a double dissolution election on the back of not getting the emissions trading scheme that he negotiated with the coalition. He had negotiated it so that it was browned down to the point of being useless, with mega dollars again going to the coal industry and mega dollars going to trade-exposed industries—mega dollars all round.

But, never mind, coming into 2010, the Greens put on the table a compromise position on carbon pricing. On 21 January 2010, a compromise position on carbon pricing was put on the table, where we asked, 'How about a fixed price period of two years, and a price of $23?' We put that on the table and we met with Senator Wong at that particular time to ask, 'What about that?' We were told that, no, there was no compromise to be brokered, at all. It was only then that we found out that Labor had decided to abandon carbon pricing, and instead go with a mining tax—the super profits tax.

That occurred in the first quarter of 2010. Kevin Rudd, the then Prime Minister, went out and launched his super-profits tax, but the big miners were not going to have a bar of it. They got together with their mega advertising campaign. They put millions of dollars into that campaign. But it was millions of dollars to save billions of dollars, so the advertising campaign was a worthwhile investment. But the focus of the miners was not only to knock off the super-profits tax but to show the Rudd government—it was a message clearly picked up by the Gillard government and relished by this one—that the mining industry will destroy you with a populist advertising campaign unless you do as you are told. And so they did. They destroyed Kevin Rudd, who was seen to be indecisive and unable to sell his super-profits tax.

Then Prime Minister Gillard took over. With the most extraordinary play-acting—if you look back you can see it for what it was—a deal was done. Prime Minister Gillard and Treasurer Wayne Swan at that time negotiated in a room with the mining industry to give them what they wanted on the tax. What was the deal? The deal was that the Gillard government would get the political win of having negotiated with the big miners to deliver a mining tax, and the miners would get the win of not having to pay the tax. It was a beautiful thing! They got the money and the Gillard government got the credit in that political deal.

At the time, we said, 'This is wrong. There's a huge loophole in this, which will mean that the federal government will have to pay.' The loophole was that the states could increase the mining royalties, and any increase in royalties would be given back, and be made up for, by the federal government to the mining companies. So the mining companies did not have to pay; the taxpayers effectively made up the difference. That was a mega hole in the tax, and we moved an amendment, at the time that the legislation was put through this parliament, to close that loophole. Of course, it was rejected. It was rejected by the government, because they had done the deal with the miners. And it was rejected by the Liberals, who were then in opposition, because they wanted to make sure that the miners did not actually have to pay the tax.

So the flaws in this tax were there from the very beginning, and the Greens have said consistently throughout, 'We should be fixing this mining tax to get the revenue for the community in order to be able to spend on education, health, and all of the things we need for the future.' That is why we said, 'Let's fix the tax and set up a sovereign wealth fund so that we can use the benefits of something which is a one-off.' Let's face it, when the ore is gone, it is gone. The Norwegians made money from their minerals. They set up a sovereign wealth fund, and out of that sovereign wealth fund they have managed to fund the transition in their economy and new jobs.

The upshot of all of that is that there is no sovereign wealth fund. The government of the day did not do as the Greens wanted. Nor would they fix the mining tax. Ever since then we have argued for it. That is why I want to foreshadow a second reading amendment. Rather than repealing this tax we should be fixing this tax. Mr Hockey says he wants revenue. Well, I am ready to give him revenue. I was ready to keep $18 billion worth of revenue but he wanted to give it away. Let me try again: I am prepared to give him more revenue by fixing the mining tax—taking it out of the pockets of these super profitable mining companies.

I would like to fix the mining tax by applying a 40 per cent rate to all minerals. That is the first thing. If you look at the oil and gas industry you will see that they already pay 40 per cent. Why shouldn't the rest of the mining industry pay the same 40 per cent? It stands to reason that you would do that. The second thing we are saying is that we should rebate only those royalties that were in place at July 2011. We should close the loophole on the state governments. If the state governments want to raise royalties the Commonwealth is not going to rebate that after July 2011.

The third thing we have said is that we should only allow depreciation on the book value of the amounts spent on mining infrastructure. The issue here is that the mining industry has again ripped us off disgracefully, claiming everything that they possibly can in order to get their depreciation maximised. We do not want to allow the mining companies to be able to depreciate what ever they like. It is a key flaw in the existing tax

So I am foreshadowing a second reading amendment because an amendment is already before the chair.

I want to go to why it is essential we do this and how disgraceful it is that Rio Tinto, Xstrata and BHP managed to rip off and hoodwink the Australian Prime Minister and Treasurer of the day. You will recall we have had revelations since that there were the Treasury officials outside the room, no doubt absolutely appalled by what was going on inside the room—not even invited in—as the mining companies negotiated this with people around whom they ran rings. I want to indicate the extent to which they did run rings around them and I want to talk about Glencore for a minute. Australia's largest coalminer, Glencore, formerly Xstrata, paid zero tax over the past three years, as at 27 June this year. I have an article from The Sydney Morning Herald. Glencore paid zero tax over the past three years:

… despite income of $15 billion, as it radically reduced its tax exposure by taking large, unnecessarily expensive loans from its associates overseas.

…   …   …

As it was claiming tax breaks in Australia on these inflated interest payments, the secretive Swiss-based multinational actually increased its lending to other related parties interest free. This may include its executives. Nobody from Glencore, which used to be called Xstrata, was available for comment despite repeated requests.

The aggressive tax avoidance tactics of Glencore Coal International Australia Pty Ltd have been identified in an independent analysis of the company's accounts—

and so on and so forth.

At the end of the story it says:

Glencore is an extreme case: founded as it is by US tax exile Marc Rich, controlled from a tax haven, and with a colourful history as a corporate maverick.

It is chaired by Swiss-based Ivan Glasenberg, who ranks No.5 on BRW's rich list … after lifting his wealth by $1.01 billion on the back of Glencore's rising share price.

In the past two years globally, this company has presided over 53 workplace deaths, a worse safety record than BHP and Rio Tinto.

This is one of the companies who sat down with Prime Minister Gillard and Wayne Swan and negotiated a price, a carbon tax, which had within it at the start the problems of its failure.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

And you supported them. What a rewrite of history!

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

Senator Macdonald apparently is hard of hearing, because I just said a minute ago that we moved an amendment to fix this at the time.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Did you vote for the bill?

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

Order! Senator Macdonald, you will be heard in silence, I know.

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

Thank you, Mr Acting Deputy President. As I said, here is a company making $15 billion, absolutely involved in tax avoidance extraordinaire, and now it is to be rewarded by abandoning the tax altogether instead of fixing it. So do not bother going to the G20 later this year and rabbiting on about how Australia wants to get some changes in tax laws and tax evasion, because this company is already making billions out of Australian resources, owned by the people of Australia, and what are we getting back for it? Practically nothing. But, rather than actually fixing the tax so they pay, we are going to see the government insisting that the Senate should pass all these cruel budget measures. If you can afford to give away $21½ billion to your mates, who have donated massively to you, who advertised on your behalf and who are sitting back waiting for the cash to roll in, do not expect this Senate to go and say to the Australian community, 'Sorry, Mr Hockey gave away all that money, so now we have to go and get it out of the pockets of the community.'

I want to quickly go through some issues here around the effect on the mining industry as such. Add to that the fact that not only are we talking about the loss of carbon pricing but, by repealing the mining tax and the carbon price, we have a total of $5.4 billion taken out of government revenue and given specifically to the mining industry, and that is because, as a result of the repeal of the carbon price, they will get their full fuel tax credit given to them. They actually will get 6c a litre more as a result of today, as well as picking up an end to the mining tax, as well as not having to pay for the pollution they cause and never having to accept their responsibility for climate change. They are driving this—they are driving more intense storms and more extreme weather events that are going to kill people in Australia and lead to loss of infrastructure. How did we feel when their coalmines were filled with water during the Queensland floods? And then, no doubt, they were out there claiming all kinds of insurance benefits and the rest, as a result of having driven the climate crisis in the first place.

Do not think the community are not waking up to that. The community are going to feel very short-changed when they find that all that has happened in the last few days is not money flowing to them, because it is a joke that they are ever going to get anything like a $550 per average family return. They are going to find that not only are they not getting that but all these hits on their pocket are so that the big end of town can get these mega-profits through an end to the mining tax and an end to the carbon price. Now they can pollute and use our resources to their heart's content and fill up the coffers of their overseas shareholders. That is exactly where we are going.

What about all the advertising about how many jobs they create? Oh, yes, the mining industry is the backbone of jobs—joke. That is not actually happening. Mining currently employs 2.4 per cent of the Australian workforce. So let's get real about this talk of jobs. Now that it is transitioning from the capital intensive phase to the production phase, this is when the super-profits will occur, because their revenue from production will be rising and they will be less able to deduct it against their capital investments. In the production phase, I would hazard to guess that they are not going to employ even the lowly 2.4 per cent of the Australian workforce, because a lot of these mines are going to be automated. That is the next thing. All these people who think all the jobs are going to be up there in the mines—no, they are not going to be there. They are moving to automation and computerised control of their trucks and the rest of it. What we are seeing is even a reduction in the jobs, even if you thought 2.4 per cent was worth giving them a massive windfall gain.

What we are seeing in Australia is a megaindustry which has advertised itself into a position where governments are too afraid to take them on as they rip off the Australian community, take the profits overseas and engage in tax avoidance on a grand scale. What sort of deal is that for the Australian community? Where is the leadership? We need to be transitioning from an economy that is overly dependent on the resource-based sector to one that is based on a future vision of a country that is knowledge and information based. It is about services, education and training, new technologies, renewable industries and decarbonising our electricity sector.

Unfortunately, what we are seeing are the vested interests of the old order in terms of those big mining companies, big polluters, and the Liberal Party and the National Party which represent them to the hilt—to which they donate. That is the old order looking backwards to the old fossil fuel age and stealing from the future, because instead of a sovereign wealth fund to fund the future, the benefits of the boom have been squandered. That is why we should fix the mining tax. I am standing here ready to help Mr Hockey to put money into the coffers of this government, not to facilitate him giving away money from the budget in order to make life hard for the unemployed, the sick, the old and the student community. That is not where we are going and we most certainly will not be taking away the low-income bonus for superannuation. Why should not those people get something to give them a decent old age?

