Doorstop Interview
Melbourne
20 May 2010
SUBJECTS: 2010-11 Budget; Opposition Budget Reply; Andrew Robb commitment to provide full list of spending announcements; Andrew Forrest; Resource Super Profits Tax consultations
TREASURER:
Well, it's a really beautiful time of the year in Melbourne isn't it? It's just beautiful, and I've certainly enjoyed my trip here. I've been down here talking about the Budget, out at community groups this morning, talking to business people as well. I've been talking about the absolute importance of bringing the Budget back to surplus in three years, three years early. How important that is to continued strong economic growth, and strong employment outcomes. And I think we've seen today in the Liberal Party just chaos and confusion when it comes to these central objectives which are so important to Australia's economic prosperity.
Mr Hockey can't tell the Australian people when the Liberals would bring the Budget back to surplus. Mr Robb has said that he would publish all their spending commitments, and he hasn't done so. The left hand doesn't know what the right hand is doing, and there's just chaos and confusion, and I think the Liberal Party have demonstrated yet again how unqualified they are to be the alternative government of Australia.
They are arguably, I think, the worst economic team that has been fielded by the conservative side of politics in generations. Over to you.
JOURNALIST:
Just on the RSPT. Could you just clarify, is the Government ruling out amending the rate at which it kicks in – the 6 per cent?
TREASURER:
Well, the Government published its framework a couple of weeks ago. We're consulting in a genuine way with industry. We're getting their views through that consultative committee. We're taking those views on board. We're having a mature discussion with the business community, with mining companies about these matters, and we'll continue to do that.
JOURNALIST:
But is that on the table or not?
TREASURER:
What we've said is we've published the rate, we've published a design for this new tax and we're consulting in the way in which we normally consult.
JOURNALIST:
But you've said the rate isn't up for discussion.
TREASURER:
The Government has said very clearly that we've published the rate, we've published the details. We said there would be generous transitional provisions for existing projects. We're talking to companies about that right now as they come through the door, and we'll continue to do that.
JOURNALIST:
Andrew Forrest says he doesn't want to vote for the Coalition, but if this new mining tax goes through he'll pull out $17 billion worth of projects?
TREASURER:
Mr Forrest can come up with a scary headline and there can be heated threats. What the Government will do is to act in the national interest. Mr Forrest will act in his own interests, we will act in the national interest. Can I just read to you some analysis that's been done by analysts today about these matters, and there will be various views among analysts, but could I just do this to put these matters in perspective.
This is what UBS have said today. They've said that after the RSPT is introduced these sorts of iron ore projects will still enjoy very high margins which will be enough to sustain new production and development. They went on to say that – current prices for these commodities will ultimately sustain production because of high profitability of iron ore businesses.
I just want to make this point. The Government is very genuine in our consultation with industry, but we have been presented with independent evidence that shows that the Australian people have not been getting their fair share of their mineral resources - the mineral resources which are 100 per cent owned by the Australian people, not by individuals, and not by companies.
And what we are doing – I just want to go through this – what we are doing is replacing a royalty regime which the mining industry asked to be replaced and recommended be replaced with a profit-based tax. That's what we're doing. We're having a discussion about that, but what we're also doing is addressing an imbalance in this tax because the report to us said that Australians have been short-changed.
At the beginning of the decade $1 in $3 of mining industry profits were paid in royalties and other charges; now it's $1 in $7. So the Australian people have been short-changed. What we are after is a fair share for the Australian people, and we are also putting in place a new set of arrangements and which do encourage investors. And if you look at that analysis from UBS they don't clearly share some of the views expressed by Mr Forrest. But I acknowledge that there will be sections of the industry that will run fear campaigns, that will defend their interests. My job is to defend the national interest.
JOURNALIST:
(Inaudible)
TREASURER:
I just wanted to make the point – and I said this in my introduction – that there will be analysis done by lots of analysts. Not all of them will agree, in just the same way that not all companies agree about the impact of this tax on their operations. There are a variety of views. That's why we're going through the consultation process that we're going through. We are talking to the companies individually, we said we would do that, we made that commitment at the beginning. We said that there would be generous transitional provisions for existing projects, and that's the way it's going to happen.
JOURNALIST:
Andrew Forrest says you're not returning his calls. Why are you not returning his calls?
TREASURER:
I talk to business people all the time, and over the years I've spoken with Mr Forrest on a number of occasions, and I've got no doubt that I'll speak to him again at some stage in the future.
JOURNALIST:
How genuine are the consultations Treasurer? I mean, there's consultations going with the Tax Panel [inaudible] Rio and Canberra. Are you going to get involved personally in that?
TREASURER:
Well, at the moment what happens is that the Panel is consulting with industry about how they see the impact of these arrangements on their operations. The Panel will provide a report to the Government, and ultimately decisions are taken by the Government.
But we've put in place this Panel – this is very important to understand this – because there are qualified people on this panel. We've got Mr Gailey for example, who is the Vice Chair of the Business Council of Australia, a former President, we've got the Deputy Chair of the Taxation Board. There are people in here who are bringing an expert eye to the submissions that have been made and, of course, at the end of the day they will provide a report to us.
JOURNALIST:
Are you down in Victoria to meet with Treasury officials over the Mining Tax?
TREASURER:
No. No I'm not…
JOURNALIST:
So you haven't met the Victorian Government at all today about it?
TREASURER:
No I haven't met with the Victorian Government, but I'm sure I will, and I have been meeting with State Government's around the country, and I've had a brief conversation previously with the Victorian Treasurer, but I'm not doing that specifically today. But I've spoken to all of my state colleagues about these matters over time, and will continue to do that.
No, I'm here because I've been going around Australia talking to Australians about the importance of disciplined economic management, the need to invest in the drivers of growth through using some of these monies which we will receive from the RSPT to give small businesses a tax cut, to boost superannuation, and to invest in infrastructure particularly in those regions which are producing minerals.
JOURNALIST:
Is it true that Australian trade officials have spoken with China's National Development and Reform Commission about this tax?
TREASURER:
Well, I know that Australian trade officials are talking to the NDRC all of the time and, indeed I'm in Beijing in two weeks time talking to the NDRC myself. So I don't know if that's true, but it wouldn't surprise me if there had been a discussion about that and a whole lot of other issues. That would be entirely appropriate, because discussions with those sorts of officials whether it's in China, or the United States, occur all the time. Thanks a lot.
