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We need to talk about Gina and Andrew.

Natural resources are owned by the people of Australia, but mining companies don’t like paying us for the resources they take out of the ground. And when they look like having to pay more, their response is swift and brutal.

The way Lang Hancock told it, he discovered the vast iron ore deposits in the Pilbara in 1952 by looking out of the window of his light aircraft when he was forced to lose altitude during a storm.

“In November 1952, I was flying down south with my wife Hope,” he said, “and we left a bit later than usual and by the time we got over the Hamersley Ranges, the clouds had formed and the ceiling got lower and lower. I got into the Turner River, knowing full well if I followed it through, I would come out into the Ashburton.

“On going through a gorge in the Turner River, I noticed that the walls looked to me to be solid iron and was particularly alerted by the rusty looking colour of it, it showed to me to be oxidised iron.”

It was a lie. The Bureau of Meteorology later confirmed that there had been no rain in that region for the whole of November that year; nor for the October, nor for the December. There were no storms.

You can’t identify an ore body from the window of an aircraft.

Woodward ... the real discoverer
And the ore body was documented in 1890 by a geologist, Harry Page Woodward, who was working for the colonial government of Western Australia.

“This is essentially an iron country, for one cannot travel a mile in the parts where the older rocks appear at the surface, without encountering a lode,” Page wrote in his report.

“It occurs in many forms but the chief are magnetite and hematite which occur in immense lodes and would be of enormous value if cheap labour were abundant. There is enough to supply the whole world should the present sources be worked out. From the large quantity of iron in this Colony it is impossible to work with any degree of accuracy with a magnetic compass.”

But nobody had claimed mining rights and in 1938 the federal government placed a ban on the export of iron ore to avoid supplying Japan with materials for war and because, at that time, it was believed the resources was limited and should be reserved for domestic use. But Hancock, as well as global mining companies, lobbied intensively for the ban to be lifted and finally, in 1960, it began to be phased out.

Wright and Hancock
Hancock, who had already made a fortune from the Wittenoom blue asbestos mine, moved quickly, pegging out a vast claim and securing a mining lease. Within a few months he had signed an agreement with the British mining giant Rio Tinto allowing them to develop and exploit the resource. Hancock and his partner, Peter Wright, secured 2.5% of the value of all ore in perpetuity. This included not only those resources Hancock and Wright had pegged but all other deposits the company would exploit in the future.

That money is still flowing, mostly now to Hancock’s daughter, Gina Rinehart. She is Australia’s richest person with a fortune estimated at $47 billion.

Lang Hancock was a prominent figure in right and far-right politics, a major funder of the Queensland Premier, Joh Bjelke-Petersen, and a long-time advocate of secession for Western Australia. He ridiculed any notion of aboriginal rights.

In a television interview in 1981, Hancock suggested a method of dealing with unemployed indigenous Australians − “the ones that are no good to themselves and who can't accept things, the half-castes”.

When picking up their welfare money from a specially-created centre, “I would dope the water up so that they were sterile and would breed themselves out in the future, and that would solve the problem.”

He denied that asbestos caused health problems, believed mining interests should run the media, deplored social welfare and thought the role of government should be limited to running the police force, the Titles Office and a nuclear-armed air force.

Funder and fundee
Lang Hancock did not discover the resource. He did not make significant capital investment for its exploitation and marketing. All he did was to be the first to peg a claim. And on that is built what has now become, by far, Australia’s largest private fortune.

Most discoveries and inventions, outside of mining, are covered by patent law. A person or company developing a drug, an innovative industrial process, or breeding a new plant variety can apply for a patent on that invention. If they can prove that it is a genuinely new creation, they will be given a monopoly over its production and exploitation for 20 years. But they will have to make public the details of their discover and how to replicate it. After 20 years, the monopoly ends and anyone is able to use that information to create their own version.