6:02 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

I contribute to this debate proudly in solidarity with the thousands of men and woman of Australia who work in Australia's mining industries and with the tens of thousands of my fellow Australians who benefit from, and whose mere existence depends upon, a strong mining industry in Australia.

I am a proud supporter of the Australians for coal industry. I remind senators that where I operate, in Townsville, we are near the Bowen coal basin, where there are hundreds of jobs and billions of dollars of wealth for all Australians out of the coal industry. There are some 54,900 direct jobs in the coal industry. There is some $6 billion paid in wages in the coal industry. The coal industry alone pays $25.5 billion in royalties to state governments in the five years from 2006 to 2012. Seventy-five per cent of the electricity that we use comes from Australia's black and brown coal. A contribution to the GDP is measured in the order of $43 billion with some 90 megatonnes in export value.

The coal industry—and the mining industry generally—is particularly important in my state of Queensland where there are 37 projects proposed or under development in the coalmining industry. Coal exports have contributed something like 15 per cent of Australia's total export over the last five years. The coal industry alone has contributed $260 million to an industry fund supporting low-emission technologies. Some 82 megatonnes of coal have been sent to Japan over the years. Importantly, to defy the arguments of Senator Cameron, Senator Lines and Senator Milne, the coal companies alone—this is not all mining companies, this is just coal—paid $17.7 billion in company tax over the five years. This bill that we are debating today is getting rid of a tax that inhibited our mining and mining exploration in our country. It was a tax that not only discouraged investment and therefore discouraged jobs but also did not raise any money. We know for all the projections of the Labor and the Greens that it was going to raise $49 billion, in the first year or so it raised only $340 million and most of that was spent in trying to administer the act and the collection of those moneys.

As we went—these are the Labor government figures—the $49 billion projection came down to 26 and then came down to 11, then came down to 9, then came down to 7, and then came down to 4. This was a tax that, in spite of what you heard from Senator Milne, the Greens political party supported the Labor government in introducing this useless, worthless and job destroying tax. Senator Milne would have you believe that the Greens were against it. They were totally involved and I am glad that Senator Milne mentioned the three big companies. It was the three big companies that Senator Cameron was disparaging—Senator Cameron forgot but Senator Milne obviously did not—that did the secret deal with Prime Minister Gillard and Treasurer Swan. Remember they went into the little room, came out of it and, as a result of that, everybody paid the mining tax except Xstrata, BHP and Rio Tinto. They must have thought all of their Christmases came at once when they walked into the room to negotiate with Wayne Swan and Julia Gillard. They just could not have possibly believed their luck.

I have heard the class warfare arguments from both Senator Milne and Senator Cameron. If they are so against all of these big mining companies, why didn't they get up and support me when I suggested, just a week or so ago, that the debt levy should not apply only to individuals but should apply to the big corporate people? I think I particularly mentioned Xstrata and BHP and Rio. And yet did the Greens support that? No. They let them go. And they talk about the government being the friends of the big end of town! 'The friends of the rich people'—how many times did we hear that? Yet here is the Labor government negotiating with those 'rich people at the big end of town' to get this mining tax in operation. What absolute hypocrisy of the Greens political party and the Labor Party!

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Order! Resume your seat, Senator Macdonald. Senator Ludlam, you have acted in the most disorderly manner by using a prop, as a stunt during a senator's speech. Return to your place, Senator Ludlam. What you have done is completely inappropriate. It is disorderly. It has no place in this chamber. Senator Macdonald, please resume.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Again, Mr Acting Deputy President, it shows the lengths the Greens political party will go to to try and stop people making a point. Why? Because they know that everything I am saying is the absolute truth, and there is one thing the Greens political party cannot handle, and that is the truth.

We have been told that the mining companies pay no tax. Indeed, the truth is very different. Mining has paid $117 billion in company tax and royalties since 2006-07, and it has paid some $21 billion in 2011-12 alone—that is double the payment it made several years previously. Australian Taxation Office statistics show that mining's effective tax rate was 28 per cent in 2010-11, but, if you include the royalties that are paid to state governments, the effective rate of tax was 40 per cent. So Senator Cameron, Senator Milne and Senator Lines would have you believe that the mining companies pay no tax, but there it is: the ATO's statistics say some 40 per cent effective tax is paid by mining companies.

Mining companies do make profits and they do send them overseas—which makes me wonder why the Greens did not support my call for a debt levy on them. But the Greens can answer to that.

Mining companies do pay a considerable amount of tax through mining tax and royalties. They are a major contributor to the Australian economy directly, accounting for eight per cent of GDP, and directly employing some 250,000 of my fellow Australians. That is why I proudly stand in solidarity with all of those people who work in the mining industry that the Labor Party and the Greens would throw onto the scrap heap. I know that, since the mining tax has come in, there has been a pause, a concern, a hesitation in investing in Australia—due to sovereign risk as well as the mining tax and the carbon tax. As a result of that pause in investment, a lot of jobs have been lost in the Bowen Basin area in my home state.

Australian mining spends more than $4 billion each and every year on research and development, which is about 22 per cent of the total business expenditure on research and development in Australia. Mining has spawned an Australian mining equipment technology and services sector worth around $90 billion, and it exports some $15 billion worth of goods and services.

We have been asked to be brief. There are a lot of other facts and figures I would like to submit—and perhaps that will be something for the future. But, before I leave the debate, I just want to contribute by referring to some of the things that others said in this debate. We heard Senator Lines refer to the 'big end of town' and 'big mining mates', carrying on the terminology of Senator Cameron, and I pointed out: who are the mates of the big mining companies? The Labor Party that got into bed with the three biggest of them, and then had the hide to come in here and accuse everyone else. And don't let the Greens fool you. They were in it up to their necks with the Labor government. They worked and worked with the mining companies to bring in a tax which affected many mining companies but not the big ones.

I would refer you to a publication of the Association of Mining and Exploration Companies, who clearly said that the legislation was an:

… ill conceived, anti competitive, complex, distortionary … and … irrefutable bad tax.

They say a lot more things about it, but time does not allow me.

We heard Senator Cameron railing against the three big companies that his government got into bed with and did the deal with, and using all of the old-fashioned class warfare arguments. I want to say something to Senator Cameron—and I hope he is listening. In this chamber we should be debating the issues, playing the ball and not the man. Senator Cameron—and I do not know if he has got something against women—cannot let a day go past without attacking personally and viciously—

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

Mr Acting Deputy President, I rise on a point of order. I draw your attention to the standing order about reflecting on other members of the chamber. I think Senator Macdonald is coming very close to making allegations against Senator Cameron which are indeed reflecting on his character.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Moore, there were no allegations made. I think what Senator Macdonald was doing is part of the robust debating process.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

Mr Acting Deputy President, I rise on a point of order. I would like to express my strong objection to the conduct of this chamber and the production of this bloody commercial message without my permission. This is a protocol issue—

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Heffernan, resume your seat. That is not a point of order.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

I refer Senator Moore to Senator Cameron's speech in this chamber—and the Hansard is here—where he attacked Ms Rinehart. At least Senator Milne attacked Ms Rinehart and Mr Palmer. We do not hear that from Senator Cameron. He does not attack Mr Palmer. I wonder if that could have something to do with the fact that Mr Palmer's own political party has the balance of power in this chamber now. Let us not attribute those motives to him. Let us wonder why it is always Gina Rinehart he attacks in a vicious and personal way. Senator Cameron, if you are going to start playing the man instead of the ball then we can all contribute. I ask Senator Cameron: what was your association with my namesake—the bad Ian Macdonald, the Labor Party Ian Macdonald—from the New South Wales parliament? If you want to get into personalities, Senator Cameron—

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

Mr Acting Deputy President, I rise on a point of order. Again I am concerned about Senator Macdonald making a reflection on another member of this parliament.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Moore, I am absolutely conscious of your concern in this regard, but Senator Macdonald was simply positing a question.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

That is exactly what I was doing. I was asking Senator Cameron what his association is with Ian Macdonald the bad, the New South Wales Labor politician, who I understand was in his faction and whom he supported. Perhaps he can tell us. I want to also ask Senator Cameron about his role as a board member of a very big superannuation company. We always hear about how these big companies, the big end of town, do all these bad things. Perhaps we should look in the mirror. Senator Cameron can attack me as much as he likes, but if he wants to attack people who are not in this chamber—like Ms Rinehart, who is one of the great Australians, one of the great entrepreneurs and a person who has contributed so much to the Australian economy—he should remember it is a two-way street. I will not raise those things again unless he continues to attack people who are not in this chamber to defend themselves. Regardless of his opinion of her, many other people, including me, think she is one of the great Australians.

I will complete my speech there because we are wanting to have a vote on this bill. I want to emphasise that all of the mining companies in Australia already pay a substantial amount of company tax and, importantly, royalties to state governments. That is why when a group of coal companies—and coal, as I have indicated, is just so important to my state of Queensland—initiated Australians for Coal then I proudly became involved in it. Unlike my good friend Senator Heffernan, who I know has an objection to the fact that they printed his name on these jackets, I was tickled pink and very proud to see my name embroidered here. Senator Heffernan—to his own respect, and it is his issue—did not like it, but I was so proud of it. So I proudly wear this high-vis shirt in the chamber today as a demonstration of my support and my solidarity with all of those workers involved in the mining industry right throughout Australia and in all of the towns and communities, most of which are in northern Australia, that exist only because of Australia's mining industry.

I look forward to a big future for the mining industry in Australia. If the Greens are so concerned about carbon emissions, I look forward to a time when the Greens political party will join me in supporting uranium production for energy in Australia. No, the Greens want it both ways. They do not want any carbon and they do not want uranium, yet they like their air conditioners, their fires and the creature comforts of human beings. I proudly support all of those involved in the mining industry, many of which are in northern Australia and in my home state of Queensland. My home state of Queensland is a substantial beneficiary of the Australians for Coal campaign and of the coalmines and jobs created there. Communities in my state are supported by the fabulous mining industry we have in Australia.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Heffernan, you are not on my list of speakers. Do you have a point of order?

