Five of Australia’s top coal companies – Peabody, Yancoal Sumitomo, Citic and Whitehaven – racked up $54 billion in total income over the past five years and paid zero income tax in Australia, according to Tax Office corporate tax data. Fossil fuel companies should foot the bill for the fires, not ordinary taxpayers. Michael West reports.
As bushfires rage across the country, further igniting the acrimonious debate over climate change, the Insurance Council of Australia says the NSW Emergency Services Levy may raise premiums on households by 25% and businesses by up to 50%.
The debate is now likely to move to whether fossil fuel companies, whose emissions assist in fuelling these catastrophes, should be paying, rather than households and businesses.
Like ordinary taxpayers, giant fossil fuel companies are protected by firefighters. They too enjoy access to and the protection of the law. They are big users of this country’s legal system. Their executives too drive on Australia’s roads.
Their children go to school here, their plants consume huge amounts of water, they enjoy the diesel fuel subsidy, they like ordinary taxpayers are protected by Australia’s armed forces and police.
They are effectively subsidised, heavily subsidised by ordinary taxpayers although they return little or nothing by way of income tax.
Oil and gas companies, as shown in the report below, are even worse tax avoiders than the coal companies and contribute as much to global warming.
In modest defence of coal companies, they are contending with a falling thermal coal price, and as tax is levied on profits, not revenues, have an excuse for paying less tax.
Still, the time has come for these mostly foreign multinational fossil fuel companies to pay their fair share towards this country in which they operate.
Coal’s champions and their peak body, Minerals Council of Australia, have long conflated taxes and royalties, arguing they pay royalties on their coal production as evidence of their “taxpaying”.
Yet royalties are not a tax, they are a payment for the commodity which is extracted from the earth, a payment to the owners of the coal, the citizens of the state.
Just as a steel company would never contend it should get its iron ore for free, or a cafe should get its coffee beans for nothing, so coal companies should never get taxes mixed up with royalties.
This was always the argument propounded by leading coal miner and notorious tax dodger Glencore, that royalties be counted as tax. Glencore has begun to pay a bit of income tax in Australia, following years of investigation by this publication.
The latest tax transparency data from the Tax Office shows Glencore Investment Pty Ltd made $58.6 billion in total income of five years, managed to whittle down its taxable income to just $3.9 billion and show tax payable of $240 million. That’s a tax rate of just six per cent on the taxable income it did declare.
Another in the Anglo-Swiss stable, Glencore Holdings, showed total income of $16.9 billion, taxable income of $295 million and tax of $67 million.
They are behaving better than ever on the tax front, to pay them their due. Bear in mind however the enormity of this enterprise; its 16 coal mines, 18,000 workforce and $75.5 billion in revenue, and years of paying nothing, and the tax take is tiny.
- Introduce a fossil fuel levy at one per cent of total income.
- Cap the timeframe to use tax losses at five years (rather than infinity) to prevent the likes of Exxon paying zero tax on $42 billion of income over five years.
- Ban political donations to ensure politicians don’t kow-tow to corporations.
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Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences.