SUBJECT: Minerals Resource Rent Tax, policy costings ahead of the 2013 election.
STEVE AUSTIN:
Have a listen to this...
Insert: Anne Burke: I'm not taking the cry of childish from anybody in this Parliament today. You should all be wary, I can hear just about everything you are muttering under your breath and I'm finding it very unpleasant. It is such convected behaviour is what the public does not desire to see in our Parliament.
AUSTIN:
The Speaker of Federal Parliament yesterday. Inside Canberra, the Nation's capital where you've heard the news of the day that the Prime Minister says she's currently discussing, negotiating with the states mining royalties. Although the Premier of Queensland didn't seem to be that keen on discussing it. Bernie Ripoll is the Federal Labor Member for Oxley and Parliamentary Secretary to the Treasurer. Bernie Ripoll, good morning to you, Bernie.
BERNIE RIPOLL:
Good morning.
AUSTIN:
And Steve Ciobo. Steve is the Federal Liberal Member for Moncrieff based in the Gold Coast. Steve Ciobo, good morning to you.
STEVE CIOBO:
Good morning to you Steve.
AUSTIN:
Steve Ciobo, why were you thrown out of Federal Parliament yesterday?
CIOBO:
Well, Steve, look I think it's a little known, not exactly a State secret, that when you're a member of the Opposition, the chances of being ejected from the Parliament are significantly higher than, if you're a member for the Government. For example, when we were in Government I never got booted out once and now we're in Opposition and I have been booted out a couple of times. It doesn't take a lot and to be blunt, yesterday it was because the Minister for Trade Craig Emerson continued to speak and ignore the Speaker when the Speaker was instructing him to sit down and I, and probably about ten of my colleagues, were signalling that he should be sitting down and so the Speaker took the opportunity to eject two of us and I happened to be one of the two. So in some respects...
AUSTIN:
You were helping the Speaker?
CIOBO:
...was it unparliamentary? Yes, it was. But, you know, it wasn't sort of the greatest sin ever committed on the floor of the Parliament.
RIPOLL:
Steve, I'm not saying I've never been guilty of doing the same sort of thing myself and I think I used the same excuse; it's just somebody else's fault.
AUSTIN:
You were helping the Speaker do her job and you didn't need help, Steve Ciobo?
CIOBO:
You know, no good deed goes unpunished as they say, Steve.
AUSTIN:
Alright. Bernie Ripoll, I think you would have heard a bit of the Premier's comments earlier this morning...
RIPOLL:
I did, yes.
AUSTIN:
...about mining royalties with the State and Federal arrangements. What are the Federal Government's plans to negotiate over State and mining royalties? Can you reveal that? Because I asked the Premier whether he was planning negotiations next month and he said; not that he's aware of, but he's happy to talk.
RIPOLL:
Well, he may not be involved, but I know his Government is. The reality is that there's been negotiations on and discussions on for some time on exactly the process and how it will work. Obviously, the way that the MRRT, the Mining Resource Rent Tax is designed. We pay back the State royalties to make it a fair tax and, of course, we need the cooperation, as we always do in these things, with the States and Territories and we're working to gain that proper cooperation. Now, they have some power in this area and so do we and so it's a negotiation. We expect the Stets to do the right thing. Not doing the right things by this Government, it's about doing the right thing by the Australia people. The resources belong to everybody. We can all tick off and agree on all the basics. But, I will take note of something that Campbell Newman did say, two things in fact, one; when he was talking about trying to get more out of those resources for the people of Queensland and the State of Queensland, I agree with him in the concept, but if it's ok for the State to say that, why isn't it ok for Federal Government? We've been in this space for a very long time. We've got a Petroleum Resource Rent Tax that we put in place 25 years ago. I don't' see any Government at any time saying we should give that back. In fact it works really well. The whole idea the structured around a resource rent tax is that you get the value out of it, you try to extract the right value out of it when commodity prices are very high and you get a little bit less when commodity prices are low and you make a number of concessions on that basis. So, it does work. It has proven to work for example for the PRRT over more than 25 years.
AUSTIN:
A number of people on your side of politics are not happy with the MRRT. Stephen Jones, backbencher, Chief Whip Joel Fitzgibbon, I think Doug Cameron from memory. There seem to be a number on your side of politics, Bernie, that says the MRRT tax negotiated by Wayne Swan and Julia Gillard with the mining companies is not working and needs to be changed.
