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Speech: Mining tax repeal

Speeches in Parliament
Lee Rhiannon 17 Jul 2014

What a week! We have seen the government really deliver in spades, so to speak, to the mining industry. They are right out there, you would have to say—sycophantic, pandering. It is going to be tough, because, when you do not have such a revenue stream coming in, somebody has to pay. What we are seeing here is a very clear reason why the coalition has earnt its name as the party of the one per cent. The government is actually propping up a dying industry, particularly when it comes to the mining of coal and the use of coal. The world is starting to turn its back on this industry—and that is why, at this moment, when Australia does have these resources that are being mined, and sections of the world do want them, rather than repealing this tax, we should be strengthening it. That is something that the Greens have long worked for and that is what should be happening tonight—but we know in fact it is going in a very ugly direction.

We will lose this very rich revenue stream. It is very simple, what is going on here tonight. Mining companies make massive profits, huge amounts of money, out of digging up the resources of this country. Surely much more of that money should come back to Australia, because by far the bulk of the profits go overseas. And we are talking really big profits. Just take three of the big mining companies—BHP, Rio Tinto and Xstrata. They are on track for $30 billion in after-tax profits for one year. That is not unusual. That is what has been going on year in, year out. I certainly acknowledge they are not just the profits from digging up our mineral wealth—they come from around the world—but a lot of the profits come from Australia. And, like they are ripping off Australia, so many of these companies are ripping off other countries, particularly many of the low-income countries.

I think we also need to ask ourselves: when we lose this revenue stream, who will pay? It will be the disadvantaged, who are copping it as we have seen set out in the budget. People who have been really targeted in this budget include the sick, Indigenous people, the elderly, students and people who are unemployed. They are the people who will carry the burden. Also it will be working people, because the taxes, the money, will have to come from somewhere. We again need to remind ourselves that the mining tax could be and should be a rich revenue stream. That was what was originally envisaged by the Henry tax review. It could have brought in $35 billion in the original form, with some of the loopholes plugged. That is where we should be heading. That is what big business should be paying for.

I think it is worth reminding ourselves what that money could and should have been spent on. This is the Australia that I think most of us envisage. It is just that, unfortunately, the policies of this very conservative, neoliberal government cannot deliver it for us because of the mean, greedy way they operate. We should have dental care. It is an extraordinary aspect of our medical service that the health of our teeth is not covered in a free universal health scheme. We should have high-speed rail—something the Greens have worked on for so long, along with so many in the community—along the east coast. The jobs boom that that would bring is so exciting. But, if we do not have the revenue there, it is certainly off for a long time. There are issues to do with disability, with welfare, with public education. With regard to our higher education system, so much of Europe still has a free higher education system. This is not just light talk. This is not just something that is a dream of a past era. It is achievable. The revenue is there. We need a government with the political will to raise the money. Then there is the all-important area of overseas aid. We heard just yesterday that the government has come up with another way of taking money out of the overseas aid budget. Again, this is where we should be on track to get to 0.7 per cent of GDP, and we could be if the government had the political will to stick with and improve the mining tax.

I congratulate Senator Christine Milne and the Greens MP for Melbourne, Adam Bandt, who have consistently worked to strengthen this tax and save this important legislation. We have to acknowledge that this legislation has had an unfortunate history, with Labor watering it down from what was originally envisaged. That certainly was a setback. There has also been the problem with the loopholes. A deal was negotiated with the big miners, and they won hands down and the Commonwealth lost out. We lost out at a federal level in terms of funding, because every time the state premiers raised royalties it was a hit to Commonwealth revenue. The Greens worked, with a private member's bill, to try and tighten up those loopholes and eliminate them. Again, there were so many possibilities with this legislation, and this was a big setback.

