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Transcript of interview with Paul Murray: 6PR, Perth: 25 October 2012: MRRT



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TRANSCRIPT

THE HON JOE HOCKEY MP

SHADOW TREASURER

PAUL MURRAY (PERTH) 6PR RADIO 25 OCTOBER 2012

E&OE…………………………………………………………………………………

PRESENTER:

The Opposition’s Treasury spokesman Joe Hockey joins me now. Morning Joe.

JOE HOCKEY:

Good morning Paul. That was very interesting because he (Wayne Swan) doesn’t even understand how much his tax is expected to raise. He said $9 billion - I heard that correctly, didn’t he? $9 billion this year! Well the document he released on Monday said it would raise $2 billion this year. He doesn’t even understand his own tax

PRESENTER:

Down from $3.7 billion which they said earlier it would raise this year.

JOE HOCKEY:

So $2 billion. Wayne Swan has just done a press conference where he’s said it is going to raise $9 billion this year . The Treasurer doesn’t even understand his own tax, and now we hear it is not going to raise anything. I will tell you why Paul, because the individual companies have to make an assessment of what they expect to pay for a full year and then they have quarterly instalments. What has happened - what has been revealed today - is they have paid nothing in their first instalment which means they don’t expect to pay anything this financial year and if they get the numbers wrong they get fined. So, Wayne Swan doesn’t understand his own tax and he negotiated it personally. He negotiated the tax with the three lead miners, as you said. It is unbelievable!

PRESENTER:

He says it’s about the low commodity prices. Is that the only reason? Because even when commodity prices were low I spoke to a person from the mining industry in WA who said they wouldn’t pay this tax because the tax was poorly constructed?

JOE HOCKEY:

Correct, this was a fix up, because you remember when Julia Gillard took the leadership off Kevin Rudd she said there were three things she was determined to fix - these will be her signatures. Number one, she was going to stop the boats. Well we’ve had 14 boats in the last seven days and the boats keep coming. Number two, she said she was going to get rid of an emissions trading scheme. What she has delivered is a carbon tax. She failed on that. Number three, she said she’s going to fix the mining tax. Well she has done it spectacularly. There is no mining tax. There is none! I have heard of schools with no students. Even in “Yes Prime Minister” I remember hearing about the hospital with no patients, I have never heard of a Government tax with no money.

PRESENTER:

I have plotted the course of this against iron ore prices, right. This is how it goes. When the Henry Tax Review was started by Kevin Rudd in November of 2008 the iron ore price was $69.98. When the Henry Review reported it was $161. Just before Kevin Rudd got chopped up a month or so later it was at $143, at the time Julia Gillard then did the MRRT. When they got the mining tax bill through it was $135 and now it’s just under $100 - $99.44 today. So they have missed the boom - that’s what happened here, they missed the boat.

JOE HOCKEY:

What is alarming is - they have spent the money. That’s the worst part it. Wayne Swan has just said ‘Oh well, it’s just a volatile tax’. Wayne Swan committed to new expenditure on the Schools Kids bonus, on infrastructure, on superannuation, on small business tax write-offs. He’s committed to billions of dollars and it is going to continue to grow at a cost to the budget and he said it is all going to be paid for out of the mining tax. There is no mining tax. None. This is a fraud. It is unbelievable and they can’t be allowed to get away with it because by bringing forward the mid year update to Monday they did it deliberately to avoid having to deal with the collapse in the mining tax. That is act of total deceit by this Government.

PRESENTER:

They are going to blame you - and they are blaming you today for the fact that there is no cut to corporate taxation - company tax profits and that was part of the mining tax right back to the start because you lined up with the Greens to knock it over in the Senate. They then got this working party together. The working party now can’t find a way to do the company tax cut because it has to be revenue neutral because of the straight jacket the Government has got itself in.

