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Wednesday, 2 June 2010
Page: 5078


Mr KEENAN (11:19 AM) —I rise to talk about Appropriation Bill (No. 1) 2010-2011 and cognate bills and the government’s recent budget, which was brought down at the beginning of the month. The Labor government inherited perhaps the strongest economy in the Western world when it came to power in 2007. It inherited an economy with no government debt and close to $50 billion worth of reserves. It inherited an economy with an unemployment rate of four per cent—a near historic low. Our banking system was well regulated thanks to the reforms of the coalition government. Because of those reforms, our banking system had a very small exposure to subprime lending and it was, in every respect, financially stronger and more secure than its counterparts in America and Europe.

This sound economic management, which was instituted by the previous Howard government, provided the basis from which the Rudd government could deal with the unexpected global financial crisis. Faced with the inherent uncertainties of the circumstances we were in, and in the knowledge that we were better positioned than almost any comparable country, a prudent government would not have embarked, of course, on the reckless spending that we have seen. A prudent government would have better targeted spending and would certainly not have expended the exceptional quantum that the Rudd government have expended since coming to office.

Indeed, this stimulus package is characterised by some of the most wasteful and mismanaged spending in our country’s history. The pink batts program has wasted billions of dollars. The school halls program, known as Building the Education Revolution—one of the Orwellian titles that the government give to their programs—has wasted literally billions and billions of dollars. This Labor government should hang their heads in shame for the way they have mishandled taxpayers’ money and, more particularly, for the way in which they panicked and responded over the last 2½ years to the challenges that have been thrown up by the global economy—spending money like drunken sailors. Sadly, this budget does nothing to address those issues.

I want to talk about a few things today. As a Western Australian, I want to talk particularly about the mining tax, because it threatens to drive a stake through the heart of my state’s prosperity. I also want to say something about how this budget fails my electorate of Stirling and to touch on my portfolio area of justice, customs and border protection.

I think one of the biggest of the issues that overhang this budget is the great big new tax on mining. Not long ago the government had another great big new tax, the Carbon Pollution Reduction Scheme, which was the Prime Minister’s response to what he considered the greatest moral challenge of our time. Now that that scheme is in abeyance, Labor has invented another great big new tax on Australians. This tax will destroy Australian jobs, it will encourage Australian industry and international industry to move offshore and it will increase the cost of living for all Australians.

It is a big new tax on the mining sector and astonishingly the government has been selling this big new tax on the mining sector as being something that is designed to make the mining industry bigger and stronger. Sadly, it cannot find anyone within the mining industry to support that case. On a very basic level, of course, it just does not make sense. This is a government that has been reduced to the worst form of propaganda to sell this tax and it is a government that has been punitively attacking mining figures who have dared to disagree with it. Labor’s resource profits tax is destructive and it is a tax that changes the rules of the game for all investors, particularly those who have invested billions of dollars in the industry based on the fact that Australia was a country with very low sovereign risk and not liable to such arbitrary changes in policy.

This was a tax that was designed without any industry consultation whatsoever. If the government had cared to consult the industry, they would have been given a much better idea of the destructive nature of what they proposed to do, and I just want to go through some of the responses of some of the larger mining companies. In a letter to shareholders on 17 May, BHP Billiton chairman Jac Nasser said:

The risk is that Australia could now be seen by the rest of the world as a less stable and less competitive place for long term investments.

Xstrata chief Mick Davis spoke to the Bank of America-Merrill Lynch Global Metals and Mining Conference on 11 May. He said:

This is the biggest assault on the mining industry I have witnessed in my now long involvement in the sector. I am troubled both at the magnitude of the tax impact on mining companies in Australia but also its retroactive nature and the total absence of consultation in the run-up to the announcement. This is much more reminiscent of countries perennially trapped in a spiral of mercurial populist actions, followed inevitably by dwindling foreign investment and ever-poorer populations; not of a country like Australia.

All of the Western Australian members and senators represented in this place, in fact all members of the opposition, stand resolutely opposed to this tax. Sadly, and although the Western Australian members of parliament have called on them to do so, Western Australian Labor MPs and senators remain silent or endorse this attack on our state. Nothing but a resounding rejection of this great big new tax will stop mining projects in Western Australia and around the country being put at risk. The respected economist Dr Henry Ergas recently said:

The bad news on the death and taxes front is that death is still certain. The worse news, in a world where investors value predictability, is that taxes are not.

As reported in the Australian on 19 May, Fortescue Metals group have put their $10 billion Solomon hub and their $7 billion Western hub projects—which were together set to employ as many as 30,000 people in construction and operation—on hold to examine the financial impact of the tax. If we just dwell on that for a second, that is an incredible amount of investment and tens of thousands of jobs just from one company alone that have been put at risk by the ramifications of this great big new tax.

