Some comments on the Mining Tax from David Macilwain…
In a collision of parallel universes – that of the ordinary taxpayer and that of the extraordinary non-taxpayer – the revelation of the new Mining Tax’s pitiful returns coincided with the concealment of Rio Tinto’s extraordinary tax-free profit.
The returns to the people’s fund from rattling the can around the coal-pits and slag heaps for the last six months was a mingy $126 million. a ‘poor result’ put down to falling demand for iron ore and difficult trading conditions – the mining companies simply couldn’t afford to give any more.
At the same time, Rio Tinto announced that 2012 was the first year it had not been able to record a profit, and had allegedly made a loss of $2.9 Billion. Unlike the paper money that the government collects to spend on US, Rio’s money is only ‘on paper’, and the announcement of its ‘loss’ was soon followed by an admission that thanks to a profit of $9.3 billion it would be able to pay its shareholders a dividend up 15% on last year.
A little quick maths reveals that Rio’s profit was 72 times the little bit thrown to the Tax agents by mining companies, though Rio wasn’t one of them – it paid nothing. Simply couldn’t afford it!
( The explanation for the ‘disparity’ is that Rio marked down the value of some of its assets/investments in Mozambique ( a coal mining project) and aluminium refining, to the tune of $13.5 billion, these assets being allowable against Tax on earnings.)
Never mind that the NT government has just mortgaged its future gas supply in a vain effort to keep open the polluting Aluminium refinery which Rio plans to sell, once the indefinite guaranteed gas supply has been assured. Nowhere else in the world can Aluminium be made with fossil fuel – it’s either too expensive or too polluting, and the plans to replace the dirty heavy oil burning plant at the NT refinery with ‘Clean’ gas rely on it being supplied at a knockdown price, just as the Portland refinery uses dirty brown coal power from Gippsland supplied under a 30 year deal for minus peanuts – it costs Victorians $120 million a year to subsidise it.
So why do we do it? It’s not a question I can answer.