Media release from Larissa Waters:
Australia's love affair with the mining boom has been in the headlines for many years now.
Mining is credited with saving us from the Global Financial Crisis, putting food on our tables, keeping our economy strong and thousands of people employed.
It's been a great public relations success. A survey released by Essential Media this week showed that 67 per cent of Australians count mining as one of our top three most important industries. A typical Australian believes the mining sector accounts for more than one third of economic activity, and employs about 16 per cent of our workforce.
Unfortunately, our perceptions of the mining industry are wildly out of step with the reality.
Today, The Australia Institute released its new research paper Mining the Truth; The rhetoric and reality of the commodities boom, which provides a detailed analysis of the ways in which the mining boom is affecting our economy, both positive and negative.
The true picture of Australian mining it reveals is startling, in all the parts that have been glossed over, rewritten or ignored.
To begin with, mining doesn't even come close to accounting for a third of our economic activity. Mining represents about 9.2 per cent of GDP, roughly the same as manufacturing. And the perception that mining employs around 16 per cent of our workforce credits the industry with nine times more workers than it actually has, about 1.9 per cent of the workforce. Despite the expansion of mining over the past seven years, mining accounts for only 7 per cent of new jobs created over that time.
Of course, mining likes to roll in all the indirect jobs it creates. If every sector calculated their share of the workforce in this way, the total number of Australian jobs would be inflated by three times the true number.
Ironically, mining could create many more jobs here if it sourced more of its materials in Australia. But without local content rules for big mining projects, most materials are sourced offshore. Australian steel, for example, make up only 10 per cent of the steel used for mining. If mining used more Australian steel, it might have been a very different outcome for 1,400 BlueScope workers.
The Mining the Truth report also sheds some light on some of the questions we are currently facing; if mining has boosted our economy and benefited all of us, why are other sectors struggling? What is the truth behind the two-speed economy?
Mining has hiked up the exchange rate, creating a direct disadvantage for our industries which need to compete internationally, such as tourism and manufacturing. Most importantly, mining and the high prices of commodities are major causes of our current high interest rates, putting great pressure on other sectors and Australian households.
But surely the profits that are created by mining are more than enough to offset the negative impacts of mining on other sectors?
As a matter of fact, they are. BHP Billiton recently posted an annual profit of $22 billion - more than half of the entire annual budget of the state of Queensland. Overall, mining will realise a whopping $600 billion in profit over the next decade.
And we are going to get next to nothing of it - 83 per cent of Australian mining is foreign-owned, and these profits will be sent back overseas. The industry has spent millions on campaigns designed to limit fair taxation on mining, even though the average rate of corporate tax paid by mining companies is around 14 per cent, mainly thanks to generous tax deductions by the Government.
The Resource Super Profits Tax would have collected an additional $200 billion in the next decade. Just imagine that money being invested back into Australian communities, hospitals, schools and public facilities.
Its meagre proposed replacement, the Mineral Resource Rent Tax, would raise only an extra $38.5 billion over the same time period. $38.5 billion - out of $600 billion of pure profit. That's less than 6.5 per cent.
The profit margin of mining is, on average, 37 per cent. Compare this to manufacturing, which enjoys a 6 per cent profit margin, or retail, which sits at 4 per cent. By now, the fairytale story of mining is less about happily ever after, and more about the Haves and the Have-Nots.
It's often argued that the mining boom does benefit everyone, by boosting superannuation through increased share prices. But again, this argument fails when held up to the light - the average superfund, among Australians who have superfunds, has barely 4 per cent of its portfolio exposed to the mining sector.
Where is the voice of fairness in all this? Why are only the Greens standing up to say the minerals in the ground belong to all of us, not just the people who dig them up? Why aren't the old parties making sure that a fair share of mining profits is returned to all Australians? Far from acting in the best interests of the public, the Government has provided one long gravy train for the mining industry.
The latest mining campaign is Our Story, another multi-million dollar PR exercise to tell us mining is good news for everyone. It doesn't include the story of high interest rates, unemployment in our other export industries, and an Australian public whose assets are being stripped from them without fair recompense.
If it did, we may discover that the true story of the mining boom is not the fantasy we've all been sold.
Senator Larissa Waters is the Greens spokesperson for mining, and the first Greens Senator for the state of Queensland.
