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Thursday, 26 November 2015
Page: 9077

Senator DI NATALE (VictoriaLeader of the Australian Greens) (11:23): I rise today to speak in support of the Mining Subsidies Legislation Amendment (Raising Revenue) Bill 2014. Just to be clear about what the bill does: it removes the fuel tax credit for resource companies which gives them effectively 39c a litre off their fuel. So, while the rest of us pay 39c in fuel excise when we go to fill up our cars, the large resource companies get a 39c discount. The bill also scraps accelerated depreciation. Let us not forget that this is not simply about the question of the fuel tax credit; it is also about other benefits given to the mining industry: accelerated depreciation for fossil fuel infrastructure and the immediate deductions that are available for mining exploration. It is a suite of measures.

We can have a long debate about whether this is a subsidy, a tax concession, a handout or a business input. We can have a long debate about that. There are many economists who describe this as a subsidy. There are others who would call it a business input and do not like the fuel tax credit being called a subsidy. We can get into that long argument about what it is, but we know what its effect is. Its effect is very simple. It means that, if you are in a mining operation, you get a big discount on the fuel that you use within that operation. Some people, of course, argue that the excise exists for road use and exclusively for road use. That argument is a straw man. Mining companies can claim fuel tax credits right across their operations, including those operations' heavy trucks and road freight vehicles that do use roads.

I think Senator Canavan said that it is not economically efficient to charge taxes on business inputs. There would be pizza delivery drivers and taxidrivers right around the country who would argue, 'Well, why are we being treated separately from the mining industry?' So let us be clear. It is a specific concession given to the mining industry. It is absolutely a concession, and it is a concession that is worth a staggering $3 billion to $4 billion a year, which goes into the pockets of some of Australia's most profitable companies. So, while we can get into a semantic argument around whether we call it a subsidy or a concession, the bottom line is that this is $3 billion or $4 billion that is going to the mining industry and that other industries do not benefit from. Let us be absolutely clear about that.

I would also like to suggest to Senator Canavan—he had a long treatise on economic theory—that the biggest subsidy that is available to the mining industry is the externalities they create that permeate the economy. They get a free ride on the back of those externalities. When you look at it, this is a very simple, straightforward proposition. This is where I think there is a bit of cognitive dissonance within the coalition. We get these long economic arguments about why the mining industry should not have to pay this $3 billion to $4 billion concession but not a word about the enormous externalities that permeate right through the Australian economy as a result of the activities of that industry.

If you are being consistent and you accept the science of climate change—and here is where we get to a point. I accept that some of the dinosaurs in the coalition do not accept the science. Now, I do not argue with them on that basis. It is the same thing as having an argument with someone who believes in chemtrails or some of the antivaxxers or about whether the moon landing happened or did not happen. There is no point in engaging in an argument around whether climate change is real or not. You either accept the science or do not. You either make your decisions based on the views of science or make them on some other basis that I think does not belong in this place.

If you accept the science of climate change and if you accept the evidence that is now almost unequivocal that, as a result of climate change, we are creating enormous problems right across the planet that are environmental, social and economic, then you have to be consistent with your own theory and acknowledge that the best and most efficient way of tackling those externalities is to price them so that businesses do not get a free ride. Effectively, we have businesses creating pollution which are getting a free ride on the back of the rest of us. That is where all of the bluster in the world comes unstuck because you are not prepared to be consistent with your own arguments.

Let us look at when the carbon price was introduced. The carbon price was introduced, and we finally did something about that enormous concession that exists with regard to cheap fuel. We had miners for the first time having to pay 6c—not the 39c that everybody else pays but 6c—in excise that reflects the carbon emitted in their fuel. When the carbon price was scrapped, that was $1.6 billion of revenue given straight back to the miners. It was an externality that finally was being priced, and any market economist worth their salt acknowledges that it is the most effective way to deal with the issue of carbon pollution—Senator Canavan is reluctant to go into that territory because that is a very slippery slope for the Nationals—and any economist worth their salt acknowledges we should ensure we are pricing these externalities. We finally did it. We had a 6c per litre price on fuel, and this government scrapped it, handing $1.6 billion back to the mining industry. It is an issue that is not being discussed much in this place.

