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Monday, 21 November 2011
Page: 12966

Mr RANDALL (Canning) (17:00): I am pleased to speak on the Minerals Resource Rent Tax Bill 2011 and related bills. I am amused by the title 'minerals resource rent tax'; it is a benign name for an evil tax. As the Leader of the Opposition has said, this government has not seen a tax that it did not like and that it did not want to hike. This government has brought in a tax that is a taxation of envy, where the states are the envious parties. This is a jingoistic tax. The opposition has seen the Labor Party, the Greens and the Independents talking about these evil foreigners that invest in our country! They take their dues after having invested billions of dollars in this country. This is a tax that will destroy jobs.

We have heard so much from the government—the Labor Party—about why this is a good tax. I will talk very quickly in the small amount of time we have to talk on these 11 bills. Remember, there were 19 bills related to the carbon tax and we had 15 minutes to debate them. And now we have 15 minutes for 11 bills. I just want, generally, to flesh out some of the details, particularly as they affect my electorate of Canning. As a proud member from Western Australia I can say that the state of Western Australia will be affected very much by this minerals tax.

This is a tax that was thought up by Ken Henry, the head of the taxation inquiry. He wrote 130 or more recommendations in his review. Just 2½ of those were taken up by the Treasurer, Wayne Swan, who decided to sell it to the then Prime Minister, Kevin Rudd. He fell in a huge hole over this. This, along with the carbon tax, was the reason his demise was so swift and the execution so brutal. Along came the night of the long knives, and we had the new Prime Minister ,Julia Gillard, who decided to do a deal with three miners: BHP Billiton, Xstrata and Rio Tinto. It is such a secret that nobody is allowed to know the details of this fantastic deal that has been done with the three multinationals! So much for multinationals being evil! But the deal left out the Australian investors—the small- and mid-cap investors. They are going to be the ones who will pay so much more than anyone else.

AMEC, the Association of Mining and Exploration Companies, which represents the explorers—the mid-caps and the juniors—see this as a gravely unfair tax. As we have heard so often lately, this is a tax that will see the larger companies being able to write off much of their infrastructure and investment, yet the mid-caps and the juniors, who are endeavouring to raise money, will not have the same opportunity so they will be paying the higher rate of tax.

Let us focus on the fact that Australia is not the only place with a wealth of minerals. Africa, South America and many other parts of the world have a plethora of minerals. I have mentioned in this place before that Chile has BHP Billiton's largest copper mine in the world, Escondida. Chile has a mining tax that is something like 26 per cent negotiable. How much are we going to tax the same sorts of companies? Up to 44 per cent. So where will those companies go with their money? If you have some money and you want to invest in a mining, exploration and production unit, will you go to Australia and pay 44 per cent or go to Chile and negotiate around 26 per cent? It is a no-brainer. Canada is rubbing its hands with glee. They are saying, 'Come our way. We'll accommodate you at a sensible tax regime.' Companies will go overseas.

The fact is that this is happening now. There is already a slow burn. We heard the Treasurer in question time today talking about the reinvestment in Olympic Dam. That is a massive investment and a huge mine; of course they are not going to wind it down. They will eventually get their resource, but will they do another Olympic Dam under this sort of taxation regime? Of course not. They will find an Olympic Dam in Namibia, Zambia or somewhere else in the world which will not do the same damage to them as they begin to mine.

For some bizarre reason, the Labor Party thinks that if you put a hole in the ground and dig away you will make a massive amount of money. This is risk capital. I have had contact from a whole range of people in my state of Western Australia who feel very concerned. For example, there is a group representing the magnetite miners. As compared to hematite, magnetite is very difficult to process. It is a very common mineral. You can dig it out of the ground but it needs to undergo a fair bit of processing. The miners are asking for recognition of this. They went to the Treasurer, the resources minister and everyone else and put a good case to them but they were snubbed. They even went to the Independents, over the last few days, who feigned some interest in helping to bring some justice to this argument. But the Independents were always going to be bought off. They were always going to do a deal with the government so that they could square up with their opponents in the National Party in this place. Goodness knows what deal has been done to get their vote! I think this is a bit tawdry and unseemly, because we found out from the Australian newspaper on 3 November about the member for New England:

Mr Windsor sold his adjacent family farm, Cintra, to Whitehaven in February last year for $4.625 million and now leases it back from the miner.

While seemingly content to allow his land to be torn up for coal, Mr Windsor has seized on coal-seam gas as an environmental evil which could also save his political skin.

So much for sincerity and genuine behaviour on this!

This mining tax, at the moment, is meant only to operate on coal and iron ore, but the Greens representative in this place—the member for Melbourne—has been talking about this being extended to gold. I have one of the largest goldmines in Australia in my electorate, at Boddington. They extract 800,000 ounces a year. How do you think they are feeling about reinvesting a massive amount of money in expansions at Boddington?

Other gold projects around Australia are also very concerned about their future. In fact, they are now looking again at Africa as a place to go and do deals. So I say to the crossbenchers, including Mr Oakeshott: let us hope that the 30 pieces of silver which, dare I say it, materialise once you are not in this place—whether they come from the ambassador for somewhere in the world or someone else—does you some good and salves your conscience about trying to ram this shocking tax through the House.

