While mining is a source of great wealth for Australia, its socio-ecological benefits are mixed. Yet the power of the industry means a balanced conversation on these issues is yet to start. Debate about the efficacy of the existing Minerals Resource Rent Tax (MRRT) notwithstanding, a broader discussion about the industry is unlikely, especially in an election year.
The role of mining in Australia is complex. Western Australia is rich in iron ore and there are significant deposits of natural gas, gold, coal, uranium, opals, lead and zinc across the country. Mining and exporting these minerals has proved extremely lucrative: according to the Australian Bureau of Statistics, mining has grown to just under 10 per cent of GDP, nearly doubling in the years between 2003 and 2008.
The industry is widely credited with allowing Australia to maintain its economy in surplus while similar European and North American economies adopt ever-tightening austerity measures to counteract the fallout from the banking collapses in 2008. Mining has made fortunes. Australia hosts the world's richest woman, mining tycoon Gina Rinehart. Mining magnates Clive Palmer and Andrew Forrest have spent millions on philanthropic causes.
Mining's status as a mainstay of the economy has its disadvantages. Both major political parties are beholden to the industry and fear the advertising power its money can buy. Two brief examples demonstrate the problem.
The Labor Government under Kevin Rudd announced a plan to overhaul the outdated royalties system which allowed miners virtually untaxed access to what are, by law, largely government assets. Australian Election Commission figures show that the mining companies spent AUD$22 million campaigning against the new tax until Rudd was removed as leader by the Labor Party.
After Rudd was replaced by Julia Gillard, the mining tax was reconsidered. Gillard entered into negotiations with three of the major mining companies (BHP Billiton, Xtrata and Rio Tinto) for a limitation of the tax and confinement of its effects to miners' extraordinary profits. Perhaps it's not surprising that revenue raised from this watered down version of the MRRT has fallen well short of expectations.
The Coalition, on the other hand, is now the major recipient of mining company donations: just over AUD$3 million in 2010–11 according to Australian Election Commission figures. It has promised to repeal even the current, weakened MRRT, along with the carbon tax (which was introduced by the Labor Government as the price of support from its junior coalition partner, the Greens).
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