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Tuesday, 1 June 2010
Page: 4882


Mr MELHAM (7:22 PM) —I rise to speak on Appropriation Bill (No. 1) 2010-2011 and Appropriation Bill (No. 2) 2010-2011. This is the 21st budget that I have had the opportunity to witness in this place since I was first elected on 24 March 1990. Indeed, my first speech in this place was on an appropriation bill and was given on 11 September 1990.

I am pleased to rise in support of the budget, because I think it is a responsible budget and it is a budget that shows that the government has been acting in a responsible way both economically and for the safety and protection of our community. We now know that during the global financial crisis this government created some 225,000 jobs. The prediction at the beginning of the crisis was that 200,000 jobs would be lost. That has not happened. We are the best-performing economy in the Western world. That means that many hundreds of thousands of families—many hundreds of thousands of people—are better off. We have protected our human capital.

Those opposite were arguing at the beginning of the economic crisis to do nothing or to give tax cuts to the rich. The only criticism I have of this government is that we have not gone out and told the electorate often enough and loud enough what we have achieved. The average punter in the street does not believe it, or does not think that it was going to be as bad as what was predicted. But they only have to look at the rest of the world—or just in England and America—to see what happened.

I know what the stimulus did in my community, where some $90 million has been committed to skills. I was at a function on Friday night with a number of builders, and they told me that, for their firms, it meant the continuation of work, the retention of existing employees and the putting on of new employees. We should not take that for granted.

Both sides of the House should be looking after our human capital. I can understand why those opposite want higher unemployment: it means that they can push the price of wages down and attack conditions. We now know that we are going to get a reintroduction of Work Choices should the opposition win the next election.

In relation to this budget, there have been a couple of measures that the government has announced for which there is a campaign, and it is a campaign that I do not think we should be giving in to. Last Thursday in a doorstop, when asked about the resource super profits tax, I said that there was ‘no doubt the tax would be sorted, even if it took some time,’ and I also said: ‘What you need is a proper compromise for the Australian people. I don’t want a quick-fix—I want a solution that is in the interests of Australia.’ That is what we should be looking for. I note that the Prime Minister, in his press conference today with the Treasurer and the Minister for Resources and Energy, had this to say:

… we do not expect to land any agreement with the mining industry any time soon. Anyone out there expecting that there’ll be some magic deal at midnight tomorrow night is wrong. That’s not how it’s going to be. Furthermore, this is going to be quite a long and protracted negotiation over quite a long period of time. And there I speak of weeks, at least, if not beyond.

The Minister for Resources and Energy reminded us that it was a tax on profits; it was not a tax on extraction. The Prime Minister also said:

… the Government is entirely prepared for the sorts of scare campaigns that we’ve seen in times past. We saw it with the introduction of the Petroleum Resource Rent Tax, we saw it over Mabo, we’ve seen it in relation to industrial relations …

I was here when we saw the initial scare campaign by the mining industry over Mabo. You would have thought that the sky was going to fall in. It did not. The then government was confronted with a High Court decision and we took the view that we would respect that High Court decision and attempt to create certainty in the marketplace. There were many that wanted the government to extinguish native title and acquire the property rights of Indigenous Australians. They argued that it would be the end of the world as we know it. The government at the time came up with a balanced act. The land rights act—which was initially an act of the former Whitlam government but which did not get through prior to the dismissal in ‘75—was enacted by the Fraser government and has a veto. The Native Title Act has a right to negotiate, a right to be consulted. There is no right to veto. The Native Title Act was an alternative to common-law litigation. It was an act that was to help miners to sit down and talk with Aboriginal people.

To their credit, when the Wik decision was handed down the mining community did not go berserk. It was the farming community, because they had expected that a lease would extinguish native title. But the miners acted responsibly. I myself dealt with Rio Tinto, as they then were, in relation to what they wanted to do with the proposed Century Zinc mine. The reason I refer to that is that it is an example of how you reach an agreement that becomes a long-term agreement. Originally Rio Tinto were asking for the state government and the federal government to introduce special legislation, because they had been negotiating outside the Native Title Act. They had some time lines in relation to that mine under which they needed an agreement.

