Senator RYAN (Victoria) (15:11): We have just had a speech here from Senator Singh that reinforces what Senator Fifield had to say about Senator Wong’s alleged answers to the question.
Let’s go back to what happened in question time. There was a refusal to answer whether or not the mining resources rent tax had raised any money. Then from Senator Edwards there was a refusal to actually release or concede any talk about what impact the assumptions about prices for iron ore and coal would have upon the MRRT. But I have to address a couple of points that Senator Singh raised there.
Senator Singh raised the false comparison between the MRRT and the PRRT. There is a very big difference: the PRRT is for petroleum that is taken out of Commonwealth territory, for which no royalties are extracted, unlike the minerals this government is attempting to levy an additional tax on, which are already taxed at the state and territory level.
We keep hearing from this government that somehow royalties are less efficient. In some cases they may be, but it is not a black-and-white issue. This government has, if anything, made royalties more efficient. Up until last week and ongoing over the course of this tax are mining companies throughout Australia spending millions upon millions of dollars on accountants’ fees, auditors and lawyers merely to determine whether they have to pay nothing—merely to determine that they do not owe the government a single cent, which is what is happening today. If anything, that is making it more inefficient because royalties are a simple, transparent tax levied upon volumes and occasionally prices.
One thing this government does not want to admit is that we do have price-sensitive royalties. It is very simple to know how much you owe a government in royalties: it is simply how much you have dug up out of the ground and sold. Only this government with their Greens cohorts in the corner could develop a tax that turned into an accountant and lawyer employment scheme but delivered the Commonwealth no revenue whatsoever. This got through on your vote, Senator Di Natale. It got through on the Greens’ votes.
This goes to the core of what this mining tax was about. It was about a seizure of state revenues. What this government will not tell you when it talks about spreading the boom is that the royalties levied by state governments are entirely appropriate. They pay for teachers, nurses and the hospitals we heard Senator Evans talk about. The Commonwealth wants to seize control of those mining revenues and have them at its own disposal.
Every state in the federation, through the horizontal fiscal equalisation measures, benefits from Western Australia and Queensland increasing their royalties. Within three years, the people of Victoria will be receiving a higher share of GST revenue precisely because Queensland and Western Australia have increased iron ore and coal royalties. That is the way the system is meant to work.
Horizontal fiscal equalisation keeps royalty revenues within the ambit of the state and territory parliaments. They are the revenues that pay for our roads and our public transport. Yet what we have from this government is an attempt to seize those revenues because it does not want to support state governments doing such things. It would prefer to be able to have announcements of its own and dish out the money, using it as a form of patronage rather than allowing the states and territories to be autonomous in what they do.
The royalties are precisely in the rights of the states in order to protect their financial independence and, no matter what construct this government comes up with, no matter what class war it invents, running around and saying it wants to spread the benefits of the boom, and no matter what slogan it comes up with, those benefits are already being spread. Those benefits are being used today by our state governments in paying for those services that are so critical to many of our citizens.
We do need to look at the antecedents of this tax. This tax was based on the failed and flawed RSPT model, which was itself, to quote Senator Fifield, a bastardised version of what was outlined in the Henry review. It was nothing less than an attempt by the Commonwealth to effectively seize equity in our resources industry—
Senator Cormann: A grab for cash.
Senator RYAN: It was a grab for cash—thank you, Senator Cormann—in order to plug a budget deficit and it actually exposed the Commonwealth to substantial liability. What the government will not admit either is what liabilities the government has now against future revenues of the MRRT because of the credit being given for payments for state royalties. This tax is a debacle. It symbolises the complete failure of this government to do the most basic economic tasks.