Source: ABARE Australian Commodities report, June 22, 2010.
Just days after the ALP replaced Kevin Rudd with Julia Gillard as PM, Rio Tinto boss Tom Albanese delivered a blunt warning to governments around the world, especially Third World governments, not to be tempted to go for what he called “resource nationalism”.
“As you know, the original May proposal for a super tax caused a furious national debate in Australia”, Albanese told a gathering of mining executives and big investors at Lord’s in London.
“Rio Tinto and the broader industry chose to take a robust stance in the interests of our shareholders, the Australian economy, and to maintain the investment climate in Australia.
“We have been encouraged by the [Australian] government’s constructive engagement over the last couple of weeks.
“Following this dialogue, last Friday the government announced that the Super Tax proposal of May will be replaced by a Minerals Resource Rent Tax or MRRT. This is clearly an improvement on the Super Tax, through we remain somewhat cautious.”
He then went on to warn: “I want to touch on the risk of the Australian approach being considered by other jurisdictions. I would advise policy makers to think carefully about country specific factors at play; the impact of decisions on international competitiveness; and appropriate compensation for the risks assumed.
“Other considerations include the balance between the host countries’ need to attract investment capital, and the desire to share in the fruits of the investment.
“While it maybe appropriate in Australia it may not necessarily suit a developing country. An emerging economy might see greater advantage in levying production royalties that provide an earlier and more stable revenue stream, in contrast to a resource profits or rent tax.
“Policymakers around the world can learn a lesson when considering a new tax to plug a revenue gap, or play to local politics.”
The Rio Tinto boss’s arrogance reveals how much power these giant corporations exercise, especially when it comes to defending their presumed right to pillage the world of its resources — resources he then astoundingly went on to claim were not finite!
“I would like to close this section by dispelling the myth that resources are finite, a notion some policymakers sometimes like to promote.
“Resources will only become finite if limits are placed on exploration because a country has suddenly become less attractive for investment.”
The immense power of these giant companies is very real and with that comes great pride.
BHP Billiton, Rio Tinto and Xstrata’s deal with the Gillard government will cut government revenues that would have come from the now axed Resource Super Profits Tax (RSPT) by at least $7.5 billion by 2012 and possibly more than $50 billion by 2020, even if resource prices drop from their current record high after 2014.
But this is also a power that can and needs to be broken by people’s power. The Venezuelan revolution led by Hugo Chavez has shown this.
Human survival and justice requires that power to be broken.
Green Left Weekly is committed to building a people’s power movement that will one day bring down the corporate emperors who rule the world today.
But we need your financial assistance to keep doing our job. While billion dollar tax discounts are being made in Canberra, and the major parties prepare to splash at least millions in advertising in the August 21 federal election campaign (they spent about $40 million in the last on advertising — note that’s $60 million less than the mining companies set aside to destroy the RSPT), GLW has a modest $300,000 fighting fund target this year.
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