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MRRT and Mining an ideal partnership

Thursday, May 24, 2012
OUT AND ABOUT: When Justin Di Lollo, managing director of government relations and lobbying firm Hawker Britton, approached the microphone at the Broken Hill Resources and Energy Symposium this week one could almost smell the cauldron of oil bubbling away in the foyer and hear the chickens being denuded back stage.

The stage had been set for a colourful appearance in a press release from the organisers of the conference, Symposium, in which Di Lollo had committed, what is in mining industry terms, a mortal sin.

In the release Di Lollo had thrown down a well-aimed gauntlet by declaring the Mineral Resources Rent Tax (MRRT) to be an essential piece of economic reform which addresses a growing structural issue in Australia.

What possibly irked most in the room was his insistence that some elements of the mining industry are greatly overstating the impact of the new tax before its true effects are known.

“The minerals industry is vital to our prosperity but remains only a small proportion of our large and diversified economy,” he said before attending the symposium.

Needless to say he was not greeted by the audience with the enthusiasm or friendliness they had afforded earlier speakers – and to most of those that followed over the course of the two and half day event.


“We are living in a changing world, and a world that it is really changing for the better in Australia,” Di Lollo announced to the packed auditorium.

“What this means is that the Australian economy is really changing and we have all got to change along with that broader rotation of the world or we are going to end up being quite injured by it.”

The crux of Di Lollo’s argument was that change is coming and the entire community, not just the minerals and resources sector, has to face up to reality.

“We have got the choice to embrace change,” he said.

“That goes for the labour movement and the unions, it goes for the environmental movement and it goes for the short term losers in the current Australian economy - the agricultural and manufacturing sectors.

“The embracing of change also goes for the winners in the new Australian economy, and essentially I am talking to the resources and energy sectors when I say that.”

Essentially Di Lollo was emphasising the need for this economic change to be embraced across the entire community.

Unions, he said, through all sectors of the economy are going to have to change their mindset.

This change will need to be reflected by discarding our traditional manufacturing methodology, while the agricultural industry will change dramatically and probably located in different areas.

The mining sector wasn’t the sole recipient of a rebuke with the environmental sector also collecting a slap as Di Lollo said it is going to have to accept that we are a fossil fuel driven economy and we are going to remain so into the future.

“They (environmentalists) are going to have to start embracing this and working out how they can use their activism to make it (the economy) cleaner and more appropriate rather than trying to make it go away, which it is not going to,” he said.

“But for the resources and energy sector there is also a lot of change on the way.”

Di Lollo told the mining-based audience that as it was a much larger and more central part of the economy, and as such the importance of its role was to become much greater, bringing with it proportional responsibilities.

“The claim,” he said, “of political, economic, social, and environmental stability in Australia is not going to be an option.

“It is going to have to be something that we must do.”

This will lead to the disappearance of some of the old ways of thinking from the traditional political framework.

Farmers refusing to give up their land for the benefit of the greater good would no longer be able to repeat of the phrase, ‘my family has farmed on this piece of land for five generations’.

Neither would the union movement be able to chant, ‘we’ve always had this penalty rate and we’re not going to give it up’.

According to Di Lollo, this is not participating in the change.

“Trying to hold out against that change could result in them losing everything instead of embracing and evolving with change,” he said.

Di Lollo knew he was working a tough room and acknowledged that what he had to say probably wasn’t going to please many of the crowd.

He had many shifting in their seats as he said the resource industry needed to not only accept the MRRT but that it needs to embrace it.

“I’m not here to change your opinion, so don’t get too upset about what I have got to say, but by the end I hope to challenge some traditional thinking,” Di Lollo said.

“We have got this problem now in the two speed economy that we’ve been talking about for a long time that now is really not going to go away.

“This is a problem for the entire Australian economy, including the energy and resources industry.

“We have to make the choice of either choosing to try and haul back the tide or…choosing to surf the wave instead.

“I think surfing the wave can make us all really prosperous, but if we are going to do this it is going to upset a lot of the traditional old ways of the economy.”

Di Lollo said the carbon constrained economy approaching Australia was not going to go away, instead it will soon be here and all of us, across all sectors from all schools of thought are going to have to get used to it.

He said it will be here regardless of what anybody may think about the science of climate change and that it doesn’t actually matter, because the shift in the economic landscape has nothing to do with climate change.

“It is the economic changes that are coming with a carbon constrained economy, globally,”
 he explained.

“In Australia, we are going to be harder hit than just about any other country and like it or not we are going to have to do something to help our economy.

“Carbon pricing is a simple and smart way of doing it, and I would say that carbon pricing and a rigorous minerals sector go hand in hand.

“Carbon pricing, and addressing the emissions issue, allows the industry to go ahead in a new economy.

“In other words, to not try to haul back change, but embracing that change and moving forward.”