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Wednesday, 13 February 2013
Page: 1218


Mr ALEXANDER (Bennelong) (16:26): Thank you, for the opportunity to contribute to this matter of public importance about the adverse impact of the government's mismanagement of the mining tax on investment. As has been eloquently said by my colleagues before me, our nation's wealth is built on strong economic management that provides the stable and certain conditions essential to attract investment. It is our nation's great misfortune that this stability and certainty has been progressively undermined by five years of economic and policy ineptitude under this Labor government.

Over a very long period of time our nation has earned the highest reputation of one that could be depended upon, of a people whose hand you could shake, whose word could be given and trusted. This reputation was built under fire on foreign battlefields as the staunchest and most heroic of allies. This reputation has been built during peacetime, with relationships based on the foundations of integrity and trustworthiness with our trading partners—sometimes with the same countries against whom we have endured conflict. This reputation has been developed through generosity for those in need in times of disaster or hardship, or through assistance to build a better future. We have shared our good fortune. This reputation has been built on the sporting fields of the world, not just through our successes, but through our willingness to compete against the odds, try with our all and, if defeat visits, smile, shake hands and look forward to the next opportunity to compete. Reputations are so hard won but so easily tarnished. Values of honesty, integrity and trustworthiness are not fashions that may come and go. They are the essential building blocks for a country building a great future to establish and demonstrate in every endeavour and at every dealing.

Today's MPI topic of the adverse impact of the mismanagement of the mining tax on investment is representative of the past five years under this Labor government. Unfortunately, day after day in this place, and in every home, and the places we visit in our electorates, there are questions about this government's values, their honesty, their integrity and their trustworthiness. Time and again we have seen calculated promises, made in the heat of an election campaign, that put politics above policy. We have seen deals done with Independents to negotiate power and paid for with our dollars—politics above policy. There were promises broken and deals reneged upon. How far does this sad characteristic extend and what are the consequences? We all saw the choices made in the face of the GFC: pink batts, school halls that were overpriced and often not needed and $900 cheques dispersed. These initiatives were plagued by rorts and rip-offs, high cost and more debt and were for no benefit. Surely we can do better. Sovereign risk had never been a label attached to Australia. Sadly now it is, and there are consequences as collateral damage manifests.

This mismanagement of the mining tax is just the most recent example. Prior to that, we saw the memorandum of understanding with the pharmaceutical industry, where the government promised certainty through the PBAC process for PBS inclusion in return for the industry forgoing significant revenues.

Not even 12 months had elapsed and the government backed away from their agreement through cabinet deferrals of PBAC recommendations. Tremors reverberated around the pharmaceutical world, and Australia and sovereign risk were mentioned in the same sentence for the first time. Export income of $4 billion, more than the car and wine industry, $1 billion in research and development and huge current and future investment in this sector were put in peril.

Just like with this mining tax fiasco, this mismanagement of economic policy does not just affect the companies but also affects the people we are here to represent. In my electorate of Bennelong there is a company that has developed the first innovation in over 50 years in medical treatment for stroke in atrial fibrillation, replacing the use of warfarin, a type of rat poison, as a treatment of this life-threatening condition. This innovation has passed our TGA and PBAC processes. Even our neighbour New Zealand has listed this medicine, but not us. Instead, this government, in a move that only creates uncertainty for investment in our nation, has decided for the first time ever to conduct a lengthy and costly review of the medicine before it is even listed on the PBS. Also, in a reply I received last week to a question on notice to the Minister for Health, the minister could not even commit that they would not have yet another review of this medicine prior to its listing.

Another example of poor government policy impacting on investment was the response to the ABC Four Corners story regarding live cattle exports to Indonesia. Policy decisions made in haste to grab a headline and appease certain interest groups served only to damage our nation's standing in the international community, devastate our relationship with our closest neighbour and destroy an industry that generated over $700 million in foreign income per annum and happened to be the biggest employer of Indigenous people in the region. Australia was again cited as a nation of sovereign risk.

The reason cited by Prime Minister Gillard for her challenge against the former Prime Minister Rudd was that he had lost his way—the government had lost direction. The first course of action was to meet with the mining industry and mend the Minerals Resource Rent Tax. It was claimed that in six days, working tirelessly with the Treasurer, this was done. In conflict with this claim, if I recall correctly the Treasurer's first responsibility under the government of Gillard was to replace the deposed Prime Minister and attend the G20 meeting in Canada for a two-day conference. If you add travel time—one day there and one day back—that left only 2 days to work out the new MRRT. Jet lag is well known to reduce your ability to calculate complex equations. Possibly this is where the problem lies in the failure of what was negotiated to deliver what was promised. Whether it was jet lag, incompetence or simply being outmatched by skilful negotiators on the other side, the result is undeniable.

The mining world, which has delivered such wealth to us, was traumatised by these events, and all for no benefit. The mining industry now risks investment in war-torn Africa in preference to the risks involved in doing business in Australia under this government. This represents the gravest consequences produced by sovereign risk. This has occurred because this government does not have the timeless building blocks based on the values of honesty, integrity and trustworthiness.

Great damage has been done, but for what benefit? The MRRT was projected to generate more than $10.5 billion to fund programs that included the National Disability Insurance Scheme and the education reforms recommended in the Gonski report. However, in the first 6 months only $126 million has been received. When this is impacted by implementation and administration costs of some $50 million, and lost tax revenues, which are in the vicinity of $40 million; this conspires to make a most worrisome situation. Short-term thinking may just rack this shortfall sum up on the national credit card, but it must be widely recognised by now that debt is simply future taxes.

Yes, there will be those with short-term selfish views: yes, slug the big miners and give us a share. You may be distressed to learn that when $126 million is impacted by the setup costs and the loss of revenues, you will get only about a dollar each. Responsible government should behave differently and place policy above short-term cheap politics. The building of industries and relationships with our trading partners must be based on trust, on certainty and on stability. If a government is unstable, it is very hard to produce stable government.

It may not be in fashion to adhere to such values, but when you are entrusted with the responsibility of protecting our wealth, our future and our reputation, only these values, which we have fought to establish as core to the Australian character, will suffice. Values that establish honesty, integrity and trust must replace the political expediency that has so tarnished our reputation with the words 'sovereign risk'.

The DEPUTY SPEAKER ( Mr S Georganas ): Order! The time allotted for this discussion has now expired.