From British imperial management to multinational company dominance, Australias financial independence stays extra phantasm than actuality. DrEvan Jonescontinues his three-part collection learn half onehere.
CONVICTS, whaling/sealing, wool and gold beganWhite Australia. Mid-century gold introduced a dramatically enhanced immigrant inhabitants and urbanisation.
There developed stress to boost a home manufacturing sector and infrastructure to make use of the urbanised inhabitants, led by Victoria, with the protecting tariff (customary on the time) as the principle weapon. This nationalist impulsion was naturally meshed with ongoing union with Britain, with the expectation of additional British funding on Australian soil and British peoples immigration, each of which occurred.
After 1945, Australian funds continued to be held in British Sterling. This aided Britain however was a drag on Australian financial restoration, with the wanted USD in brief provide. (Australia began abandoning Sterling solely throughout the Sixties, dramatically after 1967 when the pound was devalued, with formal full abandonment occurring in 1971.)
In the early Fifties, the Brits wouldn’t let go. Britain, by way of its media (particularly the influentialEconomist), was insisting that Australia think about what it was good at (comparative benefit), which was agricultural manufacturing. Australia ought to up its agricultural manufacturing for the sake of Britain and the Commonwealth international locations.
Colonial cringe runs deep: Australia’s army subjugation
Australia is not a colony, however nonetheless behaves like one payingtribute to its so-called “allies”.
Dependence on the protecting tariff for manufacturing improvement was at all times problematic and it got here underneath sustained criticism from the mid-Sixties. The want for extra sustained improvement and to assist in offsetting perennial stress on the commerce stability, post-World War II governments dedicated themselves to useful resource exploration and mining improvement.
The1957 Trade Treatywith wartime enemy Japan was seen as a nationalist measure for larger financial autonomy, nevertheless it quickly opened the door to subordination to transnational mining and power. U.S. capital was in like Flynn (reminiscent of Utah coal).
The scene was set quickly after with the event of large bauxite deposits at Weipa, Queensland, by Comalco (collectively owned byRio TintoandKaiser) after 1963. The 1957Commonwealth Aluminium Corporation Pty Limited Agreement Actappropriated Indigenous land for the event, permitting for a 500 sq. mile growth (restoration of title occurred solely in 2024).
Soon after, Comalco and Japanese bauxite importers collaborated in a switch pricing association, by way of a Hong Kong shell firm, to cut back tax funds in Australia. The Comalco technique was a trailblazer. During the Nineteen Seventies and Nineteen Eighties, the Japanese buying and selling firms, mediating all Australia-Japan commerce, stored Australian export costs low by way of cartelised shopping for and honed the switch pricing approach.
General Motorsdidnt have to fret about switch pricing. Induced to find in Australia after World War II with a authorities financial institution mortgage (and low cost buy of native automobile physique producer Holden), GM created the auto firm mannequin by not itemizing domestically. Its iconic Holden automobile was manufactured behind tariff obstacles and all income went abroad, with (till belatedly) no necessities to report on their scale.
Large-scale uncontrolled international funding and takeovers of native companies (together with agricultural properties and concrete industrial properties) led to a pronounced nationalist intuition for larger management. AForeign Investment Review Boardwas created in 1976, nevertheless it was by no means strong and it has lengthy lapsed into quietude and acquiescence.
Beyond the Western alliance: Australias unsure horizon
As the Western alliance fractures underneath uncooked energy politics, Australia faces a stark strategic selection.
Transfer pricing, utilizing varied dodgy however nonetheless authorized mechanisms (mental property fees, intra-corporate lending curiosity funds), is in fact a worldwide downside, however theAustralian Taxation Office(with worldwide collaboration, particularly theOECD) has but to seek out the means to up the tax take.
Among thecorporate giants paying no or trivial taxin Australia in 2023-24 (the 12 months previouslyhere) are:
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JBS Global Meat;
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AGL(Australian power retailer);
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Ichthys LNG(Inpex, Japan);
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TotalEnergies EP Holdings(France);
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Santos(Australian power producer);
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Singapore Telecom(Optus telco);
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Liberty Holdings Australia;
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Transurban(monopoly parasite toll street operator);
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News Corp(Murdoch);
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Microsoft;
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Netflix;
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Amazon;
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Dell;
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Ford Australia;
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GM Australia; and
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Persol(Japan, recruitment firm).
Liberty Holdings is the last word dad or mum firm of Liberty Steel (Whyalla Steelworks). It is at present in administration, having been administered remarkably indifferently by Liberty supremoSanjeev Gupta, receiving authorities help due to its essential significance to the South Australian (certainly the nationwide) economic system.
Liberty pays no company earnings tax due to its construction (belief silos), legitimised in a Federal Appeal Court judgement in 2024, but merely a rort. By distinction, Australias different metal producer,BlueScope, cops a regular tax invoice (23 per cent in 2023-24).
Wongs world: Diplomacy underneath the shadow of America
Penny Wongs cautious diplomacy reveals Australias wrestle to stability loyalty to the U.S. with the necessity for real independence on the world stage.
Of Inpexs large Ichthys (early Christian allusions?) challenge, Michael West Mediareports:
The Brazilian JBS, the worlds largest meat producer, shall be a serious beneficiary of the bizarreMercosur commerce dealbeing pushed by Brussels bureaucrats and German industrialists, that spells catastrophe for European agricultural producers (particularly French) and for the well being of European customers.
JBS additionally ownsTassal, one of many salmon farming firms destroying coastal and estuary water programs in Tasmania. Tasmanian Richard Flanagans 2021 bookToxic: The Rotting Underbelly of the Tasmanian Salmon Industrytells the story in all its gory element. Nothing has modified since 2021.
Indeed, Prime MinisterAlbanese, in February 2025, disgracefully gave the rotten and rotting trade (the three predominant producers are foreign-owned) hisfull blessing. This was to shore up a Tasmanian citizens three months earlier than the May 2025 Federal Election. Jobs for staff are necessary, however at what value when environmental catastrophe and local weather change catastrophes beckon (outdated progress forest felling, coal mining, fuel manufacturing)?
The Albanese Labor Government retains granting consent to fossil gasoline tasks as if there isn’t a tomorrow. Former Labor Western Australian PremierCarmen Lawrencenoted(mid-November 2025) that, since taking workplace in May 2022 (re-elected in June 2025), the Federal Labor Government had authorized 32 fossil gasoline tasks and one other 42 had been already lined up for approval.
In specific, the Government gaveapprovalfor an extension ofWoodside Energys Western Australian fuel challenge, one of many worlds largest, to be prolonged to 2070 (in impact, endlessly). Approval is formally linked to emissions reductions and safety of close by Indigenous websites, however the situations are dodgy and unenforceable.
Apart from the opposed affect on local weather change, heritage and species safety are token. In 2020, Rio Tinto cynically destroyed 48,000 year-old Indigenous websites at Juukan Gorge in Western Australias Pilbara, with state and federal approval. In January 2026, the Albanese Governments Environment Minister, in hisapproval of Korea Zincs windfarmin central Tasmania, integrated a desk that lists the species and numbers that the corporate can kill every year (and with no provision if the corporate exceeds its restrict).
Then chroniclers of Australias neo-colonial standing, Greg Crough and Ted Wheelwright printedAustralia: A Client Statein 1982. Nothing has modified within the meantime.
This is an element two in a 3 half collection. Read half oneHEREand keep tuned for half three, printed tomorrow, Saturday 28 February.
DrEvan Jonesis a political economist and former tutorial.
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