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Wednesday, 13 February 2013
Page: 1209


Ms JULIE BISHOP (CurtinDeputy Leader of the Opposition) (15:45): After the last election, I met in Sydney with a number of mining and resource ministers from central African states. There were ministers from Chad, Cameroon, the Congo and Burundi. They told me that the reason that they were in Australia was because they were seeking investment from the Australian investment community in their countries because they saw an opportunity to capitalise on the sovereign risk that prevailed over investment in the Australian mining sector. They could relate to me chapter and verse of the impact of the carbon tax and the mining tax on Australia's international reputation as a reliable trading partner and as a reliable place to do business. Does anyone recall the phrase 'sovereign risk' being used in the same sentence with 'Australia' before this lot came into government?

Today the coalition has raised as a matter of public importance the disastrous saga of the latest version of the minerals resource rent tax, the mining tax, and the impact on sovereign risk for Australia. As the Leader of the Opposition so eloquently catalogued it, the MRRT, the minerals resource rent tax, has been an unmitigated disaster for the Gillard government. This tax reminds me of the Cheshire cat, appearing and then disappearing until it just fades away, leaving only the grin. You will remember that in Alice in Wonderland that prompted Alice to think 'she'd often seen a cat without a grin but never a grin without a cat.' Well, we have seen revenue without a tax but never a tax without revenue. This really is like a scene from Alice in Wonderland.

We got a public taste yesterday from the member for Griffith, God bless him, as to the bitterness that resides within Labor on this issue. He wanted Australians to understand, very clearly, that the current fiasco was the idea of the current Prime Minister and her Treasurer. Indeed, former Prime Minister Rudd made a point of noting that the Treasurer deserved to be pinned with the title 'father of the minerals resource rent tax'. According to the member for Griffith, it was the Treasurer's idea from the beginning and as the then Prime Minister he agreed to proceed with it based on the assurances of the Treasurer. But, as former Prime Minister Rudd said in his most understated way, 'It has not collected any real revenue of any significance so far.'

When the whole Kevin thing came crashing down the first time round in 2010, the member for Griffith lost his prime ministership. However—and it is important that my colleagues recall this—the Treasurer, the principal architect of this unmitigated mess, actually got a promotion to Deputy Prime Minister. That is the Labor way: completely mess up a policy and you get promoted.

Mr Dutton: And the treachery.

Ms JULIE BISHOP: Let alone the treachery. I wonder how much longer he will be the Deputy Prime Minister? How much longer will he be Treasurer now that we have a second train crash, with the MRRT? If the member for Griffith were to return to the top job, he would probably last a nanosecond. However, will he last much longer under the present Prime Minister? He can count on her loyalty, of course, can't he? The Treasurer, if he is worried about his position, might find it instructive to talk to the member for Scullin, the member for Barton and Senator Trish Crossin, to name a few. They can all vouch for the Prime Minister's loyalty, can't they? What is going to happen to Swannie? It reminds me of the old Russian tradition of throwing the weakest individuals out of the sleigh as the baying wolf pack gets closer and closer. I wonder who is going to be the next one to be ejected, Wayne? Desperate prime ministers do desperate things and, given this Prime Minister's inability to take responsibility for any of the disasters that she has presided over, there will be a scapegoat. In this case, I cannot think of a more deserving scapegoat than the Treasurer.

Let us look at some of the detail of this mining tax. The government that broke its word on the carbon tax and the surplus is now planning to break its word on the mining tax. The government is desperate for cash following yet another fiasco—the amazing disappearing budget surplus. By the way: thanks for that, Treasurer—that was another one of his disasters. With a non-existent surplus, Labor is now scratching around for some more revenue. It seems that the Prime Minister is on track to rip up her 2010 written agreement with the mining companies in the same way that she ripped up the written agreement with the member for Denison on gambling reform. Now we have the mining tax in a shambles. The only certainty for miners in Australia and for the investment community is that if Labor is re-elected it will increase and broaden the impact of the mining tax after the election. There is no doubt at all that that is the case.

In the event that anybody was under the misapprehension that the mining tax was not in a shambles, think of the message that this is sending to the international investment community. After months of hiding the truth, we now know that the mining tax has raised only a fraction of the revenue promised in the budget and in the Mid-Year Economic and Fiscal Outlook, MYEFO. It has grossed $126 million. But that is not the full story. You see, when you remove the lower company tax payments of about $40 million and then remove the administration costs—estimated by the government to be about $50 million over three years—you find that it has raised virtually nothing.

And yet the Treasurer has linked over $15 billion worth of expenditure to this mining tax and now has no money to pay for its promises. Having raised only a fraction of what was intended, Labor is now indicating that they will grab more money from the states and the mining companies after the election to fill their mining tax black hole. They will take more money from the states and they will take more from companies. Do you know what that means? Fewer services from state governments and fewer jobs and investment in Australian mining companies.

The Treasurer likes to blame iron ore prices for his mining tax disaster, but this claim does not stack up. In the MYEFO, the MRRT was projected to raise $2 billion in mining tax revenue, but since MYEFO was released iron ore spot prices have actually increased by about $30 a tonne. So blaming weak commodity prices for missing his revenue forecasts by 90 per cent defies reason. This is yet another colossal forecasting error by the government. The MRRT failure is the third strike against the Treasurer's economic credibility, and fortunately the member for Griffith is keeping count. The Treasurer promised a surplus, he promised 500,000 new jobs and he promised a mining tax to pay for $15 billion in promises. He has broken all three promises. Labor has a Treasurer with zero economic credibility.

Yesterday the Prime Minister, the Treasurer and the Minister for Trade let the cat out of the bag when they admitted they have a process in place which we know will result in a grab for state government mining royalties as a way of compensating for their failed mining tax and their mining tax black hole. Labor's plan to hit the states with yet another tax grab means less for services for nurses, for teachers, for police and less for infrastructure. In the case of my state of Western Australia and in the case of Queensland this infrastructure is needed to underpin the very mining sector with whom this government is at war. It is not spreading the wealth; it is spreading the pain as state governments are forced to cut back on essential services.

The sovereign risk caused by this return to the MRRT is on top of a litany of government decisions that have tarnished Australia's international reputation. The resources area—remember the hit to condensate. Without any warning to industry they removed a tax exemption on condensate. At the time, we said that it was an absolute smash and grab raid and that it was the equivalent of a drive-by shooting against the oil and gas industry. The other beauty was the infamous decision on live cattle exports that resulted in Australian producers losing potentially half of their market in the long run. In the last 12 months the government has reneged on the purchase of munitions and on the purchase of self-propelled artillery, both to the detriment of a reputable South Korean firm. As a result, the Executive Director of the Australian Strategic Policy Institute commented:

It's a major problem when a big company from a trading partner as important as South Korea chooses not to compete for business in Australia on the basis of 'sovereign risk'—a term indicating a serious lack of confidence in our policy settings.

By the way, Samsung was reported as saying that this government had been disingenuous and dishonourable in its dealings with them. This government is a disgrace, and a mining tax is yet another example of why. (Time expired)