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Monday, 15 November 2010
Page: 2221

Mr STEPHEN JONES (3:28 PM) —My question is to the Minister for Resources and Energy and Minister for Tourism. Will the minister update the House on the progress of the Policy Transition Group in progressing the government’s reforms to the taxation of resources?

Mr MARTIN FERGUSON (Minister for Resources and Energy and Minister for Tourism) —I am pleased to advise the House that the work of the Policy Transition Group, which is jointly chaired by Don Argus and me, is progressing well. Face-to-face consultations have been held in five states to date, namely Western Australia, South Australia, Queensland, Victoria and New South Wales. We have also ensured that industry representatives from other states and territories have had ample opportunity to express their views to the Policy Transition Group. The last face-to-face consultation will be held in Melbourne this Friday and will be totally focused on the all important issue of exploration.

I also note that there have been detailed submissions from a range of interested parties and they will, in due course, be given proper consideration by the Policy Transition Group. In this context, I note that the OECD economic survey of Australia, which was released yesterday, also supported the concept of a resources rent tax. In fact, the report emphasises the importance of getting the detail right, as we are seeking to do through the Policy Transition Group. The report states:

As proposed by the government, a tax on resources rents is in principle highly efficient, since it has no impact on investment and production decisions if properly designed and administered.

Clearly, that is the objective of the Policy Transition Group and it is intended that we present our report to the Treasurer prior to Christmas. I also inform the House that, following our report to the Treasurer, the government will release an exposure draft in the new year, which will give industry yet a further opportunity to actually comment on the government’s intention with respect to where we go on this particular tax. Perhaps more importantly, the House should be advised that since our announcements on 2 July there have been a series of major announcements with respect to a pipeline of ongoing investment decisions in Australia. I can refer to, for example, the announcement by British Gas, of 1 November this year, of a $15 billion investment in a new industry in Australia: the coal seam methane export opportunity out of Gladstone in Queensland. Interestingly, there have also been a range of similar announcements—for example, Rio Tinto Iron Ore in Western Australia, an upgrade of their Cape Lambert export opportunities, with an investment of US$3.1 billion; BHP Billiton, with its coal opportunities at Mount Arthur in New South Wales, an investment of $784 million; and Xstrata with respect to its Ulan coal opportunities, an investment of US$1.1 billion. There have been many other announcements going to the issue of certainty of investment in terms of our announcements of 2 July.

In conclusion, I simply say that, from the government’s point of view, the Policy Transition Group process is actually going well. Industry understands the nature of the taxation arrangements which we announced on 2 July. I can also assure the House there is no intention by the government to change those announcements from what was agreed with industry. That, in turn, has created certainty which has enabled investment to continue since 2 July this year. The government will put in place a new tax system which will ensure that the Australian community gets a fair return for the development of its national resources, based on the principles of equity, efficiency and investment neutrality.

Ms Gillard —Mr Speaker, I ask that further questions be placed on the Notice Paper.