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Monday, 19 March 2012
Page: 2091

Senator FISHER (South Australia) (12:24): I rise to join my colleagues in speaking against the Minerals Resource Rent Tax Bill 2011 and associated bills. There has been much discussion by members opposite and many accusations have been made about bad business, big bad miners, dirty miners and mining daring to be profitable. But the baddest thing—if there be such a word—as far as I am concerned, in the context of this issue, is the minerals resource rent tax itself and the process whence it was delivered to the Australian people. It is bad policy. It has come from a bad process. It is a bad tax. It is bad for jobs, it is bad for the economy, it is bad for investment and it is particularly bad for my home state of South Australia. It has come out of a bad process.

It has essentially been hatched in secret, with very little and certainly insufficient consultation with many of those who will be acutely affected by its imposition. It essentially rewards vested interests of those who have been inside the Labor government's consultation tent. In that sense it is not a lot different from some other proposals before this parliament and the South Australian parliament by the state Labor government.

The proposals being put before this parliament by this Labor government are bad and are hatched out of a bad process as a result of an outcome hatched in secret. I refer by way of example to the dirty deal done between this Labor government and the Greens in the lower house, the bill to effectively abolish the Australian building and construction industry—in particular, the amendments agreed to by this government to ensure that no investigations can be conducted and no action can be taken by the policing authority where a perpetrator to a wrong does a deal to settle the matter with another perpetrator of that wrong or victim of that wrong.

In terms of dirty deals hatched and leading to bad policy in South Australia, I refer to the proposal put by Premier Jay Weatherill to the South Australian parliament that there be some so-called freeing up of shop trading hours—which admittedly has been a very vexed issue in South Australia—the price for which is tampering with public holidays legislation and hooking into the federal workplace relations system. It is a bad deal, it is not what it says it is and it is being hatched in secret, arguably by those who do not represent people who are most acutely affected by it, as has been the minerals resource rent tax.

The coalition report into the mining resources rent tax more than adequately lays out many of the reasons we think this tax is bad policy. Reasons include the tax's poor design and the fact that it is discriminatory to miners; it reduces Australia's international competitiveness, where otherwise we are an attractive investment destination; and it gives an unfair advantage to the three big multinationals, who seem happy with the proposition—mainly because they are multinational, multicommodity and multiproject companies. As recorded in the coalition senators' dissenting report, it also makes the federal budget hostage to outcomes of decisions by state and territory governments about their royalty issues and it raises serious constitutional issues. But perhaps most concerning for the future of this parliament, for so long as it continues in its current permutation, is the politics of envy and class warfare that seems to be constantly referred to by members of the government in a very poor attempt to justify the mining tax. It is, it would appear, a tax based on class warfare and the politics of envy that are alive not only in the Australian parliament but in the pages of the Monthly whenever Treasurer Swan puts his poisoned pen to work. Some of Australia's most successful and most prominent businesspeople, that is, people seen as tall poppies, have been maligned by members of this government in the process of discussion about or comment upon—I would not even call it debate—the proposed tax. Senator Doug Cameron, one of my good colleagues opposite, seems to be fascinated habitually with the likes of Gina Rinehart, Twiggy Forrest and Clive Palmer. It does not seem to matter much to Senator Cameron whether he is making accusations against them in relation to their incomes, their companies or their private health insurance. The fact that they are successful and have a high profile seems to be sufficient for Senator Cameron and many of his colleagues to attack them on things they would like to take from them.

It is bad economics as well as bad policy to single out a particular sector for the imposition of a tax. It is also bad policy to promote the politics of envy in discriminating between business interests within the one sector—and I will say more about that later. Australian mining companies already pay double taxation through company taxes and government royalties. Of course, with the minerals resource rent tax they will now be hit with triple taxation.

In the South Australian economy we have some success stories, but it is also a very vulnerable time for South Australians. South Australians deserve to know what their representatives on the other side are doing for the South Australian economy and for South Australian jobs, when Labor members of parliament like the member for Adelaide, Kate Ellis, and Senators Wong, Farrell, McEwen and Gallacher are supporting the mining tax and, of course, the job-destroying carbon tax. I will refer to a few statistics about what is happening in South Australia. Australian Bureau of Statistics figures show that our economy had the worst economic growth in Australia for both the December 2011 quarter and the calendar year 2011. Growth figures in SA for the September 2011 quarter showed a negative growth of 0.3 per cent and a negative growth of 0.3 per cent again in the December 2011 quarter. Our exports have declined in two consecutive quarters—by 0.7 per cent in the September quarter and by 0.4 per cent in the December quarter. Now the South Australian economy will be hit by both the carbon tax and the mining tax. As far as small businesses are concerned, as the so-called Fair Work rubber hits the road, this is happening at a time when they are realising, as are many small businesses across the country, the price imposts of and inflexibilities imposed upon their businesses by the so-called Fair Work legislation. South Australians are right to ask: what good is it having South Australian MPs like the member for Adelaide, Kate Ellis, and Senators Wong, Farrell, McEwen and Gallacher supposedly representing their interests?

