KIERAN GILBERT: With me now, Liberal frontbencher Senator Simon Birmingham and Labor MP Andrew Leigh. Gentlemen, good morning to you both.
SIMON BIRMINGHAM: Morning, Kieran, Andrew.
KIERAN GILBERT: Andrew, the Access Economics [Deloitte Access Economics] report… you’re an economist, I want to get your thoughts on this straight away… the Deloitte Access [Deloitte Access Economics] report. It says the Government might try hard to impose a surplus on an already fragile economy, that this is essentially a political objective, not an economic one…
KIERAN GILBERT: The Government obviously committed there, Senator Birmingham, to return to surplus. Wayne Swan has reiterated that as well. The Coalition, though… we spoke to Barnaby Joyce… he’s, you know, defending the fact that the savings aren’t out there yet but, gee, the bill’s racking up – it’s another $12.6 billion in the commitment to keep the super increases but without the mining tax.
SIMON BIRMINGHAM: Oh, well, Kieran, look, I mean, firstly, we think returning the budget to surplus is important but we don’t think it’s going to happen under this mob. We don’t think it will happen under Labor. We will just say to the Australian people look at the track records of the parties. We, in government, consistently delivered budget surpluses. This Government has never delivered a budget surplus. It never will and, of course, you have to go way back into the Hawke-Keating years to find the odd budget surplus that’s ever been handed down under Labor, so the track records speak for themselves – that’s the first point.
The second point is, at the last election we detailed an extensive range of budget savings to bring the budget back into surplus and we’ll do the same thing again this time. It’s not easy but you don’t aspire to be in government because it’s easy. You aspire to be there to do the right thing for Australia and for us that is about sound economic management and it is, quite frankly, about having smaller government, more focused government on the services that matter, not the things that don’t, and reducing taxes wherever possible and they’re the things that the Liberal Party should be standing for, we’re proud to stand for and that’s what we will deliver.
KIERAN GILBERT: Andrew, it’s not just the Coalition that doesn’t support the mining tax, of course. There are the small and medium sized miners. Andrew Forrest has been the biggest critic. He says that the Treasurer is pathetic on this, quote, “pathetic” in the Herald [The Sydney Morning Herald] – that was his line this morning. He says the big companies won’t be paying the tax. Now, if this is the argument that’s being made – that Xstrata, Rio [Rio Tinto] and BHP [BHP Billiton] won’t be paying – why not release the assumptions upon which this whole tax is designed?
ANDREW LEIGH: Kieran, we’ve released an enormous amount of information into the public domain around minerals taxation. Let’s recognise what we’re doing here. We’re moving from a royalties regime, which is inefficient and doesn’t take into account changes in exploration costs and changes in prices, to a profits-based tax…
SIMON BIRMINGHAM: Which royalties are being eliminated, Andrew?
ANDREW LEIGH: … that’s absolutely the right thing to do in order to build the efficiency of the sector. We saw this with the Petroleum Resource Rent Tax in the 1990s and we’ll see it again with the Minerals Resource Rent Tax. This is a tax backed by a vast majority of economists. That’s why we’re putting…
KIERAN GILBERT: But will the big players pay? Because the numbers that were put out by Andrew Forrest, and the Coalition’s been arguing this as well, raising questions about whether or not they’re going to be paying an extra cent in tax.
ANDREW LEIGH: Absolutely they will and that money will go to firstly fund increased superannuation which the Coalition on some days says they’ll roll back and other days says they won’t; it’ll go to boosting infrastructure, particularly in the mining regions; it’ll go to cutting the company tax rate; it’ll go to tax breaks for small businesses – all absolutely critical reforms for boosting the productivity of the Australian economy.
KIERAN GILBERT: Okay, let’s get Senator Birmingham’s response to that because it is a two-speed economy. There obviously does need to be some reform in this space?
