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Wednesday, 26 May 2010
Page: 4201


Mr ABBOTT (Leader of the Opposition) (3:33 PM) —I move:

That so much of the standing and sessional orders be suspended as would prevent the Member for Warringah moving immediately:

That this House censures the Prime Minister and the Treasurer for grossly and falsely misrepresenting the economic basis for their so called Resource Super Profits Tax which is nothing more than a great big new tax on mining and puts at risk a vital part of our nation’s prosperity, and in particular:

(1)   for claiming over the weekend, based on a draft academic paper by an American graduate student, that Australia’s mining sector only pays 13 to 17 per cent company tax when in fact, overall tax payments exceed 27 per cent and the total tax paid, when royalties are included, is over 41 per cent;

(2)   when found out that the US paper was based on as few as four Australian mining companies (and later completely revised), for then trying to rely on a hastily released paper by three Treasury officials that was later exposed as using six year old data and came with the disclaimer that it wasn’t “necessarily the views of the Australian Treasury”; and

(3)   and most damning of all, for relying on the Treasurer’s own Economic Note dated 9 May 2010 which bases this new tax on completely false graphs that have been relied upon by this Government, analysts, investors and the media as being true and correct.

When is this government going to admit that it has got it wrong, and scrap this big new tax on mining? This is a government which cannot be trusted with Australia’s future, because it does not know what it is doing and it does not know what it is doing because it cannot get its story straight. First, this Prime Minister said that mining companies pay tax of just 14 per cent. Wrong—dead wrong—because it completely ignores the fact that these companies pay corporate tax as well as royalties. Then he said that the mining companies pay tax of between 13 per cent and 17 per cent. Wrong—dead wrong—because that relied on a draft paper by a University of North Carolina graduate student, you fraud! That is what he relied on. He relied on that and we now know that that paper was based on data from as few as four companies, and that particular part of the paper has now been withdrawn. Finally, these people opposite say that the rate is just 27 per cent, and again they have got it wrong, because now they are relying simply on the corporate tax rate and do not include royalties. This is a government that does not know what it is doing. This is a Treasurer who has built his case upon a misprint. He has built the case for a $9 billion tax a year on a misprint in a Treasury document.

Then to top it all off we had the extraordinary spectacle in question time today of a Prime Minister who did not know whether the projects on the North West Shelf were going to be included under the resources rent tax or the super profits tax and then had to be corrected by Minister for Resources and Energy. This is a government that does not know what it is doing. This is a government that cannot be trusted with Australia’s future. Most of all, this is a government that cannot be trusted with the truth, because their case for this great big new tax is based on lie after lie.

They say it will fund the super. Wrong. That is a lie, Mr Speaker. The three per cent payroll tax on business or the three per cent of salary forgone by workers will fund the super increases, not this great big new tax. They say it will fund a tax cut for companies. This is a $9 billion tax increase to fund a $2 billion tax cut. What a fraud! He is robbing Peter to pay Paul, and I tell you what: Peter is robbed a lot more than Paul is ever getting under this government.

The Prime Minister says that it will fund small business concessions. There are $300 million worth of small business tax cuts funded by a $9 billion rip-off of those businesses on which small business depends for their economic livelihood. He says that it is the same as the Petroleum Resources Rent Tax. Well, what a whopper that is! The Petroleum Resources Rent Tax was, firstly, prospective and, secondly, it was effectively at 11 per cent. It was a retrospective tax at anything over six per cent.

This Prime Minister simply cannot be trusted. He says there are consultations—again, wrong, wrong, wrong. There is simply dictation to the mining companies of this country. They are being faced with a fait accompli. The one thing that he will not discuss in consultation is the 40 per cent rate for the six per cent threshold and retrospectivity—and they are the only things that matter, Mr Speaker. The only things that matter are the things that they will not discuss.

Finally, the Prime Minister says that it will not damage the mining sector. The idea that ripping $9 billion a year will not damage the mining sector is completely and absolutely incomprehensible. If he were right, and ripping $9 billion a year out of a sector was going to somehow help that sector, why aren’t all the other companies in Australia saying, ‘Give us a super tax! If it is so good for the mining sector, give it to us!’? Come on, why aren’t they falling over themselves to get hit with this great big new tax if it really is so good for the economy, as he suggests? The truth is that this is a Prime Minister who has one big love—he just loves tax. That is what he does. He just loves tax because he needs tax, ever more tax, to feed his obsession with spending and buying his way back into office.

What is the real impact of this tax? We have heard about the real impact of this tax from the people upon whom this tax will fall. What are Fortescue Metals doing? They have suspended $17 billion of investment and they are not going ahead with an investment that would create 30,000 new jobs. Thirty thousand new jobs have evaporated because of this Prime Minister and his great big new tax. Rio Tinto says that had this tax been in operation over the past decade $38 billion of investment and the tens of thousands of jobs which depend on that investment would not have happened.

And finally, we have BHP, the big Australian, now blaggarded by this Prime Minister as a foreign company, and the boss of BHP now blaggarded by this Treasurer as an ignorant liar. That is what this government says about the heads of great companies like BHP and Rio Tinto—because they dare to criticise, they are ignorant liars. What an absolute disgrace! How dare the Prime Minister and the Treasurer of this country blaggard in this way the businesspeople on whom our economic future so much depends. The head of BHP has said that iron ore mines and uranium mines in Western Australia, coalmines in Queensland and, above all else, the $22 billion new investment in Olympic Dam—the lifeblood of the state of South Australia—are all in doubt because of this Prime Minister. This is the Prime Minister who is close to slitting the throat of the South Australian economy because of his great big new tax on mining.

Let us be very clear about this. This tax here is a triple-whammy tax. It is not about reform. It is just a revenue grab. In fact the greatest travesty of all is the idea that somehow he is enshrining the wisdom of Ken Henry—poor Ken, the most misused man in this country and misused by this Prime Minister. Let us make it absolutely clear. This triple-whammy tax is a tax on jobs. It is a tax on retirees who depend upon the dividends and income from mining shares. Above all else, it is a tax on consumers whose prices will inevitably rise as the price of their power goes up.

Mr Speaker, we heard it, didn’t we? We heard it the other day from former Prime Minister Malcolm Fraser, who saved this country from the second-worst government in Australia’s history. I am very pleased and proud to be able to save this country from the worst government in Australia’s history.


The SPEAKER —Is the motion seconded?