Super Profit or Super Obscene or Super Con

Rio Tinto today announced a 122% increase in its profit to $14,300,000,000.  Which is more than many country’s total GDP.

It revealed its bottom line almost tripled last year with record underlying earnings of over US $13.9 Billion based on soaring prices.

That same year “Last Year” it was proposed that a “Super Profit Mining Tax” be introduced by the Rudd Government on profits that were considered excessive.  The mining industry immediately went into massive hysterics claiming it would send them broke, projects would be cancelled, many thousand of contractors would be thrown to the scrap heap and they would mine elsewhere.  A major scare campaign was unleashed against the government complete with the mega wealthy protesting in the public domain, like a PAYG worker, as though they would not be able to afford their bread or milk should the tax proceed.  The coalition jumped on the band wagon claiming it would kill off the industry.

To make the situation alarming and distressing to the community, the major mining companies immediately announced a hold on projects and people were sucked into the claims that mining would go broke.  Most did not understand the tax only extended to profits over and above a certain level.  Not standard profits but determined super profits.  The ALP became scared and started their ultimate demise of Kevin Rudd and now we have the Gillard Government.  Amazingly with the change of leader and a backdown of the tax all of the projects immediately recommenced.  A real demonstration of the power of these monolithic beasts.

I am sorry but I consider a 122% increase in profit to $14.3 Billion Dollars nothing short of obscene and a major con of the Australian people.

So, who will share in this astronomical profit?  Shareholders only.  The country of which they mine a non renewable resource has been well and truly taken for a ride by Mining Conglomerates and their mega wealthy owners.

Obviously the mining industry knew full well that their profits were going to be Super Obscene and as a result spending a few hundred million to stop tax being imposed on many billions was good management on their behalf.

After release of these results, I would like the coalition and the mining industry, to please put forward their argument, once again, as to why we should not have a Super Profits Mining Tax.

It is a Super Profit.  It is Super Obscene and worst of all it is a monumental Super Con of the Australian people.

ADDITIONAL UPDATE : Newcrest Mining Announces a 148% increase in profit.

42 comments on “Super Profit or Super Obscene or Super Con

  1. “I am sorry but I consider a 122% increase in profit to $14.3 Billion Dollars nothing short of obscene and a major con of the Australian People.”

    Shane, great post.

    I’m w/ you on that. Bloody obscene.

    If our governments continue to kowtow to these resource & energy giants & do not legislate to redistribute some of these grotesque super profits, to assist w/ infrastructure, preserving the environment, health services & transport as we grow as a country…the people should hit the streets like they are in Egypt.

    It’s time for a change.

    Time for courage.

    The people need to take off the blinkers forced on them by these con-artists & rapers of sovereign land…

    and stop listening to those in the media who benefit from their, or their media outlets, association w/ these “mega wealthy owners”….robber barons as TB would put it…

    corporate aristocrats.

    N’

  2. Nas

    I think the Super Profit Tax should be put away for the future when either our resources are depleted, or the world has found alternatives to our resources.

    Just like Norway is doing.

  3. You make a good point Shane.

    But I worry that the Coalition will find an excuse to use it as a war fund down the road.

    I always had the fear that the Super Fund would be used that way if Howard had stayed in…once Bush & his cronies had helped collapse the economy.

    I was relieved when Howard lost & McCain.

    As long as the fruitloops like Palin don’t get more control I’m beathing a BIT easier. Abbott’s a worry tho.

    N’

  4. Futhermore,
    I think it might be harder to sell a “super profits” tax if it’s not offset by reducing another tax…

    and provide the people w/ something they can see, use.

    To save it seems very abstract to many.

    Perhaps the compromise is to save a certain percentage?

    And refer to it as ‘The Australian People’s Fund’ or something similar.

    N’

  5. I also heard on the radio this morning that companies that might be affected by the proposed price on carbon (read, Big Oil) are considering a similar campaign against that tax. My guess would be that their first stop will be murdochs offices, as he did so well in enabling the previous campaigns numerous illusions to foster.

  6. If the taxes are what is needed for the country,

    Mr. Abbott’s opinion is obsolete.

    PM’s cannot government if they are afraid of what the Opposition Leader says.

    Australians at the end of the day are not stupid, though the likes of Mr. Abbott think we are.

    Most of us know that governments need money to govern the country.

  7. Shane, excellent post. There were certainly some big furphies put out by the Big Miners. The fact that they are for the most part multinational corporations who send most of their profits overseas was hidden in the footnotes of the stories put out by their publicity machines. Of course they tried the ‘this means you’ thing and it worked..unfortunately.

