WILL JULIA GILLARD YIELD TO THE BIG MINERS?

Clive PalmerGillard PM

 

I was apalled at the nonsense that tried to pass itself off as reasoned discussion when 3AW shock jock Neil Mitchell interviewed mining magnate Clive Palmer on radio this morning.  It was hopeless.

As the proposed resource rent is going to cost mining jobs, opined Palmer, the new Prime Minister Julia Gillard’s commitment to negotiate with mining companies isn’t good enough.  She must scrap the resource super profits tax altogether, said Palmer.

Now here’s the thing, Neil and Clive: there’s a vast difference between a tax and a natural resource rent.  A tax hits labour and capital, whereas a resource rent is a charge for use of the community’s natural resources.

How did you both ignore the fact that taxes keep the returns to labour and capital down – even Clive Palmer’s labour and capital – and that to the extent you capture land and resource rents to the community you raise the returns of labour and capital?  Amazingly, you both managed to avoid this critical point for about ten minutes.

C’mon guys, even the economic textbooks make the distinction between arbitrary taxes and targeted resource rents*, so in whose interests were you working this morning?  ‘Cos it certainly wasn’t the Australian people’s.

Oh!  “Australia’s rent-seeking parasites”?  OK …. now I understand.  But aren’t rent-seeking leeches the reason the world’s having this global financial crisis, Neil, Clive ….?  #

*Pure rent is in the nature of a “surplus” which can be taxed without affecting production incentives.”  ECONOMICS – Second Australian Edition, Samuelson, Hancock and Wallace, 1975.

# If you can put aside an hour to learn about how the GFC is affecting Europe and what needs to be done about it, Professor Michael Hudson will bring you right up-to-date.