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Monday, 21 November 2011
Page: 13002


Mr BANDT (Melbourne) (19:29): We are living through one of the biggest commodity booms in Australia's economic history. The mining industry has grown from four per cent of GDP in 2004 to approximately nine per cent today. Commodity prices have surged and there is an enormous investment pipeline that will continue to drive the giant profits currently being made by the mining corporations.

Until recently much has been said about the positive impacts of the mining boom, but there has been less focus on the impacts on the rest of the economy. It is worthwhile to start by remembering some facts. Fact No. 1: the Australian mining industry is largely overseas owned. In 2009-10, mining profits were $51 billion, of which 83 per cent, or $42 billion, went to overseas investors. Over the next 10 years, mining pre-tax profits are likely to be around $600 billion. At present levels of ownership, around $500 billion will end up in the hands of overseas owners. Fact No. 2: while mineral prices have boomed, mining employment has not. Mining is one of the smallest sectoral employers in the country. According to the ABS, out of a workforce of over 11 million, only 217,100 are employed in mining. Fact No. 3, mining companies do not pay much tax. The average rate of corporate tax paid by the mining industry in 2008-09 was 13.9 per cent, substantially below the company tax rate of 30 per cent.

Despite these facts, the miners have liked to portray themselves as big taxpayers, big employers and big money spinners for Australian shareholders. By and large, until recently, those myths have held sway, but this is changing. With a greater understanding among the public about the negative effects on manufacturing, for example, particularly in the wake of the recent announcement by BlueScope Steel to cut over 1,000 jobs, people understand that the high exchange rate associated with the mining boom, while making imports cheaper, is hurting trade exposed industries such as tourism, manufacturing and education that are competing in international markets. They know that our high mortgage rates are in large part caused by the mining boom, as the Reserve Bank seeks to keep down inflationary pressures with higher interest rates.

People also know that, while mining investment does create some jobs, there are problems associated with the fly-in fly-out culture of the workforce. People know that a largely overseas owned sector is moving to import many workers and procure many of its materials from overseas and, at the same time, is sending large profits there. That is why, despite an unprecedented campaign of opposition from the mining industry and the ongoing chorus of negativity from the opposition, the Australian people are strongly supportive of a superprofits tax on the mining industry.

The Australian Greens are at one with the Australian people on this issue. We want to see a mining boom tax that will ensure that the big mining companies are made to pay their fair share of the profits made through the digging up and sale of Australians' mineral wealth. These are minerals that we all own but we only get to dig up and sell once. Unfortunately this mining tax is not that tax. Instead what we have before the parliament is a watered down, mining giant approved compromise. It is limited in scope, there are problems with its design and it will sell the Australian people short when compared to the original Treasury endorsed proposal.

The Australian Greens supported the original mining tax proposed by Treasury. That tax was designed to set us up for generations to come. It would have covered a broad range of minerals, including gold, and raised substantial revenue for the Australian people. Like the IMF and the OECD, we question whether this tax can do the job that is needed. We would have liked to have seen some of the revenue going towards a sovereign wealth fund to relieve some of the pressure on the rest of the economy from the mining boom and to invest in the future. We would also be spending the revenues from the current proposal differently.

We support the principle of an increase in superannuation. In fact, we think it is just the first step in superannuation reform and we need to be looking at what other changes we can make to improve retirement incomes for our workforce. We also need to look at the equity implications of providing, in effect, a tax break to people on higher incomes and providing it to them disproportionately. Whilst the Greens support a cut to the company tax rate for small business, we think it could be larger. In fact, we want small business to get a five per cent tax break and larger companies to continue to pay the current rate of company tax.

We note that the government has not introduced its tax cut for big business as part of this package of bills which includes the Minerals Resource Rent Tax Bill. But we remain concerned that the government has adopted an open-chequebook approach to refunding state royalties, a decision that should never have been made. So we have some big questions, but we also recognise that this mining tax is better than the opposition's proposal, which is to have nothing. Our focus in on improving, not blocking, this tax. We want to get something in place that can be built on into the future.

Contrast this with the approach of the opposition. They have joined with the big tax evaders and foreign miners in saying no to any tax. They joined the millionaires' revolt; the Rolex revolutionaries like Twiggy Forrest and Gina Rinehart crying poor on the streets of Perth while being some of the richest people in this country. It takes one's breath away to think about what these jokers believe they can get away with. And how will the Opposition fund their commitments, including their superannuation pledge, without the mining tax? What jobs and services will they cut to offset a budget black hole that looks to be expanding towards $100 billion? The Leader of the Opposition's claim to any sort of credibility on the economy is rapidly eroding. He will not even get behind a sovereign wealth fund, unlike others on his front bench.

The Australian Greens went to the election saying that we would support this proposal before us now even though we believed that it represents a cave-in of $20-odd million by the mining industry which saved them having to pay $100 billion in taxation over the next decade—and that is $100 billion that every one of us and every member of the Australian public is going to have to find and make up. We said we would support it because something is better than nothing. We have also been saying very clearly to anyone who would listen that any further changes to be made to the tax in order to gain the support of other members of this place would have to be revenue neutral, that the Greens would not automatically support a further watering down of this tax. We find it astonishing to learn today that now the government has formed the view that, for companies that earn up to $75 million profit, the money that would have gone to revenue and could have gone to schools and hospitals is now better staying in the companies' pockets—that is, the government has made the decision today that it is far better that a mining company that earns between $50 million and $75 million profit in a year should get to keep that rather than pay their fair share of contribution. We do not agree with that, and as a result of that decision our support for this bill, and my vote in particular, has moved from the yes camp into the undecided camp, because this is a further watering down—something that we have said that we would not accept.

