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Friday, 16 March 2012
Page: 2005

Senator POLLEY (TasmaniaDeputy Government Whip in the Senate) (10:25): It is with delight that I rise today to speak in support of the Minerals Resource Rent Tax Bill 2011 and related bills. Let us be very clear: the natural resources in Australia belong to Australia—that is, to all Austra­lians. However, this is not an attitude shared by everyone. If you listen to the words of Lord Christopher Monckton, the great climate change sceptic, talking to leaders of the Australian mining industry in a private meeting last year, this is clearly not a view shared by everyone. I would just like to quote from some of the discussions that were held:

Frankly whatever you do at street level, which is what you ' re talking about here, is not going to have much of an impact compared with capturing an entire news media.

He continued:

And it seems to me that devoting some time to encouraging those we know who are super rich to invest in perhaps establishing a new satellite TV channe l—it ' s not an expensive thing …

He went on:

I would like to suggest a modest free market solution to the problem we've identified … which is that we don't have a TV channel of our own.

I would be … happy to work with people … to put together a business plan for such a thing if the idea would be generally supported and then we'll see if we can get someone to be an angel funder.

Did those at this private meeting agree? You bet they did. You do not have be Albert Einstein to work out what they were think­ing. It seems to fit in with the commentary from our Treasurer, Wayne Swan.

Let me say this again: the natural resources in Australia belong to Australia, and all Australians should benefit from the mining boom, not just the mates of the coalition. The coalition want to give back the mining resource rent tax to Gina Rinehart, recently declared by Forbes to be the 29th richest person in the world. To the coalition, it does not matter what happens to Australians or who will benefit from the mining resource rent tax as long as they look after their mates. The Gillard Labor government is not going to allow this opportunity for all Australians to benefit from the mining boom to be lost. We are not going to repeat the actions, or more precisely the lack of action, of the Howard government that frittered away the first mining boom. From 2000 to 2010 the average iron ore price increased fourfold, from $28 per tonne to almost $120 per tonne. Export earnings from mineral and energy resources are forecast to reach a staggering $218 billion in 2011-12, a 20 per cent nominal increase from 2010-11. Treasury estimates are that the MRRT will raise $11.1 billion over the first three years, which we will reinvest in our economy through lifting the superannuation guarantee, through a tax break for small business and through investing in a Regional Infrastructure Development Fund.

Fidelity Worldwide Investment are a significant shareholder in BHP Billiton, Rio Tinto and Newcrest, and they do not share the coalition's view. In fact, their global equities manager, Amit Lodha, said:

… the policy intent of the mining tax … is the right one for Australia … the mining profits tax will give a much-needed boost to innovation in local industries.

He went on to say:

The intent of the mining tax or any excess share taken from the mining industry was right … in that you take money from a sector that is doing very well and invest into technology, R&D … innovation.

Then we have the OECD's 2010 economic survey of Australia, which says:

The proposed mineral resource rent tax (MRRT) on coal and iron ore operations along with the extensions of the petroleum resource rent tax are justified on both equity and efficiency grounds. This resource rent tax is more efficient than the current royalties system as it raises taxation of finite and immobile resources. This will improve efficiency in the resource sector.

Or there is Saul Eslake, program director at the Grattan Institute, who said:

… the principle

of resource rent taxation—

namely, that the return to the Australian people from the exploitation of mineral and energy resources should be based on the profits derived from the extraction and sale of those resources, rather than on the volume of resource production—is one that I (and most other economists) strongly support.

Philip Daniel, deputy head of the IMF's tax policy division, said the mining tax was a 'significantly worthwhile reform' that should be copied by other mineral rich nations. He went on to say that it will strengthen Australia's public finances while leaving a large share of resource profits in private hands.

The ACTING DEPUTY PRESIDENT ( Senator Stephens ): Excuse me, Senator Polley. Senator Edwards, if you want to have a loud conversation could you please do it outside.

Senator POLLEY: Thank you, Madam Acting Deputy President. I know those people opposite do not agree with this legislation but they might actually learn something if they listened to other speakers. As Ken Henry concluded in Australia's Future Tax System Review:

The community, through the Australian and State governments, owns rights to Australia's non-renewable resources and should seek an appropriate return from allowing private firms to exploit these resources.

Current charging arrangements failed to collect a sufficient return for the community because they are responsive to changes in profits. Further, the current arrangements distort investment and production decisions, thereby lowering the community's return from its resources.

…      …      …

A rent-based tax would, over time, earn for the community a greater return from the use of its resources while still attracting private investment.

I will turn now to the benefits for small business which we support and those opposite are going to vote against. From 2012-13, up to 2.7 million Australian small businesses will be able to instantly write off any asset worth up to $6,500 as a tax break to help with cash flow and to cut paperwork. This is up from $1,000. Small businesses will also be able to write off other assets, apart from buildings, in a single depreciation pool at a rate of 30 per cent. From 2012-13 small businesses will also be able to instantly write off up to the first $5,000 on the purchase of a motor vehicle, including utes and vans. Further, approximately 720,000 small business companies could benefit from the reduction in the company tax rate to 29 per cent from 2012-13. These are real benefits going directly to small businesses.

The government are also looking to assist workers through this legislation. As part of the Clean Energy Future package we will be tripling the tax-free threshold from $6,000 to $18,200, which will deliver tax cuts of at least $300 to around 60 per cent of our taxpayers. About 8.4 million Australians will benefit from the increase in the superannu­ation guarantee from nine per cent to 12 per cent in 2013-14. I think Senator Sherry last night more than adequately put on the public record the benefits of superannuation and the history that Labor governments have of supporting Australian workers with the superannuation. Someone on full-time average weekly earnings who is 30 years of age will now be around $108,000 better off at retirement.

Around 10 million taxpayers in Australia have benefited from the government's three rounds of tax cuts. Changes have included a person with $50,000 of income paying $1,750 less tax in 2011-12 compared to when we came to office. That is 18 per cent less tax. A person with $80,000 of income will be paying $1,400 less tax in 2011-12, including the flood levy which is $150 for them, so they are better off than when we came into office. And if we look at the benefits through investment in infrastructure, there will be $6 billion for local roads, rail and ports as part of the government's Regional Infrastructure Fund.

I do not see what the problem is. Most economists do not see what the problem is. Of course, that does not include those opposite. As we know, the coalition's economic 'three stooges' cannot see the benefits of this tax. But the Gillard Labor government is governing for all Australians, not just those that are already privileged in our community. I commend this package of bills to the Senate.