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Thursday, 7 May 1987
Page: 2809

Mr LEE —Can the Treasurer inform the House of the consequences for the taxation of crude oil of recent opposition to the Government's resource rent taxation legislation?

Mr KEATING —Since 1977 the Australian Labor Party has had as part of its platform the introduction of a resource rent tax on off-shore petroleum mining and exploration. In two elections-in 1983 and at the end of 1984-we went to the country with that as an integral part of our election platform. In accordance with the mandate which we were given on both those occasions, the Government has continued to negotiate that resource rent tax proposal with the industry over a period of four years. We are now at the stage where for the first time ever we have a stable, profit-based system of taxation for off-shore petroleum exploration and mining which over time will be constant, will not change and will only levy tax if there is an adequate level of profitability for that tax to be levied upon. In other words, we have moved away from the production-based system to a system based on profitability, which is the very essence of the resource rent tax proposal.

Despite the fact that the Government has had a mandate on two occasions for a very clear and specific program and has had the most exhaustive discussions with the Australian petroleum exploration and mining industry, it is now finding difficulty in getting that legislation through the Senate. At the hands of the Liberal Party of Australia, the National Party of Australia and the Australian Democrats, the Petroleum Resource Rent Tax Assessment Bill, which passed this House, is now threatened with defeat in the Senate. I make a couple of points about that. Such a defeat would remove the one decent piece of legislation which has come from the Parliament to the industry in all the years that it has been in operation. Apart from basically production levies which the Government has put on from time to time, this is the first stable piece of mining tax law that has ever been proposed. But once again we are finding destructive opposition from the Liberals, Nationals and Democrats in the Senate, for different reasons.

I make the point that the Government took the royalties off Jabiru and Challis in north-western Australia in good faith. We took those royalties off by legislation in the expectation that this Bill would be passed. But now there is no royalty system to collect the tax, and indeed, Broken Hill Proprietary Co. Ltd and its partners went ahead with Jabiru and Challis because of the impending RRT legislation. The company was not against that legislation, it acted because of it. What we are seeing, for the basest of reasons, is plain tax vandalism in the Senate in the hands of the Liberals, Nationals, Independents and Democrats. If this Bill is defeated there will be no tax on Jabiru and Challis and we will be in a position where we will have to start reintroducing royalty and excise arrangements on those fields. I know that the industry is opposed to the conservative parties' stand and to that of the Democrats in the Senate. Apparently some of the Democrats believe that we should not have this sort of a Bill because basically they do not believe in the petroleum industry-they believe in solar power and all that sort of thing. That is all very interesting, but the rest of us have to run an economy. The Liberal Party, which should have more brains and sense, is trying to defeat this legislation when it is a mainstream piece of government tax law, negotiated over four years and taken through two elections.

Mr Carlton —The industry is opposed to it.

Mr KEATING —The industry is not opposed to it. The honourable member should ask BHP. We are at the stage in our constitutional history where the Senate is poisoning the Australian parliamentary system. Senate quotas of 12 1/2 per cent mean that almost any splinter group can find representation in the Senate. It is becoming a problem for the major parties-in this case the Government-and the whole tradition of Westminster government in having the Senate there, either as a States House, as it was designed to be, or a House of review, it being put asunder for the basest political motives. There are no rules and no conventions; there is no sense of responsibility, no sense of the Westminster tradition. What we are seeing now is a government not being able to pass its reasonable, negotiated and fair laws because of what is basically just some good, old fashioned, vicious vandalism at the hands of people who have no intellectual framework. That means the Liberal Party, the cockies and the Democrats. I conclude on this point: The people of this country will be made aware of the capricious behaviour of the Senate, of the vandalism of this second chamber, and they will realise that it is poisoning their parliamentary system and their democracy.