JERRY ROBERTS. The Miners Win Again- A REPOST from October 27 2017

A two-paragraph story under the heading “Gold hike dead” on page 24 of the West Australian newspaper, Friday 13 October, ended the latest chapter in the one-sided battle between Australian governments and the mining industry.  The miners won again.

Strapped for cash, the West Australian Labor Government had attempted to raise the royalty on gold.  The mining companies told their workers the royalty increase would put their jobs at risk.  The workers in their high-visibility shirts marched on Parliament House in West Perth and confronted the State’s Treasurer, Ben Wyatt, standing courageously on the front steps overlooking the fair city of Perth.  The Labor Party held firm, for a change, and the Liberals wavered.  The situation looked promising but the parliamentary Liberals succumbed to the pressure and voted against the revenue measure, which was defeated by one vote in the Parliament’s upper house, the Legislative Council.

At the Gratwick airport in Port Hedland, named after the quintessential Australian hero, Percy Gratwick VC, we are used to the military parade of mining industry workers in their orange and yellow shirts marching from the aircraft, straight through the airport lounge to the buses waiting outside.  The mining companies employ a fly-in, fly-out work force for various reasons, including taxation, but their main strategy was to break the power of the trade unions.  Workers from all over Australia and New Zealand fly directly to the mine site or via brief stops at airports.  They work 12 hour days without a day off for a few weeks then fly home.  There is no time for labour to organise. The routine is work, shower, eat, sleep.  After Cyclone George I found myself in Royal Perth Hospital where one of my fellow patients was an under-ground diesel fitter from the Nifty copper mine in the East Pilbara who routinely flew out from the mine site to his home in southern Tasmania.

Seeing our mining workers on the television news marching on Parliament House I was reminded of a comment by the American political scientist, Corey Robin. “Capital governs labour, telling it what to say, how to vote and when to pee.”  This latest disaster in Australian politics started in August last year when the Leader of the National Party in WA, Brendon Grylls, my local Member of Parliament, proposed a steep increase in lease fees charged by the State to the established iron ore miners, BHP and Rio.  The ink was not dry on the press release when Ben Wyatt, then Labor’s Shadow Treasurer, was all over Brendon like a rash, accusing him of fiscal illiteracy among other nauseating clichés from the neoliberal song book.  I am a member of the Australian Labor Party and I groaned when I heard Ben on the radio.  He should have kept his mouth shut, had a cup of coffee with Brendon and Colin Barnett, then Premier, and quietly worked through a tri-partite approach to the miners.  That is the only way we are going to beat the multinationals.

Brendon and his colleagues in the National Party campaigned strongly on the mining charges from then on.  The miners dusted off their advertisements used to destroy Kevin Rudd and the federal mining tax in 2010.  They ran a saturation campaign, especially in Brendon’s Pilbara electorate, where I live.  It was probably counter-productive.  The miners may scare the politicians but they don’t fool the people.  Residents of the Pilbara are under no illusions about companies like BHP and Rio.  On election day, Saturday 11 March, I was standing in the rain in front of the Baler Street polling place in South Hedland in a red T shirt handing out Labor how-to-vote cards next to Brendon Grylls in his green shirt handing out the National Party cards.  I told Brendon a story he had not heard, because it was before his time, from Andrew Mensaros, the Hungarian intellectual, who was the brains trust of the Liberal Party in the WA coalition governments of the 1970s. It was about the Nationals and the north.  Brendon was a trail-blazer.

Brendon is a naturally gifted politician and he did not need professional opinion pollsters to tell him he was having a bad day.  As for the Liberals, their support was so dismal they shut up shop mid-afternoon and went home.  When Brendon lost the seat to Labor I suspected from observations on the day that the collapse of the Liberal vote and consequent loss of preferences was the cause.  This was partially true but the final count showed the major influence was the presence of Pauline Hanson’s One Nation and the Shooters, Fishers and Farmers Party.  The Shooters picked up 9.5 percent of the primary vote and to my astonishment they directed preferences to Labor.  A gun-owner explained that he and his mates had never forgiven John Howard for taking away their semi-automatic rifles after Port Arthur.

Shortly after the election, on 14 March, John Menadue from his pulpit in Pearls and Irritations thundered against the miners and the newly elected government.  “Multinational corporations are foreign-owned,” wrote John,” and therefore effectively guests in this country.  They should not be allowed to run such political campaigns…. In six months’ time the Labor Government will own everything broken, including the ballooning debt.  At that point (Premier) McGowan will be either working for the miners or working for the public.  If he wants to ensure he is doing the latter he must move fast.”   Shortly before the WA election (Pearls and Irritations 28 February) Paul Cleary, who has written extensively about mining taxes, pointed to the Norwegian example where a hybrid royalty has been developed with support across the political spectrum.  I doubt if we can muzzle  multinational advertising but maybe our federal politicians can find some backbone in this volatile period.

