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Monday, 19 March 2012
Page: 2074

Senator BOYCE (Queensland) (11:07): After that contribution from Senator Sterle we cannot claim that the government is not singing from the same song sheet. They are singing the song of the politics of envy nonstop. That was perhaps one of the most malicious and revolting contributions I think I have heard in this chamber. In case Senator Sterle was not aware, most large businesses started out as small businesses. Let us look at the transport industry and Lindsay Fox's business and Sir Peter Abeles' business. They were people who started out and used their own intelligence and their own sheer hard physical labour to create something big and worthwhile and profitable. And guess what? They used those profits to pay wages and to build their companies—to invest in more products, more technology and more research. That is what small businesses do in this country, but they certainly will not be able to under this disgusting government.

I was rather hoping that after the fracas, the latest little effort of Ms Gillard and Mr Rudd, had settled down and we finally worked out who the Prime Minister was it would mean the government would get on with government. But it has not. The same song of mismanagement and envy just goes on and on. Today I have been reviewing the report done by the Senate Economics Committee on the minerals resource rent tax and two other reports that are going to come down today—one on the personally controlled e-health records and one on the MySuper legislation. With each of them, you do not have to read our dissenting reports to realise how poorly managed they are, what a mishmash there is with the lack of negotiation and 'Oops, we got that wrong; we'd better change that.' A litany of mistakes applies to every one of these reports. You can read the government report. The only thing that is missing at the end of every one of the government's reports—with this long litany of a lack of consultation, a lack of understanding, poor timing and poor leadership—is 'and so we need to fix it'. This government limps along trying to put bandaids on whenever they discover 'Oh goodness, we can't even try to pretend that we'll put that through!'

These bills relating to the minerals resource rent tax are a classic example of what this government do not know about business and will never know about business—and one hopes they will be out of government before they destroy any opportunities there are for business. Let us look, for example, at Senator Sterle's laughable comment that 'there aren't small miners'. Just because you have six zeros on the company balance sheet does not mean you are big; it means that you are in an industry that requires very deep and long-term investment to make a profit. And that is what the people in the mining industry in Australia have done over centuries. We are very lucky in Australia. This government is extraordinarily lucky that the mining industry and the profits from the mining industry are currently masking their extraordinary ineptitude. It beggars belief that this government cannot even recognise that what they are doing is destroying their own golden goose. The only thing that will keep them in government is good profits from the mining industry—because they are just useless at anything else.

Let us look, for example, at the profit mark of $75 million. I first made these comments in relation to the BAS. We have this wonderful view that, if someone makes a $1 billion profit, we have to get in there and rip it from them. A $1 billion profit can be a huge profit or it can be quite a small profit. We should not be talking about the profit, we should be talking about the return on investment. If you have invested $1 billion and made $1 million you have not really done very well, it is not a large return on investment. To have set an actual figure of $75 million is the most bizarre, fiscally irresponsible and completely ignorant way to approach this legislation. Why $75 million? As Senator Sterle said, if is $74.9 million you are all right. It will not matter whether you have invested $150 million or $10 billion to make that $75 million, you will still pay the tax. How bizarre, how comple­tely outside any reality, any assessment.

One of the biggest issues, of course, is that mining expenditure is the cost a miner incurs in bringing the taxable resources to the valuation point—and the government still has not quite worked out how they are going to deal with the market issues they have developed there. In my own state of Queensland we are very lucky to have a strong flow of royalties from the mining industry—not just coal but particularly in the coal area with the Surat and Bowen basins. Nine per cent of Queensland government revenue currently comes from state royalties. But this is the boom, this is as good as it gets with getting money out of the mining industry. Everyone assumes that it will steady and then, over the next 50 or 60 years, begin to taper. Queensland is getting its cut, particularly out of the coal industry and many other industries, and they get nine per cent in royalties. So, Senator Sterle, while we are looking at how well Labor governments perform, you might want to ask: is the Queensland government in surplus? No, they are not in surplus. Have they had a downgrade of their credit rating in the last three years?

Senator Williams: Yes, yes!

Senator BOYCE: Yes, they have. So here we have an example yet again of how well Labor governments can perform if they have got good—

Senator Sterle interjecting

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): Senator Sterle, come to order so that Senator Boyce may continue. Senator Boyce, you have the call.

Senator BOYCE: I am not quite sure what Senator Sterle is talking about. The coal seam gas industry will be a major contributor to Queensland's economy and has been a steady contributor to Queensland's economy for 50 years, Senator Sterle. Certainly there needs to be a balance, and thank goodness from next Saturday there will be an economically responsible government in Queensland under the premiership of Campbell Newman that will actually get the balance right between the development of coal seam gas and the protection of farm and food production areas. That may well be beyond the wit of Senator Sterle and his colleagues, but it is not beyond the wit of the LNP government that will be installed in Queensland next Saturday.

It is hard to think of a worse way to have gone about developing this legislation than the way this government has. We had the old super resource tax under former Prime Minister Rudd. A bizarre 287 pages of new tax law is what we have got out of this. As I said earlier, the introduction of the market valuation scheme to calculate applicable deductions gives the big three companies a significant tax shield that is not available to small- and mid-tier mining companies. There are small- and mid-tier mining companies. Every industry is relative. Certainly, if we are talking about milk bars, there are small milk bars and large milk bars, Senator Sterle, in the same way there are small mining companies and large mining companies. You would think that this government would be pleased that every one of those small mining companies is working assiduously to try to turn into a large mining company. That is what Australia's prosperity and the availability of jobs is based on. It is based on individuals who have worked furiously to go from being sole traders in many cases through to being national and multinational companies and there is nothing wrong with doing that. I must admit I was somewhat appalled by Senator Sterle's suggestion that apparently Ms Rinehart cannot have friends. The fact that both Senator Joyce and Mr Schultz have written to her children is on the public record.