If the principles of patent law had applied, Hancock would not have been able to secure rights over the Hamersley tenements and would have had to buy those rights from the owners, the governments of Australia and Western Australia. The resources would have still been exploited but not under the terms of a perpetual monopoly.

Royalties are different.

Blame the Romans

It goes back a long way. In the fourth century AD, the Roman emperor Gratian (ruled 367 to 383) decreed that the empire had the right to all mined gold and silver and one-tenth of all other mined minerals. The notion was adopted by the English government before 1400 and, by 1580, the Crown assumed full ownership of all land and the right to take any gold and silver found. By 1829 the concept of “royalties” meant the payment under a lease in return for the privilege of working a mine. This concept eventually became the norm throughout the world.

The underlying concept, which underpins the exploitation of natural resources, is that they are all part of the commons. Minerals, like water and the air, belong to all of us. People can obtain the right to use water or minerals but ownership remains public.

Why taxes and royalties need fixing

Throughout the development of royalty law, the operators of mines were either individuals or relatively small companies, and the law was designed with that in mind. Today, the era of the individual prospector finding a resource and staking a claim is long past, eclipsed by vast corporations like BHP, Glencore, Rio Tinto, Fortescue, Xstrata and Adani. The wealth being extracted, and the profits being made, are so vast that a regime conceived in Roman and mediaeval times is now of questionable suitability.

In Australia, minerals companies are taxed in two ways – by the standard corporate tax to which all companies are liable, and royalties. Corporate tax goes to the Commonwealth, royalties go to the states and territories.

Theoretically, companies pay 30% of their taxable income. But huge, often multinational, mining companies have many options to reduce the amount of their total income that is classed as profit, and how much of that profit is actually taxable. Royalties are among many allowable deductions. Enormous amounts are being made, but taxing it properly is another story.

A favourite option is to set up a “marketing hub” in a low-tax jurisdiction like Singapore, where it is nominally 17% rather than Australia’s 30%. But Singapore, anxious to attract such operations, provides a range of exemptions that further reduce the corporations’ tax bill. The assistant minister for competition, Andrew Leigh, explained how it works:

“Starting around 2006, Singapore suddenly began to play a key role in Australian commodities exports,” he wrote.

“From 2006 to 2014, BHP sold $US210 billion worth of resources to its Singapore subsidiary. They then marked it up by 10 per cent and sold it on. The iron ore never went near Singapore – it was shipped out of Western Australia to the final buyers in Korea, China, India and Japan. Yet somehow a chunk of the profits landed in Singapore.”

As tax office records show, a large proportion of the mining industry doesn’t pay much tax – and, often, no tax at all. Perhaps the most extraordinary example was the global oil and gas giant, Chevron, which in 2020-21 derived more than $9 billion in income from its Australian operations and paid $30 in tax.

Despite attempts by authorities in Australia and other countries to stop this practice, it continues. Andrew Leigh welcomed the result of settlements with the Australian Taxation Office.

Leigh ... not winning: losing
“When commodities are dug up in Australia,” he wrote, “company tax will be paid in Australia.”

But how much? Given the enormous earnings from the export of Australian minerals, the tax actually being paid varies from minimal to derisory. The table above shows that BHP’s tax bill, as a proportion of its total income, remains low, even though the settlement was made in 2018. Rio’s settlement, in 2022, is unlikely to provide much benefit to the federal budget either.

BHP agreed to pay $500 million and Rio $1 billion after many years of dodging their tax liabilities to Australia. In 2020-21 alone, BHP’s income in Australia was $93 billion and Rio’s was $44 billion.

The government would like us to think they are taking on the mining giants and winning. They are doing neither. And governments around the globe aren’t having much success either.

A much-trumpeted international agreement to tax multinational companies at a minimum effective rate of 15% has been signed by 135 countries, including Australia. The idea is that companies will no longer be able to evade tax by shifting profits to tax havens. The OECD, which is behind the move, says it will stop the “race to the bottom” in which countries competitively lower tax rates to attract big companies, a process that is costing world governments trillions of dollars each year.