SIMON BIRMINGHAM: Well, this is a misleading argument that Andrew is running. Firstly, he says this will eliminate, take out of play, reduce the effect of inefficient royalties and have this new tax regime. There’s not a single change to royalties in the proposal; this is just a new tax that comes in – the mining tax – on top of existing royalty regimes, so it doesn’t, of course, achieve any efficiencies. It’s now a poorly designed tax. It’s one of those camels designed by a committee, effectively, here because, of course, the Government has been through the wringer on this. They’ve compromised with some mining companies. In doing so, it’s come out to the detriment of other mining companies. This is now a poorly designed tax. It won’t, over the forward estimates and particularly beyond the forward estimates, raise the type of revenue the Government originally talked about. It won’t contribute to addressing structural deficit problems or the like over the longer term because it’s so badly designed and that’s why, frankly, you’re better off saying ‘we’re going to run a tight and disciplined budget instead and we’re not going to tax this very important part of the Australian economy over and above what’s already being paid by it’.
KIERAN GILBERT: Okay, well let’s just get a quick response on the royalties issue before we come back to Senator Birmingham on, you know, the broader issue of the two-speed economy.
ANDREW LEIGH: Well, royalties will certainly be deductible but let’s look at the big picture on this. It is only the Coalition in Australia that thinks that the big miners are paying too much tax. We don’t agree with that. The Coalition, if it comes into office, is going to repeal a carbon price backed by economists, it’ll repeal a minerals tax and have miners paying less tax and Tony Abbott is in a $70 billion black hole in his costings and he is digging deeper. Frankly, if he’s going to repeal a law, it should be the law of mathematics.
KIERAN GILBERT: Well, the Government did botch the sales job on the original [Resource] Super Profits Tax – there’s no doubt about it – but the public sentiment has shifted on this. Are you worried that you’re going to find yourselves on the wrong side of this debate, that Andrew and others in the Labor Party will say you’re backing the big miners?
SIMON BIRMINGHAM: Well, you’ve got to be willing, of course, to stand by your convictions in these things. The truth is that mining companies making record levels of profit pay record levels of company tax, so they’re already paying a vast amount of taxation. The bigger the profit they make, the more company tax they pay. The more minerals they take out of the ground, the more royalties they pay. The more staff they employ, the more payroll tax they pay. These are companies already paying enormous amounts of tax to Australian governments. They should – they’re big profitable companies – but that doesn’t mean we need to find new and additional and inefficient ways to slug them on top of that.
KIERAN GILBERT: Sorry, Andrew, we’re going to have to move on, my apologies. I think we’ve had a good crack at the mining tax this morning. I want to look at the last issue – we’ve only got a couple of minutes left. The Prime Minister paid a visit to Australian troops in Tarin Kowt – the base in Afghanistan. We’ve got some vision of her talking to the troops. It was a surprise visit. All of these are, of course, for security reasons. This comes at a very difficult time. Yesterday we saw three bodies repatriated to the Amberley air base in Brisbane. It’s a very, very sad time for the ADF [Australian Defence Force] both in Afghanistan and at home. We would be hoping that this would provide a morale boost…
KIERAN GILBERT: We do know, though, Senator Birmingham, as I mentioned earlier, we saw the repatriation of the bodies of Captain Bryce Duffy, Corporal Ashley Birt and Lance Corporal Luke Gavin. It’s been a very tough time – 32 Australians now killed since the operation began – and an awful year this year. Now, we know the security handover by 2014… the Prime Minister says, when she opened the embassy in Kabul – the new embassy – she says this: that it reflected Australia’s commitment to remain engaged with Afghanistan in the spirit of friendship for the long term. In the long term it’s not looking that bright, though, is it? The embassy might be open, shiny and new but on the ground it’s awfully, awfully tough.
SIMON BIRMINGHAM: Kieran, it’s never going to be easy in the foreseeable future in Afghanistan but that’s why everybody needs to remain focused and dedicated and committed to what is a very important mission. You probably couldn’t have a more timely visit by an Australian Prime Minister to Afghanistan to reassure the troops on the ground the reasons that they’re there, the support they have at a bipartisan level here at home in Australia, to reassure the Afghan Government of our commitment and our desire to make sure we see the job through and ensure that Afghanistan is never again a haven for terrorists who can threaten the rest of the world like they used to.
KIERAN GILBERT: Senator Simon Birmingham and Andrew Leigh, Labor MP, appreciate your time, gents, this morning.
ANDREW LEIGH: Thanks, Kieran. Thanks, Simon.
KIERAN GILBERT: A rare note of bipartisanship to finish our discussion – appreciate it, thanks a lot.