Make the mining monopolies pay!

Vanguard June 2010 p. 1

The Rudd Government’s proposed 40% tax on the super profits of the giant multinational and local mining monopolies should be supported.

It has thrown the spotlight on the critical question of who owns Australia’s rich natural resources and the massive profits created by workers’ labour in the mining and transport of these non-renewable resources. It begs questions of how taxes on national resources should be used and how the country should deal with the foreign dominated mining industry.

Super profits, super taxes
The 40% tax on super profits is an immediate, first step in the right direction. It resonates with ordinary people’s sentiment against the mining monopolies ripping off Australia’s national resources and the people. The proposed tax itself poses little threat to the mining monopolies or their super profits. For example, the tax will slightly shave BHP’s present 24.6% returns on capital to about 20%.

The existing taxation regime is already structured to help big business’ tax evasions and minimisation through price transfers, capital depreciation, fuel cost exemptions, and on it goes. The new tax also guarantees failures will be rebated by taxpayers, with the government taking a 40% risk. Costs in exploration and development will be able to be written off against the giant profits from successful mines. The mega profits will continue to flow out of Australia to the international head offices of BHP-Billiton and Rio Tinto. The imperialist plunder of Australia’s natural resources and people will continue untouched.

Business Council cracks the whip
The Business Council of Australia, the peak organisation of the most powerful and influential foreign and local corporations, together with the Minerals Council, are panicking that the proposed new resources tax is releasing public sentiment for stronger control of Australia’s national resources, as well as demands that this wealth should be used for the collective benefit of people. They’re anxious that this public sentiment threatens their unrestrained profiteering. This anxiety compelled the Business Council of Australia to issue a public statement calling on the Rudd government to strengthen the guarantees on maximising profits by foreign investments and remove further restrictions and obstacles in its operations in Australia. They demand opening up the country to even more unrestrained and uncontrolled foreign investment. In the same statement the BCA praised the Rudd government’s recent relaxation of restrictions on foreign investment since it came to power in 2007.

The people’s common wealth
Many people want to see government revenue from the mining super profits tax used for the common benefit of Australia’s people and the environment.
Unions and workers in the mining industry are rightly demanding that their communities and families should benefit from this wealth through improvements in community services and infrastructure in the mining towns.
Australia’s Aboriginal people, the dispossessed original carers of the land, should see the benefits lift the living conditions of their communities.

It also stands to reason that the national government should invest the revenue from the mining monopolies’ super profits tax in building a nationally planned, viable manufacturing industry based on renewable energy and technology. Investing in community services and public infrastructure will go a long way to improving conditions in our funding-starved public education, health and public transport systems.

Hold the line
Public campaign in support of the 40% tax on the super profits of the mining monopolies is growing. Unions in the mining industry, community organisations like Get Up and others have started the ball rolling. The people don’t want the Rudd Labor government give in to threats, bullying and intimidation by the multinational corporations. The Rudd government should be encouraged to hold the line on taxing super profits.

Large numbers of people from different walks of life can be drawn in and united around the demand to tax the multinational mining corporations. The 40% tax is only a start, and the mining giants should pay much more tax. The tax on the super profits is an immediate and a small step in securing even a token of national resources wealth for the people. In the longer term, nationalising the mining industry can provide the only guarantee that the wealth from Australia’s natural resources will benefit the national interests of Australia’s people and the whole country.