A Labor MP speaks out against the mining tax

Wayne Fehlhaber says:

08:24am | 14/05/10

John , Britain is about to make changes in several spheres maybe you could return to the Motherland and suggest better fixes .
Australia’s federal and state system is serving the country just as well as it always has without some crack pot changing anything.
Tom Kenyon’s admission that the mining tax , as it is proposed , is not going to help the industry and that the Federal government , is , in fact , usurping the rolesof the states in mining taxation.
Tom’s views are the first cracks to appear in Labor’s united front on this issue and will be followed by more serious concerns from government M.P.‘s over the next couple of weeks.

Craig Lambie says:

09:03am | 14/05/10

@John there you go again fighting for the FDT…

On the states… well I have to say, I completely agree.  Time for them to go, we are a small country, we don’t need 3 levels of Government, we need 2 levels of Government, and we need a Govt that listens to what the people want, and acts in the best interests of all, not just the people in their pockets.
For example.  I say all campaign contributions should be put into a pot, and all politicans get an equal share.  Media laws require the companies to give up a “fair” amount of their prime time and other advertising time to dedicate to Govt sponsored campaigns, at no cost to the Govt… etc etc..

Tom,
On the Super Tax… I am with you all the way, all 3 of your suggestions are reasonable, well thought out and logical.
It is only reasonable to tax “super” profits on super profits, which I would call 3 times the Long term bond rate, not 1 x…..

Bob says:

09:30am | 14/05/10

Love to abolish the states, but not with someone like Rudd in charge, blowing our future!

John A Neve says:

10:41am | 14/05/10

Wayne,

You are now starting to scare me. You say the state and federal system
“has served this country well”!!  But you are continually slagging Labor and all it stands for!!!!  Do we take from that you want a one party Liberal/ National government for ever?

As I have suggested before Wayne, nothing in this world is perfect except possible a Liberal/National coalition in your view.

So surely a wider spread of parliamentary representation would be good for all?  But no, it would be to confusing for the one eyed voter wouldn’t it?

Wayne Fehlhaber says:

01:14pm | 14/05/10

Toying with my words won’t change what i’ve said John.  It is you in this instance , who has raised the politics in relation to the Federal and State system of government in Australia. There is absolutely no reason to change something which works well for Australians , or to put it in slang terms ,  ” if it ain’t broke , don’t fix it. !
Your constant references to ” one -eyed voters ”  makes me smile when i read the content of your posts which invariably support Labor . That of course is your prerogative , but as i have said in the past , your views will be challenged by those with differring views.

John A Neve says:

01:56pm | 14/05/10

Wayne,
You always avoid answering questions, but no surprise, you don’t have an answer. So simple, if to quote you, our “federal and state system” has served us well!!  Why are you always slagging off at Labor”

You do want a one party system don’t you?

Tell us Wayne, you have had Howard, Nelson, Turnbull and now Abbott and you have supported them all !!!!  All in less than three years, don’t have much loyalty do you.

Face it, you are a one eyed supporter, no thought, just mindless, blind obedience. Unlike you Rob and Adian have woken up.

Wayne Fehlhaber says:

02:21pm | 14/05/10

John Neve :  Seems the message is not going through John , you raised the issue of abolishing the states , i say leave our system in place , it works well . You keep raising politics to cloud an issue you raised yourself. Seems to me that it is you who seeks a one party system by advocating the abolition of the states .
I reiterate , our state and federal system have served us well.
The system , the system , the system , the system , the system , have you got that John. ?

John A Neve says:

03:24pm | 14/05/10

Wayne,
There you go “the system, the system, the system, the system”. Blind mindless repetition.

You don’t like Labor, to vote Green is a vote for Labor, Indendents would in your words create chaos. So you only want one party, bugger the “system”.

Wayne, your idea of democracy = do what I tell you, the born to rule sydrome.

If the high command of the Liberal/National parties put a dog in as leader, you’d support it!!!

No wonder we are in a mess.

Christian Real says:

04:43pm | 14/05/10

Wayne,
        I have noted that you appear to be in a tug of war debate with John Neve, perhaps that is because your a Liberal, and they appear to think and believe that they are “born to rule” and that nobody else “can be right’ if they have a different view or opinion to them.
        I noted also your comment to “The Chronicle” on Thursday, May 13, 2010, I read it and it gave me a good laugh, you really appear to vent your hatred for the ALP in some of the things that you write.
        I don’t think that John ought to return to England as you suggest though Wayne, he has much more to contribute here, and also these blogs just wouldn’t be the same without him.
        Personally Wayne, I think that John has got you rather rattled by the way you fail to fully address what John has written.
        While I am not saying the ALP or the Greens are perfect, neither are the Liberal/National party (the party that adopted Workchoices and the Anti Terrorism laws that were in fact akin with some of the laws that “Hitler’ brought down in his “enabling Act’ of March 23rd, 1933.”

Wayne Fehlhaber says:

06:01pm | 14/05/10

John Neve :  Hmmmm , i won that round !  you have resorted to the slanging off you so fondly accuse me of doing.
When Mark Latham led Labor , i recall your support for his leadership
in posts to the C.M. columns .  Now there was a great leader for Labor , you must have adored him John.  At least ithought he was a great leader for the pinkos , but then , i’m one-eyed ,  aren’t i ?

John A Neve says:

05:16am | 15/05/10

Wayne,

Please highlight where I have “slagged off” at you?
As to Mark Latham, perhaps you could point out where I have ever supported him?

Rather than dreamup untruths, just try addressing my questions Wayne,

Wayne Fehlhaber says:

09:06am | 15/05/10

Christian Real :  Just like a faithful puppy , you parrot the Labor dogma that John has spewed into these columns , repeating the same idiotic lines of lunacy he is prone to key in his haste to denigrate other posters
who dare to challenge his views .
The Rudd Labor government is in electoral strife and his supporters have come to the realisation that they may well be a one term wonder, something that most Australians have known for some time.
This latest budget proposal to place a 40% profits tax on miners to pay for Krazy Kev’s failed policy expenditure and bumbled program mistakes , highlights the panic rippling through Labor M.P.‘s in marginal seats. Bring on the election. !

John A Neve says:

10:34am | 15/05/10

Wayne,

You have the gall to talk about dogma!!  “Repeating the same idiotic lines” are you talking about yourself again?
Just read your last post Wayne, I think you are loosing it.

When you come good, try answering some of my questions, forget the Huff & Puff, address the issues.

Christian Real says:

01:57pm | 15/05/10

Wayne,
        John Neve is right, because you do appear to be deliberately avoiding addressing his questions. Perhaps Wayne,you simply haven’t got the answers to the questions that John is asking you.

Suzanne Elaine says:

03:56pm | 15/05/10

I agree John.  Throw the current system out completely and bring in the 1% Easy tax.

Christian Real says:

04:10pm | 15/05/10

Wayne,
        In yesterday’s Courier Mail :
“Henry defends tax grab”, wriiten by Rachel Hewitt:
“The architect of the Rudd Government’s resource profit’s tax stepped into the debate yesterday by declaring the controversial plan would boost rather than threaten growth in the mining sector.”
“As criticism from the resources industry continued u-abated, Treasury Secretary Ken Henry released a terse statement defending the 40% super profits tax.”
“It is the strong and clearly stated view of Treasury that the resource super profit tax will grow the mining sector and the economy,he said”.

Wayne Fehlhaber says:

10:31am | 16/05/10

Christian :  Have you seen or heard any word from any representative of the mining industry supporting the ” great big new tax ” on profits. ?
We have all heard those representatives condemn the new tax as it will stifle programs , expansion , exploration , investment and jobs in mining and associated sectors.  Of course Henry will defend the ” great big new tax ” , he designed it. !  but that won’t change what the miners think about the plan.
The Morgan poll released in the Australian’s Wall St. Buisness section makes interesting reading as it was conducted on the Wednesday and Thursday nights following the budget. :  Labors primary vote slumped 3.5%  to 36% . The Liberal primary vote rose to 46%. :
On a two party preferred basis the Coalition would win government ,
52 - 48 .  :
The indications are becoming consistent Christian , the federal election will be very close indeed and Labor , at the present time , could lose a
ballot this weekend.
As to John’s questions , i have answered them , he just does not accept the answers , that is his prerogative , but he needs to say so or shut up.

