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Monday, 23 March 1987
Page: 1325

Mr IAN CAMERON(6.26) —Mr Deputy Speaker, I was hoping that you might have suspended the sitting so that people could listen to my great speech on a full stomach, but that is not to be, I guess. I first remind the honourable member for Dobell (Mr Lee) that the only person who has broken any promises on fuel is his Prime Minister (Mr Hawke), because when he was campaigning in 1983 he promised to reduce the price of fuel by 3c a litre. All that has happened since then is that it has gone up by 15c a litre, so that is an 18c a litre broken promise that this Prime Minister has delivered to the people of Australia. Mr Deputy Speaker, as you well know, the people of this country are sick to death and fed up with the ever increasing taxation which this Government has imposed on the fuel industry and oil producers. Since the Government announced its intentions of introducing the extra tax on crude oil in June 1984, it has introduced a whole raft of new taxation measures which apply to oil companies. We have a new fringe benefits tax--

Mr Martin —It doesn't apply.

Mr IAN CAMERON —It does apply. All companies producing crude oil have to pay it. The iniquitous capital gains tax also applies since it was introduced, and there are other taxes as well. The company tax rate has gone up by 2 per cent from 47 to 49 per cent. This is another burden on the oil producers. The honourable member for Dobell does not want anybody to make a profit. He wants to drag the profits out of these companies before any profit is shown. That is a disgusting arrangement.

Mr Price —You want to drag it off the pensioners.

Mr IAN CAMERON —I have nothing against the pensioners. The pensioners are against honourable members opposite because all they have had to suffer is an increase in the price of fuel at the pump. This Government has moved from excise to a tax at the well head. Honourable members opposite should tell me how much the excise has gone up. The poor pensioners have to pay more for fuel for their lawn-mowers and the cars they drive. Honourable members opposite hate pensioners, that is their trouble. They will have no way of being elected at the next election, and the sooner they wake up to that fact the better.

We are debating the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill. Those Bills cover various things to do with more taxes which this Government has to collect because it is rapidly spending every dollar it collects and is borrowing billions of dollars to continue to let Australia gurgle down the hole that has been dug by this socialist Government. One has only to look at the figures on oil exploration to realise what is happening with this resource rent tax. The tax was announced in June 1984 and the Government has taken almost three years to bring these Bills forward.

As has been mentioned, the tax applies only to off-shore fields, but basically to the new fields of Jabiru and Challis in the Arafura Sea. These people go out hundreds of miles off-shore, with the enormous off-shore rigs-they are a huge investment, millions or billions of dollars of investment-to find and drill for these fields. Yet, having done all that, they are faced with an extra tax on the production of their product. It is the policy of the National Party of Australia and the Liberal Party of Australia to withdraw the resource rent tax at the well head. Our intention is to gradually withdraw this tax so that companies will be put back in the position where they are paying taxes on profits, not taxes on unearned profits, or taxes on production at the well head. This is the economic position we have to get back to if Australia is to get up and start moving.

Sitting suspended from 6.30 to 8 p.m.

(Quorum formed)

Mr IAN CAMERON —Madam Speaker, I am pleased that these government members have dragged themselves away from their dinner tonight to listen to my speech. I am sorry that I was rudely interrupted at 6.30 by the dinner suspension, and I am sorry that we have taken these people away from their dinner and their nice red wines. That reminds me that this Government imposed an extra sales tax-from 10 to 20 per cent-on wine. I ask: Why is it necessary to introduce this new tax when an industry, such as the oil industry, is down on its knees?

Dr Theophanous —Oh!

Mr IAN CAMERON —Well, it is. The price of oil has dropped by half in the last 18 months or so and the Cooper Basin and Roma gas and oil fields in my electorate of Maranoa have suffered as much as those in other areas, where we have seen 25 per cent decline in exploration and a 56 per cent decline in the past 12 months. Seismic activity has dropped by 57 per cent. There is nothing we need more than new discoveries.

Mr Cohen —The kangaroos are up.

Mr IAN CAMERON —The Minister for Arts, Heritage and Environment is here advising me on kangaroos. I thought that I advised him mostly on kangaroos. I must thank him for the work he has done in that area because we are trying to keep kangaroos under control.

