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Thursday, 25 September 2008
Page: 5606


Senator JOHNSTON (10:54 AM) —I want to commence my remarks on the Excise Legislation Amendment (Condensate) Bill 2008 and this tax, which is essentially one of the greatest assaults on the living standards of Western Australians I have ever seen in the history of Federation, by saying that it discloses all of the morality of carpetbaggers and burglars. That is what we are looking at here—carpetbaggers and burglars. This is a wacky government. It has got absolutely no idea of good public policy. Their first real act was to obliterate the exceptional circumstances regime for drought stricken farmers. That was their first contribution to public policy in this country.

Of course, we have seen today the luxury car tax. What a wonderful thing for a car industry that is on its knees through lack of confidence, a manufacturing industry that is going to be assailed by an emissions trading scheme, and here they are—the wisdom of Job!—implementing a luxury car tax. Then of course we see alcopops. I can tell you that the distillers are thinking this is the best thing since sliced bread. They are selling more raw spirits than ever before. What a wonderful contribution to our youth. Of course, we have got an emissions trading scheme green paper. How brilliant is this? The LNG industry is not included as an emissions intensive industry receiving permits. This is the one industry that Australia puts to the world to reduce global greenhouse gas, particularly in East Asia, and they are not included in the scheme. It is just unbelievable.

Of course, they then give road transport certificates, which I take no issue with, but they leave rail out. The most energy efficient, combustion efficient and emissions reduced area of transport in Australia and they do not give them a permit. Then of course we see them attack our uranium exports to India. In one fell swoop they would eliminate a whole year of Australian emissions by seeing the Indians produce electricity through fission. This is another wacky tax. This is an absolute smash and grab raid and I want to style it right here and now as the drive by shooting of the century. Here is an industry that has drawn in international players—we have investment from Japan, America and Australia—building what is Australia’s premier and biggest oil and gas project. It has paid billions of dollars in tax royalties since 1984. So what does this government do as one of their first acts? It thinks: ‘How can we get into the pocket of these people? How can we grab the money and run?’

Of course this $2.5 billion tax grab must be passed on. What business in the world could possibly tolerate a $2.5 billion assault on their bottom line? So the people of Western Australia, the mums and dads and their businesses, are going to have to pay this money to Canberra to fund Labor’s profligate, stupid, hopeless state governments in Victoria and New South Wales. That is what is happening. Look at what has gone on in New South Wales. The frolicking in the offices, ministers going to jail for all sorts of drug offences and goodness knows what. There is no water. They cannot build a desalinator. These two states cannot get themselves organised to do a damn thing in this country and this government is bailing them out with Western Australian money. That is what is happening. We are paying taxes in WA for these guys, for these incompetents.

We have already seen what the party brings to the table in terms of good governance. We saw it in Western Australia. We saw what happened after eight years of the Carpenter government. We ran an ad on television that said: ‘Think of three things the Labor government in Western Australia has achieved.’ Everybody thought, ‘Well, that’s a bit tough. What have they achieved?’ Do you think the Labor Party responded to that ad? Do you think they got the money together to put their ads on TV to say, ‘We’ve done good things’? They sat there like stunned mullets and did not respond to that ad—ipso facto they have done nothing in eight years. They have done nothing in the world’s best economy, with mineral prices and agricultural prices through the roof and they have done nothing—and they admit it.

May I predict: we will take the other viable marginal federal seat from Labor at the next federal election. We will take it because, when Kevin Rudd said, ‘We are going to put this tax on the pockets of Western Australians,’ what did the then Labor Premier do? He sided with Canberra and said to his constituents, ‘Pay up and shut up because we’re Labor, we know what we’re doing and we’re going to take your money.’ That is what he said.

What did that mean for the wonderful strategies of Labor in Western Australia? It is going to follow on federally, I can say. In Morley we had a 9.5 per cent swing. This was a blue ribbon Labor seat where they would strut around haggling over who was going to get the seat. There were parachutes landing every day with beautiful media stars who were going to be the new state gurus, but there was a 9.5 per cent swing to a fabulous Liberal candidate who nominated five minutes before the closing of nominations. That is how good this government in Perth was.


Senator Abetz —What about Southern River?