Wayne Fehlhaber says:

10:40am | 16/05/10

John Neve :  I have answered any questions worth a reply , you have answered some of them in your own rhetorical posts in this column.
Must say i sure do enjoy our spirited debates John ,  but best we stay on the column subject as the moderator is likely to be looking rather closely at this drawn out session.

John A Neve says:

01:25pm | 16/05/10

Wayne,

Like me, the “moderator” is probably interested in your replys to some, if not all my questions.

But just keep running Wayne, many, like you have short memories.

Lenny Bill says:

01:57pm | 16/05/10

John…As clearly a Labor supporter, your call for real and fulsome review of taxation is like Hitler calling for a review into the holocaust. Your Labor mates spent the best part of a decade campaigning against real and fulsome taxation reform firstly in the farce that was Keating and the unions 1993 campaign of lies and then again in 1998 with Beazley, Rudd, Swan and the unions spending tens of millions campaigning against real rform and Howard and Costello. This is the same mob who are now plundering 30% of GST take to fund their next blowout in health. Labor are hypocrits who stand for nothing but power and populism.

Wayne Fehlhaber says:

04:17pm | 16/05/10

John , what did you make of the Morgan poll conducted after the budget.?  What’s that you say ?  All lies. !  Gary Morgan is highly respected for his opinion polling results.
Ah well , you can back ‘em when their in Opposition too John.

John A Neve says:

08:10am | 17/05/10

Lenny Bill,

Just what makes you think I support any party?
The difference between you and I, is the fact that I don’t swallow pollie waffle.

Try reading Hansard instead of the papers, try watching question time instead of the news. Most importantly try thinking for yourself.

Impartial Observer says:

08:44am | 14/05/10

Bravo T Chong,

I think you will find most mining companies actually are apolitical (you do know what that words means don’t you). They actually either donate to both main parties or not at all. Those staff who are employed in government relations positions come from both sides of the political spectrum and are extremely sensitive to maintaining a neutral line. I know in any response Clive Palmer will come up so I will ask you know to not do so as I will avoid in my response asking you how much money is provided to the labour party by Trade Unions.
I have worked for a range of resource companies and my senior boss in one actually stated that they do better under Labour Governments than Liberal - sort of put things into perspective doesn’t it.

T.Chong says:

09:01am | 14/05/10

Impartial (no irony in yur monicker, is there? as far as what “impartial “means)  At this site the evils of union and Labor are standard mantra ie unions call the shots, union “fat cats” etc,yet so many of the same punters actually seem oblivios that the corporate sector equally wants bangs for its bucks,via the LNP, but this is all good . ?.  As Howard would have said ,a clear example of “passing strange”

brenton says:

12:17pm | 14/05/10

T. Chong, what a childish response!  The world is not flat, nor is the world fair and even for all.  We live in a commerical world where those who work hard and/or take risk can either benefit greatly or fail miserably trying (80% of small businesses fail).  The key word being ‘risk’.  You can live life without taking risk, and good luck if you do, but don’t penalise those who choose to take risk - often with much personal sacrifice - to excel.  T. Chong, your talk of ‘multi million dollar salaries’ are a populist line that applies to a very, very, very, very small minority of people.  Who’s to say they don’t earn their money?  Just for a second, imagine a parallel universe where Australia has 50% less mining.  We’d be in a long and hard recession by now.  It was only just a few years ago that mining companies were closing down because they were not profitable!  And just because the resource prices are high, you feel it’s your right to take some.  I say, they took the risk, via huge, upfront investment, years before reaping a reward (profit) and employing 10,000s of Aussies in the process.  Wake up.  It’s a competitive, commercial world out there.

Tim says:

12:35pm | 14/05/10

Brenton,
what risk are you talking about?
Companies only get charged this tax once they are making a certain amount of profit.
Sure you can argue the return amount of when the tax kicks in should be higher but the tax itself actually makes exploration and development easier because you don’t have to pay the tax until you you are earning large profits.
The old system was far more restrictive as you were taxed on production

luke09 says:

12:40pm | 14/05/10

T, what is wrong with having a debate to get the right outcome for all? Tom Kenyon is far from being a liberal.

brenton says:

12:57pm | 14/05/10

Tim, mining companies already pay business tax… and some.  They also pay mining rights and royalties to state government to begin (and continue) exploration in the first place.  This is just a populist tax grab that has a socialist mentality at its core. Tall poppy syndrome if you ask me.

As for what risk?  The risk is the upfront millions of dollars in investment, that is made on assumption of certain resource prices… should those prices fall, so do profits and potentially viability of a mine.  Again, I say, it was just a few years ago that small miners were going under and closing because of low resource prices (remember when our AUD was 0.50c to the USD)???

persephone says:

01:25pm | 14/05/10

Brenton

and under the proposal, royalties will be refunded and business tax rates reduced.

brenton says:

01:57pm | 14/05/10

persephone, exactly, so the govt is giving back some taxes, so it can take more… with a net effect of taking considerably more tax.  Hence I direct you to my original comments.

persephone says:

09:00am | 15/05/10

Fine, Brenton.

By refunding royalties, even when a company is not making a profit, the government is taking on some of the risks of investment.

A company which is starting out developing a mine pays royalties even if the mine has not yet started making profits - arguably an unfair situation and certainly a disincentive for small operations to develop a mine.

If the mine goes under, or never turns a profit, the government has paid out money for no return.

So the government, under this proposal, is taking a share of the risk which it does not at present.

It will not recoup a cent of its money until/if the mine is profitable, and it will not start making more than it does at present until the mine is making profits of over 12% - twice the bond rate.

So, on your ‘risk’ argument, this arrangement is fairer to miners, as the government takes some of the share of the risk., which they don’t at present.

Scott. says:

01:15pm | 15/05/10

I’d say a fair bit less cash than the Unions fling the way of Labor.

Brad Price says:

08:16am | 14/05/10

Why? Tom has raised a very real and plausible alternative. Why should he be shunned and excluded for his alternatives to the Leader.

But that’s the way of unionism isn’t it! “All those who agree raise their hands and all those who disagree come down the front so we can all have a good look at you”

Wayne Fehlhaber says:

08:27am | 14/05/10

Lucky Lady , there is something unique about Tom as a Labor M.P..
He tells the truth. !

Anthony says:

08:34am | 14/05/10

Loyal to who? Good for him, sticking up for us, the australian public, just goes to show not all labour supporters are Rudd yes men and can think for themselves, let hope more of them see the light

RT says:

08:45am | 14/05/10

Better than being a yes man… Anyone who shows some independent thought on any issue is to be encouraged I believe

T.Chong says:

08:51am | 14/05/10

Anthony, I quick rundown on how Tom and fellow Conservatives are “sticking up"for the Australian public ?

Anthony says:

09:09am | 14/05/10

T.Chong, who mentioned conservatives sticking up for us? If you can not see the so called super tax for what it is and what the results will be, whats the point, push your head further in the ground

Sal says:

09:23am | 14/05/10

Congratulations, Tom, for speaking out for what you believe and making such a considered and helpful contribution to the debate.  I hope your thoughts will be rationally considered in the hallowed halls of government.

Patricia says:

09:39am | 14/05/10

It is a sad day when a cogent argument should be stifled in the interest of sychofantism to a ‘superior’ section of a political party. There are times when federal policies do not suit the state interests and it is quite proper for the state to speak up no matter what party they represent or even whether it is an election year. Personally, I never knew Tom had the smarts until I read this article.