But Australian tax experts disagree. Professors Kerrie Sadiq and Richard Krever say it will not solve the problem but make it worse, implicitly accepting the legitimacy of profit shifting.

“Rather than ending the race to the bottom from international profit shifting, the 15% tax is likely to entrench it”, they wrote.

“It ensures companies that successfully shift profits out of Australia will pay no more than a 15% tax rate. This will continue so long as different parts of a multinational corporation are treated as if they are separate entities for tax purposes. This is nothing more than a legal fiction.

“The only way to prevent this is through real and substantive changes in the way governments tax multinationals.

“The obvious solution is to treat multinationals as the global entities they are, then allocate profits for tax purposes to the countries in which real activities creating those profits take place. In the case of Australian mining companies, that should be where they dig their riches out of the ground.”

The mining industry also receives substantial government subsidies, such as the fuel excise rebate. The previous federal government’s COVID-19 support, which included the Jobkeeper payments, was remarkably generous for iron ore and coal miners.

The Jobkeeper support was particularly generous when you consider two things: the massive profits being made by these companies throughout the pandemic, and the relatively low levels of employment, accounting for only two per cent of all Australian workers.

Unearned billions

Economic rent is a fancy term for unearned and undeserved income. Technically, it’s the money made by a company or person in excess of the amount that would be necessary to keep that enterprise in production.

If a company isn’t earning enough to make the business worth while, they’re likely to close. That’s not good for the country.

On the other hand, if they’re making a lot more than an ordinary profit, that’s not good for the country either. It either means that the company is overcharging its customers, or it isn’t paying enough tax. Or both.

In Australia, the principal exponents of the dark arts of rent-seeking are in the minerals industry. The big Australian miners typically exploit high-grade resources and therefore have low production costs compared to international competitors. Even in the lean times, their profits are far beyond the levels that would be needed to justify their investments.

Effectively, they are digging public money out of the ground and calling it theirs.

The mining companies were profitable in the years before export prices took off in 2003-04 in a minerals boom that has never ended. If they were profitable then, it’s reasonable to conclude that most of the extra amount they’re making now is economic rent: unearned income. The pattern of iron ore prices reflects is replicated by the other main export minerals, coal and liquefied natural gas.

But prices were rising for one main reason: immense demand, and not only from China. Companies ramped up production and shipped vast amounts overseas. Although prices temporarily fell when a commodities boom ended during the Global Financial Crisis, there was barely a hiccup in export volumes.

Put the two together – booming prices and soaring volumes – and you get this:

In the June quarter of 2021 alone, the value of Australian iron ore exports reached $49 billion. Back in 1993, prices were good and the industry was profitable. It is a good deal more profitable now.

Increases in production required capital investment, which counts as a deduction on their corporate tax bill. Royalties are paid partly on volumes and partly on prices but these rates are so low that, even though the public theoretically still owns those resources, the benefit from the continuing boom has disproportionately gone to the companies, not to the people of Australia.

For instance, iron ore and coal exports in Western Australia pay a royalty of 7.5%; oil an gas is charged at either 10% or 12.5% of the well-head value.

With coal exports, we see the same story as we saw in iron ore:

And for liquefied natural gas, the same again:

In 2021-22, the states obtained $25.7 billion in revenue, mainly from royalties, from the minerals industry. That’s concentrated in Western Australia and Queensland, but the GST system allows a redistribution of that between the states, on the basis that all Australians are entitled to an equal level of services.

But in that year, minerals companies earned $449 billion in sales and paid $23.8 billion in royalties. That works out to a share of just 5.3% for the exploitation of resources that the public, not the companies, owns.

The Australian Bureau of Statistics calculates the profitability of various industries. Profit share is the amount of total income companies are able to retain as profit, after taking expenses into account. As these chart show, the miners are extraordinarily profitable, compared with other industries. Coal, and oil and gas, suffered a single-year’s turndown when the pandemic hit world trade but the iron ore miners did even better than usual.

As this table shows, when profits go up, as they did over the three years from 2019-20 to 2021-22, the share going to royalties falls. This has been the story throughout the past 20 years of mineral wealth extraction: proportionately, much more of the increase has gone to companies, not to the public.

The system is broken and has been for decades. Why, then, hasn’t it been fixed?

Who makes the rules?

In countries like Australia, where the mining industry produces a substantial share of economic output – 14.5% of GDP, ahead of health and education combined (12.8%) – its economic performance can be matched by its political clout.

Over a fifth of all corporate political donations come from mining companies, well ahead of the property and construction sector, which is also highly interested in influencing the rules by which it is governed.

In the United States, the cost of getting elected is so high that only billionaires can afford to foot the bill themselves.

According to the independent research group Open Secrets, members of Congress raised $US3.7 billion ($A5.6 billion) in the year leading up to the 2022 mid-term elections. And in 2020, presidential candidates raised just under $US4 billion ($A6 billion).

Everyone who’s not a billionaire depends largely on corporate donations, which is why certain industries such as pharmaceuticals, technology companies and the finance sector effectively own large numbers of American politicians.

In Australia, elections are much cheaper. It’s therefore more difficult (though far from impossible) to buy Australian members of parliament than it is to buy members of the US Congress. Mining companies are prominent in the annual disclosure lists.

But direct and declared political donation is not the main game either here or in the US. Lobbying is the main game.

As an example PhRMA, the American drug company lobby organisation, made political donations of $US170,942 in 2023 but spent $US21 million on its lobbying activities – 122 times as much.

Similarly, the Minerals Council of Australia spent $377,000 on political donations in 2022-23 but it receives around $21 million a year to fund its overall lobbying activities – 55 times as much.

Although data on political donations are incomplete and potentially misleading, details of lobbying are almost entirely opaque. Ministers’ diaries are generally not published. We simply do not know what paid lobbyists are doing, what they are offering, or what they are getting in return. Usually, we don’t even know who they see in the government or in the public service.

There is some, very limited, information to be gleaned when ministerial meetings are made public, as the Grattan Institute found when it trawled through the information from the Queensland government.

These figures show the minerals industry was responsible for around 10% of all lobbyist meetings in 2018. But the figures also reveal how much that industry relies on lobbying, rather than on donations. It has by far the most overall lobbying contacts of any industry in that state.

The Grattan Institute’s work also revealed how pervasive lobbying is for former senior politicians. In 2018, 36% of lobbyists on the national register were former state or federal ministers or assistant ministers. That’s more than 200 people.

It should, then, come as no surprise that mining companies tend to get the policies they want from both Liberal and Labor governments. That’s why we have such low tax and royalty regimes. It’s why new coal mines and gas projects are being approved in an era of massive climate change. And it’s why rules on environmental protection and site remediation are so ineffective.

Playing hardball

When persuasion fails, the velvet glove is cast aside and the iron fist within is brought to bear.

In 2010, the Rudd Labor government announced plans for a Resource Super Profits Tax that would direct more of the excess income from mining into the public purse rather than to burgeoning company profits. Such a tax was promised before the 2007 election and was based closely on recommendations in the Henry tax review.

“The return of boom conditions in the mining sector means great opportunities for our economy, our nation and our people,” said the Treasurer, Wayne Swan.

“As a nation, we must manage the next boom better than the last, when our economy fell prey to capacity constraints and our non-resource industries fell prey to a ‘two-speed economy’. And spending the proceeds of the boom meant Australia got to the end with relatively little to show for it.”

The new tax regime was scheduled to start in July 2012 and would affect about 2,500 companies. It would take 40% of a mining project’s profits, once the company had recouped its initial capital outlay. Remaining profit would still attract company tax and a scheme of refunds to the states would ensure they were no worse off.

