Mineral Resource Rent Tax 2011
I rise to speak in this second reading debate on the Minerals Resource Rent Tax Bill 2011 and cognate bills. We have before us today yet another landmark reform of the Gillard Labor government. It is a reform that moves beyond parochial short-term interests towards the long-term national interest—a reform that ensures that there is continued investment in mining while lowering the overall tax burden of Australian businesses; a reform that ensures all Australians benefit from the natural resources with which this country has been blessed.
As we all know, these resources have a value on international markets. They are the raw materials needed to build growing societies and economies, which is why there has been such demand for these resources from Asia—and China specifically. However, it is clear that the prosperity resulting from the resources boom has not been reflected across all sectors of the economy. While mining companies have grown dramatically and have posted profits that challenge our imaginations, the rest of the economy has grown at a slower rate.
In fact, the profit reported by BHP Billiton last year was $22.5 billion. Rio Tinto posted a profit of some $14 billion, while that so-called 'small miner' Fortescue Metals Group reported a profit of almost a billion dollars. This means that for every hour of the debate in this chamber Fortescue Metals will make over $100,000 in profit, Rio Tinto will make more than $1.5 million in profit and BHP Billiton will make $2.5 million in profit. Yet we heard just the other day that, at least in Fortescue's case, they have not paid company tax.
I do not believe that some of these companies are contributing as much to society as is reasonable. I do not believe that this is fair. We have before this chamber, legislation to ensure that the entire community profits from the exploitation of resources which I believe belong to every Australian. As is the nature of mining we have but one opportunity to ensure that the benefits of our current resource boom are shared with all Australians. After all, we can only dig up these minerals once.
The member for Hasluck was talking about value-adding. I regard this legislation as value-adding for all Australians. That is the added value that we get from the minerals boom. This was certainly a view expressed in the Henry tax review, who thought the Australian community 'should seek an appropriate return from allowing private firms to exploit these resources', and: A rent-based tax would, over time, earn for the community a greater return from the use of its resources while still attracting private investment.
Philip Daniel, the Deputy Head of the IMF's tax policy division, said this was a 'significant worthwhile reform' and urged other nations with large mineral deposits to follow our lead.
This legislation is particularly pleasing to me, as it allows for further reforms to two areas that are among my key passions and concerns: small business and the future superannuation savings of women. As many in this chamber know, before my election to this House I operated my own small business for 10 years. It was simultaneously one of the most exciting and exhilarating times of my life, but also an anxiety ridden part of my life. I do not regret for a moment branching out on my own and diving into running my own consultancy company, but there is a constant pressure that comes from knowing that your mortgage payments are entirely based upon your ability to manage your cash flow and drive your business forward. It is a daunting task, and the rate of failure is high, but, as I saw at my small business seminars earlier this year, there is no shortage of people out there willing to take on the hard but rewarding task of owning their own business.
These people play a very important role in the economy of the country—in fact, it is often said that small business is the backbone of the economy. So I am very pleased that the revenue from the Minerals Resource Rent Tax will go towards lowering the company tax rate and to the introduction of an instant assets write-off for small business for each and every asset worth up to $6,500. The impact that this will have on those small businesses, particularly start-up businesses, will be enormous. This is a significant reform that will mean so much to small businesses. They will now be able to buy new IT or some other equipment and immediately get a write-off on their tax. These changes will benefit Australia's estimated 2.4 million small businesses, including the more than 17,000 in my own electorate. On top of this is the cut to company tax that will benefit each and every company in Australia.
The legislation before us today will also provide a boost to the superannuation savings of Australians through the implementation of a better superannuation guarantee. Compulsory superannuation is now 20 years old. It is a Labor reform that has contributed greatly to making sure that all Australians have a comfortable retirement. However, it has become clear to me, and to many on this side of the chamber at least, that more must be done to ensure that people entering their retirement do not have to worry about their financial matters. Far too many Australians, women in particular, are not retiring with the level of savings they need to maintain a comfortable lifestyle. I have long had a keen interest in the retirement savings and financial planning of women, an interest that has only strengthened on being elected to this place.
Since becoming the member for Canberra I have seen too many women who are not in control of their finances. I have seen women who are the victims of domestic violence sleeping in their cars with their teenage children; women who are on their own with small children in search of social housing and financial assistance; women who are on the pension and still having to rent in the private market; and desperate women in their 60s, who are finding it hard to get work but need to keep working because they do not have enough for their retirement. It is for these women, and for the many more Australians, that this Labor government wants to increase the superannuation guarantee from nine per cent to 12 per cent. It is for these women that Labor will improve the super for lowincome earners. It is for these women that Labor will increase the concessional super cap. Labor's reforms to the tax system and to the superannuation guarantee for low-income earners will assist so many Australians, particularly women who are employed part-time while raising a family.
I have said in this place before and I will say it again: a woman must have a strong superannuation account and assets if she is to have choice and if she is to avoid money worries later in her life. An education gives you choice. Fertility control gives you choice. And financial planning and independence gives you choice. This is one reason why reform of superannuation is critical. These reforms will help to ensure that for millions of Australian women retirement is not a burden, that woman will have financial independence into their retirement and will not need to worry about how they can afford to live.
I find it quite difficult to understand why those opposite would oppose these reforms. I find it really hard to understand how the party that claims it is the champion of small business is opposing tax cuts and tax concessions to small businesses. I do not know how they can be talking to small businesses in their electorates and telling them they oppose a tax cut. I do not know how they can be in here in this House, knowing, as this government does, that so many Australians are not going to retire with enough money, and opposing measures to do something about it.
Perhaps more concerning to me is the fact that, once again, if this legislation passes—and I believe that it must and will be passed—those opposite plan to repeal it. Let us be clear about what exactly they want to repeal, because it is more than just removing a rent tax on mineral resources. It will mean winding back the retirement benefits of millions of Australians. It will mean removing millions of dollars of tax concessions to small businesses. And it will mean not decreasing the company tax rate.
These are the clear messages from the Leader of the Opposition about what he would do if he becomes prime minister: those opposite, if in government, will not decrease the company tax rate and will remove tax and super concessions for small business and working families. Of course, they could remove the tax and keep these concessions and tax cuts, but they have not yet answered how they would pay for that or how they will fund the other promises in their $70 billion black hole.
While the opposition will oppose this—like everything else—the fact remains that this legislation is right for all Australians and fair for all Australians. It is in the interests of small businesses. It is in the interests of millions of Australian working families in their retirement, particularly women. And it is in the national interest. I commend it to the House.