Speech by Joel Fitzgibbon
Mr FITZGIBBON (HunterChief Government Whip) (16:17): The MRRT is not a perfect tax; no tax is. Anyone who has been in this place for any period of time surely understands that. It is complex and brings regulatory burden; all taxes do. The arrangement with the states with respect to royalties is untidy, inefficient and, I think, unsustainable. Review and reform will be necessary with respect to this taxation regime. But the MRRT is, unquestionably, a good thing. It is a good thing for the nation and it is certainly a good thing for the Hunter region and, of course, the Hunter electorate. It is a tax, I can assure this place, which enjoys the support of those who live and work in my electorate. Let us return to the objectives of this tax, because there has certainly been little discussion about that on the other side of this chamber.
Dr Emerson: Hear, hear!
Mr FITZGIBBON: I acknowledge the minister at the table because he was one of the architects of the petroleum resource rent tax. As has been the case with the petroleum industry for decades, the MRRT taxes profits above normal, so-called 'super-profits'. It does so for three very important reasons, none of them acknowledged by those sitting on the opposition benches. It does so because the resource being extracted by the mining companies is a community owned resource. It is owned by the Australian people and, when the price goes up to exceptionally high levels, they should benefit in that outcome. It is also important because, once the right to mine is granted, that right is an exclusive one. That company then has a monopoly, if you like, on the right to mine that resource. They secure that right when commodity prices are X and exercise that right when they are Y or, in other words, potentially much higher. Thirdly, it is important to return when prices are very highand I have touched on thisthe dividends to the broader community. That is certainly where my community comes into this debate.
The people in my electorate would resent this MPI and anyone in the electorate listening to the debate will resent it. To them, today's debate is just about politicspure politics. They just do not understand what the debate is about. They certainly do not understand the opposition's position on the minerals resource rent tax. One moment they hear that the opposition think it is a terrible tax, they hate the tax and they want to scrap the tax. The next minute they turn on their radios and they hear the opposition complaining that the tax does not raise enough money. No wonder my constituents are confused. First the opposition say the tax is going to destroy the mining industry. All my coalmines were going to be closed down when the government announced this tax, according to the opposition, but now they say it has no effect at all. Again, no wonder my constituents are so confused.
Let us go back to first principles. We introduced a tax that, as I said, was to tax super-profits. My constituents thought that was a pretty good idea. At the time, those who sit opposite said, 'It's going to destroy the industry.'
I was talking to many of my constituents on this issue over the weekend, because they have heard the noise coming from the opposition and of course they have heard that in the first two quarters the tax only raised $126 million or thereabouts. I say to them, 'It is a funny thing, isn't it. We said we were going to tax the superprofits. And guess what, coal prices have fallen and there are no superprofits, so we are not getting much tax from the coal mining companies.' Surprise, surprise! Wasn't that our intention. We were never going to destroy the coal mining industry. I am talking mainly about coal, because it is in the interests of my electorate, so I will set iron ore aside. We were never going to tax normal profits. So what is the fuss? I say to my constituents, 'Tony Abbott, the Leader of the Opposition, said we are going to destroy the industry.' We always said, 'No, we are just going to tax superprofits. Coal prices have fallen and there are no superprofits, so therefore we are not raising much tax.' And of course my constituents say, 'That makes a lot of sense,' and they are relieved. They know that we got $126 million more than the Leader of the Opposition would have raised, because he is going to scrap the tax, or indeed would never have had the tax in the first place. My constituents find that a very simple proposition, but they cannot understand the position of the opposition, who seem to change their view about this tax every moment.
Now they have moved to the royalties question. I have acknowledged that the royalties question is a difficult one, because the states have chosen to abuse that arrangement. The states now think they can just keep raising royalties and the companies would be rebated back. The problem in that for my constituents, in addition to all the obvious problems, is this: the mining tax is going to be in part returned to my local community to fund infrastructure in my communities, which is necessary because of the impact of the mining industrythe traffic jams and the like, the rail needs et cetera. But if New South Wales Premier Barry O'Farrell keeps raising his royalties and on that basis forces us to give more of the mining tax back, then, instead of the money being spent in the Hunter Valley it will be spent in Sydney. I apologise to my Sydney colleagues. I will let them look after their interests and I will look after mine. I want the money coming from the mining industry to be spent in the mining region, the region I represent. That is the big difference between Barry O'Farrell taking the money and the Commonwealth taking the money. It is a big difference and it is very important to my constituents. The mining industry has brought great wealth to the Hunter. We welcome the mining industry. It is a great job creator and a great driver of higher wages. But it also brings problems: pollution, air quality, water quality, traffic jams, higher prices in the supermarkets as prices chase wages and child care shortages. The list goes on and on. It is a challenge for us to get the balance right. You let mining go to superprofits it will just run away. Governments will take the revenues and we will end up with too much coal mining in a region like the Hunter Valley. In fact, it is arguable that we already have too much coal mining in the Hunter Valley.
Just yesterday I saw an extraordinary piece in the Newcastle HeraldI will cite it as a report, because I have not had a chance to check the factswhere the Anglo company, which is proposing to establish the South Drayton mine, is objecting to a tourism development because it is fearful that the tourism development will be impacted upon by the South Drayton mine. It is going to be impacted upon, according to the report, because they expect to exceeded their EPA guidelines on a regular basis. They are admitting that they fully expect to be emitting more dust pollution than they are allowed to, and on that basis the tourism development should not be approved. That is pretty extraordinary stuff. I am a great supporter of the mining industry, but we have to get the balance right. We cannot allow shorter-term industries like mining, as important as they are, to threaten sustainable industries, industries that are going to sustain us for centuries to come: agriculture, viticulture and thoroughbred breeding. These, too, are very important industries in my electorate, bringing great wealth in their own right and employing a lot of people in their own right.
So it is about balance. I remain a supporter of the industry. I want the industry to continue, to thrive and to keep bringing wealth to the valley. I want it to continue employing lots and lots of people directly and indirectly. But I also want there to be balance. I want to protect the sustainable industries. In many ways in economic theory the MRRT is an excellent way of helping to strike that balance. The opposition needs to get back to the facts, get back to first principles, and explain to the Australian community, the community of the Hunter Valley, and in particular my community in the Hunter electorate, what they are going on about in this debate today. Do they support the tax or not? Do they want it to raise more? They do not want it to raise anything. They are going to abolish it and in doing so they are going to abolish the infrastructure fund, the small business tax cuts, the super increase for low paid workers and all those good things that are attached to this tax. They need to explain to the Australian people what they hell they are on about.