The reaction was swift and brutal.

It was “a surprise attack on us”, said Andrew Forrest of Fortescue, Australia’s second-richest person. “Highly regrettable,” said the boss of Xstrata. “Shocking,” said the head of Rio Tinto.

Projects would close or not proceed, they warned. There would be mass job losses. The national economy would suffer a downturn and the whole country would be damaged.

In 2010, a year before the draft legislation was completed, the Minerals Council of Australia engaged Australia’s top creative adman, Neil Lawrence (pictured), to prepare a major public campaign attacking the tax. Lawrence’s personal politics were left-wing and pro-Labor, and he was the author of the renowned Kevin 07 campaign which helped Labor win the 2007 election.

This time he was on the other side. He had been retained with a brief to highlight “the flaws in the tax, important role the minerals industry plays in the lives of all Australians” and to “send the message: hurt mining and you hurt Australia.”

Within two days of receiving the brief, Lawrence and his team launched a website, keepminingstrong.com.au. By the end of the campaign they would produce 20 print advertisements, eight radio ads and 11 television commercials.


The core of Lawrence’s skill was to understand the psychology of people receiving a message, and he constructed this campaign with a clear emotional pitch. It drew on real people and amplified their fears of job losses and impacts on local communities, while stressing the amount of tax mining companies already paid.

His aim, which seems to have largely succeeded, was to make a direct emotional link between the people in the advertisements with the electorate at large.

BHP, as well as contributing to the Minerals Council campaign, ran a fight of its own that was even more direct and deceptive, with the suggestion that BHP could pull out of Australia. “We love to compete,” the BHP ads said, “but the Super Tax could take us out of the game.”


The government was caught unprepared. It responded too late and when it finally did, its campaign was dry, without emotional content and widely panned in the advertising industry.

The TV spots had a speaker in a darkened lecture theatre explaining details of the tax and the rationale behind it. The press ads consisted of blocks of type: hundreds of words of explanation. If someone was deliberately designing a campaign to fail, it would look very like this one.


 One leading ad executive, Jamie Mackay, said the miners ran a vastly superior campaign that was designed to appeal to everyone.

“To me that had more empathy and spoke to me in an adult way,” he said. “Whereas the government ads did what governments do: they preached to me like an adult to a child.”

According to research commissioned by The Sydney Morning Herald, the MCA’s 11 separate television ads ran on average 33 times a day, reaching a total of 1,100 times across all free-to-air channels. The government’s ads ran 413 times over the same period.

According to reports to the Australian Electoral Commission, the MCA spent $17,184,924 and BHP spent $4,210,755. That’s a total of $21,395,679.

The real figure was probably much higher. “I’ve never seen anything like it,” the head of the PHD media agency, Barry O’Brien, told the SMH.

When the campaign ended, he said, about $90 million remained in the miners’ war chest. “They haven’t put the gun back in the holster and they have a lot of credit [air time] with the networks ready to go any time.”

The government spent $9 million. It faced an extra complication because there was no viable alternative to funding its campaign with taxpayer money. This created a tangential controversy, exploited effectively by the Liberals and Nationals.

A highlight of the campaign was provided by the country’s two richest people – Gina Rinehart and Andrew Forrest, who own as much personal wealth as the bottom 5.5 million Australian – yelling “Axe the Tax” into a microphone. Forrest accused Rudd of turning the nation into a communist dictatorship.

Polling showed that even though public support for the tax declined over the campaign, it remained strong. The Essential poll taken in late May 2010 found 43% in favour and 36% against. But trust was a bigger problem for the government. Although the trust question was split heavily along party lines, a government trying to make a big change against strong opposition needs to have more community trust than this poll revealed.

