The Gillard government’s mining tax has raised just $126 million in its first six months, a tiny amount compared to the $2 billion it was expected to generate.
Out of this only $88 million will actually benefit the federal budget, as companies who pay the mining tax pay less company tax.
To put this in context, the government recently cut $700 million from welfare that was paid to single parents.
In the days after Prime Minister Julia Gillard replaced Kevin Rudd in the top job — a move initiated by mining companies in revolt over Rudd’s Resource Super Profits tax plan — the government renegotiated a much more favourable deal for the corporations.
One of these changes meant that mining companies would be refunded any state royalties they paid. This loophole lead to five state governments — all of the states with mines — to raise their royalties to allow increased revenue flow to them at the expense of the federal government.
The federal government is allowing mining companies to make billions of dollars extracting Australia’s natural resources, while ordinary people miss out on benefits from the mining boom.
These revenue raised by these resources could help fund public services that are constantly having their budgets cut, such as schools and hospitals.
It could also fund the transition to renewable energy that Australia urgently needs.
The Greens have proposed a bill to amend the current tax, supported by independents Rob Oakeshott and Tony Windsor.
Greens leader Christine Milne said on February 14: “Closing the depreciation loophole, which allows the big miners to deduct the market value of existing assets over many years instead of deducting the book value over five years, could eventually save almost $2 billion a year in lost revenue.
“This is a core issue for democracy in Australia. The public interest requires a fair return on our country's resources so we can fund schools, dental health and disability insurance.”
But the mining companies will not allow governments to reallocate even a small portion of their large profits without a fight. They have resurrected the public campaign to convince voters that increased taxes on mining companies would hurt all Australians.
The Minerals Council of Australia, worried that an embarrassed government would try to renegotiate a tougher tax deal, took out full page ads in The Australian on February 13, which read: “Enough is enough in relation to the obsession with increasing taxes on mining in Australia.”
No doubt the prime minister is listening.
It’s time to break the power that big mining companies have over our political, economic and social life in this country.
If we really want to share the benefits of the mining boom with all Australians, then it makes sense to put the mining companies under public ownership. The resources would then be owned by all citizens and it could be democratically decided what to do with the wealth created.
Instead of the money made from selling Australia’s minerals being held in private hands and wasted — like billionaire Clive Palmer’s plans to build a Titanic II and a Jurassic Park resort — imagine what we could do if we spent that money on things our society desperately needs.