MTR Breakfast with Steve Price 

E & OE   

PRICE: And I’m sure the Minister for Resources, Energy and Tourism, Martin Ferguson would have won a few meat raffles in his time raising funds for the ALP. Minister good morning.

FERGUSON: Good morning Steve.

PRICE: The old meat pack?

FERGUSON: It’s nice to win them but no time to be hanging around the pubs with people like you these days.

PRICE: No, you’re too busy. The Australian newspaper today says you’re going to have trouble getting your mining resource rent tax through the Senate. The Greens have turned on it. You’ve got large miners like Andrew Forrest saying it’s not the right way to go. You’ve got the West Australian Government saying it’s unconstitutional. Are you going to lose the argument here?

FERGUSON: No, I’m confident we’ll get it through the Senate. This is a fair and balanced outcome and let’s deal with, for example, FMG and the comments of Andrew Forrest. You have to tell the Australian community why, with an increase in profits of 630 per cent, they shouldn’t get a one-off opportunity to share in the benefits of the development of Australia’s resources. But, you know, in terms of balance and I suppose Australia being attractive for investment, what better endorsement of yesterday’s announcements could we get than the announcements by BHP overnight of new investments of $7.4 billion in iron ore in North West Western Australia, $5.2 billion in metallurgical coal in Queensland, and $400 million in thermal coal in New South Wales. They were the announcements of last night. We’ve put in place a profits based system which industry supported, which means we can cut company taxation, assist small business, increase superannuation and invest in infrastructure. These are our resources and it is a balanced outcome. The heavy lifting has been done. Let’s have the debate because you know the Australian Parliament has a choice now: do you deny the Australian community a fair share of the profits as a result of the development of our resources?

PRICE: I must say the public debate seems to have moved on to the carbon tax and we’ll get to that shortly. I think the public seem to think that you do now, you have put the argument on the mining tax and that most people accept it but Greens leader Bob Brown says look we favour the original Rudd proposal. It would have raised $12 billion, and he’s arguing that you are again caving into the big miners?

FERGUSON: You have to understand soapbox Bob – because that’s what it is really about, playing to the gallery as usual – the heavy lifting has been done by the Government. We have got the miners onside to a large extent and the Australian community understands with profits, as I’ve spoken about, for example FMG 630 per cent, Xstrata 75 per cent, Rio Tinto 122 per cent, and BHP 88 per cent. They want a share of this because how else do you develop the infrastructure, cut company taxation unless you actually say to this sector of the Australian community, that is doing exceptionally well at the moment, that in return for developing our resources we want a fair share.

Look Bob Brown has always played to the gallery on this issue. But he’s also acknowledged that he will move his amendments but at the end of the day – including during the election campaign and on a number of occasions since the election campaign – he’ll give way to the Government because in essence we had a very long debate during the election about this and the community understood our determination to put it in place. But, what’s new? When it comes to settling hard political issues Bob Brown and the Greens will always play to the Gallery. And I might say we wouldn’t be having a carbon tax debate today if the Greens had voted for the CPRS in November 2009 the issue would have been resolved.

PRICE: Well that’s true, he’s tossed out this $100 billion figure, he then attaches education and health to it and infrastructure spending. You say he is just playing to the gallery, but is that likely to resonate and given that he’s going to have the numbers come the middle of the year, can they stall it long enough to stop you getting it through?

FERGUSON: It will resonate in the cities, in places such as my seat where there are a substantial number of Greens, but that’s what Bob Brown wants. But you know Bob Brown has got to understand we’ve got a balance which means that we will get a bigger take in terms of the profits being earned by mining companies, but ensure Australia remains attractive for investment. And that means further taxation revenue for Australia over time, because, if that investment dries up, then you end up with zilch. And that’s what he’s got to start understanding, the nature of a complex economy such as Australia. It’s just not about taxation, it’s about fair and reasonable taxation which continues to maintain a pipeline of investment. And that’s what Australia’s got, which is further jobs and training opportunities, apprentices and I might say, more money over time to invest in childcare and health and education. You don’t kill the golden goose by over taxing.  You create a balance which gets a reasonable return but maintains investment and gets a bigger return over time.

PRICE: Do you want to get this out of the way so that you can get on with the harder argument, which is to try and convince the Australian people that you need a carbon tax?

FERGUSON: Well the Treasurer has clearly indicated we’ve had a process of consultation. We’ve set, I suppose, the parameters for the legislation. Now there’s a tax experts committee that we have established, people from industry who’ll be consulted in the drafting of that legislation. We’ll present an exposure draft, further consultation with industry. It’s to be in place by the first of July 2012 and that’s when the benefits start kicking in, for example, huge assistance to small business for the purchase of new capital equipment from the first of July 2012.  

