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Tuesday, 22 November 2011
Page: 13367

WYATT ROY (Longman) (20:51): I rise to speak to the minerals resource rent tax package of bills. This package of 11 bills totalling 525 pages is of serious concern for both Australia's current economy and its future prosperity. As I have said in this place before, the Australian people deserve to have a say on the future prosperity of this great nation. They deserve to have a say on this tax package, which has serious implications for the Australian economy broadly and for the mining industry specifically.

As the federal member for Longman, I would be remiss if I failed to articulate my serious concerns about the implications of these bills for my electorate. My electorate's local economy is based on tourism, light industry and manufacturing, which will all certainly feel the impact of this tax package.

Businesses in my electorate rely on confidence in the market and the strength of our country's economy, which is largely based on the continued prosperity of the mining industry.

As Australians we are all aware that we owe much of our prosperity to our resources. However, no-one is under the illusion that we will forever be able to rely on mining to prop up our economy. There is also no dispute over the fact that as a nation we need to be savvy about how we ensure that our current resources will ensure our future security. But this tax, which has ignored the advice and input of all but three mining companies and simply does not take into account the situation of hundreds of smaller companies, is not the best way for our country to maximise the benefits of the mining boom in Australia.

As I have stated in this place many times before, we in the coalition recognise that our economy will face many challenges in the future, and we understand that our economy will need to transition and be restructured post the current mining boom, rising to meet the challenges of an ageing population. It is important that as a nation we meet these challenges from a position of strength. The coalition left the current government with that position of strength. The Howard government paid off $96 billion of Labor debt, leaving this government with $50 billion in the bank. However, this Labor government has managed to turn that $50 billion in the bank into over $107 billion in net government debt, which is accumulating more debt at a rate of $100 million a day, with an interest bill of $20 million a day.

It is here that the philosophical difference of the two sides of politics emerges. We on this side of the House believe in lower taxes and in growing the productive capacity of the economy. Those in the Labor Party believe in higher taxes. This Labor government is so addicted to new taxes that it has introduced or increased 19 taxes. For every problem, its solution is a tax. Binge drinking is a problem; we have a tax. Smoking is a problem; we have another tax. There are floods in Queensland—yes, that is right: another tax. Climate change and the environment present a problem; not only do we get a tax but we get the single largest carbon tax in the world. Yet again, what do we have in these bills before the House? Yet another Labor tax.

It is the design of this tax that is fundamentally flawed. This is a bad tax, a tax that affects the sovereign risk profile of Australia. This is yet another tax from a bad Labor government that will be yet another deterrent to investment in Australia and investment in the future of the mining industry. Contrary to what the Labor Party would have you believe, we are not the only country in the world that has iron ore. We are not the only country in the world that has coal. We operate as part of a competitive global marketplace. This Labor tax, along with all the other Labor taxes, will bear on the investment decisions of companies that are operating in the global marketplace. From where I am sitting, this tax does not bode well for Australia's future.

I am concerned that this tax is another opportunity for a tax grab by the Labor Party as a means to fund its wasteful spending. I am concerned that this government is taking the easy way out and that it is failing to make the tough decisions. We have seen pink batts, school halls and a blow-out on border security—all wasteful spending that should have and could have been avoided. On this side of the chamber we are instead guided by the principle that governments do not have any money of their own; they only have the people's money in trust. This money is held in trust for the people of Australia with the expectation that it will be spent wisely, not wasted in bungled government programs and certainly not wasted under the justification that a government can create yet another new tax, such as this tax that we are debating today.

I also have great concern about what this bill will mean for Australians living in my electorate. It is all very well for this Labor government to say that mining companies will be the ones that foot the bill for this tax, but it is foolhardy to fail to recognise the greater impact this has on all areas of the economy. It is not just the direct impact that this tax will have on the mining companies themselves; it is also the trickle-down effect that we will see for all areas of our economy. In my electorate there are many who will be indirectly impacted by the changes to the mining industry.

Let me share with the House some examples from my electorate. One local business, Glendale Homes, builds prefabricated housing utilised by mining sites and regional communities which host large numbers of mining employees. A decrease in the mining industry and a consequential decrease in the numbers of employees requiring accommodation will wipe out a large percentage of this business and will affect this innovative local business in my electorate. Another great local business, Atlas Heavy Engineering, will also be impacted by the tax. Atlas, like many local businesses, is being hit hard twice this year—once with the cost increase of the carbon tax and yet again with the probable decrease in demand for mining equipment due to this tax.

It is not just businesses adversely affected. Unemployment is a huge concern in my electorate, something I have spoken about countless times before, with the town centre of Caboolture hosting twice the national rate of unemployment. Every day I speak to families in my communities who have been forced to take employment elsewhere, including in the mining industry, because local jobs are difficult to come by in our depressed local economy. An impact on the mining industry from this tax will be felt in my electorate. A loss of mining jobs would put more pressure on families in my electorate, seeing local unemployment continue to rise.

While it is vital that as a nation we take advantage of the current mining boom, that should not be at the expense of future potential investment. The Labor Party may have conveniently forgotten in their quest for new taxes that we have a tried and proven method which has survived and worked well for more than a century in Australia. This is the system of state based royalties, a system that ensures that money raised from mining is spent in that same state and a system where state governments are competitive and where a state such as my own state of Queensland can make the tough decisions, encourage investment, and be fairly rewarded for doing the hard yards. That is a right that has endured a century—a right that the Labor seek to remove with yet another new tax.

If we as a nation are to take full advantage of the current mining boom, we must do so in a way that encourages potential future investment in our mining industry rather than discourages it. The international investment community must look at what this Labor government is doing in our country with more than a little degree of confusion.

Underpinning all investment decisions should be a significant degree of certainty. And the one thing we have never seen from this Labor government is certainty. We have a PM that promised never to introduce a carbon tax under the government she led and who subsequently introduced a carbon tax. Now, with this tax, we have seen version after version, Prime Minister after Prime Minister, with each updated version of this tax negotiated with just a select few companies who were given the opportunity to negotiate and discuss the tax. Three companies, BHP, Rio Tinto and Xstrata, were given the chance to discuss this tax while the Labor Party left the rest of the mining companies, and particularly the critical smaller and start-up mining companies, in the dark. What we are debating here in this place today is this version of the mining tax which represents far more of a political fix than a carefully considered and effective piece of public policy—a political fix that was desperately scrambled together after the current Prime Minister politically assassinated the member for Griffith.

It is clear that there is an imperative for Australia to prepare for its future; however, this tax is not the solution. Another tax grab from this government will hinder, not help Australia's future. Let me leave the House once again with the wise words of Winston Churchill, which I think so accurately capture this debate. Winston Churchill said:

We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

Perhaps the Labor Party should take his advice.