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Wednesday, 2 June 2010
Page: 5091


Mr BEVIS (12:17 PM) —This budget, as with last year’s budget, is set against a backdrop of international difficulty in global financial markets. Against that background of the worst financial crisis this planet has seen in more than 70 years, Australia stands alone as the only advanced economy to have weathered that storm and to have avoided a recession. Today we look at an unemployment rate of around about 5.3 per cent, anticipated to fall to 4.75 by mid-2012.

It is worth noting that the IMF, the International Monetary Fund, have credited this government’s stimulus packages with having saved at least two per cent of the workforce from unemployment queues. That is a quarter of a million Australians in work today directly as a result of the Rudd Labor government’s fast and effective action to protect the Australian economy. That has been recognised by every credible commentator and just about everybody in the Australian community, except for the Liberal Party, especially its current leadership.

I want to refer to some of the observations that others have made. The Australian Financial Review in November last year said:

The federal government’s financial position is one of the strongest among the world’s leading developed countries, many of which face a huge task in reducing public debt to safe levels …

Australia is at the top of the economic report card when it comes to that performance, and I want to say something about government debt shortly to put that into perspective.

Reserve Bank Governor Glenn Stevens said this in March this year, as reported in the Australian:

We can come out of this episode—

that is, the global financial crisis—

as the country that didn’t have to buy their banks, where government finances are in terrific shape, where the government debt ratio will peak at 10 per cent of GDP, with a strong regulatory framework and where unconventional fiscal and monetary measures worked a treat …

Reserve Bank Governor Glenn Stevens’s view is that the approach this government took in insulating and protecting Australian jobs and businesses from the global financial crisis ‘worked a treat’. Michael Rennie, managing partner of McKinsey, in March this year said:

Many countries would envy Australia’s debt position—

and they do.

We need to put an end to the foolish and childish argument that so often goes on in this parliament, with those opposite claiming credit for the government’s low debt and saying—as we just heard then from the member for Maranoa, a person I had more respect for, frankly, than his speech gives credit to—that conservative governments, Liberal governments, pay off the debts and look after the economy after periods of Labor government. The inescapable truth of it is that, if you go back over generations—and I recently went back over a period of 30 years looking at the Australian government debt—Australian government debt is at the very bottom of the OECD every year. It has made no difference whether there was a Labor government or Liberal government. The truth of the matter is—and it is about time this debate had a little bit more truth and a little bit less spin—that the Australian government, irrespective of its politics, has had extraordinarily low debt levels. That goes back not just years, not just decades, but generations.

If you have a look over the last 30 years, you find that our debt has been a tiny fraction of that of our trading partners and the OECD average. At the moment it stands in stark contrast. Australian debt is now expected to peak at 10 per cent of GDP. Contrast that with the United States. The United States now has government debt in the order of 100 per cent of its GDP. The United Kingdom is in the same category—100 per cent. Japan has debt in excess of 200 per cent of its GDP. The average for all countries in the OECD is now above 50 per cent and Australia sits at the bottom of that at 10 per cent. So let us put to rest this nonsense argument that those opposite like to trot out: that they come and rescue the economy and pay off the debt. The truth is that Australian government debt is, and has been for as long as anybody in this place can remember, extremely low and it has not mattered whether there was a Labor government or a Liberal government. It is time we had a little bit of honesty in the debate. Every serious commentator knows that is the truth. It is a pity some of the people in the gallery do not print a bit more of what they know rather than just repeating some of the nonsense from those opposite.

With the stimulus package, the Australian government has helped steer Australia, alone amongst all of the advanced economies, through this period of economic difficulty without going into recession. In doing so, we have also embarked upon a program of building services and infrastructure. I have spoken in this parliament before about the wonderful work being done in Building the Education Revolution. In Queensland, where I know the situation quite intimately, the additional resources that have gone into schools were much needed and are being very effectively and efficiently applied.

But I want to turn for a moment to another area of importance, and that is health. Throughout our history, it has fallen to Labor governments to create the foundations for our decent health system. We often talk here about the Australian health system being the best in the world. That did not occur by accident and it was not easy, because every milestone that we point to today was fiercely opposed, usually by the conservative politicians in this country and very often by some in the medical profession.

I want to cite the key milestones. The Pharmaceutical Benefits Scheme, something that everyone in this parliament would now embrace and which the Australian people rely on to ensure that every Australian has access to quality pharmaceuticals, was a system introduced by the Chifley Labor government. It was opposed fiercely by the medical profession at the time and, in the face of that fierce opposition, Labor pressed ahead. It was the Whitlam Labor government that introduced Medicare, as we know it today—Medibank as it was then—to ensure that every Australian, irrespective of their means and no matter how poor they may be, could, if they were sick, go to their local GP and get medical attention. That was fiercely opposed by the Liberal and National parties and fiercely opposed by the AMA. Today it is regarded as a bedrock of our health system.

