The onslaught against the government because of its new resource rent tax proposal coming as it does only a few months out from the national election has the real potential to determine our national government and, of course, determine taxation arrangements in our nation's most profitable industry for decades to come.
And with the stakes so high for these powerful multi-national corporations no expense and no exaggerated scare-mongering is being spared.
It is presently impossible in Australia to open a newspaper or turn on the television without seeing sophisticated advertising selling the self-interested and highly distorted claims of the mining giants.
Well, what about some genuine facts?
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Commodity prices for minerals such as coal and iron ore have shot up dramatically in recent years while costs of extraction have only risen marginally.
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Ten years ago Australia got $1 in every $3 of mining profits but this has fallen to $1 in every $7 today.
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Australia has had a Petroleum Resources Rent Tax (PRRT) for 20 years - when it was introduced the resources companies said they would be ruined - instead they prospered.
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The RSPT as presently proposed will result in additional taxation revenues of $3bn in 2012-13 and $9bn in 2013-14.
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No current projects will close because of the RSPT and new projects will continue to come on stream when the RSPT is in place. Marginal projects (those which are borderline to proceed under the current royalty regime) will become viable because they will not pay royalties.
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The revenue raised by the RSPT will be invested in new infrastructure, assist with the move to a higher Superannuation Guarantee and will pay for cuts to the company income tax rate. Economic modeling suggests that in the long run the package will boost GDP by 0.7%, and raise real wages by 1.1%.
The outcome of this high stakes economic and political struggle will be very revealing about the nature of power in our advanced democracy.
Working people should not be hoodwinked by noisy but fundamentally dishonest claims from self-interested corporations who have been and will continue to reap massive profits from our non-renewable resources.
9 June 2010
