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Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

25 March 2011

Interview with Geoff Hutchinson

ABC Radio 720, Perth

25 March 2011

SUBJECTS: Minerals Resource Rent Tax; Parliamentary discourse

HUTCHISON:

Mr Swan good morning.

TREASURER:

Good morning.

HUTCHISON:

You will refund any future increases in state-based royalty charges to the big mining companies as long as they support the Mineral Resource Rent Tax.  Is that correct?

TREASURER:

Well, what we've agreed with the mining companies is that we've got an internationally competitive mining tax regime, what we've said is we will [credit] existing royalties.  We've also said that we'll be talking to the states about what they do in the future, but there's no green light in this report for future increases in state royalties.

HUTCHISON:

Have you told Colin Barnett though, that that is the plan, that this may well be the price WA has to pay to keep the miners happy, that it will forego potentially hundreds of millions of dollars in royalty payments?

TREASURER:

Well, there have been already very substantial increases in royalties in Western Australia and we're interested in having an informed discussion with Colin Barnett about royalties and indeed about Federal/State financial relations.

HUTCHISON:

Colin Barnett says this kind of thinking of yours is perverse.  The quote – “Well, bring it on, because WA won't be intimidated by the likes of Wayne Swan”.  So what do you say in response to that?

TREASURER:

Well, I've read those comments this morning and I understand that Colin Barnett is the State Premier of Western Australia, and State Premiers in WA and Queensland have always been pretty assertive.  As a Queenslander and a representative of a resource rich state, I understand the frustrations that Premiers like that have and that's one of the reasons we've put this Resource Rent Tax in place, because what we are going to do is to invest substantial portions of the money raised in infrastructure, particularly in WA and Queensland, but also give a tax break to small businesses.  I mean, in Western Australia something like 200,000 small businesses will benefit from our instant asset write off which is funded by revenue from the Resource Rent Tax.

HUTCHISON:

I wonder if one way of imposing this on the states – and I don't mean the Resource Rent Tax, I do mean the return of those state-based royalty charges to the big miners – is to withhold funding for projects.  As Martin Ferguson implied, you know – what about $400 million of road improvements around Perth Airport?  Would you consider doing that?

TREASURER:

Well, I think Martin Ferguson made the very legitimate point that the revenue from the MRRT does go to investment in infrastructure projects like the Gateway project in Western Australia around the airport.  That's what it's all about, making investments, particularly in these mining communities.  If we don't have the revenue from the tax then we can't make the investments.  Now –

HUTCHISON:

So your message to Colin Barnett is what?  We know you're an assertive State Premier, but come on board otherwise you won't get this kind of money for these kind of projects'?

TREASURER:

Well, first of all we've got to get the legislation through.  We think it's really important to get it through to provide certainty for the industry, to deal with the challenges that come from the two-speed economy, to give a tax cut to small business, to bring down the company rate, to make all these sorts of infrastructure investments.  And yes, there are issues that we'll work through with the states and with Colin Barnett, and Anna Bligh, and with other State Premiers when it comes to the future of royalties. 

But I think the Argus Report made the very important point that we need our investment here to be attractive.  We've reached agreement with the industry. The report makes the point that they don't want to necessarily see continuing increases in royalties.  We've got to reach a balance here and we'll work our way through that with Colin Barnett and the other Premiers.

HUTCHISON:

You say that you've reached agreement with industry, what do you say then to Andrew Forrest then, who says that the mining tax remains unfair and that it was designed by BHP for everyone else to pay?

TREASURER:

Well, that's just complete nonsense.  There's been wide consultation across the industry about this tax.  Andrew Forrest doesn't agree with it.  The mining industry is achieving record investment at the moment and also record profitability.  Now with that, what we have to do is to get investment in infrastructure and we also have to help other industries that aren't in the fast lane, particularly like the tourist industry including in Western Australia.  That's why I want to give tax cuts to small business and bring the corporate rate down.  What we want to do is with this mining boom, make sure we don't leave too many others behind.

HUTCHISON:

Is there going to be enough support Treasurer, in Federal Parliament to pass this bill this year?

TREASURER:

I certainly believe we'll get the support in the Federal Parliament because this is a response to Mining Boom Mark II which recognises the challenges that lie ahead, in giving a tax cut to small business, in making the investment in infrastructure.  I believe we'll get the numbers because this is good for Australia.

HUTCHISON:

We're talking about mining taxes, we're talking about carbon taxes - I just wanted to get an opinion from you on the events in Canberra of the last few days.  Do you think voters are being rather turned off by, be it, unsavoury events outside the House and inside the House, the kind of emotive language, the aggressive language being used on both sides of politics?

TREASURER:

Well, I think the extremism that we've seen in the last few days has been coming from the other side of politics and Tony Abbott's decision to go out to that rally and associate himself with Pauline Hanson and the League of Rights – that's extremism.  And to come into the Parliament and use the sort of extreme language that Tony Abbott has been using, I think just demonstrates that he's unfit for office.

HUTCHISON:

And you don't think that the Prime Minister has been responding like for like?

TREASURER:

Not at all.  I've been sitting in the Parliament and this has been now going on for some months, just not in the past week.  I mean, a couple of weeks ago Tony Abbott had a senior frontbencher go out and compare our Prime Minister to Colonel Gaddafi.

HUTCHISON:

Do you acknowledge that the way these debates are being held, often not able to focus on central issues and more on name calling and mudslinging, that both sides of politics really risk antagonising a broader community, and that there has to be a better debate than the one that we're having?

TREASURER:

Well, I certainly don't want to see my kids grow up with a country where the political debate is filled with intolerance and anger and that's what we are getting from the Liberal and National Parties at the moment and some sections of the Australian community. 

The government for its part has been getting on with the job.  That's why Martin Ferguson were out yesterday talking about dealing with the challenges of Mining Boom Mark II, making sure that Australians get a fair share of the resources that they own 100 per cent and responding to the two speed or multi-speed economy. 

We're getting on with the job.  I mean, yesterday I was out there talking about a competitive banking system, the abolition of mortgage exit fees, so people could walk down the road if they wanted to get another bank.  The Government is very much focusing on the mainstream issues out there.

HUTCHISON:

Sure, but do you also concede that some of those people who are dissatisfied, and whether you like them or not, or agree with where they're coming from, look at a Prime Minister who has, in their eyes, either lied or gone back on an important promise and they find that very, very hard to rationalise and accept and explain away?   Do you accept that there are people who think that?

TREASURER:

I accept there will be people who don't agree with us and that we should be having a debate about ideas, and I made that point in the Parliament yesterday and so did the Prime Minister.  But the personalisation of all this, the violent language, the vilification – that's not coming from the Labor side of the Parliament, it's coming from some sections of the Liberal Party – not all of them – and it's certainly coming from some of the extreme groups in Australian politics such as Pauline Hanson and the League of Rights.

HUTCHISON:

Thank you for talking to me this morning.

TREASURER:

Good to talk to you.