In the last few days, although the government have said that the MRRT will be quarantined to coal and iron ore, we have heard that the Greens, who we know are the green tail wagging the dog, want the tax extended to uranium mining. The Prime Minister said only three months ago that the Labor Party would not countenance selling uranium to India. What does she stand for? She changes her mind on everything; we are not sure what she stands for. She was part of the Socialist Left as a student and hated the United States of America, yet when Barack Obama was here she fawned all over him. Despite the fact that the Prime Minister said she would not sell uranium to India, she hobnobs with the Indians at every opportunity and stared down the Left of her party to say that she is going to sell uranium to India. Now out come the Greens to say, 'No, we need a minerals resource rent tax on uranium.' Where is this going to end up? It is like when the Prime Minister said before the last election that there would be no carbon tax under a government she led. Will this Prime Minister say that, after the next election, there will be no extension of the minerals resource rent tax to the mining of any other mineral? Who would believe her?

This tax causes massive sovereign risk. Premier Barnett from my state of Western Australia is very concerned. He has renewed his attack on the federal government, saying that in China concerns are being raised to him about sovereign risk. Mr Barnett said that this tax is 'the worst piece of public policy'. An article on AAP on 26 October this year said:

Mr Barnett said the concern was about a new tax when projects were already in construction or planned and upfront investment had already been made.

This is a retrospective tax, in other words. The article went on to report that Mr Barnett had said:

“For the first time in my 20 years in politics, I have heard the term ‘sovereign risk’ raised in an Australian context.”

The premier said that at the very least, the higher cost and lower grade magnetite iron ore projects should be exempt from the MRRT.

But they are not listening to Premier Barnett, who is a successful Premier. Already some of the magnetite projects have lost their backers, and we know that the miners are having extreme difficulty raising funds for new projects. So an unseemly deal has been done with the crossbenchers, and this is going to have a rebounding effect for generations to come.

The Treasury modelling which we keep hearing about is rubbery at best. Recently, Mr Forrest—who is now an evil man because he has a successful mine!—said that he no longer trusts the advice of Treasury to be fair and impartial and that, with their modelling, Treasury are essentially backing whatever the government asks them to come up with. Today the basis used by this Treasury modelling and the money that it will collect is under extreme scrutiny. It is said that it will collect $11 billion, but we now know that all that is under question. The government have already committed to putting $14 billion into superannuation. Business is very concerned about this because, while the government say that the increase in superannuation to 12 per cent will come from the minerals resource rent tax, small businesses—and people in the Labor Party have never had anything to do with trying to run a small business—will be the ones who have to come up with the balance of money to help increase superannuation to12 per cent. Business said, 'If you're going to force us to pay this extra superannuation, the one per cent you are going to give us as a concession in company tax will do nothing, because we will be paying more in superannuation to our workers.' This measure should be consulted on and agreed to rather than rammed down people's throats.

Between 2012 and 2014, Treasury, with its rubbery figures, says that my state of WA will generate $7 billion for the MRRT. But guess what: Western Australia will only receive $400 million back in those years. This is less than 6c in every dollar that Western Australia will hand over to the federal government. Then they will come looking for us again, because what people on the government benches fail to realise is that mineral resources are not owned by all Australians but by the state in which they found. That is just a fact of life. There is this great myth that mineral resources are owned by all Australians; but, if a mineral resource is found in—for example—New South Wales, it belongs to the people of New South Wales. I say to my colleague the member for Franklin, who is sitting across the table there: if you dig up a goldmine or a tin mine down in Tasmania, the people of Tasmania will get the royalties. The trouble is that they do not have many there and they are not allowed to dig them up because the Greens will not allow them to put a spade in the ground. A state such as Tasmania cannot get much in the way of minerals—they are hamstrung by the Green-Labor alliance—but in Western Australia we actually do things: we dig minerals out of the ground, we sell them for a good price, we get royalties for them and we build ports and roads so that they can be shipped out.

However, the Labor Party are saying that they want to get more out of mining. I will tell you, Labor Party, how you get more out of mining: if you sit down and reach an agreement, and some of those in the industry say that they do have the ability to pay more, you do it in a fairer way—that is, through a company tax. A company tax will make sure that the proceeds of mining are more fairly distributed than they would be by the Labor Party's minerals resource rent tax.

This tax will hurt my electorate of Canning in a big way because, based on Australian Bureau of Statistics figures, I have the second highest number of fly-in fly-out and drive-in drive-out workers of any metropolitan federal electorate in WA. All those workers know—and we see them regularly flying over the top of my house, every five minutes, going off to the mines—that this tax is going to hurt them because it is going to stop investment in their industries and spread worry to other mining industries. But, even in the mining sector in Western Australia, where money is being invested either for expansion or start-up, they are very nervous about the sovereign risk this brings to their jobs, their future jobs and the job opportunities for their families. Let us finish on the fact that Mark Cutifani from AngloGold said that Australia is now a sovereign risk country, worse than South Africa. It is a shame. (Time expired)

Debate adjourned.