Date

February 2, 2011

Kevin Rudd … deposed as Prime Minister. Photo: Glen Hunt

HOW much does it cost to bring down a prime minister? The answer: a tad over $22 million.

That’s how much the mining industry spent in six weeks last year on its campaign against Kevin Rudd’s plan for a resource super profit tax.

The advertising and public relations campaign dominated the airwaves in May and June.

But the Australian Electoral Commission’s political spending disclosures for 2009-10, released yesterday, reveal just how much the miners spent campaigning against the plans to levy a 40 per cent tax on their ”super” profits.

The campaign contributed significantly to a slump in Labor’s electoral standing in the middle of last year, which prompted Labor MPs to replace Mr Rudd as prime minister with Julia Gillard.

The figures show the industry spent $22.2 million on the campaign which ran from the start of May until late June when Ms Gillard took over and negotiated a compromise on the tax.

The industry’s national body, the Minerals Council of Australia, spent $17.2 million, mainly on TV advertisements; BHP Billiton spent $4.2 million; Rio Tinto just over $537,000, and a smaller lobby group, the Association of Mining and Exploration Companies, just under $274,000.

A spokesman for the minerals council said the tax had been a threat to the viability of Australia’s minerals industry. ”The MCA campaign reflected the size and nature of that threat,” he said.

“The RSPT would have destroyed shareholder value, shelved projects and acted as a massive disincentive to future minerals industry investment, with negative flow-on consequences for every Australian.”

On top of the industry’s direct spending, several companies donated another $1.9 million to the election war chests of the Liberal Party and the Nationals.

The figures, which cover political spending and donations to parties in the year to June 2010, show miners who made big donations to the Coalition parties included Clive Palmer’s Mineralogy ($700,000), Straits Resources ($500,000), Western Areas ($400,000), Savannah Nickel ($125,000) and Lanfranchi Nickel ($125,000).

The figures suggest the mining association still has about $1.5 million in unspent donations collected from WA companies at the height of the campaign. The association’s members – smaller mining companies – are not happy with the compromise Ms Gillard struck.

While the industry spent $22.2 million, the union movement spent only $2.8 million on its political campaigning in 2009-10. Unions donated $1.1 million to federal and state ALP branches.

The mining donations gave the Coalition an edge over Labor before the election on August 21.

The Liberal Party’s federal secretariat collected $2.5 million in donations and the Nationals raised $211,000. Labor’s national office received $1.7 million.

The Greens federal office reported only $12,500 in donations but this does not include a $1.6 million donation from the businessman Graeme Wood in July. He founded the internet site Wotif.

• Steve Lewis and Phil Jacob
• News Limited Network
• March 17, 2013 4:59PM

Some companies say the carbon tax has had a negative effect. Source: The Advertiser

Rising energy bills caused by the Government’s climate change scheme have been called the “straw that broke the camel’s back” by company executives and corporate rescue doctors who are trying to save ailing firms.

New data from the corporate regulator reveals insolvencies have hit a record high over the past 12 months, led by widespread failures in manufacturing and construction, which accounted for almost one-fifth of collapses.

The Australian Securities & Investments Commission reports there were 10,632 company collapses for the 12 months to March 1 _ averaging 886 a month _ with the number of firms being placed in administration more than 12 per cent higher than during the global financial crisis.

While the high Australian dollar is seen as the main factor behind manufacturing closures, experts say the carbon tax is adding to increasing cost burdens for many firms struggling to stay afloat.

Peter Macks, principal of Adelaide-based insolvency firm Macks Advisory, said the carbon tax was “quite debilitating” for a number of hotel operators who he said had been “struggling for a long time”.

“It is very tough operating at a profit,” Mr Macks said.

Todd Gammel, a partner with HLB Mann Judd, likened the carbon tax to pulling a leg out from underneath a chair.

“For companies which have exposure to energy, and other factors which are affected by the carbon tax in a significant way, the carbon tax and the costs related to it are having a significant impact on the ability of these companies to continue,” Mr Gammel said.

His firm was brought into help rescue Grain Products Australia, which called in the administrators late last year before being liquidated.