Stuart says:

10:18am | 14/05/10

As a backbencher Tom is not a member of the government and not answerable to the PM in any way. That is fundamental in a parliamentary democracy. Therefore he should speak his mind on all things (in the tradition of Ted Heath and Malcolm Turnbull). In any case the resources are owned by the states and they impose royalties in that capacity. Rudd’s and Swan’s justification that they belong to all Australians is simply untrue.

Try Harder says:

10:38am | 14/05/10

He’s in the SA Parliament, you dills. State Labor.

Member for Newland, in the NE suburbs of Adelaide. The Libs took 4% off him at this years State election - his seat is marginal. He does have some background in the industry - don’t laugh - as adviser to the Minister for Mineral Resources and Development

Protecting your own back there,son?  You need to look into the mining tax provision more carefully and explain them better. You need to -
Try Harder!

Astonishing actually says:

12:36pm | 14/05/10

Yes I agree LuckyLady - How dare a Labor politician to speak their mind and say it like it is eh.  Zig Heil.

John A Neve says:

10:41am | 15/05/10

Wayne,

Says “He tells the truth”, you wouldn’t know the truth if it bit you on the bum.  You are a political truth manipulator.

Question Wayne, who was best Howard, Nelson, Turnbull or Abbott?
A hard question seeing as you love all of them and that’s the TRUTH.

Christian Real says:

10:24pm | 15/05/10

Lady Luck,
            I agree, he is not very loyal and should be kicked out of the party.
            When I found this bit in Wikipedia about Tony Abbott I thought that he wasn’t very loyal to the Liberal party government that he belonged to.
“Despite his right wing leanings,Abbott has acknowledged he voted for Labor in the 1998 NSW state election as he thought “Barrie Unsworth was the best deal Premier that New South Wales had ever had”. “Nevertheless,abbott then clarified that he has never voted for Labor in a federal election”

Wayne Fehlhaber says:

04:11pm | 16/05/10

John Neve :  I have told you in the past , John , i deal only in the truth as i am aware of it , and i am proud indeed of that fact.  Your own views are a differrent kettle of fish ( very fishy )  you don’t tell lies but you omit the full facts to create a scenario that suits John Neve and his printed nonsensical argument. 
When you are matched or beaten in debate you like to label your adversary a liar and it reflects rather badly on yourself.
95 % of your debate is in support of Labor but when challenged , you will deny it . There are several people who have been in touch with me on this strange reaction from you , not once but several times. Some have put the same facts to you and they get the same denials.
Better to declare yourself John , you don’t want to be labelled a liar , do you.  ?

Steventon W says:

11:36am | 21/05/10

Lucky Lady: Tom represents the State Government, being the Member for Newland, Rudd is pushing the mining tax which is a federal government issue. As someone who lives in Tom’s electorate and voted for him at the recent election I do not want to see him sacked. He is a fantastic Local Member of Parliament and I am proud to have him represent me in the house.

non-smoke says:

08:29am | 14/05/10

That is because the taxes are very different. You pay more from your very first cigarette. The super profits tax means that mining companies typically would pay LESS TAX under 11% or so profit.
It would be like making cigarettes cheaper for your first pack each week. Would that make more people or less smoke?

Peter says:

09:11am | 14/05/10

Non-smoke: no, the mining tax makes unsuccessful wildcatting and marginal olperations more attractive, and long-term, viable deposits less attractive.

It’s an open invitation to spivs and shonks - kinda like pink batts, eh?

Additionally, it hits small, boutique operations which rely on higher that normal profits to maintain viability, like Gosford Quarries.

What’s that?  You didn’t know quarries were also hit by this tax?  They are.

This tax is a disgrace.  I hope there is a massive capital strike by the miners and quarriers.  And I hope the Mining Division of the CFMEU shows a bit of ticker and starts to look after its members’ jobs.

Wayne Fehlhaber says:

08:30am | 14/05/10

Hear hear !  Well said Brad.

Walter Kinross says:

11:08am | 14/05/10

As a mine manager of some 24 years experience from zinc in Tassie to iron in WA I can assure you that the above is utter cobblers and a recipe for the death of Australian mining and major recession in Australia.  Hopefully you never have a position of power in the country.

Leigh says:

11:11am | 14/05/10

Try harder

the Henry review recommended this in place of other taxes, not in addition to….so tell us again how Krudd has gotten this right?

Try harder….

persephone says:

11:56am | 14/05/10

Leigh

which is exactly what the government has delivered, so according to your criteria, they’ve got this right.

Tim says:

12:24pm | 14/05/10

Leigh,
yes the Henry review says state royalties should be removed.
And guess what? Any company affected by the new tax has the state royalties refunded to them.

john says:

12:53pm | 14/05/10

6% is hardly sound profit.. Property developers make more than 6% are they going to tax them next.  The lies Kevin Rudd tells about the PRRT on the oil and gas industry are the same thing is rubbish. it has the same rate of 40% but its application is different which makes a huge difference to the amount of tax paid.  if you tax the industry too much and it slows down and our economy slows down too much you can’t pick it up straight away. these projects take years to get of the ground but labor don’t care about that they just want to win votes now. just like the NBN waste of money by the time they role it out it will be old technology..

Flats says:

02:43pm | 14/05/10

Try Harder is regurgitating nothing more than the populist sales pitch.

Since when is the mining sector as a whole a ‘highly profitable’ industry.  Segments of the mining industry may currently be… Iron Ore and Coal, but the future is by no means certain.  What about the other minerals, Zinc, Lead, Copper, Mineral Sands, Nickel, Aluminium etc etc.  These minerals are well off their highs, any mines brought into production over the last few years banking on the higher prices are now marginal at best.  Taking what meager profits are available only reduces what they have to reinvest or even keep the mines open.

Reimbursing 40% of investment loses in many cases will make closing marginal mines more attractive then keeping them going.

Secondly this tax grab has effectively pick pocketed every Australian investor who invested in the resources sector.  These investors took the risks, did the analysis and put money into these sectors.  The government has now come along and taken a substantial amount of what should be the investors returns and claimed them for themselves.  It’s pure appropriation from the successful to be distributed to the lazy or incompetent.  Anyone can partake in the success of the resource sector, BUY SHARES!

john says:

03:51pm | 14/05/10

henry also recommended a 25% company tax to ease the burden of this tax.. and not an extra 3% to super.. i know people who work in state and federal treasury and they are not all that smart all of them have had no industry experience.. people who work in the public sector are life employees no they no jack.. i used to work for woodside.. i can tell you i know jack too haha.. but so do a lot of people at these big companies.. non of this is rocket science but a public sector monkey with no idea on real business is dangerous..

Christian Real says:

09:45am | 16/05/10

Leigh.
This is what Treasury Secretary Ken Henry had to say in the Courier Mail, Friday,14,2010:
“It is the strong and clearly stated view of Treasury that the resource super profit tax will grow the mining sector and the economy.”
“The tax was constructed on that basis,and the modelling released with the tax package clearly demonstrates it.”

Ali says:

09:54am | 17/05/10

Its technically around the 57% the effective tax rate when taking into account the income tax also paid and the denied deduction in respect to financing/capital and other auxiliary mining operations.

Ella says:

11:47am | 14/05/10

But you would buy a product with a higher price tag if you couldn’t get it cheaper else where.

There’s only so much coal, oil, uranium etc in the ground and it is only in certain places in the world. We are fortunate to be one of those places.

Mining companies can’t just go to any country to get what they want and that allows us to be a bit more demanding about what we get in return for our resources.

persephone says:

11:57am | 14/05/10

Er…where else can they get the same product cheaper?

brenton says:

02:19pm | 14/05/10

persephone - answer:  south African, Canada, South America… why?  EBIT is the same but after tax, all the others are much cheaper.  Supply v demand.  Pretty simple really.  And yes, they can’t move a mine tomorrow, but they can certainly direct new mines elsewhere, and why would you.  I’m a small business owner, and if I can save $$$ to invest in the growth of my business, I will.  and so will they.

