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Tuesday, 24 February 2009
Page: 1617

Mr TUCKEY (5:22 PM) —The Uranium Royalty (Northern Territory) Bill 2008 is welcome legislation. It puts a formal and automatic proposal in place for a royalties regime in the Northern Territory, which of course is still a Commonwealth territory in terms of the mining of uranium. In the same breath as doing that, the government are admitting that ‘uranium’ is no longer a dirty word. We survived for all those years with their three mines policy, and the difficulty of changing that in the Senate was just outrageous. Suddenly, this legislation openly admits that the government have changed their policy on uranium mining, and the comments that the member for Canning just made in that regard are very sensible. His was a very pragmatic analysis of the situation.

I will now take the opportunity to look at some of the difficulties that still exist and at how there can be significant abuse of the authorisation and approval of these particular mines. The government speaks primarily about the management of a royalties regime. It has been acknowledged in the offshore oil industry for a long time that it is more sensible to have a profit based tax than an ad valorem tax, whereby it is a tax per tonne. The latter does not let the community share in the good times and it does not protect a lot of mineral deposits in the bad times, when a fixed ad valorem rate per tonne can be very expensive. A profit based tax for the oil industry was decided on, as I recollect, in the early years of the Hawke government, with the approval of the opposition. It is a much more practical approach because it is a form of income tax, with variations. So that is a sensible approach.

We look at the circumstances confronting Australia today and see the very significant retrenchments that are occurring in the mining industry. The Ravensthorpe mine, which was closed completely, is a classic example of that. One would think that there would be better initiatives for employing the sort of people being retrenched in the industry. The member for Canning has made the point that there could be opportunities were uranium mines to open promptly. Of course, some have been discovered, but most have still got a lot of approval processes to get through before those displaced mine workers could have an alternative job. The $42 billion stimulus package will not do that, unless they want to be checkout chicks or have some skills in cottage construction. As we know, many of the miners that are being retrenched are those on the construction side of the industry. They are the first to go when there is a cutback and they need job opportunities that are not catered for in this $42 billion package—although maybe some of them could become fitters of pink batts! The sorts of jobs that would suit these people are not being encouraged.

There was a major campaign during the period of the Howard government to change the tax laws—and tax, of course, is fundamental to this legislation—to encourage exploration, picking up on a Canadian tax arrangement. Dedicated exploration companies frequently declare losses because they are constantly spending money in looking for new mineral development opportunities. As such, they have losses which, under our tax law, accumulate in their books. Of course, these companies are of no benefit until they make profits, which may take a long time, and so that does not make investing in exploration very attractive for the typical investor. The Canadian process is to have what they term a ‘flow-through share’. It is the reverse of franked dividends, where the dividends are franked. Instead, where a company does not have to pay tax, the shareholder does not have to pay tax either. In this case, the company can allocate its losses from a tax perspective to the shareholder, which of course can be very attractive to the shareholder as a style of investment. There are many examples where people have participated in those sorts of tax friendly schemes.

It appears to me that if we want more people out there looking for uranium—now we have suddenly made it a good mineral rather than a bad mineral—then in fact it is time, in this particular environment, to consider tax assistance through the flow-through share principles for the broader mining exploration industry. I take this opportunity with this legislation to argue for that. When it was being promoted to the Howard government, the mining industry was booming; there were plenty of profits to be made in exploration and there was no need to give this concession. In the present economic circumstances, it certainly should be considered and, of course, it would contribute to further exploration in the pursuit of uranium. Uranium is in demand around the world and, again, as companies move away from carbon based sources of energy and on to uranium, you get a very serious increase in demand and the profits associated with that. That is good for the nation because the nation gets royalties, for which this legislation is designed, and a lot of jobs are involved, particularly in the development of these mines, as we have learnt in recent times. So there is every reason for the government to be out there doing everything it can in the wider context to encourage exploration.

My state of Western Australia was, under the previous state government, identified in the international mining industry as the toughest place in the world to do business because there was a total collapse of public policy in the approvals process. To its credit, the newly elected government has given that high priority and is trying to sort it out. But, as we read in the second reading speech and in the explanatory memorandum, the distribution of royalties is reasonably complex, because the Commonwealth will remain the collecting agent. They will provide the full amount collected to the Territory government and then it has an obligation under the Aboriginal Land Act of the Northern Territory, introduced in the years of the Fraser government, to make a pro rata payment to Aboriginal interests.

That is fine, but I have to draw to the attention of the House correspondence I have had with the minister for Indigenous affairs on behalf of Indigenous persons residing in the northern part of my electorate, soon to be inherited by the member for Kalgoorlie, who has just entered the House. In that area the Indigenous people are complaining about the collapse of due process within the land and sea council—in that case, the Yamatji Land and Sea Council. I have further problems of a similar nature but in an entirely different area, which I will not mention, in the southern area of my electorate with the great southern land and sea council. The point I am making to you is that, if we want to get into the business of exporting uranium, if we want people to be out there investing in exploration and employing people in that process and creating assets for people in the future, which may be needed to pay off a couple of hundred billion dollars worth of Commonwealth government debt, we have got to get some smooth transitions, and one of the great hurdles or logjams is within the Aboriginal approvals process. Here is a circumstance where the government is passing legislation to ensure that Aboriginal people associated with a particular area of land where mining development might occur get the equivalent amount of money in a trust fund that applies to the Territory government.

