PM: Thanks for coming. I wanted to make some remarks about the RSPT, the Resource Super Profits Tax. After I've made some remarks I'll then hand over to the Treasurer and to Martin Ferguson to add to them.
The Government has received, now its interim, first consultation report from the first consultation panel which has been dealing with the contents of the tax proposal and the individual representations being made by individual mining companies. The Government will not be releasing this report or those which follow it because it's, of course, is a series of confidential consultations between the Government and industry.
However, the reason for calling you together today is to simply underline the fact that based on an initial round of consultations, first, consultations are going well, second, we do not expect to land any agreement with the mining industry any time soon. Anyone out there expecting that there'll be some magic deal at midnight tomorrow night is wrong. That's not how it's going to be. Furthermore, this is going to be quite a long and protracted negotiation over quite a long period of time. And there I speak of weeks, at least, if not beyond.
The Government of course, is sitting down with companies from right across the mining industry and will continue to do so because we believe it is right that we understand fully the implications of the Government's proposed tax on the individual circumstances of each company.
Furthermore, I wish to emphasise that the Government remains fully committed to a Resource Super Profits Tax consistent with the framework that we announced on 2 May. That of course, includes a 40 percent rate, that, of course, includes making sure that we can also bring about other elements of tax reform as well.
These reforms from the Government's perspective, are fundamental to building economic growth for Australia in the future because they make possible bringing down the company rate, they make possible changes to the taxation arrangements for small business, they also make possible the delivery of increased superannuation entitlements to working families.
For us therefore, this is important reform. We remain fundamentally committed to it. We intend to get on with the job, but this is going to take quite some time yet.
Treasurer, like to add to that?
TREASURER: Thanks, Prime Minister. I just wanted to make a couple of points and I think I made them quite strongly on the 2 May when we released the response to the Independent Tax Inquiry, and that is, fundamental reform is absolutely necessary to strengthen our economy for the long-term. And this reform of resource taxation is absolutely fundamental to boost investment, to strengthen the economy over time, but most importantly to deal with the challenges we face as we go forward, to build our national savings, to invest in infrastructure, to make our economy much more competitive by lower corporate rates across the board and in particular, tax incentives for small business.
Now, I think there are many here who are aware that over the years, particularly the last 25 years, it has been the hard, fundamental reforms that have built the strength of the Australian economy which has assisted us so much in recent years. This is fundamental, hard reform.
The Government is not surprised that it is meeting fierce resistance from some of the biggest companies in the country, and indeed, some of the biggest resource companies in the world. That is just a fact of life, and it is naïve for anybody to expect that it would be different because they will have to pay a bit more tax.
There is compelling evidence in the Henry Report that they've not been paying their fair share, but the Australian people deserve their fair share, and compelling evidence in that report as to what we must do for economic reform as we go forward to build our national savings, to make our economy more competitive through lower corporate rates and to invest in infrastructure. Thanks.
MINISTER FERGUSON: Might I remind you that this is a tax on profits. Contrary to what the Leader of the Opposition is saying, this is not a tax on extraction. We should also not forget that the industry itself has argued for tax reform. It has actually argued in support of a profit-based tax system.
What we are about putting in place is a modern tax system to actually take forward the resources and energy sector in the 21st century. We took on a debate 25 years ago akin to this with respect to the petroleum industry, and we've come a long way in that 25 years. Last year we landed the biggest ever single investment for a project in Australia.
What we're about is bedding down the detail and putting in place certainty, which ensures that we get a fair return for the Australian community for their resources during the good times but I also remind you that during the bad times there is also some relief for the mining industry. And in the past when we had a total focus at a state level on an extraction tax, time and time again this, the very mining industry that was approaching treasurers and resource ministers to actually get some relief from the royalty payments, and we should never lose sight of that because this is about a fair approach to how we develop the resources sector in the future, akin to how we put in place, 25 years ago, a Petroleum Resource Rent Tax, and the only person and organisation that is now opposed to the resources sector actually paying a fairer return to the Australian community during the good times is actually the Leader of the Opposition and the Coalition.
PM: Just before I take your questions, the Government therefore remains fundamentally committed to delivering this tax reform, important for the nation, important for the industry. Secondly the Government is entirely prepared for the sorts of scare campaigns that we've seen in times past. We saw it with the introduction of the Petroleum Resource Rent Tax, we saw it over Mabo, we've seen it in relation to industrial relations, each of which created a furore at the time with the mining industry at various stages saying that would end in the collapse of the industry, none of those scare campaigns proved to be accurate nor does this one have that potential either.