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

Yes, I do.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

I give you the call to make a point of order, but you are not to make a speech, Senator Heffernan.

Photo of Bill HeffernanBill Heffernan (NSW, Liberal Party) Share this | | Hansard source

Righto, I will not make a speech. I would like some guidance through a point of order as to the protocols in this parliament and in this chamber about the endorsement of a commercial product without my permission and the wearing of advertising material in the chamber. I thank you for your indulgence, Mr Acting Deputy President. I support the mining industry too but my point of order is it sets a precedent and the next thing we are going to have is 'Bill Heffernan: friend of marijuana' or 'Bill Heffernan: friend of Coca-Cola' without my permission. I have told the minerals and mining council to shove this and everyone else should too.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Thank you, Senator Heffernan. I will take your concerns under advisement and I will refer them to the President of the Senate. But when it comes to the attire in the chamber, I have noticed on occasions in my time here that people have worn scarves, they have worn T-shirts—

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source


Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Kilts, indeed—and I have noticed that Senator Macdonald does at least have a tie on.

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

Mr Acting Deputy President, on the same point of order. I would seek some advice from the chair on the wearing of a garment with advertising material on it. I support Senator Heffernan's question on that and I would like to get some guidance.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Moore, I have undertaken to refer this to the President, which I think is appropriate and he can make an appropriate ruling in the circumstances.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Mr Acting Deputy President, on that point of order. But you have ruled on that, so I will raise another point of order. This is a very colourful and well-fitting outfit I am wearing. As for advertising, perhaps I am advertising myself here where it says, 'Ian Macdonald'. Here on the other side, it says in very, very small letters, 'Australians for coal'. I am not sure which company that is that is being advertised. When you are referring this to the President, could you please alert him to the fact that there is no advertising on this wonderful garment I am wearing.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

Senator Siewert, on this point of order or a new one?

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

On this point of order. Perhaps when you refer this issue to the President, you could also refer the fact of where these shirts came from and whether they were specifically given out so that senators could wear them during the debate on the mining tax, please.

Photo of Cory BernardiCory Bernardi (SA, Liberal Party) Share this | | Hansard source

I take your point and that will be up to the President to consider.

Senator Ian Macdonald interjecting

I am not going to continue with this, I am going back to the bill. Senator Urquhart has the call.

6:24 pm

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | | Hansard source

I rise to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 No. 2. I will be kinder on people's eyes by not wearing a very bright jacket and I will also be kinder on people's ears by not blowing their ear-holes out.

This bill clearly demonstrates the policy differences between this cruel government and the Labor opposition. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners—tax cuts for mining companies, tax hikes for small companies; tax cuts for mining companies but benefits cuts for everyday families; tax cuts for mining companies but retirement income cuts for low-income earners; tax cuts for mining companies but cuts to capital works in regional communities; and tax cuts for mining companies but tax hikes for those participating in geothermal exploration.

At its core, this bill is not about defining a taxation regime for mineral resources in this country. No, at its core, this bill clearly defines this government's cruel agenda, an agenda to end the so-called age of entitlement, an agenda laced in disdain for working Australians, disdain for the families of Australia, disdain for Australians living in the regions and disdain for Australians seeking to expand the renewable energy industry. It is an agenda we see on display in this place every day, where the language of many of those opposite shows an utter contempt for Australian workers and Australian families.

This bill clearly demonstrates the cruel nature of the Abbott government. This bill cuts assistance payments to families, to small businesses, to low-income earners and to our communities while at the same time providing a $3.3 billion tax cut to the owners of Australia's biggest mining companies over the next four years, mining companies who are well and truly majority foreign owned—80 per cent, in fact, of the owners of Australia's biggest mining companies are foreign nationals. This bill hurts Australians while providing a tax cut to foreign nationals.

This minerals resource rent tax is a tax, a fair tax on superprofits—yes, the superprofits realised from coal and iron ore mining in this country; a fair tax that has and will continue to realise significant revenue for the budget at a time when this Liberal government seeks to introduce a tax on visits to the GP and wants to increase the company tax on Australia's biggest companies to pay for its unfair, unaffordable Paid Parental Leave Scheme. This company tax increase will lead to increases in the prices Australian families pay for groceries, for fuel, for power, for clothes and for all goods and services supplied and provided by Australia's biggest companies. It is a tax that will be applied regardless of the profitability of the company and it will not even raise the required amount to pay for their overly generous, poorly targeted Paid Parental Leave Scheme. This company tax increase and the Paid Parental Leave Scheme are further evidence of this Liberal government's desire to hit the hip-pockets of low- and middle-income Australians and line the pockets of the wealthiest in this country.

The minerals resource rent tax is a fair tax that only impacts mining companies when its profits less deductions are over $75 million in a year—a tax that is only imposed on coal and iron ore producers in times of profitability. When this tax was introduced in 2011, Australia was experiencing an unprecedented boom in our resources sector, specifically in iron ore and coal, which delivered record profits to mining companies year after year. During the last tenure of those opposite, royalties as a percentage of mining profits decreased from around 40 per cent to about 15 per cent. It works out at about $35 billion that could have been invested for the benefit of all Australians if captured by a superprofits tax.

These mineral resources are nonrenewable. The resources and a large share of the profit are actually shipped off overseas—resources that can only be dug up once, resources that can only be sold overseas once. All Australians should benefit from the sale of our resources not just the few who are directly involved in the mining industry. It is vital that the community who owns the resource 100 per cent gets a fair return on these resources to strengthen our whole economy for the future. Of course, the fact that this tax does not deliver on forecast revenue in its first few years does not make it a bad tax. It is a tax designed to work in perpetuity. When profits are high, the tax will pull in significant revenue. Or when capital works are high and therefore deductions are high, as has been the case for the past few years, the revenue is reduced. Or if profitability is low and a mining company makes less than $75 billion from a mine in a particular year then no superprofits tax is paid.

The tax actually provides an incentive to invest in iron ore and coal mining operations relative to a pure royalties taxation model.

As the mining industry is extremely capital intensive, it actually employs only around two per cent of Australian workers. While profits in the mining industry grew by over 250 per cent over the last decade, the mining industry contributed only seven per cent to Australia's jobs growth over that period. While the manufacturing industry continues the decades-long trend of employment decline, it still employs over four times as many people as the mining industry. The metals manufacturing industry, which includes smelting, refining and producing metal products, has not been a significant beneficiary of the mining boom. Increased competition from Chinese smelters and refineries, high-energy prices and the appreciation of the Australian dollar saw value added in the metals manufacturing sector flat through most of the last decade. The export volume of processed metals fell over the decade with weakness across a wide range of refined metals. This trend will only continue as smelters continue to close. Despite this, there are no proposals from those opposite to assist manufacturing businesses to deal with the high Australian dollar, which has been stuck over 90c for the better part of four years. Where the former Labor government sought to assist non-mining industries through rational, interventionist, government industry policy, this government has a fanatical approach to free-market economics.

This government has turned its back on Tasmania. The coalition government was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election has been nothing but a complete failure. Last week, the member for Franklin and Shadow Minister for Regional Development and Local Government, Ms Julie Collins, released a report card on the Abbott government's Economic Growth Plan for Tasmania. Of the ten major proposals in Prime Minister Abbott's Economic Growth Plan for Tasmania, only one has been completed. All of the others are well off track. The Abbott Tasmanian file shows that the status of the Tasmanian Major Projects Approval Agency is 'announced', but it only began meeting with stakeholders last month and no board appointments have been made as yet.

The next project is the Tasmanian jobs program. The status is that 60 positions have been created since 1 January 2014. The coalition government's target was 2,000 positions over two years and there has been a cut in funding from $6,050 over a six-month period to only $3,250 over the same time. The next project is the Hobart International Airport, with a $38 million runway extension and the promise of 200 jobs. The status of that is that there is no start date, no international carrier and no details around the design of the runway. The next project is a centre for Antarctic and Southern Ocean research funding boost. The status: 18 CSIRO jobs have been lost in Hobart. The next project is the fruit and vegetable industry task force. The status is that it was announced in March, it was to have had its first meeting in April, and a similar organisation already exists in Tasmania.

The next project was a the Productivity Commission report into Tasmania's shipping costs. The status of that is that the coalition government has yet to formally respond and has had the report since 7 March 2014. The next project is support for the forestry sector. The status is that only eight projects have been announced from Labor's $100 million Jobs and Growth Plan. The eight projects total only roughly one-third of the total amount allocated. Meanwhile, businesses are waiting to co-invest hundreds of millions with government to create jobs in Tasmania. The next project is the Midland Highway $400 million upgrade. The status is that $100 million was cut from Labor's plan and construction work is yet to start. The next project is Sense-T. The status is that funding was announced on 12 June 2014. This is one project where the commitment has actually been met. So that is good news. The project to revitalise Work for the Dole was started on 1 July 2014 without any coordinator in place for Tasmania. All of Braddon, all of Bass and a good proportion of Lyons are to be covered under the one Work for the Dole program.

It is clear that this government has turned its back on Tasmania. The coalition was full of talk before the election about jobs, jobs, jobs in Tasmania, but since the election we have seen nothing. A recent article in the Burnie Advocate highlights the discontent from a senior Tasmanian entrepreneur and key Tasmanian jobs adviser to Prime Minister Abbott. The coalition's Economic Growth Plan for Tasmania also included the creation of the Prime Minister's Joint Commonwealth and Tasmanian Economic Council. The Prime Minister's co-chair, Mr Dale Elphinstone, has said that the council's processes are running a little slower than he would have liked—as in: it has not even formally met yet. The council is also meant to include the chair of the Tasmanian Major Projects Approval Agency, but the chair has not yet been appointed. The council is due to meet next week and I hope that the senior ministers who are listed as members, including Prime Minister Abbott, Treasurer Hockey and Industry Minister MacFarlane, all make the trip to Tasmania and attend this meeting. It is interesting to note that the Minister for Employment, Tasmanian Senator Abetz, was not included in the council.

