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Thursday, 26 June 2014
Page: 7594

Ms MacTIERNAN (Perth) (17:15): And certainly, Mr Deputy Speaker, you would not have heard it in relation to the iron ore companies in Western Australia, which have certainly been doing very well. It is with pleasure that I take this opportunity to get up here and speak on the mining tax and the reason why I support very, very strongly the fundamental principles of a resource based tax. I have been grossly verballed by the other side from time to time on this matter, and I want to just take this brief opportunity to set this out.

There is no doubt that, when you look rationally at the taxation system and the best way to bring to account the value for the Australian community out of the resources industry, it is as the Henry tax review says. It says that we should replace the current royalties based system with a uniform, rent based tax, legislated for and administered by the Australian government. I agree with that. And that, indeed, was the position that was put by the Minerals Council in their submission informing the Henry tax review. I want to make it very clear that I totally support that principle of a resource based tax.

I guess my view is that I do not think that you can put this just on top of a royalties regime. I think that, if we are going to solve this problem, in the long term we need to work with the states and to come together with a composite and uniform system, which was indeed the vision of the Henry report. I think that must be the way that we go down.

But I want to address this nonsense that we hear from the government all the time that somehow or other this tax has been bad for Western Australia. I can set out why it has not been bad for Western Australia, but I also just want to make sure that I get this opportunity to acknowledge that I think that really, fundamentally, Labor lost the public relations battle on this one. So, when after the 2013 election I suggested from time to time that I thought it was time to let it go, it was not that I in any way thought that this tax was an improper tax or that this tax had in any way curtailed the development of Western Australia. I do not believe it did, and I am very confident that it did not do that.

I just want to give some facts associated with this. Let us have a look at iron ore production in Western Australia. Iron ore production in Western Australia in 2011, when the tax was introduced, increased by 15.9 per cent. In 2012, it increased by 12 per cent. In 2013, it increased by 13 per cent. So we see this massive growth in volume after the introduction of the tax. And we look at the value of iron ore sales. From 2011 to 2013, it went up first by 15.8 per cent and then, in the following year, by 23.3 per cent. There is absolutely no way that this hampered the performance of Western Australia. Rio Tinto's full-year profit was $3.7 billion. BHP Billiton's was $7.8 billion. FMG's half-year profit was $1.7 billion.

Let me quote here. There was this idea, this nonsense, that the industry was going to wander off and go off to Africa. I want to quote here the report of Dr Stephen Grenville, who is a former RBA member and a former OECD and IMF member. In response to a statement by the then chief executive of Rio Tinto that Australia represented his main sovereign risk, he says this:

Now, with some hindsight, the absurdity of this argument is obvious.

Would Rio have gone elsewhere? He says:

Its painful experiences with Riversdale coal in Mozambique, Simandou iron ore in Guinea and Oyu Tolgoi copper in Mongolia were assuaged only by colossal Australian iron-ore profits.

I put it to you that, on any rational analysis, this tax has not had a negative impact on Western Australia. Am I disappointed that we did not get this right, that we perhaps could have introduced this in a better way? I am, but this tax has not—

The DEPUTY SPEAKER ( Mr Broadbent ): I thank the member for Perth for her contribution.