Take my tourism sector which is doing it pretty tough at the moment with the strength of the dollar, and the devastation of Japan, its impact for example on Queensland. At least from the first of July 2013, we get this tax in place we can cut company taxation to help those people. We can increase our savings. We can go to places such as Western Australia and invest in long sought after infrastructure to fix the roads around the airports which is about productivity. So they’re the choices the Parliament has to make. But I think the Australian community understands the Government took this debate on, it was always going to be tough, it’s about difficult resource taxation reform. Let’s get it into Parliament, get it resolved in the second half of this year and get on with the job of managing a huge pipeline of investment in Australia that is going to create great wealth for the next generation.

PRICE: Tony Abbott says he will repeal a carbon tax, has he said whether he will repeal your mining tax?

FERGUSON: I actually thought you couldn’t work out what the Coalition was going to do yesterday on the mining tax when I read the Shadow Treasurer’s media release, Joe Hockey, the Member for North Sydney. But you know Tony Abbott’s going to have to say to the Australian community that with all the profits we’ve spoken of – I must say reinforced by a Reserve Bank Statement yesterday which said for the listed ASX top 200 resource companies the increase in profits is around 68 per cent for the second half of 2010, and expected to be over 60 per cent again for the foreseeable future.

PRICE: That’s good for our economy though isn’t it?

FERGUSON: It’s good for our economy.

PRICE: I mean you’re the Minister for Resources.

FERGUSON: Very good for our economy, good profits, Australia is attractive for investment. So Tony Abbott has got to say to the Australian community you shouldn’t get a share of those profits to actually help you meet the strains and stresses of the growing economy, how you actually invest in infrastructure, how you manage a two-speed economy, the impact on the services sector. You know their big job at the moment is trying to compete with the resources sector to keep workers. They can’t pay those type of wages, hence you work out how you cut company taxation, work out how you help them buy new capital equipment. That’s the nature of the debate now confronting Tony Abbott and the Opposition. Look, they are in a mindset at the moment, no matter how good a proposal is they are going to oppose it - a very negative, short-sighted approach to the medium and long-term responsibilities and challenges to Australia. 

PRICE: Any sympathy from you for Tony Abbott? He fronted that rally outside Parliament the other day. You have fronted dozens of rallies through your career. You can’t be held accountable for some clown holding a sign up behind you can you?

FERGUSON: Look, to be honest I think enough’s been said about it. Let’s move on and have a proper debate about policy and the dynamics of the Australian economy. Those side-show antics don’t do Australia any good so you know I’ll leave those debates to others. I just want to concentrate on my responsibilities and the responsibilities of this Government. Let’s get the resource taxation system in place that is good for Australia, its good for investment. Let’s resolve the issue of a price on carbon, let’s concentrate on the big issues because that is going to determine what the legacy of this Government is in years to come.

PRICE: Are you saddened by how much Labor is going to be wiped out in New South Wales tomorrow?

FERGUSON: I think when I look back, and I’m former Vice-President of the NSW Branch, I might have lived in Victoria since 1990 but I keep a close eye on it, I think it is fair to say that we won one too many elections. A bit like I suppose us in Parliament in ’93 when we one an election and lost the next one. Quite often governments win one too many elections and they fall apart. Now obviously it is a very challenging period for the NSW Premier. I must say I think she has performed with dignity and determination…

PRICE:…but there might not be much left.

FERGUSON: And that’s going to be about rebuilding. You know it is not a time to start an examination of what went wrong today but everyone knows there have been difficulties in the New South Wales Branch of the Labor Party since John Della Bosca left as General Secretary. The post-mortem will no doubt start on Sunday, there is no need for me to kick start it today but I simply say the Labor Party is going to have in my opinion a huge job of rebuilding, putting decent people into parliament who can take the party forward, starting with the organisational wing of the party and winning the trust of the party and the trust of the New South Wales electorate. But it is a New South Wales election. It in no way reflects the debates going on federally at the moment, and I suppose the New South Wales electorate will makes its assessment of our performance as a party over the last four years.

PRICE: One last question. I know you like the Grand Prix. Should we in Victoria keep it?

FERGUSON: That’s obviously a debate from a cost-benefit analysis for the Victorian Premier…

PRICE:…as a tourism event though?

FERGUSON: Look put aside the Grand Prix. I simply say that in terms of I suppose events, the performance of successive Victorian Governments, of all political persuasions, from Kennett to Bracks to Brumby, has been the best in Australia. The Grand Prix has been part of that. They have to assess from time to time the cost-benefit opportunities of each of those events and determine what is best for Victoria. It is not for me to judge that but I simply say that as the Federal Minister for Tourism I think the performance of the Victorian Government on events such as the Grand Prix for many, many years now has been second to none in terms of comparisons with other state and territory governments in Australia.

PRICE: Good to talk to catch up. Thanks a lot.