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representatives vote 2014-06-26#2
Edited by
mackay staff
on
2014-06-27 10:42:02
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Title
Bills — Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2]; Second Reading- Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2] - Second Reading - Read a second time
Description
<p class="speaker">Bob Baldwin</p><p>I rise to speak on the important issue of repealing the minerals resource rent tax. Today and at previous times, I have heard, endlessly, members opposite banging on about programs that will be cut. There is a schedule of programs that will be cut. One needs to ask oneself: why will these programs be cut? The reality is: of the revenue that was supposed to be raised by the minerals resource rent tax—to pay for things such as the loss carry-back, the small business instant assets write-off threshold, deductions for motor vehicles, geothermal energy, superannuation guarantee charges, low-income support contributions, the repeal of income support bonuses and repeal of schoolkids bonuses, plus infrastructure—only $340 million has been raised since its inception by this failed tax.</p><p>I just want to name one project, in infrastructure, that was funded by the money to be raised from that tax, and that was the ring road around the Perth airport—a good project, costing $480 million. Well, this tax has only raised $340 million to date, and yet the funding for the other programs continues. This is typical of the budgeting ability of a Labor government.</p>- The majority voted in favour of a [http://www.openaustralia.org/debate/?id=2014-06-26.104.1 motion] to read the bill for a second time.[1] This means that the majority agree with the main idea of the bill and the House can now discuss it in more detail.
- ''Background to the bill''
- The [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5300 bill] was to repeal the [http://en.wikipedia.org/wiki/Minerals_Resource_Rent_Tax minerals resource rent tax] ('MRRT'), which the Coalition called the “mining tax”.[2] The tax began 1 July 2012 and applies to profits earned from the extraction of mineral resources such as coal and iron ore. Its abolition was an election promise of the Coalition during the 2013 election campaign.[3]
- The bill also repeals the [http://www.dss.gov.au/our-responsibilities/families-and-children/benefits-payments/schoolkids-bonus schoolkids bonus], the [http://www.humanservices.gov.au/customer/services/centrelink/income-support-bonus income support bonus] and the [http://www.ato.gov.au/Individuals/Super/In-detail/Contributions/Low-income-super-contribution/ low income superannuation contribution].
- This is the second time a bill implementing these measures has been introduced. Earlier this year, the [http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5142 Minerals Resource Rent Tax Repeal and Other Measures Bill 2013] was rejected in the Senate.[4]
- References
- * [1] Read more about the stages a bill must pass through to become law [http://www.peo.gov.au/learning/fact-sheets/making-a-law.html here].
- * [2] You can read more about the MRRT [http://www.ato.gov.au/Business/Minerals-resource-rent-tax/ here].
- * [3] You can read the Coalition's policy [http://liberal.org.au/our-plan/5-pillar-economy here].
- * [4] See that division [http://publicwhip-test.openaustraliafoundation.org.au/division.php?date=2014-03-25&number=2&dmp=14&house=senate here].
<p>I heard the member for McMahon, the shadow Treasurer and former Treasurer, talk about all these cuts and how terrible it was and how good this tax was, and how we as Australians deserve to share in the mineral wealth of this country. Well, can I tell you: these programs are leading to a deficit in this country, because the tax is not raising revenue that it was designed to raise. If you, members opposite, want to mount your argument about Australians sharing in the mineral wealth of this country, you should at least have a look at the state governments, who actually place the royalties on the minerals coming out of the ground. That is how we share the mineral wealth in this country, as the states actually own the minerals. When the minerals come out, a royalty is placed on them, and that royalty can move up and down as market conditions demand. I have heard some ironic arguments in this place in my time here since 1996, but none more ironic than the one against cutting spending on programs that are funded out of a tax like this when the tax has not even raised enough to pay for one of the projects that it was being raised for.</p><p>It concerns me that members opposite argue to keep this tax and the carbon tax. It concerns me because, across Australia, we are seeing mining jobs under threat—not only direct mining jobs but indirect jobs as well. Yet members opposite, those who have coal in their regions, including the member sitting at the table opposite, the member for Cunningham—</p><p class="italic">Ms Bird interjecting—</p><p>I know you're there! She has not spoken a word about supporting the mining industry, when Illawarra coal is cutting jobs in her electorate.</p><p class="italic">Ms Bird interjecting—</p><p>I am honest enough to admit that the jobs are going primarily because of the amount that they are getting per tonne. But the difference in making a profit is the cost of extraction as against the sale price. One of the costs of extraction is the amount paid in the carbon tax, and, given that only 20 of the mining companies are actually paying the minerals resource rent tax, there are 145 companies that have to go through the auditing process, and that auditing process is another cost to the bottom line of minerals extraction.</p><p>Headline after headline after headline is about job losses and potential layoffs in the mining industry. This week, we have seen BHP over in the west put out an announcement that 500 jobs were going—100 at their headquarters—and possibly 3,000 jobs. That was a report from ABC News by Graeme Powell updated yesterday. This concerns members on this side of the House because we know that we need a viable mining industry to sustain this nation.