A says:

06:55pm | 14/05/10

Hey look persephone is at it again !! Guess what ! Australia is not the only country with resources… Yes we have a big share but price is the dictator here… You can get everything that we dig out of the ground elsewhere and the super tax will make our resources uneconomical to buy. Brenton is totally correct. Why can’t the labor supporters do basic maths ?

persephone says:

09:08am | 15/05/10

I’ll be the first to admit that I don’t know the world mining situation.

However, I have read of a couple of articles on the problems with overseas mining.

With Canada the obvious exception, many of the countries mentioned as possible alternatives are politically unstable. Mining companies don’t like that, because political uncertainty creates uncertainty about the future of their investments.

My understanding is also that, whilst many of these countries have mineral resources, few of them can supply them in the same quantity we can.

It costs as much to set up a mine which is going to exploit a resource for ten years as it does to set up one which will still have a resource to exploit in twenty. Again, companies tend to prefer a long term option over a short term one.

Finally, there’s actually a plus in this. Slowing down the extraction of our resources in favour of others (although KPMG predicts this isn’t going to happen if the tax is introduced) means that our resources stay there until the others are fully exploited.

Better to extend the life of our resources - which this tax does in other ways as well - than rip it all out of the ground now and have nothing to sell in the future.

a says:

11:51am | 15/05/10

BUT… ING doesn’t offer a rebate on all the royalties you paid to a state government in the process of digging it up your profit. Further the reality is that the tipping point of paying more tax (after rebates for state royalties) is around 10.5%, Anything less than that and you are paying LESS TAX.

James III says:

11:03am | 14/05/10

What is your experience in the mining industry/investment industry?

Raw xenophobia wrapped in socialism is all the rest of us see in all of your inane posts.

T.Chong says:

11:40am | 14/05/10

Jimmy the third. xenophobia ? I think you have me mixed up with some one else.
Remind me what I said.
But, since you raised the issue, wasnt it the LNP getting hysterical over Chinese investing in mining just a few months ago?
As for mining, no, just like 99.9% of everyone else here.
And you , how do you spend your working day.? If you claim to be a miner, then a bow to your obvios experience in all mining matters, I’ll buy a copy of Modern Mining just to read your articles, attend your lectures.

Willy K says:

12:01pm | 14/05/10

James III - don’t bother responding to Cheech & Chong.  He’s on the funny stuff and is just an ALP staffer/member parroting whatever the Rudd line is.

Its scary when Public Servants start dictating what business should do with zero real world acumen.

Shane says:

02:49pm | 14/05/10

T. Chong - you are just winding people up right? You’re not REALLY this stupid are you?

Of course the companies won’t just get up and go; they will continue their existing operations, but you can be assured that future expansion will be, at best slowed, at worst cancelled. The problem with that is that Kevin Rudds whole budget is based on sustained growth with this latest tax grab.

“But when they cancel exploration and expansion someone else will pick it up”  I hear you say. Wrong. Mining companies have a thing called a tennemant lease - some of these can be for terms of up to 50 years. These leases give them the exclusive rights to mine the minerals found there. So, even if some other company did want to take up the slack they won’t be able to.

And before you ask, yes I do work in the mining industry and have done so for over 10 years. I also grew up in a mining town and can assure you that everyone that I know who is involved in this industry are scared for their families futures should this new tax go ahead.

AndrewR says:

05:16pm | 14/05/10

Further to that Shane, existing operations may stay because of sunk capital but they need significant capital injections to replace equipment and plant on a regular basis. If they can’t replace from their own cashflow they will need to look at financing and those costs will be going up. And while the uncertainty exists banks aren’t lending! Existing mines can also decay and drop away.

No-ones mentioned here what will happen when China slows or hits the speed hump (and that looks to be sooner than later) or if the EU disintegrates.

Ben in Canberra says:

07:20pm | 14/05/10

Righto T. Chong, why don’t you CONTRIBUTE to the debate rather than denigrating someone who doesn’t share your point of view. Your blatant left leaning is utterly painful!

The Guardian says:

11:09am | 14/05/10

Willy,
“Being thrown out of the ALP for daring to be honest is a badge of honour. ” But crossing the floor for an ETS (Turnbull) is in some way a betrayal to the Liberal Party? LOL

Question: How is this a tax on jobs?

Please provide answer including fear mongering as well as lies.Bonus points will be awarded for terms such as “Great Big New Tax”.

Shane says:

02:52pm | 14/05/10

The Guardian - I can tell you right now that I personally know of people who have either already lost their job or are currently in limbo awaiting a response from their company as to whether their projects are going forward.

No fear mongering, no catch phrases, just the frightening truth.

AndrewR says:

01:50am | 15/05/10

I take your points Rabbit although you will find the Norway situation is a lot different. As I understand it, the Norwegian qovt were actually a full partner with the main players from day 1. They took a share of the risk and quite rightly have a fair share of the benefits. And good on them. I agree they should be a model and their Future Fund has been brilliant for developing other sectors of their country.

Unfortunately they had more mature politicians and social outlook than we do.

Silica says:

10:35am | 14/05/10

Labor!! Labour is in Great Briton

Try Harder says:

10:45am | 14/05/10

Willy K, CC, for God’s sake get a grip.

He’s a State MP. That’s the SA Parliament, you dills. Read his bio. He won’t be voting on anything in the Budget.

God almighty. Try harder.

Willy K says:

10:56am | 14/05/10

Exactly.  He can side with the Liberals against Rann’s stunting of SA’s mining industry.

From your hysteria - clearly you are scared that you hero Rudd is DITW.  Dead in the water.

Try Harder says:

11:09am | 14/05/10

Garn! Hysteria? ROFL!  You people are hysterical - hysterically funny.

You come here and spruik your cut and pasted “opinion”, but you know nothing about the topic, and nothing about the poster.

And when caught out, you backflip. Good one!

Hysteria. That’s the new party line buzzword for anyone you disagree with is it?

Garn. Are these the best posters the Lib machine can muster? What a total hoot.

Voxpop says:

10:48am | 14/05/10

“In 2005-06 the mining industry had a profit of $30 billion and they paid $8 billion in taxes. In 2008-09 their profits were over $90 billion and what did they pay in taxes? They paid $11 billion.” 

They enjoyed an extra $60 billion in profit and our extra take was a pittance of only $3 billion.  Surely no-one out there thinks this is a fair return on our non-renewables - once they’re dug up they’re gone.  We need a better return on them rather than allowing profits to go overseas.

Link for my quote above comes from Senator Cameron in question time on Tuesday
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;adv=yes;db=;group=;holdingType=;id=;orderBy=date-eFirst;page=0;query=mining profit tax 30 billion 90 billion;querytype=;rec=10;resCount=Default

T.Chong says:

10:54am | 14/05/10

Trouble is HJ, many here actually think its a good thing that big corporations pay less tax than they do.
Its the corporate (capitalist) tin foil protected mind at its best.

B Nesbitt says:

11:00am | 14/05/10

Yup a tax that increases profits.  That makes sense.  8 years of study and 12 spent in Investment banking/mining and I have never come across that concept but yeah Labor must be right.

10/10 for trying.  0/10 for content.  Give it up.

N says:

12:04pm | 14/05/10

The problem I have with the RSPT is its fielding for the mindless individuals of this country. Everyone with half a brain knows that mines turn major profits, so here’s an idea; invest in them! Put down the carton of whinny blues and the slab of VB and set that money aside for stock.  Don’t tax an industry into the ground (excuse the pun), for your inability to have fiscal sense.

Those who think mines won’t close their doors are living in Labor nirvana; Canada and South Africa have already offered the big miners (BHP and RIO) concessions because they know how beneficial these companies are to their respective economies.

Now consider this; you run RIO, BHP or alike and are facing down a massive tax from the current government, what do you do?