JOURNALIST: Whatever changes you make will be made before the election?
PM: We will take this process of negotiation seriously Michelle, however long it takes. We don't intend to be railroaded by any particular timetable, we intend to get it right and we will take those negotiations seriously. Our commitment to the reform hasn't changed one bit.
JOURNALIST: Mr Rudd why not offer the taxpayers a break here and offer a deal to the mining sector and say we'll back of our ads if you back off your ads while this consultation period proceeds?
PM: Well it's quite plain that, and I've seen some reports of advertising campaigns for the mining industry up to $100 million - Clive Palmer's probably kicking in I don't know - but the bottom line is we've got a responsibility to rollback against the misinformation, and there's a fair bit of misinformation out there. And it's in the public interest that that occur and we don't resile from that one bit. This is an important tax reform for the nation, any significant tax reform results in a public information campaign of one description of another. This is a major one. We therefore have a responsibility to make sure it is a debate based on facts, on facts, rather than misinformation.
JOURNALIST: The miners are going to be in town tomorrow, is this press conference, is this statement to them in advance you're not going to be pushed around?
PM: Well look I am sure when the miners are in town, Martin will have some time with them, he's always a cheery chap. Wayne I think you're going overseas aren't you?
SWAN: But we have been spending a lot of time together.
PM: And what I seem to remember last time that we had what is I think called a "minerals week" is that I had all those folk from the mining industry round for a drink beforehand, I am sure I'll do so again, unfortunately I can't attend the dinner itself -
JOURNALIST: (inaudible)
PM: I'm speaking at a Chifley Research foundation. I really haven't thought that through Phil but I'll let you know.
JOURNALIST: Was your decision to go with mining ads on the part of the Government a mistake in terms of what it's done to your credibility?
PM: Well first of all, we don't back away one bit from our responsibility to make sure we have a public information campaign on a major area of tax reform based on facts. Secondly the mining industry has very deep pockets. As I said, reports out there circulating of a campaign up to $100 million, that's a lot of advertising. We therefore have a responsibility to make sure that this is a debate based on the facts.
Furthermore, you go to the question of guidelines and the probity of decision making processes, can I make it very plain that the Government has adhered to the guidelines which it announced earlier in 2010 and we've adhered to those guidelines. Those guidelines make specific provisions for certain compelling circumstances, those compelling circumstances arose. We don't back away from that decision one bit.
JOURNALIST: Prime Minister, hello, we're doing a profile on Julia Gillard for Australian Story -
PM: Oh good.
JOURNALIST: Which has been sort of very interesting in the last couple of days, what we'd like to know from you is do you think she'll be the next Prime Minister?
PM: You know what I've said many times in the past when asked this subject, she's a fantastic Deputy Prime Minister and she's going to make a fantastic Prime Minister as well one day.
JOURNALIST: On the issue of the advertisements, you spoke of your system that you put in place, but in fact back in 2007 you in fact said that the Auditor-General would have it. You didn't say anything about giving yourself a get out clause of giving the Minister the right to give you an exemption. Why, given that you offered a 100 per cent guarantee that you wouldn't do what the previous government did, should I believe anything that you say about anything?
PM: First of all can I say that in the debate in 2007 it was about whether or not we would first of all bring down the quantum of public advertising, we have done that. Secondly, would we therefore introduce as well a set of guidelines anchored in the Auditor-General, yes we said that as well. Thirdly, very soon after the Government was elected, the Auditor-General in fact wrote to me and indicated that he regarding this as potentially in conflict with his position. Nonetheless we proceeded, and we proceeded on the basis they we'd review how those arrangements went for a period leading up to 2010; it was then subject to review. Subsequent to that review, the revised guidelines which introduced the Independent Communications Committee, that decision was taken and revised guidelines were issued I think in March of 2010.
Those guidelines contained the provision we referred to before, because exceptional circumstances do from time to time arise and that is the set of provisions that we drew upon in the case of this particular campaign.
On the question of the quantum, we've honoured our commitment. We implemented a set of arrangements with the Auditor-General for the first two years. There were considerable complaints about that initially from the Auditor-General, subsequently also from the Opposition, I think in the Public Accounts Committee level, the Opposition welcomed the change in the guidelines including the content of them, that is the full content of those guidelines.
