In mobilising every argument at their disposal to fight the Rudd Government’s proposed Resource Super Profits Tax (RSPT), the mining lobby has drawn attention to some of the very complex relationships between this industry and the society around it.
The Government’s proposal is predicated on the need to ensure that excess profits derived from resources owned by the Crown — and thus part of "the common wealth" — are sensibly conserved and equitably distributed. The announcement of the RSPT was, predictably, greeted with both ridicule and howls of despair from the business community. Opposition Leader Tony Abbott declared war on the tax, and it provoked petulant announcements that some mining companies would put their projects on hold, or alternatively, just might take their business elsewhere, thanks very much.
This is by no means the first time that the mining sector has been a vocal critic of legislative reform from Canberra. In a much-analysed interview on the 7:30 Report, Rudd likened the outcry with the "campaign which was run … in the lead up to the last federal election about how the abolition of Work Choices would fundamentally destroy the mining industry". Comparisons can also be drawn with the sustained and bitter campaign against the introduction of the Native Title Act in 1993, as noted by former Minerals Council head David Buckingham and Australian Workers’ Union secretary Paul Howes.
The comparison with the Native Title Act is instructive. The Keating government’s legislation was originally opposed by the mining industry, as well as by pastoralists, conservative state governments and the then-federal coalition opposition led by John Hewson, who characterised the Act as "one of the greatest disasters that is before this country … we will be paying a price for this for decades to come". However, the system the Act created has now become, like environmental and other regulatory regimes, merely part of the legislative furniture that governs the way in which proponents do business.
Moreover, interaction with native title claim groups has become a useful aspect of the industry’s self-reinvention as good corporate citizens and supporters of Indigenous Australians’ economic aspirations. Agreements between claim groups and mining companies that are negotiated under the Native Title Act are often presented as vehicles for community uplift entered into by companies who have embraced a "culture of agreement-making", rather than the result of a statutory right to negotiate.
This is not to say that industry-led initiatives to improve the socio-economic standing of local communities do not have merit. On the contrary, some companies’ approach to corporate social responsibility (CSR) includes projects that may be ahead of those engaged in by governments. Professor Ciaran O’Faircheallaigh, who has written extensively on negotiations between native title claimants and proponents, notes that while "some companies essentially engage in symbolic activities or ‘window dressing’ to create an impression of commitment to CSR … others display a genuine commitment to CSR by expending substantial resources and through a willingness to go well beyond their legal obligations."
The point here is not to disparage the industry’s efforts to secure their "social licence". It is simplistic to assume that the interests of Indigenous Australians will inevitably conflict with those of proponents. Indeed, concerns have been expressed, most recently by Indigenous Studies academic Marcia Langton, about the possible impact of the RSPT on agreements between native title claim groups and proponents and on Indigenous employment in regional areas. Perhaps in response to these fears, Treasury secretary Ken Henry told an economists’ briefing in Sydney that there was "absolutely" a case to be made for a proportion of the income from the RSPT "going to support Indigenous development".
However, conceptual confusion can result from the mining industry’s multilayered identities. In areas such as the Pilbara region of Western Australia, the mining industry has long enjoyed a status above that of other businesses. The Pilbara is peppered with mining towns — such as Karratha, Tom Price and Port Hedland — in which mining giants such as BHP Billiton and Rio Tinto Iron Ore operate in a manner analogous to local governments. The companies are employers, landlords, and neighbours. Official publications from industry players can blur the line between the ordinary business drivers (accumulation of capital and maximisation of return on investment) and such goals as increasing Indigenous workforce participation or supporting local sporting teams.
The responses of mining company executives to the RSPT betray a similar, disingenuous blurring of public and private concerns. Are critiques of a tax that is allegedly "not good for my country" based on a healthy self-interest or on the national interest? In decrying the RSPT for its potential to "hurt the blue collar worker more than the white collar worker", are the executives speaking as entrepreneurs or philanthropists? Are the companies interested in supporting regional Australia or, as federal Treasurer Wayne Swan suggested, making "fat profits"?
These questions are particularly acute in Western Australia, where a sincere belief exists that what is good for the companies is good for us. Alongside this feeling run two other threads of discontent which could be glibly summarised as Rest of WA v Perth, and WA v "The Eastern States".
With respect to the former, regional and remote communities in areas affected by mining have for the most part failed to gain from successive booms. While Perth grows richer, these towns suffer escalating property prices, poor services, and the social upheavals that accompany a "fly in, fly out" workforce. Popular discontent over poor infrastructure in mining towns and other locales out bush fuelled the successful "royalties for regions" campaign which propelled the Nationals to kingmaker status at the last state election, securing an agreement by the Liberals to allocate 25 per cent of the Government’s annual intake from mining royalties to projects in regional WA. Barring the obvious fear (and overstretched metaphor) of "killing the goose that laid the golden eggs", then, it might have been supposed that WA residents would sympathise with the Federal Government’s argument that profits derived from mining are failing to trickle down. Indeed, the RSPT has met with some support on this basis within the state.
For the most part, though, reactions have been conditioned by the parochialism that continues to characterise Australian politics over a century after Federation. Antipathy towards those "over East" is a prevalent theme in local political commentary; analysis of the current political scene almost inevitably references WA’s secessionist history. Many local opponents of the RSPT do not come from a laissez-faire capitalist perspective — they have no quarrel with the argument that mineral resources belong to "the people" and not the companies. Their argument is, rather, that "WA minerals" belong to WA people and not, as Rudd maintains "to all Australians".
Premier Colin Barnett has characterised the RSPT as having cast "a cloud, a shadow over the optimism in Western Australia" and warned that it will slow down WA, "the go-ahead state of the commonwealth".
However, despite the Premier’s couching his rhetoric carefully in terms of states’ rights rather than free-market ideology, its underlying logic dovetails neatly with the interests of the business sector. WA v The Eastern States might be a hummable tune, but socio-economic divisions remain more tangible and relevant. Discussion of such divisions, however, is often conveniently rejected as "class warfare" by proponents of the status quo.
Whether these deeper issues underlying the furious PR campaigns by Government and the mining lobby actually arrive at any resolution partly depends on how long the issue remains in the spotlight. Although Ken Henry — one of the tax’s supporters — yesterday dismissed calls from the mining sector for compromise, the Government has hinted in the last few days that it is prepared to negotiate further with the big mining companies, and perhaps water down the super-profits tax.
If that happens, the issue may be another that the Government manages to neutralise ahead of the coming federal election, and public attention will turn away from the Australian mining industry’s complex and problematic social relationships once more.