Just waffle. Its an important part of the economy, sure, but its far from its backbone.
Then recently I read this, its a piece from a Law graduate from a leading Law School (assumption of high intellect and also the son of Australia's bizarro* carbon tax crusader) Chinese see softening in iron ore, steel prices.
THE Chinese steel mills that have been holding up the Australian economy are under pressure, with steel prices falling and iron ore prices expected to follow.Holding up Australia's economy? I'm thinking 'get a grip'. I then find his raison d'être is talking up China's relationship with Australia, (Business Day-John Garnaut) on that note I suppose he is just doing his job. However myopic I feel that view is.
It then dawns on me, the absolute power this industry holds in this country and how the bombardment of propaganda sways public opinion and can even bring down a Prime Minister. That's absolute power.
Key General Facts
- Mining exports in the year to March 2011 were worth $155 billion, or 11.4 per cent
of GDP (this is all resources including our Liquid Natural Gas, Copper and Gold sectors etc);
- It employs less than 2 per cent of the workforce;
- Mining is, in fact, one of the smallest sectoral employers in Australia, offering work to fewer people than that employed in the arts and recreation services sector;
- The average tax rate paid in 2009 was just 14 per cent;
- 83 per cent of profits are sent offshore to the foreign owners of mining companies - the total pre-tax profits earned by mining firms operating in Australia was more than $51 billion in 2009-10;
- The average superannuation fund has only 4 per cent of its funds invested in Australian mining.
The RSPT vs the MRRT
The original version of the mining tax, the Resource Super Profits Tax (RSPT), would, at current commodity prices, have collected more than $200 billion in additional mining taxes over the coming decade. Unfortunately, the $22 million advertising campaign run by the mining companies against the RSPT resulted in a much less effective, and much less equitable, mining tax being negotiated. According to Treasury, the new Mineral Resource Rent Tax (MRRT) will raise an extra $38.5 billion in taxes from miners over the coming decade. The dividend of the $22 million advertising campaign for the mining industry was, therefore, more than $160 billion—equivalent to a 730,000 per cent return on investment. And, the effective removal of one democratically elected prime minister.
The move from Plan A, the RSPT, to Plan B, the MRRT, will cost, over the next 10 years, $16 billion a year less for us to spend on health, education or to lower other taxes. Remember, over 80% of mining profits leave the country.
For additional data about the effect the industry has on other economic sectors (eg the high AUD on manufacturing, tourism and increased cost of raw materials etc) read the embedded report below.
China, Iron Ore and Coal vis-a-vis The Australian Economy
- Total Australian GDP approx $1,400B AUD (July 2011 and July exchange rate of $1.076AUDUSD)
- Iron Ore Exports to China 2.86% of GDP (remember Garnaut's "Chinese steel mills that have been holding up the Australian economy" - the other 97.14% of the economy must be Scotch mist);
- Coal Exports to China 0.31% (yep, not even 1% of our GDP).
- Iron Exports to others (not China) 1.32%
- Coal Exports to others (not China) 3.11%
Mining the Truth IP7
DFAT Australia Fact Sheet
DFAT China Fact Sheet
This not an ant-mining rant its just about perspective; propaganda; abuse of power; the gullibility and stupidity of the population to respond to such propaganda; and the total failure of the media and bloggersphere to see the manipulation. I wish those individually employed in the sector the very best.