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Tuesday, 18 August 2009
Page: 8180

Ms COLLINS (3:15 PM) —My question is to the Prime Minister. Can the Prime Minister outline recent developments in the resources sector and the ongoing debate about future economic policy in the national interest?

Mr RUDD (Prime Minister) —I thank the honourable member for her question, because it goes not just to what government is doing in terms of providing stimulus to the economy but to what the private sector is doing to provide stimulus to the economy as well. And that goes, of course, to the future of our major resource projects right across the country—although we spent time earlier in question time today speaking of the critical role of small business.

I informed the House yesterday that the government of Australia and the Liberal government of Western Australia had reached an agreement in terms of the responsibility for the storage of CO2 in geological formations under Barrow Island as part of the Gorgon LNG project. That is a particular responsibility in terms of long-term indemnification arising from the sequestration action. But I draw to the House’s attention again the absolute financial significance of this project. If this project proceeds—although all approvals are not in place yet, and the Minister for the Environment has matters still to deliberate on—it will be a $50 billion investment. To put this into context, it is the largest single resource project in the country’s history. The government stimulus, if you take it together, adds up over time to some six per cent of GDP. This project in itself is worth about 5 per cent of GDP. It is a very large project indeed. That is why the Australian government, together with our other partners, has been actively engaged in deliberations on this with Chevron, ExxonMobil and Shell.

There are, of course, other projects which are being considered for future development as well. Yesterday I referred to Woodside’s $12 billion Pluto 1 development, which is well advanced. Chevron is also progressing the Wheatstone Project by awarding the onshore front-end engineering and design contract. Wheatstone, for the information of honourable members, is to produce first gas in 2016. A final decision to proceed with the project is expected in 2011. This project involves two LNG-processing trains, each with a capacity of 4.3 million tonnes per annum, plus a domestic gas plant and export facilities at Ashburton North, west of Onslow.

Finally, Origin Energy today announced that its joint venture with ConocoPhillips, Australia Pacific LNG, had secured the Laird Point site on Curtis Island in the Port of Gladstone as a site for its proposed LNG plant. The construction of this project is estimated to be worth approximately $35 billion and is expected to produce up to 16 million tonnes of LNG per annum.

The reason I make reference to these projects is that the government, supported by the resources minister, other ministers in the government and the Treasurer, are actively behind the long-term resources industry of this country. We believe that the decision that we took—

Opposition members interjecting—

Mr RUDD —I do appreciate the howls on the part of those opposite. It was this government which took a decision with the Liberal government of Western Australia in a cooperative national interest frame to provide the indemnification necessary concerning the sequestration of the CO2 off the back of the Gorgon project—a necessary precondition for the project proceeding. It was a decision of this government, not of that opposition; a decision of this government in partnership with the Liberal government of Western Australia.

That project is of particular interest to the parliament not only because of the job implications—6,000 Australian workers at the peak of construction and $33 billion worth of goods and services being purchased over 30 years—but also because of the $40 billion, prospectively, in government revenue which will be delivered from the project over time. Of course that is important for the funding of the rest of our much-needed economic and social infrastructure across the country, because the more that we have by way of revenue streams from the resources sector, the less pressure that places over time over the rest of the taxation system.

I notice that tax has been a subject of some debate here in this chamber today. I notice that the questions asked by those opposite about the Henry review could well have been asked at any time from May last year. That is when we set up the Henry review, that is when we laid out its terms of reference and that is when we said what exemptions would exist in relation to it on the GST. Since then, that process has been underway: a rational process in public policy development. What has changed today—

Mr Pyne —Mr Speaker, I rise on a point of order. There is a facility for the Prime Minister to add to another minister’s answer at the end of question time. This question was not about the answer the Prime Minister is now giving. If he wants to add to the Treasurer’s—

The SPEAKER —The Manager of Opposition Business will resume his seat. There is no point of order.

Mr RUDD —How embarrassing it is for the opposition to be confronted with a Leader of the Opposition whose 279 tax proposals are out there for the entire nation to behold. They have slipped the old Ergas under the table, but when it comes to this one—

Mr Dutton —Mr Speaker, I rise on a point of order. This attempt at a grab for the news tonight is rubbish, and it is an embarrassment for the Treasurer. He should abide by your ruling—

Mr Albanese interjecting

The SPEAKER —Order! The member for Dickson will resume his seat and the Leader of the House will resume his seat.

Mr Adams interjecting

The SPEAKER —The member for Lyons will learn to absolutely leave the void alone, because it makes it very difficult for the chair. The member for Dickson knows that when he comes to the dispatch box he is to make a point of order and not argue a case. He is therefore warned. To the minister who cried, ‘Throw him out’: I have thrown that member out seven times for one hour for the same crime. I am not falling for the same mistake. He has to learn therefore that his warning places him in jeopardy of being thrown out by a motion of the House for longer periods.

Mr Albanese interjecting

The SPEAKER —Order! The Leader of the House will contain his enthusiasm. The Prime Minister will respond to the question.

Mr RUDD —Thank you, Mr Speaker. I remind those opposite about the question, which went to resource projects and their implications for economic policy across Australia, which includes within it tax policy. The answer I gave before referred to the revenue implications for the Commonwealth flowing from this particular project. I would have thought that $40 billion worth of combined revenue, flowing to state and federal governments, would be of some consequence to the House as we go to our long-term planning on tax. That, of course, has been the subject of what those opposite have raised. But there is an absolute sensitivity of those opposite in having canvassed the Turnbull tax plan in this parliament—actually, you just scratch the surface and they get very anxious indeed—because the Turnbull tax plan is a flat tax. That is what it is. It is about abolishing the upper rate, it is about abolishing the rate underneath that—everyone getting taxed at 15 per cent and 30 per cent. That is what it is about, that is what the opposition are sensitive about—really rich people getting let off with a huge tax cut and poor and middle-income earners not being left with any other rate.

The government is so proud of its position on reform because we are prepared to tackle the hard questions: get on with the business of tax reform; get on with the business of health and hospital reform; get on with the business of education reform for the future; get on with the business of the implementation of long-term industrial relations, changes in the economy; and get on with the business of the restoration to the economy of proper economic recovery on the back of what government does by direct investment in the economy and what private sector projects, such as those I referred to in question time today, can do to materially affect the wellbeing of all Australians.

I would say to those opposite: why do you constantly engage in the politics of talking down the economy? Why do you constantly engage in the politics of trying to punch our confidence in the economy? Whether it is on tax, whether it is on prices, whether it is on debt, whether it is on deficit, one strategic objective on the part of those opposite—as the Leader of the Opposition smirks and smiles—is to talk down the economy. Can I say to those opposite: why don’t you join the project of building up the Australian economy? That is the government’s intention. Why don’t you get with the action?

Mr Hockey —The Prime Minister has purged his soul!

The SPEAKER —Order! As the member for North Sydney has purged something, now we can get on to invite the member for Hinkler.