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And where does that $45B evaporate to? They will invest that money somewhere, which can spur on Australian business. Even if they don't invest it, it'll still b

And where does that $45B evaporate to? They will invest that money somewhere, which can spur on Australian business. Even if they don't invest it, it'll still be in a bank account, which means that it can still be loaned and invested. The only way I can think of where it wouldn't benefit Australia is if the investors of the mining companies are not from Australia or don't invest it in Australia. >because the companies have massive tax holidays and find ways to legally avoid the upside. Another thing to note is that quite often the way companies legal avoid taxes is by investing that money instead of taking out profits. That's still beneficial for Australia. The world doesn't only revolve around how much people pay income taxes.

ggm 7y ago
The only way I can think of where it wouldn't benefit Australia is if the investors of the mining companies are not from Australia or don't invest it in Australia. Invest meaning purchase Australian Goods and services, and invest in Australian enterprises. Well.. Labour hire aside, there aren't many heavy machinery manufacturers onshore, and there are cost issues in sourcing construction materials fabricated onshore. The least-cost tender tends to favour Chinese and Indian sourced goods and materials, even if made with Australian steel they don't always come from domestic sources. The shareholdings are a mixture of Australian and International and there is a huge upside in shareholder benefit which includes pension funds and state investment funds, no denying that. Another thing to note is that quite often the way companies legal avoid taxes is by investing that money instead of taking out profits. That's still beneficial for Australia. The world doesn't only revolve around how much people pay income taxes. Yes, but they also seek tax holidays for sunk costs, and then seek co-funding for investment costs, so they avoid the cost of actually having to build the ports and railway lines, but get a tax holiday on the investment made: the state government has to pick up the difference. Investments are valuable for australia in the longer term, but have to be offset against longer term downside costs, like remediation of the minesite which has historically been avoided, or damage to the water table, or the groundwater, or the effect on local property prices which disadvantages local residents not engaged in mining, or the downside effect on tourism from damage to the environment.. Nothing is simple. if I over-state the evaporation of the $45B, then the positives of the $45B have been equally if not more so overstated. Much of the money is fictive, never actively enters the economy, and instead "enhances shareholder value" at the expense of actual, incurred real-world costs in the state. Mines make money: they also incur costs. Who bears the costs is not the same as who makes the money.
- specialist 7y ago
  Maybe a contrast with how Norway manages their Oil Fund would better illustrate your points. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... The Iraqi who saved Norway from oil https://news.ycombinator.com/item?id=19594153 https://news.ycombinator.com/item?id=19594153
megablast 7y ago
> They will invest that money somewhere, which can spur on Australian business. Or drive up Australian housing prices? Or pay off the government to remove environmental protections. Or invest overseas in more mines.
bamboozled 7y ago
It evaporates to other countries such as China, India and Japan. A small handful of union backed Australians get paid ridiculous amounts for relatively easy work and those unions kick up a massive fuss whenever discussions of shutting down the industry come up. Thermal coal adds little tangible value to the lives of everyday Australians. It’s also doing a great job of ruining agriculture, tourism, water catchments and the natural environment.
- jimmydorry 7y ago
  And yet 50% of the coal we export is metallurgical coal. The kind needed by humanity in almost every kind of construction and large scale manufacturing. For some reason though, it's always lumped in with thermal coal by protesters and so-called environmental activists. Also, you are massively kidding yourself if you think that Thermal Coal doesn't affect your everyday life in Australia. Enjoy no power and a collapsed grid if you remove most of the baseload power in the grid. The energy sector is forecasting an energy shortage in NSW and Vic due to them prematurely closing coal plants without adequately replacing that capacity. South Australia may be "net green" or close-to if you are to believe headlines, but it would collapse instantly without the baseload of Victoria stabilising its grid and supplying power when required (and Vic later accepting power and lowering its coal output for the close to free useless power). There is close to 0% chance that QLD alone will be able to supply the missing power that NSW and Vic will require.
  - shakna 7y ago
    > The energy sector is forecasting an energy shortage in NSW and Vic due to them prematurely closing coal plants without adequately replacing that capacity. There's also a massive backlog of green power efforts to connect to the grid, because the grid is badly designed. It was designed to take power directly from coal stations to cities, it wasn't designed to be an effective or efficient network. Saying we need coal because we haven't upgraded the grid to meet modern demands is like saying someone with a broken arm needs a sling. It is true, but it isn't permanent, and the goal should be to get rid of it or you'll hurt yourself more in the long run.
sumedh 7y ago
> They will invest that money somewhere, and keep some of it in off shore tax havens.

