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Thursday, 26 June 2014
Page: 7533


Mr NIKOLIC (Bass) (13:10): Another day and another leadership audition from the member for McMahon -with all of that confected outrage. What we have seen during the last 13 or 14 minutes is the member for McMahon still framing the national debate using the politics of envy and division. It shows you how far the once proud Labor Party has fallen, because Hawke and Keating never would have done that. Every day, the member for McMahon and his colleagues walk in here and try to frame the national debate in the way that Australians instinctively know is not right. He stands there and talks about low-income earners and the cost pressures on low-income earners. If he is so concerned about low-income earners, why does he not pass the repeal legislation for the carbon tax? Why does he not provide that cost-of-living relief of $550 for every Australian family? Instead, they come in here time after time and they brigade with the Greens in the Senate to stop that cost-of-living relief for Australian families.

I am pleased to make a contribution to the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014. Let me commence by saying that, just like our repeal legislation for the carbon tax, the government will act in a way that is consistent with our clear election mandate to roll back Labor's ill-considered taxes. We are determined to wind back the bad policies of the former government—particularly the MRRT, which imposed significant financial and economic pain on the mining industry for very little gain. At a time when the industry was—and it remains so—confronted with challenges to its ability to invest and grow, the former government imposed additional pressures through the minerals resource rent tax.

The MRRT repeats the mistakes of the carbon tax. Recall that the carbon tax took no account of what happened at the Copenhagen summit and became a millstone around the neck of our international competitiveness. Despite the pain that it caused, and continues to cause—some $15 billion of economic damage in the last two years—the carbon tax did not actually have the policy effect of reducing emissions. Indeed, emissions went up in Australia, and the way we achieved that abatement effect was by putting billions of dollars of taxpayers' money into dodgy carbon markets overseas. How do we get to a point where this country puts forward and approves a bill that imposes $15 billion of damage that does not actually have the intended policy effect? As a former senior public servant I cannot understand that, much less Australian families.

Whether it is the carbon tax or the mining resource rent tax, it has the effect of undermining jobs and endeavour in our country. Similarly, the MRRT imposed a big lead weight on the mining industry. It increased its compliance costs, yet raised nowhere near the forecast revenue. Like some snake oil salesman at a country fair, the MRRT doubled up on the economic damage it caused when the former government linked a number of spending measures to the failed MRRT. The schoolkids bonus was an example of that—it was clearly dependent on revenue from the mining tax. We see that link in comments from Senator Wong, the then Minister for Finance in June of 2012, which directly linked the schoolkids bonus to the proceeds of the mining tax.

What happened is that Labor raised expectations in our community that the federal government would fund certain programs from mining tax revenue. The problem was that the MRRT did not deliver anywhere near the forecast revenue. Labor became even more reliant—if that is possible—on borrowings to pay for these commitments. When the longer history of Australia is written, the carbon tax and mining tax will be remembered as signature policy failures of the Labor Party in government. In the case of the MRRT, it is forecast to raise only around 10 per cent of the originally forecast revenue. It is a bit like a gambler predicting what their winnings at the casino will be and then undertaking to spend all those winnings and expressing surprise when the consequences of their bad judgement are realised.

In my home state of Tasmania, resetting our economic course for a brighter future includes reinvigorating valuable industries like forestry and mining. Increasing the tax and compliance costs for industries like mining has the potential to damage our state doubly. It can impede new investment and impact on the growth of local jobs—highly undesirable outcomes for Tasmania which, sadly, has the highest unemployment rate in the country for both youth and adults and the lowest participation rate. Goodness knows the very deliberate and deceptive campaign by the Greens party to impede mining and forestry projects in Tasmania is bad enough already without these sorts of additional pressures.

I refer in particular to Greens efforts to lock up the so-called Tarkine in Tasmania. 'Tarkine' is a name given to the area by Dr Bob Brown, the former Greens leader, in the early 1990s which sought to elevate it to some mythical and romanticised status. In reality, this area is called the Arthur-Pieman Conservation Area. It is bounded by the Arthur River in the north and the Pieman River in the south. Yet Dr Brown's invention has mystical growing boundaries, matched only by Greens party demands to lock up even more of Tasmania as a national park. The Arthur-Pieman area is indeed a beautiful area with important reserves that deliver a sensible balance between recreational, economic and conservation imperatives.

Despite mine proposals and existing mines only covering one per cent of Dr Brown's mystical creation, the Greens continue to use every legal advice to impede their approval. That includes threats to sue the member for Braddon and Senator Madigan. The member for Braddon was in the chamber yesterday talking about some of the extraordinary pressure that is being applied in trying to stop him doing his job as a representative of his people as someone who is a champion of mining and forestry and seeks to restore the economic fortunes of what was once a proud state. Sadly after 16 years of state Labor and six years of federal Labor, and Labor-Greens government, Tasmania is no longer the proud state it once was. The member for Braddon, the member for Lyons and I will do everything in our power between now and the next election—and beyond, if we get the opportunity—to make sure that proud status is restored and the economic revitalisation of Tasmania is brought forward.

I will now go back to the Arthur-Pieman area, the so-called mystical Tarkine that Dr Brown talks about. Despite this area being dotted with historical mine sites and railway infrastructure, the Greens party, quite mendaciously, presents the whole area as pristine untouched wilderness. There is no doubt that the Greens and their Labor partners celebrate the MRRT, which only serves to add pressure on the mining industry. In this sense, Labor's mining tax supports Greens party efforts around the country to impede sensible development.

