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The Forum > Article Comments > Australia’s mining boom – a dirty business > Comments

Australia’s mining boom – a dirty business : Comments

By Helen Lobato, published 13/1/2012

To accuse the mining industry of murder may seem overly dramatic but...

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There are some very dishonest methods of argument being used here. I'm not inclined to take seriously anyone who starts out accusing a writer of laziness etc without first taking up substantive issues. They start out with a sneering appeal to prejudice.

Here are some responses to substantive issues.

1. The poster who refers to royalties as taxes displays a deep ignorance of the mining industry and economics. Farmers pay a price to buy their land, that is not tax. Miners pay royalties to buy the right to exploit a resource. That is an input, or purchase price, not a tax, although the two things were dishonestly confused by the mining companies' demagogic campaigns against the Rudd and Gillard mining taxes. The Rudd tax would have secured a much fairer return for the majority of Australians, but the Labor Party buckled to big money, which is a bit of a habit for it these days.

2.Matthew Benns' book is about producing mining companies, not explorers. The poster who introduces that point does so in the hope of obfuscating, not clarifying.

3. None of the critics of the review appear to have read the book, yet want to hold forth on the review. It would be a good idea to read the book so you have some idea what you're talking about. What I see here is mainly general assertions with a neoliberal bias (no tax, low tax, flat tax, etc), with very little substance.

4. The book is about the operations of Australian, and Australian-linked mining companies overseas as well as in Australia. The Ok Tedi disaster is one of many, and it is still going on in the hands of another company, although it is scheduled to close this year. Damage done, mineral wealth removed, leave the locals to clean up the mess; tell me the old, old story.

I could go on, but I've reached my word limit and I'm not convinced of the value of grappling with such ignorance and arrogance.
Posted by Ed Lewis, Sunday, 15 January 2012 10:17:07 PM
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Ed,

Firstly Helen's post is not a book review, but her commentary on the issue emanating from the book.

Secondly, Mining royalties are a tax as defined in the dictionary.

A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government [...] a payment exacted by legislative authority."[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government [...] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."

You appear guilty of more ignorance and arrogance than any of the other posters.
Posted by Shadow Minister, Monday, 16 January 2012 4:15:09 AM
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Indi, we have been over this before, a flat tax is simply unfair, as those on a lower wage require 100% of their income just to scrape through, while the high income earner sits pretty.

In my view the only fair flat tax would be a real transaction tax. The GST is no such tax.

Alternatively, you could increase the tax free threshold, then impose a flat tax.

A transaction tax, once modeled and approved, would relieve business of so much red tape that it may even make it worth while doing business.

Now back to the miners.

They are listed companies and are simply minimizing their taxes to the letter of the law.

When we all put in our tax returns, we do the same thing.

Receipts for coffee at meetings, union fees, subscriptions, uniforms etc etc.

If you take all your deductions, including negative gearing allowances, then apply our net tax to our gross income, the result will be a lower tax than if you had no deductions.

This is exactly what the miners are doing.

They just have the means to do it better.
Posted by rehctub, Monday, 16 January 2012 6:17:02 AM
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Shadow minister, you're talking nonsense. Royalties are the purchase price of an input (minerals) that's essential for mining. End of story. If you confuse a purchase price with a tax, everything is a tax, which no doubt suits neoliberal anti-tax propagandists, but as economics is pure moonshine.

And, Curmudgeon, I wrote a bit more last night on sandmining, but ran into this site's word limit on comments.

I've been to areas of the NSW coast that have been sandmined. What you say may be true to the casual observer, but not to anyone who saw the area before it was mined. The large dunes are mostly gone, replaced by low dunes, artificially stabilised with plantings, but vulnerable to high seas in stormy weather. I've seen such dunes breached by the sea and that pattern is likely to continue. Some of these areas will be the first to go under in the event of any sea level rise.

Some clean-up work after mining is required by law in Australia, but it is usually perfunctory and cosmetic.
Posted by Ed Lewis, Monday, 16 January 2012 7:55:01 AM
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The book and article offer a shallow, incomplete understanding of Australia's mining industry designed to appeal to the chattering classes but not to serious people who are interested in policy analysis. In response to the puerile statement "For every $240,000 worth of iron ore that Fortescue Metals sells it gets about $200,000. Of this the commonwealth receives about $27,000 in taxes and the state around $12,000 in royalties. But the Yindjibarndi, the traditional owners of the land being mined, receive a miserly $136.", consider this:
The $27,000 of taxes is spent to benefit all 23 million Australians (including traditional owners), equal to 0.11 cents per person. The $12,000 in royalties is spent on some 3 million West Australians, equal to 0.4 cents per person. The $136 paid to traditional owners goes to a small group of less than 200 people, equal to 68 cents per person. When you consider that Fortescue Metals generates billions of dollars of income from its iron ore sales, the major per capita beneficiaries are without doubt the traditional owners. I have no complaints about this income distribution, by the way, but use this to show how biased and shallow the book and article are.
Posted by Bernie Masters, Monday, 16 January 2012 11:02:45 AM
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Ed,

While you would prefer to redefine the definition of what is a tax to meet your political agenda, I prefer to rely on the generally accepted definition as used by the ATO, accounting firms and government generally. The definition I gave could not extend to everything, as most costs are not payments to legislative authorities.

Helen using examples of what happened many decades ago is completely irrelevant to what is happening today.
Posted by Shadow Minister, Monday, 16 January 2012 1:42:47 PM
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