While the senior ministers are in Tasmania, I hope they reflect on their cruel and unfair budget. In particular, I hope they reflect on this debate and on the cruel and unfair measures that they are proposing in this bill—cruel measures that will actually leave many Tasmanian families much worse off. I call on the government to reflect on the impact of their proposal to repeal the schoolkids bonus—a cut that will cost the average family $15,000 over the period of their children's primary and secondary education and a cut that is not related to the mining tax as it was not enacted by the MRRT bill. Further, it existed as the education tax refund before the MRRT was introduced. The government now plans to scrap the schoolkids bonus and not even reinstate the education tax refund. This secret cut will impact over 32,000 Tasmanian families. Around 60,000 Tasmanian children will go without the payment.

The schoolkids bonus delivers parents some extra help to meet the large costs associated with sending their children to school. When the schoolkids bonus was introduced, those opposite opposed it because they claimed it was not specifically targeted to education. They called it a cash splash and they did not trust Australian families to spend it on educational needs. They said the education tax refund was a better way—despite the fact that millions of families were not getting their full entitlement—and promised to increase it. The mums and dads that I talk to spend the money that they get through the schoolkids bonus on essentials: on uniforms, on excursions, on footy boots, cricket bats, guitars and recorders. It is clear that those opposite do not care about supporting families. I am heartened to learn that there might not be enough support for this measure in the Senate.

I call on the government to reflect on the impact of their proposals to stall the increase in the superannuation guarantee and to scrap the low-income superannuation co-contribution, backdated to July 2013. It is clear that the government does not care about support for low-income Australians who are saving for their retirement. The Minister for Finance, Senator Cormann, recently told ABC Radio:

For somebody who stays on the lowest income tax bracket for their whole working life, all the way through, I think you'll find that they will have the ultimate safety net. They will be supported by the aged pension once they reach retirement.

Minister Cormann just does not get it, because the measures they are imposing through the budget will actually reduce that income for pensioners.

The coalition government, and particularly Minister Cormann as finance minister, want to push the retirement age to be the oldest in the world, at 70. I challenge Minister Cormann to look a cleaner in the eye and say that his government is ripping money out of their superannuation to give to big miners. I challenge Minister Cormann to look an early childhood educator in the eye and say that he thinks the pension is the ultimate safety net. I challenge Minister Cormann to look current pensioners in the eye and tell them that cutting the indexation will keep the pension as the ultimate safety net.

The purpose of superannuation is to provide relief to the age pension system and to provide all Australians with options in their retirement. If the coalition get their way, people earning $37,000 or less will lose the tax incentive to make personal contributions to their superannuation. This measure effectively reduced the tax rate on personal superannuation contributions to zero. The coalition do not just want to reintroduce this tax on low-income earners saving for their retirement; they actually want to back date this measure, hitting the 3.6 million Australians, including 2.1 million working women, with an increase in their tax this year if they made personal contributions to their superannuation. These people entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. This goes against all standards of responsible economic management. Again, I am heartened to learn that there is not enough support for this measure in the Senate.

This bill would also abolish the income support bonus, a tax-free payment to people on payments—including Austudy, Newstart, the parenting payment, and the children of our veterans who were killed or injured in action—to help with unexpected living costs, such as medical expenses or car repairs. If the proposed abolition is successful, around 1.1 million low-income Australians will lose the payment. It was introduced in early 2013 'in recognition of the fact that the current rates of income support allowance payments are manifestly inadequate'. The bonus provides $210 a year to single recipients and $350 a year to most couples, where both partners are eligible.

The Australian Council of Social Service has estimated that 57 per cent of parenting payment recipients and 28 per cent of Newstart allowance recipients could not afford to pay their utility bills on time, compared with 12 per cent of all Australians. That is what this government is about: in every way possible, unashamedly attacking Australians who are doing it tough. Once again, this has failed the fairness test in the Senate. I am proud to stand with the senators who will not be supporting this measure.

This government is even attacking its supposed base—2.7 million small businesses—by slashing the instant asset write-off from $5,000 to $1,000. The 'other measures' component of the bill will also close the loss carry-back scheme utilised by up to 110,000 businesses to smooth their tax over the good and bad years. Just like the 'other measures' in this bill, it has no friends outside of the coalition party room, with the Australian Industry Group and the Council of Small Business speaking out against the removal. The AiG said that the existing arrangement provides a very important boost to a company's cash flow 'at a time when they need it most and at a time when it is going to be most critical in ensuring the survival of that business'. Further, the AiG warned that the Australian economy faced a 'large gap in investment, particularly outside the mining sector' and that removing the instant write-off facility for small business would have a material effect on them and would 'decrease investment at the time it is needed most'. It is disappointing that it appears that not enough of the crossbenchers will vote to support small business in this way.

The 'other measures' in this bill also impose extremely negative effects on geothermal energy exploration. Under current arrangements, geothermal energy exploration and prospecting expenditure is deductible in the income year that the asset is first used or the expenditure is incurred. Under the new legislation, this expenditure would not be immediately deductible. The Australia Institute has observed that 'if this measure is repealed geothermal exploration will not have the same incentives as any ordinary explorer looking for fossil fuels'.

I conclude my remarks by restating that the MRRT has seen and will continue to see the benefits of mining shared across our community. I am pleased to speak against a bill that clearly demonstrates the policy differences of this cruel government and the Labor opposition. It is not an indecent proposal to provide transitional support for businesses and workers in industries hampered by the sustained strength of the Australian dollar. It is not an indecent proposal to impose a superprofits tax on coal and iron ore mining companies and to use that revenue to assist families, low-income earners, small businesses, regional communities and those exploring for commercial geothermal energy. This bill gives a $3.3 billion tax cut to Australia's largest mining companies over the forward estimates while at the same time cutting payments and tax relief to families, small businesses and low-income earners. (Time expired)

6:44 pm

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

It is ironic, isn't it, that on the same day that the government moves the second of its measures to cut revenue, revenue that would create billions of dollars, the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2], the Treasurer is on the radio in the morning, saying, 'We're going to have to bring in more cuts; we might avoid parliamentary processes for that.' This is on the same day that we see two measures going through this place that take billions of dollars out of our revenue stream.

One reason the Treasurer says that the government has to bring in more cuts is that this place is not going to support and has already sent back to the other place measures that it does not accept, because we are listening to the community and we know the community hate the cruel budget the government has brought down. It is a budget that affects young people, students and single parents. Health payments affect pensioners, disability support pensioners, and Aboriginal and Torres Strait Islanders. You name it, this government has a go.

Because the community are saying no, standing up and making their voices heard and being listened to, the government, once again, go behind the back of parliament and say they have to bring in more cuts. And on the very same day the Treasurer is talking on the radio, they want to repeal another revenue-raising measure.

Coalition senators have said how this is a job-destroying tax. Senator Macdonald was in here, saying, 'It's a job-destroying, profit-destroying tax.' BHP increased its profits last year by 83 per cent, to US$8.1 billion. BHP WA alone increased its profits by 20 per cent, paying very little of the mining tax. So much for the job-destroying, profit-destroying tax! We are talking about revenue from the resources that all Australians own.

But of course the government, as usual, are protecting their big business mates at the big end of town. Yes, this tax could operate better and I will come to that in a moment. The government are looking after the big end of town. The three biggest mining companies in WA made profits of over US$17 billion. They paid no MRRT on that. But that is not enough for them, though. They want to make more, more, more and not pay their share. And the government want to protect those people, while making young people, students, single parent families, pensioners, people with disabilities live in poverty. That is what they are doing when they kick young people off the income support and make them live on nothing for six months. 'But it's okay, we've looked after the big end of town and the mining companies. Cross off the billions of dollars of revenue we could make from our own resources.'

Yes, this tax does have some flaws as Senator Milne pointed out. And Senator Macdonald, if you are listening, no, we were not there. You keep having a go at the Greens and saying, 'You were there and you supported the government.' Well no, we were not in the room—and, let me tell you, if we had been, the mining tax would not have been this bad! It would in fact have been fixed. It would actually be generating the billions of dollars that if you had actually listened—and even had the original one—you would now be making money from to provide the revenue that we know is needed to ensure that our community is a fair, just and compassionate community.

But no, you are running to the orders of the mining industry, who have graciously provided certain senators in this building with nice high-vis tops with their names on them. Senator Macdonald wore his into the chamber to do another little bit of advertising for the mining industry. That was clearly around Senator Macdonald trying to advertise for the mining industry. It sends a really clear message about who is giving the orders and calling the shots in this place. That is what it does. It sends a really clear message about who is calling the shots in getting rid of this mining tax that provides Australia with a fairer share of the super profits from the resources that they mine. I continue to remind people that they are Australia's resources. It is only fair and reasonable that Australians get a fair share of the super profits from those resources—and this mining tax is about providing that.

Proceedings suspended from 18:50 to 19:30

I will start where I left off before we had that interlude for dinner. I was making the point that members of the coalition were in here 'vested up' by the mining industry, who quite clearly had vested interests. So it is appropriate that they provided vests for certain senators to wear in the chamber while they are doing the mining industry's work by getting rid of the mining tax for them. To make it even better for the mining industry in this country, and to ensure that the superprofits from their digging up of our resources are not shared with the community, those on the other side of the chamber make the most vulnerable Australians pay the price for their supporting and looking after the big end of town.

As I pointed out before, we do know that there are holes in this mining tax. We tried to fix them—and what this government should be doing, instead of scrapping this mining tax, is improving it so that it genuinely delivers a revenue stream that, according to the government, we need in this country. The government is saying that there is a budget emergency but, with gay abandon, they get rid of the carbon tax that would have generated billions of dollars for our country. Now they are in the process of trying to get rid of the mining tax—that would, again, generate billions of dollars for our country.

The Greens supported the original proposed tax on mining superprofits recommended by the Treasury in 2010, because it did make sense. It made sense because it was a tax only on those companies earning gargantuan, huge profits. It was fair because it ensured that Australians benefited from their exploitation of publicly-owned resources. The principle of the tax was that the superprofits were made by the mining companies when they were digging up mineral resources—which, I repeat again, are owned by all of us—and selling them. Originally, the tax was meant to be 40 per cent on superprofits above $50 million and applied to all minerals. It got watered down to an effective rate of about 22½ per cent on profits above $75 million. In its original form, it would have raised $4 billion last year alone.