Kevin Rudd, already unpopular with voters and disliked by many in his own cabinet, was vulnerable even before the campaign began. Before the tax was announced, his satisfaction ratings had largely stabilised but his final slide into political oblivion coincided with the mining industry’s campaign. By June 2010 he was gone, voted out of the leadership by the Labor caucus and replaced by Julia Gillard.

One of Gillard’s first actions as Prime Minister was to surrender to the miners. She asked them to suspend their campaign in return for the government reconsidering the issue. A new, much weakened, tax – to be called the Mineral Resource Rent Tax – was negotiated in a room in Parliament House between the heads of BHP, Rio Tinto and Xstrata on one side, and Julia Gillard, resources minister Martin Ferguson, treasurer Wayne Swan and some political staffers on the other. Ferguson, not Swan, is now regarded as a driving force behind backdown.

Extraordinarily for such a critical and technical discussion, no public service experts were present. Ken Henry, head of Treasury and architect of the government’s own tax plans, was kept entirely out of the loop. During this slightly bizarre exchange at a Senate committee hearing the next month he was asked about his involvement in the talks. There was, as he reveals, none.

CHAIR: So you were not personally present for any of the sessions of the negotiations?

DR HENRY: That is certainly true.

CHAIR: Who was the most senior Treasury official directly involved in the negotiations between the government and BHP, Rio and Xstrata?

DR HENRY: As I have indicated, there was no Treasury official directly involved in the negotiations as such. There were Treasury officials who were, during that time, having discussions with senior executives of those companies about numbers and design issues.

CHAIR: So the way it would have worked was that the Treasurer and Minister Ferguson were having negotiations with BHP, Rio and Xstrata and then somebody would walk out, pick up the phone and talk to a Treasury official and say, ‘They have just told us this. Is this right? We have just agreed to do that. What does that mean?’ Is that the way it worked?

DR HENRY: That is a relatively accurate characterisation of it.

CHAIR: When did you first see the final negotiated agreement?

DR HENRY: It was finalised rather late. It was finalised not long before the announcement. All I can say in response to that is that I saw it shortly before the announcement.

In its 2012-13 budget papers, the government claimed its replacement scheme, the Minerals Resource Rent Tax, would raise $3 billion in that year. As Wayne Swan subsequently admitted in parliament, it actually raised $126 million in its first six months.

As soon as the news was announced, BHP’s share price rose by $600 million and Rio Tinto’s by $1.2 billion.

In 2021 the Parliamentary Budget Office, on a reference from the Greens, calculated that if the original tax had gone ahead, the budget would have ended up almost $35 billion better off after the first eight years.

Over the three-and-a-half financial years since then, mineral prices and volumes reached new record highs. By now, the amount foregone by the government – and saved by the companies – is likely to be in excess of $50 billion.

The $21 million spent by the industry on its campaign has proved to be an extraordinarily good investment: for them, at least. For the Australian public, less so.

Just as Neil Lawrence had helped Rudd win the Prime Ministership in 2007, he also played a substantial part in his fall only two-and-a-half years later. Lawrence’s and his agency’s earnings from this are unknown.

Martin Ferguson also did well. Before entering parliament he had been a leading member of the Labor left and president of the Australian Council of Trade Unions. His key role as resources minister in the abandonment of the resources tax appears to have endeared him to the mining industry. In 2013, six months after leaving politics, he joined the Australian Petroleum Producers and Exploration Association as a highly-paid lobbyist. At the same time he took up a post as head of natural resources for Kerry Stokes’s Seven Group Holdings.

As minister, he had been involved in granting a favourable retention lease on the Crux gas field off the WA coast, in which the small and embattled Nexus Energy had a 25% stake. A year later, as head of Seven’s resources division, he oversaw its successful lowball bid for Nexus – and its undervalued assets. Ferguson was also appointed to the board of British Gas.

In 2015, there was an angry union attempt to expel him from the Labor Party. The attempt failed.

