When is a $15 billion profit not enough? I suppose when you are at the helm of BHP and do not want to pay a fair share in taxes in return for digging up the minerals that are making you rich.
It’s not, as the Sydney Morning Herald tells us, a day to cry at BHP:
The group is still highly profitable. Underlying earnings before interest and tax fell 14.8 per cent to $US27.2 billion, but that was still a very [sic] 39 per cent share of revenue, and BHP’s underlying return on capital invested was 23 per cent.
I’m assuming the missing words in the sentence above were “big haul” or “monster profit” or something. It is not something to wring ones hands over, as CFMEU National President Tony Maher points out. That profit is still the second-biggest corporate profit ever recorded in Australia and more than double the highest profit made in our next most profitable sector – banking. Maher continues:
Don’t be fooled. This is a massive profit, greater than the GDP of over 60 countries. BHP shouldn’t have to be dragged kicking and screaming to do the right thing by its workforce, by mining communities and by downstream Australian businesses trying to benefit from the mining boom.
The worry should be that BHP will use a lower, but massive profit, to try to squeeze workers and continue to fight a reasonable resources tax. Maher also points out, though, that any higher costs are not about workers’ wages:
Where mining companies are looking to cut costs, the protracted record-high level of the dollar is to blame. Australia’s mining boom is going to continue for many years into the future. For the sake of jobs across the whole Australian economy – it’s time for some serious action to take the heat out of the dollar.
Rita Mallia speaks of the importance of unemployed locals getting the first pick of mining jobs as well as her union’s proud multicultural ethos.
Importing foreign workers has rocketed during the mining boom. Last year almost 90,000 workers were employed under 457 visa grants allowing them to stay and work in Australia for up to four years. The number of visas granted is up nearly 50 per cent on last year.
Since Gina RInehart received permission to bring in 1700 workers for her Roy Hill mine and the subsequent uproar, a Resources Jobs Board has been created.
The CFMEU’s Rita Mallia tells 3Q 60,000 people have already visited the website — putting paid to claims that Australians don’t want to do remote mining work.
As Gina continues on her “I, Gina” self-absorbed stomp, it’s always useful to keep in mind that a society always has the ultimate option: if rich people, or mining barons, don’t care about the national interest, they can just move somewhere else. And what is pretty clear is that most don’t, and won’t, because they have it good where they are–which brings us to the whinging about resources taxes.
Gina and her ilk–Clive Palmer and Twiggy Forrest come most quickly to mind–bring up the usual fiction heard around the world whenever higher taxes on the wealthy are pushed as a way of making sure a society sustains itself: it’s anti-business and hurts “us” from being competitive.
Well, to focus on just mining, that’s pure rubbish, as we learn from a pithy summary from Peter Colley, National Research Director at the Construction, Forestry, Mining and Energy Union (we don’t have a link to a place it might be posted–we’re just privileged to get such gripping, novelistic American Idol-like fare sent our way…). As Peter writes:
One would think the mining companies were losing money when the overall picture for the mining industry globally is one of rude good health.
PriceWaterhouseCoopers, one of the global Big 4 accounting firms, in their annual survey of the mining industry summarised the good news for big mining companies:
“In 2011, the financial results for the Top 40 hit new heights”, it said, listing the following facts:
• Revenues increased 26% to over $700 billion
• Net profit was up 21% to $133 billion
• Operating cash flows grew 34% to $174 billion
• Investing cash flows grew 92%
• The Top 40 returned 156% more to shareholders than in 2010
• Total assets remained above $1 trillion and grew a further 13%.
Imagine that. They are rolling in dough. And it isn’t the case that the local barons, Gina and The Gang, would have it so much better in another place on the planet. Back to Peter:
At least 25 countries increased taxes and royalties on their mining industries, or announced intentions to do so. These include all the major mining nations – Canada, the USA, South Africa, Indonesia, Chile, Brazil, Colombia and even China and India.
These taxes and royalties are often far higher than in Australia – in Colombia they can reach 81% of coal mining profit, while in the oil and gas sector it is well known that Norway taxes almost all the profit of the North Sea oil industry – but what remains is still enough to keep the investors coming.
So, the proper response to “we’ll take our business elsewhere” should be, “what flight can we book you on?” The truth is that what Gina and The Gang are really up to is a extortion–but they aren’t holding much of a weapon. The resources are in the ground. You can’t take it with you. But, by all means, if life is so cruel for Gina and The Gang, the country should organize a collective farewell party, wave goodbye and invite others to do their business here.
And we neglected to mention that Fortescue is out there whinging about the mining tax and, per the SMH, taking the government to court:
While large miners Rio Tinto and BHP were able to strike a deal with the federal government over the final scope of the tax, smaller miners including Fortescue and Gina Rinehart’s Hancock Prospecting have waged a fierce battle against the tax.
Fortescue has been threatening to challenge the MRRT in the High Court for months, arguing it is unfair and was been stitched up by the government in conjunction with the big miners.
A spokesman for the acting prime minister and Treasurer Wayne Swan said the challenge had not come as a surprise.
”Mr Forrest has made it clear that he is staunchly opposed to the government spreading the benefits of the mining boom to millions of households and small businesses who aren’t in the fast lane,” he said.
“The Gillard government believes Australia’s non-renewable natural resources belong to all Australians, not just to a handful of mining billionaires, and is determined to deliver the MRRT to ensure the Australian community shares in the benefits and opportunities of the mining boom.” [emphasis added]
To which we say: good on the government, and the Swanster for saying what needed to be said.
When Wayne Swan attacked mining magnates for undermining Australia’s national interests in pursuit of their own ends it created a storm of controversy.
Yet the mining magnates haven’t been shy about opposing the mining tax and climate change policy.
And now Clive Palmer is running for office, Gina Rinehart has bought big into Fairfax and Twiggy Forrest is challenging the mining tax in the High Court.
He wonders whether Australia will ever have a Warren Buffet or Bill Gates fighting for the rights of many rather than the rights of a few.
Or will the billionaires soon be launching their own campaign to save themselves?
Michael O’Connor is the National Secretary of the CFMEU. Michael has been an outspoken supporter of timber workers, their families and communities and has coordinated a large number of community campaigns in support of employment and resource security for Union members.
I’m going to Adelaide next week and I’m excited.
Obviously I take some satisfaction in being the first person to ever write that sentence, but I’ll take more if things go our way on November 24.
(Sorry, Adelaide. I understand how it feels to be the lazy gag writer’s best friend. I’m from Canberra.)
The South Australian capital will be the focus of the nation’s attention on Wednesday, because it is where we will finally find out whether the Australian Building and Construction Commission can put an ordinary worker in jail for sticking up for safety.
In 2008, the excellently named Ark Tribe, a construction worker, raised serious safety concerns with his employer on a site in Adelaide.
Read Essential's ongoing research on the public response to Covid-19.
In this week's report:
- Performance of Scott Morrison
- Performance of Anthony Albanese
- Preferred Prime Minister
- Views towards re-electing the federal Coalition government
- Party trust to handle issues
- Importance of Australia’s international reputation
- Scott Morrison’s impact on Australia’s international reputation
- Views towards Australia’s international reputation