The Australian government has launched a 38 million Australian dollars media campaign to counter what it calls a “scare campaign” by big mining companies against a proposed super profits tax on mining companies.
On May 2nd the Australian Prime Minister Kevin Rudd unveiled the new super profits tax. He argued that they “need to make sure that everybody has a fair share of resource profits.” This now means that Mining companies in Australia which includes some of the biggest in the world are to pay an additional 40% on any profit after they have paid their 30% corporate tax and 6% tax on profits. If the companies make any profit above the 6% then the 6% will be deducted when they come to pay the 40% super profit tax. On the other hand though if they do not make anything above the 6% then they will not be expected to pay the super profits tax.
This has been described furiously as “bloody rubbish” and softly as “unacceptable” by the mining concerns. They accuse the Australian Prime Minister of wanting to impose measures which could potentially harm the mining industry which is one of Australia’s main source of revenue. “There is no way this will not have an impact on (mining) investments in this country” a mining official said. “The banks are out there, the shareholders are out there how can you keep changing like that?” another asked.
The mining concerns have reacted with adverts over the television, radio and the newspapers attacking Prime Minister Kevin Rudd of election gimmicks when his popularity is down. They claim the super profit tax will harm the economy.
The government too, over the weekend launched a 38 million dollar media campaign with Prime Minister Rudd justifying it on Sky television that “we have a responsibility to make sure the facts are out there and not simply subjected to a scare campaign sponsored by some huge vested interests.”
The opposition have now waded into the quarrel saying that before he was elected Prime Minister Kevin Rudd had criticized huge advertising campaigns and promised to get rid of them now he is using tax payers money to launch a media campaign on his tax issue which is infact disguised campaigning for the election which could be August this year. The opposition is now calling for a senate inquiry into the 38 million dollar media campaign.
This is a lesson for countries like Sierra Leone where not much is realized as resource revenue. Australia which equally has nearly all and more of the minerals found in Sierra Leone have used its resource revenue to build what is now a developing country while Sierra Leone is a poverty stricken country.
The benefactors in Sierra Leone have always been the politicians who receive kick backs for signing the contracts and agreements which hand over the bulk of our resources to foreign nationals who pose as so called investors.
In Australia mining concerns go to the stock market and the banks for money to do their projects and no tax holiday is given, while in Sierra Leone the government uses development aid to help pre finance mining concerns to kick start their operations without owning any part of the said companies.
As Foreign Minister Steven Smith said Africa has a lot to learn from the expertise of the Australians in the mining industry.