As I said, you have got to keep in mind the fact that the three big iron ore companies, to which the mining tax applied, increased their profits by 81 per cent last year. In Western Australia alone, BHP's profits were up 20 per cent. Let's put to bed this myth, perpetrated by coalition, that this is a profit-killing tax. It simply is not true. We should have fixed the original proposal. We should have made sure that we put in place the original proposal. The current MRRT takes only 1.5 per cent off the companies' profit margins, but the government thinks even that is too much. Instead of fixing it—and making sure that we do get a fair share of revenue from our resources and a proper revenue from superprofits made from the mining tax—the government wants to hand back billions to the mining companies that should be put into our revenue stream so that we can look after the most vulnerable, so that we can provide a universal health system, so that we can make sure that we index our pensions and our Newstart payments and our income support payments properly so that we do support the most vulnerable members of our community. But no. Instead, the government is looking after their big business interests mates.

I come from the state of Western Australia. I have heard told many times that this is killing jobs and killing profits in Western Australia. But as I just articulated, funnily enough, profits from mining have gone up in Western Australia. Yes, Western Australia has benefited from mining and we have benefited from the boom. I will come back to that in a minute. We do employ slightly more people in mining in Western Australia than we do in the rest of the country. However, about 92 per cent of Western Australians are not involved in mining in Western Australia—as opposed to about 98 per cent for the rest of the country. But in Western Australia we have had a two-speed economy. I had some work done on this a while back in my office and it clearly showed that if you are working in the mining industry, you are doing okay and getting higher wages. But if you are working in hospitality or retail or in the public sector, for example, you are not doing as well as those in the mining industry. But you are still expected to pay the high house prices that we have in Western Australia. You are still expected to pay the high rent prices we have in Western Australia—because, I will tell you, trying to find a house to rent in Western Australia is like finding hens' teeth. You are still expected to pay the higher cost of living in Western Australia. You still have to be part of a health system that is cracking at the seams. You still have to live in an economy that is geared towards those high-end earners and pay the prices they are paying. If you are in aged care, you still have to be finding workers to work in the aged care, because they are all going off to work in the mining industry. If you are working in farming, it does not take very long before people working in agriculture realise that they can make more money out of working in the mines. After they have been trained, off they go to the mines.

If you fall out of mining, then—because you have been used to the high payments in mining—it is very difficult to make those hire-purchase payments and things like that. Also, a lot of younger people who have gone into mining have not completed their technical training, because they have been enticed into mining, and then, when they fall out of mining, it is very hard to get a job without any other qualifications—I know that because I have spoken to a lot of people who work with people who have come out of mining without the adequate training and skills to find work elsewhere.

So, in Western Australia, yes, we benefit, but we also have the downside, which is a two-speed economy. And that issue has not been adequately dealt with.

Of course, as we have touched on, and as some other members in the chamber contributing to the debate have touched on, this bill also repeals some very important supports for families, for communities and, particularly, for people who are on lower incomes. For example, the Income Support Bonus is gone. I acknowledge that it is not a lot of money; it is about $105.80 if you are single, and it is paid twice a year. As I pointed out, I think we worked out that it was a cup of coffee a week. But when you do not have much money, every dollar counts. And that money is important when you are on a low income.

Then there is the schoolkids bonus, and that is extremely important to people on low incomes. It is extremely important to single parents, because—and we have traversed the debate on this issue a number of times in this chamber—the successive cuts that have impacted on single parents make it even harder for them to survive. The schoolkids bonus provides a little fill-up, just when they need to get their kids into school or to buy them new school uniforms or buy them necessities, and I have had single parents talk to me about the fact that it has actually helped make ends meet after school holidays, or just as their kids are going into school—because we all know that that is a very expensive time. Also, remember, they threw single parents onto Newstart, and, when they did, a number of single parents told me that they were advised by people at Centrelink to use their schoolkids bonus as a top-up, because they had lost so much money through being dumped from single parent payments onto Newstart.

Then of course you have the low-income superannuation contribution, the loss of which is going to disproportionately impact on women. It is outrageous of this government. It has not fixed the high-end super contribution issues. It picks on the most vulnerable members of our community. Great job! While you look after your top-end-of-town mates, you impact on the most vulnerable members of our community. The low-income superannuation contribution was designed to help those on low and fixed incomes of under $37,000 a year, to help them build up even a modest retirement income. This is from a government that wants to make those same low-paid workers work until they drop, until they are 70, with no adequate super. And they are not doing enough to help them find work, either, when they fall out of work as older workers because they are being discriminated against. They cannot take a trick, these people. They are impacted every single way you look at it, and now you are going to add another hit to them. This cut disproportionately affects women, and Industry Super Australia has said that axing the rebate will affect around two million working women, including 80 per cent of female part-time workers. Older workers—in particular, women—already face discrimination in the workforce, and they have a variety of obstacles to improving their superannuation. It has been well known for a long time that there is a group of women who have very significantly low superannuation, and now you are going to give them another hit; now you are going to give them another cut. Well done! I hope you feel proud of yourselves! While you are looking after your vested interests and your mates at the big end of town, you are impacting on the most vulnerable of Australians. It is outrageous.

This government is clearly running to the calls of the mining industry. We supported the concept and the principles of a strong, effective mining tax, because we know that it is important that the resources of Australia help to contribute to the wellbeing of all Australians. We will not be supporting the repeal of this mining tax. It should be improved, not taken away. And we will not, as I said, support it. We have amendments before the chamber to make sure that these important components of the mining tax are retained. We will not be voting yes to get rid of this mining tax.

We will not help the Treasurer to undermine the budget—because that is what he is doing. The ridiculousness of him going on radio this morning and saying, 'I'm going to have to make more cuts because the Senate has torn holes in our budget,' when he himself is proposing to get rid of two effective generators of revenue for this country, the carbon price and the mining tax! Billions and billions of dollars he and his government are cutting. Well, we will not be aiding and abetting that. We will not be supporting the repeal of the MRRT.

7:43 pm

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2], and to draw attention to Labor's embarrassing economic credentials and its history of overpromising and underdelivering. When it was first proposed, the minerals resource rent tax was expected to generate some $49.5 billion in revenue, encouraging the Labor government to lock in some $16 billion in expenditure over the current forward estimates. Instead, it has generated just $340 million in net terms. But, more than that, it has created an economic and regulatory environment which spurns investment.

But I want to take you, Mr Acting Deputy President, to my home state of South Australia. The Labor government has based its entire state budget on what went on to be the abandoned expansion of the Olympic Dam mine, which was supposed to deliver huge employment numbers and growth for a languishing South Australian economy. That was not only a blow to the economy but, significantly, a blow to the confidence of all South Australians. Like its federal counterpart, the state Labor government spent its money before it earnt it, and it is of great concern to me that that same Labor government is still in office today.

The minerals resource rent tax was another poorly constructed, poorly executed Labor tax that constrains businesses and shuns investments. Without the investments private enterprise makes, we will not have jobs in Australia and we will not have much of a future. As such, I support this bill that will repeal this useless tax.

7:45 pm

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party) Share this | | Hansard source

The government has shown its true colours with the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]. The minerals resource rent tax is an efficient tax designed so Australians can share in the wealth we all own. We have a fundamental view that Australians deserve to share in the benefits of minerals we all own.

The repeal of the associated measures will hit Australians right across the board, especially those who can least afford it. It is an attack on all corners of society. Low-income earners, and women disproportionately, will suffer with the removal of the low-income superannuation contribution. Then there are the children of ADF veterans. Small businesses will suffer from increased taxes and compliance costs. Over 50s on the Newstart allowance who require income support to deal with unexpected living costs will not get assistance.

Another associated measure—and the list does not stop—is the discontinuation of company loss carry back. On that one alone I really cannot understand where the Liberal free enterprise spirit is. They do not want to assist small business; they do not want to help small business. In fact, they have said that a good tax and a good system, such as discontinuing company loss carry back, is plain dumb. This will hurt small business. You should be ashamed of yourselves.

Then there is the reduction of the instant asset write-off threshold from $5,000 to $1,000. Why do you hate small business? It does not make sense. Why do you hate small business? They want to discontinue vehicle accelerated depreciation. Again, why do you hate small business? There are many small businesses that could use the loss carry back and higher threshold for accelerated depreciation. Do you think small businesses ride bicycles? That is the only solution I can think of.

Then there is amending the geothermal exploration treatment, rephasing the superannuation guarantee increase and abolishing the schoolkids bonus. There is not a corner of society that they have not attacked in this repeal legislation. We oppose this repeal because it is economically irresponsible and hurts most those who can least afford it.

I was interested to read in The Australian this week that the Reserve Bank Governor, Glenn Stevens, has echoed concerns that we on this side have about the minerals resource rent tax. I think the heading says it all: 'The resources boom should have delivered more'. We benefited from the upswing of the mining boom and welcomed foreign investment—well, not all of us; some of the Nats in the corner over there probably did not welcome it as well as they should have. As we know, they are doormats to the Liberals. They rolled over with the Korean FTA, they really did. Thank goodness they did. We benefited from the upswing and welcomed foreign investment and jobs for construction of railway lines and infrastructure. However, we can draw a line here. The investment phase of the mining boom is coming to an end and the extraction phase is beginning in earnest. So the rivers of iron ore and coal are flowing but, unlike in the investment-construction phase, there will be fewer returns for Australians and more of the returns will flow overseas should this bill pass tonight.

That does not change investment decisions because investment decisions are long-term. They were made five, eight or 10 years out. We all follow that when you have a construction phase you then have a production phase. We are now entering the production phase where there will be opportunities for a return on the investment. This bill is going to squash that just when it should be working.

Economists are in agreement that most other taxes are less efficient than a rent tax. Cutting the minerals resource rent tax just increases the reliance on the more inefficient and less equitable taxes. But I am not surprised. This government has embraced taxes. It loves taxes. It used to say that we should lower taxes. If you look at the range of work that they are doing now, they are embracing taxes. We will get an opportunity to see their outcomes.

