Mining Super Tax

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Originally Posted by Waldo

Let's see the government squirm out of this, makes interesting reading, inclusive of all the links. It will be a good one on Lateline tonight.

I'm not arguing on points of view with members. It is a very bad thing that on the world stage Dudd has put a big black mark on our economy.

ABC The Drum Unleashed - Ruddtopia: fool's gold

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There seems to be starting from those of right wing persuasions, the habit of insult.
Kevin Rudd is PM and as long as he is PM he should be treated with the respect that office deserves, I see the same in the USA against their president from the Fox network. I did not agree with John Howard on many things, but I never once saw such vitriol at playing the man.
To me, this is an insult to the country, and to the very roots of democracy. Have a view, say your piece, but please lets not enter into childish insult ryming.
My view by the way is if the rich dont pay their share of tax the burden falls on those less wealthy.
If you wish to check facts and figures, the tax burden decreases as wealth increases. Thatcherism in the UK worked to preserve the wealth of the rich. Now the UK is nearly broke. Another myth is the one that super will fall. Super funds invest world wide, that one really is the cherry on the clowns nose.
One wage, they recon circulates about 3 to 5 times before it returns. You get, you buy which gives wages etc etc. So you need a balance of money being spent to money saved . Another cherry I read was that most of the mining profits return to Aus. Simply not true. BHP is now mainly owned overseas, but regardless, who really owns what, and where they are from would be a maze to figure out. If I were a betting man I would put odds on the Chinese and a few Sheikhs owning a huge slice.
I believe this tax has been badly sold, its a 10% hike in supertax on a finate commodity. What does Aus do when we run out, get back on the sheeps back?

I'd agree that using terms like Dudd are particularly demeaning to the person using them and cheapen the argument, they should not be used. There is a certain level of respect that should be shown to the nations office holders and each other and we should never play the man, especially using cheap insults.

BHP is a staple of many Australian shareholders, and the majority of BHP shares are owned by Australians. If mining shares fall in value it does reduce the value of Australian superannuation funds. Our major funds because of their size tend to take a stake in major players on the all ordinaries relative to their market size. If mining falls in value it has to reduce superannuation. It is not so easy just switching to overseas markets, and the experience of Australian managed funds investing in overseas markets has not always been a happy one.

It is also simplistic to blame the UK's problems on tax breaks to the rich. They are an economy that let manufacturing go and concentrated on its commercial and banking sector which have been hit hard by the GFC. Their problems are not really the result of one simplistic approach to tax spread but go far beyond that including a trade imbalance which is not tax linked at all.

You obviously move in different circles to me. When Howard was in we called him a lot worse than that, especially when he was busy murdering my sport (target shooting).

Personal attacks are not exclusive to any political or social group. I don't vote for these turkeys and frankly I believe our country would be better off with a mob of wallabies in the parliment.

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Originally Posted by damian

You obviously move in different circles to me. When Howard was in we called him a lot worse than that, especially when he was busy murdering my sport (target shooting).

Personal attacks are not exclusive to any political or social group.

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That's true and I'm happy to call a spade a spade, but silly name calling while trying to make a rational argument diminishes or completely eliminates the arguers credibility ... it just makes them look like a bit of a raving nutjob (you know, the sort you see going off on A Current Affair or Today Tonight).

BTW this is not directed at you Damian, just quoting your post.

How about we get back to the debate and end the discussion on individuals credibility.:shutup1::U

HH.

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Originally Posted by HappyHammer

How about we get back to the debate and end the discussion on individuals credibility.:shutup1::U

HH.

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Perzactly.

I think this article sums up the state of play. If you read some of the comments even the Duffers guide to the Resource Super Profits Tax does little to explain to duffers like me.

I also note that the treatment of interest differs from standard accounting practice if what is written is to be believed.

What has become clear to me is the fact that one should treat any communication on the subject with the utmost caution as it appears nobody including our leaders are able to fully explain how this tax is calculated or the true impact it will have.
Did you see a couple of backbenchers on the news last night. It was down right embarrassing, they did not have a clue.

A refreshing view here in the SMH from a Reuters reporter. Interesting that 60% of over 10,000 people who voted on the poll are in favour of the tax.

HH.

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Originally Posted by m2c1Iw

I think this article sums up the state of play.

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Makes the tax sound fair to me, the risk of a project not making a large profit is offset by a lower tax rate than they have now and if it is very successful they pay more to enable an increase in Super contributions and improvements in infrastructure.

HH.

I hear Rudd is considering varying tax rates for different commodities/mining projects. Great idea Kev.....so now we have a poorly thought out simplistic tax regime that's fast morphing into a complicated cumbersome and no doubt costly tax regime. The only beneficiaries will be the extra public servants required to run the whole thing.

