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Tuesday, 12 February 2013
Page: 1086


Mr RANDALL (Canning) (19:59): I am delighted to speak on the Appropriation Bill (No. 3) 2012-13 this evening because I have much to say. It is always difficult to follow a quality contribution by the member for Bruce, so I will do my best to bring to this chamber an examination of some economic issues that are very relevant to my state of Western Australia.

At the outset I want to cut to the chase and say that this Labor government is intent on damaging Australia's mining sector. Why is it intent on doing that? Because it wants to tax it out of existence. I will explain this as we go. Any responsible government should support rather than hinder the nation's most important industry and Australia's unique economic advantage. However, the policies produced by this government have made it abundantly clear that they are uninterested in supporting this industry in any meaningful way. Furthermore, both the Rudd and Gillard governments have shown a preference to do backroom deals with multinational miners BHP, Xstrata and Rio rather than dealing with Australian people who have produced mines and resource companies from scratch such as Gina Rinehart and Twiggy Forrest. They should be applauded rather than the disgraceful attacks that have been made on them by the Labor Party, particularly the Treasurer, the member for Lilley, Wayne Swan. They should be applauded rather than scorned.

We have spent a lot of time in this place exposing the flaws associated with a carbon tax so I will not spend too much time on it tonight other than to explain to this House that this carbon tax is a direct assault on the mining and resources industry of Australia and particularly Western Australia, as that is where most of the action is happening in terms of resources and mining. We are all aware today that the West Australian Labor leader, Mark McGowan, has tried to dissociate himself from the Prime Minister, Julia Gillard. He does not want her in the state for the state election and he does not want her over there at all in relation to her policies. In fact, he has made it quite clear in the last few days that he does not support a carbon tax. He is also dissociating himself from federal Labor's mining tax. Federal Labor's taxation policies take a direct aim at our mining sector. Indeed, Mr McGowan has made it clear that he is very aware of this and this tax is a taxation of envy on states like Western Australia and dare I say Queensland.

As Kevin Rudd, the member for Griffith, has pointed out today, this was a tax generated by the Treasurer, Wayne Swan, as a result of Ken Henry's investigations into taxation. He sold it to the then Prime Minister, Kevin Rudd, and Kevin Rudd today has said that this is a tax that Wayne Swan, the Treasurer, sold to him in a flawed way. We will not go through the whole details because it has been enunciated beautifully by the shadow Treasurer, Joe Hockey, today in the fact that it has raised only 10 per cent of its income predictions. They said that in the first 12 months on their modelling it would raise $2 billion. They attached to it a whole lot of programs that will be paid for by this $2 billion. Those include not only superannuation and a whole lot of other wages support but in Western Australia, dear to our heart, there is a program to produce roads to the airport and in association with the airport which is going to be one of the largest road projects in Western Australia, closer to a billion dollars than half a billion dollars, which they are going to open in July this year. It is all dependent on the mining tax. Let us take a middle figure of $700 million and it is based on the mining tax and that has only raised $126 million in its first six months, who is going to pay for it? Not the mining tax, the taxpayers of Australia are going to pay for it. They have fallen short in their estimates by anyone's measure. It is just ridiculous that they would come out and suggest they would raise this massive amount of money from a mining tax which they now put this florid language on, saying it is a variable tax so it will go up and down.

When it went down, I could understand that. But it is at $170 a tonne now, which is almost at record heights, and the spot price is up to $190 a tonne. So forget the business about it being variable and not raising the money; it is raising the money.

So at the end of the day, yes, Kevin Rudd was quite appropriate in saying it was a dog of a tax. It is the responsibility of the Treasurer and the responsibility of the negotiation by Prime Minister Julia Gillard with the three major mining companies. Forget the juniors; forget the mid-caps. Fortescue Metals is a company that has been targeted and vilified. Twiggy Forrest has been vilified by this government because he is successful and is doing great things in the resources industry. But you hear the Treasurer stand up and lambaste someone who is successful like Gina Rinehart. He lambastes Twiggy Forrest, even though he is doing a great thing by employing Australians, paying a lot of tax and employing a whole lot of Indigenous people in the mining sector. But, no, this is the class warfare you expect from the other side. This is what is happening in a perverse way.

They see Western Australia as a cash cow. They see us as a place where they can come and rob us because we are actually successful in producing not only income in terms of the Australian terms of trade but also income in terms of taxation and jobs. This is going to have a big impact on Western Australia. This sort of attack on Western Australia will cost Labor dearly. They hold only three out of the 15 seats in my state. Dare I say the member for Brand—and he is a good friend of mine—is looking at this carefully because he holds the seat which has the highest number of fly-in fly-out workers of any seat in Western Australia. He is cognisant of that. That is probably why he made the comments he did today.

