The Prime Minister has been accused of plucking the goose that laid the golden egg. The Federal Government's proposed tax on super profits has sparked a wave of uncertainty among miners. On Thursday, The Australian led with the news of mining giant Rio Tinto shelving plans to spend $11 billion expanding its massive iron ore operations in Western Australia. ABC Radio's AM reported on Canadian MP Brad Trost's glee at the prospect of his country winning the mining investment that Australia could lose.
It seems nobody has stopped to ask the obvious question of what would happen if there was less investment in Australian mining. The simple answer is that more of Australia's mineral wealth would stay in the ground. There would be less taxes of any description for the Federal Government, and less 'fat' profits for the mining companies and their shareholders.
But perhaps most significantly, more minerals would be available for future generations to use for their own wellbeing. As simplistic as it may seem, that is surely the best argument in favour of the 40 per cent super tax. For our own generation, a higher proportion of the admittedly smaller mining dividend would find its way into the public purse. For our descendants, there would be more minerals left for mining activities and wealth generation.
There is no imperative other than self-interest to extract minerals from the ground as fast as we can. China wants them now, and seems prepared to pay what is required. If they don't get them from us, they could look elsewhere. Let them. In the future, current sleeping economic giants such as India and Indonesia are likely to follow China's lead and be similarly hungry for Australia's remaining minerals. Our future generations will be relying on them.
We only need to look at the nearby example of Nauru to see a country move from being one of the richest per capita nations on earth to one of the poorest, in the space of a generation. This occurred only in recent decades, after intensive mining exhausted the island's substantial phosphate deposit. While the phosphate revenues were coming in, there was profligateness. Now there is poverty.
Recently there has been much talk of the size of Australia's future population, and whether 36 million would be sustainable. It is obvious that it would be more sustainable if Australia still had a significant deposit of minerals to fund the import of