Australian Mining Industry Vs the Federal Government Over New Mining Tax

Australia is blessed with a large quantity of natural resources. Mining these Australian owned resources is a very profitable business for big multinational mining conglomerates, so the Australian Government last week put a Super Profits Resource Tax on the mining industry.

BHP Billerton and Rio Tinto in turn have been putting the squeeze on their customers. China and India are now subject to spot prices for Australian iron ore instead of contract prices for the raw material. China desperately needs high grade iron-ore for their massive building projects.

The mining conglomerates are mining much of this high grade iron ore from the Pilbara region of Western Australia, South Australia and western Queensland. The distances the ore has to travel from these mine sites to get to a port for loading onto ships is sometimes hundred's of kilometres, and requires a lot of rail and road infrastructure.

The mining companies themselves aren't putting in all this new infrastructure, but are expecting the respective state governments to put some of it in place. This in turn is paid for by the Tax Payers in that state.

So basically, Australian Tax Payers are subsidising these multinational mining companies to rip our nationally owned finite resources out of the ground to provide the Mining company CEO's and their shareholders with huge profits.

Up until this Labour Government's recent line drawn in the sand two weeks ago, Australia acquiesced to these conditions but we finally have a Federal Government who has decided we want fairer compensation for all Australian Tax Payers.

So the argument is erupting in the Australian media now between the Federal Government, state Governments and mining Companies who are all vying for public opinion is massive.

The real winners from this scrap will be the media owners and their shareholders who must be rubbing their hands with glee at this profitable windfall. This dispute is seriously benefiting advertising agencies and media owners as big advertising campaigns are being rolled out to gain the public's approval or disapproval just before a Federal election sometime this year.

There is big money and big stakes involved for both these combatants. In the meantime, some of the rhetoric being served up by some of the CEO's of these multinational companies is so obviously more self-interest but cloaked in the guise of Australia's national interest that it is obscuring reality.

On the other hand, the Government can't afford to lose this battle or they lose credibility. So statistics and years of reports are finally being tabled in Parliament supporting the Governments stance for this super profit resource mining tax.

The Federal Government Opposition leader is siding with the multinational mining companies because they need the financial backing with which to fight the looming federal election. After the last election in 2007, the Liberal party were so soundly beaten by the Labour Government they haven't as yet refilled their war chest with enough financial backing to go into another election in the near future

So, the media fight escalates between the multinational mining companies and the federal Government as viewers and readers alike bear witness to more blues, bruises, wins and stings in the saga of one of the biggest financial decisions this century in Australia.

If you are one of the shareholders of one of these multinational mining companies, it could be a good idea to attend the next AGM and start asking some of these overpaid CEO's some uncomfortable questions about their preferred settlement policy. One way or another, this super profit resource tax will be put on the mining industry simply because it is a fairer tax for everyone and that includes the mining industry overall.

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