Thursday, June 17, 2010

Reject miners' scare campaign - tax the rich!

Yesterday there was a full-page advertisement on page 8 of Murdoch’s Advertiser (17 June 2010).

The ad featured retired Whyalla road sweeper Ross Bray and the comment attributed to him that “The average worker is getting great benefits from the mining industry through the superannuation they have”.

This is because super funds are major shareholders in many mining companies.

Beyond a reference to “somebody (throwing) a hand grenade in amongst it all now”, the ad specifically avoids stating that the proposed resources super profit tax (RSPT) will cut superannuation returns.

This is because the Association of Superannuation Funds of Australia has “rejected mining industry claims that the federal government’s resource tax would hurt superannuation returns” (Financial Review, Friday 11 June 2010 - the Fin Review is a paper for the business community in which the elite of the community generally are somewhat freer with information than in the tabloid press circulated for the masses).

The ad, and similar TV ads featuring working class Australians saying how they will be hurt by the RSPT, are part of a deceptive scare campaign by local and foreign-owned mining companies.

Presenting working Australians as the face of a multinational campaign to avoid paying a fair rate of tax is the height of hypocrisy.

Nor is Bray quite the gormless piece of anonymity depicted in the ad. He is quite well-known in Whyalla as President of the Association of Independent Retirees Ltd, railing against the Superannuation, Retirment and Savings Division of the Australian Treasury for having "shown uncharacteristic favour to the big end of town in the finance industry" in relation to pensions in small super funds.

However, the big end of Whyalla, a town of 23,000 residents, is the major employer OneSteel. The company mines iron ore and manufactures steel products at its Whyalla steelworks.
According to a report in the Australian, Bray leases property to OneSteel contractors and has children who work for the company.
"If the taxation of mining is the demise of OneSteel, we'll be wiped out," he is reported as saying.
So a victim of a local scare campaign (OneSteel has prated about having to close the steelworks if the RSPT goes ahead) lends his services to a national scare campaign.
But it is not just the comments of the Association of Super Funds that show what a scare campaign this is....mining companies crying poor have been exposed too.
Treasury figures released today (again in the Fin Review) reveal that resources company profits more than doubled to $91 billion last year.

The unprecedentedly high demand for resources, particularly from China, has seen profits in this industry surge in such a way that the proportion of taxes and royalties paid has diminished against what is called "resource rents" (ie income from mining sales and services less operating costs and "an allowance for corporate capital").

In 2004 taxes and royalties comprised 76.6% of resource rents, falling in successive years to 61%, 47%, 45.8%, and 37.4%. Last year, it went down to 26.5%.

Profits skyrocket, taxes plummet in proportion, and still they have to drag out the Ross Brays of the world to defuse the indignation of the people.

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