Staggering sums of money generated by the commodity boom are providing cash bonuses for mining executives and riches to mine owners beyond their wildest dreams.
The problem is, that money belongs to you and me. It is our country being dug up and shipped out.
Last Thursday, the Australian Financial Review leaked Treasury forecasts that the revenues lost in the Gillard Government’s back down on the mining tax will exceed $100 billion over the next ten years (AFR 24/2/11, Mining tax hole tops $100 billion).
The story was hidden in plain view at the top of page one.
Earlier estimates put the loss to government revenues at $60.5 billion. That number is large enough to prompt bloody riots, if people understood. Perhaps the loss of $100 billion will stir us from our slumber.
The original mining tax offered the financial headroom for genuine reform. That giant sum would have broken Australia’s nasty tax logjam. Slashing the deadweight cost of inefficient, behavior-distorting taxes – Ken Henry named 125 for removal – would create an appetite for tax reform as efficiency and equity benefits appear.
Meanwhile, the massive commodity boom has driven the Aussie dollar above the US dollar for the first time since the 1970’s. It is making other exporting and import-competing industries unprofitable and uneconomic. These industries are about to begin further staff and production reductions.
Removing the taxation albatross from business would go a long way to restoring their competitive position, and secure millions of jobs too.
Boosting incomes and encouraging enterprise are evergreen goals for government. The Gillard government and the Abbott opposition have squandered a breathtaking opportunity. They are to be condemned.
It can easily borrow money even for the first time.