PM: Now it's good to be here with Chas Hopkins today, our candidate for Cowen, and it's good to be here at a local community investment where we the Australian Government have helped put the money into this Kingsway regional sporting complex, an investment of some $2.8 million. And I've just been told by the locals here that down here you've got about 4000 netballers who come here every weekend and use these courts. A very practical thing that we had put to use by the local community is how can we make this better and if you look at all the resurfacing of these courts here, we've actually tried to make it better for local people to be able to use these facilities without, shall I say, unnecessary injury. In fact a little girl just fell over there and her mum said she didn't graze her knee this time so that's one good thing that we've done.
But these are the sorts of facilities that we're investing in right across the West, and right across Australia as well, and it's all part and parcel of the infrastructure needs of the nation.
Infrastructure is a key challenge for us all, every time I come to West Australia there is one question I'm asked at every press conference: What are you doing to fund this state's infrastructure needs for the future? And we the Australian Government so far in our two years in office have set aside some $3.4 billion worth of investment in various categories of infrastructure here but there's much more to be done.
And that's why we the Australian Government are stepping up to the plate with our plan for a Super Profits Tax on the mining industry, so that West Australia gets a fair share when it comes to investment in local infrastructure needs right across the state.
Infrastructure Australia, when it did its round of applications for infrastructure needs around the country recently, got $14.5 billion worth of applications from WA alone. $14.5 billion. Every time I meet the Premier of WA, he's got his hand out and he wants some more money for infrastructure. Well we've tried to help so far, but you know something infrastructure doesn't come for free. That's why we need a new revenue source to make it possible for the future. Therefore our super profits tax on the mining industry is about three things.
Firstly, to make sure that workers right across WA and right across the country get a fair share when it comes to their superannuation. That's the first thing, raising that superannuation guarantee from 9 per cent to 12 per cent.
The second thing is this, to give businesses and small businesses in particular a tax break, and for small businesses that ability to offset your $5000 worth of assets purchases in a given year immediately. That really helps with your cash bottom line.
The third thing is this, to also provide money for a continuing fund to support the infrastructure needs of the future. And the largest slice of that fund is likely to come to Western Australia, because this is where so much of the growth around the country is happening.
So in summary three things. One, we need a super profits tax to fund better super for working families. Two, to help small businesses with a substantial tax break and three, to fund this great state's future infrastructure needs as well.
That's what it's all about. In West Australia right now there are some 700,000 workers who would benefit from the superannuation improvement that we put forward. There are 230,000 small businesses here who benefit from the significant tax benefit that we've put forward as part of this package. But on top of that, every West Australian has a big interest in their infrastructure needs for the future: port, rail, road, other infrastructure needs.
Last thing I'd say before taking your questions is this. Is that I noticed the Premier has come out in some opposition to this tax. Can I say that you can't have it both ways. If you're the Premier of WA, you can't go to Canberra and say please give me more money for infrastructure on the one hand, and say no to a proposal to raise money to fund that infrastructure on the other. You can't have it both ways. WA has huge infrastructure needs. What we're talking about, with our super profits tax for the mining industry, is delivering a fair share back to the people of Western Australia for their super, their small businesses and their future infrastructure needs. Now there's going to be a big debate here, I understand it's on in earnest, and I'm over here to actually talk to local miners and to hear their views, and to work our way through some of the concerns which they have raised. But I believe this is an important reform for the future, for the people of Western Australia, for small businesses, for better super for working people but on top of that, for the infrastructure needs of this great state for the future.
Over to you
JOURNALIST: Speaking of the future, those kids you met a little while ago, are you worried that their parents are now going to be paying higher interest rates?
PM: The decision by the Reserve Bank today, let's just cut to the chase, makes housing affordability much harder for working families. Of course interest rates are now at still something in the order of two and a quarter per cent lower than they were when we came to office. But the bottom line is this rate rise today of one quarter of a per cent is still a slug for working families and is hard for housing affordability.
A big challenge for the future is to help with housing affordability nationwide, one of the things that we're seeking to do it to support that through programs like the Housing Affordability Fund, the Rental Affordability Scheme and other programs like that. But there's no bones about it, when you've got a quarter of a percentage point rise in interest rates it hurts the bottom line and it hurts families in their repayments on their mortgages.
JOURNALIST: You wouldn't want any more in an election year though would you?
PM: Well the Reserve Bank makes its own mind up on these things, but the bottom line is for working families, dealing with the challenge of paying off the family home, a quarter of a percentage point rise hits the family budget and there's therefore a real challenge for families in dealing with that and other cost of living pressures.
