Nonfiction

Spin When You’re Winning

28 February 2013

Daniel Carr looks at that little ol’ mining tax.

Amongst the dollars and rhetoric thrown against Kevin Rudd’s mining tax, the definitions of pro-business and pro-market have been manipulated to suit the interests of those with the loudest voices.

While the success of the PR war waged against the mining tax has been dissected countless times, little attention has been paid to the pro-market mantra that was used when opposing the tax. Mining magnate Clive Palmer called Treasurer Wayne Swan a “communist” who “doesn’t know very much about economics at all”. Opposition Leader Tony Abbott spoke of “sending a message to people that success is bad,” and Joe Hockey claimed the tax was “adversely impacting Australia’s sovereign risk profile”. The Australian ran a blistering editorial entitled ‘Mr Rudd needs a quick course on capitalism’, berating his weak business credentials.

You could be forgiven for thinking the Liberal Party and the right-wing commentariat were valiantly defending the success of our free market economy in the face of a punitive overreach of a revenue-greedy government. However, doing so would be conflating pro-market with pro-business.

Being pro-market means the government is agnostic about who succeeds and fails in an economy–all businesses operate on an equal playing field and the most innovative and profitable succeed. Pro-business means providing government help for industries that are favoured, at the expense of those that are not. It’s not unusual for the businesses or industries that are most favoured to be those with the most campaign contributions and political connections.

At the start of 2013, the revised mining tax has not raised as much as expected. Mining magnate Gina Rinehart has been fighting a battle to gain influence over the editorial direction of the Fairfax papers. At a summit of mining leaders in July 2011 Lord Christopher Monckton had called for miners to unite to build a Fox News style outlet to provide the Australia with a “proper dose of free-market thinking”. Gina was obviously taking notes.

Meanwhile, the Minerals Council of Australia has funded a sustained PR campaign around the “This is Our Story” theme, seeking to firm up public sympathy for the industry.

Why this extra groundwork? The polls are predicting that Abbott, with his promise to rescind the mining tax, will be elected by the end of the year, but the mining heavyweights now seem to have a more ambitious legislative bounty.

In December 2012 Gina Rinehart delivered by video an address to the Sydney Mining Club that made instant headlines. “Gina’s $2-a-day vision” was the headline across the mainstream media, a reference to Rinehart’s stated fear that Australian companies must compete against Africans willing to work for a pittance. She ended her speech with a touching appeal:

“We need to revitalise our mineral-rich, defence-poor, people-poor north.” Not only does she hate the mining tax, but tax in general.

“We need to create a large special economic zone in our north, stretching across Northern Queensland, Northern West Australia and the Northern Territory, with fewer regulations and taxes: a region that truly welcomes investment and people.”

George Christensen, an MP and just one of many Coalition supporters of Rinehart’s vision, sketched a picture of what this special economic zone might look like, flagging foreign workers, less regulation and red tape and reducing almost all forms of tax.

You might consider the possibility that Ms. Rinehart’s quest for a glaring exemption from nearly all forms of taxation and regulation stemmed from some altruistic impulse. Maybe if her bright idea didn’t read like a Christmas wish-list on behalf of the mining industry I could believe that. If the mining lobby had not spent $3 million in donations to the Coalition in 2010/11 alone I might assume that the enthusiastic reception that Joe Hockey, Barnaby Joyce and other influential Coalition figures have given this idea was motivated from a national interest perspective. But it’s hard to believe that the receipt of such money doesn’t have an effect on the Coalition’s overall rhetoric.

The Liberal Party has been in the pro-market corner for 30 years. It is a shame to see it tarnishing in this pro-market legacy in the fight for a self-interest pro-business cause.


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