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Wow! A Trade Surplus

For the first time since 1975 Australia has achieved a trade surplus. What that means in plain English is that the country exported more than it imported. WOW!! What at first glance seems to be a financial windfall for essential infrastructure, is illusory. The trade surplus was achieved as a result of increasing prices for coal and iron ore as a result of China embarking on a program of shutting down their local coal industry to decrease very serious pollution problems in the country. China is currently embarking on the largest expansion of green energy production the world has ever seen. Drowning in a sea of pollution, diminishing air quality is having an impact on both individual health and production targets in the country.

The country is in the midst of a frantic expansion of solar, wind and hydroelectric activity. In the interim, while it struggles to achieve self-sufficiency in producing green energy, China has to increase the importation of coal and iron ore driving up prices of these essential commodities. This increase in exports from Australia of coal and iron ore is likely to last about three years, that’s the main reason for the first time in over four decades Australia has achieved a trade surplus.

A trade surplus does not mean increased taxation revenue or increased company profits for Australian owned companies as over 80% of all mining companies in Australia are owned by overseas interests. Australia’s corporate friendly taxation laws means very little taxation revenue will be raised as a result of the trade surplus. Wages will not rise as a result of the trade surplus so workers buying power will not be increased. Static wage growth does not provide the increased taxation revenue the Federal government needs to embark on a much needed expansion of essential infrastructure.

So who are the winners in this once in a lifetime achievement? The winners are both the executives of overseas based corporations as well as the head offices of corporations who have based their head offices in low company tax havens. Trade surplus or no trade surplus, Australians are the losers in this grubby little game.

Things would be different if the means of production, distribution, exchange and communication were owned by the Australian people, not overseas based corporations. The nationalisation of the country’s resources should be high on the country’s agenda. If the ownership of Australia’s mineral rich resources were incorporated into the Australian constitution, the profits made by these assets would definitely remain in the country.

The price we pay for the domination of Australia’s industrial, mining and retail sector by foreign companies, that are based in tax havens, is astronomical. When you factor in the amount of corporate welfare and tax minimisation that goes on, it’s time the question of nationalisation of Australia’s essential goods and services sectors needs to be put on the national agenda.

Dr. Joseph Toscano

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