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Wednesday, 26 May 2010
Page: 4197

Mr IAN MACFARLANE (3:18 PM) —My question is to the Prime Minister. I refer the Prime Minister to his previous answer on North West Shelf taxation. Does he stand by his answer or does he stand by his resources minister, whose office told the Australian newspaper yesterday:

Federal Resources Minister Martin Ferguson’s office yesterday confirmed the huge West Australian LNG project, which is exempt from the offshore petroleum resource rent tax, would be taxed under the proposed resource super-profits tax.

Further, a spokesman for Mr Ferguson said yesterday that the project, like all resources projects not under the PRRT, would fall under the new tax system.

Mr RUDD (Prime Minister) —I thank the member for Groom for his question. First of all, as the honourable member would know, North West Shelf projects currently exist under the federal crude oil excise regime. That has been the case for a long time—since about 1987. Secondly, the minister’s response to the question which was posed to him by the media the other day and is reflected on by the member just now is entirely accurate. Thirdly, together with all industries, as we have said from the beginning, all companies are engaged in consultations with the Treasury panel on detailed implementation and on transition. That applies to those companies. It applies to all other companies in the mining sector. That is what we have said from the beginning. Our position has not changed.

I say to those opposite, in their state of frenetic activity on this one, we on this side of the House welcome any question to do with tax reform. The reason we welcome any question is that these tax reforms are fundamental to delivering better super for working families, tax breaks for small business and, on top of that, support for infrastructure investments nationwide. The key development in the debate in the last 24 hours is from the shadow minister from finance—that is, he is embracing for the first time, on behalf of those opposite, the principle of a profit based tax system as opposed to a production base tax system.

In question time today I went through the logic underpinning a profit based system. It is a flexible instrument which deals with the different profit circumstances of companies over time. It is sensitive to changes in commodities prices. Also on top of that it is an ability to replace comprehensively a patchwork of state royalties regimes and therefore boost production over time in the mining sector. That is the logic of a profits based regime. That is why it is good for the mining sector. That is why we are engaged in consultation with the consultation panel through Treasury with every company affected by this RSPT. That is what we have said from the beginning; that will continue in the future.

Mr Speaker, mark this day down as that day those opposite embraced the principle of a profit based tax system for the resources sector. The member for Tangney, at the door this morning, was forced to make that concession. The shadow minister for finance has made that concession as well. The key question is: does the Leader of the Opposition back the shadow minister for finance or not? Every economist in the country, including even the MCA, backs a profit based regime. Where does the Leader of the Opposition stand on this other than to say he believes that the mining industry does not pay enough tax at present?