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Wednesday, 13 February 2013
Page: 1211

Mr KELVIN THOMSON (WillsParliamentary Secretary for Trade) (15:55): There is plenty of Alice in Wonderland about the opposition's approach to the mining tax. They used to complain that the MRRT would raise too much money and risk jobs; now, they wring their hands and say it collects too little money while ignoring the jobs created. Their only consistency is a determination to see absolutely nothing flow into the pockets of ordinary working people who own the minerals. At the core of the MRRT is the fundamental determination of this government to stand up for the working Australians who own resources.

Australia's economy stands as a beacon of resilience around the world. Unlike virtually every developed economy, we avoided recession and saved hundreds of thousands of jobs in the face of the worst global economic conditions since the Great Depression. Australia has had 21 years of consecutive economic growth and one of the lowest unemployment rates in the industrialised world. The resources sector has, of course, underpinned Australia's economic strength. Our resources sector accounts for 16 to 17 per cent of Australia's GDP and expanded by around 12 per cent over the last year, and our resources and energy export earnings reached a record high of $193 billion in 2011-12. Mining accounts for 60 per cent of Australia's total exports of goods and services and is the largest share of outbound trade with Australia's largest trading partner, China. As for employment, in 2011-12 total employment in Australian mining, oil and gas extraction sectors averaged around 248,000 people—20 per cent higher than in 2010-11. The figures released by the ABS for the September quarter of last year show mining employment at 270,000 for the quarter—around 2.3 per cent of total employment. The Australian Workforce and Productivity Agency forecasts employment in the Australian mining sector will be over 300,000 by 2017, with a further 280,000 employed in oil and gas extraction.

Because of the profits based nature of the MRRT, the MRRT has had no negative impact on Australia's iron ore and coal industries. This is an opposition at war with the facts. You are entitled to your own opinions, but you are not entitled to your own facts. Facts are things to be shared. So let me share some facts with the House and with the opposition. Since the announcement of the MRRT in May 2010 there have been 50 coal and iron ore projects approved including infrastructure projects worth around $57 billion. The House should not forget that, when the MRRT was announced, those opposite, coming out to do the bidding of the mining billionaires, described the MRRT as 'investment destroying' and 'job destroying'. The shadow Treasurer wanted us to believe that under the MRRT Australian mining had no real place for growth, but in fact each of the major iron ore producers in Australia have spent or are planning to spend billions of dollars expanding their iron ore operations.

Since May 2010 there have been iron ore operations approved, increasing production of iron ore by 55 per cent. And since May 2010 there has been approval for around $24 billion committed to coal projects, including infrastructure.

The investment in coalmines will increase Australia's capacity by 76 megatonnes per annum, an increase of 20 per cent from Australia's 2010 saleable coal production, including both thermal and met-coal but not brown coal. Committed investment to increase the capacity of Australia's mining industry, as at the end of October last year, was a record $268.4 billion, an increase of three per cent from April 2012. In the six months to October last year, 24 resources and energy projects, with a combined cost of $11.9 billion, were completed in Australia. For 2011-12 the Australian Bureau of Statistics reported total exploration in Australia at $7.1 billion, 14 per cent higher than 2010-11. Metals and other minerals exploration expenditure for 2011-12 totalled $3 billion—again, 34 per cent higher than in 2010-12. So the real threat to investment in Australia is not the mining tax; the real threat to investment in Australia is the possible election of a Liberal government which has learnt nothing from the global financial crisis and is hell-bent on slash-and-burn austerity measures.

In 2008 private aggregate demand collapsed and the Labor government had to step in with stimulus to shore up demand—225,000 jobs were created through the government's spending program; and, in fact, since November 2007, Labor has created over 800,000 jobs, including in mining, in retail, in health and in skilled trades. And unemployment is well below the previous Liberal government's average of 6.4 per cent.

The OECD, the Organisation for Economic Cooperation and Development, found that Australia's fiscal stimulus measures were amongst the most effective in the OECD in terms of stimulating economic activity and supporting employment. The Nobel Prize winning economist Joseph Stiglitz lauded the Labor government's spending, saying:

Not only was it the right amount; it was extraordinarily well structured, with careful attention to what would stimulate the economy in the shorter run, the medium term and the long term.

He said:

When I look around the world it was, I think, probably the best-designed stimulus program in the world and you should be happy that in fact it worked in exactly the way it was designed to work.

The global financial crisis wiped a massive $160 billion off government revenues. If we had not implemented a timely and targeted stimulus, we would have experienced a deep recession and much higher unemployment, with all the destruction of capital and skills that comes with that. Such a devastating blow would have set our economy and budget back years. There is no serious issue of public debt in this country, as a result of the stimulus: gross debt peaks as a percentage of GDP at 18.4 per cent in 2011-12 and 2012-13; net debt peaked in 2011-12 at 10 per cent. Our net debt has peaked as a percentage of GDP at almost one-tenth the level of the major advanced economies. In Australia's case, that is like someone earning $100,000 a year owing only $10,000. And our net interest payments for 2012-13 will be 0.5 per cent of GDP. That is like someone earning $100,000 paying only $500 a year in net interest. We are paying down net debt as a percentage of GDP now, and gross debt as a percentage of GDP falls from next year. This refutes the coalition's irresponsible claims that our nation's debt levels are somehow comparable to debt-stricken parts of Europe.

The government's actions in relation to mining, to stimulus, to skills and to renewable energy have ensured that we have one of the strongest economies in the world. We have a AAA credit rating. We have a low unemployment rate—Australia has less than half the unemployment rate seen in Europe and the rate is significantly below other advanced economies. We have, as I have said, an exceptional job creation record. We have contained inflation, with underlying inflation in the middle of the RBA's target band. We have low interest rates—currently at three per cent, lower than at any time under the previous Liberal government, meaning that a family with a $300,000 mortgage is paying $5,000 less in repayments a year; $100 less a week.

The Labor government is building on resilient economic fundamentals that are the envy of the world, solid growth, low debt, healthy public finances, contained inflation, low interest rates, a gold-plated AAA credit rating—one of only seven countries in the world which has that—but we are not done yet. We are investing in labour reforms for the future, the NDIS, Gonski in education, the NBN and renewable energy. We stand for an Australia where every child can get a quality education, where their parents can have a decent-paid job and their grandparents can retire with a dignified income. We are at a critical moment when strong rather than weak Australian government leadership is vital—the kind of strength of leadership that we have shown through the minerals resource rent tax and which we will continue to show.