Whilst no-one likes tax rises, Wayne Swan and Anna Bligh should be congratulated for together slugging the North West Shelf and Queensland coal miners with a $1.1 billion tax rise for 2008-09.
If anyone can afford to pay more tax, it is the following ten huge multi-nationals which will share an average tax increase of about $100 million each courtesy of soaring oil, gas and coal prices.
I reckon the “victims” rank biggest to smallest as follows: BHP-Billiton, Mitsubishi, Rio Tinto, BP, Shell, Chevron, Woodside, Xstrata, Anglo-American and Mitsui.
This list tracks the ownership and tax arrangements for Australia’s biggest resource projects and it shows the state royalty arrangements are all over the place.
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However, there is no doubt that Queensland’s new 10% rate on coal sold for more than $100 a tonne sets a new benchmark.
WA Treasurer Eric Ripper will be looking on enviously as he grossly under-taxes BHP-Billiton, Rio and Fortescue Metals with iron-ore royalties of just 3.75%. Rio Tinto even negotiated a cut in royalty from 7.5% to 5% in exchange for proceeding with a $1 billion expansion of its Argyle diamond mine in WA.
Even worse is the complete royalty holiday on gold mines in WA, including booming projects such as the Kalgoorlie Super Pit which are 100% foreign-owned.
The most surprising element of yesterday’s Queensland royalty hike is that there wasn’t any collusion with NSW, which has a far worse budgetary position, so both states could join in the tax party.
The poor old Northern Territory will be looking on with interest but at least their citizens know something about mining royalties after a series of stories by Northern Territory News reporter Alison Bevidge, the only journalist in Australia who has been pointing out the highway robbery that global mining houses have been getting away with.
In a story on May 8, headlined “Territory public assets sold for a pittance”, Bevidge wrote:
NT Government Budget figures released last week reveal mineral and energy production is estimated to rise by 7.7% to $5.6 billion this financial year. That is $25,866 for each of the Territory’s 216,500 people. Last week’s Budget showed mining royalties are projected to increase by $16.2 million to $88.4 million in 2007-08. That is $408.31 for each person. Royalties would make up just 1.6% of the projected value of production.
More than 80% of Australia’s resource projects are foreign-owned and resource nationalism is a global phenomenon, so the Labor Party is simply playing catch-up after John Howard sat back and did nothing to capture more of the super-profits being generated by China.
Australia has an alarming current account deficit of $70 billion a year which is increasingly driven by the huge profits being shipped offshore by resources companies. These two new tax slugs will keep about $800 million in the country, so consider it a policy to tackle the current account deficit without hurting any of the Australia voters our politicians are meant to represent.
Listen to this spray at the Credit Suisse chairman and Babcock director Joe Raby for funding Alan Bond.