But, as I said, the Australian Greens are seeking to improve this bill. In particular, we believe there is no reason why gold should be excluded from the tax, and later in the debate I will be moving amendments to return gold to the bill in accordance with the original Ken Henry proposal. Australia is the world's second biggest goldminer after China and we have 13 per cent of the world's gold resources. In 2010 the industry produced 266 tonnes, or 8.5 million ounces, of gold. This was a 17 per cent jump on 2009 output, as mining companies have capitalised on record gold prices. Like those sectors subject to this bill, the gold industry is making enormous superprofits. In fact, gold currently has many of the same characteristics which iron ore and coal have exhibited in recent years, so there is no legitimate economic reason for its exclusion. Most notably, the gold price is on a sustained upward trajectory, reacting to ongoing global anxiety, and goldminers' profits are surging with the higher price. Market experts do not believe current high gold prices are a bubble, and these superprofits are very likely to be sustained. The Australian gold market is dominated by five large players, all of which, with the notable exception of Newcrest Mining, are largely overseas owned. So currently profits from gold are mainly returned to overseas shareholders.

The Australian Greens recently commissioned a study of the estimated revenue impact of excluding gold from the mining tax, and the results were startling. Using ABARES's forecast of gold export earnings and a notional gold price of approximately $1,500 an ounce, the study found that the value of gold exports would be as high as 17 per cent of the combined value of iron ore and coal exports. This represents an incredible loss to the revenue base of the mining tax. The study estimated that, if gold is included in this bill, the revenues from gold could be as much as $840 million over the forward estimates period and $1.8 billion over the next ten years. This would be a big boost to revenues, especially when compared to the Treasury estimates of total mining tax revenue of $11.1 billion over the forward estimates.

Of course, these revenues could have been much higher if the government had not abandoned the original resource super profits tax in the face of a $20-odd million campaign from the mining sector. The original mining tax, proposed by Treasury and backed by the Greens, would have included gold. In that original mining tax, revenues from gold would have been approximately $3.5 billion over the forward estimates and $8.2 billion over the next 10 years—$8 billion over the next decade. That is $8 billion that could have been spent on schools, on hospitals or on trams and trains or that could have could have been put into a sovereign wealth fund for the future. That is the opportunity lost because of the cave-in in the face of a campaign from some of the richest people in Australia and overseas. But, of course, we know the opposition would not even have collected one cent. Given these facts, it seems incredible to the Australian Greens that gold will be excluded from this tax, and that is why we will move to put gold back in later in the debate. Members in this place will have opportunity to show where they stand on Australia's economy. Do they support miners contributing a fair share or not? Do they think gold miners should be able to send all their superprofits overseas or not? Let the Australian people see where they stand.

Gold is not the only mineral that is excluded from the mining tax. Recently the Prime Minister said she thinks we should sell uranium to India. This is despite India's failure to sign the nuclear nonproliferation treaty and its nuclear weapons stand-off with Pakistan, and it is despite the recent nuclear disaster at the Fukushima nuclear power plant in Japan. The Australian Greens oppose this move by the Prime Minister. We continue to believe that we should end all uranium mining. Uranium is not safe. It is dangerous and should be kept in the ground. However, if the government, as it is obviously intending to do, allows continuation of uranium mining and potentially its expansion—if that is going to be the reality—then we ask the question: why shouldn't uranium miners pay this tax? Why, at the very least, should the profits from this toxic trade not be taxed at a reasonable rate? Should not BHP and others contribute a fair share of the profits they are making from Olympic Dam and other uranium mines? At the end of the day, a failure to include uranium in this is just another leg-up to uranium-mining companies. They will get away with what companies mining iron ore or coal cannot. The answer is again a lack of courage. All too often we see a willingness in this place to let mining giants get their way and get to determine Australian legislation and public policy.

Members in this place share an enormous responsibility that we must exercise with great care. It is incumbent upon us to balance competing sectional interests to make decisions that are in the interests of all Australians and of generations of Australians to come. That is why we must take this opportunity now to put in place measures that can fairly and sustainably share the bounty of the mining boom. To not do so will mean we squander an enormous opportunity—an opportunity that potentially comes once in a lifetime. We will be allowing these big mining companies to continue to send profits offshore at the expense of the rest of the economy, and we will be robbing future generations of the opportunity to share in this country's mineral wealth.

We need to know that these opportunities may come only once in a lifetime, and we must be prepared for the future. We must take the fruits of this boom and invest in health, education, science and infrastructure. We must ensure that the boom does not destroy the rest of the economy. And we must build an economy that is sustainable and fair. That is why, subject to what happens over the next couple of days, we intend to improve this bill rather than block it, and it is why we will move to include gold and uranium within the tax on miners' superprofits. It is the fair thing to do and it is the right thing to do.