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HUTCHISON: |
Martin Ferguson, good morning. |
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FERGUSON: |
Good morning. |
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HUTCHISON: |
They feel sidelined and overlooked. What will you say to small miners today to reassure them? |
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FERGUSON: |
I adopt the view that both the Government and all the companies, both big and small that we have spoken to over the last two months, have actually been listened to and, in trying to put together a reasonable package that served the needs of industry and government, we have had proper regard for big and small mining companies in Australia and also in the petroleum sector. But more importantly there's a process which enables them to be further heard in terms of the application of the principles which go to the development of a minerals resource tax system federally. |
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HUTCHISON: |
Okay. I'll talk about the process in a moment. They're arguing the rate at which the tax kicks in should be higher, that they should be able to reach $100 million in profit before the tax kicks in, and not 50. They say that they've lost their exploration rebates that would have taken a lot of risk out of the search. Do they have a point and is there room for exemptions? |
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FERGUSON: |
The Government has actually made some announcements about the principles that will be applied and in terms of exemption from the MRRT we've actually exempted a hell of a lot of industries because the real focus was on a couple of major priorities and, I must say, there is a total exemption from the MRRT for any company earning less than $50 million per year in profits and that is not an inconsiderable amount of money.
On the issue of the resource exploration rebate, after we announced this incentive we hardly heard from industry because industry was more concerned with killing the whole tax—not trying to save the resource exploration rebate. I therefore, with other Ministers, resolved that the only way forward is to refer this issue to the reference group headed by Don Argus and myself, to actually think through the question of exploration in the future. |
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HUTCHISON: |
David Flanagan, as you know, from Atlas Iron, has been particularly vocal. I'm paraphrasing him here but he says we're the juniors who want to give it a red hot go and become great Australian companies and you just did a deal with two South Africans and an American. Why wasn't a group like AMEC at that table? |
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FERGUSON: |
Well, I must say, I take exception to any suggestion that foreign interests, be it in the form of companies or individuals, influence government in terms of actually working out what is in our national interest and I'm sure those people would too and perhaps you should interview them about that accusation.
But in terms of small and medium-sized companies, they were spoken to and I actually had a meeting with Mr Flanagan himself and he spoke on a number of occasions to my office.
It's also totally wrong to suggest that some of the big companies in Australia have no regard to small and medium-sized companies. People should also remember that the WA Chamber is an integral part of the Minerals Council of Australia and their voice is heard in the deliberations of the MCA. Reg Howard-Smith is the CEO of, outside of the MCA, what I think is to be the pre-eminent mining industry association in Australia at a state level and I can assure you that if he has a view he expresses it to me and my office. But in framing this package we've sought to work out what's in the best interests of all miners and the Australian national interest. |
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HUTCHISON: |
You're listening to Federal Resources Minister, Martin Ferguson. 1300 222 720 is our talkback number.
Colin Barnett was quick to say, on my program last week, it's coal, it's iron ore and petroleum today but if the nickel price trebled tomorrow, will it be nickel tomorrow? |
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FERGUSON: |
We've exempted all industries other than coal, iron ore and petroleum. I also… |
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HUTCHISON: |
He's arguing, of course, that you would consider adding other industries to that list. Is there any truth in that? |
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FERGUSON: |
Oh, no, it's not the suggestion but can I also say to the Premier, who I do have a good, constructive, working relationship with, is what the Commonwealth Government is doing is no different to what he just did in terms of increasing the return to the Western Australian community out of the iron ore sector by increasing substantially the royalties paid by BHP and
Rio Tinto. It's also well-known around Perth that the WA Government is actually considering a number of state development agreements and royalties with respect to how it might increase royalties over the years to come in a variety of industries beyond iron ore. So, you know, it's a bit difficult to accept that when the pot's calling the kettle black. |
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HUTCHISON: |
The leader of the Opposition, Tony Abbott, was in Perth yesterday on a flying visit. What do you say to him? He continues to say we'll make the next election about this tax and we will rescind it. |
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FERGUSON: |
I think the Leader of the Opposition and the Opposition in general is out of touch with the Australian community. Firstly, the Australian community actually accepted that the mining industry, especially in the iron ore, coal and petroleum sectors, are well-placed to pay more tax. The issue is actually making some changes which enabled a bit easier and more practical application of our announcements of two months ago.
We've now got the industry largely accepting publicly that the outcome is a reasonable way forward, that they should be paying more taxes and that those taxes should be appropriately used, for example, to cut company taxation.
We will go to this election with a level of company taxation at 29 per cent. Tony Abbott will go to this election with a company taxation level of 32 per cent. We'll be able to increase spending on infrastructure in the regional communities so heavily hit by the pressures of the mining industry boom.
We'll be able to put in place changes in superannuation to take pressure off the community in the decades to come on retirement income. To small business, and I represent the tourism sector, we'll be able to put in place changes to the purchase of capital equipment for anything less than $5000 to be written off. It clearly shows we're about reform, reasonable reform, and Tony Abbott is out of touch, even with the mining industry who has now accepted that they should pay more taxes. |
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HUTCHISON: |
Now, I know you are talking to those small to medium-sized miners this morning and I guess they will say that the big three shouldn't be able to argue a position for the whole industry. I just wonder, finally, Minister, what happens when Don Argus returns to Australia? What kind of negotiations will take place then and is there some room to move here? |
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FERGUSON: |
Can I firstly say Don Argus is the former chairperson of BHP Billiton. He's a person of considerable standing and respect, not only in the mining industry but he's got huge expertise in the financial sector and the banking sector.
Don Argus is first and foremost proud to be an Australian. He has the job to work out with me how we apply these principles for all companies, big and small, and any suggestion that this process is prejudiced and not of integrity because of his involvement is just plain wrong and he and I would take serious offence at that.
What we're about is applying a set of principles based on terms of reference which will enable us to go forward but, remember this, this legislation will come into place on 1 July 2012 so there's plenty of time to actually work out how you apply the principles, what are the taxing points, how you play with the levers to actually make it right.
And I've, for example, indicated to the magnetite sector that I've already met with here in Perth this morning, that I regard them as one of the first cabs off the rank so I can bed down any issues they've got in their minds, get certainty for them sooner rather than later, because that's what the process is about.
It's not about trying to sweep the issue under the carpet. It's about a detailed process that's also going to take a lot of my time to make sure that we get it right. And I can assure you that in terms of my dealings with industry, it doesn't matter how big or small the companies are, they generally get in to see my office, if not me, my staff or my department and the good thing about this process is that my department representing the sector is part of the secretariat of the Argus-Ferguson committee. |
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HUTCHISON: |
Thank you for talking to me this morning. |