ggm 7y ago

The only way I can think of where it wouldn't benefit Australia is if the investors of the mining companies are not from Australia or don't invest it in Australia. Invest meaning purchase Australian Goods and services, and invest in Australian enterprises. Well.. Labour hire aside, there aren't many heavy machinery manufacturers onshore, and there are cost issues in sourcing construction materials fabricated onshore. The least-cost tender tends to favour Chinese and Indian sourced goods and materials, even if made with Australian steel they don't always come from domestic sources. The shareholdings are a mixture of Australian and International and there is a huge upside in shareholder benefit which includes pension funds and state investment funds, no denying that. Another thing to note is that quite often the way companies legal avoid taxes is by investing that money instead of taking out profits. That's still beneficial for Australia. The world doesn't only revolve around how much people pay income taxes. Yes, but they also seek tax holidays for sunk costs, and then seek co-funding for investment costs, so they avoid the cost of actually having to build the ports and railway lines, but get a tax holiday on the investment made: the state government has to pick up the difference. Investments are valuable for australia in the longer term, but have to be offset against longer term downside costs, like remediation of the minesite which has historically been avoided, or damage to the water table, or the groundwater, or the effect on local property prices which disadvantages local residents not engaged in mining, or the downside effect on tourism from damage to the environment.. Nothing is simple. if I over-state the evaporation of the $45B, then the positives of the $45B have been equally if not more so overstated. Much of the money is fictive, never actively enters the economy, and instead "enhances shareholder value" at the expense of actual, incurred real-world costs in the state. Mines make money: they also incur costs. Who bears the costs is not the same as who makes the money.

specialist 7y ago
Maybe a contrast with how Norway manages their Oil Fund would better illustrate your points. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... The Iraqi who saved Norway from oil https://news.ycombinator.com/item?id=19594153 https://news.ycombinator.com/item?id=19594153

megablast 7y ago

> They will invest that money somewhere, which can spur on Australian business. Or drive up Australian housing prices? Or pay off the government to remove environmental protections. Or invest overseas in more mines.

bamboozled 7y ago

It evaporates to other countries such as China, India and Japan. A small handful of union backed Australians get paid ridiculous amounts for relatively easy work and those unions kick up a massive fuss whenever discussions of shutting down the industry come up. Thermal coal adds little tangible value to the lives of everyday Australians. It’s also doing a great job of ruining agriculture, tourism, water catchments and the natural environment.

jimmydorry 7y ago
And yet 50% of the coal we export is metallurgical coal. The kind needed by humanity in almost every kind of construction and large scale manufacturing. For some reason though, it's always lumped in with thermal coal by protesters and so-called environmental activists. Also, you are massively kidding yourself if you think that Thermal Coal doesn't affect your everyday life in Australia. Enjoy no power and a collapsed grid if you remove most of the baseload power in the grid. The energy sector is forecasting an energy shortage in NSW and Vic due to them prematurely closing coal plants without adequately replacing that capacity. South Australia may be "net green" or close-to if you are to believe headlines, but it would collapse instantly without the baseload of Victoria stabilising its grid and supplying power when required (and Vic later accepting power and lowering its coal output for the close to free useless power). There is close to 0% chance that QLD alone will be able to supply the missing power that NSW and Vic will require.
- shakna 7y ago
  > The energy sector is forecasting an energy shortage in NSW and Vic due to them prematurely closing coal plants without adequately replacing that capacity. There's also a massive backlog of green power efforts to connect to the grid, because the grid is badly designed. It was designed to take power directly from coal stations to cities, it wasn't designed to be an effective or efficient network. Saying we need coal because we haven't upgraded the grid to meet modern demands is like saying someone with a broken arm needs a sling. It is true, but it isn't permanent, and the goal should be to get rid of it or you'll hurt yourself more in the long run.

sumedh 7y ago

> They will invest that money somewhere, and keep some of it in off shore tax havens.