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Thursday, 15 March 2012
Page: 1955

Senator MASON ( Queensland ) ( 20:58 ): I rise this evening to speak about the Minerals Resource Rent Tax Bill and associated bills. One cannot address the mining tax and the effect it will have on mining and our economy without also speaking about the carbon tax, at least in passing. The mining tax and the carbon tax can be seen as part of the same project. They are part of a package that one would expect from the Australian Labor Party, the same old social democrat project. The party is one that is addicted to spending and to borrowing, addicted to debt and to taxing. If you need any reference, just look across at western Europe. The last thing Australia needs now or ever is Social Democrat economics or social engineering. The last thing we need is another re-run of European social democracy. With the carbon tax and the mining tax, Labor is trying to lead Australia down the path which, as the European experience shows, ultimately leads to decline and crisis. We know that.

In times of depression or when I need to be amused—I like to amuse myself—I open my drawer and I pull out an article from The Monthly, 'The Global Financial Crisis' by Kevin Rudd, published in February 2009. It is one of my favourite curios from the past. You might note its comforting sepia tones. It is hard to believe now, but just over three years ago, when Mr Rudd was Prime Minister, he argued that social democracy had to save capitalism from itself. Remember that? He was going to be the new President Roosevelt, the new FDR, because only social democracy could rescue capitalism.

Haven't things changed in the last three years? We now know that the only thing that can save social democracy, whether here or in western Europe, is a big dose of what they call economic rationalism and what many of us might call capitalism or liberal democracy or free trade. Social democracy cannot save itself. Mr Rudd's article in The Monthly in February 2009 was wrong in its fundamental assumptions that social democracy had to save capitalism, that nothing else could. Now it is the precise reverse. The only thing that will save western Europe and the social democracy project is liberal democracy and capitalism. Isn't that one hell of a change in a thousand days? The Labor Party and the Greens are still stuck in this Western European social democratic project and it is crumbling.

The fundamental problem with the Labor Party, the Greens and social democracy worldwide is very simple: it is structural debt, and that is unsustainable. It is far worse in Western Europe than the United States. Even before the economic crisis hit in 2008, Greece's public debt stood at 110 per cent of GDP; Italy's at 98 per cent. Now the Greek debt is almost 150 per cent of GDP and 18 OECD countries have public debt above 40 per cent of their GDP. Can you imagine that? That is the social democratic project. The experience of the past few years shows clearly that you cannot continue to borrow indefinitely in order to finance social welfare and recurrent expenditure. It is impossible. When the crunch comes, you are gone.

It is true, and the government is quite right to say this, that here in Australia we do not have the same mountain of debt as European social democracies. Why? We are very, very lucky that the Labor Party have only won one in every three elections post World War II. Can you imagine if they had won two out of every three elections since World War II? No matter what they say, always go on their performance in government. You have heard me say this before, Mr Acting Deputy President: what is the Labor Party's record on debt since Federation? Let me remind the chamber, though the Labor Party do not like being reminded about this. Since Federation, since 1901, for more than 110 years, every time the Labor Party are forced out of office they leave Australia further in debt.

If Australia had not been fortunate enough to elect conservative governments, Liberal governments, two out of every three times since World War II and it rather had been one in three as in western Europe, what would be the result of that? It would be mountains and mountains and mountains of structural debt. Thank God, we do not have that. The only thing standing between our country and structural, systemic, systematic debt is the Australian coalition. Thank God, we have won two out of every three elections since World War II, because every time this lot get into office they put Australia further into debt. That is a fundamental problem; that is the DNA of the Greens, the Australian Labor Party and social democracy in the western world. It has never changed and it never will change. That is the fundamental cancer within the Left in the western world.

Not only do they wreck the economy, but the Labor Party love to talk about social justice. What is the great bequest of Labor governments to the next generation? Let us reflect on that for a second. It is unemployment and intergenerational debt. That is what this lot leave to our children and our grandchildren. They have done that for all Australian children and grandchildren since 1901. That is the fundamental thread woven through Australian political history: every time this lot get in, Australia is further in debt when they leave. Senator Sherry can talk all he likes about Mr Keating and Mr Hawke—we will get to them in a minute—but that is the fundamental proposition that this lot can never, ever overcome. It is a problem in western Europe, and this lot reflect that.

If anything, of course, things have been getting worse. You might recall, and I know Senator Macdonald would recall, that it took Mr Hawke and Mr Keating 13 years to build up $96 billion in debt. They denied that we were in that much debt, but it took 13 years to accumulate it. For Mr Rudd and Ms Gillard, it took only four years to borrow even more than Mr Hawke and Mr Keating. That is Labor's attempt to Europeanise Australia, to make structural debt a permanent element in the new social democratic compact. What this does is ensure all interest groups are beholden to the state. They all put their hand out—and they have been doing this in western Europe since World War II—and what happens in the end? There is no money to pay the interest on the debt; they cannot even do that. Again, thank God this lot has only won one in every three elections since World War II. If they had won any more we would not be in this position.

If you do not believe me, Acting Deputy President, you might believe our newest senator, Senator Bob Carr. What did he say in the Financial Review on Friday, 2 March 2012, in an article titled 'Social democracy crisis'? Senator Bob Carr said:

There is not much glow in the Labor past because there was never a golden age for Australian Labor.