Let us turn to the associated spending measures. The Reserve Bank Governor is notoriously reserved. For example, he said in his monthly report about challenges for the Australian economy, 'Public spending is scheduled to be subdued.' Statements like this are perceived by the market to mean that the government's budget cuts will impact growth by reducing overall demand in the economy. It is not such a subtle message. I think the Reserve Bank has overreached itself in making things plain. It normally resorts to more subtle language. In plain language, in language we would understand: taking money out of the economy as the mining boom changes from investment to extraction puts Australia's growth at risk. That is what it does, short and simple.

I was also interested to read an article by Moody's Analytics about the effect of the government programs on the economy in the US. Tax cuts to high-income earners has little effect on increasing the GDP. There is only 35c extra GDP for every $1 of high-income tax breaks. Again you are using bad opportunities when you have good ones in front of you. However, the American child tax credit resulted in $1.38 increase in GDP for every $1 spent. The Washington Post said of this effect:

… tax cuts for lower-income Americans have a much larger multiplier effect on the economy … as they're more likely to spend their tax savings immediately rather than tuck them away into savings accounts.

We, on this side of the chamber, know this is true from our lived experiences. It is a pity some of those on the other side do not have the same lived experiences.

The money from the schoolkids bonus is not squirrelled away for a rainy day. It is needed for the expenses of children at school. The schoolkids bonus is designed to go to people when they need the extra money. When the schoolkids bonus is removed for the purposes of this bill, low- and middle-income families will be hit to the tune of $410 a year for primary school students and $820 a year for high school students. The expenses for parents of school-age children are great—new shoes, schoolbooks, maybe a laptop, maybe an iPad, new uniforms, and the list goes on. That money that is spent by parents goes straight into the non-mining economy. It is also worth noting that the non-mining economy needs some help after the hit to consumer confidence from the budget and the pressures on the Australian manufacturing industry caused by this government.

What about the over-50s who require income support to deal with unexpected cost of living increases? We know this allowance also goes straight into the economy. The over-50s will not get assistance if this repeal is successful. It is a modest payment, that is recognised, of just $210 extra per year for singles and $350 extra per year for couples. The abolition of this payment is opposed by National Seniors Australia. Who would doubt that the seniors need this payment? Who would doubt this payment goes straight into the economy, paying for the emergency plumber or those unexpected medical costs? You do not see seniors squirrelling the money away for a rainy day; it goes into the economy.

The mining companies may squirrel money away. Where will the majority of their gift from the government go? The gift from the government of $3 billion from the resources that we own will go to the owners of the mining companies, which are predominantly overseas owned. This is money that lost to our domestic economy. The Australian Institute states:

... this package as a whole transfers income from something like 10 million Australians, including the poorest ... The main beneficiaries … are a handful of foreign owned corporations that are collectively worth $200 billion.

So when it comes to cuts and increased taxes, where does this government look primarily? It does not look to the big mining companies—it does not there at all. It looks to those on low and middle incomes. This is bad for the economy.

Let me make a prediction. We can expect a negative effect on the GDP for every dollar taken out of their pockets. The cuts associated with this bill and the other cruel cuts in the budget target those who can least afford it. Not only is this cruel to those on low incomes and those with children; it damages growth and damages business confidence. But hurting the economy is just one reason not to remove the measure associated with the minerals resource rent tax. The repeal of these measures will cause real hardship for hardworking Australians. I have ready touched on the hardships that families will feel from losing the schoolkids bonus, a hardship at a particularly tough time. I have also touched on the income support bonus, a payment of little over $200 that goes to Australians who are most in need. Children of veterans aged under-16 who are homeless or living away from home, or those under 25 who are unemployed or studying full time would have been entitled to receive this payment. It is a small thing to recognise their service, but the coalition have decided that these people do not deserve our country's support. Quite frankly, that is a shame.

The removal of the low-income superannuation contribution, despite a promise by the Prime Minister to not implement adverse changes to superannuation, will affect individuals by cutting the super of millions of Australians earning up to $37,000. But it will increase the super for the 16,000 people who have over $2 million in super balances. I think that says it all. That represents the modern coalition government. They will take from the poor and make sure the rich get richer. The MRRT repeal will increase superannuation taxes on one in three of Australia's lowest paid workers. This is a very strange move from a party that claims to be the party for lower taxes. No wonder Senator Cory Bernardi thought they had lost their way!

It is those on low and middle incomes, especially those in rural and regional areas, who will be disproportionately affected by the removal of these measures. Twenty-four of the 25 electorates that will be hardest hit by the removal of the low-income super guarantee are in—guess where?—rural and regional areas. They will be impacted the hardest. I have no doubt that the National Party will go out and tell them that! They will walk out of this place and go to their electorates and say: 'By the way, we've got rid of the MRRT and in the meantime we are also taking super from you. Isn't that fantastic!' I would have expected the National senators to have opposed this and to be up in arms. But we all know their histrionics. They like to play the game in here, but they go back to their electorate and there is not a whisper.

It has been a long time since the Nationals have stood up for working people in rural and regional Australia. One surprising proposal is their cuts to local government. That will hurt local communities.

Senator Mason interjecting

Senator Jacinta Collins interjecting

That's fantastic! I had a letter from the mayor of Cowra telling me that cuts to the financial assistance grants will hurt the shire—$38,000 out of their budget in the first year that will not be spent on local roads and community bridges and infrastructure. And you wonder where the Nationals are when it comes to their local communities in regional areas Nowhere. They may be here, but they are not there supporting their regional communities. Cuts to superannuation hurt infrastructure. Superannuation invested in super funds drives investment in infrastructure in Australia. Industry Super Australia estimates that, combined with the proposed delay in increasing the superannuation guarantee to 12 per cent, the removal of this superannuation will reduce national savings by $53 billion by 2021-22. That is $53 billion less invested in projects like Australian infrastructure. The reduction in available capital for infrastructure investment is forecast to be $5 billion based on current industry-wide asset allocations. This is at a time when the government is scratching around for funding streams to finance new infrastructure projects. Rural communities especially need this vital infrastructure.

Low-income superannuation contributions are important for many reasons while, for high-income earners, superannuation does have tax advantages. However, for low-income earners there are effective incentives to encourage superannuation contributions. That is why they structured the low-income superannuation contribution, because it addresses this very issue and stops low-income earners being at a disadvantage when it comes to savings. The Financial Planning Association of Australia was clear on this point. They said repealing the low-income superannuation contribution will disproportionately affect already disadvantaged members of Australian society and dissuade low-income earners from engaging with their superannuation. The removal will particularly hit women; 2.1 million women will be affected. Many are mothers working part-time while looking after young children. This is exactly the part of a woman's career where an additional $500 a year going into superannuation will be of the most benefit for building savings now and into the future for her retirement.

The 20 big miners are going to get a gift of $3.3 billion, and Australian businesses and taxpayers will lose out. The budget—and the approach that the government has adopted since taking office—says a lot about the values of this government. A tax grab on millions of Australian low-paid workers to give a tax refund to large mining companies seems to now be Liberal Party values. The minerals resource rent tax is not paid by a young family; a pensioner does not pay this tax; a truck driver, a farmer and a shearer do not pay a cent of this tax. The only group that pay this tax are mining companies with profits over $75 million. Only those with profits over $75 million begin to pay this tax—fewer than 20 companies in 2012-13. However, the people who suffer from the MRRT repeal are more diverse: small businesses, parents, school children, people saving for their retirement, those on low incomes, those exploring for geothermal energy, and the children of veterans.

The coalition rails against class warfare. However, when you look at the coalition and this bill, they practice class warfare to a tee. They are taking from small businesses, retirees, pensioners, parents and school children to increase the rent extracted from a shared resource by a select few who are earning profits over $75 million. That is the stark difference between the coalition—supported, surprisingly, by the Nationals—and us. The removal of the associated measures will impact on those members of the community who can least afford it. And you only have to look at the results of this. Again, I go back to where I started: I cannot fathom why you hate small business so much that you will not give them the tools to be able to have loss carry-back, to have accelerated depreciation, to have an asset write-off at $5,000—it does not make sense to me. Those on the other side have always said that they embrace small business and that they support small business. They are certainly not showing their colours now.

8:05 pm

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

For many months, we have been told by this government that we have a budget emergency. We have been told by the government that we have a debt crisis and that we are going to run out of money. Indeed, I think the Treasurer, Joe Hockey, went so far as to say that we were running out of money and the cupboard was bare. He effectively declared the country bankrupt. You would think that, faced with a crisis of such herculean proportions—conjuring up images of the soup kitchens of the Great Depression—a government would be looking very hard at potential revenue measures and savings. It might look at the huge savings that could be gained from the enormous fuel subsidies given to industries like the mining industry. It might look at all of the depreciation benefits given to those same industries—worth billions of dollars. It may even look at things like superannuation tax concessions—things that benefit, disproportionately, people on very high incomes over those on low incomes. It might even look at something like negative gearing. It might look at revenues and it might say, 'Well, maybe there is a case, given that our big four banks are so profitable and that we in fact underwrite their success, to say that they should be obliged to provide a fair return.' It might look at the current mining tax and say, 'Well, why not strengthen it? Why not look at how we can ensure that we get a fairer share of the revenue from the mining industry?'

It might even look at the industries that are ensuring they pay very little tax here, looking for tax havens overseas and involved in one of the greatest corporate tax avoidance schemes that we have seen. You would think that might be a rational, reasonable reaction when faced with this budget crisis that lies ahead of us, but what is their reaction? Our budget emergency is so extreme, so severe and so catastrophic that, faced with that enormous challenge, one of the first acts of this government is, on this day, to get rid of $20 billion of government revenue. Sit back and think about that for a moment. This is a budgetary crisis of such enormous proportion that today we are wiping $20 billion from the budget bottom line. If there were ever proof that this budget emergency, this debt crisis, is simply a fabrication—something concocted in a coalition backroom today—you have seen the evidence.

The debates today have not just been debates about the mining tax and, earlier, the clean energy laws and the carbon tax. They are not simply debates about those taxes in isolation. They are debates about the sort of country we want to be. They are debates about priorities. They are debates about whether we can provide the things that the Australian community wants. We have choices. We can choose to keep the revenue from the mining tax. We could have chosen to keep the revenue from the carbon tax and we could have invested billions of dollars in health care, education, science, research and development, and vital infrastructure. We could have done that. We could have chosen to invest that money in the things that the Australian community say, time and time again, they want their government to do.

