MARK BEESON. WA and the politics of the resource curse. Take on the miners at your peril!Mar 15, 2017
WA is but the most glaring example of the way that Australia’s politics have been directly affected by the politics of the so-called ‘resource curse’, when a powerful economic sector uses its disproportionate influence to shape political outcomes.
One of the more striking features of an otherwise rather bland election contest in Western Australia was the apparent political demise of WA National leader Brendon Grylls. Despite the fact that the Nationals suffered far less electoral damage than their coalition partners, the Liberals, they look almost certain to lose their outspoken leader.
How did it come to this? How did a popular politician who engineered a significant redistribution of wealth from the City to the Bush via his Royalties for Regions’ program come to lose what seemed to have made into a relatively secure seat in the Pilbara? He might do worse than ask Kevin Rudd.
The principal cause of Grylls’ demise looks to be his high profile claim that a greater share of the profits from the resource boom should be kept in the state and used for local development. Rudd suffered a similar fate when he tried to take on the immensely powerful, well connected and wealthy mining lobby at the federal level for similar reasons.
Rudd’s political demise may have been partly of his own making, but the lavishly funded campaign criticising him and his proposed resource super profit tax didn’t help. It’s estimated that the mining industry spent around $22 million funding an anti-tax, anti- Rudd campaign, which it is estimated would save the mining industry around $60 billion over 10 years. Not a bad investment, albeit an entirely self-interested one.
Eliminating the political and economic challenge posed by Grylls in WA proved a snip by comparison. The mining lobby only needed to spend $2 million to engineer Grylls’ otherwise anomalous political demise. It is a safe bet that the victorious incoming Labour government won’t go anywhere near this issue. Despite a continuing budget crisis that is likely to constrain their freedom of action and their thumping mandate, tax policy looks toxic. The unambiguous message for politicians in WA and elsewhere is that you take on the miners at your peril.
Even One Nation, which generally ran a disastrous campaign in WA, has demonstrated little appetite for taking on the overwhelmingly foreign owned multinationals that dominate the mining sector. On the contrary, even the normally nationalistic, xenophobic figure of Pauline Hanson was reluctant to pick a fight with the miners. She opposed Grylls’ tax plans on the grounds that WA needed a strong mining sector.
Whether One Nation’s leader actually understands either the current tax regime or possible alternatives, not to mention the complex ownership structures of ‘Australia’s’ mining industry is a moot point. What is clear is that even Australia’s most nationalistic party draws the line at taking on a powerful mining lobby despite – or because of – its being dominated by foreign-owned multinationals.
And who can really blame them? Any possibility of actually creating a tax regime in which the benefits of ‘Australia’s’ resource boom might be shared by the population more generally looks lost for a generation, if not forever. As they used to say on Yes Minister, it would be a very ‘brave’ political leader who considers revisiting resource tax policy in the foreseeable future.
Even those of us who try to make a modest contribution to an impoverished debate on these issues may find ourselves in the firing line. I have recently been sacked from my regular column for The Conversation. What turned out to be my last piece was on the rather dull WA election and the brave, not to say politically foolhardy campaign run by Grylls.
There is a serious point to be made, of course. WA is but the most glaring example of the way that Australia’s politics have been directly affected by the politics of the so-called ‘resource curse’, when a powerful economic sector uses its disproportionate influence to shape political outcomes.
We might like to think that this is something that only happens in ‘underdeveloped’ states in Africa or the Middle East. We might like to think again. Losing one political leader to the actions of the mining lobby might be unfortunate. Losing two, looks like a habit we might be advised to give up.
Mark Beeson is Series Editor, Critical Studies of the Asia-Pacific, University of WA.