The central catastrophe of Australian politics in the 21st century was the failure to pass the mining tax put forward by Kevin Rudd and Wayne Swan in 2010.  Developed by a professor of economics in Melbourne and based on the thinking of John Stuart Mill in relation to putting a value on a country’s non-renewable resources, the tax was recommended as a model to all mineral producing nations by the Financial Times of London so the miners were bound to fight hard in Australia.  They didn’t have to.  The Australian political establishment collapsed like a house of cards.  It is hard to say who were the weakest performers – the Liberals, Labor, or my old trade of the media.  The Liberals should have supported the tax since J.S. Mill is their favourite philosopher.  Labor got rid of the tax by getting rid of Kevin Rudd.  Honourable members did not just let down Kevin, their government, their Party and their country.  As the Financial Times demonstrated, they let down the whole world.  They gave the multinationals another effortless victory and allowed the City of London to continue unperturbed in its dominion over the world’s resources.  To make this dark chapter in Australian political history even blacker our politicians and political commentators discovered they were brilliant psychiatrists and spent the following five years finding faults in the character of Kevin Rudd.  Whether this was deliberate obfuscation sponsored by the miners or just plain, old-fashioned, lazy ignorance the effect was the same.  The miners laughed all the way to the bank and they are still laughing.  To this day we have not had a debate on the Melbourne Professor’s tax proposal, the views of John Stuart Mill and the big picture of Australia’s economy.  In a country that is one of the world’s major mineral producers this failure of public policy beggars description.

We knew 2010 was a turning point.  The following is the text of the letter I wrote to Kevin Rudd on 10 May 2010.  Despite the smug satisfaction of today’s economists looking at gross domestic product and households full of electronic gadgets the issues raised here remain relevant.

“Dear Prime Minister — Please go ahead with the resources tax.  Be patient and be prepared to explain the economics and the history in detail as you take this issue to the public.  There is widespread concern about the frantic exploitation of non-renewable resources, especially here in the north, where we see every day the immense stockpiles, endless trains and mighty ships taking it all away.”

“Nugget Coombs wrote about a resources tax, rent or fund in one of his late works.  I think you will find the reference in The Return of Scarcity.  He traced his own thinking on the subject to a proposal by John Stuart Mill, the patron saint of British liberalism and one of the founding fathers of classical economics.  So the origin of the policy is conservative.  I saw you on a television news report responding to Andrew Forrest’s hyperbole on nationalisation.  Nugget Coombs thought Chifley’s move to nationalise the banks was unnecessary and I would be surprised if you did not share that view on mining.  There is a lot of talent and vitality in Australia’s mining and prospecting sectors.  Nationalisation would be more trouble than it is worth. There will always be corporate types and companies will come and go.  If some of them go offshore in a huff others will take their place.  The most important person in the industry is the small prospector, just as the most important person in the education industry is the teacher in the classroom, a point often forgotten in the needlessly complicated education debate.

“For 45 years we have been exporting high grade iron ore from the Pilbara.  In all that time we have not even inter-connected the railways up here with the trans-Australia standard gauge, let alone connected with the coking coal mines of Queensland.  It is a great failure of nation-building and it was not intended to end this way.  The original agreements with the iron ore miners were hammered out in the West Australian Department of Industrial Development.  The iron ore mining was intended to lead to steel making and usher in a period of industrialisation in the Australian economy.  Instead we have de-industrialised.  We do two things well in Australia – materials handling and real estate sales.  We extract and ship out amazing quantities of non-renewable resources and we convert them into non-productive suburban property at such inflated prices that we can’t afford to live in our own country.

“Unfortunately, this is all we do.  We have a top and bottom but no middle.  We have arms and legs but no heart. We organise our society for the benefit of big companies.  We have men and women working 12- hour days for two or three weeks solid then flying around the country like zombies.  In Port Hedland they can camp at a Battle of Britain village on the Gratwick Airport between the air strip and the manganese stockpile.  They don’t even have a footpath to the nearby pub.  Because we are selling so much ore and gas we are said to be booming yet we can’t run our hospitals and in the West even our public libraries are threatened – the primary building block of a free society and one of our State’s proudest achievements.

“So stick to your guns please.  This is a turning point we need to debate with a view to the future of the Commonwealth.  That name, by the way, is Ye Olde English.  It refers not to the uncommon wealth of the Murdoch, Packer type of thing, or the latest Lord Forrest of West Perth, but to the common weal as in well-being or welfare.  Common, that is, to all 22 million of us.  I hope you receive thousands of letters like this.  You are most welcome to use this one any way you like.

“Good luck,  Jerry Roberts.”

After the neoliberal dogfight in the blogosphere with ace starfighter Paul Frijters I told Anne I should have a break from political economy so I went to the ancient history section when we wandered through the library.  The break did not last long because I picked up Ancient Worlds by Michael Scott, who refers in his introduction to the German historian Karl Jaspers and his concept of the Axial Age from 800 to 200 BCE.  “A time,” writes Scott,” when across cultures and civilisations not necessarily themselves connected there was an overlapping rejection of old wisdom and a search for new understandings and explanations across philosophy, science, religion and politics…. How best to govern human society, to establish man’s relationship to man, is a question we will never stop asking.”