JOURNALIST: What can you tell us about the Government's decision to move asylum seeker families to the West Australian goldfields and is there concern in the Government about this issue damaging the Government in the polls?
PM: Can I just be very plain on the question of asylum seekers, we're not going to be party to some fear campaign run by the Liberal Party in the community about asylum seekers. We believe that we should have a proper process to deal with genuine asylum seekers, we should have a proper process to return those who don't pass the criteria for being accepted as a refugee to return those to their country of origin. That's the right thing to do.
So we're not going to engage in some sort of race to the bottom as, which seems to be being embarked upon by the Leader of the Opposition. What we have out there is a fear campaign based on a whole series of myths, a whole series of myths. Let's go to one of them. Every year in this country, going back to Mr Howard's time, we have about 13,000 refugees come to this country. What varies from year to year is whether they come by boat, whether they actually arrive by plane or whether they are processed out of various refugee camps around the world, but the overall number's about the same.
That's the reality here. Now the fear campaign being mounted by our opponents is of a different type all together, based on a series of myths. Let's have some truth in this debate, some absolute truth in this debate. We have a fair and balanced and reasonable and humane asylum seekers policy, we believe it is the right policy for the future. And I think it's time that this scare campaign and fear campaign being mounted by our political opponents was confronted for what it is, which is essentially based on a series of untruths.
JOURNALIST: Prime Minister, where will you begin, when will you begin then processing Afghans and Sri Lankans again and will you do that before the next election? Will you give us some sort of timetable as to when those people who are in detention will know when that will come to an end?
PM: Firstly, the policy as it relates to both Afghanistan and Sri Lanka is entirely consistent with the one that we've had since the Government has been in. Secondly the operation of that policy is entirely contingent on changing security circumstances in countries of origin. Various parts of Sri Lanka, various parts of Afghanistan, that's why the decision to suspend processing was taken. As to what happens at the conclusion of that suspension period, that'll also be determined by the circumstances in those countries.
I go back to the general principle however, we have a fair, balanced, humane, tough border control immigration policy. We think it's the right one for Australia, and when it comes to the fear campaign being run by our opponents based on a series of myths out there about numbers and about push factors and about this that and the other and social security entitlements, let's just you know, unmask each of those for what it is: a rolled gold bucket of fear and invariably, in fact almost exclusively based on myth.
JOURNALIST: Given that you asked us or invited us a few years ago to keep you accountable on Government advertising, how is it that you're spending $7.6 million in the next, in the weeks to June 30, advertising your broadband scheme which similar to the RSPT, does not have the backing of legislation and you're still going through consultation. And following up from Mark Simkin's question, you said to your party room today that you wouldn't be outflanked by the right, so are you actually being outflanked by the left in terms of Colin Barnett who says that housing people in Leonora is not humanitarian.
PM: First of all on the question of the operations of the Independent Communications Committee of the Government and as it relates to other normal public information campaigns can I suggest you direct those questions to the Special Minister of State. Secondly, on the question of Colin Barnett and what he may have said or not said on a particular day, I don't know. But what I can say to you is this, we have a fair, balanced, reasonable policy for dealing with the challenge of asylum seekers, and I think, including in the great state of Western Australia, it's important to start rolling back in some of the myths and some of the untruths which have been put out there. Let's just bring this down to tin tacks in terms of numbers of folk in any given year, push factors around the world, processing arrangements, refusal rates. Let's just put this into some context and we should also put into a bit of context the role which people who come here and have done so in the past as refugees have played in subsequent Australian life.
I was, the other night at a do in Sydney to honour Frank Lowy's 50th anniversary of the establishment of Westfield. Now Frank's circumstances may be known to some of you, a lot of people have come to this country as refugees and made huge contributions. Now, right now in this debate around the country, there's a lot of fear out there, a lot of people in the community are feeling fear, and that fear is also being also whipped up by some folk as well. What we need to get down to is nailing each one of these facts and dismantling some of the myths being put around by our political opponents. We are not going to engage in some sort of race to the bottom with these guys on the question of asylum seekers. It seems to be fear is the common denominator for every public utterance by the Leader of the Opposition on any element of Government policy. (Inaudible)
JOURNALIST: Thank you. Prime Minister if you can break your word to someone like a Labor mate like Morris Iemma, why should we and voters trust you anymore?
PM: Well firstly Mr Iemma at the time asked me to publically support his position on the privatisation of the electricity industry of New South Wales. I did that, I supported the Government's policy. Secondly on the question of organisational matters within the Australian Labor Party, Mr Iemma's recollection of events is not accurate.
