Mining Super Tax

[Frank&Earnest]

An interesting read Fred and it goes part way to explaining some of my reluctance to go in to bat for the miners.

I remember John Elliot lobbing a similar threat some years ago. He said he was willing to take operations off shore where he would get a better deal. Should have locked him up and thrown the key away.

We should not bow to such pressure from any group!

It was interesting to hear wat Clive Palmer had to say on a promo for Four Corners about this whole episode not being democratic. I must make sure to watch Four Corners.

I think one of the problems we have with governments of both persuasions in this country is the number of "gotchas' they land on us. While some things have to be done on the run - or as circumstances dictate - Major decisions like this are likely to lead to the sort of angst we are seeing now if the processes are not thought through properly and we have no prior warning of them.

This sort of decision making is unsound, unhelpful, divisive and even carries an element of danger.

Let's see some more intelligent articles and some better informed and reasoned debate than we are getting from most sources at the moment.

My sentiments entirely. And then our vote does not count. Frustrating, isn't it?

[Sebastiaan56]

My sentiments entirely. And then our vote does not count. Frustrating, isn't it?

I think our votes count for a lot. Apart from our comments and dialogues it is the only voice we have in our "duocracy". The point is to be able to use our vote to send the messages we want to send. That the buggers dont listen is of course another point.

Thanks for the links, seems like Im not the only one who thinks like this. I really take Shaun's point that the future of our democracy is at risk from this simplistic populism. hmmm

[Gingermick]

. By greatly increasing the amount of tax to be paid on existing mines you extend out the time taken to recover cost and produce an acceptable rate of return.

Don't profits only come about when the mine has paid for itself? Isn't all revenue up to that point spent on expenses until the balance sheet balances?
Having said that I think to cherry pick a major taxation reform document is woeful management. I'm a labor voter and although I liked getting the stimulus cash, I haven't been impressed but K Rudd at all.

Ken Henry, the man Peter Costello and John Howard appointed the head of Treasury

Seems henry had the backing of everyone

[Gingermick]

Found this article relevant and interesting

Shallow discourse

That is scary

[artme]

Having said that I think to cherry pick a major taxation reform document is woeful management.

Exactly!!

We have focussed too much on the mining tax at the expense of the big picture and perhaps our concern- anger for some - should turned in that direction.

But is this not typical of the present gov. approach to policy?? Throw mud - er , money - and hope some sticks.

[johnc]

I'd agree with Mick and Artme the problem really is the cherry picking not the make up of this particular tax. Even then what was picked is not the same as the recommendation in some aspects. It is not acceptable that after sitting on the Henry review since December that this is all we get. It should also be noted that the tax was sold not on its merits but what it could be spent on. It has all the hallmarks of lack of thought wrapped up in a sugar coating and we do deserve better than this. It would have been far better to release the document and get some debate and consultation going before announcing what could have been a more comprehensive response.

In answer to Mick, you could say that a mine doesn't really turn a profit to its owner until it covers it costs of development which agrees with your comment. On the other hand if you expect that the mine might have a 20 year life then you may spread that cost over the twenty year period and in each year possibly make an operating profit that repays its development costs over the entire period, you would be taxed on that operating cost. In a simplified answer the company is taxed on the latter approach, paying royalties up front and company tax on the basis or operating profit less allowances.

It is all a moot point, and up to the miners to work out, however I would expect that as most of our majors have overseas interests nothing will change in the short term. They will continue to mine in the countries that give them the best rate of return, we have to be prepared to accept that may not be here in every case. However is that a bad thing, we may well be exploiting our mineral reserves at too fast a rate considering we are doing very little to boost our terms of trade in any other sector.

[Big Shed]

Definite signs of softening attitude here

Swan accepts miners' concerns are legitimate - ABC News (Australian Broadcasting Corporation)

Could have something to with today's Newspoll?

[damian]

Damian, you certainly have a slant against labor, but seem happy to ignore those same traits within the coalition. Personally I don't particularly like any of the political options we currently have, but to even consider the current coalition as a viable option is almost laughable.

It is possible I haven't made myself clear. First some housekeeping:

, I appreciate your concern but while this thread is "vigorous" I think everyone is showing appropriate respect for one another's views.

When you read my posts remember I have an overactive sense of humour balancing my passionate cynicism and dislike for government. It _might_ be a joke and it would pay to ask before you flail me (not that anyone has ...yet..)

Johnc: Some very good posts, well done.

Now to labor.

I accept completely that the coalition are a lousy bunch. As I mentioned previously I have no doubt they are corrupt and incompetant, and I am sure I could make a strong case for same. I protested against Howard's gun laws and railed against many other things they did (tiered hex anyone?).