RIPOLL:
Well, what they're indicating is that like all of us, we had an expectation that we'd be getting more back from it at this very point in time and unfortunately we're not getting as much. Expectations have to be lowered. But you've got to understand, this is not about a month by month game of how much this brings in. This is, if you look over the long term, generationally, over 20 years or more, this tax is designed to work in that respect. Just like the Petroleum Resource Rent Tax is over a 25 year period. It's raised $28 billion and sometimes it's volatile. Sometimes it brings in a lot, sometimes it brings in a little, but it is the best way, it's an efficient tax method. It is the best way to collect it, not just by sending some arbitrary limit per tonne that you extract out of the ground which means that sometimes when resource prices are very high, you're still getting a tiny little bit back for what is a resource for all Australians.
AUSTIN:
Doesn't this all mean that given you're getting so little back under the new tax, that the whole process of getting rid of Kevin Rudd and his Super Profits Resource Tax was a complete waste?
RIPOLL:
Well, it's just got nothing to do with that at all. Sorry, Steve.
AUSTIN:
Well, it was directly linked. It was the MRRT was the new tax negotiated by the new Prime Minister Julia Gillard after the mining companies squealed so much about Kevin Rudd's profits tax.
RIPOLL:
That's fine. I'm not exactly sure how you tie it all together, or what your point is. The point is...
AUSTIN:
Well, the new tax you negotiated has failed. Even member of your own side...
RIPOLL:
No, but it hasn't, that's what I'm saying to you, I don't get it because it hasn't failed. It has raise revenue. We're not saying it hasn't raised any. We're saying it hasn't raised as much as we would have liked.
AUSTIN:
Five per cent of what was forecast by Treasury. Just five per cent.
RIPOLL:
They got it wrong. Treasury got it wrong and unfortunately we rely on the same Treasury as the Opposition does when they were in Government and Treasury maybe need to do a little bit of work in this area and I'm prepared to give them some criticism where it's due. The problem is we have a volatile resources price market. The market sometimes will be very high and other times we'll see that process collapse. We'll see prices spike and that's why they're called spikes and collapses in prices and the tax will work as it's designed to do. When there is a super profit. Let's get this down to its basics. Who are we taxing? A handful of billionaires. That's all. We're not taking average mum and dad down the street. This is taxing billionaires. Why is everyone so excited about when we tax billionaires? No one gets too excited in reverse. These guys, when they're making extra billions, which is exactly what it is. Gina and Clive, when they're making their extra billions should pay a little bit more back to the Australian people who share in this resource and when they're not making those extra billions, they'll pay ordinary tax, as they should. (inaudible)
AUSTIN:
We're not talking about Gina and Clive, we're talking about Rio Tinto, BHP and Xstrata who were the only three mining countries in the room when you negotiated the MRRT.
RIPOLL:
But the tax applies to all of them. So, who actually negotiated, it doesn't mean the others don't pay. Again, this is part of the complexity of this debate. Just because you're in the room doesn't mean you're the only one that's a party to the agreement. It's across the whole mining sector. There might have been three more people or three less people in the room. It doesn't change the structure of the tax or who it applies to. Those who are making the super profits ought to pay the tax, whether it's Gina or BHP or Rio, whoever it might be. I don't particularly care because those resources belong to the Australian people and when they're not making as much they ought to pay the ordinary amount of tax that they're due to pay. Now, it's a complex system and as we've heard just before on your show, in Queensland in particular, we've got one of the most inefficient, the most muddled-up systems of royalties and tax collection on our resources that means most other countries have a better collection rate to return back to the Queensland people and even Campbell Newman agrees with that and said, they're looking for a better way to collect more.
AUSTIN:
Steve Ciobo.
CIOBO:
Well, Steve I'm almost at the stage where I'm picking my jaw up off the floor frankly after just listening to Bernie for the last seven or eight minutes. I mean, it's just extraordinary. This is the Parliamentary Secretary to the Treasurer who's just been openly critical of Treasury and says that Treasury got it wrong and you can't rely on Treasury forecasts.
RIPOLL:
They did get it wrong.
