Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
Australia’s decade-long mining boom has generated enormous wealth for some. A report in July 2012 showed that miners working on some remote oil and gas rigs could earn upwards of $200,000 per year. The country’s richest person, Gina Reinhart, owes much of her wealth to iron ore. The list of mining billionaires goes on.
But a new report commissioned by the Australia’s Construction, Forestry, Mining and Energy Union (CFMEU) says that companies’ mining profits have “far outstripped growth in resources taxes and royalties.”
According to the study by SGS Economics and Planning, the boom has has not delivered on the promised long-term economic benefits.
Some key findings show that:
The CFMEU argues that more money should be flowing from the mining sector to education and other public services.
“We need a federal government willing to stand up to self-interested mining companies and manage this resources boom in a fair and sustainable way,” CFMEU Energy Division General Secretary Andrew Vickers said in a news release.
The report cites Norway as a good example of how resource wealth can be equitably distributed. Fuelled by oil revenues, the Nordic country’s sovereign wealth fund is the largest in the world. The fund invests strategically in domestic companies, predominantly through the Oslo Stock Exchange.
“Norway is relevant to the Australian experience. Both are small and developed economies with strong resource endowments. But Norway has taken a longer view regarding strengthening inter-industry relationships by levering its natural resource base. Australia has developed a short term market oriented approach and left it predominantly to large global corporations and has not been pro-active in developing interventionist policies to strengthen local industry competitiveness.” – SGS report.
Study authors conclude by arguing that Australia adopt certain “appropriate elements of the Norwegian model.”
Australia’s Mineral Resources Council doesn’t agree with the report. The group’s public affairs director spoke to Australia’s ABC News on Monday, saying that 98% of everything mining companies have earned out of Australia “has been invested back in Australia to keep operations going.”
He also released a series of Tweets, highlighting the industry’s successes at spreading the wealth.
In FY2013, BHP Billiton provided US$245.8 million to community programs #mining
— Ben Mitchell (@1Ben_Mitchell) November 25, 2013
The mining boom has added $290/w to every Aust’s weekly income: BREE http://t.co/wN29twOjO1 #ausunion
— Ben Mitchell (@1Ben_Mitchell) November 25, 2013
The RBA on mining + economy: resource economy accounted for 18 per cent of gross value added in 2011/12, double 2003 http://t.co/kplGwMh993
— Ben Mitchell (@1Ben_Mitchell) November 25, 2013
7 Comments
DJR96
I don’t know what fairytale world this Ben Mitchell lives in, but claiming every Australian employee is earning an extra $290 is pure fantasy. Period.
Maybe he means the average wage has increased that much. If that is his intended claim then the increase must be nearly all at the top end of the income spectrum. Which only supports the basis of this article.
DJR96
There’s a very simple solution to help alleviate the problems brought up in this article. The mining resources tax was meant to help, but has been an abject failure.
Reform the fundamental tax structure, making the company tax progressive just like the personal income tax. The companies that are highly profitable, mining, banking/finance, major supermarkets etc pay a higher rate than the smaller ones struggling to establish and compete. It levels the playing field, achieves what the MRRT tried to do and general brings about much needed equality. And would be FAR simpler and more effective to implement.
john S. metzger
…says that companies’ mining profits have “far outstripped growth in resources taxes and royalties..” NO, really?? and can you go back and re-boom and do it “right”… 🙂
kbaus
The former Labor government introduced expat tax what in reality forced majority of expats to sever links to Australia. These expats had to move and now live overseas. They do not pay tax to Australia (more tax revenue was the sole purpose of the Swan’s changes and it backfired). They do not spend their money in Australia. These expats were bringing much business through engaging Australian companies and manufactures because their contacts were in Australia. Now they have no contacts in Australia and therefore the business is going to their new contacts sadly not in Australia. That how inept treasurers and governments destroy opportunities. Let’s hope the Abbott’s government rectify the gross stupidity of the Rudd/Swan/Gillard excesses.
disqus_jAcGoSOntV
Good luck with that, as I recall it was a bipartisan decision between labor and the liberals to screw the expats.