  8. CU

    I think most of us understand that taxes are required. the problem is the wealthy right are slowly convincing the masses that the word tax is evil. That somehow a governement can operate without their income. That the country will be better with lower taxes. That less government is better for all of us in all areas of our life.

    The problem is the countries that do not have a stable taxation system with regular income end up either dictatorships or poverty stricken states ripe for revolution by masses due to the greed oof the elite.

    One classic example is Greece, where, if the tax avoided by their citizens, was paid, they would have no external debt and no crisis.

    I also maintain that if you utilise a resource for profit that is not renewable, then you must pay extra for the resultant future loss of income once the resource is depleted.

    Failure to plan properly leads to poverty and decimation once the resource runs out or is superseeded by new technology. But that becomes irrelevant to those at the top who have sufficient wealth to live anywhere they choose.

  9. Min

    I think the government should introduce the Super Profits Tax next week. They will find it hard to argue against their own publicity. Or no less than arrange meetings to discuss what is going to be the end result.

  10. “One classic example is Greece, where, if the tax avoided by their citizens, was paid, they would have no external debt and no crisis.”

    That’s a good point.

    But what about some of those observations & questions I asked above Shane?

    I’d really like to hear yer views.

    N’

  11. Shane, I agree with you absolutely. When the SPT was originally mooted the government tried to logically tie it in with tax breaks for small business, Australian resource profits should be shared by Australia, limited valuable resource etc but then the Big Miners went in hard and grabbed the headlines.

    Gillard was able to broker an agreement with the mega miners but I haven’t heard of a timeframe of when this is to be introduced into parliament.

  12. “I think most of us understand that taxes are required. the problem is the wealthy right are slowly convincing the masses that the word tax is evil. That somehow a governement can operate without their income.”

    Indeed Shane.

    And ironically the Coailtion were one of the highest taxing governments ever.

    It’s really about how that revenue is distributed, the priorities.

    The fact there seems to be majority support for the Flood Levy is an encouraging sign that people are beginning to recognise that you can’t just keep cutting into the necessary increases in spending that are required for complex & costly healthcare & education needs in a country that is increasing its population at a rapid rate.

    Nor diverting revenue into unnecessary corporate & upper-middle class welfare.

    N’

  13. Shane, good post. I think the breathtaking profit by Rio Tinto and doubtless the other mining companies should be splashed over the headlines, together with the amount that will stay in this country.

    This is what was missing from the RSPT campaign last year which was not helped by the government’s ham fisted ad campaign.

    The ads need to be short and sweet with a better portrayal of how the mining giants rob this country, including all the concessions they get.

    Maybe, once people realise just how much money they’re siphoning out of the country’s coffers, there might be a change of attitude and the essential support for an RSPT. And I don’t think Emperor Rupert’s crapaganda machine would be sufficient to counter that sort of anger.

    Another benefit would be that punters would start seeing who the Smuggles Set really supports.

  14. Shane,
    Just a thought.

    If the government pushes the mining tax next week…will we get much more of this (see below)?…a lifeline for Abbott?…

    probably not…I think people are starting to find his views unreliable & inconsistent…he’s a contortionist:

  15. Great post Shane and a most pertinent one.

    I’d like to know how much of that profit goes overseas. If the government can prove that more money will stay in Australia if the tax is introduced I think they’ll be on a winner.

    I wonder too, how much of that land that is being mined was ‘bought’ of Aboriginal people for sixpense and a song.

  16. Nas

    Isn’t that just typical. Coalition big new taxes are reform. ALP big new taxes are cash grab.

    I can tell you the biggest and the most unfair cash grab in our history has been the GST and it remains so.

    Migs

    Despite claims of our super funds owning shares the majority of their profits go overseas to their overseas shareholders.

    Aboriginies and farmers as well.

    The government needs to stare them down. I really dislike companies being so big that a nations government is scared of them.

  17. “I can tell you the biggest and the most unfair cash grab in our history has been the GST and it remains so.”

    Indeed.

    Shane,
    it goes to show that if the government has “momentum” & good negotiating skills they can get taxes thru that are seemingly unpopular.

    And Gillard certainly has that “momentum”…and negotiating skills (won the election by bringing Indies & Greens on side):

    was impressed by the Four Corner’s episode of Gillard…

    her parliamentary performances this week were hot…

    her delivery of the healthcare changes to the Press today was persuasive & determined & generally simple to comprehend…

    the ALP have created a climate commission headed by scientist Tim Flannery to hold public meetings across the country in order to give the people expert advice on climate change observations, info regarding a price on carbon etc…and draw in valuable information from people across the country….

    many schools are now reporting positives related to the Building an Education Revolution funding…

    the Flood Levy is generally getting the thumbs up from the public & Senators are starting to get on board…

    whilst Abbott…well…what a woeful period for him.