We also need to remember that a part of this story that we are dealing with tonight is the power of the mining companies. That is why Labor went for a weaker form of the tax and the coalition have delivered in spades. The coalition and Labor have benefited. Considering the wealth of the mining industry, I do not think it is that much, but, since 1998, the political donations to the Labor, Liberal and National parties run at more than $11 million. That is the amount of political donations to those parties over the period of time since 1998. These companies probably think it is just a bit of petty cash for them, considering the profits they make and what they get back. But they have got a lot more than just this weakening of the tax. I am from New South Wales, and what I have seen, year in, year out, from successive state Labor and coalition governments is a weakening of laws and a level of corporate welfare to the mining industry that is really quite staggering. It is very much part of the story we are dealing with tonight that the mining industry has become so powerful in this country that it is becoming quite bankrupting in its impact on our democratic processes and how the wider society works. I see townships, little villages, in parts of New South Wales that are just about ghost towns because of the way they have been treated by mining companies.

Let me list what mining companies get away with. It is much more than just getting this tax knocked out, as is about to happen tonight. They weaken the standards by which environmental and social impacts are judged—they have advocated for that and they have won. They get massive subsidies from governments. They get tax breaks. In New South Wales, they have achieved a weakening of the planning laws that cover mining applications. A really big issue is the lies about the number of jobs the industry delivers and its so-called economic benefits.

I want to go into the issue of jobs in more detail. As a Greens MP—I was fortunate enough to have the mining portfolio when I was in the New South Wales state parliament—and now as a Greens senator for New South Wales, I have found that we often have our position misrepresented. It is made out that we are damaging the economy. Because we are trying to bring some balance to how mining industry operates in this country, it is made out that we are taking jobs away from people. That is an absolute lie. The new clean energy industry, the new clean manufacturing industry—that is where the big jobs growth is for the future. The mining industry is not where the jobs growth is. What we are seeing now is that the mining industry is actually a jobs killer. I will go into why I say that. Even where productivity might be going up, the jobs numbers have plateaued because of the high levels of automation in the industry. This so-called plus—that the mining industry brings benefits to communities—is well and truly a thing of the past, left long ago in the 20th century.

I will go through some of the job losses—I am talking here just about the Hunter. It is a big mining area in New South Wales but not the only one. These are some figures pulled together by the Newcastle Herald on 4 July. They report that 2,200 jobs went in one year. In only the last two months, these announcements have been made: BHP, 163 mining jobs to go; Arrium, 30 jobs to go; Forgacs, 100 redundancies; Sandvik, 103 jobs; Powerserve, 178; and BHP, a further 50 contract jobs. Then Bradken announced jobs to go from its office at Steel River in Mayfield. The Brazilian mining company Vale confirmed about 500 jobs will be permanently lost as a result of the closure of two of its mines in the Hunter Valley. Then rail company Pacific National cut 4,500 jobs, many of them coal related—because the railways are so important to the coal industry there.

These job losses take such a toll on the Hunter region. A responsible government would be working with these communities. Clearly jobs will go. We are going to see more and more of that. This is where governments should be working with industry, working with the workforce and working with the unions on the transition to new jobs. Nobody should be out of a job when an industry has to change if a society realises in time that major restructuring steps are needed.

There are other aspects of the assistance the mining industry has had over the years. This has included the loosening of environmental protection and the removal of mining taxes. This has been a major theme of how the mining industry has been operating, particularly in recent times. Then there is the issue of subsidies. The Australia Institute has done some very useful work in identifying the volume of subsidies going to the mining industry. They have found $17.6 billion in government subsidies going to the mining industry. So here we are with these huge amounts of corporate welfare going to polluters, companies who are severely damaging not just the environment but the health of our communities.

Air pollution around these open-cut coalmines is now a huge issue of great concern, with the mining companies regularly breaching the standards under which they are supposed to operate. What do we hear when we raise these issues with governments? We have regularly asked questions. In particular, I used to ask questions of disgraced former minister Ian Macdonald in the New South Wales parliament. In reply he would talk about the rigorous environmental standards that covered these mining companies. But when he talked about 'rigorous environmental standards', those were just the words that came out of his mouth. The reality—and you can see it if you travel through the Hunter—is huge plumes of dust. That dust should not be allowed to get higher than the height of about two trucks before action is taken to limit it. But dust plumes just cover the Hunter. These are some of the problems the locals have to put up with—while industry gets away with it. Again, I am making the link with what we are dealing with tonight: industry, more and more, is dictating how governments work. Governments are rolling over and letting them get away with so much. This is so unhealthy for our society.