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Originally Posted by kiwigeo

I hear Rudd is considering varying tax rates for different commodities/mining projects. Great idea Kev.....so now we have a poorly thought out simplistic tax regime that's fast morphing into a complicated cumbersome and no doubt costly tax regime. The only beneficiaries will be the extra public servants required to run the whole thing.

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Would give a whole new meaning to "creative accounting". Company X mines 6 different commodities, so all the profit is made on the lowest taxed commodity?

Talk about "policy" on the run:doh:

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Originally Posted by Vernonv

BTW this is not directed at you Damian, just quoting your post.

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No worries :D

I think this has all been said, but not in one place and I think it's worth repeating for focus. To my mind the issues are:

General company tax as per all business. I think we agree on this ?

Additional tax to compensate for the extraction of a finite and nation owned resource (you might argue farmers exploit the same resource but that's another kettle).

The efficiency with which the tax is levied and collected. Perhaps the "fairness" also ? Differentiating between minerals for example.

Whether the mining companies or the government are better able to put $ to work in the interests of Autralia and Australians. Mining company community development and shareholder supannuation vs government spending. Not clear cut IMO.

Have I missed anything ?

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Originally Posted by kiwigeo

I hear Rudd is considering varying tax rates for different commodities/mining projects. Great idea Kev.....so now we have a poorly thought out simplistic tax regime that's fast morphing into a complicated cumbersome and no doubt costly tax regime. The only beneficiaries will be the extra public servants required to run the whole thing.

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I read this and then there was piece saying he was not going to alter his initial 40%.
So it seems that this tax moves about testing the water so to speak to see if it will get voter traction.

I am beginning to consider that it would be highly beneficial if the current tax was scrapped and the industry and government went of into the back room and started from scratch. Then came out with an agreement with out all this instability the current situation is causing.

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I am beginning to consider that it would be highly beneficial if the current tax was scrapped and the industry and government went of into the back room and started from scratch. Then came out with an agreement with out all this instability the current situation is causing.

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Nah, thats not likely to happen, pride wont let that happen and I believe he's got the nod from the power brokers. No more back pedaling on policy, so he has painted himself into a corner. Kevin in 07 gone in 11 :U

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Originally Posted by hughie

Nah, thats not likely to happen, pride wont let that happen and I believe he's got the nod from the power brokers. No more back pedaling on policy, so he has painted himself into a corner. Kevin in 07 gone in 11 :U

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Try this little news paper heading.
Poll the key as mutineers circle Kevin Rudd | The Australian

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Poll the key as mutineers circle Kevin Rudd | The Australian

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Bad news for some. But good news for others :U yay! :2tsup:

I think the ultimate goal of the federal government is to force the states to do away with royalty payments altogether...

Every year the federal government is making the states more and more obsolete as they turn them into their serfs by withholding monies until the states do the federal government's bidding..

This is not helped out by voters voting in crap state governments... Before you all jump up and down and say the states should be abolished consider this.... Federal government laws are much stricter then most state laws.... Ever tried to import a knife into the country?? What is legal to own and make in the states can be illegal to import into the country..

When was the last time you went to a federal government building for assistance other then for welfare payments?

I do not think I have ever been to a federal department building even centrelink.. I have been to plenty of state department buildings..

I firmly believe the government does have an agenda to make state government as obsolete as possible which is not the way our constitution is set up... Power is supposed to flow from the states to the federal government, after all we are a federation of states.. Federal government is supposed to be the smallest sector of government..

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Originally Posted by .RC.

I firmly believe the government does have an agenda to make state government as obsolete as possible which is not the way our constitution is set up... Power is supposed to flow from the states to the federal government, after all we are a federation of states.. Federal government is supposed to be the smallest sector of government..

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There are arguments for an against state governments. Here are some examples of the negative side of State Governments:

1. My wife is a registered nurse working in South Australia. One of her jobs is working as an office based coordinator for a home nursing company that has operations in SA and Queensland. She is required to have registration as a nurse in both states. Why can't there be a single national nursing registration body so nurses can work in any state without having to take out new registration?

2. Until relatively recently it wasn't possible to run trains between states without having to deal with different track guages. The reason for the different guages.......it depended purely on the nationality of the Engineer in charge of railways in each state at the time railways were established. The only reason New Zealand doesn't have multiple guages is because shortly after the first (broad guage) lines were built they did away with the provincial governments and the national government adopted narrow guage as the standard.

3. Payrol tax is levied by state governments and varies by state. It's a tax on employment and a straight out money grab.

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Originally Posted by .RC.

I firmly believe the government does have an agenda to make state government as obsolete as possible which is not the way our constitution is set up... Power is supposed to flow from the states to the federal government, after all we are a federation of states.. Federal government is supposed to be the smallest sector of government..

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IMO this is an outdated and costly structure and inhibits progress and efficiency on many levels some of which have been pointed out. The sooner we have a single government and abolish the state governments the better.

