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Thursday, 21 June 2012
Page: 7517


Mr SIMPKINS (Cowan) (15:46): I think the minister ran out of things to say several minutes ago, particularly when he started talking about how our proximity to China is apparently due to good management, not luck. I really thought it was about distance, personally. As a proud Western Australian I see what great things the innovators and the courageous have done for our state and, as we know now, this country. I talk of the industry that, for all intents and purposes, carries this country at this time: the resources sector. There was a time when it was said that Australia rode on the sheep's back, indicating the dependence on the wool industry, yet I wonder where this country would be if it were not for those who backed themselves in the exploration and development of mines and gas and oil fields. Where would we be if no-one wanted to take a risk? Where would we be if people like Lang Hancock had not risked the shirt off his own back in the belief that he could find and develop mining opportunities for the sake of this country? Where also would we be if the big and the mid-cap miners just decided, 'Well, we will sit on what we have; we won't risk anything more'? Where would we be if the guys involved in the small start-up prospecting companies did not mortgage their houses on the belief that they could succeed? It is true that many of the great resource businesses in western Australia were established and continue to be established by pioneers. Whether it was 50 years ago or whether it is right now, success in mining at some point takes someone to go out to some dusty, barren landscape to start making decisions. At the start of some ventures there are no six-figure pay cheques.

Where we would be is that this country would be less developed in every respect of economic, social and other forms of its life. We would be in recession and cities like Perth would be towns, not cities. This country is being held up by those who have taken risks in the belief that for the high risk there will be higher returns. Every one of the fly-in fly-out workers and their families and supporting businesses in Malaga, Wangara or Lansdale within the electorate of Cowan owe their existence to the fact that someone was willing to take risks and get out there, away from the cities and look for oil, gas, iron ore, gold, uranium and many other minerals.

Those who are employed as a result of these origins and as a result of the continuing decisions to invest and take a chance are the ones spending money in our retail sector in Perth and around the country. Food, equipment, vehicles and everything that keeps mines, projects and supporting businesses going are being sought in most cases from other businesses around the country and so the cycle goes on. Of course not everyone can or wants to take those risks but those who can and do in exchange for that risk should get the returns.

This government falsely believes that what comes out of the ground is the property of every Australian, but if it comes out of the ground in WA it is the Western Australian taxpayers that are due the royalties, not the Australian taxpayers. The same applies for each mine in any state or territory. This government sees the resources sector and Western Australia as cash cows. In the case of Western Australia, they fleece in excess of 40 per cent of the mining tax money out of WA and give a pittance back as they try to buy the votes they need to save their political hides.

The carbon tax is a bizarre piece of legislation that will have absolutely no effect on the world's climate, despite it being the world's biggest carbon tax. On the carbon tax, a lot is said by the government about who said what about Whyalla being wiped off a map but, as we know, it was Wayne Hanson, South Australian Secretary of the AWU—probably the preselector for half of the South Australian members on the other side—who said that Whyalla and Port Pirie would be wiped off the map by the carbon tax. So if they want to quote their own preselectors and be accurate maybe they should do so.

The definition of sovereign risk does include uncertainty about a nation's economic policies, and the idea that regulations or laws can change without warning creates a lack of trust and consequent uncertainty. Sovereign risk is about certainty and consistency, and the carbon tax is an excellent example of a policy creating uncertainty and being inconsistent. Clearly, when the voters and investors hear a Prime Minister six days before an election say, 'There will be no carbon tax under a government I lead' and the Treasurer say, 'Certainly what we have rejected is this hysterical allegation that somehow we are moving towards a carbon tax,' it is interesting to consider those pre-election statements versus the post-election reality, because this goes to more than just the outrageous deception of the Australian people. These facts about pre-election promises of no carbon tax and then post-election deals with the Greens for a carbon tax say something loud and clear to international and domestic investors. It says that if the going gets tough for the Labor Party they will ditch any key commitment in order to hold onto power. So those thinking about investing in Australia now know that a Labor promise cannot be relied upon and they have to factor that into their lack of certainty about Labor. Even the government's $23 a tonne as the carbon tax starting price represents a sovereign risk, as that is above any market price in the world and, indeed, the government predictions as seen in the Treasury documents. It seems that while economists everywhere predict the carbon cost per tonne will fall as low as $4 per tonne, Treasury says that it will rise to $29, and if it does not the whole scheme will fail. Investors are looking at the real world realities, and they can see the fallacies that surround the carbon tax.