    As you mentioned elsewhere, for Abbott these days it’s all:

    Aaaaaaaahhhhhh….

    and negabore stuff…

    and strange head nodding.

    I see a big change in the popularity polls coming. The last Newspoll was showing a delayed reaction by a busy public…and a few anomolies.

    Abbott is “dead man walking”.

    The government & Gillard have the momentum.

    N’

  18. I’d like to know how much of that profit goes overseas.

    When it comes to Rio, more that 80% of its shareholders are not residents of Australia.

    a few hundred million to stop tax being imposed on many billions was good management on their behalf

    Actually they ‘only’ spent $22 million. A very, very good ‘investment’. So cheap.

    HOW much does it cost to bring down a prime minister? The answer: just a tad over $22 million.

    That’s how much the mining industry spent in just six weeks last year on its political campaign against Kevin Rudd’s plan for a resource super profit tax.

    http://www.theage.com.au/national/mining-industry-dug-deep-to-shaft-rudd-over-tax-20110201-1acfi.html

  19. Nature 5

    ‘more that 80% of its shareholders are not residents of Australia.’

    That is what the government should have been pushing, when we had twiggy etal mixing it with the ‘common people’ telling them it is the government taking away THEIR profits, point out just how false that is.

    The government need to get themselves some real media people, who know how to highlight the false claims made by the magnates.

    Its like Gillard in QT. She hammered yabot yesterday over his hypocrisy and the total lack of economic rigour shown by his party. But we don’t get to see that anywhere. Even the 7.30 report appeared to assiduously avoid QT at all. All we get are the ‘he said, she said’ talking points. Labor need to bust through that, and get Gillard out there talking to reporters as if she is in QT. She may as well, they all appear to be from the party.

  20. That is what the government should have been pushing, when we had twiggy etal

    Tom R, I think it was too little and far, far too late. The government has been hopeless at ‘preparing the ground’ before attempting any major changes. This lack of ‘setting the scene’ applies not only to the mining tax but also in areas such as ‘climate change’.

    Hopefully, somewhere down the track, Gillard will move to cut (or at least curtail) the unfair and unequal allocation of monies spent on children’s education. But without a careful information campaign BEFORE any ‘necessary’ action, demanded by the public stirred up by prepublicity and the like, that fight will be lost as well.

    The creation of a climate change commission and put someone like Flannery in charge should have been done years ago. Get the punters to demand that the government act. Don’t wait while the ‘target’ sets the scene.

  21. Shane, one of the best thread posts I’ve read for a long, long time!

    Just “speed reading” the posts a couple of things stand out:

    1) It should never have been planned as a tax (ie after gross earnings) but as a Commodity Value Cost (eg Australia’s cut of the companies digging up and marketing our minerals) …

    … they pay rent to park all their plant and equipment in certain spots … but they need to pay us a cut of the profits just like any business/resource owner would expect …

    … as an example, a copyright owner can sell the total intellectual property, or, lease it for a limited use and a given period, or, allow another business to print and sell for a profit and share that profit with the copyright owner …

    … what we are doing with mining, is leasing the product to a mining company, letting them use it, onsell it to others BUT not sharing the profit …

    … it should not be a tax … it’s payment for our mineral commodity – once its gone its gone …

    2) The second major point was brought up by TomR and N5, the way the ALP doesn’t “sell” any of its “products” (policies and bills) …

    … they really need to sack the current “marketing experts and emply some good old fashioned “propaganda experts” on Twitter and Facebook …

    … the technology may change but people don’t change much!

    … and of course we are just watching, The Robber Barons, busy robbing us all, as usual … that’s never changed, either …

  22. doesn’t “sell” any of its “products” (policies and bills)

    Part of that ‘problem’ was Rudd’s promise to radically cut the amount the government spent on advertising. That decision, particularly in the face of a hostile MSM (who then got even dirtier when the advertising spend dried up), was a bad mistake.

    But the main problem is a failure ‘prepare the ground’ which needs to be done well before there’s any hint of action. Get them off balance before exposing your hand.

  23. The main problem is that our MSM are also the creation of 2 big beasts, as is our retail sector. We are the country of competition that sells off its government owned assets and then goes on to permit takeovers resulting in a duopoly in almost all aspects of our lives.

