Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

I rise to oppose the coalition's proposition to dismantle the minerals resource rent tax. It is a tax designed to deal with profits. There is clearly a proposition, which has widespread support, that the profits of mining companies should be shared by the community in a whole range of areas. Senator Bernardi, in his contribution, performed his usual trick. He said it was Marxist rhetoric, in taxing the mining industry, to say that the Australian public should get their fair share of the superprofits miners make out of the resources that belong to the Australian community. That is the test Senator Bernardi sets in relation to whether the Australian public should get their fair share. The test is: if you want a fair quid out of the mining industry then you are engaging in Marxist rhetoric.

He could not resist going even further, describing a tax on the mining industry as class warfare. How could it be that simply saying to a multinational company you require them to make a financial and social contribution to the Australian economy and Australian community is class warfare? Where does this nonsense come from? If that is what the coalition are making their assessment on—that is, Marxist rhetoric and class warfare—no wonder we have propositions coming from them that say, 'Forget the Australian public, forget their rights, forget that they own the minerals, and just let the mining companies claw every cent for their shareholders and transfer some 80 per cent of the profits overseas.' He then said it was tribalism. Where does this nonsense come from? To get a fair share of the profits from the mining companies is suddenly about tribalism.

He talked about there only being $400 million raised. I would rather have $400 million being spent in the community on issues of importance to the community than have the mining companies make even more profit. He went on to say that we should cut our cloth to fit the taxation system. That seems to me to be coalition code for saying that we will cut investment in the community. What investment in the community is Senator Bernardi talking about cutting? We know what Senator Bernardi and his team on the other side want to cut. They want to cut education, they want to cut health and they want to cut investment in jobs. It is really good that Senator Bernardi opens up all of these issues in this straightforward and honest way. It was a straightforward and honest contribution from Senator Bernardi.

I do not agree with anything that Senator Bernardi has said. I see him sitting in the chair, so it is a good time to deal with Senator Bernardi's issue, but at least Senator Bernardi has been honest about what this is all about. It is about allowing the miners to get more of their profits sent overseas, to get more of their profits for a small group of shareholders, not to put the profits back into the community and not to get a fair share from the community. We have to cut our cloth to fit the taxation system. If we cannot afford to provide decent health care and if we cannot afford to provide decent education systems, because we are not prepared to tax the mining companies effectively and appropriately, then so be it. That is the message from Senator Bernardi.

It is not just a message from Senator Bernardi. He advocates the view that is a common position amongst the coalition party. Some of them have more sophisticated ways of saying it, but it means the same thing. Some government senators try and hide what Senator Bernardi has just said, and try and fill their speeches with rhetorical nonsense. But Senator Bernardi has cut to the quick on this. He says that we must cut our cloth to fit the taxation system: we cannot change the taxation system. He says that we cannot change the taxation system, even if there are major multinational corporations making superprofits and sending the profits overseas. He says that we have to cut our cloth. That does not seem to me to be an appropriate way forward in this country.

Let me to go to the issue, as argued by Senator Bernardi, that we should not tax mining industry companies because they saved Australia during the global financial crisis. Nothing could be further from the truth. I happened to be on the economics estimates committee. We had more than one contribution from officers of Treasury outlining the contribution—or lack of contribution—of the mining industry during the global financial crisis.

Dr Ken Henry, in addressing this argument that the mining industry saved Australia from the global financial crisis, outlined what had actually happened in the mining industry during the global financial crisis. The mining industry cut jobs quicker and deeper than most other industries. In the vehicle industry—the industry that the coalition have abandoned and told, 'Go back to wherever you want to go because we don't want a car industry here'—the union movement and the companies sat down and looked at how they could be flexible in responding to the challenges of the global financial crisis. Workers took unpaid time off. Workers took annual leave. Workers were more flexible in their whole approach. That is what happened in the manufacturing sector across the board during the global financial crisis.

But what did the mining industry do? The mining industry turned up at mining sites around the country and told contractors, 'Pack your bags; you're finished.' Workers were sacked unceremoniously in the mining industry. Dr Ken Henry pointed to the fact that if everyone had behaved the same way as the mining industry behaved then there would have been 18 per cent unemployment in Australia. That was the great save by the mining industry of the Australian economy! So no-one should ever buy this rhetorical point that the mining industry saved us from the global financial crisis. What saved this country from the global financial crisis was government intervening in the economy and making the appropriate investment of government money to keep people in jobs. It was done in a timely, targeted and temporary manner, and it was seen around the world as the appropriate thing to do.

So do not buy the rhetoric from those in the coalition who try and pretend that the mining industry saved this country from the global financial crisis. They did not. It was government intervention—the government stimulus packages—and the unions and employers working together to try and keep jobs and keep communities afloat. That is what helped to maintain growth in the Australian economy when growth was declining everywhere else around the world. It was not the mining industry. In fact, they acted in a way that would have seen 18 per cent unemployment.