Of course the election of the Fraser government saw Medibank largely dismantled and dismembered, and it took the next Labor government of Bob Hawke to restore it and it became the Medicare system that we largely know today. I do have to say that the Howard government took the knife to that when it had the opportunity. It all but destroyed bulk-billing for the first half of its tenure in office, only to realise that the Australian public would not tolerate that, so it spent the next few years trying to restore what it had destroyed.

It is now the Rudd government that is taking the next significant step, with the historic agreement reached with the states and territories—all but the Liberal government of Western Australia. We are now going to see significant increases in funding for hospitals so that they will be properly resourced into the future and run locally. We are also seeing the introduction under Labor of e-health, allowing each individual to personally control their own medical records but to have them accessible electronically so that wherever they may be in the country they can go to a doctor and be assured that that doctor has access to their full history. This is an interesting example of the double standards the Liberal Party have applied to this issue. The leader of the Liberal Party, Tony Abbott, has said that he will abolish the e-health commitments that this government has made. That is in direct contrast to what his own health shadow minister had to say, and it is even in contrast to what he himself has said in the past. When he was health minister, Mr Abbott said—


The DEPUTY SPEAKER (Hon. Peter Slipper)—The member should refer to the Leader of the Opposition by his title.


Mr BEVIS —I said when he was the health minister.


The DEPUTY SPEAKER —I think you then said ‘Mr Abbott’.


Mr BEVIS —I did, yes. The then health minister—I will not use his name if that offends the Deputy Speaker—


The DEPUTY SPEAKER —No, it is just that the standing orders should be observed.


Mr BEVIS —Like I said, I will not use his name if that offends the Deputy Speaker.


The DEPUTY SPEAKER —It is not a question of offending me; it is a question of what the standing orders provide.


Mr BEVIS —He said:

Without an integrated health record system, effective and efficient team care will be almost impossible. Queues will be longer and costs will be higher as health professionals under pressure keep asking the same questions and ordering the same tests.

That was the view of the Leader of the Opposition when he was health minister in 2005. He thought it was a good idea then; today, of course, he has a different tune and he has committed the Liberal Party to oppose this. This is in contrast to what his shadow minister has had to say. His shadow minister in 2009 is on the record as saying:

When I first sat down with Nicola—

the health minister, Nicola Roxon—

coming into this portfolio only six months ago I gave her an undertaking that we would—on the issue of e-health—provide bipartisan support.

It is a bit like the bipartisan support they provided for the Carbon Pollution Reduction Scheme—it did not last very long. You cannot take the Liberal Party at their word. They have demonstrated that they are untrustworthy.

I want to turn to the debate that is engulfing a lot of newspaper columns at the moment—the debate on the resource super profits tax. It has been discussed in this debate by other speakers. Opposition members continue, through either ignorance or malice, to perpetuate falsehoods. Rather than just have me argue the point, I want to refer to the comments of the former head of the Minerals Council of Australia, Mr David Buckingham, who was also the head of the Business Council of Australia. He described some of the reactions to the tax in the media as ‘hysterical’. So let me look at what the facts are.

The resource super profits tax of 40 per cent replaces the crude oil excise, and it effectively replaces state and territory royalties by giving a refundable credit for all royalties that have been paid. That is going to ensure that there will be no double taxation of resource profits. The new lower company tax rate of 28 per cent will apply to all companies, including mining companies. This new super profits tax only applies to the super profits. In fact, mining companies in less profitable ventures are actually going to have their tax rate reduced. For example, most mining companies with a 10 per cent profit return on investments will actually pay less tax, not more tax. Companies are also going to be encouraged to undertake exploration with an upfront rebate at the prevailing company tax rate, including, I am pleased to see, for the exploration of geothermal energy. David Buckingham, who given his experience is a person who understands the industry very well, made this comment in a recently published article:

… I think the balance over time is likely to see an escalation in investment, a growth in jobs, a growth in exploration activity not, as a number of the more hysterical commentators are suggesting, withdrawal.

David Buckingham not only understands the industry very well but is able to bring to this a broader perspective than the short-term self-interested mining executives, who seem to be able to channel their thoughts through the Leader of the Opposition very well. In fact, David Buckingham, in his article, cited a similar scare campaign that was run by mining companies. He said:

A similar pattern occurred before I arrived at the Minerals Council in the 1990s with the long and scarifying debate around native title. Australians were told native title would cause an investment strike, lost projects, lost jobs, exports and national income. As we all remember, the debate had some ugly features throughout.

Of course, we all know what happened next—native title legislation was passed, the sky did not fall in, and the mining industry went on to grow and prosper in the years that followed.