The other choice is this: we abolish those taxes and we slug the sick, the poor and the young in an effort to implement our agenda, which is a harsh agenda, that says, 'Get out of the road, Government. If you're sick, if you're poor or if you're young, we're no longer going to look after you.' It is a great tragedy because we had an opportunity today to not just save the mining tax but improve it, strengthen it and return to the original tax proposed by Kevin Rudd, backed by Treasury, to bring in billions of dollars more of revenue. It is a fair tax. It is a tax that says: 'If you're making extraordinary profits, most of which go offshore, you owe the country a fair share,' because the resources, the minerals, underneath our feet belong to every one of us. That is what we should have been doing today.

How do you reconcile where we have got to? How do you reconcile the mismatch between the rhetoric and the actions of the government? How can you understand, at a time when we have this enormous budget emergency, that we are slugging the people who can least afford it and we are abolishing sensible sources of revenue? I think the answer represents everything that is wrong in Australian politics. I think that is where it comes from. It is a testament to the power of lobbyists and vested interests who have unprecedented access to the decision makers in this country. Every day you see them walking through the corridors, knocking on doors, inside and outside of ministerial offices—people who are here to advance their own interest ahead of the national interest. The line between what is a lobbyist and what is a decision maker has become more and more blurred in this place. We are now seeing people from industry becoming employed as members of staff and, indeed, in some cases, becoming members of parliament, doing the bidding of big business rather than putting the national interest first.

It is not just a story of the power of special interests; it is also a story about the lack of political courage and conviction. It is the lack of political courage and conviction that gives the special interests in this place their power. We no longer believe enough in a cause to take a stand and say, 'We will fight this and see it through.' We have seen it with a number of other reforms. We saw it with poker machines; we saw it recently with junk food advertising and junk food labelling; we saw it with alcohol—we have seen it with a number of areas where the interests of a few are put ahead of the national interest. We need to realise that those groups only have their power because we give it to them, because we are not prepared to take up the fight. We are prepared to cave-in in the face of cashed-up advertising campaigns. We need to ensure that we put the interests of people who want a decent education, decent health care and, if they are down on their luck, welfare support. We have to put their interests first.

It is also a story about the huge disconnect between our politicians and the community. There is an emerging disconnect. When a government chooses to abolish sensible revenue measures and implement a budget so harsh, so brutal and so severe—a budget that effectively destroys the social contract that was built over decades—you know something is wrong.

We have heard a lot of discussion about mandates and this government's mandate to implement these policies. But these choices were never put to the Australian community. We now have a government that is governing not because it was honest enough to put these choices to the Australian community but simply because it is not the current opposition. That is what the last election was about. The election of 2013 could have been summarised in this way: vote for us because we're not them. That is your mandate: to govern because you are not the opposition. It was an election campaign that was devoid of any vision, ideas or policies of substance. So do not mistake your election victory as a mandate to abolish these sources of revenue and, instead, tax the sick, the poor and the young. Do not make that mistake. The truth is that you were too frightened to put those choices to the Australian community. And do you know why you were frightened? Because you knew you would lose.

Faced with the choice: do we want a fair mining tax, a decent education system, a decent health system and welfare support for people when they are down on their luck? We know what the Australian community want. They have said it time and time and time again. Most Australians want decent health care. Most Australians want to be able to go to the doctor and not have to think about their bank balance before they do. Most families want to send their kids to university and not have to think about what the legacy of that education will be for their children.

Most Australians want adequate investment in infrastructure. They want fast, frequent and reliable public transport. They want investment in science. They do not want cuts to CSIRO. They want to see that institution expand and grow. They want investment in research and development. And they would support a stronger mining tax if they knew that that was the choice in front of them. But you did not give them that choice, because you lacked the courage to do it. You knew your vision was so brutal, so unpopular, so lacking in support that you were afraid to put it to the Australian community. Instead, we have a government that uses the word 'mandate' as though it has some meaning. You are only governing because you were dishonest and because you are not the opposition. That is why you are here.

So I simply say this to Prime Minister Abbott: 'If you are determined to scrap these taxes and shred the social contract that we fought so hard over so many decades to establish, understand this—you do it at your peril.'

8:18 pm

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | | Hansard source

I too rise tonight to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No.2]. Labor believes that all Australians own a share of our mineral resources. Labor believes that all Australians should share in the profits that come from extracting our natural resources. That is why Labor, when in government, introduced the MRRT.

Those opposite are seeking to repeal this tax. The Abbott government is happy to see all these profits go straight into the pockets of just a few people. This government is beholden to the special interests of big business and the super rich. This government, by its first budget, has clearly shown that it does not understand the pressures facing low- and middle-income Australians.

To justify the repeal of this tax and the so-called related measures in this bill, those opposite rely on two contradictory arguments. Firstly, they argue that this tax is hurting industry. Secondly, they argue that it is not raising any revenue. They cannot have it both ways. In addition to repealing the MRRT, the bill before us today axes a variety of government payments, support bonuses and tax breaks that benefit Australians. These are initiatives, introduced by the Labor government, that make life a little easier for families, schoolchildren, retirees and businesses. But now those opposite want mining companies, making superprofits, to pay less tax and they want small businesses and the lowest paid workers to pay more tax. This legislation is a retrospective tax grab, which will hit millions of Australians—low-income earners, families and small businesses—and will give a tax refund to large mining companies. That is why Labor will again oppose this bill, the removal of the minerals resource rent tax and associated measures.

I wish to speak further about some of the associated measures. The first of those measures in the bill is the schoolkids bonus. Many in this chamber will remember that the Treasurer, Mr Hockey, put out this legislation to the public late last year, on a Friday. Attached to this piece of legislation, to many people's amazement, was the repeal of the schoolkids bonus.

This payment currently benefits over 2.2 million school-aged children across the nation. It is a payment that is not linked in any way with the MRRT, despite the government's rhetoric. This is a vital payment that helps low- and middle-income families ensure that children are equipped and ready to engage in school. According to evidence given by ACOSS to the Senate Economics Legislation Committee inquiry into the Minerals Resource Rent Tax Repeal and Other Measures Bill, one in six children in Australia is living in poverty. That is over half a million children whose families may be unable, without the schoolkids bonus, to buy them school shoes or books. These are the very same families that have been hardest hit by the vicious cuts in the Abbott government's budget.

Evidence has been provided to me by the President of the Tasmanian Association of State School Organisations, Ms Jenny Eddington, who has indicated quite strongly how important and effective this particular payment is to families to enable them to provide the necessities that children need to be able to go to school.

Earlier this month about 1.3 million families welcomed the July instalment of the schoolkids bonus. This instalment of $205 per primary school student and $410 per high school student will help families—and it has been shown that it has been effective and is helping families—with the cost of school uniforms, shoes and sports equipment. In my home state of Tasmania more than 35,000 families received this payment. Many of these families have contacted me to tell me how important this payment has been to them, and just recently we tabled a petition in the Senate asking that the schoolkids bonus be spared from the Abbott government's axe.

The Tasmanian Association of State School Organisations President Jenny Eddington told me that the surveys they have conducted show that families rely heavily on this payment to properly equip their children for school. She said: 'It's important we keep this bonus. It's one of the single most valuable payments that has been made in recent years.' School associations have told me that, since the schoolkids bonus was introduced, there have been more children arriving better-prepared to start the school year and there are fewer parents taking out payment plans to pay off their levies.

I know that those opposite do not understand this. They do not understand the financial pressures facing families, or they would not be taking this measure. They do not understand how important this payment is to help families meet the cost of their children's education. It is a fair and reasonable payment that has helped many Tasmanian families, especially those on low and middle incomes. But as we have seen in the Abbott government's first budget, they do not understand or do not care about—I prefer to believe they do not understand—the financial pressures facing low- and middle-income families. We need to ensure that our kids are as well-equipped as possible to be able to get a great education. It is a real kick in the guts for hardworking families putting their children through school.

Scrapping the schoolkids bonus means the average Australian family with two kids will be $1,230 worse off every year and $15,000 worse off over the life of their child's education. It is a cruel and underhanded move by the Abbott government which will hurt families who are already struggling. Not only is this government ripping off Australian families, it is trying to fool them about the reasons why. Those opposite claim that the schoolkids bonus was paid for by the MRRT. It was not. It has nothing to do with the minerals resource package, and those opposite know it. The schoolkids bonus replaced the education tax refund. The education tax refund was introduced in 2008 to help families cover the cost of educating their children. However, more than 80 per cent of families did not claim the full amount they were entitled to and 20 per cent did not claim anything at all. Some families lost their receipts, or simply did not keep them, or were unable to afford to pay for their children's school uniforms or other education costs first up and then wait months, or even up to a year, for a reimbursement on their tax. The schoolkids bonus simplified the process by making two up-front payments to parents when they needed it most. This government is trying to play Australian families for fools by repealing the schoolkids bonus as part of this package and as part of this bill.

This government seem intent on misleading the Australian people by blaming the minerals resource rent tax for cuts that have absolutely nothing to do with the tax. When the Prime Minister visited Tasmania he said regional development funding would be scrapped because it was paid for by the minerals resource rent tax. Here is what he said at his press conference in Wynyard in north-west Tasmania when asked about a Regional Development Australia Fund grant budgeted in May for the redevelopment of the Royal Hobart Showgrounds at Glenorchy in the electorate of Denison:

[It was] associated with the mining tax. Because we are abolishing the mining tax, we would abolish the programs and funding associated with it, unless we specifically committed to it ourselves. Sure, the [Labor] government announced the money for the showgrounds out of those funds. We didn't match it, so we are not committed to it.

So Mr Abbott is trying to use the minerals resource rent tax as a front to scrap vital infrastructure funding for Tasmania—a job creating project. It showed the Prime Minister clearly had not done his homework and clearly had no regard for jobs in Tasmania. The money for the showgrounds was not a part of the minerals resource rent tax. Labor put this money in the budget under the Regional Development Australia Fund. Despite the fact that Mr Abbott had his wires crossed and had not done his homework, his statement clearly shows that he would rather line the pockets of big mining companies than help communities like mine create jobs and growth.