I am scarred by Labor. First in the early 80's when I was younger and poorer and I saw what Hawke did to "working class" people with his economic rationalism. No percieved national benifit could offset the damage he did to the lives of some of societies most vulnerable people. I was out of work for some time during the "recession we had to have". I was plenty hard up, but there were many people around me who suffered worse. Here in Queensland I watched as Beatie systematically destroyed this state. He stripped money out of both the taxpayer and the state government and syphoned it into the pockets of his labor mates at astronomical rates. In 12 years we have gone from being the lowest taxed state in Australia to the highest. Despite a mining boom we are supposedly broke and our infrastructure is shot.

I truely hate both sides of politics, but reluctantly over time I have come to the conclusion that the coalition inflicts a bareable level of pain while labor just slits you open and keeps on cutting until your drive them back into their holes. I accept I am anti labor, please don't imagine I'm pro coalition

Back on topic.

As has been said miners cost projects on a whole of life basis and those lives are decades not years. The capital upfront is enormous. If the government changes the rules mid stream they won't shut existing mines but if mine A is now less profitable it impacts on developing mine B. Jobs will be lost, I garantee it.

We all benifit far more than we suffer from our market economy. You can argue the balance for that market being global, but that is the reality we face. If a miner can spend X and get more return in Canada than here we lose. End of story.

Henry being technically right or wrong is irrelevant. It is part of his job to properly answer questions from government hearings. He didn't, and showed himself an arrogant and egotistical individual worthy of the parliment.

Mining companies don't vote, people do. You guess why new taxes are aimed at companies not individuals. It's a balancing act though because as I said previously many companies are not tied here and can simply move overseas if it gets too expensive. James Hardy anyone ? It's a cheap shot to attack the "big bad multinational". I've said previously I believe the company is the single most evil creation of man, but this harms people it does not defend them against the evil these institutions do.

Am I against changing the way mining companies are taxed ? No. I am against blundering into tax changes without thinking them through properly.

Anyway, interesting reading everyone's comments.

[Waldo]

One thing I don't think has been touched on yet, and I haven't heard it in the public arena except Ch 2, and that is that this won't just effect the big end of mining (as Dudd has been only to willing to point out) but the little fellas too.

If it comes out of the ground it will be hit by the Mining Super Tax. And that will include quarries, lime etc., so we aren't just talking about big business but SME too.

And when that gets out, which it may well do tonight on 4 Corners, then I think there will be a bigger public swing against the whole thing.

(edit to phrase for Fred )

[Big Shed]

Could I, once again, remind people that the subject of this thread is Mining Super Tax?

[johnc]

One Steel, which is a steel producer spun off from BHP a few years back has sent its view to shareholders. It believes it will be hit hard with few offsets, which could make it less able to compete with imports. If that view is correct it could cause price increases or loss of jobs, but the implication is we need to more closely look at flow on effects of the tax.
Four corners will be of interest tonight, although you have to wonder if there is much more to add over what has already been written at this stage.

[RETIRED]

It is possible I haven't made myself clear. First some housekeeping:

, I appreciate your concern but while this thread is "vigorous" I think everyone is showing appropriate respect for one another's views.

I have no qualms about the behavior in the discussion but as I said it was starting to digress.

: di·gress
Pronunciation: \dī-ˈgres, də-\Function: intransitive verb
Etymology: Latin digressus, past participle of digredi, from dis- + gradi to step — more at grade
Date: 1529
: to turn aside especially from the main subject of attention or course of argument

[Sebastiaan56]

Well Rudd would have lost an election last weekend and Im sure it will never get through the Senate so I wonder what they have been up to while we were chewing the fat on this one....

[smeds]

This is one of the most rediculous ideas i have ever heard of, lets just tax the guts out of a business until you have ground it into the dirt. If any of you have shares in these mining companies or any company for that matter, you will note that if your shares are fully franked, the Government has already taken tax at 30%, so how much more do they want.

Secondly, if they insist on doing something like a new tax, don't just target the mining industry, how about hitting the top end of town, or are they too scared. Hit the banks, have a look at the profits they make as opposed to mining companies, their directors seem to get paid multi million dollar salaries and they still turn over a huge profit.

So if they insist on a tax, then spread it around and make it even. Put a cap on the tax so a company doesn't fall into their new bracket until they reach a certain profit margin. You just can't keep taxing companies and people for that matter to top up the Government money bucket, just because they can't balance their books or make proper decisions. If they run their own personal bank books like this, then i am surprised their not living on the street, because i am damn sure they wouldn't be able to pay their own mortgage.

[Waldo]