Mining Tax

It seems the end of the world is coming!  The mining super tax will destroy civilisation as we know it.  We will be cast into unemployment as mining companies flee Australia.

Where is the outrage of ordinary Australians and Christians at the attempt by mining companies to subvert an attempt by government to reclaim a fair return on Australia’s resources?

During the mining boom … as profits from our nation's resources have increased, the community's share of those earnings has decreased. And about half of the profits have gone overseas. If our share of the profits had remained at the average of the first half of the decade, we would have collected around $35 billion in additional revenue between 1999-00 and 2008-09 to invest in vital social and economic infrastructure.

This seems a fair tax to me.

The RSPT will apply a 40 per cent tax to profits from resource projects after allowing for extraction costs and recouping capital investment.

Companies will not pay RSPT until after they provide shareholders with a normal return on capital investments. The generous tax treatment of capital investment under the RSPT, compared with the royalty regimes, will improve the viability of many less immediately profitable mining ventures, boosting investment and jobs in the sector. (My italics)

Perhaps it might even be a fairer tax! Currently

State governments currently tax resource projects through state royalties. These are generally based on a fixed amount per tonne of production or on a fixed percentage of the value of production.

The amount of tax collected does not recognise that some projects required a lot of investment to get underway, while other projects required relatively little. The tax does not vary with profits made.

The response in the media has been outrage.  The mining companies are crying foul. The Liberal Party is outraged at the use of taxpayers money to counter the mining lobby’s advertising campaign. We have been warned in a landslide of newspaper articles that mining companies will leave the country.

Counter claims like the quotation below seem to be getting little air time by comparison.

Meanwhile, mining companies threatening an exodus of investment from Australia over its proposed super tax may struggle to find better prospects in a world of finite resources, analysts say.

Critics say South Africa, Canada and South America stand to gain if the resources giants head elsewhere, but Johannesburg analyst Nick Goodwin said mineral deposits in most developed nations were already under claim.

"You're going to have to go to the Congo or wherever," he said, adding that these types of countries would be more unstable.

"This is what the Australian government knows. They can threaten, but there's nowhere to go to. You can't just replace these mines. You can threaten to pull out of a country because of a tax regime, but where do you find the resources?"

Haytham Hodaly of Vancouver's Salman Partners said mining firms were "just posturing at this point", while Toronto analysts said it would be difficult to walk away from Australia's gold and iron ore deposits - considered among the best in the world.

The more dominant fear was that the move would have a domino effect and prompt other countries to alter their tax regimes, said Saul Eslake, chief economist with Australia's ANZ Banking Group.

"We've heard Canada say that they're not going to, but we're also aware that, for example, Brazil has expressed interest in what Australia is doing, the Indian government has imposed higher taxes on the proceeds of exports of iron ore and the like," Mr Eslake said.

The multi-national mining companies are pulling out all the stops because at last a country is doing the right thing and restricting their rapacious appetites, and asking a fair return. If Eslake is correct then it is no wonder that mining companies are frightened.

The issues at stake here are serious.

The most concerning aspect of all of this is not the breaking of some pledge by the government, or the tax itself or the future of the mining industry. The real worry is the future of our democracy. If we accept that “the big miners have a right to defend their rights” and spend whatever they want on advertising in a campaign to stop paying more tax, where does that leave other citizens less well heeled who might also not want to pay more taxes? There are no rules to limit the spending of rich and powerful individuals and corporations - and in all of this discussion no one seems to think there should be.

Why have limits on government spending on selling public policy and not on corporations spending on opposing public policy?

Surely any curb on political advertising first and foremost should apply to corporations? And should there not be limits on corporate funding of political parties?  Power and money to thwart the democratic process by Gavin Mooney and Colin Penter

Clive Hamilton has written a piece headlined We stand by meekly as the rich greedily assert their power.

So here's the situation. A small group of obscenely rich people are acting in concert to bring down an elected government that wants to tax super profits. They want to install a new government sympathetic to their interests.

Hamilton points up something that's blindingly obvious to me, but seemed mostly unremarked.

One of the most telling vignettes in this sordid debate was Andrew Forrest's expression of wounded bewilderment that the Prime Minister and the Treasurer no longer return his calls. Well, they won't return my calls either.

It's the sense of entitlement of the militant rich that sticks in the average craw. Yet in Australia today, mining billionaires expect that they only need to pick up the phone to get our most senior politicians to jump. So accustomed are the mining magnates to getting their own way that they are genuinely dismayed when the government, deciding for once to represent the collective interest, acts against the miners' commercial interests…

Hamilton sees all this as part of a wider strategy. He says

The mining industry has been basking in its own success since its brilliantly successful campaign to defeat the introduction of an emissions trading system. It was an exercise in political thuggery rarely seen in this country. No remorse was felt over the direct thwarting of the popular will embodied in a government that won an election in which both main parties promised an emissions trading scheme.