I would now like to talk briefly about the low income superannuation contribution. The low income superannuation contribution, which helps one-third of the Australian workforce, is also on the chopping block here tonight—and Mr Abbott's government plans to implement that retrospectively. The low income super contribution currently benefits almost 3.6 million Australians who earn up to $37,000 per year by refunding their superannuation tax by up to $500 each year. We should not penalise the lowest-paid workers in our society for saving for their retirement, and certainly not retrospectively. Those hurt most by losing their low income super contribution are those who can least afford it.

Analysis done last year showed that 87,000 Tasmanians would benefit from the low income superannuation contribution. And now checkout operators, office cashiers, childcare employees, hairdressers, hospitality workers, midwives, receptionists and many others will lose this support. Part-time workers, young workers, older workers and half of the female Australian workforce will be hit by this move. Women face many challenges when saving for their retirement. We are paid less on average, often leave the workforce temporarily to have children, are over represented in lower-paid jobs and face barriers later in life. It is sickening that Minerals Resource Rent Tax Repeal and Other Measures Bill, which puts more money in the pockets of the big miners, penalises half of the female workforce in this country. It goes completely against the Australian values of equality and fairness.

The ABC has reported that, according to Industry Super Australia, this action by the coalition, those opposite, would cut as much as $27,000 from the retirement savings of almost 3.6 million Australians, and mostly—I will repeat for the benefit of those opposite—women and young workers. This is according to the body representing industry funds, Industry Super Australia. Industry Super Australia's chief executive David Whiteley says the changes are unfair and unsustainable. The ISA's submission also says the changes will disproportionately affect four in 10 regional and rural Australians. Mr Whiteley said the changes leave low-income workers without a tax concession on their superannuation, while those on high incomes already receive concessions. To quote Mr Whiteley: 'We would be very keen to see that this committee recommends to the parliament that every option is exhausted to make sure that all Australians are getting access to tax concessions on their super.' The ISA warns axing the rebate will undermine efforts to improve half of working Australian women's retirement savings, including 80 per cent of female part-time workers—all this as Mr Abbott's government plans to roll back the proposed 15 per cent tax on superannuation earnings over $100,000 a year.

As our population gets older, how on earth can it make sense to gut the superannuation savings of ordinary, working Australians? Surely the government would want retirees to prepare for an independent retirement? But here Mr Abbott is hacking away at the superannuation savings of low-income earning Australians to line the pockets of big miners. It is bad enough to ramp up taxes on workers who can least afford it, but making the new rules retrospective is cruel.

The Liberals have never supported the superannuation guarantee. Mr Abbott is on record as saying to parliament as far back as 1995:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

And in 2012 he stated:

We have always as a Coalition been against compulsory superannuation increases.

This is a government that is against helping out hardworking Australians on lower incomes—all the while shovelling money back onto the pile of money the big miners are already in possession of. It is not how the resources of our country should be used. The benefits they bring should be shared by all of us, especially those in our workforce. But this sort of mean-spirited move is, after just a few months, already becoming Mr Abbott's government's trademark.

I will take a few months to comment on the changes to the instant asset tax write-off and the loss carry-back tax incentives. These changes show that it is not just workers who are in Mr Abbott's sights; the leader of the Liberal Party, the so-called friend of small business, plans to make life tougher for small business as well. The Prime Minister plans to axe Labor's increase to the instant asset tax write-off, which saved businesses thousands of dollars at tax time. Under Labor's initiative, small businesses were able to write-off depreciating assets that cost less than $6,500. Those businesses have now been given until 1 January to make their purchases before the figure reverts to the former Howard government figure of $1,000.

The loss carry-back tax incentives allowed businesses to spread up to $300,000 as a refundable tax offset via the carry-back provision for the previous two years. Mr Abbott's cutting of the loss carry-back will hit more than 100,000 companies and will tear more than $900 million from the Australian economy. This was a law that allowed businesses to adapt to changing business and economic conditions. Similar schemes are in place in other developed economies, including the United Kingdom, France, Germany and the United States. These 100,000 companies have been given less flexibility, making it much harder to do business. How can that be good for businesses? It does not seem to matter to this government or Mr Abbott—as long as those big miners get their money.

Mr Abbott's push to strip back the minerals resource rent tax and to cut tax concessions, payments and bonuses is not only unfair but is also unpopular. In an article in the Australian on 4 November the headline rung out 'Business takes aim at MRRT repeal'. The article by Sid Maher said:

A TOP business group has attacked Tony Abbott's plans to scrap nearly $4 billion in tax concessions for mainly small businesses as part of the axing of the mining tax, arguing that it will permanently increase compliance costs and cut investment returns at a time when business is struggling.

The Australian Industry Group has told the government that its plans to reduce the thresholds available under the small business asset write-off regime from $6,500 to $1,000 'will add complexity and compliance costs for eligible small businesses'. Ai Group chief executive Innes Willox said in a submission:

It will subtract from their cash flow over the next few years at a time when many small businesses are struggling and it will reduce the return on new investment at a time when there is weak investment outside of the mining-sector.

The Liberal Party, the so-called friend of business, is so clouded by its determination to give money to the miners that it will hurt businesses. At a time when this country needs to be encouraging small business and diversifying the economy, Mr Abbott simply wants to rip money out of the economy and place it back in the pockets of the big miners. Schoolchildren, families, workers and business all will cop it so the miners get their money. It is a growing list of people who are unhappy with the Abbott government's move. But there is more. Australians on a raft of allowances are also set to suffer, with the loss of the income support bonus. This payment provides $210 extra per year for singles and $350 extra per year for couples. I have not much time left to me, but I will repeat: this bill before us is set to hit workers, families and businesses. It is an unfair bill. It is a bill that only benefits the big miners and it rips money from those that can least afford it to give back to the big mining companies.

8:38 pm

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

What a week! We have seen the government really deliver in spades, so to speak, to the mining industry. They are right out there, you would have to say—sycophantic, pandering. It is going to be tough, because, when you do not have such a revenue stream coming in, somebody has to pay. What we are seeing here is a very clear reason why the coalition has earnt its name as the party of the one per cent. The government is actually propping up a dying industry, particularly when it comes to the mining of coal and the use of coal. The world is starting to turn its back on this industry—and that is why, at this moment, when Australia does have these resources that are being mined, and sections of the world do want them, rather than repealing this tax, we should be strengthening it. That is something that the Greens have long worked for and that is what should be happening tonight—but we know in fact it is going in a very ugly direction.

We will lose this very rich revenue stream. It is very simple, what is going on here tonight. Mining companies make massive profits, huge amounts of money, out of digging up the resources of this country. Surely much more of that money should come back to Australia, because by far the bulk of the profits go overseas. And we are talking really big profits. Just take three of the big mining companies—BHP, Rio Tinto and Xstrata. They are on track for $30 billion in after-tax profits for one year. That is not unusual. That is what has been going on year in, year out. I certainly acknowledge they are not just the profits from digging up our mineral wealth—they come from around the world—but a lot of the profits come from Australia. And, like they are ripping off Australia, so many of these companies are ripping off other countries, particularly many of the low-income countries.

I think we also need to ask ourselves: when we lose this revenue stream, who will pay? It will be the disadvantaged, who are copping it as we have seen set out in the budget. People who have been really targeted in this budget include the sick, Indigenous people, the elderly, students and people who are unemployed. They are the people who will carry the burden. Also it will be working people, because the taxes, the money, will have to come from somewhere. We again need to remind ourselves that the mining tax could be and should be a rich revenue stream. That was what was originally envisaged by the Henry tax review. It could have brought in $35 billion in the original form, with some of the loopholes plugged. That is where we should be heading. That is what big business should be paying for.

I think it is worth reminding ourselves what that money could and should have been spent on. This is the Australia that I think most of us envisage. It is just that, unfortunately, the policies of this very conservative, neoliberal government cannot deliver it for us because of the mean, greedy way they operate. We should have dental care. It is an extraordinary aspect of our medical service that the health of our teeth is not covered in a free universal health scheme. We should have high-speed rail—something the Greens have worked on for so long, along with so many in the community—along the east coast. The jobs boom that that would bring is so exciting. But, if we do not have the revenue there, it is certainly off for a long time. There are issues to do with disability, with welfare, with public education. With regard to our higher education system, so much of Europe still has a free higher education system. This is not just light talk. This is not just something that is a dream of a past era. It is achievable. The revenue is there. We need a government with the political will to raise the money. Then there is the all-important area of overseas aid. We heard just yesterday that the government has come up with another way of taking money out of the overseas aid budget. Again, this is where we should be on track to get to 0.7 per cent of GDP, and we could be if the government had the political will to stick with and improve the mining tax.

I congratulate Senator Christine Milne and the Greens MP for Melbourne, Adam Bandt, who have consistently worked to strengthen this tax and save this important legislation. We have to acknowledge that this legislation has had an unfortunate history, with Labor watering it down from what was originally envisaged. That certainly was a setback. There has also been the problem with the loopholes. A deal was negotiated with the big miners, and they won hands down and the Commonwealth lost out. We lost out at a federal level in terms of funding, because every time the state premiers raised royalties it was a hit to Commonwealth revenue. The Greens worked, with a private member's bill, to try and tighten up those loopholes and eliminate them. Again, there were so many possibilities with this legislation, and this was a big setback.

We also need to remember that a part of this story that we are dealing with tonight is the power of the mining companies. That is why Labor went for a weaker form of the tax and the coalition have delivered in spades. The coalition and Labor have benefited. Considering the wealth of the mining industry, I do not think it is that much, but, since 1998, the political donations to the Labor, Liberal and National parties run at more than $11 million. That is the amount of political donations to those parties over the period of time since 1998. These companies probably think it is just a bit of petty cash for them, considering the profits they make and what they get back. But they have got a lot more than just this weakening of the tax. I am from New South Wales, and what I have seen, year in, year out, from successive state Labor and coalition governments is a weakening of laws and a level of corporate welfare to the mining industry that is really quite staggering.