JOE HOCKEY:

Well, Paul, the reason why we opposed the 2% cut in company tax was because it was funded by the mining tax and we said the money isn’t there. You can’t pay for something if you haven’t got the money. The same with the School Kids bonus, the same with all these other things. Labor was committing money that didn’t exist and that has been proven today. As

much as we want to see lower company tax - and we really do - the bottom line is you have to find the money from somewhere. So when the Government itself couldn’t find the money it said “well, we’ve had the Henry Tax Review, we couldn’t do that. We’ve had a Business Tax summit. That didn’t work out too well. Let’s have a working group with the business community to try and find a way to pay for it”. The Business Tax Working Group has collapsed because Government has broken the trust. The Government is meant to do the job of finding the money and the Government failed in its own endeavour and ultimately the business community - I’ve never seen the business community walk away from the Government like this and I’ve never seen a Government without any support from any business leaders anywhere in Australia like this - and that’s because of their complete shambles. Their economic and budget policy is in a complete mess

PRESENTER:

You said at the start of this interview that the fact the miners hadn’t paid any mining tax for this first three months when the instalment was due meant they wouldn’t be paying it for any of this financial year. How does that work?

JOE HOCKEY:

Under the actual agreement - the explanatory memorandum of the legislation - effectively it says that the miners need to work out the liability for the mining tax for a full year on what they expect to pay and then pay it in quarterly instalments. If they get the total liability wrong - that is, they underpay the mining tax - then they can get fined.

PRESENTER:

So you think there would be four equal instalments so each one would look the same, and if it is none in the first one it is going to be none in the other three?

JOE HOCKEY:

That’s right. It is very complicated but that is our understanding of it and that seems to be the common understanding. So this line that somehow there is going to revenue in six months or something - it doesn’t stack up. If it does, everyone has got it wrong.

PRESENTER:

I wonder how the Government’s partners in Government the Greens are going to think about this because they wanted a mining tax that pulled in about $20 billion a year and they liked the Kevin Rudd tax. I mean, I wonder what they are going to think of Julia Gillard’s tax now that it has got nothing?

JOE HOCKEY:

What’s Kevin Rudd going to think? He was knifed by Julia Gillard because he was going to have a tax on carbon, he had the boats coming and he had a mining tax. Now a Government that lost its way has completely failed again. So is Julia Gillard going to go? Is Wayne Swan

going to go? I have never heard, anywhere in the world, of a Government that goes through the pain that this Government has in having five versions of a mining tax. I have never heard of a Government that announced a tax that doesn’t raise a dollar.

PRESENTER:

This couldn’t be why we got the Mid year Economic and Fiscal Outlook statement early, could it? Because they must have known this was going to happen shortly after it?

JOE HOCKEY:

Correct. That is exactly right. It is absolute act of fraud. I am using strong language because I have never seen anything like it. Normally this update is midyear - mid economic year or financial year. So normally it would be mid November or December. The only time the document has been released mid October - less than four months into the financial year - on the two occasions an election has followed soon after - an election in the next few weeks. There is no election now, and they brought it forward to exactly the same day that on the other side of Canberra the miners were saying ‘sorry, we have got no obligations to pay the mining tax’. The Government still factored in $2 billion into its budget this year. The surplus is gone, the budget is gone, the credibility of the Government in relation to taxation is completely gone but what is worse is they have created a massive fraud on the Australian people by claiming to have a mining tax that was going to ‘spread the benefits of the mining boom’ and there is nothing there, nothing at all.

PRESENTER:

Finally Joe, on that Rudd matter. The bitter irony here is that if the Rudd tax had come into play and that was all the minerals, gold, copper etc. Given what’s happened to gold prices they would have had a revenue dream at the moment?

JOE HOCKEY:

They may well have. The person who would be most amused by the events today and the last few days would be Kevin Rudd. He was dumped because of all of this and this Government has made a complete hash of it. It is the most extraordinary thing I have seen in public policy and that is saying something from a Government that handed out $900 cheques to dead people and pink batts in homes and everything else. I am stunned at this.

PRESENTER:

It is a doozy. Thank is for talking to us Joe.

JOE HOCKEY:

Thanks very much.

[ENDS]