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Sep 25, 2010

BHP and the carbon tax.

Cartoon: by Nicholson.

One of the curiosities of Australian politics is the self-fulfilling rumour. When there is an intention of calling an early election, increasing a tax, carrying out a leadership spill, or introducing new legislation a creative leak is made. As the press follows this up all parties involved assiduously deny it.

After a decent interval, and when everyone is talking about it the government or party then announces that despite its assurances that it would not do it, the degree of speculation is becoming destabilising and therefore it is necessary to do it anyway. This should not be confused with ‘flag waving’, which is the technique of starting a rumour in order to gauge the electorate’s reaction to proposed actions.

It’s all about establishing certainty. Or at least that is what we are supposed to accept.

Marius Kloppers, the head of BHP Billiton obviously knows how the game is played and has now called for a carbon tax in order to “create certainty” for business. It would be interesting to hear his explanation as to why not having a carbon tax would create uncertainty, and why the certainty of paying much higher energy bills is better than not having to do so.

In calling for the tax he is claiming that some form of consensus could come about under which an international price for carbon could be reached. This seems a rather loopy proposition given the results of Copenhagen. There was obviously no intention among the major energy users to cripple their economies with these measures. Without their active cooperation the whole idea is a waste of time.

BHP has prior form in getting the governments agenda through. Prior to the last election the government was on the ropes and appeared likely to lose in a landslide over Rudd’s proposal for a 40% mining tax. All miners stood together against it and launched an advertising blitz. Three companies, the majors, BHP, Xstrata, and CRA, at that point broke with the rest and negotiated a sweetheart deal with Gillard for a much lower rate for themselves.

It is worth noting that, 70% of U.S. voters believe that big business and big government generally work together against the interests of investors and consumers, according to Rasmussen Reports surveying. Just 14% disagree with the assessment, and 17% are not sure. Lobbying is much more blatant over there but there is little reason to believe it is less prevalent here.

BHP, while being a huge mining company extracting millions of tons of coal and iron ore here does the vast majority of this for export to countries such as China and India which are not subject, nor will they be subject to an energy tax.

Probably one of the most disingenuous aspects of Klopper’s call was the fact that one of the best methods of reducing carbon emissions would be to move towards nuclear power, something that is sadly lacking in the Australian energy industry despite the fact that we have some of the largest reserves of Uranium in the world. This indicates that his main interest is not the replacement of ‘dirty’ energy with ‘clean’ alternatives. If he had any concern about carbon emissions rather than playing the political game of the Labor/Greens luddites, he would surely have raised this issue.

So, is this guy a zealot or just an idiot?

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