Mr Hand —What about your views on the pensioners? Why don't you tell us what you said about pensioners?

Mr IAN CAMERON —The honourable member for Melbourne does not know anything about the pensioners in his electorate. He is not interested in them and he does not look after them. He would have to live in Maranoa to get some decent fresh air and to see how pensioners are looked after. I look after pensioners more than any other--

Mr Hand —Madam Speaker, I raise a point of order. I find that comment about me and pensioners in my electorate offensive, and I ask that it be withdrawn. It is not true. The honourable member misled this House earlier--

Madam SPEAKER —Order! The honourable member will resume his seat. He does not have a point of order.

Mr IAN CAMERON —Thank you, Madam Chair. I turn again to oil. World oil prices have also fallen, from $US43 a barrel to $US29-a 33 per cent drop. I would have thought that that reason alone would have been good enough for the Government not to impose new and additional taxes on the oil industry.

Mr Katter —That is right.

Mr IAN CAMERON —Yes, and the honourable member for Kennedy agrees with me. I am pleased about that, because he has exploration rigs criss-crossing the wide expanses of Kennedy, and the same goes for Maranoa and for the Cooper Basin, which is bigger than Victoria. There is a whole stack of roughnecks working out in that industry, looking for more oil, drilling and finding more oil, which is more to the point. But of course the whole industry has been on the downturn since the Australian Labor Party came to government. Unfortunately the international oil producers seem to have more interest in looking for oil overseas. The Broken Hill Proprietary Co. Ltd is now drilling in the China Sea of all places, rather than drilling here in Australia. That is the sort of situation we have got ourselves into. The balance of payments is severely affected by the oil situation. If we find more oil that will obviously keep our balance of payments down and that is most important in our present economic situation.

I have always disagreed with the import parity pricing of oil and I hope that when we are returned to government at the next election, whenever that might be-it could be next weekend or the weekend after-we will start reducing these taxes. As we know, the price of oil has collapsed and the companies looking for it have found it very difficult to carry on in the present situation. It is difficult for them to raise new capital, particularly for those in the high risk exploration industry.

Oil production is now 20 per cent lower than it was in 1983-84 and Bass Strait oil production in 1992 and 1993 will be just over half that of the 1985-86 figure of nearly half a million barrels a day. I think this is very important because by that time Australia will be only 65 per cent self-sufficient. If we add that on to our present balance of payments situation, of something approaching $15 billion a year, we can see the precarious situation we are in. I would have thought that under those circumstances any government would be out trying to encourage the oil industry to look for more fields. But what do we see here tonight? We see the Government introducing a new Bill to impose new taxes to drive the industry away from Australia. As I mentioned previously, that is where the companies have gone. Fifty companies have gone to other parts of the world looking for crude oil. I have already mentioned BHP and the China Sea. It has had some success, but I would much prefer it to be spending its exploration budget here in Australia.

We are looking at a $3 billion increase in the amount of crude oil which we will have to import in the 1990s, and this is very important because it will affect our balance of payments. We are presently looking at a $44m difference in the balance of payments. We are actually importing about $1.2 billion worth of oil and exporting about the same-a difference of $44m. If we take that equation forward we will see an enormous difference unless we find new oil supplies to replace those that we are rapidly using.

Of course, corporate taxes have gone up. As I mentioned earlier in my speech, not only have company taxes risen by 2 per cent to 49 per cent but we have also seen the fringe benefits tax introduced, and companies, including oil companies, have to pay that. In addition, the capital gains tax, which we will abolish when we are elected to office at the next election, is something that really works against large companies such as oil companies.

The other thing that has been lost is the 20 per cent investment allowance. We heard some previous speakers talk about the way that oil was found in this country. Oil was found by government offering tax incentives of 100 per cent write-off to oil companies to go and look for oil. The first commercial oil flow in Australia happened to be in the electorate of Maranoa at a place called Cabawin, where I live. Those early explorers-in that case the Union Oil Development Corporation, an American company-were encouraged to come into Australia. When I was at school all the geologists were telling us that we would not find oil in Australia. But because the government of the day was prepared to give those explorers some encouragement, they came into Australia. They drilled many wild-cat holes; many of them were not successful. But eventually Union Oil found oil at Cabawin and then moved to Moonie. The Moonie oilfield, which is within about 20 miles of where I live, was the first commercial oilfield developed, and it is still producing oil. Those are the sorts of risks that oil companies have to take. We have to continue to encourage companies, both local and overseas, to look for more crude oil because, more than anything, it is a product that we need to help us to continue.