Martin Ferguson is not the first resources minister to pursue a post-political career in the industry he once regulated. Ian Macfarlane, who held the job in the Howard and Abbott Liberal governments, left politics in 2016 after Abbott was replaced by Malcolm Turnbull. He joined the Queensland Resources Council as chief executive, a position he still holds.

Despite a requirement in the ministerial code of conduct that ministers must wait for at least 18 months before taking up a private-sector post in their former portfolio area, both Macfarlane and Ferguson made the switch within six months.

And now what?

The federal budget has been in structural deficit ever since the Howard-Costello government gave away the temporary windfalls of a mining boom in the form of permanent tax cuts. If the value of minerals exports remain in their current range, the original tax would have put an extra $12 billion a year into the budget. Taking the most recent budget forecasts into account, this would have improved the government’s average budget deficit since 2012-13 by around 21%.

It would not have solved the structural deficit problem, but it would have gone a long way.

The most recent Treasury advice is that the Stage Three tax cuts will cost the budget $106.7 billion over four years. That’s an average of almost $27 billion a year.

That this hit to the budget has already been factored into fiscal estimates does not alter the fact that restoring our crumbling basic services is now much harder. The redesigned cuts are more socially responsible than they were but the real reform task the government now faces is expensive and further away than ever.

A reformist government, which Anthony Albanese aspires to lead, cannot allow Medicare, public hospitals, universities and government schools to continue to deteriorate. Welfare, particularly the unemployment benefit, must be boosted if hundreds of thousands of people are to escape poverty. But to reform the nation, and to justify its place in history, this government needs money. Almost every reputable economist tells us we need, as a nation, to pay more tax. Much more.

But rather than raise that money, Albanese and Chalmers have been giving it away. There are the tax cuts, which the nation cannot afford. Nor can we afford to spend between $268 billion and $368 billion on a tiny fleet of nuclear submarines.

So far, the Labor government has done much more to worsen Howard’s structural deficit than it has to improve it. Major reform to resources taxation is an essential component of any long-term budgetary remediation.

There is one minor bright spot, though it is a mere glimmer. In last year’s budget, the government promised reforms to the Petroleum Resource Rent Tax, which was introduced by the Hawke government in 1987 when Australia was a minor oil exporter. It is now one of the world’s leading suppliers of liquefied natural gas but, as Budget Paper 1 says, “to date, not a single LNG has paid any PRRT and many are not expected to pay significant amounts until the 2030s.”

But this reform is the dampest of squibs. The tax will be paid on only 10% of assessable income. And they won’t even have to pay that until seven years after the first year of production.

According to the Treasury estimates, it will raise only $2.4 billion over five years. That’s $480 million a year, or 0.00007% of total government outlays.

Perhaps this is a hint of a new beginning. Jim Chalmers worked in Wayne Swan’s office throughout the previous resource tax brouhaha and saw the damage mining companies were able to do to a government that wanted them to pay more. He understandably favours incremental change over the big bang.

But he’s got to do better than this. Only gas producers are affected at all. Every other mineral, including iron ore and coal, escape any change.

Mt Arthur ... a very large stranded asset

Over the next couple of decades most of Australia’s oil, gas and coal resources will become stranded assets. BHP tried to sell one of the biggest thermal coal mines, at Mount Arthur in NSW, but couldn’t find a buyer. It will now close. Other mines are in a sale process.

Metallurgical coal, gas and oil will eventually face crunch-points of their own. The big mining companies will attempt to pass these off onto smaller players, but these are not their resources: they are ours, and soon they will be of negative value.

The new owners of these fossil fuel projects will extract as much residual value from them as possible before they finally close. There will be a massive remediation cost and history shows the public will be left with most of the bill. That amounts to an effective subsidy, adding to the vast subsidies to which these industries have always felt entitled.

It is now beyond time for the corporations that have made so much from the natural resources Australia owns to pay a fairer share. The longer that is delayed, the more the rip-off will continue and the worse essential services will become.


 

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