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Monday, 21 November 2011
Page: 12991


Mr BALDWIN (Paterson) (18:46): It is said that Australia's wealth grew on the sheep's back. Well, I can tell you that the Hunter's wealth grew on the miner's back. Today I rise to address the Minerals Resource Rent Tax Bill 2011 and associated bills, to give the Hunter a voice. This tax, when coupled with the Labor-Green carbon tax, will cripple the Hunter Valley economy, cost the jobs of thousands of local people, lower investment confidence and cut the retirement savings of those who rely on their superannuation. Yet my Labor colleagues in the region are not voicing the real fears of their constituents.

As I stand here today, I feel a sense of deja vu. A year ago I stood here to warn the Rudd Labor government about the consequences a resources tax would bring. The Australian public shared those fears and, as the polls began to slide, Prime Minister Rudd was replaced with Prime Minister Gillard by the faceless men of the unions and the ALP. And here we are again. The policy is slightly different, but the consequences remain the same. But what more should we expect? Labor has always believed in tax and spend, tax and spend. And now we have the minerals resource rent tax—a 22½ per cent tax on miners who invest their money in Australia in good faith, gave local people jobs, supported local business and poured billions of dollars in to the Australian economy.

I was recently at a function here in parliament where a senior representative of a foreign owned airline said that introducing a passenger movement charge in their country would be thought of and seen as adding a tax on its biggest wealth generator, something that would be a complete anathema to them. The chorus that came back from those in the audience was that this was just what this Labor government is proposing with the MRRT. The Labor government knows this is a bad idea. It knows that, in the long term, jobs and investment will be lost. However, after wasting the former coalition government's surplus of $20 billion and racking up a multibillion-dollar debt for this country through infamous programs such as the school halls rip-off and the insulation fiasco, this government is desperate. It will do anything to claw back money in the short term, regardless of the consequences for Australian people.

The coalition is determined to warn the Gillard Labor government about the dire consequences it will face if this tax is approved. We recognise that the resource sector is just too important to jeopardise. When companies make investment decisions, a significant equation about where to invest is a nation's sovereign risk. Under the Gillard government, Australia now has a very real sovereign risk problem. Members on the other side do not understand this. However it is their government's increasing regulatory burden, its original dumped plan to nationalise 40 per cent of the mining industry, the carbon tax and now this proposed MRRT that put future investment at risk. They need to understand that Australia is not the only resources game in town. Global corporations can choose to move offshore and invest in places like Brazil, Mongolia and Africa, which have friendlier tax regimes. Once the investment goes elsewhere, so will the jobs and we will not get them back.

The resource sector employs half a million Australians. It is one of the most productive parts of the national economy and was our salvation during the global financial crisis. It was also pivotal in rebuilding after the recession of the 1990s. We absolutely cannot afford to have our mining industry be the victim of yet another tax-and-spend Labor government. Last year Xstrata gave a start-up commitment in excess of $130 million of infrastructure through Xstrata rail in New South Wales, and the potential is there for further investment of more than $4 billion over the next three years. Why would a government want to do anything that puts Australia at a global competitive disadvantage and puts both this or further such investment at risk?

Those opposite say that Labor is the party of the workers. Why would the government want to introduce policies that threaten the livelihoods of our miners in the Hunter? There are 17,000 people directly employed in the coalmining industry in the Hunter and there are thousands more jobs indirectly reliant on those positions. That includes jobs at Newcastle Port, where 97 million tonnes of coal was exported in 2010. It includes 400 employees and 16 apprentices at Port Waratah Coal Services. As these figures show, the mining export industry is one of the Hunter's key businesses and would cripple the local economy if it were to fold. The reliance of the Hunter on the resource sector is an easy relationship to see. So, at a time when the cost of living is at an all-time high, you would think that our region's elected representatives would be fighting to attract jobs to the Hunter. In fact, it is quite the opposite. Hunter Labor MPs have backed the party line rather than local jobs. Sharon Grierson in Newcastle, Jill Hall in Shortland, Greg Combet in Charlton and Joel Fitzgibbon in Hunter all live in the Hunter amongst the thousands whose jobs and livelihoods depend on the continued success of mining. They know all too well how reliant our economy is on this sector. For example, Xstrata, which operates 10 mines in the Hunter Valley, has alone contributed $14.6 billion in goods and services, port and rail, wages and royalties since 2002. At the same time as Hunter Labor MPs are preparing to wipe out local mining jobs, they are doing very little to create new jobs.