AUSTIN:
This is coming from the same Government that has the audacity to be critical of the Opposition because we say we cannot rely on their numbers and that's the reason why when it comes to budget costings and policy costings, we're going to wait for the final numbers from the pre-election fiscal outlook, which is the only numbers which we can reliably use. So, I'm delighted that Bernie has endorsed the position that we need to wait for PEFO in order to be able to cost policy, because as he said, Treasury gets it wrong. It's not only Treasury that gets it wrong, Steve, it's this Government and in particular this Treasurer. Bernie sat here and said what has the mining tax got to do with Julia Gillard knifing Kevin Rudd in the back several years ago. Well, bear in mind, Julia Gillard when she plunged that knife between the shoulder blades of Kevin Rudd, did so on the basis that she was going to correct two things; one of them was the debacle of the Super Profits Tax, and the second was the debacle of border protection. And what's the net outcome? They have forecast $10 billion of revenue from their mining tax and what have we raised so far? $126 million. They've committed to something like $10 billion of expenditure. So $10 billion of policy promises, Steve, that the Labor said they're going to spend and they're raised $126 million. And this is our concern; this is a Government that's spending money like there's no tomorrow. They're promising everything to everybody. They're saying they're going to do this, they're going to do that and the problem, Steve, is that there's no money for it and that's the reason why and Bernie has confirmed it this morning why they're now going to break yet another promise and they're going to renegotiate the mining tax after they actually had a signed agreement with the mining companies and the problem too, Steve, is that this is entirely consistent with past form of this Labor Government. This Labor Party committed in writing to Andrew Wilkie to engage in poker machine reform and the Prime Minister just walked away from it and now, the Prime Minister who has once again committed in writing to the mining companies, is going to walk away from that agreement as well and renegotiate it. And why? They're doing it because they desperately need revenue and the way they're going to do it is by ripping funding out of State Governments which means less money for police, less money for the hospitals, less money for nurses all to try to patch up the complete debacle that is the mining tax that Wayne Swan and Julia Gillard put in place.
RIPOLL:
Steve, just a couple of quick points?
AUSTIN:
Bernie Ripoll.
RIPOLL:
Look, we don't fund the police, so...
CIOBO:
The State Government do, that's the whole point.
RIPOLL:
And I didn't say you can't rely on Treasury, either. If you go back over it and listen to it.
CIOBO:
$126 million versus $10 billion.
RIPOLL:
What I said was... Well, I didn't say that, that's just what you said. Look, the policy in terms of what we're spending, whether it's school kids bonus or whether it's a superannuation concession for 3.6 million of the lowest paid Australians, all the good things that we're doing for families are not reliant on the MRRT. It's not as if there's a ledger which is directly this one for that one. Government revenues are there.
CIOBO:
No, they're not Bernie.
RIPOLL:
The MRRT is reaping in money. Not as much as we would have expected (inaudible)
CIOBO:
Bernie, out of $126 million and it cost you $50 million to raise $126 million.
RIPOLL:
Well, that's not accurate. (inaudible)
CIOBO:
It is, they're the published figures.
AUSTIN:
Where are you getting those figures from Steve Ciobo?
CIOBO:
That's the figures that's been released by the Government. That's the compliance cost and the cost of administration of $50 million to raise $126 million. They were going to raise, Steve, $2 billion by this stage and they're raised a paltry $126 million.
AUSTIN:
I'm sorry, Bernie Ripoll.
RIPOLL:
Steve, what there is with the MRRT. This is a long term shift, a change to a much more efficient and a better way to collect tax. That is not a point of argument. Now, it hasn't raised as much as expected, yes, I can see that. It is a disappointment to us that this has not been... but then again, we do not control global prices, they are volatile and they will go up and they will go down. But what we've done is put in place a mechanism which means that as prices go up, Australians will reap a larger share from the super profits that are made. (inaudible) Why is the Opposition so determined that a handful of billionaires keep those extra super profits rather than share them with the 23 million Australians instead. (inaudible)
AUSTIN:
Steve Ciobo, just a brief explanation then I'll have to go on.
CIOBO:
Happy to explain the answer the Bernie's questions. This is not about billionaires. The mining companies have paid $130 billion in taxes in the last decade. They currently pay over $20 billion a year in taxes and in addition to that, for example, BHP is the single biggest tax payer in Australia. These mining companies pay tens of billions of dollars in tax and for the Government to sit there and try and pretend that the millions on shareholders that have direct interests in these companies and those very shareholders who in fact are the people that are, for example, self-funded retirees and people who might have some investments in superannuation funds. Everybody's super, your super, my super, everybody's super that's invested in these funds, they're the people that own these mining companies. They're the people that pay tens of billions of dollars in tax and the reality is that the Australian mining companies are more heavily taxed than just about any other country in the world and it's very neat and simple for the Labor Party to make out this is only about Gina Rinehart and Clive Palmer, but it's untrue, it's not supported by fact and more importantly it is nothing other than despicable class warfare from a Labor Party trying to raise revenue desperately because they are spending more than they can afford.
