Home Cairns News Fossocracy Australia: government of the people, by the fossil fuel companies for the fossil fuel companies

Fossocracy Australia: government of the people, by the fossil fuel companies for the fossil fuel companies

Fossocracy Australia: government of the people, by the fossil fuel companies for the fossil fuel companies

Public subsidies for coal plants are merely the icing on the cake of a triumphant year for multinational fossil fuel corporations operating in this country. Michael West and Callum Foote report on Fossocracy Australia.

If democracy is government of the people by the people for the people, surely a government whose two major parties are financed by fossil fuel payments, and which returns the favour with favourable policies and billions in fossil fuel subsidies each year, can reasonably be labeled a fossocracy.

It might seem a cheeky term, but not an unreasonable one if you follow the money: record fossil profits and record fossil subsidies at a time when the cost of living is soaring, there is record demand for food relief and public housing, and the planet is warming.

This week’s publication of the annual Michael West Media Top 40 Tax Dodgers confirmed fossil fuel corporations once again as the biggest “leaners” on the public purse; and that, hard on the heels of the government’s sheepish admission there would be hundreds of millions of dollars in public subsidies for thermal coal plants operated by the likes of Rio Tinto and Origin Energy. That was quietly concocted amid the Christmas cheer to counter the modest moves by the Albanese government to cap gas and coal prices – instead of something robust such as a super profits tax or carbon exports levy. 

It should be noted that Rio pays a lot of corporate income tax in Australia, but both Rio and Origin are still guilty of aggressive tax avoidance; the former with its Singapore hubs grift and the latter with its fake LNG sale.

Further to the organs of Australia’s fossocratic state is our very own Pravda, a fossil media duopoly of Rupert Murdoch’s News Corp and Nine Entertainment’s AFR, both of these funded by federal government subsidies and millions of dollars a year in fossil fuel industry advertising and sponsorships. 

The fossil media literally, daily, rewrite the press releases and espouse the talking points of the fossil lobby with its publicly subsidised tax-free status: the Minerals Council of Australia and APPEA (both lobby groups are controlled by foreign corporations despite boasting the word “Australia” in their titles).

This barrage of propaganda is promptly telecast across the rest of the fossil media, from a gun-shy ABC to the subsidised airwaves of Sky News, talkback radio and Kerry Stokes fossil media Seven West.

How otherwise could it have possibly come about that the biggest LNG exporter in the world is importing gas back into Australia from overseas while the gas cartel of Shell, Exxon, Santos and Origin reaps record profits and claim “gas shortages on the East Coast”?

How else could it be that truly independent analysis of this mollycoddled gas cartel be routinely blocked from appearing in the fossil media, such as this from IEFFA’s Bruce Robertson?

How else could it be that Australia is a fossil pariah globally yet remains on track to frack the Beetaloo Basin which could blow out the country’s emissions out by another by 20%?

How can it be that the government is forking out billions in subsidies to foreign tax avoiders while poverty, the working poor and homelessness are all on the rise?

How else could the fossil media duopoly, straight-face, page one, run the hissy-fit by Santos boss Kevin Gallagher that the Albanese government’s modest gas cap measures are “Soviet-style” and risked Australia turning into Venezuela or Nigeria? So embarrassing was the rant that Santos didn’t even run it on its website but got the lapdogs of the fossil press to run it for them.

in many cases, the big fossil players pay more in political donations than they do in tax.

Once again, the MWM Top 40 is dominated by foreign-controlled fossil corporations paying little or no tax, yet the ATO annual transparency report upon which the figures are based is lagging, capturing mostly the profits and tax payments up until this time last year (December 2021).

Since then, with the war in Ukraine sending coal oil and gas prices into orbit, both revenue and profits have soared. (Indeed, the new government is tipped to have lucked into a Budget surplus this year thanks to precisely this.)

We will therefore see some of the worst offenders, the likes of Exxon, Energy Australia, Santos and Shell perhaps paying what will appear to be big licks of corporate income tax. It’s not about the size though, it is about the proportion.

Globally, Shell racked up a $25bn profit, Exxon $23bn, Chevron $18bn and Santos $1.2bn. That’s profit, not revenue. Locally, their subsidiaries are racking up double digit increases in revenue (not profit but revenue) and are now expected to be so glamorously profitable at the end of 2022, that when their December year profits are quietly released to the corporate regulator in late April, they will finally be seen to be paying some income tax.

A social licence?

So the question must be asked, again, what social licence do the fossil giants have to operate in Australia, given their lies and fear-mongering, their impact on the climate and failure to pay tax to fund roads, hospitals, schools and critical infrastructure?

When you consider that up to 80% of gas and 90% of coal is exported, and that the dazzling profits accrue to foreign shareholders … none.

And that is why they are buying their social licence, not by paying tax like the tobacco companies for instance, but by sporting sponsorships, hundreds of them from local nippers to first grade football and national teams.

In doing this, they are buying PR and advertising, paying for the image of a social contribution to Australia in lieu of paying tax. 

Routinely, they pay “independent experts” to conduct “analysis” into their contribution, and dutifully, their fossil media clients reproduce their press releases.

But a dig into the actual numbers unearths the big lie.  

The Big Lie

The claim by the Minerals Council and their experts (formerly Deloitte and now EY) is that the big mining companies provide over $43 billion in contributions to the Australian government every year in the form of royalties and taxes.

Keeping to one side for a moment that royalties are not taxes, they are the payments which companies make to the states to extract our resources, the fossil lobby has overcooked its contribution by more than $80bn over the years.

The Minister for Energy, Madeline King, has repeated these claims from the carbon lobby, that the mining industry made payments of $43.2 billion in company tax and royalties to Australian governments in a speech given at an ​​NT Resources Week conference. The figures were repeated on ABC Radio without question.

The EY report, the latest that is, has – like Deloitte’s previous work – failed to disclose that up to 60% of the tax that they claim the mining industry pays to Australian governments is returned in the form of GST refunds.

They have included GST paid but not refunded. The false claims come at a critical time for the mining and energy sectors which are reaping record profits, partially at the expense of energy customers, and the minerals lobby is threatening a public campaign against the government if efforts are made to increase taxes and royalties.

As for the government, they are doing things, unlike the previous mob which had a penchant for words over action. The gas and coal caps are modest but you could argue politically savvy, even brave by recent standards.

Yet they are small steps, tiny steps, which do little curb the power and the influence of the fossil giants. Or to tax them properly, contain energy prices, or strike significant reform.

The solution then? Abolish fossil donations, enact media reform (rather than embracing continued subsidies) to attract a diversity of voices and detract from the relentless barrage of propaganda, and bring in a levy on carbon exports as per this excellent roadmap from another independent source Tim Buckley. And stay true to the pledge of no new fossil fuel projects, and up the ante to no fossil subsidies, none.

When the time comes to mend all the mining voids, to rehabilitate, the fossil brigade will have made their super profits and left.

Photo above: Fossocracy? Image by Kylie de Guia @captured_deguia, Unsplash

Michael West Media


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