The Write Direction: commodities conundrum

I AM fascinated by the direction of the commodities taxing debate.

The PM is saying he won’t increase taxes on the production or export of gas and minerals, while his principal advisers are saying the opposite.

Australia’s present economic position centres on the very high borrowing regime of our government’s ever-growing debt structure as high interest rates, growing deficits and increasing inflation bite into our standard of living.

It is not clear to anyone how these issues are to be solved, so are we missing out on an exit strategy?

With the spectre of a national recession being a possible outcome, there needs to be a plan that all Australians understand.

Obviously paying down the debt is the first move and this will probably mean increasing taxation for all, but who and how to tax is the important political decision to be made.

One of the brightest and probably the bluntest person of merit would be Dr Ken Henry, the ALP-appointed former Treasury boss whose views are those of a highly experienced public servant who has seen it all.

He points out that Australia’s number one income earner is the mining industry and that because all minerals are found below the surface of the land, then those minerals are rightly owned by all Australians.

Yet they are dug up and sold at large profit margins.

Dr Henry’s argument is that the actual value of the mineral should be costed and taxed and that the revenue should be shared with all Australian people.

What I’m finding to be riveting, is that the left side of politics is saying don’t tax the capitalists any more while the right side is saying that the big miners are selling our minerals and so should be taxed more.

Politically, the right is suggesting that their traditional followers be burdened by higher taxes for the benefit of us all, while left voters are saying ‘why are we protecting the capitalists from paying higher taxes while we are the ones hurting’?

I’m loving watching how the mismatch of ideas is being sorted with a left-wing government in charge and the right wing still searching for direction.

By John BLACKBOURN