Diggers and Dealers, the mining industry’s biggest conference was on in Kalgoorlie this week. The colourful trade fair is Australia’s largest gathering of mining types, from well-heeled investment bankers in suits to prospectors in high-vis vests and dusty boots.
New Matilda was unable to attend the lavish event. But the reports from those who did leave us in no doubt as to which party the mining industry supports in the forthcoming federal election. If the poll was decided on the votes of the mining sector, the Coalition would romp home on 7 September.
Taken as a whole, Coalition policy is now much friendlier to the resources, energy and mining sectors than Labor. If you’re looking for one of the starkest differences between the major parties, look no further than where they stand on the mining industry and its environmental regulation.
For instance, the Coalition remains committed to removing the Minerals Resource Rent Tax, one of the mining industry’s most hated imposts. The role of the mining industry in destabilising Kevin Rudd’s first term prime ministership is well known, courtesy of the multi-million dollar campaign against the Resource Super Profits Tax in 2010. Julia Gillard replaced it with a watered-down version, the MRRT, which few mining companies pay. Even so, Fortescue Metals is still attacking the tax, despite losing a High Court challenge against the legality of the MRRT yesterday.
In a statement to investors, Fortescue’s CEO Nev Power went so far as to thank Tony Abbott and the Coalition, “who have stood by the mining industry with their promise to repeal the MRRT”.
“The ill-conceived introduction of the MRRT, without proper industry consultation has resulted in an unfair and administratively burdensome and inefficient tax,” Power said in the statement.
If media reports from the Diggers and Dealers conference are anything to go by, anti-Labor sentiment remains strong in the industry. “We have one party that's been in power for the last two terms that definitely believes in overtaxing industries that are already under a lot of stress because of the world economy,” MacPhersons Resources' managing director Morrie Goodz told the ABC this week. The ABC’s Babs McHugh says she spoke to “a hundred or so” delegates at the conference. “All of them believed a Coalition government is the only one that can deliver the reforms needed”.
The Coalition’s commitment to repeal the carbon tax is another policy that plays well with mining interests. Australia’s energy and resources companies have some of the biggest carbon liabilities under the current system, for the obvious reason that they emit the most carbon pollution. A shift to the Coalition’s direct action plan would remove this impost, and even see some companies rewarded with taxpayers money in return for reducing their emissions.
New BHP Billiton boss Andrew Mackenzie was banging on about paying too much tax at his first major Australian speech yesterday. “We are a big taxpayer – 45 per cent – I think that's more than a fair rate of tax that we're paying,” he told The Australian’s Matt Chambers. “If that were to continue to rise, I would worry about the competitiveness of the country and the competitiveness of mining in this country.”
But it’s not just tax. Big Mining also wants fewer regulations – especially environmental regulations, which they argue are stifling resource development. And the Coalition will deliver cuts to environmental regulations, if elected. Labelling them with the handy pejorative of “green tape”, the Coalition has pledged to hand over environmental approvals to the states, starting with Queensland. The idea is to establish a “one-stop shop” that will speed up environmental approvals for big projects.
Big business loves the idea. The Business Council of Australia’s Tony Shepherd, who has been a vocal critic of the Labor Government, gave a speech in April attacking red and green tape, and calling for the Renewable Energy Target to be phased out, and nuclear power brought in. “Regulation is choking businesses,” he said. “All business – small, medium and large.”
As well as the cut to company tax announced yesterday, and the abolition of the MRRT and the carbon tax, the Coalition will devote special parliamentary sittings to the repeal of regulations. Special committees and departmental units will be set up to identify regulations to be struck down. The Coalition will also commission an audit (pdf) of “all environmental legislation and regulation at state and federal levels”, with the aim, obviously, of getting rid of some of it.
Environmentalists question the idea that green tape needs to be cut. The Australian Conservation Foundation’s Ian Lowe says that the “evidence shows that we need to toughen our environmental standards, not weaken them.” But that hasn’t stopped the Coalition from pressing ahead with ambitious policies to slash the taxes big business pays, and the regulations that protect our environment.
Just yesterday, for instance, the Coalition was announcing that if elected it would reduce company taxes. Shadow Treasurer Joe Hockey was enthusiastically promoting the policy to trim company tax rates from 30 per cent to 28.5 per cent. It’s part of a broader election platform of reducing business costs and boosting corporate profits. But he made sure to include reference to the Coalition’s opposition to the carbon tax and MRRT.
“From the 1st of July next year we get rid of the carbon tax and we get rid of the mining tax, and from the following 1st of July we reduce company tax,” Hockey told the ABC’s Sabra Lane yesterday, “because the only way we are going to get job security and job growth in Australia is if we have the economy growing and business being profitable.”
Hockey’s point is debatable: economic growth does not always lead to growth in employment, and job security is a function of many factors, including industrial relations laws, the power of unions, and the share of economic growth that goes to wages. The Australian economy has been growing in recent years, but so has unemployment, because that growth has not been fast enough. Nor do healthy corporate profits necessarily translate into secure, middle-class jobs, as the painful American recovery has demonstrated.
What is less debatable is the Coalition’s support for business, particularly big business, and especially dirty business. When it comes to the interests of the mining industry, the Coalition is behind them all the way.
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