Why we need a super profits tax on all highly profitable corporate sectors

(image courtesy of WA Today)

Corporate and business power is being mobilized to oppose the Rudd Government's Resource Super Profits Tax. (In essence this is an extra tax levied on additional profits that a corporation makes because it has been given exclusive or privileged access to a limited resource).

Already the massively profitable mining corporations are crying poor and we are hearing all sorts of dire predictions from the mining and resources industry and their corporate and business lobbyists.

But the mining and resource companies make massive profits out of Australia's resources, and existing royalties and taxation regimes are a minor part of their expenditure. Between 2006-7 the value of top mineral production totalled $100 billion, of which the Australian community retained just 7% in Commonwealth and State tax revenue.

Most ordinary Australian will support the tax as a way to ensure that super profits from Australia's sovereign mining and resources wealth actually remain in Australia and benefit all Australians. Indeed, there are good reasons to extend the Super profit tax across all business sectors, particularly the highly profitable banking and financial services industry who continue to make obscene profits off the backs of ordinary Australians.

At the moment the overwhelming majority of profits earned in Australia by mining and resource companies goes overseas. Stephen Mayne reports that 80% of Australian resource profits go to overseas owners. The majority of the major mining and resource companies operating in this country are overseas owned, even those who proclaim their Australian-ness. (Stephen Mayne has a list here of Australian resource projects that are majority foreign owned).