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Wednesday, 16 June 2010
Page: 5604


Ms MARINO (7:50 PM) —I rise to speak on the impacts the Labor government’s proposed mining and resource tax will have in my electorate of Forrest—a tax that will impose some of the highest taxes in the world on our mining sector and which will apply to all existing and future non-renewable resource projects. The tax is an attack on regional areas, our regional economies and our communities—particularly in Western Australia. This is graphically demonstrated by the latest Deloitte WA Index covering 600 Western Australian companies which shows that the values of WA listed companies fell more in May than any other major index anywhere in the world. The combined value of these companies fell by over $20 billion, and $13.5 billion has also been wiped from superannuation fund investments in resources stocks.

In my electorate the mining industry directly contributed over $2.3 billion in 2008-09 from alumina, coal, heavy mineral sands, tin, tantalum and spodumene. The Bunbury Chamber of Commerce and Industries Business Focus newsletter has stated:

Local mining companies are worried about future investment following the Federal Government’s announcement that a new Resource Super Profits Tax will be imposed.

Simcoa Operations is ‘extremely concerned’ about the ramifications of the new tax, which could put a halt to a proposed fourth furnace. Vice-President Jim Brosnan said ‘the devil was in the detail’ and what Simcoa was most concerned about was the sovereign risk issue which related to Australia’s security and ability to attract investment. He said:

Moving the goal posts by applying a new tax to existing operations has upset a lot of companies and it sets a precedent that makes Australia a riskier place to invest in.

Simcoa is a silicon metal plant producing some of the world’s highest quality silicon for domestic and global markets.

I want to raise the issue of the direct effect of the mining tax on all of the extractive industries in the south-west—the businesses that rely on sand and gravel mining and pits, blue metal quarries, clay, agricultural lime, limestone, phosphate rock, lime sands, mineral sands and even those who supply landscaping materials. Dredging businesses are also mining a ‘non-renewable’ resource and would be subject to the mining tax. Where in their individual processes will the tax be applied to these companies? Will it be at the point of extraction? Will it be after value adding if the material is screened, crushed or processed in any way? Will it be at the point of sale? At what point will the clay, sand, shale, lime, silica and concrete aggregate in bricks be taxed? How much will this tax add to the cost of building a house or commercial building?

The access and subdivision roads and house blocks will cost more in road base and bitumen. There will be increased costs for earthworks and foundations; the sand, lime and blue metal in the concrete slab; the gypsum and silica in internal plasterboard; the copper, aluminium and lead in the electrical work; the silica in the window glazing; the aluminium in the windows; and the cement and clay in the roof tiling. Once the house or premises is built, the mining tax will increase the electricity bill. The port of Bunbury relies on exports of alumina and projected coal to urea plant exports, which will also be affected.

Of the 30,000 workers directly employed in the WA mining industry, almost 25,000 are employed in the support and services sector. Thousands of these workers are employed directly and indirectly by the mining and resource sector in the south-west—on mining sites and in energy generation, manufacturing, construction, transport, haulage, business services, accommodation and hospitality. BHP Billiton’s Worsley Alumina refinery is the biggest private employer in the south-west, with about 1,500 permanent staff and 500 contractors. Its expansion project has recruited another 1,000 workers to date and is expected to generate 4,000 construction jobs over its life. Every single day, the project injects $1 million into the WA economy through wages, contractor and supplier payments, taxes, royalties and community sponsorship—much of this in my electorate.

I note that BHP’s effective tax rate is estimated to be 55 per cent under Labor’s mining tax, and even the Labor Treasurer has finally admitted that some companies will be paying an effective tax rate of up to 58 per cent. I am seriously concerned about what this will mean in my electorate, given that $l million daily contribution to the south-west economy. At what point will gravel become bauxite and alumina and at what point will the tax be applied in the processing and profit stream?

Let us be really clear about this: the majority of BHP’s shareholders are Australian and this tax will directly reduce their income and savings as well as affecting other Australians, whose superannuation is invested in mining and resource stocks. The Chairman of Wesfarmers Ltd, which has investment in coalmining in my electorate, has written to shareholders saying that, in his view, the proposed new super profits tax would not only make Australia less competitive in the global resources industry but also have significant flow-on effects for the broader economy and society and the Wesfarmers shareholders. The Wesfarmers group of companies is Australia’s largest private sector employer. (Time expired)