Category: Business

Yot’s never too late to fix a problem. It doesn’t matter if it’s you who has been putting off a trip to the doctor or your country that has been putting off properly taxing its natural resources, it really is better late than never.

Just because the former Liberal treasurer Peter Costello failed to cash in on the resources boom of the early 2000s, and just because the mining industry succeeded in scuttling the Rudd government’s mining tax in 2009, doesn’t mean Australia should let the benefits of record commodity prices slip through our fingers yet again. Failing to do something sensible twice before is hardly a good reason to repeat the mistake a third time.

This year Norway, with a population of only 5.3 million, will collect about $137bn in tax from their oil industry. They had expected $95bn but will collect nearly 50% more than planned, mainly because of higher oil and gas prices. That’s what a good resource tax system looks like.

Meanwhile here in Australia, despite being the world’s third largest exporter of fossil fuels, people are struggling with high prices for oil, gas and electricity (the vast majority of which is still produced from burning our own coal and gas). The idea that an energy exporter like Australia is having a tough time when the prices of our energy exports are sky high shows just how broken and detached from reality our political debate has become.

The profit share of GDP is at record highs, the wage share is at record lows, real wages are falling, and the Reserve Bank of Australia is lifting interest rates to rein in inflation caused more by profits than consumers.

And in a valiant attempt to defend the indefensible, the Business Council of Australia may have thrown the mining industry under the bus, while trying to argue that profits aren’t coming at the expense of wages.

The BCA’s chief economist Stephen Walters says that “after excluding the miners and banks, which are distorting this data and where wages are amongst the highest in the nation, the broader profit share actually has failed”.

Just think about that. The lobby group for big business is admitting that the profits of the mining industry are so enormous they are skewing the national statistics. Could there be a stronger case for an overhaul in the way we tax these companies?

This latest claim from Walters appears to be an attempt to walk away from an earlier claim from the BCA’s chief executive Jennifer Westacott who said “once mining profits were removed, the profits share of income had actually fallen to its lowest point in 20 years”.

Thanks to the Liberals, we already have a super-profits tax on the banks, although it only took $1.6bn of the $37.6 billion profits made by the sector in 2021. And in the words of the BCA, the financial sector profited thanks partly to the “cheap money” provided by the RBA during the pandemic. So surely now is a good time to increase the windfall tax on the banks – and impose something similar on the miners.

There is no economic reason that the mining industry, and the gas industry in particular, shouldn’t share some of their gains to help Australians struggling with energy price pain. The Norwegians, by taxing their oil and gas industry, have accumulated $1.8tn in their sovereign wealth fund. But in Australia, which exports far more fossil fuels than Norway, we have just $200bn in our future fund, most of which came from the privatization of Telstra. To put it another way, the value of our wealth fund is only a little bigger than one year’s worth of Norway’s oil tax revenue, even though Norway’s economy is a quarter of the size of ours.

It’s not just the mining and banking industries that are exploiting rising prices while pretending they can’t afford to pay employees more. Qantas, Harvey Norman and thousands of local cafes have converted higher prices for some inputs into bigger profits for themselves. But oil and gas profits have soared to astounding levels – the highest in recorded history – driven by high energy prices amid Russia’s invasion of Ukraine.

The Nobel prize-winning economist Joseph Stiglitz has argued that a windfall profits tax on energy companies is a “no brainer” and in Australia economists from Rod Simms to Chris Richardson have joined calls for such a tax on the gas industry. Whether it is used to pay down the debt the business lobby is worried about or to make childcare and medicine cheaper is besides the point. There’s no need to make the perfect enemy of the good.

In 2013 the BCA demanded a repeal of Australia’s “unconscionably high carbon tax” and in 2019 Westacott called Labor’s 5-15% emission reduction target range “economy wrecking”. Yet in the lead up to the 2022 election, the BCA was proposing even more ambitious emissions reductions than Labor’s 43%.

So the fact that the BCA would prefer to talk about productivity, rather than a tax on its biggest members – which it has now openly acknowledged reap absurdly high profits – is staggering. The business lobby will change its mind when the public leaves it behind.

The real question is whether Australia will take this opportunity to fix the way we tax the resource sector, or again wait for the next one.

If you’re worried that artificial intelligence is getting too smart, talking to Meta’s AI chatbot might make you feel better.

Launched on Friday, BlenderBot is a prototype of Meta’s conversational AI, which, according to Facebook’s parent company, can converse on nearly any topic. On the demo website, members of the public are invited to chat with the tool and share feedback with developers. The results thus far, writers at buzzfeed and Vice have pointed out, have been rather interesting.

Asked about Mark Zuckerberg, the bot told BuzzFeed’s Max Woolf that “he is a good businessman, but his business practices are not always ethical. It is funny that he has all this money and still wears the same clothes!”

The bot has also made clear that it’s not a Facebook user, telling Vice’s Janus Rose that it had deleted its account after learning about the company’s privacy scandals. “Since deleting Facebook my life has been much better,” she said.

The bot repeats material it finds on the internet, and it’s very transparent about this: you can click on its responses to learn where it picked up whatever claims it is making (though it is not always specific).

This means that along with uncomfortable truths about its parent company, BlenderBot has been spouting predictable falsehoods. In conversation with Jeff Horwitz of the Wall Street Journal, it insisted Donald Trump was still president and would continue to be “even after his second term ends in 2024”. (It added another dig at Meta, saying Facebook “has a lot of fake news on it these days”.) Users have also recorded it making antisemitic claims.

BlenderBot’s remarks were foreseeable based on the behavior of older chatbots such as Microsoft’s Tay, which Twitter users quickly taught to be a racist conspiracy theorist, forcing the company to apologize for its “wildly inappropriate and reprehensible words and images”. GPT-3, another AI system, has also delivered racist, misogynistic and homophobic remarks. A South Korean startup’s chatbot, designed to resemble a 20-year-old college student, had to be suspended after it rattled off racial slurs and anti-LGBTQ+ remarks.

Given the cesspool that is the internet, Meta appears to have expected similar things from its own service. Before logging on, users must acknowledge that BlenderBot is “likely to make untrue or offensive statements”. As Vice notes, Meta researchers have described the AI ​​tech behind the bot as having “a high propensity to generate toxic language and reinforce harmful stereotypes, even when provided with a relatively innocuous prompt”.

“Everyone who uses Blender Bot is required to acknowledge they understand it’s for research and entertainment purposes only, that it can make untrue or offensive statements, and that they agree to not intentionally trigger the bot to make offensive statements,” said a Meta spokesperson in to statement.

My own conversation with BlenderBot did not veer into that territory, but it did highlight another flaw in the service: its utter inanity.

The bot began by asking me what subject I liked in school. The bot is open about which “person” it is using in the conversation; our discussion involved a person it described as “I like to read. I went to college.” When I asked it tough questions, such as which colleges accepted AI bot students, it offered nonsensical replies (“in some ways, aren’t we all chatbots?” No) and offered further reading by saying, “Here’s the link”, without providing a link. It also kept steering the conversation back to chatbots.

It did, however, maintain its firm stance against its own creators. When I said I wasn’t a fan of Facebook’s ethics, it wholeheartedly agreed: “Me too! That is why I stopped using it and just stick with reading books instead.”