If this tax was such a good tax, as the government has been trying to sell it to the Australian people, why aren’t other industries lining up to be taxed in the same way? The reality is that it is a very bad tax. This is a tax that has not been introduced at the same magnitude anywhere else in the world. It is a tax that will make mining companies in Australia the highest taxed compared with any of our competitor nations. We know that it was the mining industry that underpinned us in two global economic downturns over the last decade and that we rely for growth to get more income tax in the normal way on the way in which we will allow this sector to grow. By introducing this big tax on mining profits, the Prime Minister is killing the industry that has served us so well over the past decade. The impact, of course, will mean that foreign countries will win new investments with money that could have been invested here in Australia. As an article in the Business Spectator on 20 May said:

The big resource companies—and indeed the internationally active juniors—would weigh up the respective returns through investing within an Resource Super Profits Tax environment or putting their capital to work in lower-taxing jurisdictions offshore.

Virtually overnight, for instance, BHP’s 75 per cent-owned Indonesian coal project—the 774 million tonne Maruwai metallurgical and thermal coal—would appear higher up the development pipeline than it did before the announcement of the Resource Super Profits Tax. As would the Jansen potash project in Canada, with its effective tax rate of 23 per cent versus the 57 per cent BHP faces under the Resource Super Profits Tax.

Of course, the windfall that foreign countries will be receiving because of this ill-conceived tax was confirmed by a Canadian MP—a Conservative MP by the name of Brad Frost—who came on Australian radio to say:

Well, money goes where the biggest profits are and when you raise taxes profits tend to go down. So I’m sending out the message—Canada wants Australian business.

The dollars are going to move. People are scared because their profits are going to go in taxes so they should come to Canada—a low taxed, mining friendly jurisdiction.

This resource super profits tax, if it is not halted, will destroy the very industry that has saved Australia from recession. I would urge the government to reconsider its plans before they do even more damage to Australia’s international reputation as a place where you can come and invest your money in an environment of certainty, not subject to the arbitrary whims of government like some South American dictatorship.

In the limited time I have got available, I would like to turn specifically to my own electorate of Stirling. I can tell the House that if the coalition were to get elected in the upcoming election—and we hope that that will be sooner rather than later—I will be fighting for the electorate of Stirling to get its fair share of government funding. Sadly, through this budget, local projects in Stirling have gone wanting, with no new funding announced for the projects that matter most to the people I represent. At the last election, Kevin Rudd announced in front of the camera for advertisements in Western Australia, standing in Kings Park overlooking the city, that he would ensure that Western Australia got its fair share. By his own measure, Stirling’s fair share appears to be nothing. Despite the contribution that the people of Stirling have made to help steer Australia through the global financial downturn, this government has overlooked every area of need in my electorate.

The obvious and most notable snub by Labor has been their repeated failure, despite consistent promises, to provide any funding for road infrastructure in Stirling. In other Labor states across the country, this budget has managed to find billions of dollars in funding for major road and infrastructure projects. The budget has brought forward money for a number of projects that I am sure are welcomed by other members’ electorates, but there has been no funding, absolutely no funding, for road projects in Stirling.

The most galling omission is something that Kevin Rudd promised prior to the last election, that every state Labor government has promised and that every federal Labor candidate in Stirling has promised, and that is that they would build the Mirrabooka Avenue-Reid Highway overpass. This intersection has at various times been the worst black spot in Western Australia and has been responsible for countless deaths, maimings and injuries. It has been a serial trouble spot for many, many years, something that all sides of politics have acknowledged needs to be addressed. Sadly, the promises made by state and federal Labor candidates have gone unfulfilled again in this budget. As the member for Stirling it has long been one of my priorities to see this intersection improve with the construction of this overpass. I have been the member since 2004, and literally, in every state and federal election since then, the Labor candidates running have promised that this overpass would be built. But the state Labor government has squibbed it and the federal Labor government has squibbed it also.

Here we are, after one term of this government, three budgets and a record spending spree, the likes of which Australia has never seen outside of wartime. We have record government debt, yet no money has been found to build this vital piece of infrastructure in my electorate of Stirling. As is so often the case with Kevin Rudd and his Labor government, they are all talk and no action. Later this year, when the election is announced, I am sure that the Labor Party will again commit to building this overpass, but I would encourage everyone in Stirling to peruse their previous empty promises on this matter and make a judgment about how serious they are this time.