HH.

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this is an outdated and costly structure and inhibits progress and efficiency on many levels some of which have been pointed out. The sooner we have a single government and abolish the state governments the better.

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It makes sense both financially and logically. But and its a major but, do we trust the federal government with this sort of power increase?
Given various track records of the labour govt for instance... Whitlam and now Rudd I am not sure I want to go that way just yet.

Yes you can make a big list about the differences between each state. Just start with rule of the road.
Qualification matters such as nursing is a significant one but so is teaching in schools. Many states do have cross border agreements of qualification recognition.

the reality is even if you want to get rid of the states you will still end up witha central government and lost of regional boards. Reality is these regional boards will be not much different to the 'wow' local councils we already have.

Face it you get the federal and state government you vote in. You also get the political numnuts in your electorate you vote for in our so called democratic system. perhaps if the standard of politician and the level of political intelligence in each party was a big higher, (lots higher) the matter may not arise for discussion.

the SPRT is just a case of the federal government trying to make states irrelevant but perhaps it is a case that taxes should be limited to states and few actually passed to the federal government.
federal government over the years have taken over the funding of universities, TAFE and now moving into secondary and primary schools. Sorry but with all this I have not seen any real improvement in any of these areas since the federal government moved in.

ANyway this thread was about the mining tax I think.

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Originally Posted by johnc

There is a certain level of respect that should be shown to the nations office holders and each other and we should never play the man, especially using cheap insults.

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I agree.

I have had the misfortune to view the latest Liberal advertisement and must say I am extremely disheartened by it. It highlights either an inability to debate the issues or total lack of suitable alternative policies or both.

While I am conservative my current view is the Libs do not deserve government and whoever authorised this latest ad....... well someone should tell them it is very likely to have the reverse of it's intent.:((

Politics in Oz has sunk to a new low.

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Originally Posted by hughie

It makes sense both financially and logically. But and its a major but, do we trust the federal government with this sort of power increase?
Given various track records of the labour govt for instance... Whitlam and now Rudd I am not sure I want to go that way just yet.

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At least we'll only have one place to go to ask questions about progress or otherwise and it will remove the finger pointing and need for inter state agreements on anything saving us the time and money it costs to set them up and maintain them.

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Originally Posted by m2c1Iw

I have had the misfortune to view the latest Liberal advertisement and must say I am extremely disheartened by it. It highlights either an inability to debate the issues or total lack of suitable alternative policies or both.

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I agree this is an insult to voters, it suggests voters are of low intelligence and their vote will be swayed by infantile advertising.

HH.

I have had the misfortune to view the latest Liberal advertisement and must say I am extremely disheartened by it.

And what do you expect Labor will be also doing? They never throw mud do they?

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Originally Posted by Waldo

And what do you expect Labor will be also doing? They never throw mud do they?

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You're right Waldo they are as bad as each other, but this latest one probably crosses the line.

Did anyone see QandA last night on the ABC? Malcolm Turnbull made some interesting points, I think Tony Abbot will be concerned that Malcolm is back in politics.

Also the greens representative on the panel was reemed by both sides for helping the Liberals vote down the ETS.

HH.

Yes I watched Q&A. Turnball surprised me as did Richo, the policy advisor had some great points which the Labor bloke wouldn't respond to. While I agree with your point concerning the Greens woman I think she showed herself to be an absolute nutter, as was evident in some of the viewer comments via Twitter.

Your post and my subsequent reply is as a bit of de ja' vue to me. :?

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Originally Posted by Waldo

Your post and my subsequent reply is as a bit of de ja' vue to me. :?

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From recent experience or from the distant past when we used to exchange views on the forum?:;

HH.

Something like that. :2tsup:

At the risk of addressing the topic of this thread, I find one thing in this whole debate (the Mining Super Profits Tax that is) particularly concerning and that is the behaviour of one of the nation's most senior public servants and architect of this tax, Ken Henry.

I was always under the impression that public servants at that level were supposed to be non-political in their public utterances, Ken Henry is sounding more like a (labor) politician every day

Back the tax, Henry tells economists | RSPT

Looks like Julia's gonna buckle and give in to the mine owners.:~

HH.

:brava: Sanity prevails.

Any link to a news report of it somewhere?

Or is Henry just backing his baby?

The pity still is that one item has been cherry picked, and that doesn't amount to reform. It is just another example of gutless fiddling around the edges.

As for the Ginger ninja, I suspect she is taking a softer approach ( for the moment? ) to shore up Labor's chances at the next election.

It is interesting to note that negotiations between the miners and the gov. were well under way when the coup was launched. Makes you wonder.

I just found out this super profits tax will apply to any business that digs stuff out of the ground, not just minerals but gravel pits, limestone(cement) etc.