On the subject of jobs in South Australia, Senator Wong responded to a question during question time about modelling that showed that the carbon tax would cost 1,500 jobs in South Australia, yet, somewhat miraculously, the South Australian Minister for Employment, Mr Kenyon, denied knowledge of the modelling. What did Minister Wong say when she was asked about it? She said, 'Oh, well, it's simply part of the fear campaign about the carbon tax.' So if South Australian unemployment goes up that is just a fear campaign. If 1,500 jobs are to disappear, that is 75 per cent of the total new jobs the Olympic Dam expansion is expected to create in South Australia. So on the one hand you give and on the other hand you take away—all but 25 per cent. Mining is supposed to be South Australia's future. That is what we are told and that is what we would like to believe. Premier Weatherill has been pretty bullish about the mining future in South Australia. In February, he told the Australian:

We are in the early stages of this exploration boom that is transforming to a mining boom. It won't just fall into our lap and we'll have to take positive steps.

Wham!—carbon tax; wham!—mining tax. Of course, he did not say those last two things; that was me.

Premier Weatherill should talk to his federal colleagues about the carbon tax and the mining tax if he thinks we should be taking positive steps, because those as sure as hell are not positive steps. They are as sure as hell not considered positive steps for, by example, OneSteel in Whyalla. We have a curious inconsistency and unacceptable inequity when, for example, we compare the situation at Olympic Dam with OneSteel and other mining companies in South Australia. Because the mining tax will only apply to iron ore and coal, not affected by the imposition of the mining tax in SA will be BHP Billiton at Olympic Dam, with copper, uranium and gold, or OZ Minerals' Prominent Hill gold and copper mine.

There is some good news amongst all of this for mining in South Australia, where the expansion of the Olympic Dam will take four years to get to the ore body, so there will obviously be the creation of jobs in the quest in the meanwhile. It will use 110 350-tonne trucks 24/7 and the mine is projected to last for some 80 years. That is pretty good news. Olympic Dam is the world's fourth largest copper resource, has the largest known deposit of uranium and has rich deposits of silver and gold. By 2050, the size of the open pit for the redevelopment is likely to be more than four kilometres long, about 3½ kilometres wide and one kilometre deep—yet BHP Billiton will not pay this minerals resource rent tax for Olympic Dam. You have got to be feeling good about that if you are a competitor of BHP Billiton and you have to pay the mining tax.

Arguably South Australia is the birthplace of Australian iron ore and the steel industry. Clearly it plays an important role as an iron ore and steel producer, and it wants to continue to play an important role as an iron ore and steel producer. Had the government bothered to ask the 4,000 people directly employed at OneSteel in Whyalla and the thousands of others whose job in the community relies on OneSteel what they think about the minerals resources rent tax, I am sure they would not be getting the positive that Jay Weatherill says South Australia's mining industry needs. In 2011 OneSteel commented in its annual report:

OneSteel is a miner and seller of iron ore and also uses iron ore internally for steel production. If the proposed MRRT is introduced, it will have an adverse effect upon the financial performance of OneSteel.

In addition to all of that, as if the impact on jobs and on the economy and mining in particular in South Australia were not enough, there is the red tape that will be created for business, particularly smaller companies. This is at a time when the government says it will set about reducing red tape and create a commissioner for small business at the end of 2012—a commissioner which Ken Phillips, on behalf of COSBOA, quite correctly says will be a toothless tiger unless it is given power to compel the government, when doing business with small business, to step up to the plate and act like a model commercial player. At the moment the government is simply saying, as it often does, that it will create a small business commissioner and that will be enough for small business and shows that they are standing up for small business. At the same time, they are whamming small business with a carbon tax, the mining tax and the red tape that goes with it. Companies will now have to run separate accounting systems—one for their annual returns and one for their calculations of the mining tax. So that is more red tape for companies that are supposed to be leading the South Australian economy, among others, out of the economic wilderness.

Business SA, one of the state's employer organisations, in their submission to the inquiry said:

The design of the MRRT is flawed. There will soon be two different types of mining tax regimes in place. Indeed, while companies subject to the MRRT receive a refund from the Commonwealth Government on the State mining royalties that they also pay, the administrative and compliance costs of two different mining tax regimes are far higher than they should be.

Red tape, and negotiated in secret. The chairman of OneSteel, Peter Smedley, quoted in the Advertiser in 2011, said of the mining tax 'there was not sufficient certainty around outcomes to provide guidance on its financial impact'. Why was there not sufficient certainty? Because he was out of the loop, as were many of his colleagues—as was everybody other than the big three. The mining tax was negotiated exclusively and in secret with the three big miners, and the public was presented with the outcome in the shape of the minerals resource rent tax heads of agreement, which of course was signed by the MDs of BHP Billiton, Rio Tinto and Xstrata. So a Labor government comes up with a bad tax, a bad policy, as a result of a bad process. The minerals resource rent tax is nothing other than a tax on success, and the Australian parliament should reject it.