The mining boom of the early 2000s was horribly wasted by the Howard Government. Over the next few decades, to the chagrin of the current Australian Government, the economics of renewable energy will render the fossil fuel industry obsolete.
As detailed by Ross Garnaut among many others, Australia stands to gain the most from this transition and stands to lose the most from delaying it. As the transition inevitably occurs, however quickly or slowly, we should learn the lessons from our last industry boom. Will we allow the profits to be siphoned to tax havens or take advantage to build a better Australia?
The mining boom provided an opportunity to set up Australia in the long-term by funding education and research, carrying the momentum of the boom for decades to come. Instead, those with real power in this country got their way. The mining lobbies, along with the media, made sure that profits were maintained by the corporations instead of taxed and funnelled into democratic programs.
With the election of Kevin Rudd in 2007, there was finally an opportunity to take advantage of the final years of the boom by implementing a super profits tax of 40%. There is no doubt that this ambitious policy was a key reason for his downfall orchestrated by oligarchs. Julia Gillard’s compromised policy of a weaker 30% tax was then inevitably scrapped with the election of Tony Abbott in 2013. Now, instead of well-funded education and research programs, our education is among the worst in the developed world and the next CSIRO funding cut always seems around the corner.
Australia has an opportunity to learn from these mistakes in the coming decades. Our endowment of both wind and solar resources pave the way for far cheaper prices than we currently pay.
This cheap energy provides the opportunity for booms across sectors new and old from steel and aluminium production to electric vehicles and hydrogen. The carbon farming potential in Australia is almost unrivalled with European markets appearing especially lucrative. A regenerative agriculture revolution could not only create profit from the carbon market but also increased crop yields and resilience to the increasingly extreme weather events caused by climate change.
These industries, as with the mining industry of the 2000s, are bound to grow. As a society, we must decide how we manage these growing industries. We can allow large corporations and their lobbyists to take hold of these industries as was done throughout the mining boom. Alternatively, we can tax these multinationals properly and use this revenue to fund education, training and research. In an increasingly automated economy, there will likely be a need for a stronger safety net than is already in place, whether this is in the form of a jobs guarantee or a universal basic income.
Another method is to learn from the Norwegians and establish a sovereign wealth fund. Norway, having understood that they should take advantage of their oil boom, decided to establish this fund in 1990. After 30 years, the fund is now worth over $U.S.1 trillion ($AU1.4 trillion).
It is legislated that Norway is able to take 3% from the fund each year to spend, however, due to competent economic management they have done so only once in three decades. With the word “tax” often being politically devastating, a sovereign wealth fund can be seen as a softer alternative to serve a very similar purpose. Australia did establish a version of this in the Future Fund in 2005, but it is far more limited in scope.
There is evidence that politicians in both major parties are aware of the potential for Australia to become a renewable energy superpower. Shadow Education Minister Tanya Plibersek and fellow Labor MP Josh Burns have both been vocal about Australia’s superpower potential. NSW Energy Minister Matt Kean also appeared on podcast Energy Insiders with some promising rhetoric. Given this fact, it is timely to remind ourselves of the difference between the major parties in their governance.
The Liberals and Nationals, governing under the heavy influence of a revolving door with multinational corporations and lobbyists, allowed the profits to flow to those interests. The Labor Party, governing for the workers while navigating those with real power, diverted part of the profits to future-proof our country. The question now is not whether the next boom will happen, but who will benefit from it?
Tim Cornwall is a writer and video creator with interests in politics, media bias, technology and philosophy. You can follow Tim on Twitter @tijaco_.
This article was reprinted with permission from Independent Australia. You can read the original version here.