A) Stay in the country and be held over a barrel, while investors pull money out from under you and your balance sheet declines as your resources are now overpriced and unsaleable? 

B) Run your Australian based operations at minimal capacity, thus paying as little as possible on the increased tax rate, while running off shore operations at full capacity, avoiding tax and keeping resources at a competitive market price?

The beauty of choice B is that it will massively impact the Australian economy, and thus destroy the current government’s re-election chances, not sure why Rudd is pushing this, seems like political suicide to me.

Tim says:

12:41pm | 14/05/10

N,
the problem is that B is impossible. There is nowhere else to go. The few possible alternatives have individual problems of their own.
The miners know it, the government knows it, which is why they have decided to implement the tax.
All the whinging going on at the moment is just an argument over the actual rate and when it kicks in. Its just negotiation

N says:

01:05pm | 14/05/10

Tim; care to elaborate on the issues faced in Canada?

Flats says:

03:38pm | 14/05/10

There is far more to Australian mining than Iron Ore and Coal.  The faster everyone grasps this point then sooner we can have a rational discussion.

There are over 1000 Australian resource companies.  The major Iron Ore miners you can count on one hand.

The majority of explorers never find an economical deposit to turn into a mine.  Those that do take many many years to prove up the resource, attract the funding and build the mine.  In the meantime the commodity prices could have moved up or down considerably.  You can only attract the funding if the investors consider the return ample enough and risk free enough.

Funding for mines that are not substantially profitable will not happen.  West Africa will be the big winner out of this as funds move to explore there.

Australia does NOT have a monopoly on resources.  Brazil is the largest supplier of Iron Ore but deposits are found across Asia and India.  The higher Australia taxes the more incentive there is to find cheaper places to do business.  The other minerals are far more competitive, this will kill the capital investment available to grow these sectors.

To address the comment that these are OUR resources. Why aren’t we taxing brick production, it is afterall OUR clay.  Water consumption?  It’s OUR water afterall.  Farming?  They are using OUR land containing OUR nutrients and using OUR water!

Stupid.

Hamish says:

04:13pm | 14/05/10

HJ,

This is tiresome. There is a world price for resources so if the price goes up it is because global demand goes up. They can’t just raise their prices, it is a function of supply and demand. Iron ore is one of the most heavily traded commodities in the world. BHP can’t just raise their prices or no one will buy their product. The lack of knowledge amongst fellow-travellers on this blog is astounding.

If they make more profit we already get more taxation. They are already charged tax at a percentage of their profit, so the more profit they make the more money the government already gets.

And HJ they earn more money than an investment account because they take on s**tloads more risk. Ever heard of risk and return. It’s the basis of our financial system. For every successful mine millions upon millions of dollars are spent on unsuccessful exploration. If you want to get the same returns as miners stump your money up and be prepared to lose it all. Otherwise just quit your uninformed ranting and try and maintain some dignity. ‘Our’ resources aren’t worth jack sitting in the ground.

AndrewR says:

05:21pm | 14/05/10

or Ghana, or Chile or Zambia or Sweden or Mexico or…..

Saskia says:

10:58am | 14/05/10

Written spoken and authorised by P. Pot., Cambodia.

Hilarious.

The Guardian says:

11:19am | 14/05/10

Saskia,
You used this pol pot line yesterday.Are you an automated service?Perhaps a GPS (Global Political System).

B Nesbitt says:

11:24am | 14/05/10

Bunny - Why don’t we just nationalise all of the mines then einstein?

Clueless.

Dave says:

11:58am | 14/05/10

Well said Rabbit. If anyone thinks mining companies are going to leave due to a super profits tax they have to be kidding themselves. Mining companies only care about one thing - profit. If they can make one they will. If you have any idea of the obscene profits these guys make you would know that it is still well worth their while. I work in the miinng industry and it amazes me all these people that are buying this scare campaign from the liberals that it will stop mining development. It’s a simple equation… if there is a demand for the resource and they are able to make a super profit, they will charge full steam ahead.
Don’t forget, mining is unlike other industries - it is a one shot deal. Once you dig it up it’s gone. The fact that mining companies are making super profits should be telling you that you’re not getting a fair return for allowing them to mine it. Having said that 6% is too low and I would expect that the scare mongering going on from the mining industry is all just standard bargaining to try to get it to something more like 15-20%.

Sarah says:

12:18pm | 14/05/10

So Rabbit how much have you spent of your own money on mining leases, land acquisitions, mine development cpsts, SMP management plans, environmental policy development???  If the government wants a bigger slice of the pie then shouldn’t they put something towards it, your know make an investment like the mining compaines do??  A mining lease can cost in excess of $1.5 million and that doesn’t guarantee that you are going to be able to find good qaulity coal that will have a market avaliable to it.

When the government announced this tax they said it was a re-distribution of wealth for Australians as these bad mining companies take profits off shore, yet in the very same budget this government annouced a plan to increase foreign investment in Australia, so what is it you want, to be able to tax these big bad mining compaines who make so much money that is taken off shore or to encourgae foreign investors to put there money here, does anyone else not see the contradiction in policies??

Have people looked into the shareholder portfolio’s of mining companies to see whp owns the shares??  Mainly Australian super funds and mum & dad investors, I am sure they are all glad what this annoucnement has done to their investments, I know I am really pissed, but hey I get an extra 3% super in 10 years which will mean no more pay rises I am sure that will make up for the lost investments!!!

Tim says:

12:31pm | 14/05/10

Sorry Sarah you’re wrong.
The majority of these companies are owned by overseas shareholders.
And I’m quite happy with my super at the moment and this tax will only make it better, but thanks for caring.

Rabbit says:

12:35pm | 14/05/10

Well I suppose that’s better than a Nazi slur.

Legally, all resources belong to the commonwealth. Those resources are not owed by mining companies but by all of us, and as they are our assets we should be maximising the returns on those assets.

Damian says:

12:54pm | 14/05/10

What about water utilities? There should be a super profit tax on water utilities companies, after all their our resources as well. I live in Victoria and l want my share of Tasmanian water and l want it now.

Henry says:

01:16pm | 14/05/10

The logic displayed by Rabbs and his motely crew of Rudd-zombies is so flawed you could steer the QEII through it sideways.

Socialism and quasi-nationalisation of resources has been tried countless times by countless clueless quasi-socialist, socialist, and communist governments.  All have been a disaster and have sent markets into free-fall and living standards back toward the dark-ages.

But still the zombies keep digging…. 

As Winston Churchill said:

“trying to tax oneself into prosperity is like a man in a bucket trying to lift himself up by the handle”

And still the mouthbreathers refuse to learn from the errors of the past.

john says:

01:38pm | 14/05/10

sarah is right.. tim you are wrong.. do you even understand how companies shareholdings are made up.. most companies are own by big institutions and then hundreds and thousands of mum and dad investors.. might not be significant to the company but its significant to the mum and dad.. you have super like most people and this will be devalued if you have mining stocks.. and yes no more pay rises as employers are not going to absorb the extra 3% for super.. plus the increase in payroll taxes and WC on top of the 3%... yes i bet you didn’t think of that as you are clearly not a business owner.. for what 2% reduction in tax.. wow… unless you are making margins of over 100% you will benefit otherwise you are worse off.. wake up people please.. do some basic finance courses educate yourselfs i promise you will be a lot better off..

Rabbit says:

02:01pm | 14/05/10

You call it socialism or quasi whatever but it’s not. It’s a tax on profits. Profits that are made on mineral resources that have always been owned by you and I. And it’s a progressive tax too, just like the personal income taxes that we all pay. Are you claiming that the progressive tax system is a failed socialist experiment?

Keith says:

02:05pm | 14/05/10

Sarah and Tim, you also have to note that a lot of these mining companies also have mines in foreign countries. When a company declares its profits, it’s not only from Australian operations, but also from overseas operations. If a company declares $6 billion of profits above RSPT threshold, I won’t be surprised if the lot of you will say you’re entitled to 40% of $6 billion. When in matter of fact, it could be only $1 billion profit from Australian operations. You have to remember, we aren’t the only country these companies are operating in. Gotta love globalisation.

