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Wayne Swan now has no money to pay for mining tax promises

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The Government has made commitments worth billions of dollars that are linked to the mining tax - and now has no money to pay for them.

Media reports today suggest there wasn’t a single payment made to Treasury for the first quarterly instalment of the mining tax.

Only Labor could introduce a tax that raises no money, yet increases Australia’s sovereign risk profile, adds record levels of red-tape for business, and still hangs as a threat over successful mining companies. This is Labor’s new low benchmark in public policy.

On Monday Wayne Swan promised us that he would deliver a wafer-thin ‘cook the books’ surplus of $1.1 billion this year - but he deceptively released MYEFO early to avoid having the first quarter’s mining tax revenue receipts counted.

Wayne Swan has been caught red-handed. This is a double hit for the Treasurer. Firstly, he now has no hope of delivering his ‘cook the books’ surplus and secondly, has no money to pay for the promises that he has made to the Australian people.

The Treasurer told us in his Budget update that he expected to collect $2.0 billion from the MRRT this financial year - this was the seventh revenue variation since the tax was announced.

Original expenditure items linked to the Resource Super Profits Tax were set out in 2010-11 Budget Paper No.2 under the title “Stronger, fairer, simpler tax reform”. These programs included: • 50 per cent discount for interest income (promise broken in 2012-13 Budget);

• Lowering the company tax rate (promise broken in 2012-13 Budget); • An early start to the company tax rate cut for small business companies (promise broken in 2012-13 Budget);

• Standard deduction for work-related expenses and the cost of managing tax affairs (promise broken in 2012-13 Budget); • Government superannuation contributions tax rebate for low income earners; • Increasing concessional contribution caps for individuals over 50 with low

superannuation balances;


• Increasing the superannuation guarantee rate to 12 per cent; • Phasing down interest withholding tax on financial institutions; • Small business instant asset write-off and simplified pooling.

Additional expenditure measures that have subsequently been added to the MRRT package include:

• The establishment of a Regional Infrastructure Fund; • Expanding the definition of exploration to include geothermal energy; • Exemption Threshold increase which increases the level at which the Minerals Resource Rent Tax (MRRT) low profit offset applies from $50 million to $75 million,

also extending the level at which the offset phases out from $100 million to $125 million.

And the Government didn’t stop there, additional expenditure measures included from the 2012-13 Budget are: • Supplementary income support for low income earners; • Increase in the rate of Family Tax Benefit Part A;

• Tax loss carry-back; • Schoolkids Bonus which the Prime Minister and Treasurer have linked to the MRRT as it was a measure to help ‘spread the benefits of the boom’.

Australians are entitled to ask which promises Wayne Swan will break or which taxes he will raise now that there is no money from the mining tax to pay for them.

This mining tax mess simply adds to the Government’s $120 billion great big Budget black hole.

Wayne Swan must immediately outline to the Parliament how much mining tax has been collected on a monthly basis - just as Julia Gillard promised to Bob Brown earlier this year.

As Treasurer, I will make abolishing the carbon and mining taxes my top priority.