When we were approached as an opposition I met with the then Managing Director of Rio Tinto, Ian Williams, who said, ‘Our commitment is to work with the community to create opportunities to spend money on training.’ That is a quote from an AIATSIS document. My advice to the company back then was: ‘Withdraw your request for special legislation and operate within the Native Title Act and you will have a title within 12 months.’ The company did that, and the state and federal government were not all that impressed. As it turned out there was an agreement reached within 11 months. As a result of that agreement, there was a $60 million compensation package, with $45 million dedicated to creating job opportunities. Out of what the company perceived was a crisis came a long-term arrangement with Aboriginal people that turned into a win-win situation. The government at the time was left floundering because they did not want an agreement; they actually wanted to heighten tensions over the Century Zinc mine. The benefit that Rio Tinto had was that every other Aboriginal community in the country wanted to deal with them in relation to mining because they had shown respect for Aboriginal people in the Century Zinc project.

I think the same thing needs to happen here in terms of some of the government’s initiatives, particularly the resources super profits tax in this budget. If the opposition are saying that mining companies can basically blackmail the government through $100 million of advertising and force concessions out of the government that are not in the national interest, then they are kidding themselves. That is no way to do business. I do not have expertise in all the intricacies of mining tax and all that. I leave that to others. All I will say is that it is not appropriate for this stoush to be going on in a public forum when $100 million or more of company advertising is being used to try to suborn the government into submission. That is not the way to do business.

It is not the intention of this government to stop mining in this nation. The history of this government and of key individuals in this government has been one of assistance to the mining sector. And we know from the submissions to the Henry review that such a tax was contemplated. But can you really say it is good public policy when the loudest section of the community can run advertising campaigns to basically drive the government into concessions that are not in the national interest? It is madness.

I can understand why Mr Palmer is putting the boot in—because he is a member of the Liberal-National Party. He sees that it is in his political interests and probably in his financial interests to undermine the government’s position. My problem is that, at the same time that these companies might be doing this, they are the ones that are creating a problem on the Stock Exchange for their shareholders, yet they are blaming the government for it. And we know that some of the problems in relation to the Stock Exchange have to do with Europe and Greece.

But what does the government want to do through the resources tax? It is a tax on profits. If it needs to be rejigged in some respects, I am not here to argue—other than what is on the public record—the niceties of that particular formula or what concessions should be or need to be taken into consideration. What I have heard is that one in three dollars was being paid by mining companies 10 years ago and it is now one in seven. This is a national resource that is owned by the people, so what the budget is attempting to do—and I heard the minister for resources in the press conference—is come forward with a position that in effect sees us through good times and bad times.

I think the opposition are not doing themselves any favours by just jumping on the miners’ bandwagon. That is why I talked about native title and those other matters in the past where we were told by the mining sector that the sky was going to fall in. It is not going to fall in. If it were going to fall in and you could demonstrate it to the government during detailed negotiations, I am sure that the government would make the necessary adjustments. I do not believe that the government is acting in bad faith or wants to see mining companies fail. There might be some in the opposition who, in the lead-up to an election, would like to run that argument. Is that how we are going to run, in effect, a tax policy? This is different from the GST. The GST was an ideological argument about whether you have a tax on consumption, and I note that even in relation to that tax the former government made concessions to the Democrats to get their legislation through. Their initial, pure position in terms of food was not maintained.