One of the things that really caught my attention today—and I just find it unbelievable—is this report that was 'leaked' on the front page of the West Australian newspaper. It was the Standing Committee on Regional Australia's report on the use of FIFO and DIDO—fly-in fly-out and drive-in drive-out—workforces. I will just demonstrate that drive-in drive-out is important. I have potentially the largest goldmine in Australia in my electorate. It is called the Boddington goldmine—800,000 ounces of gold a year. They drive into Boddington because they cannot live there—land is very scarce and the taxation issues surrounding settling a family in a town like Boddington are prohibitive. My electorate has the second-highest number, by the way. My electorate has the second-highest number of fly-in fly-out and drive-in drive-out workers of any electorate in metropolitan Perth, in Western Australia and, I suspect, in Australia.

The subtitle of this report was 'Cancer to the bush or saviour to the city?' It likened workers to cancer. The fact that it said that is distasteful; however, most concerning about the report is not its title but its contents and recommendation. The committee is set to recommend that fringe benefits tax exemptions be removed from FIFO and DIDO workers, who are at present driving the mining boom in WA.

As a young schoolteacher, I began my working life at a place called Wickham in the Pilbara where Robe River had a mine. It was a company town. It was built by the company. It is very expensive to put a place like that in situ and to transport the workers up there. They stopped doing mining towns. They stopped doing company towns like that because it just was unaffordable. If you do not believe me, look at what every commentator says—Australia is becoming the dearest place in the world to do business. To start a mine, a business, a resource project, it is the dearest place in the world. Think about South Africa, other places in Africa, South America—they are far cheaper because of the cost of workers and infrastructure. But this committee is about to ask this government to take away the fringe benefits tax exemptions.

This decision by the Labor government flies in the face of the fact that the Labor government in 1986 imposed the fringe benefits tax on housing subsidies for workers in remote communities. That has been blamed for this FIFO workforce. What they did is they said that if you gave concessions to people who lived in north-west towns you would have to pay full tax on it; you could not get the fringe benefits tax removed. So if a company subsidised a worker's house in Wickham, Karratha or Dampier the Labor Party took it away. So it generated a proliferation of fly-in fly-out workers. As a result, we are now seeing that electorates like mine and the rest of Western Australia are dependent on these people. Good people buy a house in electorates like mine and they go up for two weeks and they come back for a week and they continually supply this incredible, reliable workforce to our resource projects, which generates billions of dollars not only for Western Australia but also for the rest of Australia.

What does this government want to do through this suggestion? They get people like the member for New England to go and do their dirty work for them. He comes up with this recommendation and they want to grab some income back but they do not realise the big picture. He is out doing this for them on behalf of his committee. He is supposed to be an Independent member of the parliament, but we know his voting pattern and, at the end of the day, this committee will recommend taking away fringe benefits from mining companies. It will take away something like $48,000 a year that a mining company can attract on a fringe benefit exemption. So why wouldn't that be sensible? Because, at the end of the day, if you take that across every mining sector, gas and the projects that are about to start up, it would be prohibitive for a company to have someone fly into and fly out of a camp, receive the benefits of the flights, the food, accommodation and care.

It has been put to us by people like Mitch Hooke from the Minerals Council that the fly-in fly-out workforce actually spreads the benefits of the boom, because you would never have got people in that region in the first place. People go up there and they spend money on developing camps, towns, roads, infrastructure and ports. It is growing the size of the cake in the north-west and other places. We should remember that the mining tax was promoted as a chief instrument for spreading the benefits of the boom; however, it has not happened. So far this disastrous dog of a tax has returned something like only $5.50 to each Australian as a result.

People in my electorate are very aware of what this government wants to do to them. The editorial in today's West Australian enunciated the argument well, saying that any debates about the development of projects worth billions of dollars cannot be started without the assumption that they are going to happen and will keep going. Bankers and investors and boards will have to be convinced that the numbers stack up, risks are well known and things can be done to mitigate most possible dangers. In other words, financiers are not going to back these things unless they stack up financially.

Just remember that, until the fly-in fly-out industry happened, we had bad towns like Shay Gap, where social problems and other problems occurred because they were just towns stuck in the middle of the desert and then after the resource ran out they just crumbled. At the end of the day, one has to understand that the banks will not lend money to people who want to go and live in these areas. For example, Boddington, the drive in, drive out area, is a postcode that the banks will not lend money to. Try to build a house in Paraburdoo and see if the bank will lend you money. They will not lend you money because it does not stack up. A 30-year loan in a town that only has a 30-year life in a mine—how ridiculous—is not going to happen.

So I say to this government and to those who are supporting this government that, if you want to go and attack the very industry that actually makes this country a unique country in terms of its resources industry, destroy the mining industry with another tax. We know that this government has not seen a tax that it does not like and a tax that it does not want to hike. It is a disgrace. As a Western Australian I say that we must stand up against this attack from Canberra—not only gouging our state but also treating us like a cash cow.