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Thursday, 26 November 2015
Page: 9080


Senator BACK (Western Australia) (11:39): I am delighted to rise to speak to the Mining Subsidies Legislation Amendment (Raising Revenue) Bill 2014 and to correct the record in a couple of areas. First of all with regard to the supposed diesel fuel rebate, let us all be very clear. Originally a road maintenance tax was put on petroleum, an excise supposedly to improve and maintain roads. Of course, as we know, over time governments used that as a cash cow and very little of that money eventually ended up in road maintenance. But that was its original purpose, at a time when diesel was not particularly used in the transport industry. It was mainly used—as you know, Mr Deputy President, from your background—in stationary industries. As diesel came to be used more for transport it became necessary to equalise the excise being charged on petroleum for diesel for road maintenance purposes—a logical thing to do and it continues to this day.

There obviously were purposes other than transport for which diesel was being used—and still is—such as, firstly, generation of electricity in remote areas; secondly, in farming where farm vehicles were not used on made roads; thirdly, in fishing, as fishing boats do not use much bitumen or require access to roads. The final purpose is mining. So let us be under no illusion. The reason there is a rebate on diesel for use off-road in mining, farming, fishing and stationary purposes such as power stations is because that diesel is not used on made roads and therefore does not cause deterioration of made roads.

Why the Greens political party wants to try to attack the very group of industries that have been underpinning this economy for the last few years is beyond me, and let me go to that point right now by quoting Australian Taxation Office figures. The single biggest taxpayer in Australia last year and prior to that was Rio Tinto, the mining company. Close behind was BHP Billiton. In fact, in the period from 2006-07 to 2013-14, the mining industry paid $117 billion in company taxes and royalties. The industry itself in the final year of that era paid $21 billion, and that was double the 2006-07 figure. Again I quote Australian Taxation Office figures when I say that if you take taxes and royalties paid to federal and state governments, the contribution exceeded 40c in the dollar. The effective tax rate was greater than 40 per cent, according to the Australian tax office. But needless to say that is not the only contribution to government taxes. We know that these mining companies exist in rural communities—for example, Kalgoorlie in the goldfields area, Mount Newman, Tom Price and all of those communities feeding into Karratha and Port Hedland. We need to consider the income taxes paid by people who work in the mining industry, the contributions to shire rates, the contributions that flow on from a sector—and again it is claimed that the mining industries in this country are very, very small employers. In fact, the direct employment to July last year—it may have tapered off now—was 245,000 people, almost a quarter of a million people directly employed, and that was an increase of some 20 per cent to 2014 from 2010. I would accept that those numbers have now dropped off to some extent.

Let me talk about the effect that the carbon tax and the ill-fated and poorly-constructed mining tax had on the exploration and mining industries in Australia. These are figures I can quote to the Senate. In 2011, two-thirds of all ASX listed exploration companies had undertaken their mining exploration activity in Australia. By 2012-13, two-thirds of ASX listed exploration companies were engaged in exploration activity away from Australia. In 2011, two-thirds of those companies were spending on exploration here and a year later two-thirds were spending exploration funds out of Australia. That was the effect of the crippling mining and carbon taxes on that industry.

It reminds me that, of all exploration drilling holes that are undertaken, less than one per cent ever get to yield a mineralisation that is commercially viable. So, if we are to do as has been suggested in this bill before us today, we will further cripple a critically important industry for Australia and especially for my home state of Western Australia, being the largest iron ore exporter. One port alone, Port Hedland, exports one million tonnes of iron ore a day—365 million tonnes a year—with a benefit to the economy. The fact is that Australia is the most efficient iron ore miner in the world. Our expertise is strongly sought after throughout Africa, where most of the African mining activity is controlled by Australian companies, and also, increasingly now, in Latin America. I have spoken of our involvement there previously. And further opportunities exist in Mexico.

We need to reflect on the value of the mining and the LNG industries to this country. In her speech, in August 2014, then Senator Christine Milne made reference to the need for funding in the university sector. I do not know whether Ms Milne visited Western Australian university campuses to any great extent, but the most significant contributors from the corporate sector to the Western Australian universities are the mining and the oil and gas companies—BHP Billiton, Fortescue, Rio Tinto. Chevron alone has invested some $53 million into universities and research institutes to help build local academic excellence and research capability. There is value coming from that sector. There are employment opportunities at the high level for university graduates which are flowing through to the skills development sector. Mr Deputy President Marshall, you and I have participated in Senate inquiries in the past demonstrating the value and the need in this particular sector. I say again that the sorts of issues put before us by the Greens in the Mining Subsidies Legislation Amendment (Raising Revenue) Bill 2014 will have the opposite effect.

I spoke a few moments ago about exploration. I was delighted that, with the permission of the then shadow minister Ian Macfarlane, whilst he was releasing our policy in 2013 on the east coast, I was able to attend the Association of Mining and Exploration Companies Convention in Perth and talk about the Exploration Development Incentive, which is now up and running and encouraging the small-cap mining exploration companies and investors to get back into exploration, because what we are not spending on exploration today we will not be yielding in five, 10 or 15 years time. Senator Milne, in her contribution in August of last year, drew attention to the gas industry, along with coal and oil, and the fact that she regarded that they were receiving unfair tax treatment.

I want to spend a couple of minutes on the contribution of one company. I understand that, in this place today, a motion will be moved to try to denigrate the influence and contribution of the Chevron Corporation and its partners. In this case it is Gorgon, Shell and ExxonMobil, and others in the case of Wheatstone. I want to place on record some statistics independently verified by ACIL Allen Consulting on behalf of Chevron. The contribution of those two major projects totals almost US$100 billion. It is the biggest, single investment ever made anywhere in the world on gas projects. But, of course, to this moment there has been no tax paid on Gorgon and Wheatstone outputs for the very simple reason that they have not yet started producing.

Those two projects and others on the north-west coast of WA will contribute over $1 trillion to the GDP of Australia, nearly $32 billion a year, when those projects and others are in full operation. They will generate 150,000 full-time equivalent jobs in Australia—5,000 jobs a year. The projected revenue to the federal government over the life of the Gorgon and Wheatstone projects is estimated by ACIL Allen at $338 billion, directly in company taxes, and another $320 billion—nearly $700 billion—from income taxes and other taxes. Not only will those projects be providing export wealth, they will be providing the very necessary domestic gas as well.

It is beyond me why the Greens want to completely and utterly try to emasculate the wealth-generating capacities of this country. In the case of gas, as the United States of America has found, it has been the biggest contributor to them meeting their greenhouse gas obligations.

Debate interrupted.