A Senate inquiry into corporate tax avoidance last week revealed that BHP Billiton was funnelling profits from Australian minerals through a marketing arm based in Singapore as a way of dodging tax in Australia.
From 2006 to 2014, BHP was “selling” minerals mined in Australia to its Singaporean arm at well below market rates. The prices were then marked-up and sold on to third-party companies in Singapore, thereby attracting the infinitesimal Singaporean tax rate.
In doing so BHP was bypassing the 30% Minerals Resource Rent Tax (MRRT) introduced by the Julia Gillard government, meaning that over a period of eight years the mining giant had an effective tax rate of only 0.002% on profits of over US$5.7 billion.
BHP Billiton was one of the big mining companies that waged an unrelenting campaign against the Kevin Rudd government’s Resource Super Profit Tax (RSPT), spending more than $8 million doing so. BHP did not publicly oppose the watered down MRRT that was proposed after the RSPT was shut down and Rudd was ousted as leader.
In hindsight, it is clear that BHP already had the schemes in place to avoid most of that ineffectual tax.
Using the Hockey/Abbott analogy of lifters and leaners, BHP is leaning so much that it appears to be prostrate and makes a mockery of the so-called emergency budget measures in 2014 targeting the “leaners”: the poor, elderly and sick. This is especially appalling given one of the Abbott government’s first objectives after being elected was abolishing the MRRT; while it was initially blocked the Mining Tax Repeal Bill was passed on September 2.
Appalling maybe but not surprising. It’s not just limited to BHP Billiton. Mining companies wield enormous power in Australia, not just in terms of the financial gains through digging up minerals and the political power that flows from that, but through changing the nature of work through fly-in, fly-out work schedules and the effect this has on local towns and communities.
This is all done on their terms, as demonstrated recently by Fortescue Metals, which suddenly made more than 100 workers redundant because of the downturn in global mineral prices. The majority of society has no control or say over how these minerals should be mined and used. The flow-on effects for society needs to be the starting point for discussion rather than what is the most ethical rate of tax.
The mass media is complicit in this, not through some shadowy conspiracy but because the owners of media — when they aren’t one in the same, as in the case of Gina Rinehart — share the same interests as the owners of the mining companies.
They aim to further consolidate the resources of the planet into private hands for private gain and to subjugate the majority of the world’s population in the service of that end. There is no space for a discussion about alternatives in the media.
There may be a few comment pieces decrying the inequity of the actions of companies like BHP, but the discussion is either moved on or abstracted away from the real underlying causes.
This is why Green Left Weeklyis so important: it provides the space to discuss and critique the basic premises and current structure of society and begin the discussion about an alternative — one where people are free to live in dignity without exploitation in a world that is not being ravaged by environmental destruction. It’s also a place to discuss the tactics, solutions and strategies in the movements for change.
One of the contradictions that we face is that while we are a not-for-profit paper, to ensure our continued survival we have to continually fundraise in addition to relying on subscribers and supporters.
You can help us continue this important work by donating to the GLW fighting fund on the toll-free line at 1800 634 206 (within Australia). Donations can also be made to Green Left Weekly, Commonwealth Bank, BSB 062-006, Account no. 00901992. Otherwise you can send a cheque or money order to PO Box 394, Broadway NSW 2007.