But the evidence is that they cannot make up their minds. The Yamatji council, and other land and sea councils operating within my electorate, meet once every three months—and only if they have enough money left in their budget to travel to some locality for that purpose. You cannot say to people with money willing to invest: ‘Come along to Australia and start investing money, form a company and buy the appropriate equipment; the worst thing that can happen to you is that you find something.’ I say that because it is when you find some minerals that you are in real trouble, because all of a sudden every possible authority in the country descends upon you—the heritage people and the environmental people. The piece of land has been there forever but it is only when someone finds something of value that all these other parties become interested. I guess it was highlighted by the extensive debates we had in this place about Hindmarsh Island in South Australia, where it became blatantly obvious that a group of individuals, not Indigenous, who wanted to prevent the development on that island co-opted a group of Indigenous people to claim all sorts of outrageous, as it turned out, cultural changes relating to the island—amongst others, all the local women were going to cease having babies if it was interfered with in any further way. I might add that people were living all over it at the time, but there was no marina and other things that have been developed since. What I am saying is that in that case it was real estate, but when we get back to uranium mining, which we are trying to simplify in terms of administrative procedures in this bill, all of a sudden activists stir up trouble amongst Aboriginal people, as they have in the past, and all of a sudden the development does not go ahead.

Major mining companies around the world, considering they are involved in Africa and many other countries, are very sensitive to these issues. They do not want to trample on the rights of Aboriginal people. But, when they are being manipulated by other parties for purposes that are unrelated and are often denied the royalties for which this legislation is designed, that is an outrage. The nation loses and people do not get jobs. What has occurred in Western Australia with INPEX is that the traditional landowners have got nothing because the state government at the time was unable to come to a conclusion regarding the provision of a site for an LNG process and they have gone to the Northern Territory. They do not have any Aboriginal problems in the Northern Territory because it is going to be built in Darwin. But these people do not get a cent because other people, partly in the higher echelons of the land council structure, messed it up.

Indigenous people in Geraldton have come to me with that complaint. There could be uranium out there—there have been spot finds in the past—but there is iron ore and all those developments. These people have come along and said, ‘There’s an opportunity for us and our people.’ One bloke, an Aboriginal person with a university degree, said, ‘We want to get out there and start businesses servicing and being employed by these mining companies.’ The Yamatji Land and Sea Council meet occasionally but not very regularly to give approval to these matters, and typically, at the end of the meeting, because some family interest has not been accommodated, they do not come to a conclusion. It just leaves people who are trying to develop our country and make investments in a very difficult period hung out to dry, so they pack up and go. I have other reasons to raise a similar issue. It is nice to have the royalties regime in place, but there will not be a cent paid out if all these processes are so deleterious to the development of whatever the find has been that it will not happen.

The member for Canning made the point about isotopes when it comes to low-level storage of radioactive products. Unfortunately—and, I think, unwisely—with uranium, if you are unfortunate enough to need to be injected with radioactive isotopes for the tracking of certain diseases or infirmities that you might have, when the doctor who administers that injection takes off their rubber gloves and disposes of the syringe, that becomes low-level radioactive waste. It is stored all over the capital cities of Australia because we are still fighting and arguing about where you might put a storage facility in the middle of a desert for our own domestic waste of that nature. When you get to plutonium and things like that, there may be other difficulties, but there is very little of that. You could probably pack that in a 44-gallon drum.

I am making the point that in this industry we need to get rid of the myths, but also, in terms of the fact that Aboriginal people, as provided for in this bill, are going to be one of the major beneficiaries, it is about time that their decision-making bodies became effective and efficient. Furthermore, and in the broader context, I have argued all my life that if—to give my analogy—you were to go to the hotel tonight, get drunk, get back in your car and drive it, you would have committed an offence and the police would deal with you accordingly, but you do not ring up and ask the police, ‘Can I go to the hotel?’ Why is it that, in so many areas of development, we have all these preliminary requirements and hurdles that people have to jump over for years? Usually they cannot even do them all at once; they have to go and get an approval from the heritage people, then they have to go and do an archaeology study and then, when that turns up a couple of little chips of rock that might have been the point of a spear, that is a major matter of concern. They talk about middens. Middens are waste dumps. We do not give a special cultural heritage value to the ones we create—landfill.

The whole point about it is: why do you have to go through all these things—heritage and environment—before you can mine? Why doesn’t the law as it is written apply so that you commence your development and comply with the law and, just as when we visit a hotel or any of the other examples I could give, you only get into trouble when you break the law? Furthermore, you should get judged by a person competent in the law, whereas all these preliminary processes are usually judged by public servants with no legal training whatsoever and often a high degree of bias as to what they believe is right. I happen to live on the Swan River, and I am just trying to build a new house. In the process of getting that approval, which only took a year, I was asked what colour I was going to paint it. I felt like saying ‘purple with pink spots’. When you have public servants interfering to that point in development, I do not think it is in the public interest.

The Aboriginal people are entitled to their royalties, but we have to make sure that they are not the reason that they never get them. I think that is a very important part to be considered in this legislation, but I welcome the fact that the government and of course the government of Western Australia have now approved of uranium mining. (Time expired)