Around half of the firm’s 68 employees will lose their jobs and GPA’s former managing director Rob Lowndes said the carbon tax and other environmental levies had added “significant” costs, of around $500,000 a year.

Mr Lowndes said the company which exported wheat gluten to Japan and other markets had suffered from increased costs for wheat and electricity.

The carbon tax, he said, was not the “primary factor” why GPA went belly-up but it was “certainly an added cost” which was making it hard for manufacturing to survive in Australia.

While the carbon tax adds around 10 per cent to the price of electricity for most families, the impact on many small businesses and energy-intensive firms can be significantly higher.“

There’s no doubt the carbon tax is driving higher electricity prices for businesses across the state,” said NSW Treasurer Mike Baird.

“NSW Treasury analysis for this financial year shows that NSW electricity customers including small businesses and households will be hit with a bill worth an estimated $580 million due to higher power prices as a direct result of this disastrous tax.”

Australian Chamber of Commerce and Industry chief economist Greg Evans said: “Rapidly escalating energy prices caused by the carbon tax and other green programs are taking their toll on many Australian businesses.

“In energy-reliant industries it is already showing up in job losses, deferred investment and in the worst cases, business closures,” Mr Evans said.

“These are the enterprises that are energy reliant, face competition from larger players or overseas, yet received zero compensation from government when the onerous tax was introduced.

“We accept business is under pressure a number of fronts including the impact of a high exchange rate, however what business operators find hard to deal with is deliberate policy actions of government designed to increase the cost of doing business,” Mr Evans said.

“It defies logic to adopt a policy which even the Treasury acknowledge will lower our standard of living and be harmful to national productivity.AMP Capital chief economist Dr Shane Oliver said the carbon tax was contributing to the demise of firms across the economy.

“The mining sector has for so long hidden the truth about how companies are actually doing and the carbon tax is clearly having a toll,” he said.Another victim of sluggish trading conditions is Penrice Soda.

The Adelaide-based firm will shut its factory which has made soda ash for the past 70 years in a few months.Guy Roberts, the company’s CEO, says up to 70 jobs will be lost, with the firm deciding it will import soda ash used in the production of glass and detergents rather than continuing to make the chemical.

“We are replacing a factory with a shed,” he laments.Penrice Soda had negotiated a deal with the Government to reduce its carbon tax bill from $8 million a year to $1 million but Mr Roberts said that was “still effectively the straw that broke the camel’s back”.

“It’s a million dollar hit to our business overall. You can argue that the carbon tax pushed us into the red I would argue that the carbon tax contributed materially to the loss in the first half,” he said.

In February, Prime Minister Julia Gillard was quizzed about Penrice Soda’s decision to close its factory, and said the carbon tax impact was “very, very, very, very modest indeed”.

An angry Mr Roberts said he feels “let down” by Ms Gillard’s comments.

“Whether you agree with the policy or not, the timing is excruciatingly poor,” he added.Campbell Jaski, a partner at PPB Advisory and head of its Resources Group, said the carbon tax “has definitely added an additional layer of cost and burden”.

The carbon tax _ and mining tax _ were also showing up as “sovereign risk” issues in discussions with foreign investors.

“It’s on the minds of investors _ whether it is hedge funds, or Chinese investors looking for resource opportunities, it’s always a comment that is made in terms of Australia’s sovereign risk profile,” Mr Jaski said.

Last comment from this blog:

Can you see how we polarise solutions by one group fighting against another to protect their interests?  Can you see how politicians are compromised as they see the reality of having to win an election?  How in truth is the public represented when there are external interests gaining special access to politicans or having disproportionate power in the media?  How can the public get accurate and true information to base their decisions? How do we create a healthy political process that doesn’t waste tax payers money on fuelling deception but is able to deeply tackle the real problems?  How do we create a new political process where all the hard work and energy is focused on positive solutions without demonising individuals?

These are critical questions central to the politics today. It is for every person in our society to decide what sort of politics they want, switching off changes nothing, being involved could be a good start. We are waiting to hear from you, what can you contribute to your society for the betterment of children and future generations? No person is unimportant.

Be the change you wish to see in the world (Gandhi)