Gus.
The first, out of nine fascinating reports from Canadian newspaper, The Tyee, is: Oil Wealth: Should Norway be the Canadian Way?
I would urge all Australians to read ALL of the articles relating to Norway’s
incredible success compared to Canada’s abysmal failure to convert their natural resources, which originally were OWNED by ALL Canadians, into dollars and cents which then in turn SHOULD HAVE been OWNED by ALL Canadians.
Australia is the twin brother to Canada in many ways; physical, ideological, political and historical background.
I can’t imagine any real Australian after having read all these articles would not be dismayed and bewildered as to what has happened in this country which is blessed with oil, gas and minerals… far more resources than Norway’s oil, yet has no money “in the bank”.
If nothing else; it is fascinating reading… compare how the political parties, close to a dozen or so and ranging from far left Communists to far right Capitalist,
handled Norway’s resources… the PEOPLE’s assets… and dealt with foreign oil
companies… compared to Australian politicians!
How the oil companies reacted when told they would have to pay a huge amount of tax, currently 78% tax and in the UK 80% and in Australia…40%!!!
And what happened when the oil companies put advertisements in the papers (just like the mining companies did in Australia)…
And much, much more to the extent that Norway today has its own State owned oil company which now operates in 33 countries around the world… and yes, even in Australia…!!!
And why not…paying just 40% tax here where we are, and eventually will be; “down and under”!
Having milked the foreign resource extracting companies for all they could; taxes and training and educating Norwegian fishermen and farmers as to all aspects of the oil industry along with oil rig platform worth hundreds of millions of dollars, but still leaving the oil companies to make a profit, Norway today, 40 years later, is THE world expert in deep sea and sub sea oil and gas extracting… and is now aiming to use that expertise to go deep sea MINING!!!
Norway, with a population slightly larger than Sydney, probably has more
engineers per population than any other country and it is booming and needs
another 8,000 engineers, all thanks to the Governments demand that the oil
companies in the early days had to source material and fabricated equipment in Norway… and in Australia…??? Ship it in from China!
Norway retains approximately 85% of the value that is extracted from it’s natural resource by way of the 78% tax and boosted by DIRECT PARTICIPATION by State owned companies like Statoil … AND; it ALL belongs to ALL the people of Norway.
The money, currently about 830 billion Dollars, is invested around the globe and ALL Norwegians now owns about 1 % (ONE PERCENT) of the entire global stock market!!!
And Australia…??? 85% of the wealth goes to foreign companies and investors whilst the remaining 15% goes mainly to a few Australian mining magnates, some wealthy share market investors and basically nothing to speak of to ALL the rest of the Australian people who actually OWNED the resource in the first place…!!!
Rex Connor, the minister for resources in the Whitlam Government, wanted in 1972 to “Buy back the farm” as he called it.
He wanted the Government to buy up foreign mining companies and allow the Australian people to get the proceeds of THEIR resource assets, rather than giving it away as a drunken sailor to anyone who wanted it.
The mind boggles as to where Australia would be today…!!!
To put us into perspective; Those 5 million Norwegians can spend 40 billion Dollars to build a National Broadband Network, EVERY YEAR… FROM NOW ON… FOR AT LEAST THE NEXT 50 YEARS… at the rate they are going!!! And never go into the red… like Australia.
It’s damn well insane how, and for whose benefit, Australian politicians have run this country’s resources.
The phrase: “The lucky country” came from writer and social critic Donald
Home in 1964.
The full phrase is, and makes far more sense when read in full: “Australia
is a lucky country, run by second-rate people who share its luck.”
… but for how long can it…???
The first, out of nine fascinating reports from Canadian newspaper, The Tyee, is: Oil Wealth: Should Norway Be the Canadian Way?
Macca
CFMEU and ABC don’t know what they’re talking about, it’s our super funds that benefit from the good work our miners do, i’d like to know what contribution the CFMEU has made, perhaps we should ask their mates the Obeids or Mcdonalds. How many employees of the CFMEU lost their jobs.