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Thursday, 23 August 2012
Page: 6273

Senator EDWARDS (South Australia) (15:28): I rise to support the motion to take note of answers given by Senator Wong to questions asked by Senators Brandis, Cormann, Birmingham and Bernardi. Don't go, Senator Gallacher, as I want to refer to your comments about the Burra mine saving South Australia from bankruptcy. I hope those words are not prophetic about the current state of affairs because, as you well know, South Australia has a $13 billion debt. I am sure that Senator Farrell has now run out to ring up Peter Malinauskas to start giving him his riding instructions for the Premier and the Treasurer of South Australia about how they are going to recast their budget in light of this decision, which for some reason has come as some complete shock until yesterday.

This has been the worst kept secret in South Australia. I refer you to a breakfast radio program on FIVEaa this morning with Keith Conlon and John Kenneally. A note from a caller:

I work up at Roxby on the expansion—

And, to all the people out there listening, Roxby is where Olympic Dam is—

My crew was demobbed on 21 July. That's about a month now, and we were told that BHP are delaying the expansion. I tried to contact the local federal ALP member, Nick Champion, but his office fobbed me off and claimed that I didn't know what I was talking about; it was just speculation. I told the guy there, 'This was real. I was working there. I was happy there. I did nothing wrong and now I am unemployed.'

That is the sentiment of what we are hearing now. As you say, Senator Gallacher, you travel around South Australia, as I do, and I am hearing, as are you, that there have been 600 jobs lost in Roxby Downs over the last two months.

I must refer to Senator Farrell's comments. He talked about the cost of mining in this country—that the high costs have driven BHP away from this decision. As we know, profits are up, which has driven wages growth, so what is going to happen now? We have profits up and wages up. The scenario that Senator Farrell put to us is that that is what has driven BHP away from this project. What is next? Profits down; wages down? I do not think so. And what do we have? As Senator Fawcett and Birmingham raised earlier, we had 3,500 BHP workers on strike in the Bowen Basin as recently as May this year. You have to understand that this has been the worst-kept secret in corporate Australia.

The BHP share price, up until two weeks ago, was sliding down and down, until such time as the corporate market realised: 'Well, they're not going to go ahead with this. They've given us a nod and a wink in the marketplace that they are going to announce at this time that they're not going to go ahead.' What has happened to the share price since? It has gone up. Again, today, the share price of BHP has risen on the strength of this announcement. What you on the other side have to understand is that you have carbon pricing—we call it a carbon tax—going out from $23 to $350 in the longer term. What do you think these companies think when they are doing their forward planning? Do they have that in Chile, in Russia, or in all these other places where they have these business opportunities? No, they do not, and you wonder why the capital shifts.

The other reason they cannot do it is the cost of capital. Why? Because if they borrow money in Australia they are competing with the Australian government to borrow funds. The cost of capital has gone up, which is also putting pressure on other businesses. You cannot consider Olympic Dam in the silo of BHP. BHP pays carbon tax all across its business in this country. Just to single it out and say, 'Well, they won't be paying carbon tax there,' is like trying to say, 'I'll sell milk bottles and snakes in my confectionery store and we will put all those in a profit silo each.' You just cannot do it. You take the money out of the till at the end of the day and that is what it is all about.

I do not know how Premier Weatherill is now going to task this debt that he has got. I am sure that he will be calling on his Labor colleagues now. He should have done that well before now and he should have told all of you South Australian Labor senators that this tax is not sustainable and it is going to continue to bring down our economy.

Question agreed to.