Mining industry threatens to unleash ad campaign against Labor unless it rules out windfall profits tax
The mining lobby has urged the Albanese government to rule out taxes on the sector or face an ad campaign akin to one that derailed the Rudd government’s super profits tax.
On Thursday the Minerals Council of Australia’s chief executive, Tania Constable, issued the threat to campaign against “bad policies”, opening a new front between resource employers and the government who are already at war over proposed industrial relations changes.
Both gas and coal prices have been pushed up by Russia’s invasion of Ukraine, just one of the causes of higher electricity and grocery prices as inflation is tipped to reach 8%.
The Treasury has given the green light to intervene in the electricity market through price caps, a move that has popular support, according to polls.
Australian unions and the Nobel prize-winning economist Joseph Stiglitz have gone a step further calling for a windfall profits tax to prevent companies profiting from the war and to bring down the budget deficit – a move that could be particularly lucrative due to outsized coal profits.
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On Thursday Constable revealed the MCA was “already having discussions with the government” about the as yet unannounced proposals. She warned miners were prepared to run an ad campaign “standing up for families, standing up for small businesses across regional Australia”.
“We can’t afford to see jobs go in regional Australia,” she told reporters in Canberra. “We can’t afford to see investment slow down ... So when bad policies emerge, the mining industry is going to look at those individually and as a whole and what sort of impacts they’re having.”
The campaign on tax follows a similar threat from the Australian Resources and Energy Employer Association to run ads against Labor’s industrial relations legislation, which chief executive Steve Knott has said would be like the $20m campaign against the Rudd government’s mining tax “on steroids”.
Constable said the MCA wanted to see taxes on the mining industry in Australia “ruled out … that’s all government needs to say”.
She warned the issue of lowering power prices should not be “conflated” with the export industry.
“We’ve heard some commentary from the government that they don’t have a preference to tax the export industry at the moment, but they haven’t ruled it out. What we want the government to do is rule out more taxes on the export industry.”
Constable said coal profits had “nothing to do” with the invasion of Ukraine, arguing that coal companies had experienced two good years of profit after five bad years in a highly cyclical industry. “That’s normal to the mining industry.”
On Friday, ahead of his trip to Asean, the G20 and Apec, the prime minister, Anthony Albanese, acknowledged the government had an “immediate challenge” on power prices.
“We know there have been some windfall gains occurring at the same time as businesses and households are under pressure,” he told 2GB radio.
“We’ll work through that, and land on a solution going forward, before Christmas, to put some downward pressure on those increases.”
Albanese confirmed caps on the price of gas was “one option under consideration”. Asked about a possible mining tax, Albanese said that “all sensible measures remain on the table” but then said “no – I’m not sure what a mining tax is, besides a slogan”.
“No, we’re not looking at a MRRT [mining resource rent tax], that was just speculation … based on the secretary of Treasury at estimates, who said we would look at all sensible options.”