Wilkie and the Miners

Anna Reynolds, Greens Candidate for Denison, asks why a Denison MP is a hero of the West Australian miners and says it’s time Andrew Wilkie explained.

Mr Wilkie is making much of the need for honesty in this election, but on the mining tax only part of the story is being told. His latest campaign newsletter said he supported “the implementation of the mining tax but continues to argue for it to be improved”. What he doesn’t say is that he helped create its failure in close consultation with the mining industry. Mr Wilkie intervened in the mining tax negotiations to increase the threshold at which companies are liable for the tax, and so reduced the revenue that could have been raised.

The Association of Mining and Exploration Companies, or AMEC, is a powerful but little known organization based in Perth. Founded in 1982, it has recently opened offices in both Sydney and Brisbane. With a membership of over 360 mining companies it exerts powerful, but often covert political influence on both state and federal politics. Its capacity to influence the course of federal politics was clearly illustrated by its successful campaign against the government’s projected Mineral Resources Rent Tax.

AMEC’s annual report for 2011 outlined the fierce corporate hostility to any form of direct taxation on the industry. Members were informed that the Association had ‘worked tirelessly throughout the year to have the tax withdrawn.’

But the report was celebratory, indeed glowing with self-congratulation. And understandably so. The anti-tax campaign was crowned with success. Amendments to the legislation in the parliament greatly reduced the reach of the tax, allowing almost all of AMEC’s members to escape the planned impost by significantly raising the threshold at which the tax would be imposed.

AMEC announced with obvious satisfaction that it was ‘now apparent that only 20 to 30 companies will be affected from the original 360 or so identified by the government.’ AMEC made no attempt to estimate, and clearly had no interest in assessing, the amount of potential revenue lost to the government as a result of the amendments they had successfully promoted, and how it might have been spent.

As well as having unlimited funds to lavish on tours of the sprawling mining provinces, AMEC had the advantage of being pitted against a government which lacked a majority in both houses of parliament. Clearly the independents in the House of Representatives held the fate of the mining tax and millions of dollars of potential revenue in their hands.

The Association’s annual report identified two of them for special, meritorious mention – Andrew Wilkie, the independent member for Denison, and Tony Crook, the National party member for the vast Western Australian electorate of O’Connor. The AMEC CEO said that they “negotiated support from key politicians Tony Crook MP and Andrew Wilkie MP, which resulted in a 50% increase to the low profit offset threshold.” The AMEC report also printed what could only be described as a trophy photo of Crook, Wilkie and his principal advisor standing beside a helicopter with a senior Association official.

The Association was quite open about the tactics it had employed. There was a national media campaign to inform the electorate of the industry’s hostility to taxation. But of greater significance was the assiduous lobbying of members of parliament, and what were called ‘AMEC hosted tours of mine sites throughout Western Australia for federal MP’s’, often in comfort aboard helicopters.

While the helicopter trips were paid for by the miners, Andrew Wilkie’s trip to Western Australia to hear the concerns of the mining companies in September 2011 was paid for by the taxpayer. The three nights in Perth was listed as ‘electorate business’ in the register of MPs travel.

Crook’s involvement in the campaign to help the Western Australian miners to avoid the mining tax is perfectly understandable. His electorate of over 900,000 square kilometres includes many mining districts, and he works from an office in historical mining town of Kalgoorlie. But Wilkie? His electorate is farther away from the West’s mining provinces than any other in the country. It has no mines and few people with an interest in the industry. And yet it was Wilkie – not Crook or any other member from mining electorates – who moved the crucial amendments in the House of Representatives which allowed over 300 mining companies to escape the tax.

It is truly a strange matter. The industry’s successful courtship of Wilkie must be one of the most unlikely romances in Australian political history. The Age said that Wilkie “was duchessed by the small miners and the vocal Andrew ‘Twiggy Forrest, bought the argument that the $50 million profit threshhold at which the mining tax will apply, was too low.” 23 Nov 2011

After successfully securing the amendments for the miners, Wilkie’s own media statement said, “I wanted to go further but the Government wouldn’t come at it given the budget cost and this is the best I could achieve.’’

What possible interest could the people of Wilkie’s electorate have in massively reducing the amount of money that could be collected from the booming mining industry in the wealthy mainland state? All the evidence would suggest that Tasmania would have been one of the principal beneficiaries of increased federal revenue.

What ithe miners make clear is that it’s the Greens who will hold them to account – their Annual Report laments “we cannot relax our endeavours…as its highly likely once the legislation is implemented the Greens will work towards having the MRRT expanded to other commodities and the tax rate increased”.

Responsibility for election comment is taken by Anna Reynolds, 208 Elizabeth Street. Hobart

• The Wilkie response, in Comments: Anna’s correct that I intervened in the Federal Parliament to adjust the mining tax threshold. Mining’s an industry with enormous up-front capital requirements and the lower the mining tax threshold, the harder it is for new and emerging Australian firms to enter the market which is currently dominated by a few giant multinationals. As Anna knows, the real problem with the mining tax revenue isn’t that some companies fall short of the threshold for paying it. The biggest problem by far is the overly generous asset depreciation loophole which favours the giant multinational companies posting the eye-watering profits.