Put the mining giants in public hands

Reading Time: 3 minutes

There has been much made in the media about the Resource Super Profits Tax (RSPT). The mining companies have conducted a scare campaign threatening strikes of capital and the loss of thousands of jobs. This has been treated as if it were the most natural threat in the world – a far cry from the treatment of workers threatening strike action to defend their pay and conditions!

Many workers are rightly concerned about the threatened loss of jobs the mining industry has associated with the RSPT. This is not only workers directly employed by mining companies but also those ‘downstream’ such as hospitality and construction workers. For ordinary people it is a question of job security.

Contrast this with the mine owners whose only concern is profit. In the recently released BRW rich list those who make their money from the resources sector added nearly $8 billion to their collective wealth in just one year!

There is no doubt this colossal amount of money would be far better spent providing services for the benefit of all Australians but this is not what the RSPT does. While increasing taxes on some of the larger mining companies, the proposal is to reduce the corporate tax rate across the board. Rather than taking from the rich to give to the poor the government wants to take from the super rich to give to the rich!

The government will spend some of the money recouped on infrastructure but not on public transport, for example. The money will only be spent on things like rail and ports for the use of the mining industry. These are things that the mining companies should be paying for themselves.

When the financial crisis hit it was the mining companies that were among the first to respond with the closure of entire mine sites and job losses of around 15% across the industry. This clearly demonstrates the absurdity of claims that the mining companies share a common interest with workers – their only interest is profit and they will slash jobs to defend it.

A lot has been made in the media about the falls on the stock market and the recent announcements of suspended projects, linking this to the RSPT. The truth is that this has had more to do with the shock waves travelling around the globe due to the debt crisis engulfing Europe, and the slowdown of industrial production in China as the massive stimulus that the Chinese government implemented is wound back.

Workers are correct to be concerned about their retirement funds but as the Superannuation industry has explained, it would take falls of around 10% in the mining stocks to reduce Super funds by 1%. Since the announcement of the RSPT, BHP shares have fallen just 2.7% and Rio 0.7%. It is questionable if this has had anything to do with the RSPT.

The slowdown in China is having a far greater impact on investment decisions than the RSPT as companies reassess the markets for their products. There is also the real threat of a ‘double dip’ recession that this time could take China with it. This would have serious repercussions for all Australian workers.

While mining giant Xstrata has blamed the suspension of the Wandoan project on the RSPT, they have continued to buy up land and according to The Australian Financial Review “it was clear at a community meeting…that the plans were far from dead”. However, this is of little comfort to workers facing an uncertain future.

Since the election of Julia Gillard as PM she has indicated that she is willing to negotiate with the mining companies to water down the tax. As we go to press the outcome of these negations is still unclear. The one thing that is clear however is that the resources sector is far too important to be left in the hands of profiteers.

If ordinary people are to really benefit from the wealth created by Australia’s mineral resources these industries need to be taken into public ownership and placed under workers control and management. Only then would it then be possible to protect jobs and redirect wealth to the areas most in need like health, education and public transport.

By SP reporters