Here we go again. Just saw a ludicrous popup ‘ad’ from the Minerals Council of Australia talking about how wonderful the miners are and making a ‘link’ between mining and scientific research into the Coronavirus (?).
The real reason for these ads, in case you were wondering, is to avoid paying more tax. The minerals council did the same after the bushfires, when the country suffered huge financial losses and there was a proposal to tax the miners more. Vague, ‘feelgood’ ads appeared which really send the signal ‘don’t tax our free diesel or our piddling 5% royalties’.
This is all pathetic and sad for two reasons:
First, apparently these type of ads aren’t really meant for the general population. They act as ‘signalling’ for the easily led elites (notably the press gallery and the canberra politicians) that the people love the mining companies, and they can’t possibly be taxed more (even though they are barely taxed now).
Surely the miners are wrong. The press gallery can’t be THAT gullible, surely, to be taken in by a special interest pleading for lower tax rates? I mean its not like the miners always hire an economic ‘consultancy’ to produce a rubbish report showing that, lo and behold, increasing the tax rate would make them actually pay less tax, or some other rubbish like that; and this ‘independent’ report is splashed uncritically across the news by basically innumerate press gallery hacks? Oops, thats exactly what happens. The press gallery ‘pre decide’ that the policy must be unpopular, as they are taken in by the laughable PR campaign and fancy reports. You can generally rely on the press gallery to side with what the elites want in opposition to what the vast majority want (see also mass immigration on this point). Taxing the miners has always been a wildly popular policy; but unfortunately not permitted by our elites.
Second, mining in Australia is criminally undertaxed. Criminally. They get tax free diesel. They pay a lousy 5% royalty (when they feel like it). They get huge, rorted, depreciation allowances which, for example, allows the gas industry to basically pay no tax. Its estimated that if the miners paid proper tax, every Australian household would be $20,000 per year richer. Imagine if I logged into your netbanking and stole 20k a year- would you be happy? And yet thats what we allow them to do. Could we all do with an extra 20k a year during this current crisis?. Hell yes. Or we could easily pump an additional 220bn a year into public health. Now that would be a good thing!
The solutions are very simple. We need a proper market bidding process for mining royalties. Lang Hancock flew over an iron deposit in the 1950s, claimed it for a lousy 5% royalty rate (for 90 years!), and they’ve been busy onselling the minerals until they are likely all gone in a decade or more. Gina Rinehart is now worth 50 billion plus (money obtained from clipping a ticket from a government resource given away virtually for nothing) while she implores us to work for $2 per hour. Gina Rinehart is also Australia’s biggest welfare bludger. Its not even close. You could add up all the money paid out in unemployment benefits, triple it, and she still extracts more than that a year.
They are our minerals, not theirs. Make them bid for it. See if BHP will offer a 7% royalty for Hammersly Iron (I bet they would) or Rio Tinto offer 15% (I’ll bet they would too!). Lets have a proper free market for these minerals, with people paying a proper rate.
Ironically, a free market is exactly what the miners and the IPA etc etc oppose- they think they should be entitled for life for a government monopoly sweetheart deal. Not any more.