A major hit on the profits of our miners is a hit on the funds available for investment in research and development. It is our own mining companies which are investing in research and technology to help bring about that innovation. This helps enable Australia's best scientists to work on developing alternative, cleaner technologies that will lead to a healthier environment. Those companies which first obtain cleaner technologies will be those that continue to prosper as we move away from a reliance on coal towards an alternative energy source. We cannot afford disincentives to investing in research and development—and a major cut in profits is certainly that.

A major cut in profits will also erode the funds available for community engagement, and I have personally seen the great things that are being achieved in coal communities. I have met several times with William Cant and John Richardson, joint owners of a family-run mine in East Maitland, Bloomfield Colliery. Bloomfield employs about 500 people in the Hunter Valley, with many more reliant on its operations, based on the multiplier effects, such as businesses in Tomago, Thornton and Beresfield. However, it is not only families and small businesses that rely on Bloomfield. Local charity organisations also rely on its support to operate. The Bloomfield Group Foundation was set up in 2006 to fund community based programs which benefit the Hunter Valley. Those causes have included the Red Cross Breakfast Club, Hunter New England Health's Neonatal Intensive Care Unit, Maitland Cancer Council's Relay for Life, Singleton Legacy and Samaritans, to name just a few.

It is not just Bloomfield Colliery giving back. Over the past decade, mining companies have made moves towards social responsibility, and community engagement programs are often included under the terms of the exploration licences. At the Doyles Creek mine, just outside Singleton, five per cent of all pre-tax profits will be directed into the community foundation. The foundation will provide $40,000 per year for three years to help the Westpac Rescue Helicopter Service. Hunter Valley Operations, owned by Coal and Allied, contributed $1½ million in community development funds last year and the same in 2009.

This year Xstrata and their partners have committed over $6.65 million to their Corporate Social Involvement Program in New South Wales. This included total contributions to community organisations of over $2 million. Organisation recipients included Lifeline's Hunter Support Program and the Maitland neighbourhood centre, and a further $2.5 million went to education groups such as the Hunter Valley Training Company. They also provided over half a million dollars to a range of environmental programs and groups working to protect and preserve our nation's unique fauna and flora such as the Hunter Central Rivers Catchment Management Authority and the Koala Research Centre. And where would the Indigenous Youth Leadership Program, the Hunter Medical Research Institute or the John Hunter Children's Hospital Neonatal Unit be without the almost $1 million committed to them in this year alone?

There are similar programs being run right across the Hunter Valley. If the profits of our mines are eroded, the ability of those mines to contribute directly to local communities will also be eroded. This will be yet another devastating effect of Labor's minerals resource rent tax, especially when combined with the effects of the Labor-Greens carbon tax. We all want our miners to contribute to the Australian landscape, so let us do it through further partnerships and positive community projects. Let us not put a huge tax on profits which will strip competitiveness, cost jobs and ultimately end up in Labor's coffers. As Labor's reckless spending and waste continue, it is evident we simply cannot trust Prime Minister Gillard with the money generated through yet another great big new tax.

