The June quarter Australian national accounts showed that the mining sector was making unprecedented war profits from gas and coal following Russia’s invasion of Ukraine, with the total profits from mining exceeding all other businesses:
Currently, Australia’s living standards are going backwards because, unlike in Western Australia, there is no reservation of gas for domestic use. Accordingly, energy prices have surged on the east coast, raising cost of living and inflation.
Meanwhile, these foreign owned energy firms are busy sending their profits offshore, which is why Australia’s net income deficit hit a record high in the June quarter despite the trade surplus hitting a record high:
So basically, Australia has found itself in the bizarre situation where the more gas we export, the poorer citizens on the east coast get.
Despite these inconvenient truths, the Minerals Council of Australia (MCA) is now demanding the federal government cut the company tax rate to 25% to spur investment:
Minerals Council of Australia chief executive Tania Constable said Australia was going backwards on international investment and a rethink was needed.
“This is about the policy settings that would encourage investment in Australia. It would be very difficult for the government right at the moment to be reducing company tax,” she said.
“What we’re saying is that the government has an opportunity to plan for very considered tax reform across the whole economy, and company tax should be part of that overall approach”…
“It’s a matter of risk and reward. If we want Australia to be competitive, we need an enormous amount of capital investment to occur in Australia just to maintain the mines that we have, in addition to investment on top of that to grow the sector.”
Can you believe this tripe? Every household and business east of Western Australia is being gouged by rising energy costs and the federal government is being starved of funds, while foreign-owned mining and energy cartels make like bandits earning war profits.
The obvious solution is to do the exact opposite of what the MCA is proposing and implement a super profits tax alongside east coast gas reservation.
As a counterpoint, the Norwegian Government will this year collect $137 billion from their oil industry courtesy of their well-designed super profits tax. In turn, Norway’s Sovereign Wealth Fund will soar to $1.8 trillion – shared among only 5.3 million people.
Sadly for Australians, the Albanese Government is stacked with policy cowards and has already ruled out a mining super profits tax. It would rather cozy up to the foreign-owned energy cartel than govern in the interests of Australians.
In doing so, Labor will starve itself of much-needed budget revenue as well as anger Australians by driving up their energy costs, reducing their real disposable income, and forcing the RBA to fight harder against inflation by hiking interest rates.