Senator McLucas: Context!

Senator MASON: Read the article; I am not taking it out of context. He said there was far too much mythology, Senator McLucas. Senator Bob Carr knows, as we all do, that structural debt is the cancer within social democracy. He knows that; anyone with any sense knows that.

For the Australian Labor Party, it is always like 1972 and party time, and they spend our bequest. It was said of the French Bourbons that they had learnt nothing and forgotten nothing. For Labor it is even worse: they learn nothing and they forget everything. That is the problem, and it has been since World War II. For the last 4½ years Labor have been spending, borrowing and taxing. As American journalist Rush Limbaugh famously said, no country in world history has taxed itself into prosperity, particularly if it keeps taxing the most vibrant sector of the economy.

In their clearer moments, Labor correctly think that by raising taxes they can change people's behaviour. They are right; I do not disagree with that. If you tax cigarettes and alcohol, fewer people will smoke and fewer people will drink. I accept that. It is meant to change behaviour; it generally works. But somehow Labor think that by raising taxes you will not change the behaviour of miners—that you can tax them more and you will not change their behaviour. What the Labor Party believe is that, if you tax resources more, miners will keep extracting and exporting as if nothing has happened. Labor think that people, maybe even drinkers and smokers, are smart but miners are dumb and they will not change their behaviour.

Australia does not have a global monopoly on coal, it does not have a global monopoly on gas and it does not even have a global monopoly on iron ore. My colleagues know that. So when the prices of Australian resources become too high because companies have to factor in the carbon tax and the mining tax on top of all the other taxies, levies, royalties and licences and so on that they already pay, our buyers, whether from China, India or elsewhere, will go somewhere cheaper, to places that do not penalise their export industries with carbon taxes or extravagant mining taxes. That is simply a fact of business pretty much anywhere in the world.

On Monday the Australian reported:

Australia's global share of the capital raised for mining projects has sunk from 21 per cent to 15 per cent since 2008 as other countries such as Russia, India and China attracted tens of billions of dollars in additional funding.

…   …   …

But in the same period, the value of capital raisings rose strongly in Africa (up 26 per cent), Canada (up 31 per cent), South America (up 59 per cent) and the rest of the world (up 78 per cent).

Why would this be happening, I wonder. Why is everyone investing in resources projects in Africa, Canada or South America more than they are investing in Australia? Could it be because people are not stupid?

Senator Ian Macdonald interjecting

Senator MASON: Senator Macdonald is right; people are not stupid, and they are reluctant to invest in a country whose government is hell-bent on making its resources sector less competitive—and that has only been in the past three years, just based on jitters and fears about the future. Just wait for what happens over the next few years when these fears are finally realised, when the mining industry is actually slugged by the double-whammy of the carbon tax and the mining tax.

As I said at that outset, you cannot take the mining tax in isolation; we on our side know that. The carbon tax and the mining tax together are the twin pillars of Labor's new social democratic project, and in time they will have a cumulative, devastating impact on our economy. To paraphrase the Roman historian Tacitus, Labor create desolation and call it reform.

Just as the mining tax is built on a lie that somehow our resources sector is undertaxed, the carbon tax is built on a lie that it is in our national interest to have it, even if no other major country, major emitter or any other nation on earth has a carbon tax. Let me say that again slowly: the Australian Labor Party and the Australian Greens are the only parties in the world that operate in an energy-rich trade-exposed economy and believe that it is in our national interest to have a price on carbon, even in circumstances where no other nation on earth has a price on carbon. That is rubbish. Over time, they will be held to account for this. That is the great lie.

My colleagues, I know, are concerned about the lie told originally by Ms Gillard, that is true, but I think the greater long-lasting lie that will really wreck Australia's national interest is this inane, pathetic belief that, even if no other country on earth does anything with respect to carbon, it is in our national interest to do something. That is the great lie. Everyone else has said no, but the Australian Labor Party and the Australian Greens know better than anyone else on earth. President Obama said no. The Canadians, the Indians, the Chinese and the Russians all said no. But we say yes.

What is it about Labor leaders? For God's sake!

Mr Swan wrote an essay in The Monthly three years after Mr Rudd's effort. I did not waste my money this time, I could not cope; I went to the Parliamentary Library and they faxed it to me. Clearly, Mr Swan wanted to take attention away from the dismal performance of the government, bash the rich and create some sort of class warfare. You can summarise the article pretty well: mining magnates should shut up and pay up. That is what Mr Swan is saying. It is a funny thing though; there is a certain irony in all this. It is quite ironic that Mr Swan, the Treasurer, the man who has wasted more wealth than anyone else in Australia's history, is having a go at people who have created more wealth than anyone else in Australia's history. Think of the irony of that in a piece published in The Monthly. I do not think Labor leaders should do this because it is not good for them. Mr Rudd's piece, the sepia toned piece, became a curio within three years; Mr Swan's within three weeks. I urge the Prime Minister not to indulge in an essay in The Monthly because I suspect it would not last three days.

The problem is this: these bills are just another chapter in the dismal Labor project to tax and to spend. It will not end unless the Senate stops it. (Time expired)