</p><p>The mining industry was expected to contribute $49.5 billion through the original resource super profits tax over five years, and then, in 2010, that was replaced with the MRRT, and that was destined to raise $26.5 billion over five years. Let us go forward in time: it has raised $340 million in net terms. Yet the previous government had locked in $16 billion of expenditure over the forward estimates. I have heard Labor stand up and talk about their economic credentials, and there was all that talk when they were in government about posting surpluses. But this displays their understanding of how to put a tax together, as against expenditure; this displays why Labor should never be in government and never be in control of the books.</p> <p class="speaker">Anthony Albanese</p><p>No, never! 'Baldwin calls for one-party state'!</p> <p class="speaker">Bob Baldwin</p><p>I do not call for a one-party state, sunshine, but what I call for is economic reliability and sustainability and sense—and you failed on all three fronts. You produced deficits the likes of which were never seen in this country.</p><p>All through my electorate, workers in the mining industry have been affected, whether from the shutdowns at various mines throughout the Hunter or, indeed, the layoffs, or the indirect flow-through to places like WesTrac and Sandvik which have laid off people and have potentially more layoffs to come. And why? As I said, at least I am honest enough to admit that it is at least in part because of commodity prices, but it is also because of the cost of production. And the minerals resource rent tax and the carbon tax are both contributors to the cost of production.</p><p>There are around 265,000 people, according to the ABS, employed in the mining industry across Australia. If you add the indirect to the direct, they say that it could be roughly a million people employed in our mining industry—that is a lot of jobs. That is about eight per cent of our national workforce. And eight per cent of our national workforce deserves the support of both sides of the House, through removing this insidious tax which raised nowhere near the revenue—nowhere near the revenue, thank God—that it was intended to. I mentioned the member for Cunningham earlier. The Peabody mine at Helensburgh has lost 42 jobs locally and the company has lost 400 nationally.</p><p>It is not just confined to New South Wales. If you look at the Northern Territory, the member for Lingiari's Frances Creek iron ore mine is becoming unprofitable and jobs will go. Why? In part because of the cost of production. There are 20 companies that are paying the MRRT but there are at least 145 that have to go through the auditing processes and submissions, which cost an awful lot of money. I will go through some of the job losses that have occurred. At the Glencore Xstrata Newlands Northern coalmine, 50 jobs will go in the next couple of days. Bradken Foundry is shut, with 1,000 jobs lost. At Wollongong Coal, formerly Gujarat NRE, there were 47 voluntary redundancies; the workforce dropped by 20 per cent. At Aurizon workshops, jobs were cut in June; 480 jobs will go by 2017. At Arrium, 120 jobs, or 20 per cent of the workforce, are to go at the Newcastle Warratah site. At Gindalbie Metals, admin jobs were cut at the Karara project in Western Australia. BHP Illawarra Coal will cut 36 jobs by 30 June. Glencore Ravensworth coalmine is going into care and maintenance in September with 17 redundancies and possible redeployment for another 110 people. The Vale Integra coal complex at Camberwell and Glennies Creek will cut 500 jobs. Forge went into administration, cutting 1,370 jobs. The Anglo American Drayton coalmine has 500 employees for the chopping block by 2017. BMA's Saraji coalmine in Queensland will lose 230 jobs. Rio Tinto announced job cuts to come at the Hail Creek coalmine earlier this month. Joy Global's machine maintenance services at Rockhampton has lost 25 jobs. The LDO Chain Valley colliery, in the member for Charlton's seat, has cut 73 jobs in March; sixty were already retrenched from Ravensworth. It goes on. There have been 4,230 recorded job losses since January this year, according to an article from <i>Australian</i><i>Mining</i>on 26 May.</p><p>Mining is the backbone of our communities. I come from a mining area and I understand how that flows through the whole economy. In fact, there was a very good article written by Ian Kirkwood in the <i>Newcastle Herald</i> which focused on the flow-through effect of the mining industry and how it affects everyone from car retailers to cafes and sandwich shops—businesses across the whole of the community.</p><p>This Labor opposition would rather see jobs go; and be mindful that most of the jobs going in the mining industry are those of members of the union movement. It is not only that they are not standing up for jobs—they are not even standing up for the jobs of the people who contribute their union fees to their political party, and that is disgraceful. They have deserted these people in their hour of need.</p><p>If we could get rid of this tax, at least it would be one more barrier to growth out of the way. Commodity prices will come and go, and we can all speculate on them. But what we need to do is make sure we keep our industries in Australia competitive. Mining capital is very fluid capital. It will take the path of least resistance and currently that is going to other countries, not into Australia. We need to see, and to demonstrate as a government, that we are open for business—that we will support the mining industry. We will maintain environmental standards but we will cut red tape and help reduce input costs so we can keep those jobs here in Australia. It is part of our bright future. Our nation deserves it and our economy needs it because, without a successful mining industry, our debt position will continue long into the night. That debt position—let us be abundantly clear about it—was created by a miserable Labor government that had no understanding of the nation's economy, how to budget or indeed even how to tax properly. They were very good at expenditure; they were excellent at expenditure. They gave themselves AAA for expenditure but, as far as revenue collection and design go, they got a big F. To raise $340 million, to date, while putting down $16 billion worth of expenditure shows me they have no economic credentials with this nation.</p><p>I commend this repeal bill to the House. It is about time the Labor Party stood up for its workers, particularly those union members in the mining industry, and did something to support them.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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