Revise ‘failed’ mining tax, former banker says | Sydney Morning Herald, 29 Nov

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Peter Hannam interviews Pavan Sukhdev for SMH Business Day

Pavan Sukhdev, leading strategist on sustainable economic practice, argues that resource taxation and corporate accountability reform is the future of a sustainable Australian economy.

Pavan explains that transforming economies into more “sustainable platforms” relies on reforming the accountability of large scale corporations who are ultimately responsible for the largest externalities (impacts on third parties such as the environment, communities and resources). He uses the example of Australia’s flailing mining tax to demonstrate the inadequacy of watered down resource taxation.

Australia should revisit its “failed experiment” of the mining tax and lift the rate as part of a wider overhaul of its economy.

Julia Gillard’s Labor government diluted the mining tax proposed by her predecessor Kevin Rudd under intense pressure from the resources sector. The new tax was supposed to generate about $2 billion this financial year but slumping commodity prices meant it generated no revenue for the government during its first three months.

He explained that countries such as Norway, which levies almost 80% tax on limited resources such as oil and gas continue to attract healthy investment despite industry protests. Pavan clarifies that it is crucial that change occur at the level of the large corporation because they are at the head of the planets modern economy, responsible for around 60% of global output.

In his latest book Corporation 2020:Transforming Business for Tomorrow’s World Pavan names a small number of corporations who have adopted significant approaches to sustainable practice and one industry leader who conforms to this holistic concept of accountability for externalities. While some notable changes are being made Pavan also concludes that “Today we have leadership but no followership,” and that a bridge between these leaders and wider industry practice must come from industry reform “…so that what the leaders are doing becomes what everyone has to do.”