Archive for March 24, 2012


Miners Rip Us Off

The never-ending story of the mining moguls whingeing and kicking against the Australian Government taking too much tax has been revealed as a myth by the Australia Institute study called Mining the Truth. Some of the facts from the AI study are:

Mining exports in the year to March 2011 were worth $155 billion, or 11.4 percent of GDP.  Mining exports make up 52.8 per cent of the value of total exports from Australia. Overall the prices received by those who mine Australian mineral resources has grown by more than 300 per cent.

Mining is, in fact, one of the smallest sectoral employers in Australia, offering work to fewer people than that employed in the arts and recreation services sector. The latest ABS figures show that in May 2011, total mining employment was 217,100 in a workforce of over 11 million .

As only a tiny proportion of the Australian workforce is employed in mining, very few Australians benefit directly from employment increases or wage increases in the mining industry.

While on average foreign ownership of mining in Australia is around 83 per cent, for some mineral resources foreign ownership is in fact much higher. According to the ABS, in 2009-10 mining profits totalled $51 billion. Taking the average rate of foreign ownership in the mining sector of 83 per cent, $42 billion worth of pre-tax mining profits flowed to out of Australia to foreign investors in the last financial year alone.

Over the next ten years pre-tax profits for mining will likely be around $600 billion; at present levels of foreign ownership around $500 billion of these profits will end up in the hands of foreign owners.

The original version of the mining tax, the Resource Super Profits Tax (RSPT), would, at current commodity prices, have collected more than $200 billion in additional mining taxes over the coming decade. 

The $22 million advertising campaign run by the mining companies against the RSPT resulted in a much less effective, and much less equitable, mining tax being negotiated. According to Treasury, the new Mineral Resource Rent Tax (MRRT) will raise an extra $38.5 billion in taxes from miners over the coming decade.

The dividend of the $22 million advertising campaign for the mining industry was,therefore, more than $160 billion—equivalent to a 730,000 per cent return on investment.

Few people realise that a major cause of Australia‘s very high interest rates is the sustained boom in the mining industry. When interest rates peaked before the GFC higher mortgage interest rates were taking an additional $24 billion per annum from the household sector compared to the pre-boom interest rates that prevailed in 2004.

Contrary to popular belief labour productivity is growing rapidly in the non-mining sectors of the economy. As a result of the unprecedented haste with which the mining industry is expanding, however, labour productivity in the mining industry fell by half between 2000-01 and 2009-10. Once the impact of the massive decline in labour productivity in the mining industry is controlled for, there is no apparent slowdown in the rate of productivity growth in the non-mining sectors of the economy.

There are negative effects on other industries such as,

  • Driving up the exchange rate
  • Driving up the costs of skilled labour for businesses in other sectors.
  • Driving up the prices of raw materials used in mining (for example concrete)
  • Driving up the cost of other services (for example construction

It is obvious that our miners are not being over-charged for digging up our resources. What is even more obvious is that while the shareholders who are mostly living overseas are benefiting big time, the average Australian is not benefiting from this industry and in fact many are worse off because of higher interest rates and from losing jobs due to the exchange rate pressures. Furthermore there are many other detrimental effects and costs imposed on the average person not mentioned here.

The Labor Government has gone soft on the miners due to the pressure from the ongoing anti mining tax campaign but the conservatives are promising a complete sellout.Tony Abbott and Colin Barnett do not want the miners to properly compensate Australians and will get rid of the mining tax if elected. They have already been the beneficiaries of an anti-government campaign that mirrors the campaigns by the Tea Party in America in being supposedly beneficial to the average person but in fact have been run and bankrolled by corporations like Phillip Morris and billionaires like the Koch Brothers for their own benefit.

Australians are likely to pay heavily in increased service costs and reduction of services if the Liberals win all State governments and the Federal Government.

The full report Mining the Truth can be found at:  https://www.tai.org.au/?q=node/384

Every Australian should read this report.

“At last, after Illinois, it seems that Mitt Romney’s inevitability is coming to fruition…”

…gasps Ben Harridan in the Weakened Caucasian, (24/03/12). Yet more creepy bullshit from the Republican Party’s favourite Foreign Editor.

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