Published by The Australian Financial Review on 25 August 2020
The Australian political arena is full of reinventions.
Tony Abbott has gone from pushing emissions cuts under the Paris climate agreement to demanding Australia withdraw from the treaty altogether. And Scott Morrison, who accused Labor of presiding over “crippling” debt, now binges on wasteful debt-fuelled spending that makes our government’s stimulus look like a rounding error.
However, neither of these metamorphoses comes close to the transformation of Mitch Hooke, the former Minerals Council chief and conservative political operative, who now pretends he is a lifelong evangelist of carbon pricing.
Writing in The Australian Financial Review, (Ken Henry got it wrong on climate wars, mining tax on August 11) Hooke said he supported emissions trading throughout the mid-2000s until my government came to power in 2007.
I then supposedly “trashed that consensus” by using the proceeds of a carbon price to compensate motorists, low-income households and trade-exposed industries.
How dreadful to help those most impacted by a carbon price! The very point of an emissions trading scheme is that it can change consumers’ behaviour without making people on low to middle incomes worse off. That’s why you increase the price of emissions-intensive goods and services (relative to less polluting alternatives) then give that money back to people through the tax or benefits system so they’re no worse off. But they are then able to choose a more climate-friendly product.
The alternative is the government just pockets the cash – thereby defeating the entire purpose of a market-based scheme. Obviously this is pure rocket science for Mitch.
Hooke also seems to have forgotten that such compensation was not only appropriate, but it was exactly what Malcolm Turnbull was demanding in exchange for Liberal support for our proposal in the Senate. Without it, any emissions trading scheme would be a non-starter.
When that deal was tested in the Liberal party room, it was defeated by a single vote. Even so, enough Liberal senators crossed the floor to give the Green political party the balance of power.
Showing their true colours, Bob Brown’s senators sided with Tony Abbott and Barnaby Joyce to kill the legislation. The Green party has, to this day, been unable to adequately explain its decision to voters. If they hadn’t, Australia would now be 10 years down the path of steady decarbonisation.
For Hooke, the reality is that he never wanted an emissions trading scheme if he could avoid one. But rather than state this outright, he just insists on impossible preconditions. As for Hooke’s most beloved Howard government, John Winston would in all probability have gone even further than Labor in compensating people affected by his own proposed emissions trading scheme, given Howard’s legendary ability to bake middle-class welfare into any national budget. Just ask Peter Costello.
Hooke has, like Abbott, been one of the most destructive voices in Australian national climate change action. He also expresses zero remorse for his deceptive campaign of misinformation, in partnership with those wonderful corporate citizens at Rio, targeting my government’s efforts to introduce a profits-based tax for minerals, mirroring the petroleum resource rent tax implemented by the Hawke government in the 1980s.
Our Resource Super Profits Tax would have funded new infrastructure to address looming capacity constraints affecting the sector as well as an across-the-board company tax cut to 28 per cent. Most importantly it sought to fairly spread the proceeds of mining profits when they vastly exceeded the industry norms – such as during commodity price booms – with the broader Australian public. Lest we forget, they actually own those resources. Rio just rents them.
In response, Hooke and his mates at Rio and BHP accumulated a $90 million war chest and $22.2 million of shareholders’ funds were poured into a political advertising campaign over six weeks.
Another $1.9 million was tipped into Liberal and National party coffers to keep conservative politicians on side. All to keep Rio and BHP happy, while ignoring the deep structural interests of the rest of our mining sector, many of whom supported our proposal.
At their height, Hooke’s television ads were screening around 33 times per day on free-to-air channels. Claims the tax would be a “hand grenade” to retirement savings were blasted by the Australian Institute of Superannuation Trustees which referred the “irresponsible” and “scaremongering” campaign to regulators.
This was not an exercise in public debate to refine aspects of the tax’s design; it was a systematic effort to use the wealth of two multinational mining companies to bludgeon the government into submission.
And when Gillard and Swan capitulated as the first act of their new government, they essentially turned over the drafting pen to Hooke to write a new rent tax that collected almost zero revenue.
The industry, however, was far from unified. Fortescue Metals Group chairman Andrew “Twiggy” Forrest understood what we were trying to achieve, having circumvented Hooke’s spin machine to deal directly with my resources minister Martin Ferguson.
We ultimately agreed that Forrest would stand alongside me and pledge to support the tax. The next day, Gillard and Swan struck. And Hooke has been a happy man ever since, even though Australia is the poorer for it.
It doesn’t matter where you sit on the political spectrum, everyone involved in public debate should hope that they’ve helped to improve the lives of ordinary people.
That is not Hooke’s legacy. Nor his interest. However much he may now seek to rationalise his conduct, Hooke’s stock and trade was brutal, destructive politics in direct service of BHP, Rio and the carbon lobby.
He was paid handsomely to thwart climate change action and ensure wealthy multinationals didn’t pay a dollar more in tax than was absolutely necessary. He succeeded. But I’m not sure his grandchildren will be all that proud of his destructive record.