Craig Emerson did his PhD thesis at the ANU under Ross Garnaut on rent resource taxation. So this exchange is particularly meaningful.
TONY JONES: Alright, two years ago, if I can quote your own speech in Western Australia, you said that ‘slowing down the development of Australia’s mining and energy resource industries would be a scandalous wasted opportunity.’
Can you [explain] the economic theory that says a 40 per cent tax on mining profits won’t have exactly that scandalous effect you were talking about?
That’s a fair enough question. Dr Emerson has a PhD in that very area.
RARELY does a young academic get the chance to implement their doctoral dissertation as official government policy. Two months after the election of the Hawke government I submitted my PhD thesis on minerals policy, supervised by Ross Garnaut.
But it didn’t spend years gathering dust. Garnaut had taken a position as economic adviser to prime minister Bob Hawke and in late 1983 I was offered a position on the staff of then resources and energy minister Peter Walsh. My brief was to design and implement a resource rent tax for the Australian mining and petroleum industries.
So this is exactly his area of interest and even after all these years should be able to make a basic explanation.
CRAIG EMERSON: Sure, I’m happy to come to that and what I was talking about in that speech which, if Tony Abbott had bothered to read the speech, but he finds economics…
TONY JONES: I’ve read it, I’ve seen…
CRAIG EMERSON: so boring. You’ve already..
TONY JONES: I’ve read it and I’ve seen the context of it.
CRAIG EMERSON: And you would have seen..
TONY JONES: The rationale of what you said…
CRAIG EMERSON: Well, hold on Tony..
TONY JONES: still stands.
Yes. Well. I think the answer to Tony Jones’ question ‘Can you [explain] the economic theory that says a 40 per cent tax on mining profits won’t have exactly that scandalous effect you were talking about?’ is ‘No’. When your best person, the man who designed and implemented the rent resource tax, can’t explain how the new tax will work then you’ve got a huge problem.