Tim says:

02:15pm | 14/05/10

That’s funny Damian,
But what part of non-renewable resources don’t you get?
Also if you actually knew anything about water utilities you would know that because most are controlled by a regulator, the rate of return allowed is extremely small. There would never be a super profit from that industry.
Henry,
If you honestly think this is socialism you are beyond help.
And maybe you should learn from the errors of history and stop quoting the same Winston Churchill quote? Everyday for a week, we get it already.

me my mo says:

05:22pm | 14/05/10

” If anyone thinks mining companies are going to leave due to a super profits tax they have to be kidding themselves. Mining companies only care about one thing - profit. If they can make one they will.”

I honestly think so many people commenting simply don’t understand business, economics, etc.

Mining companies will put their money and resources where ever around the globe that will give them the greatest return. By decreasing the returns through taxation, mining operations may continue, but they wont expand as quickly or worse, they may contract. This is lost revenue for Australia. This is why the Canadian ministers are watching with interest, because it means the mining investment money will likely head to Canada and elsewhere. Also keep in mind that while Australia’s mineral resources may be finite, so is China’s rapid economic development that fuels the mining boom.

AndrewR says:

05:51pm | 14/05/10

My first visit to this site and certainly a lot of school yard stuff. You can certainly tell those who are experienced in business and mining and exasparated by the inexperienced.

Sorry Rabbit but a few things need pointing out:

1. Mining capital does move and if you think Australia hasn’t suffered you weren’t here during the bad times. This current boom has only happened in the last few years after many of us were scratching around the bush. It will drop away when China has to correct its own economy, probably sooner than later.

2. (and T Chong pay attention) No-one is saying there shouldn’t be taxes. Just make them fair, reasonable and just. Even the mining industry have said they are willing and able to pay more. The mining royalty system is not correct (most agree) because it puts a charge on production rates not value of product.

3. “Resources are the property of all Australians” - Hmm,  this is only partly right. Until you have the required skills and are willing to risk a lot of money to find, fund and develop them, they remain just a good idea to keep you warm at night. And they remain in the ground. If the Govt wants a lions share, they need to take a fair share of the risk.

4. Mining companies, partic large ones, also have projects overseas and will compare all projects to see which they will develop next. High taxes and sovereign (country) risk will lower Australia down to a bit higher than Zimbabwe and Sierra Leone. If Rio/BHP decides its next mine will be in Guinea or Canada its a decision whose effect on Australia could take a decade to reverse, and only if the Govt of the day makes taxes fair and not retrospective.

But don’t worry - Treasury has a model and in true “Hollowmen” tradition they probably have a Powerpoint presentation as well!

(btw and to get back on topic: Tom - good, balanced article I thought)

Rabbit says:

08:51pm | 14/05/10

I distinctly remember the bad times. My father in law was the head of exploration of a mining company. The reason that times were bad had nothing to with any laws or taxes in Australia and everything to do with low world commodity prices. When the commodity boom ends and profits return to normal then the companies don’t pay the extra tax.

I’m well aware that mining companies can move capital etc but this is a tax only on the boom time portion of the profit and the majority of the profit still goes to the companies’ shareholders.

And just one last thing - an example of how a super profit tax doesn’t drive away investment and mining companies: Norway. Norway taxes mining companies at 28% and a 50%tax on oil profits. Taken together this means the tax on oil profits is 78%, one of the highest tax rates in the world. The majority of those taxes go into its sovereign wealth fund, which is currently worth over $400 billion. If Norway can do it then why can’t we?

Shifter says:

12:45pm | 14/05/10

Agreed. It’s most interesting the people in favour of the RSPT aren’t really considering the numbers involved and the future. At the rate stated, the mining companies would be better off investing in a saving acocunt at one of the big 4 than take on extra risk invest in finding and mining new deposits. Obviously no new exploration means the profits and thus the benefit of the tax has a limited shelf life.

Christian Real says:

08:16pm | 14/05/10

Persephone,
              It appears that when this Liberal brigade has not got the answers to your comments, they get bitter and twisted and attack you instead. The fact is, that it is inbred into them, and if you don’t agree with them, follow their beliefs or the Liberal party that they follow like blind sheep, they attempt to dumb down your argument. They also appear to have an underlying psychological attitude problem where they believe and think that they are “born to rule”.

Walter Kinross says:

11:52am | 14/05/10

What is your real world experience in mining?  Investment sector?  This sort of back room PS modeling is utter cobblers.

Straight from Socialism 101: How to f*ck up an economy in 3 east steps.

Its a dog.  Stop digging yourself deeper.

The Guardian says:

11:56am | 14/05/10

Persephone,
You can lead a horse to water .......

Andrew says:

11:59am | 14/05/10

You are wrong. I pointed it out to you at length yesterday. Do I have to do so again today. Stop lying.

Nick says:

12:21pm | 14/05/10

Well done Persephone; always pushing the Labor band wagon, must be getting more difficult as time goes on and they keep loading it up with more garbage policy, but your quite clearly a determined and strong woman.

Now let’s have a look at the Treasury estimates that you pointed to. Your quite right that at 6% return the tax rate is only 28% (in 2014-2015, 2 years after the RSPT comes into effect). But let’s go to the other end of the spectrum; say we are mining gold with a return of 50%; the tax rate is now 53% instead of 35% previously. 18% jump in tax seems rather significant to me.

Mitzi says:

12:28pm | 14/05/10

Persephone AKA Rudd’s PR manager….what on earth will you do all day when your boss get’s the sack??

Chris says:

12:54pm | 14/05/10

Persephone,

I hope you are being humourous in your response, becuase I do not wish for your comments to be perceived as arrogant and patronising - which they clearly are!

Your comments about you educating us sums up one of the problems with this issue. If we are apparently ‘not getting the message’ then perhaps it is the manner in which it is given to us and by whom. How can we mere mortals understand where you are coming from when we only get half the message and when questions are asked we are either bombarded with rubbish or if the questioning gets too rigourous (god forbid) we are insulted and treated like idiots.

luke09 says:

01:06pm | 14/05/10

persephone, the main problem with this tax is miners said they were deceived, the details and terms differ from what they originally proposed.  There has been no discussions or debate with what has now been proposed by Rudd and Swan, the arguments now occuring from all sides is a natural response to the change of details to the tax.

The tax will hinder new investments for some time to come, only a fool would hope otherwise.

persephone says:

01:16pm | 14/05/10

Walter Kinross

Waiting for your informed critique of the figures presented.

Oh - what - you can’t disprove them?

Well, that’s OK - just attack me instead.

Much better - and easier - than doing your own research and thinking.

Andrew

not lying, just quoting Treasury.

Of course, I accept you know more than they do.

Nigel

er.. haven’t denied that the tax gets bigger once you’re over the 12% threshold.

Just pointing out that, according to this author, such an outcome would be good - but he doesn’t seem to understand that that is exactly what the tax proposes.

No need to spin anything, the facts are out there.

And a 50% profit is a bit more than 6%.

Mitzi

exactly what I’m doing at present.

persephone says:

01:22pm | 14/05/10

Chris

on a number of posts now, I have provided links to information which would enable readers here to educate themselves and draw their own conclusions.

Since they just keep coming up with the same old pap I think I’m entitled to believe that they either haven’t bothered to read the information or that they haven’t understood it.

