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Tuesday, 22 November 2011
Page: 13330

Ms MARINO (ForrestOpposition Whip) (18:12): Why are we here again debating what is clearly just the latest—though, I guarantee you, not the last—new Labor Party tax? It is another seriously flawed, ill-conceived tax aimed at making Australian businesses and industry less productive and less competitive in global markets. Why are we here debating a tax which is so complex—it ranges across 287 pages—so costly to business and obviously so flawed in its assumptions that the Treasurer will not release the figures? Why is this government not providing the parliament with its economic modelling of world commodity market price fluctuations on the projected mining tax revenues? The real reason we are here debating this latest inequitable and inefficient Labor tax is simply that this government is vicariously addicted to reckless spending—to wasting billions and billions of dollars of taxpayers' funds—and it now has to tax its way out of a mess of its own creation in order to desperately raise revenues.

I believe that the majority of Labor's planned spending for mining tax revenues could have been already funded and delivered through existing revenues. If the government had not wasted billions of dollars of taxpayers' funds superannuation and tax cuts could already be in the hands of taxpayers without the waste. From pink batts to overpriced school buildings to the massive $1.75 billion blow-out in managing asylum seekers to Green Loans—and all that is just for starters—there is a litany of failed, costly tender processes. There is also Fuelwatch and GroceryWatch—the list is endless.

This government is racing Australia headlong to our highest ever gross debt of $250 billion, and the government continues to borrow $135 million every day, with a daily interest payment of $18 million. What we do know is that this government simply cannot handle money, particularly taxpayers' money.

No wonder the business sector is afflicted by uncertainty. Any business or industry sector actually making a profit right now is extremely nervous. You only have to talk to them: they know that they may well be the next target for the next round of Labor taxes. In fact, the mining tax may well be extended across a broad range of commodities. After all, we have seen the government deliberately misleading the public over the carbon tax, the backflip on uranium to India and on asylum seekers—and let's wait and see about their supposedly signed, sealed and delivered budget surplus promise.

Eighty per cent of members of the Australian Institute of Company Directors know that this government simply does not understand business at all—that it fails to consult effectively with business over and over, if at all, in the same way that it failed to consult the 3½ thousand miners in this country. The government designed this tax exclusively with three miners only—not 3½ thousand, just three. No wonder 70 per cent of company directors say that this government will have a negative effect on their business decision making, particularly given what we have seen in the absolutely shambolic process throughout this mining tax. I would suggest that, for the first time ever in the history of this nation, sovereign risk is now a requisite consideration for board members. KPMG and a group of 100 senior finance executives are instructing businesses to look at asset write-downs and impairment tests to assess the financial and commercial impacts of the carbon tax on their interim and annual financial reports.

This tax is also resonating globally on investment decisions. We know that Chinese political and business leaders have raised real complaints and concerns about the mining tax with WA Premier Colin Barnett. We know that the carbon tax alone will eat significantly into the profitability of Australia's mining industry, and that is in addition to the volatility in world markets, as we have heard here, and the indisputable fact that there are other countries with major mining resources that do not and will not have a carbon tax or a mining tax and also have much lower labour costs. But, yet again, the government is deliberately making Australian businesses less competitive.

This is flawed logic, and the government deludes itself that Australia is the only source of minerals in the world. Australia is actually competing every day—just talk to the companies—for markets and capital with countries like Brazil, Chile, Canada and Mongolia, as well as African and Asian countries. It was spelt out by the chief executive of AngloGold Ashanti, who said at the Commonwealth Business Forum in Perth that Australia is 'one of the top sovereign risk countries in the world on the basis of government policy and its demonstrated behaviour in terms of taxation policy and its inconsistency in policy'. If you are around a board table, it is tough making decisions.

The volatile state of the world economy, a possible contraction of global economic growth, a big new carbon tax, a big new mining tax, sovereign risk for the first time ever in Australia, unprecedented government waste, ineptitude on a scale we have never seen before and uncertainty equate to economic and industrial vandalism for the Australian mining industry. This is a time for caution, not a time to increase risk and the cost of doing business. Let us be really clear: it is future project approvals over the next decade that are at greatest risk. They are not at risk because of just one big new tax but because of a government that is openly hostile to business, imposing a regime of multiple new taxes and uncompetitive and uncertain policies, as well as government spending, waste and incompetence at unprecedented levels.