The Rudd Labor government have given nothing back to the Western Australian community and they have been particularly harsh to Stirling. What this government should have done was deliver funding to the local projects that matter most, such as funding to help fight crime—and crime remains one of most serious issues facing people in my community. My community knows all too well the effects of crime, particularly vandalism, theft and assault, and sadly this is an ongoing problem. On the front page of this week’s Stirling Times, the local paper in my electorate, there is a report on the increase in the number of reported burglaries of local businesses. During the term of the Howard government I was very proud to secure funding for the City of Stirling’s Safer Suburbs Plan, which delivered more security patrols through local neighbourhoods, CCTV cameras at Scarborough Beach and throughout the electorate, and crime prevention measures such as electronic message boards and ATV security vehicles. Unfortunately, the Labor government have not shown the same sense of urgency when it comes to addressing the alarmingly high crime rate in parts of Stirling and have failed to deliver any more funding for crime prevention measures in this budget.

Nor has this government allocated funding for local environmental projects such as the one down at the Henderson Environmental Centre. The Henderson centre has the potential to deliver environmental education across my electorate and beyond, and I have been very keen to work closely with the new state Liberal government to see how the centre can be improved and look at the possibility of developing it into a facility which is one of the premier environmental centres in Western Australia. The centre can be used not only to educate schoolchildren about the local environment but also to assist university students with research projects. The Henderson centre is a fantastic resource and already enjoys the support of many local environmental groups. Educating our youth about the benefits of protecting the environment is important, and the Henderson centre would be an ideal avenue to deliver this message.

Sadly, it is projects such as this which the Labor government has chosen to ignore. There has been no allocation for valuable and worthwhile local projects in a budget that instead focuses on slugging the mining industry to pay off the government’s massive debt, accrued through waste and mismanagement. Sporting facilities, schools, community groups and other local organisations in Stirling have all fallen by the wayside as this government desperately tries to bail itself out of the fiscal problem that it has created.

The Labor government will probably claim in the coming weeks that this budget has allocated funding to one local project in Stirling: the Mirrabooka Community Centre. But this is a typically false claim—typical smoke and mirrors. The government is actually just repackaging funding that was already announced in previous budgets, and it was a commitment that they made prior to the 2007 election. That the government has included old funding in a new budget is an admission of their own guilt as they try to divert attention from the reality that Stirling has been completely dudded by what has gone down as one of the worst budgets in Australian history.

I believe that my constituents deserve better, and as a member of a future coalition government I will be fighting for local projects in Stirling such as improving local roads, including the Reid Highway and Scarborough Beach Road. I will support environmental projects such as the Watermans Bay and North Beach coastline, and help the Henderson centre reach its potential as a premier environmental education centre in WA. I will also do whatever I can to get a future coalition government involved in crime prevention measures in local communities and, of course, particularly in my local community, assisting the good work done by the City of Stirling.

I want to say a few quick words about the tragic inaction in my own portfolio of justice, customs and border protection. We all know about Labor’s dismal record on border security. Since changes were made to our robust system of border protection in August 2008, we have had a tsunami of boat arrivals: 129 illegal boats have arrived since then, illegally bringing to Australia almost 6,000 people. This problem, of course, is accelerating. In 2010 we have already witnessed an influx of 61 illegal boats carrying over 3,000 people. The surge of boats continues because the government does not have the resolve to do anything about it.

Labor’s failed border protection policies have already cost taxpayers in excess of $1 billion over the four years of the estimates contained within this budget. The government, of course, is doing nothing to stop these costs from increasing. Their answer to this problem is to keep shovelling money to pay for the cost blow-outs and not to actually address the issue, which is the broken policy here in Canberra. The $1 billion of blow-outs is just the beginning of this; it will go higher and higher as long as the government refuses to address its failure to protect Australia’s borders.

Despite the rhetoric from the Rudd Labor government about being tough on border protection and crime, the budget papers indicate that they will slash 250 jobs at the Australian Customs and Border Protection Service, 10 jobs from the Australian Institute of Criminology and one job from the Australian Commission for Law Enforcement Integrity. As a result of Labor’s reckless spending, the Prime Minister has cut $146.3 million from the Customs service, despite this agency already being stretched beyond capacity in dealing with his failure to address the crisis on our borders. The $1 billion blow-out that I referred to comprises $770 million to increase offshore asylum seeker management expenses and $236 million to be spent on capital items, including additional accommodation on Christmas Island, reopening the Curtin detention facility and upgrades to other centres around the country.

This government’s inaction has been plain for everybody to see. It is a problem that continues to accelerate, and the government has no answer to it apart from further spin and throwing further money at the problem. This will not fix it. It is a problem that has been completely made by Kevin Rudd’s weakening of the system in August 2008 when he dismantled the Pacific solution and the system of temporary protection visas that had stopped these boats from flowing in the first place. Only a coalition government will address this problem and, therefore, I reject the cuts that have been made to the Customs and Border Protection Service. The government should do much better in this vital area. (Time expired)