Minerals, oil lobbies are not taxpayers (but guess who subsidises them?)

by | Feb 25, 2022 | Energy & Environment

It’s a phenomenon more commonly attributed to ”banana republics”. Our government is helping the resources lobby even as it works against the interests of the nation and the planet. Stephanie Tran examines the influence of energy lobby giants as they intensify efforts to delay Australia’s embrace of clean energy.

Australian taxpayers are subsidising the lobbying activities of the Minerals Council of Australia. In 2020, the council received a $100,000 “Federal Government cash flow boost”.

The subsidy was awarded under a scheme that saw businesses and not-for-profits receive a temporary boost during the economic downturn associated with COVID-19.

This cosy relationship between the government and the resources lobby should alarm every Australian. “You see a media release coming out of a minister’s office and it might as well have been written by the industry. The proximity between two suggests that democracy is broken,” says Dan Gocher, director of Climate and Environment at the Australasian Centre for Corporate Responsibility.

“You’ve got governments at a local, state and federal level that are making decisions for the benefit of corporations rather than citizens.”

https://www.michaelwest.com.au/minerals-council-demands-reform-while-its-members-pay-little-or-no-tax/

 

“What the mining industry is trying to achieve strategically is for governments to only ever adopt policies that have the blessing of the mining industry,” adds Bob Burton, editor of the Coal Wire blog. ”The first part of that is scaring any party that might want to adopt a policy on climate out of doing that. The other side of the coin is ensuring that every key decision maker is surrounded by mining industry lobbyists at all the key stages.” 

Income tax exemption

According to their 2020 financial reports, both the Minerals Council and Australian Petroleum Production Exploration Association (APPEA) are exempt from paying income tax under section 50.40 of the Income Tax Assessment Act 1997. 

The section provides a tax exemption to organisations that are established to promote Australian industries. To be eligible for the exemption, organisations must meet a special condition that states that the activity of the organisation is “not carried on for the profit or gain of its individual members”.

The significant lobbying activities of both organisations on behalf of their members arguably contradicts this special condition. In fact, both organisations boast about the success of their lobbying efforts in their 2020 financial statements.

Chief among the achievements of APPEA included:

“Advocated for, and succeeded in having lifted, the moratorium on Victorian onshore natural gas development and established APPEA’s voice in Victoria’s energy policy development.”

“Advocated successfully for natural gas to be recognised as a critical fuel for many decades to come for electricity, commercial and residential use leading to wide acceptance including by the Australian Government as a part of its post-COVID-19 pandemic economic recovery plan.”

“Advocated on the role of natural gas in reducing global greenhouse gas emissions and for this to be recognised as part of Australia’s efforts to address climate change and ensure energy security at home and with trading partners. This is now a core part of the Australian Government’s narrative on the role of the industry.”

Similarly, the Minerals Council states that

“Revenue from membership fees relates to the provision of annual membership benefits to members. The consideration for memberships is based on fixed fees and is recognised over the membership year as members simultaneously receive and benefit from the services provided.”

“The customer simultaneously receives the benefits as MCA provides the services.”  

“The MCA measures its performance by member feedback and legislative outcomes.”

In a statement, Minerals Council CEO Tania Constable maintained that the activities of the Minerals Council satisfy the special condition. “This has always been the case and remains so,” she said.

Key members

According to their AEC 2020-21 “Political Campaigner Return”, the Minerals Council received $20.9 million in contributions from 37 companies affiliated with the mining industry. The top 15 members are outlined in the infographic below.

APPEA is not registered as a “political campaigner”, however its 2020 financial report shows it received $5.8 million in funding from members. 

Political donations

Our analysis shows that since the 1999-98 financial year, the Minerals Council has donated $906,508 to the major political parties, with $449,707 going to the Liberal Party, $344,116 to Labor and $112,685 to the Nationals. 

In the 2020-21 financial year the Minerals Council contributed $256,203 in political donations. The Liberal Party received $147,998, Labor $84,260 and the Nationals $23,845.

APPEA has donated $393,975 to political parties since 2003-04. The party breakdown is as follows:

  • Liberal: $173,701
  • Labor: $152,597
  • Nationals: $67,677

In 2020-21 APPEA made $107,010 in donations with $72,610 going to the Liberal Party, $31,650 to Labor and $2,750 to the Nationals.

 

 

As reported in MWM, Australia has entered a period where the dividing line between government and business has eroded significantly and trust in the political system is at an all-time low. When the office of the prime minister is so staffed by pro-coal lobbyists that it functions as a consultancy firm for the industry, we know that regulations of government oversight are inadequate.

Why does this matter?

The science is clear – to meet the targets set out by the Paris Agreement, a third of oil reserves, half of gas reserves and over 80 per cent of current coal reserves must remain in the ground. That’s a message the resources lobby is intent on scrambling, with the help of the Australian taxpayer.


Editor’s Note: The practice of governments paying lobby groups to lobby them is not contained to the resources sector. AI Group also pays no tax, receives government contract work and grants, picked up JobKeeper despite failing the income test, and it is also funded by weapons makers.

Likewise, pro-war think tank, the Australian Strategic Policy Institute (ASPI), is also funded by government to lobby government. Like AI Group, it is also financed by global weapons manufacturers.

The public should not be subsidising private sector lobbyists to lobby governments.

https://www.michaelwest.com.au/ai-unveiled-another-propaganda-service-for-defence-big-business-and-the-coalition/

 

Stephanie is studying a Bachelor of Communication (Journalism)/Bachelor of Laws at the University of Technology Sydney. She has a keen interest in public interest investigative journalism and is president of the UTS Journalism Society. As cadet reporter at MWM, she has built our database of grandfathered companies and their political donations.

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