If this were not enough, what is also irrefutable is that the impact of the mining tax will fall disproportionately and unfairly on the Western Australian mining industry. It also appears to be a calculated attack on state rights under the Constitution. It is discriminatory. It is a tax imposed at the point of extraction, which is in effect a tax on state property—prohibited by the Constitution. Sixty five per cent—$25 billion of the $38.5 billion mining tax revenue—will be ripped from my home state. It is unprecedented that the majority of this one new national tax will come out of just one state, Western Australia. Even worse, there has been no consultation on the MRRT with Western Australia, or any other state or territory government.

We in Western Australia—and this is something that I hear from my constituents and it is in their words—have had an absolute gutful of this government using and abusing WA as a politically dispensable cash cow just to feed their addiction to spending and wasting billions of dollars of taxpayers' funds. The heartland of the iron ore and magnetite industries in Australia will suffer the greatest impost, and the government is once again picking winners and losers. The MRRT will disproportionately burden and penalise smaller and emerging operators. The higher effective tax rate will penalise and discourage riskier ventures—those that have far lesser capacity to attract investment than the major miners.

This filters right through the state economy and local employment. For instance, I have a great fencing contractor in my electorate who provides the perimeter fencing for magnetite exploration. When I last spoke to him, he had just two weeks of work left. He told me that the work had stopped because of the mining tax—that companies were not going ahead with their exploration and he had no work for his employees. So the fledgling 38 small magnetite companies trying to get off the ground will not be respected and encouraged by this government for their effort, resilience, enterprise, hard work and willingness to risk their investment funds and employ people. Instead they face counterproductive, increased, unfair taxes—higher than for the mature miners—increased unit costs of production, increased compliance costs, new hurdles and a hostile government. Mining companies will have to be very focused on their MRRT obligations. They will need—and I would encourage them to have—very solid, defensible data, as I have no doubt that the government will be instructing the ATO to aggressively pursue revenue to help shore up their budget surplus and meet their MRRT spending obligations.

I have not seen the several proposed amendments to this bill. However, the Commonwealth should not seek to further override the sovereign responsibilities of the states defined in the Australian Constitution through any of the proposed amendments. The current bill is a slap in the face for state governments that own the resources coveted by the Gillard Labor government.

Our Constitution vests lands, and the minerals they contain, in the states, including the management of lands for the protection of the environment and the benefit of current and future generations who live in those states. For instance, in the case of coalmining and resource exploration in and around the Margaret River region, the state can provide sound process and the certainty required, for all parties, through good planning, so that the future of the region is properly mapped out in an inclusive and thorough process.

One option could be that the Western Australian government develops a Capes Region schememodelled on the already existing Metropolitan Region Scheme, Peel Region Scheme and Greater Bunbury Region Scheme. These schemes are legislative planning schemes that control planning and development in the regions they cover, which include nearly all of the rapidly growing areas of the state. A Capes Region scheme, like the existing planning schemes, would also be a statutory tool that would have to be passed by the state parliament, and any amendment would be a disallowable instrument in their parliament.

This would provide the legislative backing and certainty for the region. It would deal with issues such as the potential impacts on the region's key iconic groundwater resources in what is one of Australia's two internationally recognised biodiversity hotspots. In addition, the region is experiencing strong population growth—well above the state and national averages. For example, the Shire of Busselton's four per cent annual growth rate dwarfs the state's growth of 2.2 per cent and the national figure of 1.7 per cent. This means that the South West has to manage its infrastructure needs and natural resources carefully. Shallow superficial aquifers that sustain iconic jarrah and karri forests, and the region's caves, cannot be viewed in isolation because they communicate with the deeper Leederville Aquifer and even the Yarragadee Aquifer. These two larger groundwater sources are key for the growth and even the survival of the region's environmental, agricultural and social assets.

In conclusion, I question the assumptions and the modelling of the mining tax, particularly given market volatility—and we have heard expressed more than once here today how prices have already reduced since this tax was announced and the legislation has come before the parliament. I wonder how the government will fund its mining tax promises if the mining tax does not raise the revenue projections estimated by Treasury. We have already seen the MRRT revenue estimates fluctuate between $7 billion and $24 billion. That is a fair bit of difference, and there are a lot of things the government has committed itself to.

We do know that this government cannot handle money. We also know that it is addicted to reckless spending. And there is a better way. The government should get its spending under control and focus on lower, simpler, fairer taxes and genuine tax reform. It should be equitable; it should include all stakeholders, not just a chosen few; and it should deliver genuine tax reform through proper processes.