JOURNALIST: In 2007, you said that individuals and groups had a perfect right to use their own money to advertise their views. Why has that changed?
PM: Your reference is in particular -
JOURNALIST: You gave a news conference; it was the same news conference on the 13th of June 2007 in which you also said that taxpayer funded politicised advertising was a cancer on our democracy and your prelude to that was saying that individuals and groups had a perfect right to use their own money to advertise their views, but that using Government money for politicised advertising was a cancer on our democracy, I'm asking you why that changed.
PM: Well the first thing I'd say to you in response to that Karen is your assumption that the public advertising campaign as related to the RSPT does not deal with the matter in a factual manner. Let's call a spade a spade here. You have the Opposition and the mining industry saying that the Government's proposed changes to taxes represent a knife to the throat of the industry, what a load of balderdash, what a load of absolute bunkum. I mean let's just get straight a bit. I mean in terms of your reading, have a look at this bit in yesterday's Financial Times in London, I commend the editorial to you: 'miners like oilmen - this is editorial in the Financial Times yesterday - are a tough lot, they are fighting tooth and nail to derail the Australian Government's plan for a super profits tax, but just as oil and gas companies survive when a similar tax is imposed on them, the mining industry has broad enough shoulders to bear this new burden as well,' and it goes on and it goes and on and on.
This is the considered analysis of the Financial Times in London. Can I just say when you therefore have a stream of misinformation from a bunch of mining companies who just don't want to pay more tax, guess what? It gets pretty willing out there.
So, you either stand back and say well, we the Australian Government have no responsibility to explain the facts of our tax position or we do have that responsibility. We chose the latter. We make no apology whatsoever for engaging in this public debate and we intend to prosecute this debate. It is the right tax reform for Australia.
JOURNALIST: (inaudible) just broadly of promises, just listening to your answer to Matthew's question, it sounded like one of those pharmaceutical ads where the promise it'll stop you from heart attack and then there's the list of side effects that go on for about 30 minutes later. Will you be a bit more circumspect in the next election campaign when you're making promises so you don't give up 100 percent guarantees and then get mugged by political reality later on and not be able to deliver? Will you be a bit more upfront and realistic with the Australian people?
PM: Well Mark, on the question of did I believe that the mass of public advertising being used by the then Conservative government in 2007 was a cancer on democracy, I did and I do. If you look at the numbers, from memory it's about $250 million, I think, in that particular year. I stand to be corrected. Look at the volume that went out on WorkChoices in that particular year, and if you look at my interview at the time - part of it, not all of it, part of it dealt with the sheer quantum of this stuff being rolled out.
Therefore, if you look at that compared with what we the Government, have done, I'd ask to fairly compare. In our first - just one second - in our first year in office we, I think expended about one third of that amount, our second year in office about one half of that amount. We actually took seriously this whole injunction about being very, very mindful about the sheer quantum of this material out there.
Secondly, there'll be debate, which Matthew's legitimately engaged in just now, about the guidelines. We sought to implement a series of guidelines around the Auditor General. As I said, the Auditor General, just after the election in 2007, wrote to me and said 'why not set up an independent consultative committee?', because there was some concern about conflict of interest. That is, he approves ads and then to be expected subsequently to audit them? We then changed the guidelines. We made that public in March of this year. The Opposition supported them.
On your overall question about our language and my language in particular, look, I try to be as absolutely as, you know, passionate as I can about what I believe to be a real cancer on the show, which was just the sheer volume of that stuff at the time. I'll be held accountable for what I've done subsequently. I accept that responsibility.
JOURNALIST: Prime Minister, on the super tax, you've said there may be weeks or months of consultations and negotiations with the mining industry. What could the mining industry expect as a compromise? Not obviously details of the deal, but how much are you prepared to shift from the deal was announced on May the 2?
PM: What we've said consistently, Dennis, and I think the Treasurer has said the same and the Minister has the same, is that we believe this 40 per cent rate is right and we've said we will consult with the industry on detail and on implementation and on transition. In fact, I think the Treasurer's gone further than that and talked about generous transition.
That's the framework in which we're having these consultations and negotiations, but what I do know about consultations with very big - very big - mining companies who sometimes hunt in packs is that it's far better that these negotiations are conducted direct rather than through the media.