If this is another Axial Age Australia’s contribution should be in the direction of an egalitarian society because this is a tough continent and if we are to survive on it we need to care for one another.  A correspondent on this site signing off as Peter L made a most eloquent comment on Michael Keating’s 17 July post, Why Blame Neoliberal Economics: A Response.  Wrote Peter L: “The idea that a small percentage of the population is inherently more worthy than the rest of us and therefore deserves a huge slice of the cake belongs to a time long past. Every person is worthy of respect.  This means more than that everyone deserves equal opportunities in life.  It means everyone, regardless of their intelligence level, their skills, talent or even their luck in life, deserves a sufficient share of the national income to live a dignified life.  Neoliberalism, as it is practised, ignores or rejects this principle.  The fact that the Newstart allowance is less than the poverty line is evidence of that.”

John Quiggin is working in this territory and his 11 October post gives an imaginative pointer to a more egalitarian society.  The most detailed blueprint I have read on this subject is Antony Atkinson’s book quoted by John.  Atkinson discusses maximum tax rates and settles on a figure of 65 per cent.  Picketty selected 80 per cent and mentioned the 90 cents in the dollar rate on incomes over $200,000 during the Eisenhower presidency when I was a boy growing up in the American mid-west.  This was a period of exuberant confidence in American capitalism. The world has seldom seen the like of it.  Until Thatcher and Murdoch appeared on the scene I don’t recall anybody bitching about tax, apart from the mother-in-law’s parrot in Lennie Lower’s classic Australian novel, Here’s Luck.

I’m over it when it comes to our multi-million dollar salaries for chief executives and their hedge funds and share buy-backs and the surreptitious stunts and skulduggery of tertiary capitalism, beyond the comprehension of normal, decent people.  Let’s tax them at Picketty’s 80 cents in the dollar and hope they run away to South America, or get religion or something.  And I’m over it with our newsreaders gurgling over Princess Thingamajig’s latest bub. I voted against the republic first time round, having been persuaded by Martyn Webb and Paddy O’Brien’s argument that a President can’t be appointed and must be answerable to the people.  Jenny Hocking’s work reported on these pages is showing that the Whitlam dismissal was even shonkier than we thought at the time so let’s break the connection as quickly as possible.

There are 25 million of us now.  Surely we can stand up on our own feet, not as a part of Asia or the Asian century or suchlike cliché but as part of Australia, our island, nation continent, a place like no other.

Jerry Roberts is a former parliamentary reporter who lives in the region of north-west Western Australia known as the East Pilbara and is interested in politics.

 

 

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2 Responses to JERRY ROBERTS. The Miners Win Again- A REPOST from October 27 2017

  1. Paul Frijters says:

    “The central catastrophe of Australian politics in the 21st century was the failure to pass the mining tax put forward by Kevin Rudd and Wayne Swan in 2010. ”

    I agree with that, though of course there is a long way still to go till the end of the 21st century.

    At the time, I was writing quite a few pieces to counteract all the nonsense the mining lobby come up with. Alas, to no avail, so I wrote some post-mortems. Eg.,

    https://economics.com.au/2010/06/09/is-the-kpmg-report-on-the-resource-super-profit-tax-reasonable/

    and

    https://economics.com.au/2010/07/05/post-mortem-on-the-rspt-i-the-other-hired-guns/

    and

    https://economics.com.au/2010/07/21/post-mortem-on-the-rspt-ii-observations-and-lessons/

    In that last one, I said

    “Nicholas Gruen indicated he thinks it is now curtains for any policy that tackles privilege. If true, it means the Henry review is dead and that we are hence back to taxing the middle classes on the basis of their talents and efforts. I still hope he is wrong and that instead this episode has alerted those who care about the longer-term well-being of Australia to the fact that a privileged few are arrayed against them and will use any means of disinformation to protect the sources of their wealth. I hence hope this is the start of the long road to implement the Tax Review, not its Swan-song.”

    I have to admit, so far, Nick is right. So we are on the same side again, Jerry. Then, as now, I called out individuals and companies (KPMG, foreign hired-guns, etc.). Then, as now, I believe that is more useful than chalking things up to an ideology.

  2. Hi Paul The resource super profits tax was a key element in the Henry Tax Review and it was designed by a professor of Economics in Melbourne. I recall reading an interview with the Melbourne Prof, probably in the Australian Financial Review, but I can’t find it in the archives. He had been working in this specialised area all his life, according to the sympathetic interview, and I remember wondering what he did for light relief. Can you recall his name? It is complicated material but that is no excuse for the failure to debate the issues in 2010.
    Thanks for your comment. I read the links. You were on the ball at the time, which is more than can be said for my colleagues in the press gallery. The degeneration of this debate into character assassination was tragic.

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