Beware miners claiming a rich seam of pure altruism
The scare campaign driven by BHP, Rio and Fortesque falls down when the figures and facts are consulted, writes Mark Hawthorne.
The scare campaign driven by BHP, Rio and Fortesque falls down when the figures and facts are consulted, writes Mark Hawthorne. IF YOU believe the mining moguls of Australia, self-interest is the last thing on their minds as they protest the double-whammy of a mineral resources rent tax and carbon tax.BHP Billiton, Rio Tinto and Fortescue Metals Group have all announced record profits in the past fortnight, so it's a little difficult for the big miners to cry poor. The scare campaigns have instead focused on jobs, and the effect on mining company share prices.BHP Billiton boss Marius Kloppers was on-message when quizzed about the potential impact of both taxes on his company's bottom line. He dubbed the carbon tax a "deadweight cost" and warned it would reduce investment. "It is an economic deadweight cost because it is basically just an export tax," Kloppers said.The BHP boss also pointed to the wealth the mining boom was bringing to the nation's super funds."Somebody asked a question about the sovereign wealth fund, and [Wayne Swan] said that there are 8 million superannuation holders who benefit from the resources boom in Australia. I would bring that back to this company the fortunes of 600,000 Australian families and more are tied to the outcomes here."They are individual direct shareholders, and that excludes the 15 per cent of all equity superannuation that is invested in Australian equities that sits in BHP Billiton's stocks."Unfortunately, Kloppers went off-script to discuss the impact on BHP's tax bill."Our tax rates on a cash basis over the last five years are all up. Royalty and company taxes in Australia have run percentages around the early 40s. Under the MRRT, that will go [to] the late 40s in overall percentage. That is the increment of overall tax increase."Collins & Spencer begs to differ.According to BHP's results this week, the company's effective tax rate was 32.1 per cent, pretty much in line with the past two years.BHP's royalty and excise payments were just 2.6 per cent, down from the 4.3 per cent paid a few years back. The company's total taxation rate, including royalties, has fallen substantially from to 33.5 per cent last financial year to just 23.4 per cent in the past year.Never let the facts get in the way of a good scare campaign.Frequent flyerONE of the public faces of the mining industry's fight with the Gillard government is Fortescue Metals boss Andrew Forrest, who has led the "axe the tax" choir, alongside fellow billionaire Gina Rinehart.Times must be tough for the Perth mining mob those poor souls at Fortescue can't even find decent help, and are on the lookout for a new cabin attendant for the company's private jet.Ads have appeared in the press seeking a "VIP cabin attendant" for a "Perth-based company". Working as the Fortescue trolley dolly is a full-time position, helping to "take care of up to 11 VIPs on flights of up to 12 hours".Shareholders will be happy to learn a "responsible service of alcohol certificate" is also mandatory.It's not all glamour, though. The job includes "catering for each flight as well as cleaning the aircraft after every flight".No pressure at allAT RIO Tinto, Olympic fever has hit. The mining giant is the official supplier of all the metal used to produce the 4700 gold, silver and bronze medals that will be awarded at next year's London Olympics.Some of that metal will come from the Oyu Tolgoi mine in Mongolia, so Rio is doing its bit to help the nation.The company this week became an official sponsor of the Mongolian team for the Games.Rio may want to think carefully if it ever considers dropping the sponsorship deal Mongolia has only ever won Olympic medals in wrestling, judo, boxing and shooting.