If you want bonafide proof of why soaring gas and coal prices are a ‘profitless boom’ for Australians, look no further than the Q3 current account data from the Australian Bureau of Statistics.
It showed that Australia’s terms-of-trade (export prices relative to import prices) remained just below all-time high levels:
Australia also recorded a $31.2 billion trade surplus over the September quarter.
Yet Australia’s current account plunged into deficit on the back of a widening net primary income deficit to a record high $33.2 billion:
The ABS explained this net primary income deficit as follows:
“The key contributors to the record high income deficit were high operating profits, and increased non-resident investment in the resource sector, which contributed to strong dividend payments to non-resident portfolio investment.”
So basically, nearly all of the bounty from higher commodity prices has flowed offshore, while Aussies have been left paying higher prices.
The more coal and gas prices have risen, the richer foreign-owned mining companies have become, and the poorer Australians have gotten
In turn, Australian workers are going backwards due to negative real wage growth and businesses are being sent to the wall on soaring energy costs, while the foreign-owned energy cartel gouges ruthlessly earning super profits that Australians do not share in.
Only in the upside-down land of Australia does exporting gas and coal at record prices make its residents poorer.
The above data shows why Australia desperately needs some combination of mining super profits taxes, domestic reservation of gas, and gas/coal export levies. We must de-link the nation’s energy market from global prices as well as ensure that Australians share in the record profits being made for selling our resources.
As a counterpoint, the Norwegian Government will this year collect $137 billion from their oil industry courtesy of their well-designed super profits tax. In turn, Norway’s Sovereign Wealth Fund will soar to $1.8 trillion – shared among only 5.3 million people.
Qatar is also on track to collect around $26.6 billion from its gas exports this year.
Modeling by The Australia Institute estimates the federal budget could raise $20 billion from a super profits tax on gas alone, which would also “would be effective in solving domestic supply and price issues as it would reduce the incentive for LNG producers to charge Australian customers global prices or to export uncontracted gas to the global spot markets because the additional revenue would be taxed. It has the additional advantage of being simple and easy to implement”.
Sadly for Australians, the Albanese Government is stacked with policy cowards, and it continues to bend the knee to the foreign-owned energy cartel rather than govern in the interests of Australians.
In doing so, it will starve itself of much-needed budget revenue as well as anger Australians by driving up their energy costs, reducing their real disposable income, sending businesses broke, and forcing the RBA to fight harder against inflation by hiking interest rates.