This will push up the price of everything, things like council rates will have to go up as road materials increase in price.. In fact any construction will now increase in price...

http://www.abc.net.au/news/stories/2...01/2942561.htm

"Some lower value resources, especially sand and gravel, have been arguing they should be excluded from the deal, but it is not clear if any compromise would grant their wish."

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Originally Posted by .RC.

This will push up the price of everything, things like council rates will have to go up as road materials increase in price.. In fact any construction will now increase in price...

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Now I would have thought that increasing the cost of materials would decrease sales (thus profits) so the tax wouldn't apply. Or they can drop the price of materials and (again thus profits) and the tax wont apply.
We seem to be forgetting that this is a tax on profits only above a certain threshold.

Inside business (sunday abc TV) used just such a business as it's example a few weeks back. A small family owned quarry in victoria that barely makes a profit. They said they'd basically shut down, sack their handfull of workers and sell or farm the land. I think the podcast is available at the abc site.

Go labor.

Sounds like she has caved in to the mining industry


http://www.theage.com.au/business/gi...0702-zr62.html


Short of having the tax dumped altogether I don't think the mining industry could have had a more emphatic victory.

Now watch the spin that this was a "victory" for Ms Gillard where in fact it is a humiliating back down by her.

Gillard seals mining tax deal - ABC News (Australian Broadcasting Corporation)

"he changes, announced by Prime Minister Julia Gillard this morning, include reducing the headline rate of the tax from 40 per cent to 30 per cent.

• Tax renamed the Minerals Resources Rent Tax
• Will only apply to iron ore and coal
• Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc
• Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent
• Oil and coal seam gas to be rolled into the existing Petroleum Resources Rent Tax and taxed at 40pc
• Changes mean the Government loses $1.5 billion of expected revenue"

I still believe this tax is wrong, you cannot single out one industry and tax it on the profits it makes, when there are plenty of other industries who contribute nothing to the economy who also make huge profits...

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Originally Posted by Big Shed

Sounds like she has caved in to the mining industry


Gillard cuts mining tax deal | RSPT | MRRT


Short of having the tax dumped altogether I don't think the mining industry could have had a more emphatic victory.

Now watch the spin that this was a "victory" for Ms Gillard where in fact it is a humiliating back down by her.

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Yes Fred, a victory for nobody.

The Opposition will claim a victory because they will see Ms. Gillard as weak, the mining industry will claim a victory for "common sense"., the gov will claim a victory because the tax is still there -albeit diminished.

The frightening part is that we have had a magnificent display of the stupidity of govermnents and the power of big business.

What will be the next groupto line up and force the government to bend to their will?

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Originally Posted by .RC.

Gillard seals mining tax deal - ABC News (Australian Broadcasting Corporation)

"he changes, announced by Prime Minister Julia Gillard this morning, include reducing the headline rate of the tax from 40 per cent to 30 per cent.

• Tax renamed the Minerals Resources Rent Tax
• Will only apply to iron ore and coal
• Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc
• Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent
• Oil and coal seam gas to be rolled into the existing Petroleum Resources Rent Tax and taxed at 40pc
• Changes mean the Government loses $1.5 billion of expected revenue"

I still believe this tax is wrong, you cannot single out one industry and tax it on the profits it makes, when there are plenty of other industries who contribute nothing to the economy who also make huge profits...

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They just can't help using spin. This is not a resource rent tax in any shape or form how can it be when it is on profit!!!!!!:doh:

I wonder if the trigger point now takes into account interest costs on borrowings.

I think the result is a reasonable compromise at least they have ditched the loss component as well. Still don't agree with the principle of selective taxation but nothing new in that.

Hope Gillard gives the Henry reform paper some proper consideration now and get serious about fixing the distortions in our economy. Things like negative gearing should go and replace it with a tax deduction over ten years for first home buyers.

Vote m2c1Iw for PM.......what am I saying:o

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Originally Posted by artme

Yes Fred, a victory for nobody.

The Opposition will claim a victory because they will see Ms. Gillard as weak, the mining industry will claim a victory for "common sense"., the gov will claim a victory because the tax is still there -albeit diminished.

The frightening part is that we have had a magnificent display of the stupidity of govermnents and the power of big business.

What will be the next groupto line up and force the government to bend to their will?

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In all fairness to both Gillard and the mining industry, this is probably how it should have been structured in the first place.

Seeing she was part of the "gang of four" that dumped this on the country with little thought and/or planning, if she wants to take the "credit" for this tax she should also accept responsibility for the first botched attempt. But why do that if you have a ready made scape goat in Rudd?

As for "caving in", perhaps if they had consulted with industry before they jumped in with feet first they wouldn't have had to "cave in". Setting a threshold for a "Super Profits" tax at the govt bond rate was never going to fly, you may as well invest your money in govt bonds.