Fortunately, they know that we are clear in our commitments, and they at least can rely on a future Liberal-National Abbott government. The question becomes: what outcomes are we seeing as a result of uncertainty and radical reversal of policy positions from this Labor government? The impact of sovereign risk on outcomes can be seen in projects such as the Port Hedland outer harbour. Instead of a full commitment to the whole project, now it is being phased so as not to risk the entire investment. This is where the lack of policy certainty and real sovereign risk are now playing.

Fortunately, when investors look around the world at mining and exploration projects, despite increasing levels of uncertainty concerning Australia under Labor, the fundamental political instability in parts of Africa still provides a deterrent. Yet there is increasing interest in South America, and if we are going to attract every possible cent from investors that translates into real jobs and economic activity then the national government needs to stay true to its policies and have policies that encourage risks through good returns rather than uncertainty and political cowardice.

What we have seen from this Labor government is that any critical analysis of its position is described as talking down the economy. Indeed, it is increasingly being made illegal in this country to dissent from the government. If print media is critical of Labor or the Greens then there is an investigation and new regulations or rules are imposed. Yet when the national broadcaster is critical of the opposition, that is okay.

At least one side of politics believes in free speech. I note that the Treasurer is so critical of Gina Rinehart seeking a seat on the board of Fairfax Media that he is actively trying to influence board membership in Australia. Again, this is what the government do when they wish to stifle alternative views—not that I think Fairfax journalists will ever allow themselves to be told what to do. I find the government's approach Orwellian and pathetic in their contempt of free speech in Australia.

Speaking of opposition to government policies and attempts by this government to suppress it, I should also mention the new responsibility of the ACCC to act against those who dare to suggest that the world's biggest carbon tax will push up prices. As I said, there is an increasing attempt to silence and to apply pressure to any opponents of this government, its Greens backers or its policies. I also count these efforts as akin to sovereign risk, as the Labor government is attempting to protect its policies through regulation, exerting pressure on legal media ownership and influencing the activities of businesses. This constitutes circumstances of doubt and uncertainty for those wishing to invest in and conduct legal business activity in Australia.

I previously spoke about the government's claims that we are talking down the economy and demonstrated how the government hate criticism and have attempted to regulate and influence any criticism of them or their policies. The reality is that at the core of any damage to the economy are the policies of the Labor government, including their terrible backflips, their taxing, their spending and their deception along the way. They have created all of these concerns for business and investors, and it is through their own failures and outlawing of the ability to question them that they are not going to stop Australians, businesses and investors from having an increasing lack of confidence.

The shadow minister has already outlined so many quotes from people who have increasingly identified the sovereign risk in this country. A further very recent quote from Ivan Glasenberg was:

It is a first world country but is doing things that are making people cautious of investing, so Australia is becoming another country where you have got to make sure that the rules aren't going to change on you.

So, unlike what the government says, there are an increasing number of people that are not afraid to speak out and identify the government's failures.

To conclude my contribution, I say again that the increasing levels of sovereign risk that the investors are concerned about are as a result of the Labor government's own decisions. No-one is making this stuff up. The government is wholly responsible and you cannot play the blame game here. We did not make you deceive the Australian people on the carbon tax, use Western Australia as a cash cow or increase the regulations on business. None of this came from the suggestions or the efforts of the opposition. The good news is that this will be reversed with the election of a consistent and economically responsible Abbott coalition government, a government that will allow Western Australia to thrive and that will stop the carbon tax and the mining tax.