Sunday, May 16, 2010

The Mining supertax.

The Australian labour government is pushing a crippling 40% supertax on mining in Austarlia. This is on top of the 30% existing tax base in Australia. It makes mining non-viable in Australia! Its already crashed our stock market, trashed half the pension funds and split the union movement.
Michael Darby posted this on Facebook about the advocates of this tax.
I snipped the group part of the message.
Our opponents are dangerous ideologues who believe that the "people" of the whole of Australia somehow own the iron ore beneath the ground in WA and the coal beneath the ground in Queensland. This false and pernicious belief leads the Prime Minister repeatedly to assert that the purpose of his punitive tax is to gain a "fair share" for all Australians.
The false and tendentious "fair share" theory flaunts two important historical principles.
1. Security of Tenure
The first principle is that fundamental to the growth and development of modern industrial civilisation, a prospector owns title to what a prospector has found, subject to staking out the ground in accordance with a secure system of tenure, subject to bringing the claim into production within a reasonable (and known) period of time and subject also to paying a certain royalty to the sovereign government or to the owner of the land as the case may be. Where the sovereign government is the owner of the minerals, as in Queensland and WA, the State protects the interests of the landowner by imposing obligations upon the miner such as payment of compensation, notice of entry onto land, and rehabilitation of damage. Of vital importance to this process, from the moment a prospector first registers an interest in a prospect, the rules must not be changed. Any alteration adverse to miners in the system of royalties, for example, has a retrospective effect which destroys the confidence of all future miners.
2. The sovereign governments are the States, not Canberra
Only a fool would suggest that West Australians or Queenslanders deserve a "fair share" of the Melbourne Cricket Ground or of Mt Kosciuszko or of the Barossa Valley wineries. The Prime Minister may be such a fool. In 1892 residents of the eastern colonies who wanted a fair share of Coolgardie gold booked a passage to Fremantle and tramped east with a pick and shovel. Or they set up business in Coolgardie as blacksmiths or farriers or hoteliers or butchers. In modern times most Australians own a "fair share" of coal and iron ore through their superannuation funds (already wounded by the anti-mining tax). Anyone seeking a larger "fair share" need only email the stockbroker, or apply for a job in Central Queensland or the Pilbara. Of course, any discussion of a "fair share" must take into account the huge contributions of mining companies in company tax, PAYG tax, and royalties to State Governments. The Canberra claque resents the idea of a relationship between miners and State Governments and wants a monopoly on exploitation of the mining industry.
The Canberra exploiters would do well to learn the lesson of the great Scot, Leslie Urquhart (1874-1933), whose Russian mining companies a century ago employed 40,000 workers and provided housing and amenities for them and their families. When the Bolsheviks stole his mines, Urquhart thankfully came to Australia and became the driving force behind Mount Isa Mines. The dwellers in fantasy land imagine that capital and expertise will hang around to get kicked in the guts.
These are among the points I have been making in talk radio programs, and I am pleased to report a consistently good response from presenters and other callers. Queensland Senate team leader for the DLP Tony Zegenhagen was the first political leader to come on board with his 27 April 2010 statement of unqualified opposition to the anti-mining tax, and I am pleased that Tony Abbott has followed.
This is a battle for the rights of miners worldwide, and for all who support civilisation.
Please nominate yourself as a Convenor, for your mine, your union, your town, your electorate, your university, your district or even for your State. My personal email address is Phone me anytime on 0402 558 947 and I'll phone you straight back
Kind regards
We are in a huge fight. Previous labour governments have taken two or three terms to stuff things up this badly. Our best hope is that labour will self destruct over this folly.
Mining is costly and risky the profits are not windfalls or exploitation they are the real cost of high risk capital. That the PM Kevin Rudd and Treasurer Wayne Swan don't grasp this is catastrophic.
For those in the USA this tax is an order of magnitude larger than the tariff disputes that triggered the American civil war in 1861!

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