JOURNALIST: Prime Minister Cape Lambert Resources has announced they're cancelling all planned exploration in Australia [inaudible]. Is that the action that you wanted?
PM: Let me just say, and I indicated this the other day in Canberra when we announced our plan for tax reform, which again is this: a super profits tax on the mining industry on their super profits, and remember in the last decade we've seen those profits go up by about $80 billion, we've seen revenues come back to the Australian people of about $9 billion.
What we're talking about here is a fair share; a fair return for the mining industry but a fair return also for the people of WA, small businesses and people who want better super and better infrastructure. And I said the other day in Canberra that it would be inevitable that were would be people out there that would be threatening to suspend projects, close projects. I would think that this is going to go on for a little while to come yet because we're in the midst of a long negotiation with the mining industry about the implementation details of the super profits tax.
But I would have thought about a project like that, that the right thing to do would be to go to the Government and say here are our details, let's work through that and we're doing that already with many companies around the country.
JOURNALIST: Has it occurred to you to reconfigure the structure of it if you're not going to reconsider it altogether reconsider the structure, the Premier is saying [inaudible] per cent is too high and the super profit is too low.
PM: Well can say that the Premier of WA, I gather, is already putting up taxes on the miners himself. So it's a bit rich to start talking about those sorts of questions with me as I arrive in WA. As I said, the Premier of WA can't have it both ways. You can't say that on the one hand, you want a whole lot of more money to fund this state's infrastructure needs and the infrastructure needs are huge, and on the other hand say that we shouldn't raise a tax from the Super Profits of miners to support those infrastructure needs. We're being fair dinkum about this, infrastructure needs exist, we need some way to fund them, we're doing it through a Super Profits Tax. I think Colin's trying to walk both sides of the street here, and we're just being straight up and down about what we're doing.
JOURNALIST: [inaudible] billion in industry stocks and mining stocks today. Does the Government take some responsibility for that in these announcements?
PM: Well when it comes to any adjustment to taxes in the future, of course it'll take a while to filter through the system. Can I say in relation to various of those stocks that you're talking about, they've gone through a very wide trading range of the last 12 months, lower and higher than where they are at the moment, and these things will sort through over a period of time.
My basic concern as the Prime Minister of Australia is how we deliver a better balance, a fairer share, for the Super Profits being earned by our mining companies, a large slice of which goes overseas, and the needs of the people of Western Australia: what they need for their infrastructure, their roads, what they need for their basic infrastructure facilities. Small businesses, the support that they need to meet their bottom line. As well as working families who deserve a decent, and dignified retirement through better super.
We intend to get the balance right.
One thing I'd say about the mining industry on the question you raise is, we the Australian Government through the Treasury have done independent modelling about the impact of what we're proposing. If the super profits tax on the most profitable miners, to get a fair share for working families, but at the same time is a better set of tax arrangements for those small to medium companies who in a given year may not earn any profit at all. In fact, they are net beneficiaries from the proposal that we've put forward.
And the last thing is this: we've also proposed a billion dollars worth of tax concessions for the exploration industry, to make it easier for them who are currently penalised under the existing tax scheme.
What does the independent modelling of the Australian Treasury demonstrate? That in fact you'll see an increase in mining activity of about 5.5 per cent. So you're going to have a lot of threats, a lot of warnings about dire consequences. That's all part and parcel of an inevitable industry reaction and can I say this: I'm standing for a fair share for working families and for small business and for the infrastructure needs of the people of West Australia and the people right across the country when you see super profits like the ones we've seen over the last decade, mostly disappear out the back door and overseas.
JOURNALIST: You're here to talk to miners about their concerns to curb what the Premier has to say about it. Is there any room to give on this tax?
PM: Well what we've said already is that we believe we've got the overall design of the super profits tax right, but we're here of course to discuss with the mining industry implementation details. And we are, as we said in our statement from Sunday in Canberra, open to those discussions. And we are already doing that with many miners from WA; my own home state of Queensland is a huge mining state, and with miners there and right across the country.
And of course there's a difficult transition and there's a legitimate public debate about it, but I go back to the basic point: What the Australian people want is a fair share from the super profits of our biggest mining companies, a large slice of which is currently heading overseas without a fair return for people in this country.
JOURNALIST: Is the 40 per cent on the table at all or is it non-negotiable?
PM: Geoff we think we've got that about right, what we're talking about-
JOURNALIST: -so is it non-negotiable?
PM: -we thing we've got that about right-
JOURNALIST: -That would make it absolutely non-negotiable-
PM: - I think we've got it about right -
JOURNALIST: -so that's right?
PM: -and I think we've got that about right as well.-
JOURNALIST: - I'm right or you've got it right?
