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Monday, 31 May 2010
Page: 4551

Mr SIDEBOTTOM (2:11 PM) —My question is to the Treasurer. Treasurer, why is the government’s proposed Resource Super Profits Tax such an important economic reform? How does this tax debate compare, Treasurer, with those that have gone before it?

Mr SWAN (Treasurer) —I thank the member for Braddon for that very important question. Australia has had a long history of economic reform which has created almost two decades of uninterrupted expansion. This makes Australia stand out almost uniquely amongst developed countries. Of course, in the past when there have been fundamental economic reforms put in place, there have always been exaggerated claims about these reforms—how they would produce the end of the world, how damaging that would be and how they were unacceptable. We should reflect on the last 25 years or so. We should reflect on what was said during the eighties and the nineties when the dollar was floated, when the tariff walls were brought down and when compulsory superannuation was introduced. These reforms were opposed bitterly by sections of the business community, who would have Australians believe that they would damage the economy and hurt employment.

Of course, through these reforms the Australian economy did become stronger and stronger, so much so that these reforms are much admired elsewhere in the world. But at the time there was not agreement in the community about them at all. There was trenchant opposition from sections of the business community. You can remember what happened when there were proposals to tax gold, with the removal of its income tax exemption. We were told that was going to be the end of the world. That industry survived and prospered. Of course, there was the bitter opposition to the petroleum resource rent tax that was introduced in the early eighties. It pays to go through some of the quotes of what was said at that time. This was said on 1 July 1984 in relation to the petroleum resource rent tax:

The Hawke Government’s RRT will effectively destroy the incentive for offshore exploration …

Who do you reckon said that? John Howard, the shadow Treasurer. This was from an industry representative on 2 March 1984:

An RRT reduces the upside potential so, no matter how much of the financial exposure is covered by the Government, investors will not be induced to put their money into exploration in Australia but will rather explore overseas and invest in other, less risky, industries in Australia.

Who could have possibly said that? Rio? BHP? That was a representative from BHP on 2 March 1984. We had this one from an industry negotiator on 2 March 1984: ‘An RRT is a bit like communism’. Who could have said that today? The man who owns those opposite lock, stock and barrel. All these claims were rubbish then and they are not true now. We are being told that we will see the end of the world. What we have put forward is a very important economic reform for Australia to grow the resource sector, to deal with the challenges of a two-speed economy, to provide some incentive for corporate Australia and small business. And it is opposed by all of those opposite because they are owned lock, stock and barrel by sections of the mining industry. We on this side of the House will stand up for the national economic interest.

Mr Andrews —Mr Speaker, I rise on a point of order. The Treasurer has now twice made an offensive remark and I ask him to withdraw it.

The SPEAKER —In the robustness of debate often these matters are said, and this is what I have indicated all along in this debate. On occasions people at the dispatch box have withdrawn them of their own volition, but I am not requiring it. But what I am requiring is that we give consideration to less debate in answers, and I invite the Treasurer to respond to the question.

Mr SWAN —Yes, Mr Speaker. It is the hard and difficult reforms that do produce the enduring gains. We on this side of the House understand that; those on the other side of the House do not understand that. We understood that when we put in place national superannuation, and it goes to the very core of what we are doing now. We understand the national interest in terms of building the national savings pool.

Mr Pyne interjecting

The DEPUTY SPEAKER —Order! The member for Sturt!

Mr SWAN —We know how important it is for the future of this country to build up our national savings. We understand that. We understand how important it is to give small business some incentive. We understand that; that is not understood by those on the other side of the House.

Mr Pyne interjecting

The DEPUTY SPEAKER —Order! The member for Sturt!

Mr SWAN —One of the reasons why this economy has prospered for so long is that it has had those essential and enduring reforms. We have prospered because of those reforms of the eighties and nineties and we need another round—which indeed goes to the core of what the government is doing now. We on this side of the House are about protecting the national economic interest, supporting Australian workers, supporting Australian small business, lifting our national savings and investing in infrastructure. We see that as our duty because it is in the national interest, unlike those opposite.