Australians are a smart resourceful people who have a healthy suspicion of authority. They understand that taxes are necessary to provide for our community's needs. But their confidence has been shaken in recent years by tax policies that have overpromised but underdelivered—and the minerals resource rent tax is one of the key reasons for that shaken confidence. Australians understand instinctively that, when a tax cost more than it collects, something is seriously wrong. They understand that, when a government hangs billions of dollars of expenditure on a tax that does not raise the required revenue, something is seriously wrong. They know that, when that tax also has the effect of damaging the economy and threatening jobs, there is something seriously wrong with that tax.

Deputy Speaker, I ask you to recall Labor's original announcement of the grandly named 'resource super profits tax'. It is a matter of historical record that everything under the Rudd-Gillard-Rudd government had a grand moniker—the 'super tax', the 'education revolution'—and then 'crusade'—and the 'greatest moral challenge of our time'. Well, the super profits tax was not really all that super; it was meant to raise $49.5 billion over five years, which was then revised down to $26.5 billion. In July 2010 it became the minerals resource rent tax, and it kept sliding in every budget to raise only about $340 million net—a long way from $49.5 billion. But, to compound the error, Labor contributed $16.5 billion against revenue that had not been realised.

I see that the member for Rankin is here. He was working in the office of the former member for Lilley.

Mr McCormack: 'Working' is a bit over the top, a bit of an exaggeration!

Mr NIKOLIC: I will take that intervention—it was a long way from working! The member for Rankin was one of those hoping for the three lemons to line up on the Treasury poker machine when it came to the MRRT. But the only three lemons pulling the handle were Mr Rudd, Ms Gillard and Mr Swan—and the member for Rankin, the abacus in the background, was getting the sums wrong. And that is why we are in the pickle we are in now. It is so bad that even Labor senators and MPs cannot defend it. Goodness me, if anyone should be defending your own tax, it is them. The mining tax was never understood; it has never been sold adequately; it has been a failure in practice. 'Why on God's green earth we defend a tax that doesn't raise any money, I'll never understand.' Those were the words of not a Liberal politician but the outgoing Western Australian Senator Mark Bishop. Labor's Alannah MacTiernan, the member for Perth, called the tax 'a dud' in the caucus and fights for 'a welcome outbreak of common sense'. It's a pity that those opposite do not listen to the member for Perth. 'I think it'd be fair to say that the mining tax hasn't done the job it was designed to do.' Well said, member for Perth!

The repeal of the mining tax and its associated expenditure will improve the budget bottom line over the current forward estimates by nearly $13 billion. The repeal of the MRRT will also provide welcome relief on compliance costs, saving millions of dollars for small, medium and large enterprises. The member for McMahon was in here talking about the pressure on families and the pressure on businesses. I had a Salvador Dali moment earlier today up in the Federation Chamber when the member for Franklin was similarly worried about cost-of-living pressures on families and complaining about a 40c increase for a tank of fuel while at the same time those opposite are stopping the repeal of the carbon tax that has the potential to deliver $550 per year in welcome relief to Australian families. Similarly, they stand in the way of the repeal of this mining resource rent tax that has such a big effect on our important mining industry.

Fewer than 20 taxpayers have contributed to the net $340 million raised by the MRRT to date, but around 145 other miners have been required to submit MRRT instalment notices while making no net payments. You do not need to be the Tasmanian representative on the coalition's deregulation committee to understand that it is a bad situation when companies are filling in paperwork, complying with the regulatory burden, yet not paying any net tax. Why do we force that on business? Why do we force that increased obstacle—that 1,200 kilometre screwdriver from Canberra—on the mining companies in Tasmania, forcing them to do things for no actual purpose?

The government has been entirely transparent in its policy to repeal the mining tax. In fact, we fought to repeal the mining tax at both the 2010 and 2013 elections. When we make promises—the things we say we will do for the Australian people—people know we will deliver. We said we would stop the boats and there has not been a boat now for over six months. We said we would build the roads of the 21st century and there is $50 billion in the budget—the largest infrastructure spend in this country's history, and my state of Tasmania is getting $1 billion of that. We said we would fix the budget. The member for Rankin would know the figures. He would know why we have to fix the budget. In just six years they achieved $191 billion of deficits, $123 billion in the forward estimates—another period of deficits going forward—with gross debt due to rise to $667 billion. We are borrowing $1 billion every month just to pay the interest bill on Labor's debt.

Dr Chalmers: You borrowed $21 billion for paid parental leave, you fool!

Mr NIKOLIC: If we do nothing, in a decade that will lift to $3 billion. The opportunity cost of that is extraordinary. Imagine borrowing $3 billion in 10 years from now just to pay the interest on our debt. One month's worth of interest payments would build three new teaching hospitals in Tasmania. I say to those opposite: when it comes to the MRRT and the carbon tax, for goodness sake bend to the will of the Australian people. Listen to the mandate the government was given at the last election. Let us ease cost-of-living pressures not just on the families in Australia and in Tasmania but on those companies that contribute to revenue that gives our society the services that it quite rightly demands. Do what is right and in our country's interest. I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Craig Kelly ): Before I call the next speaker, I ask the member for Rankin to withdraw.

Dr Chalmers: I withdraw, Mr Deputy Speaker.

The DEPUTY SPEAKER: I thank the member for Rankin.