Australian Mining Tax

There is widespread concern across a broad spectrum of the Australian community concerning the Rudd Labor Governments Mining Super profits tax.

Unionists have voiced concerns relating to job losses.Industry Giants have shelved hundreds of millions of dollars worth of expansion plans, which by some estimates would have generated 30,000 jobs.

Offshore, investors across a broad spectrum of industries are re-rating Australia as a capital destination, with good reason. The mining industry apparently had no prior warning of the proposed introduction of the Mining Tax. Major mining players were treated like schoolboys by a rather inept Federal Government under the guise of negotiations.

Revelations today (23 May 2010) by Treasurer Wayne Swan that miners in fact pay a concessional tax rate - just half of other businesses, begs the question of why this is so, how this concession came about, and why Miners tax rates should not reflect that of any other business.

There are further issues raised though, than have been widely canvassed.

The vexing issue for us is why this tax is not being applied across all extractive industries. Serial polluter Chevron has announced that it is staking its future on the Northwest Shelf Gorgon Gas deposit. Other energy players are at developmental stages of oil and gas extractive processes in the region. Why are they not taxed similarly? Why not banks, whose excessive profits are generated using methods which do perhaps as much social and environmental harm as extractives.

There is the additional concern that while Rudd Labor is prepared to impose this tax, they insist on giving the proceeds over to benefit the government pampered baby boomer generation. In contrast, Norway (when oil was discovered) nationalised, formed Statoil to extract, and had funds diverted to a future fund which benefit all future generations of their people. This would be a welcome use of such a windfall tax.

We have not heard from the Rudd Government on the issue of strengthening extractive eco management responsibility obligations for extractive industries. The Montara #oilspill last year graphically illustrated the lax legislation companies such as Atlas Rig site operator PTTEP could operate under. There is also the issue of independent monitoring by government or non-government bodies. Given the flow of information from Montara,largely repeated by the Australian Government from statements by PTTEP, one is entitled to conclude that monitoring is less than perfect. I suspect,in practical terms,non existent.

The uncertainty created in the minds investors, industry players workers and the international investment community is not salved by Opposition Leader Tony Abbott's promise to repeal the Mining Super Tax-- the day after he stated that he exaggerates and that we the public shouldn't believe everything he says.Who do you believe??