    So the majority of our industries have large profit makling duopolies who are also afraid of a possible tax being implemented on their massive duopoly profits. As a result they side with the opposer to ensure they are not next.

  24. “The main problem is that our MSM are also the creation of 2 big beasts, as is our retail sector.”

    Exactly Shane, they think they’re next.

    N’

  25. Damo, most of the money goes to UK shareholders … and … I just read that Rio will engage in a buyback of UK shares …

    … its not that Australians in general are dumb … just that the politicians we elect are deaf and …

    … although they do seem to listen to The Robber Barons!

    I see the new Harvey Norman marketing is aimed at “Australian Made” … must be the recycled paper or the DOS operating system they use for accounts at the checkouts …

  26. Post has been updated with Newcrest announcing and even bigger jump in their profit.

    Damo

    I just hope you still made money when you sold.

    TB

    The ones we all should boycott completly are Super Amart, who stopped selling anything Australian Made a number of years ago and Spec Savers whose company is set up in a tax haven isle. I have never bought anything from either since I found out.

  27. Maybe another way of ensuring that this money stays in Australia is for people like us to buy shares in these companies, not that it’ll make a big difference.

  28. shane, that’s sad.bad news! We buy our specs from SpecS … only because I have alsways used the optometrist (and his father before him) who joined the chain last year.

    The optometrist told me that he had joined SS because the shopping centre Westfield 🙄 would only allow “big” companies to lease … these guys had been in business for well over 25 years but were considered to be a “risk” … 😯

  29. I know I’m on the wrong page regarding this matter, but I have a question for Nasking about infrastructure in Qld, as you are aware of Anna Blight holding a meeting with all the Council Mayors throughout the State yesterday, their was one not in attendance by the name of Campbell Newman(LNP), and is it true that Julia Gillard tried to talk to Can-do??? by phone earlier in the week , but on both occasions he was unavailable even though he was in Brisbane, to me it seems very strange. is the Mad Monk lurking in the background causing TROUBLE.

  30. Interesting observation, Crowey. My guess is that by being seen with Julia would be an admission that she is doing the right thing.

    His other engagements were also more important, like attending the local boy scouts to tell them about his adventures in Afghanistan or learning to tie knots.

    Or he may have had a lot of toilet stops that day. After all, shit happens.

  31. The optometrist told me that he had joined SS because the shopping centre Westfield would only allow “big” companies to lease … these guys had been in business for well over 25 years but were considered to be a “risk” …
    This shows us why on line shopping has become so popular. It allows us to support the little man that is forced out of business in the uneven playing field that the popularity of big shopping centres has created.
    I, for one will only visit a shopping centre if I have no choice.

    With faster internet down the track, on line shopping will become more popular.

    This type of shopping should not caused unemployment as the goods still have yo be packed and transported. What we will not be paying for is the high rents that occur in shopping centres.

  32. It’s a little boring walking into a Westfield in Adelaide and seeing it as a mirror image of a Westfield in Wodonga, or Sydney, or Townsville or Melbourne.

  33. Mr. Latham must be feeling very jealous at this time. Mr. Abbott’s aggressive demeanour is much more strident than his effort. We will have Ms Bishop complaining that Mr. Abbott is encroaching in her territory.

  34. Migs @ 12.32pm, his mouth has only suffered constipation once, as far as I know. But Emperor Rupert has rushed to blame someone else for that, so it’s all good.

  35. the one thing none of these coalition fools have yet to tell us is what hapens when the resources are gone or the prices drop to the point where the mining companies shut up shop what hapens to the comunities that hinge their very existence to mining and what hapens to the rest of us when an economy based on mining windfalls dries up ,do we go into another recession.
    we do nothing with all this resource ,we manufacture nothing ,why dont we manufacture steel and sell that to the chinese and employ aussies in steel industry.
    i worked in the mining industry in a mine out of fitzroy cossing in WA take a look at that one if you want to see how long it takes a mine to shut up shop and walk out on its workers & the local communtity a, Canadian company had that mine took their bat & ball & frofits & went home or for another great story check the full details on how BHP treated the workers & communities of ravensthorpe in WA.

  36. we need to stop listening to greedy polititions who have no idea what its like to live with rising utilities costs high fuel costs & monstrously over priced rentals.
    they make decisions for people they have no understanding of in regards to climate change,mining revenue & theirs no risk to their lifestyle or future because no matter how bad things get their families wont go with out & they will be able to afford to move some where better.
    i really think that polititions wealth should be held in trust then when they make decisions that damage our futures & the futures of our children it could be used to repair the damage.

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s