Senator JOHNSTON —Southern River—fabulous. There was a five per cent swing to a very good hardworking candidate. Admittedly, he had some time to assert himself—he was out in the field for a lot longer. What about Mount Lawley? There was an 8.5 per cent swing. What about Wanneroo? There was a six per cent swing. I got up at four o’clock in the morning to run a polling booth there and the people came and said, ‘I don’t like that Kevin Rudd—he’s into us.’ They were dead right.

These burglars are into Western Australians. Let me tell you, if Kevin Rudd steps foot into Western Australia, he will hear all about it. He never goes there; he has not got the pluck to go there. He sneaks in and goes down to see Gerard Neecham’s Aboriginal college with no fanfare, just sneaks in during a state election campaign, because he knows he is on the nose. He is on the nose because, when he wants to tax Western Australians and one of our premiere and best corporate citizens in Woodside and all of their joint-venture partners, we know what is going on. We know he has his hand in our pocket and he is giving that money to New South Wales and Victoria because of their stupid, hopeless mismanagement. That is what he is doing.

In their dying weeks—and this is the wonder of Labor—they impose a condensate tax; they then get annihilated in an election because people wake up to what they are doing. Can I just say, these are the joys of a desperate Labor Party. One of their stars and champions was one Ian Taylor, a deputy premier from Kalgoorlie—where I spent time as a younger man. He was a very good governance man who worked hard for his constituents and he put a very plausible and acceptable face on Labor. His best friend in the world, John Bowler, stood as an Independent having been thrown out of the Labor Party in Kalgoorlie. Naturally, as you would, he put that relationship above politics and went up to help him. What did the Labor Party do? In the dying days of their campaign, they expelled one of their most respected sons. Let me tell you, the people of Western Australia expelled them very, very quickly. They rigged the boundaries to favour themselves and they still lost—an absolutely amazing event—all because people have woken up to Labor.

This condensate tax is one of the principal architects of Labor’s demise in Western Australia and the people are not going to forget it. I will welcome the federal election because I say: Hasluck, come on down and get on board. We are going to take Hasluck and we will have 12 of the 15 Western Australian seats because this tax is nothing more or less than a naked assault on the living standards of Western Australians.

It is one of the most arrogant things I have ever seen and it fits right in—it has a beautiful synergy—with the way that the Labor Party is currently dealing with pensioners. Here we are talking about pensioners, looking at their living standards, listening to them complain about the fact that they cannot make ends meet. You have the Prime Minister, the Treasurer and the deputy leader of the Labor Party all saying, ‘We could not live on the pension.’ In the height of all that, you have a Labor parliamentary secretary standing up in parliament and saying: ‘My wife’s serving of beef stroganoff is not big enough. I don’t care about pensioners who are buying dog food; I don’t care about pensioners who can’t make ends meet. I don’t care about any of that. My wife’s beef stroganoff is not big enough.’ This is what these guys bring to the game. It is disgraceful. They are out of touch and arrogant. Let them eat cake made from the ingredients garnered from Western Australia—they can afford it. I look forward to the next federal election or any election in Western Australia that has a Labor Party opponent because we are going to take them to the cleaners.

This government has a $22 billion surplus. It has a $40 billion infrastructure fund for unspecified projects. I heard Senator Milne say ‘The money has to come from somewhere if you want to raise pensions.’ Senator Milne, there is $40 million set aside by this government for no-name projects with no detail—for nothing. It is sitting in the ether in the forward estimates—$40 billion. They do not have a plan for this money, yet they want to take $2.5 billion from one entity.

Let us turn to the damage this does to our international reputation. This country’s reputation around the world as an exporter and as a destination for investment is second to none. We have stable government, we have good sovereign risk, we have good return on investment and our legislative frameworks are known and certain—until now. The message sent to the Chevrons, the Woodsides and the BHPs of this world is: ‘Watch out if you’re making a profit. If you have really done a good job in investment and bringing a project forward, we are going to reach into your pocket and rip it off you because you can afford it. We want to give it to New South Wales and Victoria, who have made a complete botch of everything, like we are going to. We’ve made a complete botch of everything, but you can afford it, so we’re going to take it from you.’

Sovereign risk is something that is very hard to get. A reputation in sovereign risk is very hard to accumulate. We are competing with Qatar, whose cost structures are a fraction of ours. You can get an environmental approval overnight in these places. And yet we are out there competing with them and we are investing billions of dollars. Gorgon is a $50 billion project; Woodside’s Browse is probably $25 to $35 billion, depending on what year you want to talk about the investment coming to fruition. We have provided, for 10 years, a certain stable environment where these projects have gone ahead and have been successful in the most trying and competitive of international circumstances.

