One side event at the COP21 United Nations climate change conference in Paris was the launch of the Fossil-Fuel Subsidy Reform Communique. Almost 40 countries signed onto the statement, which pledges to eliminate subsidies to the fossil fuel industry.
The communique said: “The International Energy Agency (IEA) highlights fossil fuel subsidy reform as a key component of a set of energy measures to combat climate change and estimates that even a partial phase-out of fossil-fuel subsidies would generate 12% of the total abatement needed by 2020 to keep the door open to the 2°C target.”
Australia had been expected to sign the communique until an outcry from Coalition MPs ensured that Malcolm Turnbull pulled out. The MPs objected to signing the communique as it might commit Australia to eliminating the diesel fuel rebates that the government provides to miners and farmers.
The fuel rebates cost the federal budget about $5.5 billion a year to provide discounted fuel to farmers and mining companies. According to a research paper from The Australia Institute, in 2015 the fuel subsidy to the mining industry cost $2.26 billion out of a total of $4 billion worth of federal government subsidies to the industry.
The paper said that over a six year period state governments gave an average of about $3 billion a year in subsidies. That is a total gift of more than $5 billion a year from taxpayers to mining companies.
Given that the government so often cries poor when it comes to socially useful government expenditure, such as on unemployment benefits or public transport, giving out billions to mining corporations seems ludicrous. It appears even more irrational when, in the face of a looming climate crisis, much of this money encourages the burning of fossil fuels for the purpose of digging up even more fossil fuels to burn.
However, clues to why both major political parties support this seemingly illogical policy can be found.
In the 2013-14 financial year, mining companies donated $1,718,439 to the Liberal Party, $114,405 to the Nationals and $452,980 to Labor. The ALP's share of donations had dropped sharply, possibly in an attempt to help them to an election loss after having brought in the mining tax.
The mining industry also assists politicians in their career paths with a revolving door of MPs and their staff, and mining companies and lobbyists. The list is long but includes: former Minister for Mining and Resources Martin Ferguson, now Chair of the Australian Petroleum Production and Exploration Association advisory board; former Deputy Prime Minister Mark Vale went onto the board of Aston Resources; former Deputy Prime Minister John Anderson went on to become chair of coal seam gas company Eastern Star Gas; former Labor ministers Craig Emerson and Greg Combet both became economic consultants with clients including AGL and Santos.
Adani, the company behind the massive planned Carmichael coalmine in Queensland, has hired former staffers and lobbyists connected to both the major parties.
Buying political influence is easy for wealthy corporations and is part of the everyday operation of capitalism.
Highlighting the greed and hypocrisy that results from the collusion of our politicians with big business is part of what we are dedicating to doing at Green Left Weekly. However, it means we don't attract wealthy corporate donors like the Liberals and Labor.
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