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Thursday, 21 June 2012
Page: 7523

Mr RANDALL (Canning) (16:07): I am pleased to speak on the adverse impact of government policies and the management of Australia's sovereign risk profile. I do so because it is very important to Australia and particularly to my electorate, with so many workers in Canning being employed in the fly-in fly-out side of the mining industry and the resources industry in general, where there are also drive-in drive-out workers. In this House my electorate is second to the member for Brand's in the number of metropolitan workers that fly-in fly-out or drive-in drive-out, so this is a very important issue.

What is sovereign risk? It is when people and companies see a country as a risky place to invest because the government is making the country less stable. We have become less stable for a number of reasons. The two main reasons are this government introducing a carbon tax and a mining tax. These taxes were introduced by the Gillard Labor government and, dare I say it, the former Labor government, the Rudd government. Prime Minister Gillard had an opportunity to do something about this and she did. Before the last election she said there would be no carbon tax under the government she led. Seven days before that the Treasurer, the deputy leader, said the same thing on The7.30 Report. Within days, when they were set to form a government, they told a total mistruth about this issue and worked towards a carbon tax. Those sorts of backflips do not engender any confidence in anybody wanting to invest in a country. These are the backflips you would expect from Third World countries, not a First World country.

It is ignorant to believe that there is no evidence for this. I say at the beginning, unlike those opposite who say, 'You're preaching doom and gloom,' I do not preach doom and gloom at all. This side of the House does not preach doom and gloom about the opportunities for this country. What we are saying is we could be doing so much better. We have the opportunity to be an outstanding economy and a destination for investment capital.

Dr Leigh: We are doing well!

Mr RANDALL: We are, but the point is we could be doing so much better. The little intellectual ideologue that interjects from the other side of the House will get up shortly and read some dissertation from his academic background and want us to believe his diatribe on these issues. But I come from where the workers come from. I do not come from this hothouse called Canberra, this social experiment. I come from a place where people wear fluoro jackets, working boots and working gloves. They earn real money from real jobs. They are not from the public service capital of this world. They do not feed on others, but actually produce something. That is where I am coming from. I come from the producing capital of the world. We have the richest mining province of anywhere in the world in the Pilbara, and right across Australia the opportunities are available.

Yesterday Atlas Iron were in this place talking to us. They said when they go overseas to sell the virtues of their company, investors in other parts of the world say to them there are three things they are concerned about: first, how is the minerals resource rent tax going to affect you?; second, how is the carbon tax going to affect you?; and third, what tax will they introduce next? This is a government that has not seen a tax that it does not like and does not want to hike.

China is the same. China says, before it invests in any of our companies: 'What is the story not only about your investment profile but also about your industrial relations profile?' On that point, this government has, through its Fair Work Act, allowed there to be an increasing militancy in the workforce which increases sovereign risk. This is borne out by adverse press, such as an article in the Business Spectator which states that for the first time in more than a decade BHP Billiton has been forced to declare it may not be able to supply its customers due to strikes, and the strike in its Queensland operations has gone on for more than 10 months. The article goes on to say:

Days lost to strike action have risen since the introduction of the Labor government's Fair Work Act in 2010 …

The strike has already cost BHP Billiton $2 billion in revenue. Isn't that seen as a risk by someone who wants to invest in our country? The article goes on to say:

Workplace Relations Minister Bill Shorten, who yesterday said the country had an 'overheated industrial environment'—

and this is the dog in the manger, the former union boss who is now the Minister for Employment and Workplace Relations saying we have 'an overheated industrial environment'. But what is he doing about it? He said, 'We're monitoring it'. What a limp-wristed approach. We have a strike in Queensland and in the Pilbara we have the CFMEU and the Australian Workers Union fighting over members and demarcation disputes. All this goes towards the instability of doing work in our resources sector.

These issues scare countries like China which has invested in the CITIC Pacific project in the Pilbara. The company have said if they had the opportunity again they would not invest. They would not invest because they did not know there was going to be a mining tax. They would not invest because they did not know there was going to be a carbon tax. They did not know that doing business in Australia was going to be so expensive, because of so many factors hitting them now. These factors make this one of the most expensive places to do business.

The shadow small business minister, Bruce Billson, came to my electorate recently and pointed out that producing the same resources outcome in Australia is now 40 per cent dearer than doing so in the United States of America. This is not a Third World country or an African country but it costs 40 per cent more to do business here than to do business in the United States. Why is this a concern? This mining tax is concerning because the tax impost is not happening in other destinations. If you go to any junior or mid-cap miner in Western Australia you will find that they have alternative mines elsewhere in the world, whether it be in South America, Africa or Mongolia. BHP's largest mining operation in the world is Escondida in Chile. I have been to it; it is the most massive hole in the ground you have ever seen. In Chile they have a mining tax which is flexible, from half a per cent up to 14 per cent. I have been to Colombia where Cerrejon, an incredible coalmine, is owned, 33⅓ per cent each, by BHP, Anglo American and Xstrata. Where have you heard those names before? They all invest in Australia. In Colombia the tax regime is four to six per cent depending on the mineral. And here we are with a 22½ per cent mining tax. So where are people going to go invest? Are they going to go to Colombia where it is four to six per cent or are they going to come to Australia where it is 22½ per cent? They are not going to come here. It is a slow burn but they are out there looking at alternatives. Atlas Iron were telling us yesterday that they are eyeing off mines in Africa because they need an alternative. Even Mongolia is a safer place because at least they know they are not going to have retrospective, backward-glancing taxes.

Put this together with the almost racist view that the unions and union bosses came back to us with in relation to migration, that we could not have foreign workers come to our mines to help create jobs for Australians when we are talking about up to 1,700 foreign workers—I make the point it is 'up to' 1,700—coming to our mines which will eventually create 8,000 jobs for Australian workers. So those opposite are in an absolute mess in terms of their policy. This policy is confusing and they are completely hamstrung by it because it gives uncertainty for those who want to invest in great Australian companies.

Australia is a fantastic destination. It is a stable country. It is a good place to invest because it has a wealth of minerals. But this government is turning a good situation into a risky situation. It is sending out signals that Australia is a place that investors might have to beware of. However, the good news is that we have said we will reverse both the carbon tax and the mining tax. We are going to take them away.