JOURNALIST: Prime Minister, you've mentioned the 40 per cent rate and the other tax reforms that are funded by the revenue. Is the uplift factor and the concept of carrying forward credits for previous years' losses and for un-deducted capital expenditure, is that part of the framework that's not negotiable?
PM: Consistent with the answer to Mr Shanahan from The Australian newspaper, I repeat my earlier formulation and do not change one jot from it.
JOURNALIST: PM on advertising, are you saying that you did not break a 2007 election promise because of the process, and if not would you apologise for breaking the promise?
PM: What I said was that there was a huge cancer on Australia from the sheer volume of government advertising at the time. I undertook to change that. Guess what? We did. We reduced it and have reduced it hugely. The Finance Minister will give you the details of that.
Secondly- hang on, hang on - ou asked me a question, I'm answering it. The second part concerned the guidelines which we said would be framed around the Auditor General. We implemented those in July of 2008. We said we'd review those in 2010. We did so.
We obtained as I said, initial reservations from the Auditor General. Both Petro Georgiou and I think Bronwyn Bishop on the public accounts committee also expressed their view that this represented a deep conflict of interest. We therefore changed the guidelines. They were put out in March of this year and as a result of that the Opposition at the time fully supported the change, but they are -
JOURNALIST: (inaudible) watered down on the old ones and he says that they don't provide as much protection as the ones that you replaced.
PM: (inaudible) speak for himself, but I'm saying that is the process that we've gone through. That is what we've applied. That is what we have implemented.
JOURNALIST: In relation to the mining tax campaign, the advice suggests that the committee saw an initial draft of the mining tax advertisements. Did the Gov- in relation to your mining tax campaign, advice suggests that the committee, the independent committee of officials, saw an initial draft of those advertisements. My question is did the Government decide to step around the committee because it got an impression that the ads wouldn't be cleared expeditiously enough, or did you make that decision in advance of showing them the material?
PM: That's a question you should put to the Special Minister of State, that's the first point.
The second is, as I said in the Parliament yesterday, the Government from the beginning of this year, is my recollection, fully planned to bring about a public advertising campaign to explain the detail of the RSPT. The reason for using the particular provisions concerning pressing or compelling circumstances is because we confronted the reality of a mining industry about to dig deep into its pockets - in fact, had begun to do so, I think, very early in May - to run a campaign which we would describe as misinformation.
Therefore, it was necessary to expedite. That is why we did what we did.
Furthermore, can I say to each of you, and without apology, we have a fundamental reform at stake here. That is the future of the RSPT and the associated set of tax reforms which it funds. We take our responsibility seriously. The contrast between what we offer and the Opposition offers is clear: we stand for better super for working families; they want to take it away. We stand for tax cuts for all Australian companies; they want to increase the company tax for all Australian companies, virtually. We stand for reducing the tax burden on small business; they stand for increasing that burden. We stand for investing in infrastructure; they stand for taking it away.
The contrast here is pretty clear. It's a big debate. That is why we will join that debate using this form of public advertising. We can have this debate about the manner in which decisions were taken to launch into a public advertising campaign. It's proper entirely, to be the subject of that level of scrutiny.
On the question, however, on the question however, of joining this debate and dealing with the sheer volume of misinformation out there from a bunch of mining companies who don't want the Australian people to get their fair share of the resources which they themselves own, well frankly, we're not just going to declare the field vacant. We're going to join the battle. That's what we're doing.
Part of my purpose here today is to reflect to you all that the Government's intention to prosecute this tax reform remains unchanged.
You had a question on Israel?
JOURNALIST: Is there any justification for the lethal use of force on a civilian convoy in international waters?
PM: I am still to receive a full briefing on the facts relating to this. However, as I have seen them, let me say this very clearly, the Australian Government condemns any use of violence under the sorts of circumstances that we have seen.
Furthermore, we are deeply concerned about the loss of life which has occurred.
Thirdly, it is imperative that the Government of Israel conduct its own immediate, independent inquiry as to what happened.
Fourthly, that should be immediately provided to the United Nations Security Council.
If the Israeli authorities and the Israeli Government do not do that, then consideration should be given to what other form of inquiry occurs.
The last point I'd make is this, because it is time for Question Time, and that is that also, when it comes to a blockade against Gaza, preventing the supply of humanitarian aid, such a blockade should be removed. We believe that the people of Gaza, letting aside the whole questions of the long-standing dispute and a long-standing war, the people of Gaza should be provided with humanitarian assistance.
Thank you, folks. Got to go.
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