So I take the view that you must not listen to this rhetoric about Marxism, class warfare and tribalism. If you consider tribalism, class warfare and Marxist rhetoric in relation to this tax, you should realise that the people who led the charge on this tax were those on the Henry tax review. That review comprised some of the most prominent business leaders and the Department of the Treasury looking at what are the important issues for Australia into the future. The Henry tax review said that there was an abundance of non-renewable resources and that prices would stay high—and that that would be driven by demand from China and India. Nothing has really changed in that regard.

The Henry tax review came out in 2009. They said, 'You have to deal with this.' It was not a Marxist approach. They were not loony left wingers who were out there saying that the community should get their fair share. The leaders of business and the tax department said that the community, through the Australian and state governments, own the rights to Australia's non-renewable resources, and that we should seek an appropriate return for allowing private firms to exploit these resources. I do not think that is Marxism. It is not Marxism to say that if you own something you should get a proper return. I think that is more a capitalist approach, Acting Deputy President Bernardi, than a Marxist approach.

The argument is that the Australian people want their resources to have a proper return. What the Henry review went on to say was that current charging arrangements—that is, the royalty system based in the states—fails to collect a sufficient return for the community because they are unresponsive to changes in profits. It wasn't Karl Marx writing this. This was the business leaders and the tax department. Further, it says:

The current … arrangements distort investment and production decisions, thereby lowering the community's return from its resources.

So what the Henry tax review was saying is that the proposed system, rather than being a disincentive to investment, would actually help investment because you would not be taxing companies at the start of their endeavours. The royalties would not be kicking in early. You would not be getting that tax disadvantage early in investment. If you then recoup your return on the investment further down the track through a profit based tax system, that would be a good approach to ensuring that start-up companies get their business in place without distorting taxes such as royalties early in the tax cycle.

The 'Marxists' of the Ken Henry tax review said, 'The current arrangements should be replaced with a uniform resource rent tax using an allowance for corporate capital method, and the tax should be imposed and administered by the Australian government.' The Henry tax review went on to make a number of other recommendations in terms of the report to the Treasurer.

Remember that the Henry tax review called for submissions. One of the submissions that I always find interesting was from the Minerals Council of Australia. Over a period of time, the Minerals Council went from being a supporter of a profit based tax to an avid opponent of a profit based tax, because they were being encouraged by the opposition not to pay a fair share of their profits to the Australian community. They were encouraged by the opposition. They laid the political framework for the Minerals Council to move away from their position.

Let's hear what the 'Marxists' in the Minerals Council said about mining royalties. They said that they advocate 'for a further debate on appropriate changes to the state based royalty systems, particularly around the appropriateness of profit based royalty schemes'. So the miners themselves said, 'We need to look at the appropriateness of royalties.' They actually point out some of the problems with royalties being paid immediately you set a company up and start to develop the company rather than having a profit based tax. So it is not really a Marxist approach, as Senator Bernardi would have people think; this is mining companies themselves talking about what should happen into the future.

Interestingly, in their submission to the Henry tax review, on page 3 they say there are a number of ‘big picture tax issues' that should be dealt with. Firstly, there is the development in what are known as the 'BRIC economies'—that is, Brazil, Russia, India and China. We need to look at the opportunities there and we need to look at the capacity and competitive challenges arising from the BRIC communities. That was their first point. These are big global changes and you need to look at them. The second was the ageing population in Australia. This is not Marxist rhetoric; this is big business saying you have to look at an ageing population. How do we deal with an ageing population? You need more money to help an ageing population when they are ill; you need more money to help an ageing population when they end up in care; you need more money to support an economy with fewer people paying in. So there are huge issues. Somebody has to make the contribution. If there are superprofits being made, it should be the mining industry. They said that the third area is 'efficient allocation of resources'. And let's hear this from the Minerals Council: the fourth big challenge is climate change—you know, the climate change that Senator Bernardi does not believe exists. They said:

Both externally and internally, climate change is widely regarded as both a serious and inherently intractable problem.

So there was the Minerals Council in 2009, looking at tax and recognising that there are problems funding aged care, health and education, and they were saying, 'Let's have a look at a profit based tax.' They actually said there are problems with climate change—something that they seem to have changed their mind on many times.

These are the big challenges for Australia—challenges that the coalition have failed to deal with. The minerals industry said that they would enter a debate on tax reform on the basis of 'transparency, clarity, certainty, efficiency, fairness and equity'. Those issues are not dealt with under the coalition's proposal to get rid of this mining tax. We should make sure it stays and make sure every company in every industry pays their fair share to build a good society within Australia. (Time expired)