My only other option is to believe that they don’t want to read it, because actually knowing the facts might cloud their thinking.

john says:

01:22pm | 14/05/10

no need to swear.. but you are wrong and not very clever if you think 6% is fair… most profitable mining companies will earn more than 20% easy.. Property developers earn more than that.. its not about the finite resources its about the tax dollars for votes so he can keep his job.. Kevin Rudds strategy is to get through the next election then he will water down the tax.. he can’t do it now he will look like a fool once again for backing down and coming up with such a stupid idea in the first place.. btw china’s tax rate will be lower than ours and the government shares the risk.. maybe krudd should take over BHP and RIO that way they won’t be foriegn owned.. maybe buy back telstra so he can have his own NBN.. why stop there CBA looks good too..

luke09 says:

02:06pm | 14/05/10

persephone, I re-read what you wrote, this super tax should be applied to every business, it is not fair that the miners are the only one to benefit from this. Other industry sectors could do with making more money from being taxed more and who would have thought the more tax you pay the less the government receives. Confused, I am.

Tries Harder says:

02:29pm | 14/05/10

Persephone, it’s a bit of a shame some of these folk don’t do the work on their replies that you do.

And a pity they don’t read something other than the Tele. The Fin Review would do, especially today’s.

Pity, but there it is. Pleasure reading your posts, though. No need for you to try harder - best thing on The Punch, bar none.

Spanner Joe says:

02:33pm | 14/05/10

Persephone, I really would like you to be open and tell us which Labor Minister you are a staffer for.  You are, it goes without saying, a congenital moron. Labor has done nothing, but tell bald-faced lies from they day they got in office under the assumption that people are dumb and some, like yourself, have licked it all up, thus proving them right. So we have a two-speed economy - Socialist doctrines like those expoused by you and your red comrades, means the best way to counter this is to bring the top, high-performing tier down, rather than the vastly better option of trying to lift the lower tier up. But I do like the way that every time you post you manage to blatantly lie and mangle facts yourself. Well done, you boss would be proud.

Super D says:

03:29pm | 14/05/10

Persephone said

“not lying, just quoting Treasury.”

Actually if you look a little closer at the link, you are quoting the treasurer, not the treasury. 

One is a public sectory entity, “The Treasury”, one is the nations least economically literate treasurer in decades.  If you were quoting the treasury you could be accused of bias, the treasurer you’re just a party hack.

LeftWingNutjobs... says:

04:11pm | 14/05/10

Pers,

I understand exactly how those tables work and while I can understand your point of view, I can also see how this would be extremely detrimental to Australia’s economy.

Right now, there’s no way that these mining companies are operating at 6% profit. If they were, they may as well take their money and dump it into a term deposit of some sort. Even 10% profit would be low, considering the risks involved (and I’d imagine over 90% of them make more than 10% profit, seeing as their share values have skyrocketed over the past five or so years, maybe more I have a bad memory).

Either way, it’s extremely unlikely that many of them would benefit from this tax. Granted, the Australian people deserve their fair share, but once you start making these ventures less and less appealing for companies that are so obviously the backbone of our strong economy, you can’t expect that they would keep coming back at the same rate. They’re going to find somewhere else, somewhere more appealing to invest their money.

Basically what I’m saying is, you shouldn’t be punishing a company (and especially companies this important) for their success. Seems almost communist-like…

persephone says:

06:53pm | 14/05/10

john

didn’t actually read the post, did you?

As for whether taxing 6% of profits is fair - well, it’s been happening for yonks, now, so obviously it is, and it follows from that that reducing the tax rate for someone on 6% is even fairer.

By paying companies back the royalties, even if the company is not paying tax, means that the government is taking a share of the risk.

luke

I pass no opinions on whether or not all companies should pay super rates - obviously Abbott believes they should, it’s how he’s funding his parental leave.

Mining companies are a different matter, because they are exploiting a non renewable resource. By definition, this means we can’t always rely on digging things out of the ground, and we need to make sure we’re getting the best deal possible as taxpayers for what we’re selling.

Spanner Joe

I get asked this question so often The Punch should save me the effort and put a little bio down the bottom for me - I’m up for it!

I am a member of the ALP but I do not work for any Minister. I do some voluntary work for them, and would spend close to a thousand a year of my own money in the process.

I do my own research - I’ve never believed in accepting the party line.

SuperD

I don’t think Wayne Swan sat down with a calculator and worked it out himself. In fact, if you look at the footnotes and riders at the end of the table, it’s obvious he didn’t.

LeftWing

the effects of this tax are more nuanced than any of the arguments here acknowledge.

The WA Liberal government itself recognises that a mining boom - rip those minerals out of the ground and ship them off as quickly as possible - is not healthy and is taking steps to diversify its economy.

This tax should encourage people out of a ‘get rich quick’ attitude to investment - the kind of attitude that led to the GFC - and into a more considered approach, building other industries in the long term.

It also encourages the full exploitation of a mine, as taxes fall as profits get lower, making these mines more profitable. Fully exploiting a mine is better economically than abandoning it when there’s still ore there and then coming back when ore deposits elsewhere are exhausted and reopening it.

KPMG - I’m sure you’ve heard of them - believes that mining investment, employment and output will all increase as a result of this regime.

Also, being a finite resource, the longer you hold on to it the better

luke09 says:

12:19pm | 15/05/10

persephone, your reply to everyone as usual, is well written. I just think the 40% rate is too excessive with all the other taxes still applied. I read(today’s paper) that a company will bank 20 dollars for every 100 dollars profit, not much left for investors and shareholders to get a decent return.

Mineral resources are only worth money when it is digged up.

persephone says:

04:11pm | 16/05/10

With great respect, luke, only banking 20 out of 100 dollars is impossible under this tax.

The maximum tax applicable - obviously when you’re well past a 50% profit- is : 28% + 40% = 68% - 6% (royalties) = 62%.

So they’re still, at the absolute highest level of tax, on a profit of something in the 70% plus range, banking 38%.

It’s impossible for it to get higher than that.

luke09 says:

06:22pm | 16/05/10

persephone, the reporter was wrong then and 38 dollars is still not a big amount. The new tax is a lot different to the petroleum tax introduced 25 years ago, the petroleum tax was not retrospective and doesn’t apply to the profitable northwest shelf productions, it will hurt the industry.

the following is a copy of what was reported by business,

“Industry and ABARE data shows that just about every tonne of extra gas production has been generated by the North West Shelf gas project and it is not covered by the PRRT regime.

Further, the data shows that oil production in Australia has declined pretty consistently since 1987, while production from fields not covered by the regime (Bass Strait and Timor Sea) consistently rose to a peak at the turn of the century, although they now appear to be in natural decline.
The message is clear: new production is not replacing old.” end.

john says:

01:01pm | 14/05/10

and labor voters are in the same category of envy.. they hate the rich no matter what.. well get of your back side and work.. at least you have a chance of becoming rich under the liberals who give people freedom to build their own business and profit and not be taxed heavily for their efforts..

dave says:

12:44pm | 14/05/10

Don’t worry about the mining companies kieth, they’ll do very well for themselves. Australians are entitled to get a return on letting mining companies dig up and sell finite resources owned by the australian people based on what they are worth.

It amazes me how many people seem willing - grateful even - for a mining company to bend you over and then laugh all the way to the bank.

Keith says:

01:27pm | 14/05/10

Gotta note Dave that even though these resources belong to the Australian people, there is a cost of digging it up. If it ain’t worth digging it up, then those resources ain’t worth anything.

Keith says:

01:47pm | 14/05/10

Totally agree with you Chris that people in the outback should have the same ammenities as folks down in Sydney and Canberra. Unfortunately, the Labor Government won’t do that especially for WA and Queensland. Labor is worse than Rio Tinto and BHP as Labor only plan to shift money into the finance hubs of Sydney and Melbourne. What we need is more development at our mining towns. That would make things fair. At least these big mining companies funded and built infrastructure for mining towns in rural areas. What has the Government done for them?

Keith says:

01:33pm | 14/05/10

Hi Fair Dinkum Aussie. There is a place where you entitled an equal cut in everything. Go to China, North Korea or any of those communist countries. Everyone is treated equally. Unfortunately, in the real world, some people are more equal than others.

