Larissa Waters (Queensland, Australian Greens) Share this | Hansard source

As I was saying in my contribution on this bill earlier, the last time I checked we did not have Rio, Xstrata or BHP in charge of this place yet. In fact, we were here to represent people. Earlier I was cataloguing the changes that those companies had succeeded in making to the original resource super profits tax, including downgrading of the tax from 40 per cent as originally proposed to an effective 22½ per cent and, of course, leaving out most of the minerals that it was originally designed to cover, shrinking it down to just coal and iron ore.

Perhaps one of the most offensive loopholes which was inbuilt into the MRRT was the royalty rebate, which, frankly, has been a total lark. It has allowed the MRRT revenue to be eroded by state governments. The Australian Greens, on advice from Ken Henry, had sought to close this loophole. Sadly, at the time we received absolutely no support. The Henry tax review had recommended replacing royalties entirely with a profits based tax but had said that as a second-best option there could be a royalty rebate, but only if those royalty regimes were fixed at a particular point in time so as to ensure that the Commonwealth did not then automatically fund future increases in royalties. Well, what do you know? That is precisely what happened when Western Australia, New South Wales, Queensland, South Australia and Tasmania upped their royalties: this left the Commonwealth responsible for rebating those mining companies that increase. What a farce! I do not think you have ever seen the design of a tax and rebate system more farcical than that.

The Greens had the Parliamentary Budget Office cost closing that loophole and estimate the revenue that would have been raised had that loophole been closed. Their estimate was that it would total $2.2 billion—a significant amount for a very small change. Because we received no support at the time for that amendment, the loophole remained on the books. History shows the mining tax has barely raised a dime. The other feature of the MRRT which made it less effective than originally envisaged was the depreciation rules, meaning that mining companies were able to price their assets using today's inflated market rates and then claim massive annual deductions under that amount—not what they had actually spent on capital investment.

The $4 billion that was expected to be raised under the MRRT this financial year was, because of those exemptions, reduced down to an actual amount of $232 million. This is an absolute tragedy considering that the profits of the three big iron ore companies to whom the tax applies have risen by 81 per cent in this financial year. Their combined half-yearly profits were $14.6 billion; the half-yearly profit for Rio was $6.4 billion and, for BHP, $6.5 billion. If they are not superprofits, then I do not know what are.

Most of those profits are shipped offshore. We know that more than 80 per cent of those profits flow to foreign shareholders, so that leaves about a fifth of the industry's enormous profits accruing to Australians through dividends—and even then only those with enough discretionary income to invest directly in shares would benefit. Clearly there have been some winners from the mining boom, notably those overseas shareholders. As the Reserve Bank has put it:

Since the mining sector in Australia is majority foreign owned, most dividends and retained earnings accrue to foreigners and therefore do not add to national income.

These enormous profits do not equal more jobs for Australians. The large profit margins are lovely for the mining companies, but they do not equate to job creation. If those profits do not stay on in the Australian economy, then clearly they are not creating jobs, as Ross Gittins pointed out a week or so ago.

The mining industry does create some jobs—about 2.4 per cent of total Australian jobs—but not as many as the industry constantly claims. Even those jobs, however, come at a cost to the broader economy. We know that the Australian dollar has become more volatile because of the boom and that sustaining it at high levels keeps interest rates higher than they otherwise would be. That of course creates labour shortages in other regions or skill areas. This has resulted in lower profits, fewer jobs and lower returns to shareholders in other industries, such as manufacturing and tourism. We have one chance to make sure that the nation gets a share of the current windfall profits being made by these 80 per cent foreign owned multinationals and that is why the Greens have moved and foreshadowed our second reading amendments to this bill.

The first amendment was moved by Senator Milne earlier today and it is to increase the tax rate back up to that original 40 per cent and to have it apply to all minerals, not just to iron ore and coal. It is to fix that royalty loophole that I referred to earlier to rebate only the royalties there were in place as at July 2011 so that the mining companies and not the federal government pay any subsequent increase in those royalties should the states hike them up further. It is to fix that depreciation treatment so that it is a book value and not an amount actually spent on mining infrastructure.

According to the PBO's post-election report, those features, should they be adopted, would raise an extra $21.8 billion in revenue which, frankly, we could all do with. I would have thought that this government, if we are in a so-called budget crisis, would welcome such a revenue avenue. The mining boom is transitioning from that capital-intensive phase, and the production phase is now beginning. This is when the super profits will occur, because the revenue from production will be rising and companies will be less able to deduct it against capital investments. So we need to get a super profits tax in place, a proper one that works, before those profits are shipped offshore to their foreign investors.