I congratulate some of the aid organisations for the work they have done on the subject of tax avoidance by mining companies. I am not referring to tax avoidance only by mining companies; many multinationals are involved. Aid organisations have identified that if multinational companies in low-income countries paid all the taxes they ought to pay, those countries would be receiving more in tax revenue than they are receiving in aid. It is often the mining companies that are the biggest tax avoiders—and we know this is happening in Australia too. Recently there was an extraordinary report about Glencore, sometimes known as Xstrata. I must admit I usually do call them Xstrata because I got used to that, but they have now changed their name—probably because the Xstrata name had become a bit too discredited. It was reported that their income had been $15 billion over the past three years—and on that virtually no tax was paid.

How does that happen? How does the government allow that to happen? What a reminder that we need a mining tax, a mining tax that is thorough, extensive and—as we have all been saying tonight—in the form originally envisaged by the Henry tax review. These profits arise out of Australia's wealth. The Australian people and the Australian environment should be benefiting from that huge amount of money. But, by using a combination of debt write-offs and various other accounting tricks, this company was able to get away with it. I find it really sickening that the government has allowed that to happen for so long. From what you hear, it is certainly not limited to one big mining company, Glencore—other mining companies do it to varying degrees.

I mentioned earlier some of the very useful work on subsidies being undertaken by the Australia Institute. The New South Wales government alone has given more than $870 million in subsidies over the past six years. What is even more alarming is the fact that the financial incentives offered to these companies rival what we spend on protecting our environment—again, this is in New South Wales. The Newcastle Herald has done some good work in this area. They report that, in 2013-14, mining companies received $136 million in various incentives and subsidies, while the Environment Protection Authority received only $2 million.

That $2 million actually explains quite a bit. There is an inquiry into the Environment Protection Authority going on in the New South Wales parliament—because the EPA has become such a weak body. I described earlier how these huge plumes of dust just cover communities in the Hunter. There are very high levels of asthma in the area. What are people told when they want to complain? You are told to ring up the Environment Protection Authority, that the EPA has an office in Newcastle and that they will come and investigate. If you do ring them, though, often you will just get an answering machine or they will say, 'We will get there when we can.' They are totally under-resourced. They have put up some monitoring machines that measure the levels of air pollution, but it is really meaningless. We do not need to be just doing this monitoring; we need to be reducing the dust—the pollution—that is bringing such health problems to these communities.

Some of the issues that the people are living with day in, day out are the weakening of environmental laws, the weakening of planning laws and the weakening of tax laws. It is a theme that the mining industry, through its lobbyists, with its slick PR campaigns, with its advertising blitzes that we have seen hit federal parliament back in 2010, has used to get what it wants. What I have seen time and time again is that what the mining industry wants the mining industry gets.

And then you come to some of the big laws. There are some big mining laws that cover the operations of these companies. Time and time again, when I was in New South Wales parliament, we would be told about how there are rules and standards. I pay tribute to the many communities that are taking on the coal seam gas industry across New South Wales. What you would find if they had a win—like the Liverpool farmers had a win in the courts against BHP Billiton wanting to come onto their land to explore, people took some of the mining interests to court in Port Kembla and there have been various wins—the Labor or coalition governments come into parliament and change the law so that way the community won would not be possible again. It indicates the power of this industry. Labor and the coalition so often when they are in parliament come in to give the benefits to this industry.

If you want to know more about it, just pay attention to ICAC. ICAC is about to resume again with the disgraced former Liberal minister Chris Hartcher. We have heard of some of the antics of Mr Obeid and Mr Macdonald. So much of that is to do with the mining industry. This industry is having a deeply corrupting influence on our democratic processes. What we have seen tonight might be legal, but it is certainly deeply immoral. What we are discussing tonight should be about repealing this bill; it should be about strengthening the mining tax. That is what this country needs.

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