Of course, there is now a difference in the taxing arrangements. This Government has moved from taxes at the well-head, as the world price dropped, to the excise area. We have seen a drop in the crude oil excise from $3.94 billion in 1985-86 to $1.2 billion in 1986-87. That is what I call the well-head tax. That tax is paid before any funds are taken out from the profits. It is a tax paid whether a company shows a profit or not. These are the sorts of expenses that we in the National Party of Australia and the Liberal Party of Australia intend to get rid of. This is the sort of tax, be it in the farming industry, oil production, factory production or whatever industry, that we must get rid of if we are to get this country that we all love up and running again.

Excise on liquefied petroleum gas has risen from $80m to $103m. Petroleum royalties have dropped slightly because of lack of production and also lack of price. The excise on petroleum products has risen from $2.88 billion to $5.64 billion. This is the add-on tax that the consumer pays. It applies to the previously mentioned pensioners with their little old Victa lawnmowers and to people pulling up in their motor cars to fill up with petrol. Those people have faced an enormous increase in excise on petrol, which is now about 18c to 19c a litre. Of course, farmers have been exempt from paying this tax on diesel, but many people do not understand that 40 per cent of the fuel used on-farm is petrol, so farmers continue to pay an enormous increase in taxation in that area. Of course, farmers also pay the well-head tax, which is what we are talking about tonight. Farmers will pay a percentage of that tax, whether or not they show a profit. Presently they pay between $250m and $300m in well-head taxation. These are the taxes that we intend to do away with when we come to office.

It is not only the farmers who have to pay this. Even the fishermen are being levied, who never use the roads. The bicentennial road development program is collecting 2c from every litre of petrol and fishermen are having to pay that tax. The National and the Liberal parties guarantee that we will get rid of that after the next election.

The National Party has a policy, which we have enunciated, to deregulate the market for crude oil. We intend to move to spot pricing rather than the Arab light oil prices, et cetera. We guarantee to move to a spot price that will reflect the current price of crude oil. We also promise to withdraw from the crude oil excise, as I have mentioned. We will abolish fuel excise indexation. The worst aspect of taxation introduced by this Government has been the indexation of these excise taxes. It does not apply just to fuel; it applies to beer and tobacco. We are seeing an enormous rip-off in taxation in this area. The National Party is certainly committed to abolish that indexation.

We will maintain the full excise rebate for diesel used on-farm and extend the full rebate for all farm fuels. As I mentioned previously, that would apply to petrol, as 40 per cent of fuel used on-farm is petrol. We would reintro- duce an extended fuel freight subsidy arrangement. This Labor Government purports to support primary industry and the people who live in inland Australia. But what has it done since it came to office? It has done absolutely nothing. It withdrew the freight subsidy scheme on petrol. No wonder it costs 10c more to buy a litre of petrol in Goondiwindi, Cunnamulla or Charleville than it does in Sydney or Melbourne. The fuel rebate subsidy that we introduced as a government has been withdrawn by these socialists because they do not believe in equity in these areas. We live inland and produce the export goods that help our balance of payments, which help is so sorely needed by this country; yet we are penalised by this Government for doing so.

Mr Katter —Absolutely, and the airline subsidy.

Mr IAN CAMERON —They are talking about closing down air services. Australian Airlines is withdrawing from services in western Queensland. Much of that is due to the extra high price it has to pay for fuel, which means that it does not show any profit on those routes. I also mentioned the fishing industry. It is just ridiculous to think that the fishing industry is paying 2c a litre towards the bicentennial road development program. I have never yet seen a boat sailing down a highway. But fishermen are expected to pay this tax.

We also intend to remove the sales tax on oils and lubricants used on-farm. This Government has introduced more taxation. It is the highest taxing, highest spending Government since Federation. We have seen an enormous amount of tax go on to a drum of oil, which now costs the primary producer between $400 and $500, of which $150 is tax.

Madam SPEAKER —Order! The honourable member's time has expired.