We have also foreshadowed a second second reading amendment, because axing this tax—as the government's three-word slogan would have as the description—would also axe the low-income super contribution, which we all know will have a massive and disproportionate effect on women. This reform should never have been tied to the mining tax. The low-income super contribution is about equity and removing it will simply further entrench the disparity that women face when they retire. The bill abolishes the low-income super contribution on working Australians and, as I have said, this will have a particular effect on working women. The Greens have sought for this to be dealt with separately by the parliament and not cloaked in the mining tax repeal bill, because of the significant impacts that it will have on everyday Australians—not just women but low-income earners as well—and because this issue has not had the public airing and the debate that it rightly deserves.

Frankly, the Abbott government is making a cash grab on the retirement savings of one in three workers to the value of around $27,000 each, or 15 per cent of their expected retirement savings. Under that low-income super contribution, the government pays a super contribution towards workers earning less than $37,000 a year. The repeal will therefore disproportionately affect those employed on a casual basis, which is young people, students and women with parenting duties. The fact that the bill will deplete the retirement savings of one in every two working women and 80 per cent of women working on a casual or part-time basis has sadly not received sufficient attention. Furthermore, for most young women the repeal of the low-income super contribution would completely erode the retirement income gains expected to be realised from the government's Paid Parental Leave scheme.

The low-income super contribution attempts to address the inequities in our super system, which favours high-income earners and does nothing for low-income earners. So repealing this low-income super contribution will place greater burden on future governments by increasing people's reliance on the age pension. So this legislation has basically no redeeming features, and the government is trying to sneak it in under the guise of the mining tax. In Queensland, the figures show that 744,286 people will be affected should the low-income super contribution be repealed—that is 35.7 per cent of all Queensland workers. That is an enormous number. In total, those employees in Queensland would lose $203 million. In WA, the figures are likewise very stark: 353,613 people would be affected, or 31.4 per cent of total employees. They would lose out on $93 million. These people, who can least afford to have their income and their super further restricted, are now going to be hit with the removal of a safety net for the benefit of people like Rio, Xstrata and BHP. 'The world has gone mad' is the only conclusion you can draw.

Australia's mining boom is transitioning from the capital-intensive phase to the production phase and, as I have said, this is when the profits will really start flowing, which is precisely why we need to fix this tax now rather than simply rip it up as the government is now proposing. A poll in January this year found that the majority of Australians, 54 per cent of Australians, believe that multinational mining companies do not pay enough tax. I strongly agree with the 54 per cent of Australians who hold that view, and I would urge the government to rethink its obsession with making it harder for low-income folk and making it easier for multinational mining companies. I think the 54 per cent of Australians who believe that do so because they actually value the things that a good government should provide, like keeping the low-income super contribution and keeping Medicare as a universal health entitlement that a rich country should provide its citizens, rather than an increasingly two-tiered system whereby your medical care is determined by your bank balance. What a horrific track for us to be on.

These people value things like increasing funding for all levels of education, starting at the early childhood level right through to higher education, and of course funding the fifth and sixth years of Gonski that, should we fix this tax, we would then be able to fund. They value things like properly addressing affordable housing and homelessness, which is made worse by the mining boom and the fly-in fly-out nature of employment in the mining industry. They also value things like raising Newstart and taking the single parents who were dumped onto Newstart off that inadequate payment and putting them back onto an enhanced parenting payment whereby they can actually care for their children and do not have to choose between textbooks or dinner. The 54 per cent of Australians who think that multinationals do not pay enough tax probably also value funding child care so that women actually have some decent options to return to the workplace—affordable options and quality options. They value things like decent public transport and dental health. The list of goods that the government could and should provide were it to have a revenue stream that was fixed and with these loopholes closed could go on and on and on.

Sadly, what we have seen is that instead of a government choosing to service the community that it is meant to be here to represent, it is servicing its mining masters. Once again, we will have the Xstratas, the BHPs and the Rios of the world, who originally wrote their own tax, now giving themselves a complete exemption from tax. Whoopee to them! Wouldn't it be lovely if we could all do that; but, sadly, it would bankrupt the nation. What the community does not want is a bankrupt government—a government that is morally bankrupt and that is abandoning the interests of the community and the services that it should be providing to its people. Until such time as the Abbott government abandons the parliament and decides to just put BHP, Rio and Xstrata in complete control and give up the facade that we are here to represent the people, the Greens will continue to stand for a mining tax that works, that raises the revenue that we need in order to provide the services that the people rely on, and we will do so proudly. So I again urge all senators in the chamber to support our second reading amendments to fix this tax. When something is broken, you fix it. You do not just toss it out. Let us fix this tax so that we can provide the revenue to do the good things that the community wants us to do.