In the context of the current debate and indeed the ads that the mining companies are running today—and I think Rio Tinto had one that was mentioned in media bulletins earlier today—David Buckingham made this rather prophetic observation:

… miners will always quote the 30 per cent company tax rate. They won’t talk so much about the other elements of the company tax system that are equally important, but far less obvious to the casual observer. For example, not many miners will talk about the concessions they enjoy under the company tax. But we all know that concessions like accelerated depreciation mean that the effective tax rate is well below the headline rate.

He went on to say that the Henry review found that in Australia the biggest beneficiaries of these concessions are the information and mining sectors. He said:

Once you allow for concessions, the mining sector faces an effective company tax rate of 17 per cent, far shy of the 30 per cent headline rate.

Rio Tinto are spending their shareholders’ money trying to tell people they are paying too much tax—something like 35 per cent. But David Buckingham, the former head of the Minerals Council, has belled the cat. He says that, when you take account of all the concessions, the true figure is closer to 17 per cent. There are plenty of wage earners in my electorate who, as pay-as-you-go taxpayers, would be delighted to have a 17 per cent tax rate. In fact, those of my constituents who earn more than $80,000 are currently paying more than 40 per cent marginal tax anyway, so I do not think they are shedding too many tears at the thought that Rio Tinto might have to pay the same rate that they pay as individuals.

But there is an important comparison to make in terms of what has occurred in the past decade or so with the mining boom and where the revenue has gone. From 1999-2000 through to 2008-09, mining profits grew by $80 billion—a very substantial increase in profits for the companies. Over the same time the amount of additional tax collected from the mining companies by all governments—that is, state and federal governments—grew by just $9 billion. So in the last decade we have seen an enormous shift towards the companies. The taxpayers of Australia have received a diminishing return on those mining profits. There has been an $80 billion increase in profits for the mining companies but over the same time there has been a $9 billion increase in revenue to all governments.

The mineral wealth of our nation is not the property of a handful of very rich Australians, nor is it the property of overseas corporations and investors. The mineral wealth of this nation belongs to all of us and it is time that all Australians got a fair share of it. The Leader of the Opposition seems to think that mining companies pay too much tax but at the same time he wants to block Labor’s cuts in the tax rate for small business. The Liberals want to block Labor’s plan to increase the minimum superannuation from nine per cent to 12 per cent. I should add that this increase would have occurred if the Howard government in its first budget had not abolished the program for increases in superannuation that had been put in place by the previous Labor government. It seems that the Leader of the Opposition, Mr Abbott, and the Liberal Party are keen to protect the biggest mining companies in the world but not too keen on protecting the retirement benefits of millions of ordinary working Australians.

There was a very worthwhile editorial in the London Financial Times on 30 May. It states:

Australia has for years levied a petroleum rent tax of 40 per cent on oil and gas profits before applying the normal corporate tax rate of 30 per cent to the remainder. Canberra now wants to do the same in mining. Good. It will be a long overdue update of the mediaeval practice of levying royalties on gross production. Being regressive, royalties squeeze marginal producers while letting those with the most abundant mines keep the largest share of their loot.

Quite insightfully, the London Financial Times says:

Miners predictably warned it will hurt jobs. The charge that it turns Australia into the ‘number one sovereign risk issue’, made by Tom Albanese, chief executive Rio Tinto, is absurd.

That is the judgment of probably the pre-eminent financial newspaper in the world, the London Financial Times. The London Financial Times labels Tom Albanese’s and Rio Tinto’s claim as ‘absurd’. Put that together with the comments of David Buckingham, the man who headed up the Minerals Council for years in this country and was an executive at the Business Council of Australia, who says that the response of the mining companies, echoed by those opposite in the Liberal Party, is ‘hysterical’, and you start to understand the picture that confronts the government. The editorial in the London Financial Times went on and noted, interestingly:

The industry’s greatest fear is that other countries follow Canberra’s lead. As the benefits of the tax reform become visible, there is no reason why they should not.

The London Financial Times has identified where this campaign is at. The reason this government is confronting such a heavy-handed, high-cost media campaign from the mining companies is not just that they have a concern about what will occur here in Australia. They know, like the London Financial Times, that there are plenty of other countries in the world that actually want to move down this path too. And that worries the mining companies more than anything that is happening here. Their mouthpieces in this parliament are the Leader of the Opposition and the Liberal Party, who seem to be more concerned about the top end of town in the mining companies being able to rip off $80 billion in the last decade—I withdraw that. They did not rip it off, they received $80 billion in profits, and that is a fair return for them. It is $80 billion in profits but only $9 billion to the taxpayer. This budget is a good budget. The tax laws are good laws and I support them. (Time expired)