Senator Sterle interjecting

Senator BOYCE: It would have been better, you are dead right Senator Sterle, if all those family problems had stayed out of the spotlight and I think your contribution to keeping them out of the spotlight was hypocritical to say the very least. But what is the suggestion? Is it that Ms Rinehart cannot have friends? What is the suggestion? Is it that Mr Forrest and Mr Palmer cannot make the same attempts to—

Senator Sterle interjecting

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): Order, Senator Sterle, Senator Boyce has the call.

Senator BOYCE: Every individual in Australia is entitled to do what they can to affect government policies, especially when they think it is wrong—every individual. I know Mr Craig Thomson and his mates certainly tried very hard. If you look at the Your Rights at Work campaign, I think we are talking here about a little more than some of the donations that Mr Palmer has made to the LNP. To suggest that making a donation is somehow equivalent to bribing people is a disgusting, dishonest comment to make, particularly given that we are talking here about individuals. These donations are well known and any results thereof are well documented so that you have a transparent and accountable system not like the insidious, incestuous relationship between the Labor Party and the unions where there is no accountability and Fair Work Australia apparently has to learn to read before they can work out how to produce a report sometime hopefully before the next election, although the likelihood of that, I would think, is very small.

I want to go back and mention the superannuation legislation and the so-called company tax cut that the government has tried to attach to the mining tax. They are not tax cuts; they are tax cons. In fact, if you look at some of the figures that have been produced recently over the weekend, you would have noticed an analysis that shows that, in the end, both the super changes and the company tax cuts will cost money because employers will end up in a negative situation. I would like to just remind the Senate what the Henry tax review said about the superannuation guarantee rate. It said:

The superannuation guarantee rate should remain at 9 per cent. The Panel has considered carefully submissions proposing an increase in the superannuation guarantee rate. Such an increase could be expected to lift the retirement incomes of most workers. However, the Panel considers the rate of compulsory saving to be adequate. The Age Pension and the 9 per cent superannuation guarantee (when mature) can be expected to provide the opportunity for people on low to average wages with an average working life of 35 years to have a substantial replacement of their income, well above that provided by the Age Pension.

This is the government's own review, the Henry review of taxation, which said 'Leave it at nine per cent; don't change it.' We could ask Senator Sterle perhaps what Machiavellian movement went on behind the scenes because, when you think about it, who wanted a 12 per cent superannuation rate? Gee, who was that? Was that the union movement that was pushing for that, especially funded by people outside the wages system. 'Let's go find someone rich and get some money out of them' so that we can increase the superannuation guarantee above the rate that that Henry tax review says it needs to be to give people adequate incomes.

The coalition supports a reduction in the company tax rate. We do not support the mishmash, piecemeal approach yet again that this government is taking. 'What does it matter? We've distorted so many markets now' is the Labor government's mantra. 'What does it matter if we distort a few more? Let's go for a tax cut for small business and just ignore everybody else for a bit longer.'

It beggars belief and causes me great distress that this government might be in power for another 12 months. It is really worrying what else they can damage or destroy in that time. As I have said, the mining industry—and Treasurer Swan loves looking at averages—is the only thing that is masking the serious problems in manufacturing, in retail, in services, in building in Australia.

Senator Sterle interjecting

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): Senator Boyce has the call. Senator Sterle, come to order.

Senator BOYCE: I am not sure which ideal little world Senator Sterle lives in, but most consumers when faced with a $50 Australian-made product and a $30 made-in-China product—Senator Sterle, do you know what happens? In most cases, they buy the made-in-China products, Senator Sterle. I think you need to go back to the bottom of this before you start worrying about where the wages come from. I know from personal experience that vast numbers of manufacturers are now importing some of their product. It was that or go out of business. Would that have been preferable in Senator Sterle's view? Because when he finds the consumers who are prepared to pay between 30 and 80 per cent more for a product so that they can buy an Australian-made product that will be fantastic. Vast numbers of products have to be imported because of the competition in the industry, and perhaps Senator Sterle should even look at the truck manufacturing business: Senator Sterle, how many of those are made here right now and used?

Senator Kim Carr: Quite a lot!

Senator BOYCE: Quite a lot, Yes, we must be over 15 per cent, are we, Senator Carr? It beggars belief that this government would continue in area after area to not give a damn about business and growing business to simply say, 'Wow, $75 million!' Irrespective of what that means as a return on investment, it does not matter. It does not matter if it is a one per cent return on investment or a 100 per cent return on investment, but 'Wow, if it's $75 million, you must be rich. You must be a really rich company, so we'll go and rip some money off you. We'll continue to distort the market even more.' Never mind that mining companies already pay high rates of corporate tax and pay the royalties to the states. Never mind that there is a legal question over whether the federal government can even tax what is state property: the coal and iron ore profits.

The Gillard government mining tax is divisive, complex, unfair, fiscally irresponsible and distorting. It reduces our international competitiveness and was developed through a highly flawed and improper process. It will damage our economy. It will in the long term be the sort of retrograde and extraordinarily inept process that we have come to expect from this government.