Big miners must be reined in

Saturday, February 4, 2012
Cartoon by Chris Kelly

Nearly 10 years of a mining boom has made big changes to Australia’s economy and environment. Resource companies have made record profits.

This has given Australia’s rich mining billionaires an inflated sense of entitlement. When the Resources Super Profits Tax (RSPT) was proposed we saw Gina Rinehart speaking to an anti-tax rally from the back of a truck along with fellow billionaire Andrew Forrest, who wore a high-visibility work shirt as though he was just another struggling worker.

Having helped sink the RSPT (and its proponent Kevin Rudd), Rinehart went on to become the richest person in the country. But these prominent individuals are only the tip of the iceberg.

The big three players are BHP, Rio Tinto and Xstrata. Their combined value, internationally, is more than the size of Australia’s federal budget. They were not shy of throwing their weight behind the moves to sink the RSPT. Mining interests spent $22 million on its advertising campaign against the RSPT. BHP spent $4.2 million.

Yet the resources that make them so rich are not theirs. As farmers opposing coal seam gas companies have found out, they own only the topsoil. The resources below are “Commonwealth” property by law. Sadly, there is little to protect the “common wealth” of our farms or wilderness regions sitting on top when the resource below is handed to the mining companies.

The loud voices like Forrest and Rinehart were not afraid to say the RSPT was tantamount to nationalisation. But it was a fairly mild tax, in reality. More profoundly, the mineral wealth was always supposed to be the property of the whole country.

Progressive economists have begun to shine the spotlight on the economic, social, cultural and ecological cost of the resources boom. Protesting farmers and Aboriginal Australians are underlining the importance of the issue more publicly.

The mining, gas and oil industries need to be reined in. But are higher taxes the only solution? Consider if the industries were in public hands. No more would they be beholden to their shareholders, bound to maximise profits whatever the cost. Nor would their huge wealth be available for schemes to corrupt the political process.

We could rein in the overseas pillage that Australian miners instigate in poor countries such as Papua New Guinea and the Philippines. A publicly owned mining sector, not hungry to maximise profits at all costs, could make fair partnerships with poor countries to help them develop sustainably.

So much of what is now mined is not benign minerals, but uranium and dangerous fossil fuels. Australia is to coal as Saudi Arabia is to oil: the world’s biggest exporter. We should leave Australia’s coal, gas and uranium in the ground.

The wealth from the remaining important minerals like iron or rare earths could be spent on programs to combat climate change, to improve health care, or any number of other social programs.

But is public ownership realistic, if even the mild RSPT was knocked off?

Consider that privatisation remains unpopular despite more than 20 years of promotion by governments and academia. Trying to sell off NSW power generators has been a big stumbling block for both parties. The public still trust governments to run public utilities more than they trust private investors, despite the years of propaganda.

This stubborn public sentiment against allowing greedy, giant corporations to plunder the economy for their own benefit is matched by a widespread will to protect remaining wilderness areas, the climate and farmland.

“Nationalisation” is a dirty word in mainstream economics. It tends to be associated with radicals like Venezuelan president Hugo Chavez. But if we look around the world, you don’t have to go to anti-capitalists to find examples of strategic public ownership, even in the lucrative natural resources sector.

If privatisation is still unpopular, we need to move onto the front foot and make nationalisation a real option in the minds of ordinary people again.


From GLW issue 909

Comments

Time to nationalise

What amazes me also is that the Aust govt over the years has been prepared to sell mining rights for a pittance and only just now has attempted to put on a 'mining super profits' tax for the first time. This is effectively communal wealth that is sold off to any old carpetbaggers who become overnight billionaires, like the Hancock clan, or Clive Palmer, or the execrable Nathan Tinkler. They then apparently want to buy up Australia's media with the sole purpose of running propaganda to excuse their activities, and therefore gain control for any other propganda purposes as a side benefit -- Australia becomes an instant oligarchy beholden to a handful of self-obssessed miners -- and the 'Commonwealth' 'Federal' govt has allowed it to happen and has immediately become their handmaidens, terrified of the next advertising onslaught.

Far better to do what Putin did in Russia and re-nationalise all resources as common property for the commonweal, and put these dynasties out of business. Never again can someone become a billionaire out of grubby mining speculation -- when we make finds they will be nationally run enterprises for the common good.

Of course, coal mining is extremely dubious for GHG, and Gina, it's NOT just a 'small country' producing low levels of GHG as you say, most of the mined coal supplies in Australia get shipped offshore to be burnt in Chinese coal-fired power stations and add to global pollution and GHG emissions, and well you know it.

$22 million against the RSPT

"BHP commissioned its own focus-group research, which was used to drive a $22 million TV and print-media blitz and a targeted lobbying campaign that included Geoff Walsh, a former national secretary of the ALP...."
From 'Too Much Luck' Paul Cleary, Black Inc., 2011

That's where the figure was grabbed from -- it implies that BHP spent the $22 mill, but possibly others contributed. Sorry if we mixed up the figures.

Why is resource nationalism "not really how democracy works"? Surely how democracy works is the people decide how it works? Perhaps giving resources away for a song and dance so we're left with a ruined economy and a big hole in the ground and not much else is how it works?

Cleary in his book makes a good case that the mining boom itself is partly to blame for "killing economic opportunity". It's not arguing for nationalisation but it's an interesting read all the same.

Wow, extreme views and extremely wrong

Amazing how the extremists launch out of the closet once they started to realise that political power has been seeping west for the past thirty years.

1. The Minerals belong to the states, not the federation. Period that is in our constitution. (God bless Australia)

2. If you wanted to spend money productively the last thing you would do is give it to the federal government or any government.

3. This is just a perpetuation of the dependancy mindset that the left loves. Everyone in the west and the north works while the south and the east live unsustainable lifestyles free fo the hassles associated with working 12 hours every day in remote locations.

Myself, and many others like me, are prepared to dedicate the rest of our lives to ensure that vermin like this, with un-Australian views like this, never gain this level of control over our country again.

Gina, what are you doing on the GLW site?

Seriously, so wrong in so many ways....whether the minerals belong to the *people*, and the wealth (not to mention planning so as not to destroy the place) should be shared.

Spend money productively? You'd rather it be in the deep pockets of the Rineharts, Forrests and co for their fourth yacht or jet, rather than be available for public use? It's ture that getting it back into public hands is only part of the challenge - we then need a government that is actually of and by the people rather than a corporate government - but pulling such interests out of private hands and into public ones is an important part of the challenge.

Dependency mindset? It's the corporations who have the dependency mindset, who get billions in tax breaks and government handouts to underwrite their profits.

Un-Australian views? If by Australian you mean profit before all else, greed and misery, then proudly so!

Conga line of greedy heads.

The problem is there are way to many people and organisations including unions that are compromised by the same motivator - greed. The true story of the environmental destruction and social impacts isnt being told, largely because the people on the front line who are witnessing the damage wont speak up for fear of losing their slice of the action.

BHP did not spend $22 million

BHP did not spend $22 million against the RSPT, that figure is for the whole of the mining industry. BHP spent $4.2 million.

As for your argument for resource nationalism, that's not really how democracy works. And there's no example of a country doing it well without killing economic opportunity.

--Andrew Duffy
@ajduffs (twitter)