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Tuesday, 12 February 2013
Page: 1109


Mr O'DOWD (Flynn) (21:38): I wish to speak on Appropriation Bill (No. 3) 2012-2013 and Appropriation Bill (No. 4) 2012-2013. I want to open with the carbon tax and the MRRT because they are very important when it comes to our finances and the economy of Australia, and both are very prevalent in my electorate. 'There will be no carbon tax under the government I lead' is now cast in stone, and we know who said that. Basically, a carbon tax is antibusiness. It is anticompetitive for our companies when they trade in overseas markets, and it has put our cost levying through the roof.

Businesses in my electorate are directly affected—and people say to us that the carbon tax is not a big worry; it has just blown across the waves and no-one has been affected. That is wrong. I have seen abattoirs in Biggenden whose cost of power has gone through the roof. Meat works have cut back their kill rates so that they fall under the $23 a tonne for 25,000 tonnes a year.

The aluminium and alumina industries in Gladstone still cannot make those two products at a profit. There are 6,000 jobs involved with Rio Tinto in Gladstone alone. The cement industry—Cement Australia—that supplies all Queensland's cement, as well as supplying some into New South Wales and some into Victoria, is struggling with imports of clinker from China. Again, their electricity costs have gone up by an extra million dollars a year. Anyone who runs a cool room, like the citrus orchards in Gayndah and Bundaberg, is paying through the nose. A citrus farmer was telling me that an air conditioner that needs re-gassing will now cost something like $500, but to buy a new unit it would cost about $600. So, what do you do? Do you pay $500 to have the old one re-gassed, or do you buy a new one and have it fitted, which would also cost money?

Whilst the eurozone's emissions costs are coming down, ours are still on $23 a tonne and will go up as of 1 July. But it will be the end of it if we get into power, because we are going to squash it. The MRRT certainly increases our sovereign risk. It is anti-jobs, and it means anti-competitiveness for our companies. Anyone who exports minerals is now faced with this lumbering tax. It will cost the companies a lot, and it will cost the government a lot to monitor these taxes; it is not a straightforward tax. A royalty is a tax, and the benefit of a royalty is that everyone knows exactly what the companies are paying. It is done on a per-tonne basis, and everyone knows, the day they pull it out of the ground and the day they put it on a rail wagon to go to the port, that they are up for that charge. They do not have to spend millions of dollars trying to work out their tax against capital funding or write-downs—all that stuff that comes into it. Obviously our government did not know, at the time they struck this mining tax deal with the big three, the difference between capital value and written-down value, and that is where the companies led by a nose and came out in front.

The budget in six months has drawn $126 million against a budgeted $2 billion. To get to that $126 million it already cost the government $50 million, and it also cost the companies $40 million in terms of the tax they pay. So, in all, it is probably about $50 million versus $2 billion. That was the shortfall. And guess who pays the difference? That would be the taxpayer. Iron ore has actually gone up over the period, so you cannot blame commodity prices for the big disparity between what should have been made and what was not made.

The Labor government continually knocks investors like Gina Rinehart, Twiggy Forrest and Clive Palmer, but without those people willing to invest in Australia, who have we left? I wish there were 100 of those types of people who had the money and the foresight to invest in our mining industry.

If you take out our mining industry and our gas industry, we are left with struggling industries such as the motor vehicle industry, the manufacturing industry and the steel industry. Our farming industry is very critical at the moment. Dairy farmers are falling over at an alarming rate. People are working and not even getting their costs back. So, at the moment, mining is No. 1. Mining is king. Some reports you read say that coal will be king for the next 200 years. If that is the case, we must encourage it. Twenty years ago, Indonesia did not export one tonne of coal and they are now the biggest exporters in the world, with over 30 per cent of the market. We have dropped from 30 per cent down to 29 per cent.

We do pay the highest wages in the coal industry to our workers; I am not denying that. Also our gas workers are the highest-paid gas workers in the world. Unfortunately, the productivity is the lowest in the world. So you can see the discrepancy there.

We are good at exporting our mining companies and our mining staff offshore. When Kevin Rudd was the Foreign Minister, he told me that there were 250 Australian companies working in Africa. The Mongolian ambassador told a group of us only last year that there were 171 Australian companies working in Mongolia and that Leighton Holdings, a well-known Australian company, was leading the charge in Mongolia. Our companies are also operating in South America and other parts of the world. Kazakhstan is a country that is surging ahead, and they too are picking the eyes out of the mining staff; Australia is a good hunting ground for that.

Often the Treasurer has been heard to say that our economy is doing so well, when we compare it to Greece, Italy, Ireland and Spain—those European countries that are in a fair bit of financial strife. He never mentions Hong Kong, which is a part of China; China itself; Malaysia; Singapore; India; Indonesia—good GDP there; Korea; and, in the troubled eurozone, Norway and Germany are doing quite well. In South America, Chile is going very well. But we as a nation seem to have lost control of our finances. Labor has promised 650 times that there would be a budget surplus, and of course since Christmas that promise has disappeared and we are now heading for a big deficit. The size of that deficit is unknown, but we know we have got a $2 billion deficit or thereabouts, with our mining industry going down.

We started with our net borrowings, on the bank card, of $70 billion. It soon went to $200 billion, $250 billion, and now it is up to $300 billion. The current figure is running at about $262 billion as I speak. Our Treasurer says we have got a revenue problem, but our revenue is actually going up. The Treasurer has actually got a spending problem, and he is spending more than he makes. That is the crux. You can do it for one year, you can do it for two years, but you cannot continually do it. As we all know, we have not had a surplus budget since 1989. He did inherit from the John Howard government $70 billion in the bank, and now it is down to $147 billion net debt.

It is all well and good, but he inherited from the John Howard government $70-plus billion in credit in the bank. That is all gone. That is now down to $147 billion of net debt. This is disturbing in anyone's language. The mining boom helped us to have the best terms of trade in 150 years, and yet we have still ended up with gross debt of $262 billion. That is unfathomable to me.

He talked about the low interest rates that we have. The cash rate is three per cent, but I can tell you that businesses are paying eight per cent plus, and housing loan rates are more like six per cent plus. It is nice to talk about three per cent. That is if you are borrowing money. But in real terms we are paying a lot more for our loans. Business rates are eight per cent plus, and they can be up to 12 per cent or 15 per cent. That is what is driving businesses into the ground.

There has been wastage. We all know about the pink batts and the school halls. If you just look at the school halls, if you compare public schools versus private schools, you will soon see where the wastage has been. It is a mystery that the world's best Treasurer with the highest terms of trade in 150 years, who inherited no debt and who had money in the bank and a budget surplus, has brought us to where we are. In his reign, he has introduced 27 new taxes or increases to taxes. The Defence Force has been cut $5.5 billion, plus another $1.6 billion in the last 12 months. We are now down to 1938 levels of Defence Force spending versus GDP.

An opposition member: That is a disgrace.

Mr O'DOWD: That is a disgrace. I urge and plead with the government not to touch our superannuation funds. People my age—and younger, and older—have worked hard for our super funds. If we want people to retire under their own steam we cannot keep fiddling with superannuation. People in my electorate come to me every day and ask: 'What will you do if you get into government? Please do not touch our superannuation funds. If you want us to look after our own retirement, you must come to a steady arrangement where you do not keep changing the rules.'

Debate adjourned.