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Thursday, 27 November 2014
Page: 9545

Queensland: Mining

Senator LAZARUS (QueenslandLeader of the Palmer United Party in the Senate) (14:21): My question is to the Minister for Infrastructure and Regional Development, represented by Senator David Johnston. Large-scale projects undertaken in Australia in regional and rural areas should provide genuine opportunities which support and grow local communities. Specifically, they should support local suppliers and local businesses, and provide employment opportunities for local people. Despite this, BHP Billiton Mitsubishi Alliance has established two mining operations in Central Queensland—the Caval Ridge and Daunia mines. With the support of the Abbott government and the Queensland Newman government, BHP is sourcing workers only on a 100 per cent fly-in fly-out basis. Senator Johnson: why are you allowing BHP to hurt local Queensland communities by allowing 100 per cent fly-in fly-out arrangements for these mine sites?

Senator JOHNSTON (Western AustraliaMinister for Defence) (14:22): Senator Lazarus, I thank you for that question—because it is a question that, in my home state of Western Australia, we deal with every day. One of the principal reasons for fly-in fly-out is the taxation regime around the deductibility of infrastructure for housing and for towns. I share your concern, you might be surprised to know. I spent my formative years in the goldmining town of Kalgoorlie and adjacent to that were Kambalda West and Kambalda East, which were developed by Western Mining to exploit the largest nickel deposit in the world. Those two towns were built from scratch by Western Mining at a great and significant cost to the company, because the regime at that time allowed them to deduct those expenses.

We have changed the regime so that the fly-in fly-out expenses—all of the costs of putting labour on the site—are deductible. Until we can convince central agencies—until we can put a handle on the cost of deducting those infrastructure expenses of capital, housing, hospitals and schools in remote regions—the mining companies really, to be profitable, have no alternative but to go forward with the fly-in fly-out methodology. This is a huge challenge for Australia because, in order to develop regional Australia, of course we want to see towns in remote parts of our states and our country as a whole. But, in order to be competitive, our miners must take advantage of the taxation regimes as they stand. We want them to be profitable, because they pay royalties to the states and they pay taxes to the Commonwealth.

Senator LAZARUS (QueenslandLeader of the Palmer United Party in the Senate) (14:24): Mr President, I ask a supplementary question. As already highlighted by my fellow Palmer United Party colleague, Senator Wang, during a previous question time session, there is growing evidence that fly-in fly-out working arrangements cause significant mental health and other issues including heightened stress, fatigue and family breakdowns. Why is your government not actively doing anything to address this and to stop the unnecessary suffering and suicides associated with fly-in fly-out arrangements?

Senator JOHNSTON (Western AustraliaMinister for Defence) (14:24): Senator Lazarus, I am not sure about the details of what we are doing but I can tell you that fly-in fly-out and the provision of fundamentally basic health services, police services and infrastructure for energy is the province of the states. We seek to provide assistance to the states to provide a strong underpinning of resourcing—for health particularly. In Western Australia, I believe, the state government spends a lot of money on mental health services for fly-in fly-out, because in my home town of Perth this is a significant issue. I am not sure, and I am not convinced, that the Commonwealth—given the size of Tasmania against the size of Western Australia—can equitably and equally, across all of the jurisdictions, have a formula that answers the problem that you identify. I think it is a matter of us continuing to provide basic resourcing so that state health and mental health services can provide services. (Time expired)

Senator LAZARUS (QueenslandLeader of the Palmer United Party in the Senate) (14:25): Mr President, I ask a further supplementary question. Fly-in fly-out working arrangements do nothing to support and grow regional communities; in fact, they decimate communities by eliminating opportunities for jobs, business and economic growth. Is your government aware of the economic and social damage caused to regional communities, including those in my home state of Queensland, by your endorsement and support of mining projects with 100 per cent fly-in fly-out arrangements?

Senator JOHNSTON (Western AustraliaMinister for Defence) (14:26): Senator, as a person who has come from the mining industry, can I tell you that the cashflow documents that justify the borrowings that fund the development of the mine are based upon prices that fluctuate very rapidly in a very volatile market, over a short space of time. So fly-in fly-out gives the owner of the mineral deposit the right to access and extract those minerals in as short a time as possible—to seize the price of the day, which on a particular day is determined as profitable. If you want to build towns and get all the approvals and do all the things you need to do, the bird may well have flown. We are a mining country. We must mine the minerals and provide minerals to the world—be it coal, be it oil and gas, be it minerals. We must do it expeditiously. We must seize the price of the moment because those prices will not stick around for very long.