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Tuesday, 22 November 2011
Page: 13201

Mrs MIRABELLA (Indi) (09:01): I rise today to speak on the Minerals Resource Rent Tax Bill 2011 and associated bills. I start with some words that appear to be rather wise. They were said at a keynote address to a CEDA convention in Perth last year:

There are two broad possible policy responses to the problems created by a two-speed economy: slow down the speeding sector; or reduce the impediments to the movement of capital and people from the lagging sectors to the leading sectors.

Slowing down the development of Australia’s mining and energy resource industries would be a scandalous wasted opportunity to lock in future prosperity and achieve social and environmental goals such as supporting school students in disadvantaged communities, Australians with disabilities, those with mental illnesses and others who are too sick to work, and preserving Australia’s unique biological diversity.

Easing the constraints on our mining and energy resource industries is by far the better way to go.

These words, believe it or not, came from none other than the Minister for Trade, Mr Emerson, on 29 April 2010—just three days before the government announced the mining tax. So not only does the Prime Minister not talk to her Minister for Foreign Affairs when she decides to take a new path on uranium exports to India but also, on such an important policy as this, obviously the trade minister was left in the dark. I normally do not agree with the trade minister—indeed on many things he just gets it plain wrong factually—but on this occasion his analysis is spot-on and I could not agree with him more. We cannot address the structural challenges that face our economy by tying a lead weight to the sector that is driving growth, creating prosperity and shielding Australia, to a certain degree, from international economic turmoil.

This mining tax really bears the hallmark of absolute Labor incompetence. After commissioning a so-called root-and-branch review of the tax system, the government was presented with no fewer than 138 recommendations, of which only 2½ were adopted. It is hardly surprising that a massive new tax was one of those. I can just imagine the former Prime Minister and the Treasurer drooling with delight at the thought of a huge new tax. You have to wonder what they were thinking. Were they thinking, 'Imagine how many pink batts, school halls and digital set-top boxes we can buy with all this extra money,' or were they thinking about what programs could replace those ones with the same degree of incompetence and mismanagement?

Make no mistake: this tax will inflict enormous damage on Australia's most productive industry. There are two fundamental myths that Labor likes to propagate when it talks about this tax. The first is that the mining industry does not pay enough tax and that a profits based tax is required. To begin with, the mining industry currently pays state based royalties as well as company tax. A company tax is, in effect, a profits based tax. So let us dispel that myth straightaway.

In a desperate attempt to wage some type of class war on the industry, the Labor Party made the absolutely extraordinary claim that the Australian miners are only paying around 13 to 17 per cent tax. Not only is this not true but also it exemplifies the astonishing lengths that those opposite will go to in order to demonise anyone who stands in their way. The mining industry currently pays in excess of 40 per cent tax, and this rate will of course increase substantially when the new tax is applied. What is more, this new tax directly discriminates against smaller and medium-sized mining companies, particularly those that are still owned largely by Australian shareholders. How perverse!

Perhaps this tax is an attempt by this Prime Minister to return to the so-called glory days of the Hawke government, when big government, big business and big unions ran the country. Remember what happened under that regime. Real wages actually went backwards. It was the powerful and the mighty deciding policy for Australia. This tax locks out the smaller and medium-sized companies which have the excitement, the enthusiasm and the drive to add to the productive output of the very important mining sector. You have to wonder. In her desperation, the Prime Minister just talks to the big boys, locks them in and creates a system of exclusion and penalty for smaller miners.

The legislation in front of us today is a result of a very bad deal that the government cut with the big players such as BHP, Rio Tinto and Xtrata. The words of Fortescue boss Andrew Forrest, a man who has had ties to the Labor Party and to other political parties, were that the MRRT is 'the bastard child of the RSPT'. He said that it is the bastard child of a tax which was ill thought out and so hideously complicated in the first place. They are very concise words from Mr Forrest. This tax will make Australia one of the most expensive places on earth to invest in the mining sector at a time when other nations are doing everything possible to reduce the constraints in their countries so that they can ride the wave of demand for mineral resources, primarily in China and India.

