Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Hansard source

When the Labor government introduced the minerals resource rent tax—the MRRT, which the coalition now seeks to repeal—it was a proud moment and it was a moment when in this parliament we recognised the importance and the strength of mining to our nation. Mining is an industry that has built and sustained communities across Australia, not least in my home state of Tasmania. In fact, in Tasmania, towns have been built on foundations of metal and ore, from the rich ranges of the west to the rivers of tin in the east and from seams of coal in the south to scheelite on the wind-swept islands of Bass Strait.

Tasmania has known the benefits that mining can bring to regions, just as Western Australia and Queensland are now experiencing such a thing. Towns can boom, swelling with workers from across the state, across the country and across the world. In fact, some of Australia's most significant cultural events have occurred as a result of the beacon that mining has been able to provide.

As an interesting aside, as much as an influx of Chinese miners and prospectors caused tension in Victoria and across the goldfields, the same wave of Chinese entrepreneurship in the tin fields of north-east Tasmania aroused both curiosity and admiration. The different experience in Tasmania meant that an adoptive son of a Chinese family could be elected as early as 1913. Thomas Jerome Bakhap's involvement in public debate had begun prior to 1900, as discussions of Federation were moving towards a model of nationhood that would restrict non-white immigration. When he was elected to the Australian Senate, after a stint as the member for the state seat of Bass, he proclaimed his Chinese heritage and spoke out against the White Australia policy. Bakhap understood the contribution that Chinese miners and hard-working migrant labourers had made to their adoptive communities. He understood, as a former shop owner and tin miner, the contribution that mines and minerals made to the communities in which they were situated.

But the Tasmanian experience also shows that mines must be managed properly to build sustainable communities, communities that do not just dry up and disappear when the deposit is depleted or no longer economic to extract. Governments must be mindful of both the good fortune and the finitude of the resource in every region—and the responsibility that confers upon government as custodians of the common good.

It is with that in mind that I draw upon Senator Williams' contribution to this debate this evening, because, as he stated, he believes that minerals in the ground do belong to the people. If he believes that minerals in the ground do belong to the people, then he would not be choosing to vote for this repeal bill before us, because it is with that premise in mind that this bill came about in the first place—the fact that the minerals in the ground do belong to the people and that we all do have a share in them. We must take the profit generated by the resource that is in the ground and redirect it to where it is needed and where it will do the most good. We have to support the people who have contributed to the social and economic environment that makes profit-making and prosperity possible. We have to help invest in things that keep our communities alive.

The risk is that the benefits of mining are all too short-lived. It is the case that the markets for Australia's mining resources are often these days overseas—with some notable exceptions, such as the zinc works in my home town of Hobart and the coal fired power plants of mainland Australia. They are plants that are rapidly becoming less and less sustainable in Australia, as compared to renewable energy generation. But given that the bulk of markets are currently and are likely to remain export markets, much of our resource ends up overseas. We must therefore retain the value of the ore in our soil by extracting as much monetary value for it as we can. It is a task at which Australian businesses are adept. We must ensure that profit remains in the nation from which it was originally derived.

That is exactly what the MRRT is designed to do. Just as state and territory governments exercised their ownership of mineral deposits at the start of the 20th century by licensing out exploration and extraction rights in return for royalties, the MRRT is underpinned by the fact that Australia's mineral resources are owned by all of us—something that even Senator Williams acknowledged. All Australians deserve to share in the extraordinary and unprecedented wealth that has been generated by the mining industry over recent years. Naturally, state based royalties do attempt to cover part of this task, but the incredible profits returned by mining companies by virtue of high demand, strong prices and other factors are not adequately accounted for by volumetric royalties alone. State and territory royalties do not keep pace, and have not kept pace, with the profits of mining companies because they reflect a fundamentally different measure of activity.

The fact is that as profits increase Australians deserve a further share of the fortunes reaped from minerals they have gifted to those companies. The social share of profits can come in many forms. I have already spoken about royalties, but there are other social dividends from mining. During the construction phase of the mining project, when profits are relatively low, a dividend is delivered to communities in the form of jobs and wages and investment in the construction of infrastructure that supports towns and regions, as well as the mines themselves. But, as construction comes to an end, employment scales down and companies generate huge revenues without the corresponding social benefit.

In fact, while profits in the mining industry grew by 262 per cent over the decade to 2012, when the MRRT was introduced by the Labor government, only seven per cent of Australia's employment growth was a result of the mining industry. Unlike other industries—for example, the building industries, which often function as a proxy for the economy as a whole—there are relatively few sectors indirectly linked to mining. Profits made by these companies remain extremely concentrated in and restricted to the mining sector, leading to the phenomenon of a two-speed economy that Australians understand all too well.

It is either naive or disingenuous, therefore, for the coalition to assert that Labor ever imagined that the MRRT would be a constant and immediate source of revenue for government. Comparable initiatives, such as the PRRT, show that initial periods of profit based taxes generate relatively little government revenue. But in these periods, it is usually the case that companies are delivering different types of return to communities—as I said, the construction jobs and wages or adequate royalty payments—or simply do not have the types of revenue for which the MRRT is designed. But the MRRT was never supposed to be a scheme for the next six months; it was to account for the boom periods when mining companies are generating huge wealth and little social benefit relative to that wealth. The frequency and regularity of those periods increases when the sector is booming, when prices and volumes are high, and when deductions in the form of depreciation on market values have been run down. The notion that the MRRT has not performed as expected is not borne out by an assessment of the deliberate design of the scheme. It is, like so much of what this government says, a hollow three-word slogan. But Australians will never have the opportunity to benefit from these boom periods in the mining industry if the coalition gets its way and will never see the fruits that it would produce.

