Mining Smiles For The Cameras


Last night at the movies I learned about a sweet group of women whose lives are made a million times easier by the flexible working hours available at a mine, courtesy of the chipper ad campaign still being rolled out on TV and at the cinema by the mining companies. At this particular mine, the environmental officer loves animals so much she wouldn't kill a cockroach. Even their husbands are happier because they have great jobs. "You know what they say, 'happy wives, happy lives'" one of the chirpy women reminds us.

Why is the mining industry still running these ads, when the Mining Resource Rent Tax was passed earlier this year, and the mining industry pretty much won the battle over what shape it would take?

Readers will remember the campaign against the Resource Super Profits Tax, spearheaded by the Minerals Council of Australia after the government announced the tax a week before the 2010 May budget. It ran for only 53 days and was the most expensive and effective campaign run by an industry against the government on a single policy issue. (That was before the Carbon Tax, on which the Federal Labor Government spent $25 million).

It resulted in the dumping of the original tax and contributed to the demise of Kevin Rudd as Prime Minister. As one writer put it: "How much does it cost to bring down a prime minister? The answer: a tad over $22 million".

We can only assume that the mining industry is setting itself up for another battle, one which they saw coming but to which the government seems to have been blind.

In late August, various economic forecasters announced that the mining boom was over. Because the mining tax is levied on unusually high profits, even if commodity prices remain at the lower August 2012 prices, the Labor government is in big trouble. The Gillard government has banked on a nice strong stream of mining taxes coming in over the next few years. However, this income was never assured; it is a volatile stream of tax revenue.

In order to make the budget balance, the Gillard government will either have to change the basis of calculation for the mining tax — reneging on its agreement with the mining industry — or find revenue from some other source. This would involve cutting services or raising taxes somewhere else. The mining industry is trying to ensure that the government choses the second option.

As well as rolling out ads, miners have invested heavily in the film industry. As Graham Readfearn wrote last year, the Australian film Red Dog, released in 2011 was substantially financed by the mining industry. The film is based on the true story of a free-spirited dog who roamed the Pilbara, uniting a community. The larrikinish characters work for Hamersley Iron (a wholly owned subsidiary of Rio Tinto). The cinematography depicts mines as part of the raw beauty of the red landscape. The film was the largest grossing Aussie-made film for 2011 and ranks 11th in takings in historic terms among all Australian films

The mining tax isn't just about increasing revenue, it is also aimed at creating a more balanced economy and overcoming the "Dutch disease" which occurs when a resource boom pushes the dollar up, hurting other industries which can't compete internationally. Dutch disease happens because the resource industry is not integrated into the rest of the economy. The risk is that when the boom ends, it leaves a weak, hollowed out economy.

Films like Red Dog and the "This is Our Story" ads far more effectively counter the argument that Dutch disease needs to be addressed through taxation than the negative campaign we were bombarded by early in battle over the mining tax. They make the "real story" about the employees of mines, not the shareholders who most stand to lose from a tax on mining. The campaign avoids arguments about whether the mines are foreign owned and are exporting profits.

The strategy creates a sense that the mining industry is integrated into Australian social fabric. It counters the idea that the mining industry is an "enclave" industry and builds an emotional resonance between viewers and the companies. By invoking the "Australian-ness" of the individuals who work in the mines we form intimate and direct relationships with people we identify with, and mining companies lay an implicit claim to the mineral assets that lie under Australian soil.

If it wants to alter the mining tax to help balance the budget, the Gillard Government is going to have to be incredibly smart to counter the ground work that the mining industry has been laying for the last two years.

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