Questions without notice (minerals resource rent tax)

It is with pleasure that I rise to take note of answers given by Senator Conroy to questions asked in question time today about the minerals resource rent tax. I come from South Australia so I can tell you firsthand what this tax means to people in my state. It has reduced mining activity, which equates to fewer jobs and reduced opportunities for everybody. Do not let Senator Marshall or anybody else convince you otherwise—the minerals resource rent tax did have a major impact on the decision by BHP Billiton not to proceed at Olympic Dam on the Roxby Downs expansion. I know there has been a lot of comment that this mine's expansion would not have been directly impacted on by the tax, but the cost of doing business in Australia is what has been affected. It is about the risk of doing business in Australia and that is the fundamental problem here.

When faced with a decision on whether to invest in Australia, or to spend their investment dollars somewhere else, mining companies are going to choose to invest in a country that does not keep backflipping on its decisions and a country that does not keep introducing new taxes just because it wants to balance the books. The bottom line is that Australia is no longer seen with any confidence as a safe place to do business. In short, the sovereign risk is just too great.

That is not the worst of this tax. Even at the most fundamental level, we all know that you should not spend money that you do not have and you do not know where it will come from. You can imagine walking into a bank and saying to the manager, 'I want to borrow $200,000 to buy a house. I'm not quite sure where I will get the money from but I might get a new job in a few weeks time that pays me more.' The guy would laugh you out the door. No individual, no family, no business can simply access money when they do not have any prospect or evidence of repaying it. The government have had every chance to know that this was likely to happen with that tax. All the experts have told them that the revenue from the MRRT was highly unlikely to ever be realised. But that is the track record of the government.

This is a government that was happy to give money to parents for a kids bonus with nothing to tie it to actually spending for the benefit of the education of children. Where is the investment in infrastructure promised by this government? Where are the real tax breaks that were promised for small businesses? What has happened to the promised superannuation reform? All we have seen is a massive increase in debt—$126 million raised by the MRRT, $2 billion spent so far, $14 billion in commitments, and this is all from the world's greatest Treasurer. I think not.

It is interesting that the author of this tax, the then Prime Minister Kevin Rudd, lost his job over this tax but not so the Treasurer. Together with the new Prime Minister, he has negotiated a tax that the mining industry basically does not have to pay. The big miners must be struggling to keep a straight face at the moment. I draw to your attention a comment made yesterday morning by Alan Kohler on the ABC: 'You've got to wonder which goose or geese paid the $126 million that the ATO collected from the minerals resource rent tax in the first six months.' If you look at some of our big miners, Rio Tinto did not pay any tax but it booked a non-cash revenue item of $1.1 billion against the MRRT. Xstrata—no revenue that we are aware of. Fortescue Metals says it is not paying anything. BHP Billiton paid $77 million—maybe they thought paying the retiring managing director more than the tax was probably a bad look.

All in all, the MRRT is a disaster, not a political inconvenience as the Treasurer has described it. Maybe the Treasurer could come to speak to the contractors who have geared up to provide goods and services in support of the mining expansion in South Australia. Maybe he can explain to these rural communities why they have not had the opportunities that were promised. This lack of regard for rural communities is nothing new from this government. I will not digress like everybody else has and talk about all the different things that have been impacted upon by this government. I will stick to the MRRT. But, by the Labor Party's own admission, straight from the Labor Party's website, the minerals resource rent tax is a true Labor reform. It is a tax that collects no money; a tax that has generated huge future liabilities for all Australians; and a tax on the back of which a huge debt for Australia has been generated. If this is true Labor reform then I reckon every Australian has every right to say that they have had quite enough of Labor Party reform.

tags:  speech