I want to take you through some of the areas in which Australians stand to lose from this bill and the repeal of the MRRT, many of which the coalition has included under the vague and obfuscating heading of 'associated measures'. The coalition will start the cuts early on in the lives of Australians, targeting the measured aims at supporting families in giving their kids educational opportunities. Labor introduced a payment of $205 for each child in primary school, and $410 each child in secondary school, last paid in July 2013 under the Labor government. This assistance would have been paid again to around 35,000 Tasmanian families in January this year if the coalition had decided that children's education was worth supporting. Instead, they decided that kids were an easy target in their phony 'budget emergency' campaign before the election.

This assistance follows from its predecessor, the education tax refund. Up to 7,250 Tasmanian families with legitimate claims to the education tax refund missed out on their deductions. And so, the direct method of payment, termed the schoolkids bonus, was one of the recommendations of the Henry tax review commissioned by the Labor government and designed to make the tax system simpler and fairer. Unlike the ETR, you did not need to claim the schoolkids bonus or keep receipts for education expenses, because Labor understood that there are costs in educating kids that families necessarily have to shoulder and costs for which they deserve support. Cruellest of all, this is not even a payment in any way linked to the MRRT. Despite the coalition's rhetoric, it will increase the cost-of-living pressures on Australian families at a time when they can least afford it and a time when they most need support. It is simply about targeting low- and middle-income families in an attempt at ideological purity.

It is the same rationale that the coalition applies in repealing the income support bonus, a tax-free payment of $211.60 that goes to Australians who are most in need of it. Perhaps the most discussed beneficiaries of this payment are the children of soldiers killed or seriously injured in service. Children of veterans aged under 16 years, who are homeless or living away from home, or those under 25, who are unemployed or studying full time, would have been entitled to receive this payment. But, in their infinite wisdom, the coalition have decided that these people do not deserve our country's support. Their sacrifice, it seems, means so little to the coalition that they are unwilling to support them when they need it most. As if it were a defence of this callous action, the Prime Minister insisted:

There are tens of thousands of people who will lose the income support bonus, and I do not suppose that any of them will be very happy to lose it.

He was right about that. He went on to say:

But this idea that the children of veterans are somehow being singled out for mistreatment by government is simply false. … It is an outrageous smear …

It is difficult to understand how the Prime Minister can consider a provision of his government's legislation, their own doing, as an outrageous smear, but he is correct in saying that the collateral damage of the coalition's championing of the wealthy and powerful is broader than just the children of war veterans. The victims of the coalition's cuts also include those people receiving—and the list is long—Abstudy living allowance; Austudy; exceptional circumstances relief payment; Newstart allowance; parenting payment; sickness allowance; special benefit; transitional farm family payment; and youth allowance. The repeal of the income support bonus is, as you would expect, opposed by the New South Wales Returned and Services League and by National Seniors Australia, as well as by other groups that are concerned about the welfare of vulnerable Australians.

The MRRT was also heralded as a chance to secure Australia's future by building a stronger superannuation sector. Compulsory superannuation is a Labor government achievement that guarantees not only the wellbeing and personal financial security of retirees but also the nation's financial security. Among the very many economic achievements of the Keating Labor government, superannuation stands out as one of the most important and enduring features of Labor reform. So important and so positive has superannuation been to this nation that the Prime Minister felt obliged to promise, when he was opposition leader, that there would be no adverse changes to superannuation. But those platitudes offered by the Prime Minister have, like so many of the sentiments he has expressed, failed to survive his transition to becoming Prime Minister on taking government.

Buried in the bill before the Senate is the axing of the low-income superannuation contribution—a move that will increase superannuation taxes for one in three of Australia's lowest paid workers. Indeed, within weeks, the government sought to cut the super of millions of Australians who earn up to $37,000 while boosting the super for 16,000 people who have over $2 million in their super balances. This makes it very clear which end of town this government supports. It has no support at all for low-income Australian workers who would have benefited under the previous Labor government's low-income superannuation contribution. It also speaks volumes about the coalition's priorities whereby any scheme designed to redress the inequality in support for low-income earners so that they can live with security, dignity and opportunity is scrapped in favour of one that increases the wealth of the wealthy. For high-income earners, superannuation can be concessional; for low-income earners, there are no effective incentives for them to contribute to their superannuation. This is shameful. Labor's measure addressed this issue. And disproportionate among the low-income earners who were catered for by Labor's measure were women. It is worth noting that more than 2.1 million women are affected by the proposed change. A significant percentage of these women are mothers who are working part time while looking after their children. This is exactly the time in a woman's career when an additional $500 a year going into her superannuation would be of most benefit for building savings for her retirement.

Not content with stripping these benefits from here on in, the coalition is backdating this cut; it is implementing this tax measure retrospectively—a fact confirmed by the Parliamentary Budget Office's checking of the coalition's election costings. Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax, but part way through this financial year the government has shifted the goalposts to make it harder for low-income earners.

When you combine this move with the delay in increasing the super guarantee to 12 per cent, far from helping out the Australian economy, national savings and economic security will be hit by $53 billion by 2021-22. This means a reduction in available capital for infrastructure investment of around $5 billion based on current industry-wide asset allocations. The coalition has complained, falsely, about a flight of investment from the mining sector because of the MRRT. But the worst thing we can do for investment security is to make capital harder to access—exactly what the 'associated measures' of this bill will do.

Labor will oppose this bill. Labor will oppose the removal of the MRRT and the 'associated measures'. The Labor Party believe in Australians. We believe in our students, our jobseekers, our families, our kids and in the descendants of women and men who sacrificed their lives for our country. We believe in them, and that is why we will oppose this bill.