Our competitors are doing everything they can to foster supply, and this tax does the exact opposite. It is hard to forget the excitement of the Canadian Prime Minister on the day that the first version of the mining tax was announced, isn't it? He could not believe that any government would so deliberately shoot themselves in the foot when faced with such extraordinary opportunities for growth and for increasing living standards and the economic prosperity of its people. This tax is not a win for Australians; it is a win for Australia's competitors. As if the carbon tax were not enough in adding an extra burden to Australian industry, we now have another tax.

Over many months I have had the pleasure of meeting with representatives of many of Australia's mining companies and associated companies which support and supply the mining sectors, and I am told by many of them that this tax is going to create a disincentive to engage in exploration in Australia—to engage in mining activities in Australia—and that many other, developing, countries are becoming more and more attractive. The advantage we had of certainty of government policy, a stable political environment and a stable political system has been challenged by this brave new minority government, and the uncertainty and instability created by the shambolic way in which this government approaches policy are now making some of these developing countries, where certainty of government policy and stability leave a lot to be desired, actually look attractive. You have to wonder how bad this government's approach has been to the formulation of policy on mining and to the mining tax in particular.

I am told that a recent international survey on the attractiveness of investing in the mining industry gave Botswana a better rating than Australia. This is not to denigrate Botswana, but one would have thought that Australia, with its extraordinary history of mining and its extensive legislation and regulation in the area, would have come up higher on the list than Botswana. That in itself speaks volumes.

The second myth that needs to be dispelled is that the mining tax will fund an increase in superannuation from nine per cent to 12 per cent. This is not true—it is a myth that has been spread by first-class propagandists sitting opposite. The increase in compulsory superannuation contributions is going to be paid exclusively by employers, not by this tax. Let us be clear about it, because the decision to increase the compulsory superannuation will mean that employers will have to pay this additional cost, and no additional money will be given to employers from the mining tax to pay for this additional superannuation contribution. It is an extraordinary attempt at doublespeak: to try to repeat an untruth often enough and expect it to become conventional wisdom and accepted truth.

This is a classic Labor tax. It is a tax that will be used to fund the profligate spending habits of a grossly incompetent government which, some would say—increasingly so and in a louder voices and in bigger numbers—is the worst government we have seen since the creation of this nation. It is a tax with which the government engaged in shameless class warfare, and it is a tax that has been partly responsible for claiming the career of one Prime Minister. The process the government has taken to get to where we are exemplifies absolutely everything that is wrong with this government. When it was proposed, the tax was picked out of 138 other recommendations and substantially altered against the advice of Treasury. It has been widely condemned by industry as ill-conceived, ill-devised and hideously complex. It was the subject of a $38 million government advertising campaign which was only approved under the government's own guidelines because they considered it to be—guess what?—a national emergency.

I wish the government was as quick to act in a national emergency in parts of the country where there are national disasters. Covering a rural and regional electorate covering much of the alpine country in north-east Victoria, I understand the frustration of governments at all levels when there is no quick action in a national emergency.

They have absolutely no shame in wasting $38 million in a 'national emergency'—an emergency for the Labor Party to survive politically—and throwing away as much money as possible. But when the $38 million propaganda campaign did not work, they panicked and assassinated their first-term Prime Minister. It has been complete shemozzle, a total disgrace and an utter embarrassment.

Adam Smith once said that countries should focus on what they produce best and trade with other nations. The mining and resources industry in this country is an example of one of the things that we do best. We should not be taxing it out of existence; we should be doing everything we can to facilitate its growth. We are talking about an industry that accounts for about seven per cent of GDP, upwards of 20 per cent of national investment and more than 50 per cent of Australia's exports of goods and services. This is an industry that employs thousands of people and contributes greatly to Australia's prosperity.

Having listened to the contributions of those opposite, it is clear to me that either they just do not get it or the political survival of their Prime Minister is more important than the national interest. Despite the fact that these companies are making profits, those opposite personally attack mining bosses as some kind of outlaws and do their best to paint the industry as plunderers and pillagers who would destroy our country. It is an irresponsible and disgraceful approach to policy debate. They neglect to mention the incredible contribution that this industry makes to our economy and the benefits that already flow to all Australians.

This is a bad tax and I have no hesitation in opposing it, which is the only decent thing to do in the national interest. I look forward to working with my colleagues to repeal it should we win the trust and support of the people and therefore be given the chance to repeal the tax in government.