Question Time

MINING SUPER TAX

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:24): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about the resources super profits tax.

Leave granted.

The Hon. D.W. RIDGWAY: In the last sitting week, members will recall that I asked the minister a question in relation to the resources super profits tax, in particular, the impact on extractive industries. The minister said:

The honourable member does raise an important matter about what the impact of this tax, if any, will be upon the extractive industries. I have asked my department to investigate this matter.

Later, in a longwinded response we often get from the minister, he went on to say:

In relation to the extractive industry, as well as other sectors of the mining industry, we are seeking an understanding of the impact upon industry, and we will be making whatever representations are necessary to the commonwealth government in relation to that matter.

My department is working on a paper in relation to this issue as we speak and, clearly, we are talking to the industry.

Members would be aware that the extractive industries cover the mining of sand, limestone, gravel and other rock. If we look particularly at some of the construction materials, many come from the extractive industries: cement, concrete (the combination of sand, cement and aggregate), glass made from sand, and roof tiles made from mined clay and other products. Fibre cement sheeting, often used inside houses, is obviously made from cement, which comes from the extractive industries.

The bricks on the outside of a house are made from products from the extractive industries. Steel-framed houses are made with steel from Australian iron ore which, again, is subject to the resources super profits tax. Paving bricks outside a house are made from materials from the extractive industries as are, probably, granite benchtops. If you are a government minister and wealthy enough to afford granite benchtops in your home, they would also be subject to a super profits tax. My questions are:

1. What advice has the minister received from his department in relation to the cost to industry?

2. What impact will it have on housing affordability in South Australia?

3. Will the minister now concede that this ridiculous federal tax will impact on the lives of every young South Australian buying their first home?

The PRESIDENT: The honourable minister will disregard the opinion in the question.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Industrial Relations, Minister Assisting the Premier in Public Sector Management) (14:27): There would not be much left then, Mr President. The information the government has been seeking from the various elements of the mining industry is the impact that the resources tax would have on those individual companies. Of course, part of the problem that those companies face in working that out is that there are certain parameters in relation to that tax, such as the pricing point, for example. There is other information about which there is some uncertainty. That is why the commonwealth government is, as I understand it, seeking to have a number of meetings. I think that the Adelaide meeting is the last one, in June, in a couple of weeks' time.

I have certainly made it clear that the commonwealth needs to clarify the details of this resource super profits tax as quickly as possible. As to what impact this tax would have on the extractive industries, we know that under the current proposal it would apply to such industries. That much appears clear but, of course, the impact would really depend on the rate of return, among other things, that exist within that industry.

As I said, the government has had a number of meetings. The Premier has spoken to the Prime Minister, the Treasurer has spoken to his counterpart and I have spoken to minister Ferguson in relation to some of these matters. I think the commonwealth is well aware of some of these issues, including what impact—

The Hon. D.W. Ridgway: They're not listening.

The Hon. P. HOLLOWAY: Well, I believe the commonwealth will listen but, clearly, it is going through this consultation phase. I expect that it will make some announcement at some point in the not too distant future as to the final form of the tax.

The Hon. D.W. Ridgway: This tax is about as well thought out as your Adelaide Oval proposal.

The Hon. P. HOLLOWAY: The Adelaide Oval proposal is very well thought out. I would have thought it much more sensible than building a stadium and having a train line underneath it. These are the people who wanted to put the Adelaide Railway Station (a long-distance railway station) underneath it—as if you would have people coming on the Melbourne express to watch the football. Can you imagine it? Presumably they would have a long wait. It was one of the dopiest ideas I have ever heard. Of course, the costing they had on their stadium was absolutely—

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: To think they could build a stadium with a cover for the price they were putting was absolutely—

The Hon. D.W. Ridgway: The Colosseum had a cover over 2,000 years ago. You are 2,000 years behind the times.

The Hon. P. HOLLOWAY: The Colosseum had a cover? You must have seen a different one to the one I have seen.

The Hon. D.W. Ridgway: A retractable roof, 2,000 years ago.

The Hon. P. HOLLOWAY: A retractable roof?

The PRESIDENT: Order!

The Hon. P. HOLLOWAY: It must have been a different Colosseum than the one I saw.

Members interjecting:

The PRESIDENT: Order!

The Hon. P. HOLLOWAY: What I do know is that within this country—

Members interjecting:

The PRESIDENT: Order! I suppose they had to have something to keep the lions in. Have you finished, minister?

The Hon. P. HOLLOWAY: I will just return to the question I was asked. The government is listening to the extractive industries and other industries—there was some publicity given to a salt manufacturer. The impact of the tax will depend upon particular financial circumstances. One would expect that the rate of return in some extractive industries will probably be potentially less than in some of the higher risk mining industries. Obviously, if you do not have as high a risk you will not expect so much return.

However, that general comment aside, the government has been collecting information and that is what we are using in our discussions with the commonwealth government. Clearly, it is very hard to know exactly what the impact will be for individual businesses until we know the final form of this tax.

What we are trying to do is to make sure that any structuring of this tax, when it is finalised by the federal government, has minimal impact on the mining industry within the state. The government has made it clear that, in some sectors of the mining industry, there have been massive increases. One only has to look at iron ore prices. Some predict they may well again double for projects that were decided many years ago, and we have already had a number doubling in prices. There is no doubt that in some sectors of the mining industry there are very significant profits.

However, the question for this state is to ensure that any proposals by the commonwealth do not deter some of the very significant projects in this state which, of course, are quite different in nature from some of those where the windfall profits have been made, particularly the coal and iron ore export industries.

The PRESIDENT: The first question has taken 10 minutes because of a long explanation and—

The Hon. D.W. Ridgway: And a computer that was exploding.

The PRESIDENT: —a long answer and too much noise in the chamber.

The Hon. D.W. Ridgway: The computer was hardly my fault.

The PRESIDENT: Order! The Hon. Mr Ridgway has a supplementary.