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Monday, 21 November 2011
Page: 12938

Mining

Mr HOCKEY (North Sydney) (14:52): My question is to the Treasurer. I refer the Treasurer to the revenues forecast to be raised by the mining tax of $11 billion and the fact that New South Wales and Western Australia have increased their royalties by $3 billion, thereby reducing net revenue to the Commonwealth to just $8 billion. I also refer the Treasurer to the forecast spending associated with the mining tax, which is now over $14 billion. Treasurer, how are you going to find that $6.3 billion shortfall?

Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (14:53): He has got a lot of nerve and a lot of hide to ask that question. He has got one fact right and one only: there is $11 billion worth of revenue in the forward estimates—that is absolutely correct—but, of course, he has pointed to the fact there have been some royalty increases in Western Australia that will have an impact on revenues, and we will account for that in the mid-year economic review when it is published before the end of the year.

Regarding the attempted increase in royalties by New South Wales, there is yet no royalty increase in New South Wales. There is yet no figure provided by New South Wales.

Mr Hockey: It is in their numbers.

Mr SWAN: They did put it in their numbers, but they have not told us what they are going to do. If you accept that then you believe in the tooth fairy. There is no figure that can be validly put in any calculation, but the one thing you can be absolutely sure that we will do on this side of the House is that we will put in place fiscal responsibility because we are determined to bring our budget back to surplus in 2012-13, despite the fact there has been a significant hit to revenues from events that have occurred in Europe and the United States. There has been a flow-on effect, but we understand the importance of having a clear and consistent fiscal policy, particularly at a time when there is such uncertainty in the global economy. We will send a clear message to markets and to the global economy that we will manage our economy in a fiscally responsible way, and that is what we are going to do by bringing our budget back to surplus in 2012-13 and making responsible savings to do it when we bring down the mid-year review.

We will see where they stand on fiscal responsibility because the shadow Treasurer has got a $70 billion crater in his budget bottom line and, before he takes any new policy decisions, he starts with a minus $70 billion in his budget line. All of that is on the back of the debacle of the $11 billion black hole, which was discovered by the departments of Finance and Treasury.

The SPEAKER: Order! The Treasurer is straying—I have already indicated to the Treasurer.

Mr Hockey: Mr Speaker, I rise on a point of order, on relevance: I just ask him to answer the question he was asked.

The SPEAKER: The member for North Sydney will resume his seat.

Mr SWAN: Sometimes a difference of time zones causes remarkable events to happen. The Leader of the Opposition, who has talked down our economy year after year, a couple of weeks ago went to London, and you know what he said? Our economy was the envy of the world. 'Two-timing Tony'—he says one thing in Europe and another thing here when he runs down the economy every day of his life.

The SPEAKER: The Treasurer will resume his seat. The Treasurer must relate his material directly to the question.

Mr SWAN: Supporting jobs and good budget management is our No. 1 priority. It was our No. 1 priority when we dealt with the global financial crisis and the global recession. It remains our No. 1 priority as we set about spreading the great opportunities, which are flowing from the mining boom, to every corner of our country. The rock that that is built on is our commitment to return our budget to surplus in a responsible way with savings when we bring down the mid-year review. The challenge for those opposite is: will they support responsible budgeting and the savings that are required or not? The answer will be: no.

Mr HOCKEY: Mr Speaker, I ask a supplementary question. I refer to the statement by the member for Denison just before question time that only 20 to 30 miners will be paying in full the $11 billion mining tax. Given that one of the biggest miners in Australia, Fortescue Metals, has advised its shareholders that it will not be paying any mining tax for the next three years, isn't the $11 billion of revenue from this tax just an illusion? And will the government now release all modelling details on their flawed mining tax?

Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (14:58): We have put on our website the modelling for this tax. He knows that, but we have just got more distortion and more lies from those opposite. He also knows that we are supplied with commercial-in-confidence information which, if we published it, would have major effects on the market, and we simply are not that irresponsible. But the fact is that most of this money will be paid by the largest miners in this country. Of course, we now know the lies that have been told by Fortescue have been exposed—

Mr Dutton interjecting—

The SPEAKER: The Treasurer will resume his seat. The member for Dickson knows that he could get up and approach the dispatch box, but he continues to think that he can raise points of order by interjection. That is very foolish. He is now warned. The Treasurer will withdraw the remark, but I can indicate to the member for Dickson: it is to spite him that I have ruled that the Treasurer will withdraw. The Treasurer will withdraw and the Treasurer has the call after the withdrawal to continue his response.

Mr SWAN: Yes, Mr Speaker, I withdraw. The untruths that have been put forward by Fortescue have now been exposed at a parliamentary committee in this House. Fortescue went around and said they were a small miner and they expected to pay the tax. When they turned up here they admitted that they would not pay the tax and they also admitted that they have never, ever paid any company tax. So their opposition has been based on the fact that they do not want to pay any tax.

The effective tax rates paid by miners are lower than the statutory rate, and there is a legitimate reason for that. Because mining is very capital intensive they get a lot of deductions, and that means that in the early stages successful miners do not necessarily pay their company tax. I am not saying that there is anything wrong with that at all. What I am saying is that, when there are super profits that are unexpected, the Australian people should get a share of those for the mineral resources they own 100 per cent. And guess what? The mining industry actually agrees with that—except Fortescue, who act in their own interests and not in the national interest.