The Prime Minister has said that a small fraction of the money raised by the MRRT will go into local roads. Forgive me if I don't get too excited! At the last election the coalition pledged $71 million to upgrade local roads to make them safer and reduce travel times, including $20 million for Main Road 301 between Raymond Terrace and Dungog, $20 million for the Lakes Way, $20 million to build passing lanes on the Bucketts Way, $6 million for the much-needed Nelson Bay to Fingal Bay bypass and $5 million for Main Road 7778. Had the coalition been elected, works would already be underway. I can say this with certainty because the former coalition government honoured each and every roads commitment I made under its tenure. However, Labor was elected, so I wrote straightaway to the Prime Minister urging her to fund the desperately needed works in my electorate. I never received a response. So when I hear Labor promising road upgrades in coal communities, I am beyond sceptical. I do not believe it for a second.

The Gillard Labor government would have you believe that miners are big, dirty, evil people that take from Australia and give nothing back—and that is simply ludicrous. I remember a media release from the member for Newcastle, Sharon Grierson, which read:

More importantly, this agreement will allow the Gillard Government to pass on the benefits of the mining boom to the rest of Australia.

And the member for Hunter, Joel Fitzgibbon, stood in this House and asked how the government plans to 'spread the benefits' of the mining industry across Australia. It sounds like they have been reading from the same song sheet.

For the benefit of those Labor members who do not seem to understand how the economy works, allow me to provide some real answers. The benefits of the mining boom have been and are currently being felt by the Australian public. Just ask any one of the thousands of families whose breadwinner works in our mines or related industries such as rail, at our harbours, in vehicle rental, in diesel motor repairs—and the list goes on. They could also ask the state and territory governments, which have been deeply reliant on coal royalties.

Make no mistake, our mining companies are already paying billions of dollars to governments in Australia. In fact, the premiers of New South Wales and Western Australia have recently signalled their intention to raise coal royalties. But here is the kicker: under Labor's minerals resource rent tax, these royalties will not be paid by the mines It sounds odd but it is true, because at the same time as Prime Minister Gillard is telling the public that miners need to pay more tax she has also agreed to pick up the tab for the state royalty increases. I will repeat that in case anyone thinks I have made a mistake. Under the deal struck by Prime Minister Gillard, the federal government will cover the cost of state government increases in coal royalties. Labor has pledged to return some of the royalties by giving companies a tax offset against the minerals resource rent tax. Australia's prosperity is at stake. We all know Labor cannot be trusted with the economy. Not so long ago Wayne Swan, when questioned on local radio, could not even remember the last time Labor delivered a surplus in one of its budgets. For your knowledge, it was more than 21 years ago. My esteemed colleague, Wyatt Roy MP, has never seen a Labor surplus in his entire lifetime.

It is no wonder Labor wants to sell out Australian jobs, investment, income and superannuation funds for a bit of cash. It is desperate to save face. With such a ludicrous policy, you have to ask yourself why? Apart from needing the money, because Labor has wasted billions of dollars, the ALP jumped into bed with the Greens and is now desperate to hold on to government. This presents an even scarier scenario for Australia. Just months ago, it was the Greens asking for 50 per cent of mining profits. Who is to say what the Greens will try do next against the mining industry in the Senate? If you listen to the Prime Minister, there will be no changes. But this is the same woman who stood before the Australian public just five days before the election and promised there would be no carbon tax. We now have a carbon tax; forgive me if I do not take her at her word.

These bills will hit the Australian resource sector with a double blow that will cripple our economy. As Labor looks for short-term gain to appease the Greens and to claw back some of its wasted funds, the coalition is focussed on the economic future and prosperity of our nation, jobs for local people and security for retirees. I urge the Gillard government to think about the people it represents, not the party interest. Therefore, I and my colleagues will be rejecting this bill.

In the moments left to me I note that today the member for Hunter put out a press release saying that without the mineral resource tax projects like the $1.7 billion Hunter Expressway would be in jeopardy. He was the person, when they were elected into government in 2007, who opposed funding for that road. That road is already funded. It is funded through the forward estimates and work is well and truly underway. We see here direct misleading and misrepresentation by the member for Hunter, who simply does not even understand these bills, where the funds are coming from or where they are going.