Ms BIRD (Cunningham) (13:45): I would indicate to the member who preceded me that, as a descendant of five generations of coalminers, with many of my family still in the industry, and coming from an electorate that does have coalmines, I absolutely support the range of bills before the House today. I am, in fact, very pleased to speak in support of the Minerals Resource Rent Tax Bill 2011. This bill has very simple objectives. Its first objective is to tax the above-normal profits from mining the ore and coal that belong to the people of Australia. Its second objective is to return the revenue raised by this tax to the people of Australia.
The MRRT will fund a comprehensive policy package which reforms the taxation system, invests in infrastructure and increases the retirement incomes of Australians. It will cut the company tax rate for all companies to 29 per cent by 1 July 2013. It will provide an immediate new tax break for up to 2.7 million small businesses across Australia from 1 July 2012. It will simplify the tax affairs of 6.4 million Australians, with a $500 standard deduction from 1 July 2010 and a further $1,000 from 1 July 2013. It will reward Australians who save money, with a 50 per cent discount on up to $500 of interest income from 1 July 2012, increasing up to $1,000 of interest income from 1 July 2013. It will boost the superannuation incomes of 8.4 million Australians, with the first increase from 1 July 2013, and expand the superannuation concessions to 3.5 million low-income earners and about 275,000 over 50s from 1 July 2012. Crucially, it will invest in our regions through the Regional Infrastructure Fund and the Regional Development Australia Fund.
The only political party in Australia standing in opposition to tax reform and investment in infrastructure remains the Liberal-National party. In an astonishing move, the Liberal-National party clearly do not consider that Australia's minerals and energy resources belong to the people of Australia. Instead, they clearly, by their arguments, believe that these natural resources are owned only by the mining companies. How is it possible for the alternative Commonwealth government to stand by and allow mining companies to rip out of the ground resources owned by all Australians without a thought for how we turn that to the benefit of all Australians? How is it possible for the alternative government to defend an inefficient state-based royalty system which hits all companies—big and small—in good times and in bad, regardless of their profitability?
It is simply impossible to understand the policy position of the Liberal-National Party in this debate. They say they stand for lower taxes and yet they oppose cutting company tax. They say they stand for small business and yet they oppose the instant tax write-off for small businesses, cutting red tape and increasing small business cash flow. They say they want to increase investment in infrastructure in regional areas of Australia and yet they oppose the revenue base which would do just that. However, there does appear to be growing division within the Liberal-National Party, as reported in yesterday's Sydney Morning Herald column by Phil Coorey under the title 'Mining tax now a coalition dilemma'. It does appear there is a ginger group in the coalition which is urging a rethink of the opposition to the introduction of the MRRT. There are deep contradictions in the opposition's history and approach to policy and its bedrock philosophy in dealing with these particular bills. This is finally being realised, obviously, by some members of the opposition.
The MRRT will apply to the mining of coal and iron ore in Australia from 1 July 2012. The extension of the petroleum resource rent tax to include onshore oil and gas projects and all offshore projects will also apply from 1 July 2012. The revenue to be collected from the MRRT is estimated to be $3.7 billion next year, $4 billion in 2013-14 and $3.4 billion in 2014-15. The MRRT is designed to apply to profits attributable to the resource close to the point of extraction. Its design avoids taxing the value-add of the miner after that point, such as the processing and transportation of the resource. As a result, the MRRT is a tax on the limited portion of miniprofits, unlike the company tax, which applies to all income.
The design of the MRRT is fair and ensures that small miners, with an annual MRRT profit of $74 million or less, pay no tax. It is also designed to counter the effects of the state based royalty system, which is inefficient and usually takes a flat amount of value for production regardless of profitability. In other words, it hits companies with the same flat rate no matter what the business environment—good or bad. To add insult to injury, the current taxation system on minerals hasfailed to keep pace with the boom. Royalties have been in decline as a share of operating profits before tax over the last 10 years. Yet the Liberal-National Party remain in defence of this taxation system that does not help mining and resource companies in lean times but does rip off Australian people during boom times.
The MRRT is a progressive form of tax—the higher the mining company profits, the more tax paid. And remember exactly where the tax starts—at the point of extraction. The end result is that Australian people keep getting a fair return for the exploitation of the nation's mineral wealth.
I want to indicate in my remarks that Australians have been subject to a gigantic scare campaign by some mining companies and peak representative organisations on these issues. They have tried to assert during the MRRT debate—and, indeed, during the debate on the introduction of the carbon price—that investment in mining and resources will come to a standstill. Indeed, we have heard that from many speakers on the other side in this debate. The facts, however, can be seen in the ABS figures on investment. Since the government announced the MRRT, mining investment has increased from $35 billion in 2009-10 to $47 billion in 2010-11 and is expected to increase further—to $82 billion in 2011-12.
ABARES's major development project listing released in April this year shows a total planned capital investment of $430 billion. Indeed, with my colleague the member for Throsby, I recently attended NRE Gujarat mining site for their announcement of the expansion of a mine in my own area with significant new investment.
Mining employment has also increased substantially, by 24.3 per cent compared to just 2.1 per cent for the whole of the economy over the same period. The MRRT and the PRRT have been the subject of an exhaustive consultation process since the announcement of the heads of agreement between government and industry in July 2010. The MRRT draft legislation was released for two rounds of consultation in July and September this year. The PRRT draft legislation was released for public consultation in August this year. These bills implement the recommendations of the Policy Transition Group and the principles outlined in the heads of agreement.
The constituency in my electorate understand the basic premise of both the MRRT and the PRRT. My constituents know that they share the ownership of the minerals and energy resources with every other Australian. They know that the mining industry provides a great deal of wealth and employment for Australia. The majority of my constituents support the mining industry, and always will, I suspect. But they also want to know that they are able to share in the wealth of the nation and that generations of the future are able to share in that wealth. The MRRT is important to my constituents because they will be able to share in the commodities boom currently underway.
The region that I represent in this place is an example of the patchwork Australian economy. If you are involved in mining related businesses, you are doing pretty well. But, if you are involved in manufacturing related business or retail, business can be pretty tough. Why shouldn't the Australians living in my electorate who work in or own small businesses not be able to share in the profitability of this period of the mining sector? Why shouldn't the small businesses in Wollongong share a tax break worth up to $6,500 for new plant and equipment? Why shouldn't the part-time worker benefit from a simplified tax system providing automatic deductions for work expenses? Why shouldn't a worker benefit from higher superannuation to retire on a better income? Why shouldn't a self-funded retiree or pensioner or a first home owner benefit from a tax concession on their savings? Why shouldn't the local community organisations and local councils benefit from more funding to develop community infrastructure in the third round of the RDA Fund?
As I indicated at the outset, I am very pleased to indicate my support for the MRRT and PRRT. I am extremely disappointed that the Liberal-National Party in choosing to stand for vested interests and opportunism will try to defeat this bill. But I am confident that the people of Australia will recognise that the government has stood up for each of them and that the government has stood up for the future. The government, determined in the face of a tough campaign by mining companies and the opposition, wants to ensure that all Australians benefit from the proceeds of Australia's mineral and energy resources and are able to translate the current boom into a longterm future for all Australians.