Note: This article was written for the Molong Express of June 13, 2019. Since it was published, the LNP Federal and Labor State government of Queensland have signed off on the Adani Carmichael coalmine and the consequent destruction of the Galilee Basin. This decision has sounded the death knell for the Great Barrier Reef and added another grave marker in the cemetery of dashed hopes of today’s youth. This coincides with the announcement that Norway’s “Oil Fund” is divesting itself of some $18 billion in fossil fuel investments.
Now that the election is over, we are being forced to face the fact that the winning side, bereft of many actual policies, snatched victory by riding a bandwagon of lies, half truths and the over-inflated ego of a self-proclaimed billionaire.
Some political commentators have even gone so far as to suggest that many of the government’s policy promises – and I use the word with caution – were laid as traps for an expected future Labor government.
The argument goes that on questions of border security and tax cuts, the Opposition would have to agree to many of the LNP’s promises for fear that it would be seen as “soft on security” and unsupportive of the “battler”, then, when elected, Labor would be faced with budget blowouts that the LNP could use as a cudgel with which to beat them.
Whether or not that is true has no bearing on this article, but what can’t be ignored is the simple fact that after years of growth, rising corporate profits and unprecedented expansion of the mining industry, Australia is no better off than it was prior to the boom years that began in about 2003.
During the recent election campaign, the LNP spent countless hours in trying to convince the voting public of their skill as economic managers, without any real evidence that they are. On the other side, Labor pointed to the fact that they steered the nation through the Global Financial Crisis, escaping with relatively few battle scars and little of the damage sustained by other countries.
Graphs by the score are trotted out to bolster the arguments of both sides but they all miss the point. They tell those who can read them how the economy fared over a given period of time but what they don’t tell us is how a nation’s people are feeling in themselves or, to borrow a marker from our cousins across the Tasman Sea, the wellbeing of the nation.
If we were brave enough to take a really close look at Australia and honest enough to describe what we were seeing, it’s a fair bet that we would describe ourselves as a nation in peril.
Governments ponder falling house prices and their effect on the economy, yet there is little discussion over a survey’s findings that in the whole of Australia, only two rental properties came within financial reach of someone on the Newstart allowance. Just two.
There is little concern expressed over reports showing that rents in Hobart are rapidly becoming the least affordable in the nation and that all over Australia the numbers of homeless people are growing, with mature-age women an increasing percentage of those numbers.
And perhaps that’s the trouble. This new generation of politicians sees the world in bottom lines, in spreadsheets and statistics, not as a living, breathing planet inhabited by people of all social backgrounds and capabilities, each as deserving of consideration as the next.
Using money and minerals as the yardstick, Australia is a rich country. From the first goldrushes to the diverse mineral extraction of the present, billions upon uncounted billions of dollars have been wrested from our ancient land to enrich the world’s industrialists.
Australian coal and iron have fuelled the phenomenal rise of China as an industrial power, just as our gold, wool and wheat enriched the masters of the British Empire.
Yet as a nation, are we any better off? Our public health system is under pressure, government schools are starved of funding, public housing stocks are the lowest in many, many years as homelessness rises and new apartments sit vacant, and wages are stagnant at a time when corporate profits are at an all-time high.
Public assets are flogged off to corporations who then increase the charges to their new customers while the sale proceeds are spent on pork-barrel projects that return a fraction of the original value to the community. Meanwhile the government offers tax cuts then tells voters there is no money to “waste” on social projects. And all the time, the nation’s resources are dug from the ground and shipped overseas at no great benefit to the people as a whole.
What happened to the billions in royalties paid into the “future fund”? It was squandered on tax cuts and handouts, the benefits of which have since evaporated.
It is said that one in every four bulk ore carriers plying the world’s oceans is carrying the Pilbara’s iron ore. Why then is Western Australia begging for a greater slice of the GST take?
Why is the Queensland Labor Government offering royalty freezes for miners if they contribute to community funds, while a former Federal Minister in the Liberal government, speaking for the mining companies, says he welcomes the offer but the LNP has a more attractive plan. What could be more attractive than billions of tax-free dollars in return for a few million spent on footy fields and community halls?
In 2018, Australia’s take from gas exports was expected to be $600 million, the same as is raised by the beer tax, while for the same period Qatar would reap $26.6 billion. We will soon eclipse Qatar as the world’s largest exporter of gas.
According to one source, Australia’s effective tax rate on its gas resources is 21 per cent, while that on the reserves held by the North Sea nations (which include some Scandinavian countries, Germany and the Netherlands) is 35 per cent and more. What is more, our petroleum resource rent tax allows companies to offset the costs of exploration and claim tax credits for future decommissioning of plants.
While eastern States energy prices increase at about six times the rate of wage earner income, record amounts of LNG are shipped overseas to countries whose people pay less for the gas than we do. Interestingly, very little of that gas is reserved for the domestic market – it was all given away to the miners; those same miners who tell us that if they were allowed to extract gas by fracking priceless agricultural land, we would get our domestic supply much cheaper. To add insult to injury, tax and royalty arrangements “negotiated” by governments have ensured that it will be years before the country sees any benefit.
Both miners and politicians seem to forget that it is the nation’s gas and miners should pay for the privilege of extracting and marketing it.
In 2014–15, Australian exports of gold earned about $16 billion; royalties paid during that period were about $317 million. It’s hard not to conclude that governments have given the cake to the miners – and other interests – while the nation is left only the crumbs on the floor. All this is in stark contrast to the situation in Norway, a Scandinavian country of some 5.3 million inhabitants.
In 1990, Norway established the Government Pension Fund Global, popularly known as the Oil Fund and established to invest the surplus revenue from the petroleum sector, both State and privately owned, that exploits the Norwegian sector of the North Sea oilfields.
By 2018 it had about $AU1.5 trillion in assets – $AU280,000 per citizen – assets of which 1.3 per cent are held in global stocks and shares, making it the world’s largest sovereign wealth fund and the largest single investor in European commerce.
The fund only invests in companies that it considers to be environmentally and ethically responsible; tobacco companies and those found to be environmentally irresponsible are not considered, for example. It regularly votes in meetings of stockholders, hoping to influence decisions around environmental and ethical issues.
The fund is kept aside against future eventualities and should not be confused with the Pension Fund. Set up in 1967, its investments are in Norwegian companies only and, as its name implies, is a State controlled superannuation fund.
I suppose it’s never too late to introduce a good idea, but I think the Australian horse has well and truly bolted. The miners – and other corporations – now have such a stranglehold on much of our Parliament that any legislation offering even the remotest perception of a threat to the privileged position that large corporations hold in this country would never see the light of day.