RIPOLL:
And that's why just earlier on in your program, Steve, Campbell Newman said the exact opposite and said he was actually looking at getting more from the mining companies and raising the level of tax and royalties they pay and I'd rather side with ordinary Australians any day of the week than with BHP or Rio or any of the others. They're doing quite well, thank you sir.
AUSTIN:
This is 612 ABC Brisbane and ABC digital. It is 22 minutes past 9. I'm speaking with two Federal Queensland Parliamentarians. Bernie Ripoll is the Federal Labor Member for Oxley and the Parliamentary Secretary to the Treasurer, Wayne Swan. Steve Ciobo is the Federal Liberal Member for Moncrieff. Both of them are in our Canberra studios at the moment. Can I ask you, gentlemen, sorry, Bernie, my apologies. Bernie Ripoll are there any particular changes that the Prime Minister has indicated that she would deeply like to make with the States over mining royalties? She said she wants to talk next month. Is there anything on the table already? Is there any detail out there? Can you tell me?
RIPOLL:
Well, Steve, I'm not privy to those negotiations and discussions and obviously we are, through the COAG Heads of Treasury Group, meeting with all of the States. This tax or any other tax when it relates back to the States is always a matter of ongoing review and negotiation with the States to make sure that you keep pace with time. Look, that's it.
AUSTIN:
I appreciate that. Now, Steve Ciobo, question for you if I can.
CIOBO:
I want to ask about some of your policy positions. Shadow Treasurer Joe Hockey yesterday in Federal Parliament said the Coalition would not be finalising your costings until the release of the Pre-Election Economic and Fiscal Outlook which is due to happen after the writs are issued in August, after Parliament rises in August. Why so late, Steve Ciobo? Why not get stuff out there earlier so we can look in detail of what the Coalition is planning in terms of its costings. (inaudible) We've got a bit of a problem with mic.
RIPOLL:
Hang on, I'll pass over my microphone.
AUSTIN:
Thank you Bernie Ripoll. Not quite sure what happened, his microphone has just disappeared.
CIOBO:
Steve, this is the very point that I made earlier. It goes to the very core of the way in which these fundings are done and the costings and policies are executed. The reality is that the costings and policy and the forecast in terms of what that actually means are completed by Treasury. Now as Bernie made the point just earlier, there is such a huge variance between what Treasury is saying is going to happen and what actually happens, they forecast $10 billion in revenue, they raise $126 million. They forecast a year ago that the budget deficit was going to be $22 billion under Wayne Swan's budget, the budget deficit ended up being $44 billion. A 100 per cent blow out in the size of the deficit. That's the reason why the Coalition makes it very clear that we are not in a position to rely on the forecasts that are put forward. We don't know the final fiscal position of the Commonwealth until PEFO is released. And what's more Steve, the Parliamentary Budget Office has made it clear that the only numbers that we can rely on are the numbers that are put out in PEFO and that's the reason why we are saying, very clearly , well ahead of the election, everyone will see the full costings of our policy. Those policies will be based on the PEFO forecasts. Those policies, which will be fully costed and implemented should we win. Australians can have certainty that that's going to be what it's going to cost and most importantly Steve, it's entirely consistent with the Labor Party who is refusing to release the full costings of their policies until about the same period themselves. So, from our perspective what's good for the goose is good for the gander.
AUSTIN:
Bernie Ripoll, do you want to respond?
RIPOLL:
Yeah. It's a complete cop out from (inaudible) There's a difference between trying to predict the price of resources in to the future and what that will therefore raise in terms of a particular royalty type payment and the costing, for example, of a childcare rebate or the costing of school expenditure or a schools program or the costings of other things. The fact is the Opposition, like they did last time, refuse to release their costing because they know they're very rubbery. Last time they used dodgy auditors and accountants who were fined and breached the Corporations Act, didn't do the audit they said. This is the mob that the Opposition used last time to say to the Australian people, look, we've done our costings and here it is and they're going to use the same mob again. I mean, this will be the interesting thing; who are they going to go for this time? Some unknown small-time audit firm down the road who actually breached and were fined for their complicity in what was an absolute scam on the Australian people. Look, we know when the election is, we've been transparent and upfront. Let's get the costing and policies out there. People know what the Government is doing and the Opposition should do the same thing.
AUSTIN:
I have to leave it there, gentlemen, I think those microphone problems are going to cause us a few issues, so I might move on. Bernie Ripoll, thank you very much once again
RIPOLL:
Thank you
AUSTIN:
And Steve Ciobo, Steve thank you to you.
CIOBO:
Thanks Steve.