Antinuclear

Big Mining’s removal of Rudd may cost them backlash

Julia Gillard’s quick fix essentially gave the big miners open slather to rewrite the new tax to suit themselves……Both BHP and Rio Tinto have acted entirely logically and within the law by attempting to minimise their tax and maximise their profits for shareholders. But the win in Australia, with their very public display of power, may cost them dearly elsewhere.

Big-talking giants may come down with a thud, Sydney Morning Herald, Ian Verrender, July 13, 2010 f the European Union had reservations about the iron ore tie-up between the mining giants BHP Billiton and Rio Tinto, it no doubt would have been stunned by Tom Albanese’s extraordinary remarks in London last week……..
Far from attempting to appease competition regulators, Albanese’s speech to mining executives at Lord’s last Thursday was laden with veiled threats to global leaders, particularly those in developing nations, about the wisdom of trying to emulate Australia’s move to a resources rent tax system.
‘Policymakers around the world can learn a lesson when considering new taxes to plug a revenue gap or play to local politics,” he said.

Indeed they can, particularly if they note the ousting of a sitting prime minister by his own party.

The Rio boss spoke of ”resource nationalism”, evoking the emotive spectre of totalitarian regimes forcibly taking control of private enterprise. As with his deliberate misuse of the term ”sovereign risk” a month ago, Albanese again employed the Orwellian tactic of turning the debate on its head.

The 500 or so mining executives at the dinner lapped it up.

But the mooted Australian tax changes had nothing to do with nationalism and everything to do with a fundamental tenet of capitalism: the rights of owners over renters, and the right of an owner to charge a reasonable rent.

Miners have always recognised the need to pay royalties on top of company tax. It was a recognition they did not own the resources, that they merely leased the territory upon which they mined and that they had a responsibility to share the profits from the resources they dug up and sold………..

……. despite the rhetoric, the miners have enjoyed tax relief. This has resulted in a massive transfer of wealth from the owners to the renters – and on non-renewable resources………..

Julia Gillard’s quick fix essentially gave the big miners open slather to rewrite the new tax to suit themselves. This has greatly diminished its efficiency, the amount of money it will raise and the capacity to implement further tax reform, such as much-needed cuts to corporate tax.

The new proposal is also heavily weighted to favour the big miners at the expense of smaller miners and explorers, a fact that takes on greater significance when considering the Rio Tinto boss’s London speech…….

Both BHP and Rio Tinto have acted entirely logically and within the law by attempting to minimise their tax and maximise their profits for shareholders. But the win in Australia, with their very public display of power, may cost them dearly elsewhere.

Big-talking giants may come down with a thud

July 14, 2010 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, politics international, uranium | antinuclear, Australia, BHP Billiton, nuclear costs, uranium