Hamilton places some of the action in perspective.

There was something grotesque about watching Australia's second richest person, Gina Rinehart with assets of $4.75 billion, and the fourth richest, Andrew Forrest with assets of $4.24 billion, pumping the air at an anti-tax rally and demanding justice.

Have we shifted into some crazy parallel universe where the obscenely rich complain of being victimised and call rallies where they protest that they can no longer have everything go their way?

What is absurd about the situation is not that the rich behave without conscience and continue to feel deprived as they sit atop mountains of wealth, but that we no longer laugh at them.

The top 25 mining magnates have seen their wealth increase by $9 billion over the last year alone. That is the amount that would be clawed back by the super profits tax.

… but that we no longer laugh at them… I think this is the scariest thing about the current farrago in the media. We are presented with what pretends to be a debate. Australians, of all people, would once have laughed at these people, and scorned them off our TV screens.  What has happened that we are giving them some credibility? I saw Rhinehart's comments reported on TV as serious news. Where are is The Chaser when you need them?

Was there not a time when down to earth Australia was ironically biblical in its attitudes to the rich?

My brothers and sisters, do you with your acts of favouritism really believe in our glorious Lord Jesus Christ? 2For if a person with gold rings and in fine clothes comes into your assembly, and if a poor person in dirty clothes also comes in, 3and if you take notice of the one wearing the fine clothes and say, ‘Have a seat here, please’, while to the one who is poor you say, ‘Stand there’, or, ‘Sit at my feet’, 4have you not made distinctions among yourselves, and become judges with evil thoughts? 5Listen, my beloved brothers and sisters. Has not God chosen the poor in the world to be rich in faith and to be heirs of the kingdom that he has promised to those who love him? 6But you have dishonoured the poor. Is it not the rich who oppress you? Is it not they who drag you into court? 7Is it not they who blaspheme the excellent name that was invoked over you? (The Letter of James, Chapter 2)

Could it be that we are being suckered into believing that happiness comes from riches?  Do we really think our happiness depends on the happiness of some multinational corporation who will dig us out of house and home and then leave us?

In considering what we support in this contention it would be wise to remember our heritage:

Justice, and only justice, you shall pursue, so that you may live and occupy the land that the Lord your God is giving you. Deuteronomy 16:20

But let justice roll down like waters,
and righteousness like an ever-flowing stream Amos 5:24

When he came to Nazareth, where he had been brought up, he went to the synagogue on the sabbath day, as was his custom. He stood up to read, 17and the scroll of the prophet Isaiah was given to him. He unrolled the scroll and found the place where it was written:
18 ‘The Spirit of the Lord is upon me,
because he has anointed me
to bring good news to the poor.
He has sent me to proclaim release to the captives
and recovery of sight to the blind,
to let the oppressed go free,
19 to proclaim the year of the Lord’s favour.’ Luke 4:16-19

The mining industry response to the government does not sound like a desire for justice.  It sounds like self interest.  It reminds me of business people for whom I have sometimes worked, who have not regarded their wealth and position as a privilege and responsibility.  They have regarded it as their right. They have regarded it as theirs, and only theirs. Ethics, it seemed, were determined by their self interest.

Not all people who are rich are like this.  And plenty of us who are not rich are just like this… our ethics are determined by our self interest.  But the tone of the mining companies is disturbingly familiar.

To be Christian in this dying world, as it struggles to survive rampant corporations who have no concern for the common good, is first of all to laugh at their impertinence.  And it is to not stand meekly by, but to demand justice and equity. Write to your politician. Give some support where it is deserved. There will be time and need to bring the Labor government  to some account, and require justification of their spending. But if we let them be crushed by big business, and the mining tax goes the way of the ETS, then we will deserve the oppression of the rich.

Also on this site: Jesus as Ripley. The bible commenting on multi nationals? Read to the end.

Andrew Prior

Direct Biblical quotations in this page are taken from The New Revised Standard Version Bible, copyright 1989, Division of Christian Education of the National Council of the Churches of Christ in the United States of America. Used by permission. All rights reserved. Please note that references to Wikipedia and other websites are intended to provide extra information for folk who don't have easy access to commentaries or a library. Wikipedia is never more than an introductory tool, and certainly not the last word in matters biblical!

Would you like to comment?
I have turned off the feedback module due to constant spamming. However, if you would like to comment, or discuss a post, you are welcome to email me using the link at the bottom of this page, and I may include your comments at the bottom of this article.

Copyright ^Top