PM: I think we've got that about right. What we're talking to them about is the implementation details, and there's a lot of implementation details to be worked through. I'll draw your attention to the document that was released in Canberra on Sunday, which outlines the process of consultation we're going to have with the industry right across the country, here in the West, in Queensland, elsewhere, other big mining companies, to make sure that we deal with the circumstances of individual miners. And many of those miners are saying well here are our circumstances, how do we work in with this new proposed system, which after all does not come in for some years.
JOURNALIST: Haven't you given up all real chances of picking up any other seats in WA? There appears to be quite a significant backlash.
PM: Well can I say I've just been to the local shopping centre, and I had a lot of local people come up to me and say it's about time we got a fair share from the super profits from the mining companies. Can I say to folk in Queensland I was talking to the other day, big mining state, and here today, there's a whole lot of people in this great state of Western Australia who do not get direct access to the super profits of the mining companies. There's a whole lot of people who don't get a fair share. What we're talking about is those 700,000 workers who frankly should be having better superannuation for the future. 230,000 small businesses. Let me say I think these are very important members of the WA community, and we're sticking up for them.
One other thing I'd say is this. The State Premiers, privately, have said to me in the past, that it's often very difficult for them to negotiate individually with the biggest mining companies in the world. The advantage of this arrangement that we're putting forward, for a super profits tax, means that our mining companies, the biggest ones, will be dealing with the Australian Government. And in fact many of the State Governments have suggested in the past this isn't a bad way to go.
Can I say what I'm concerned about is making sure we are in a position to serve and support the infrastructure needs of this great state of Western Australia in the future. Money doesn't grow on trees, what you've got to do is make sure you've got a revenue source in order to fund the infrastructure needs of WA. Colin Barnett says to me all the time I need more money to build this that and the other. Well Colin, this is the answer, this is the way through. As I've said before, I don't think it's quite fair dinkum to walk both sides of the street on this. One the one hand, you're either saying, legitimately, that you need more funding for infrastructure in WA, but on the other hand saying that there shouldn't be more taxes on the mining industry to do that, when after all the WA Premier is doing precisely that himself.
JOURNALIST: Would you say there's a chance then of getting you to reconsider scaling back tax on the mining-
PM: We're always up for negotiation with the industry and I've spoken at length by the way about this proposal one the super profits tax with Colin before we announced it, just so you're aware of that, and our officials were over here in West Australia for most of the week in fact prior to its announcement working through the details with WA officials and with the WA Premier. But with the mining industry itself, we are open to a discussion about the details of the regime, its implementation arrangements because we want to make it as right as possible for each individual miner.
The mining industry is a fantastic industry. I'm from Queensland, it's a mining state, and I have a long, long history of dealing with our own miners. Queenslanders like Western Australians, want a fair share themselves from the resources which ultimately are owned by the people of WA, the people of Queensland, the people of Australia. And that's what we're on about here. A fair share for super, a fair share for small business and a fair share for future infrastructure.
JOURNALIST: Is your Government responsible, or your Governments proposal responsible, for Cape Lambert pulling out of planned exploration or do you believe that it's just an excuse for something that they were always going to do?
PM: Well that's why I've said before we've got many, many companies that we're dealing with at the moment, and there are thousands of mining companies across Australia, each with different circumstances. And there are hundreds, if not more here in the West, with different circumstances.
Well the important thing that we're doing with each of those is working through the details of each of their projects with them, seeing what we can do to assist with the implementation arrangements. I would have thought it would have been useful for any company, making those sorts of announcements, to check with the Australian Government first, work through the detail of how our proposal works through with the circumstances for their particular venture.
And if you're talking about an exploration company can I say this. For the first time, there is a billion dollar set of new tax incentives to help exploration. My discussions with the WA Premier in times past, you know the big missing link here is in the West and my own state of Queensland, not enough tax incentives for exploration companies. Because these folk are often suffering so many losses up front they don't actually make profits until much later.
As a result what we've done is brought in a set of new measures to help them because the future of the mining industry, in which I passionately believe, is having a strong exploration sector, with new tax incentives, helping those small to medium companies who are not making profits up front, and that's where this system of ours benefits as well, and on top of that, yielding for the whole state and the whole nation, the benefits which come from the super profits tax, when bear in mind, $80 billion more in super profits, compared with a decade ago from the mining sector, only $9 billion in extra revenue for the Australian people to meet their needs, and so much of that $80 billion heading out of the country.
I think people would like a fairer share, a fairer share for the mining industry, but a fair share for working families and having said that folks, I've got to be somewhere else.
Thank you