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Wednesday, 22 August 2012
Page: 6108


Senator MILNE (TasmaniaLeader of the Australian Greens) (15:27): I move:

That the Senate take note of the answer given by the Minister for Finance and Deregulation (Senator Wong) to a question without notice asked by Senator Milne today relating to the minerals resource rent tax.

I rise to speak about that because I think it is a critical issue for Australia. Whenever you go around in the community, people say that they want the government to move to invest in our schools, for a start. Everybody recognises the inequality in school funding and that the bias for so many years has been away from public education towards private education. Schools have been extremely grateful, I might say, for the injection of funds that occurred as a result of the stimulus package that the government and the Greens supported and the coalition did not. Schools are very grateful for those new buildings, but, nevertheless, schools are more than buildings. They require teachers and they require additional resources to be able to get better educational outcomes.

If in Australia we are going to move away from being a dig it up, cut it down and ship it away economy to one that invests in education, knowledge, training, commercialisation and more diversification, it is essential that we invest in education—but to do that we need money. If we want a national disability insurance scheme, we need money. If we are to make sure we move to a universal access dental scheme to match Medicare, we need the money for it. The reality here is that we are not raising enough revenue.

Compare it with what happened under the Howard government. Under the Howard government, the tax to GDP ratio was such that, if the same ratio applied now, we would have an extra $24 billion to spend on education, disabilities and dental care. Let us not listen to anything from the coalition about this. If it were the same as it was then, the tax to GDP ratio would be delivering $24 billion more now.

But the government instead has the MRRT, which was negotiated after the super-profits tax failed after a change of leadership in 2010.

It was hurriedly designed by the then new Prime Minister Julia Gillard, and that tax was on Xstrata, BHP and Rio Tinto. The huge mistake, the gaping hole in that tax, was the fact that it enabled the states to increase their royalties and the Commonwealth would reimburse that increase in royalties to the states. If ever there was a green light to state governments to go ahead and increase their royalties, that was it.

When that legislation came through the parliament with the opposition not wanting to raise money to spend on things like universal access to Denticare, education, disabilities and the like, with the coalition refusing, the Greens put strongly to the government: 'We need to close that loophole. We do not want the mining trucks to be able to drive straight through that loophole and prevent the community from having the revenue it needs to deliver for the community.' We said clearly, 'Let's fix it,' but the government voted against our amendment, and Minister Wong did not acknowledge this in question time. The only reason given at the time was: 'We've done a deal with BHP, Rio Tinto and Xstrata. We're not going to change that deal. We've done the deal. It's the deal. You either vote for the tax or you don't.' And of course the Greens wanted to raise the revenue. We would have preferred the super-profits tax. We wanted to raise the revenue, so we voted for the bill but we said at the time: 'This will come back to bite the government.' And it has.

The minister has now acknowledged that the revenue that was projected will not be raised. There is going to be a big hole, and what is the government going to do about it? So we have heard Treasurer Swan saying he has written to the states proposing exactly what the Greens said in terms of stopping any further reimbursement from 1 July 2011 regarding the rate. What the Greens are now going to do is introduce a private member's bill to give effect to the amendment that we moved then to get rid of this loophole. It is the most straightforward way of doing it. Messing around with GST is going to end up right in the midst of that report, and goodness only knows where that will end up.

The cleanest, easiest way of fixing this so that the government has the revenue to deliver the programs that show we care about Australians—their ability to access education equally, their ability to have a national disability insurance scheme and their ability for universal access to Denticare—is to raise the money we need to fix this gaping hole that is out there in this tax that was hurriedly negotiated. We went straight to an election. After that we were busily negotiating something. There was a fundamental flaw in it. It has been recognised by everyone, including Ken Henry. The Greens want to fix it and we will.

Question agreed to.