Mining companies’ victory over Australian Government
The stunning victory by the mining houses over the federal government was a victory of renters over owners, and a triumph of misinformation and emotion over logic……..It is worth remembering, too, that some of our richest mines are directly and discretely owned by foreign companies.
An opportunity missed on mining super tax, Sydney Morning Herald, Ian Verrender, February 15, 2011 “…..the most extraordinary transfer of wealth in the nation’s history is taking place right under our noses……Tomorrow BHP Billiton will deliver one of the biggest half-year earnings results in Australian and British history.
If all the stars stay in alignment, the large multinational is on track to hand down a whopping $20 billion full-year result.It is all a far cry from the desperate claims made just nine months ago in the most successful advertising campaign in history. That was when the three big miners joined forces to lop off the central plank in the tax reform plan put forth by the Treasury secretary, Ken Henry……..
The miners’ campaign ignored three crucial points. The first is that mining companies do not own the resources. They merely are given the right to exploit them, for which they pay rent. Those mineral reserves are owned by the Commonwealth.
The second is that those reserves are non-renewable. As a nation, you only get one chance to extract any benefit for the population and for the generations to come.
And third, the rental system – the ad hoc and inefficient system of state royalties – was hopelessly antiquated and had failed to capture fair value for Australian citizens.
The stunning victory by the mining houses over the federal government was a victory of renters over owners, and a triumph of misinformation and emotion over logic……..
Some of the riches they are delivering for shareholders are being passed back. But it is hardly being done in the most equitable or efficient form.
It is worth remembering, too, that some of our richest mines are directly and discretely owned by foreign companies. BHP’s huge coking coal operations in north Queensland are joint ventures with the Japanese companies Mitsui and Mitsubishi.
Resource-rich nations have a well documented history of squandering their good fortune and Australia ranks up there with the best of them……
A valuable opportunity to establish a sovereign wealth fund that could invest the proceeds of the mineral boom for future generations has been lost while crucial tax reform, including a cut in corporate tax, has been delayed.
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