In addition to the 6c per litre concession, the government also gave $574 million back to the industry for them not having to pay for their fugitive emissions on mining sites—another enormous externality dealt with through a market-based mechanism and scrapped by the economically illiterate government that we have taking us back to the last century. And just think about this: we finally get some rationality into the debate and we finally have a small price on fuel, pricing an externality, bringing in $1.6 billion at the same time as they were scrapping that bit of legislation, and what did they do? They tried to claw back almost the same amount from those kids under 30 looking for work, stripping them of income support for six months. That is this government's prescription for managing climate change and looking after people—scrap a price on carbon and sock it to young people under 30 who find it hard to find work. In this government's world, a job seeker filling up at the petrol station on their way to a job interview would pay 39c a litre in fuel and Gina Rinehart would not pay a cent. When you look at the latest BRW rich list you have Gina Rinehart, one of Malcolm Turnbull's 'battlers', valued at $20 billion, now doing a $200 million deal with Caltex for her Roy Hill iron ore mine site worth 120 million litres of fuel. So that $200 million deal with Roy Hill iron ore provided 120 million litres of fuel, and as a result, if this bill was passed, we would get $45½ million for that agreement. But, no, this government thinks that money should be pocketed by Gina Rinehart. That is the same amount of funding that was cut from the ABC and SBS.

We have a big choice at the moment. We do have some structural budgetary challenges, there is no question about that, and we have a choice about how we raise revenue. We can look at fair measures like ending these huge tax concessions. We can look at ending the huge tax concessions that exist within the superannuation scheme and look at multinational tax avoiders, and there is a bill now before the parliament that would do that, but this coalition government looks like voting that down. We can look at ending negative gearing so that we do not have those distortions within the property market. Or we can do what this government proposes to do and keep all of those concessions that benefit some of the wealthiest countries and wealthiest individuals in the country or we can slug a great big GST on everybody—a tax that we know impacts most on those people who can least afford it.

But it is more than that. This is a debate about the economic direction of the country. These big concessions do not just cost us revenue, they also cost us huge opportunities. We have capital that is being attracted to the fossil fuel and mining sectors because of these huge tax breaks and to property through negative gearing and we get lazy investment. We get investors looking for a free ride when that investment could be used in much more productive places in the economy, and that is part of the reason we are in trouble right now. We have a one-dimensional economy that is over reliant on the mining industry as a result of the huge concessions that exist within that sector, causing investment to be diverted away from those other productive areas of the economy.

On Sunday, the Greens released what I think is a visionary, ambitious, forward-looking blueprint for how we can make that transition, a blueprint called Renew Australia. It is a plan to not only double our energy efficiency but to also increase the amount of energy that we generate. Under the plan we expect that energy use will grow by about 50 per cent by 2030, and part of that will be the enormous transformation that occurs within our transport sector. We will see the electrification of transport and we will see a move away from those vehicles that use fuels like petrol and diesel and so on to electric powered vehicles and machinery. So instead of subsidising those industries of the last century, why not look at providing support for those industries of this century? This could be through a combination of measures including increasing the renewable energy target and having a 90 per cent target for 2030 through direct auctions, through the RET, through direct investment and through an increase in household solar. All of those measures would allow us to make the transformation that we need.

But it is not just happening within the domestic sector. Earlier this year the Australian Renewable Energy Agency partnered with Rio Tinto to install solar hybrid for their zinc mine in Weipa in Far North Queensland, instead of using diesel generators. So we have a solar hybrid system helping the operations of a zinc mine in Weipa rather than diesel generators. That is a first for mining in this country. The fact is that that technology has to compete against that subsidised diesel fuel provided for those dirty generators. If miners paid excise on that fuel, then solar would absolutely be more cost-effective for greenfield mine sites. It is effectively a reverse carbon price. What you are doing at the moment is offering an incentive to those old, dirty ways of doing things, and it needs to be scrapped.

This bill does a number of things. When you look at the purpose of taxation and tax credits, what we are trying to do is discourage bad behaviour, encourage good behaviour and raise revenue to pay for the services that we all want and deserve. That is what this legislation does. It does all of those things. It helps to restore the government's budget position; it helps us to reduce our lazy reliance on fossil fuels; it helps us to create investment pathways in new industries—those industries that will take us forward; it helps to drive the rollout of cost-competitive clean technologies; and it supports new sunrise industries. That is what is needed. This century belongs to the nations that take advantage of those opportunities. Yes, it is true that Australia has benefited from a strong mining sector. That is absolutely true, but we now need to raise our gaze.

Our prosperity depends not on what lies beneath our feet but on those renewable energy resources in the sky—the sun and the wind—and on new and emerging technologies like geothermal and tidal. We have those competitive advantages; we are lucky. As Donald Horne said, we are the lucky country. We are lucky because we are blessed with those renewable energy resources. We can make that transition. The challenge now is up to us. Will we take advantage of the enormous opportunity that this transition brings? Will we renew Australia? Will we kick-start our economy? Will we help restore the government's budget position? Will we be able to pay for services like health care and schools? Will we do those things by tackling some of these unfair concessions or will we stick to the old ways? Will we stick with a regime that props up industries that have been hugely profitable at the cost of ensuring that we have a much more prosperous, innovative and forward-looking nation? That is the question before us today.