I think the average member of the electorate will agree that the resource super profits tax, when it is explained to them, is a fair thing. What are the offsets? We have a superannuation guarantee increase from nine per cent to 12 per cent. We have some other superannuation measures. Small business has simpler, lower tax. There is a two per cent cut in company tax. There is an infrastructure fund. All of these things are offsets. I am quite amazed that the Minerals Council of Australia, having first submitted to the Henry review their support to such a concept, have now gone feral. The other thing that is staggering is that this tax is not due to come in until 1 July 2012. There is no legislation before the parliament. The government has allowed time for consultation, for the necessary discussions to take place and for the legislation to be formulated for a start-up date on 1 July 2012, yet we have the opposition wanting to abandon the proposition without even following it through. I think that is bad public policy on the part of the opposition. It will not augur well for them if the community has to reach a judgment on it.

My own personal view, as I said earlier, is that there should be a proper compromise for the Australian people. The government, in conjunction with the relevant stakeholders, should sit down, work it through and seek to reach agreement. If the mining companies think that it is a good thing to take the government on during an election, that might be right—if you have got blinkers on. What happens if you lose the election? What if the government, in conjunction with the Greens, has control of the new Senate from 1 July 2011? What does that do for your investors? If there is no agreement, it is not something I am frightened to go to an election with. I am quite prepared to go to an election with it and get a mandate from the people. I am sure the opposition are prepared to go to an election with it, too, because they think it will help them in Queensland and Western Australia. But is that the way to run a tax policy for a sector of the community that is vital to the Australian economy?

My advice to the mining companies when I was shadow minister for Aboriginal affairs was not to rely on politicians to deliver you certainty but to go out and achieve it with Indigenous communities and other stakeholders. The smart mining companies did that after Mabo. I pay tribute to the leaders of the mining sector because not just in Australia do they have to negotiate with Indigenous people but they have to do it around the world. Rio Tinto has arrangements around the world with Indigenous people. There is an example where the mining companies learnt from being burnt in the Mabo situation where they were not at the table. In the end they were hostile to the government and they lost, and it did not get picked up after Wik. I say to the mining sector that the way to sort this out is not to have it as the subject of an election between us and the opposition. What you want is long-term certainty. If you have got a case, then argue the case at the appropriate table. What precedent is it for those of us in political life if we are going to decide policy on the size of a public relations campaign that a section of the community is prepared to run? I know what my view is. I am prepared to lose on it. I am prepared to lose on it because that is not the way to do business. In the Minister for Resources and Energy, Martin Ferguson, the resources sector has a champion. I know it and they know it. They can get in his door any time they want to put their case. It should be the same with the Treasury on this.

As I said, it is the principles I am interested in here. I am not going to have an argument on the detail, because that is not my area of expertise. My area of expertise is settling disputes as a lawyer. When I was a lawyer I learnt very early on to cut a deal with the prosecution if you could; that you only relied on a tribunal when it was a hopeless case.

In this budget—and no-one has run through these figures and exposed them as being faulty—we are bringing the budget back into the black three years earlier. That is another demonstration of the responsibility of this government. At the end of the day, since the budget was delivered till now, I have not heard anyone say, on the assumptions that we have made—which are conservative assumptions—that what we have said will not happen.

I know the opposition are wounded and they are looking for a fight, but this is not the sort of fight—


Mr Hawke —Wounded?


Mr MELHAM —They are wounded because they lost the last election. I am not particularly worried about the polls because the body language of a lot of people in the opposition is not that of people who think they are going to win the next election—but that is a matter for the punters to decide. I will say that if you were a shareholder and your shares relied on the result of an election that even on the current polls will be tight, then it would be pretty dumb if your directors relied on an election to sort out the problem rather than on negotiation with the government. That is jeopardising shareholders’ money, if you ask me. That is playing games with shareholders, if you ask me. That is playing games with good public policy.

I have great pleasure in rising to support this budget. I think it is a good budget. It is a budget that exposes the opposition, because I am still looking for something positive from them. All I have heard in two-and-a-bit years is negative, negative, negative. They are a bunch of knockers. What do they stand for? We will soon see. This budget stands for a better Australia and I commend it to the House. (Time expired)