They are extraordinarily capital intensive industries. The first thing they have to do is go out and drill these petroleum licences in deep water, 1,500 metres of water, and then they have to bring the produce—the gas or the oil—another 400 to 500 kilometres on to shore. And then, if it is gas, they need to compress it down to LNG, put it on a specially designed boat and then sell it into the world against the Middle East competition, against the Indonesians and against the South Americans. They have made a huge success of it. Charles Court got them going by saying, ‘We will take the gas and, if we don’t take it, we’ll pay you for what we don’t take.’ That was a very brave contract but it got them going.

Now this government comes along and says: ‘Yes, well, you’re very fat and happy. I don’t care if you’re investing about three-quarters, or 75 per cent, of your profits back into the development of further gas fields. We don’t care about that; we just want the money. Give us the money.’ That is the attitude of a man with a gun doing an armed robbery with violence. That is what we have got from Canberra: an armed robbery with violence. If you do not comply, you get the butt in the head. That is what is going on here.

Our reputation has gone down the drain because of this. Every single large project boardroom is saying: ‘What is happening in Australia? They have just ripped off the condensate tax with no warning, no notice. It has never happened before and now they are imposing an emissions trading scheme on us. I thought we were doing a good job. Why are we getting crucified?’ This is the question everybody around Australia who is involved in big investment and employing thousands of Australians is asking: ‘What have we done to deserve this? What have we done to deserve this very profligate, bad government?’

This is a drive-by shooting. It is an assault on one of the nation’s best assets and it is an assault on one of the nation’s most prospective industries. It is an industry that will carry us into the future. I quote the CEO of Woodside, who is the operating partner of the North West Shelf gas project, when he said about this:

Governments have a responsibility to consult with industry on major issues such as this. On this occasion there was no consultation on changes to arrangements that we considered to be binding,

This is not a loophole which is being closed or a free ride that has come to an end. This is a negotiated fiscal arrangement which formed the basis of Australia’s largest resource development.

And there it is; this is a negotiated arrangement which forms the basis of Australia’s largest resource development. In 2006 and 2007 the Commonwealth government raised $1.594 billion in resource rent tax from this project and is estimated to raise $1.84 billion in the current year rising to $3.74 billion in 2009-10. Is that not enough from one project? Is that not billions of dollars from one project? Is that not enough for this government? Royalties have been paid since production began in 1984. In the past 12 years, royalties paid to both the Commonwealth and Western Australian governments have realised $6.5 billion.

Here we have a government that without a word of warning, without a semblance of commercial courtesy and without respect for our sovereign risk issues, simply announces in the budget, ‘You’re hit for $2.5 billion.’ It is unprecedented in terms of bad public policy, bad governance and discourtesy. It is unprecedented. So, domestic users are going to be whacked because nobody could bear this. The retribution for the Rudd government will be felt in the seat of Cowan by ordinary people who rely on reticulated gas for their hot water, as well as in the seat of Swan and in the seat of Stirling.

I assure the Senate this—and you, Mr Acting Deputy President. The Prime Minister has not been seen in Western Australia; he dare not show his face. They know what is going on. The Prime Minister does not read our newspapers, he does not know the headlines that have pointed the finger at him for this tax on us. We have very long memories.

This is a government of focus groups. This is a government that talks in mantras, talks about ‘working families’ and, yet, admits at the same time working families have never been worse off than under the Prime Minister. That is a confession by the man himself. They have not been any better served and, in fact, are worse off. They are his words and admission. What is he doing about it? Wringing his hands and saying: ‘Pensioners? Oh, it is a terrible thing.’


Senator Abetz —Inquiries.


Senator JOHNSTON —‘We will wait till an inquiry. They can just wait. They can just wait till next year for the inquiry. Make ends meet and wait until we’re ready to give you something in your pension.’ Infrastructure bottlenecks: another well-worked mantra through the focus groups. Little does anybody understand or know that the Commonwealth controls not one single infrastructure bottleneck. The states control the lot. The education revolution: this is a government of the most spun mantras I have ever heard. ‘We’ll keep grocery prices and fuel prices down.’ ‘We’ll end the blame game,’ and ‘We’ll bring cooperative federalism.’ Here is cooperative federalism working as it has never worked before: a drive-by shooting, a raid on the pockets of every Western Australian. We will not forget this.