Steve says:

01:34pm | 14/05/10

“Fair Dinkum” wants a free handout from those who are willing to risk their wealth on the markets. I say put up or shut up! Place YOUR MONEY where your MOUTH IS and risk your hard earned wealth like thousands of Aussie investors on the highly volatile commodity markets.  Moving up in the world and making Australia a better place to live in the process involves high risk, so how about you share it with the rest of us?

Bilbo Faggins says:

02:17pm | 14/05/10

Bloody oath, Fair Dinkum. More for those who don’t deserve it and less for those who do, I say (that’s the union motto afterall). But while we’re at it, where are the handouts to disadvantaged groups. As a struggling half-Aborigine, half-refugee, fully gay, amputee woman, I am surely entitled to anything that is thrown my direction even if I bear none of the risk inherent in creating the income. Just hand it over to me, afterall I am just a victim of my circumstances and the fact I couldn’t be arsed working is besides the point - I still deserve my share. Redistribute money from greedy corporate big wig fat cats to unemployed blud… er, victims, like me. Now that’s what I call a bloody super tax.

Jeff says:

01:14pm | 14/05/10

Why don’t you dig it up yourself and sell it if it’s that easy Ken. What is a fair rate? Anything, as long as it’s more than they’re paying now? These types of Robin Hood Taxes are what drives innovation and industry out of Australia.

brenton says:

01:18pm | 14/05/10

Ken, you say ‘Most of you are very shortsighted’....?  I say, here’s looking at you!

Tom says:

03:09pm | 14/05/10

Don’t fret Big Red Commi; the wheels of communism are slowly beginning to turn.  Your megalmanic leader knows he has the support of the many mediocre, simpleton, wannabe-minions in this country - those who want everything for nothing and who can’t stand themselves so much that they despise anybody who succeeds through hard work.  Keep voting for him and you’ll acheive your utopia - “Austral-zing Provence”.

persephone says:

09:25am | 15/05/10

Obviously you have no idea what ‘corruption’ is.

International agencies investigate and rate countries objectively for levels of corruption.

Australia ranks 8th (for least corruption) out of 180 countries.

Keith says:

03:35pm | 14/05/10

Yes, I agree with N. If you dug up a piece of gold or diamond in your backyard, it is not yours. It will be claimed by the State Government. Legal implications can occur if you attempt to sell that piece of gold or diamond that you dug up even if it was in your backyard. Mining companies are allowed to dig up and sell minerals because they pay for a license to do so. If the Australian people believe they have an entitlement over their minerals, then they should pay their fair share and they will get their benefits. Otherwise, quit leeching off someone who did the hard yards.

Willy K says:

04:08pm | 14/05/10

I only hope Rudd & Co squib it as quick as you have ‘Try Hard’.

I’d quit too if I were you.  You are trying to ride a dead horse.

I have to go now too… I have to get in the queue of businesses lining up to be taxed so we can make more profits…

Them that votes together dotes together. says:

04:43pm | 14/05/10

Aaawww that’s lovely - such devotion to Persephone - glad to see your hubby knows how to use a keyboard eh Pers!

Saskia says:

05:18pm | 14/05/10

Try Harder - go on cut and run.  At least you know when you are beat.

Most of us are not Libs just people concerned with the terrible mismanagement of the country, Rudd’s lies and this shocking Mining tax designed to stunt the industry and lock our prosperity in totally with it.

Rudd and this government stink to the heavens and now just have to go.

Christian Real says:

09:19pm | 14/05/10

Try Harder,
            The Liberal folk are narrow-minded and they also are tunnel-visioned where they only read, see and hear what they want to. Anyone that appears to be more knowledgeable then them, they attack, ridicule and attempt to dumb them down by denouncing everything as a lie.
            Anyone that don’t agree with them , or jump on the Liberal party bandwagon with them, they insult and name call like schoolyard bullies.
            I am not a Labor staffer either, but I work for private enterprise, and in my spare time I peruse all the online papers and online media outlets and keep up with the political scene as much as I possibly can, because one of my main interests is politics , another interest is writing.

Try Harder says:

08:06am | 15/05/10

I’d like to thank WK, TTVTDT and S for making my point for me. Having a loud, spiteful, uninformed opinion just doesn’t cut it.

I’ll take yesterdays Fin Review on the mining tax proposal any day, over their rants.

Right now I’m off to enjoy the day. Soon as I stop laughing.

Willy K says:

11:44am | 15/05/10

I thought you had gone Try Harder?  At least stick you your word.

persephone says:

09:34am | 15/05/10

Um, Tanner says the 40% is non negotiable.

And everyone who wasn’t a twit knew that the dip in shares had nothing to do with the proposed tax.

I hope that posters here took my advice a few days ago and bought up big.

Against the Man says:

07:31pm | 14/05/10

Time for change, vote Kevin ‘my temper control issues are real’ Rudd out and get Australia back on track.

Darryl Price says:

06:24pm | 14/05/10

One of the least well informed opinions ever seen on here.  The proponents of the politics of envy will be heartened to see someone in their demographic with access to the interweb. In any case, I’ve got two words for you - COMMODITY PRICING. Google it. It’s the search engine box in the top right of your computer screen. Top right will be near the little red box with the white cross in it.

Henry says:

11:05pm | 14/05/10

Written and authorised by K Marx.

Willy K says:

11:22pm | 14/05/10

Its outrageous that the mining industry is being favoured by the government like this.  Why can’t small business be the recipient of being taxed 40% too so we have the opportunity to grow strongly too?

Shame.

Darryl Price says:

05:19pm | 15/05/10

This calls into question the judgement of Ken Henry then doesn’t it.

Bruce says:

12:23am | 15/05/10

Christian: All the factors you mention have an effect on share prices. Fear and greed, along with perception, sentiment, government policy and confidence has a major effect on all share prices, despite the logics of a tax effective strong or weak balance sheet, or trends in global markets and commodity prices.

Trader says:

06:27am | 15/05/10

Christian, the price of BHP and RIO are still 12-15% down on prices prior to Rudd opening his mouth. BHP were touching $45 and are still hovering around $38-39. That means your super has fallen by a similar amount in the mining sector of your super. I suggest you check out your superannuation agreement. It might mean you will have to work an extra couple of years to get back what Rudd has cost you!

Oh No says:

09:16pm | 16/05/10

I think this is all happening because it is hightly unlikely that this tax will go through and yes the markets go up and down very regulary but is it conincidence it faulted so after the announcement, I am more concerned about my super in the long term . You are grabbing at straws here you know.  The ALP and it’s followers have become very defensive and agro since the budget haven’t you.?? What’s up, the rope getting tighter..the old saying… give em enough rope….....

Sam P says:

12:01pm | 15/05/10

And how are they going to pick up on them?  Set up Chinese mining companies owned by their govt in Australia then ‘sell’ our ore to themselves? 

Get a grip.  That can’t happen.

The tax is an utter dog.  Why do all of you lounge chair experts with zero real world experience refuse to accept what an entire industry from the pick and shovel blokes to the CEO’s are telling you crystal clear?

The tax will wreck our greatest industry.

You denialists simply parroting the Rudd line with no logical thought process are really just making fools of yourselves

AndrewR says:

05:23pm | 15/05/10

Akemed, you misunderstood that release. They will only pick up the attractive ones but Rio/BHP won’t drop those - they can sit on them and slow development in preference of other projects around the world. China has been in the market for some time now and if you think they’ll do you any favours you’re sadly mistaken.

Hell NO says:

09:09pm | 16/05/10

Yes Yes Yes, and how can those same people condone the terrible waste of their taxes and all the debt we now have and also my biggest detest of Krudd is the way he has handled the insulation and schools schemes. I can not beleive how anyone could possibly condone these.

Average Joe says:

02:41pm | 16/05/10

Good luck with that Lenny. Tax rich people more and they will find incentive to leave the country. They pay a lot more taxes compared to all your average joes. If they leave, how are you going to fund anything? Most rich people own businesses too. If they leave, who’s gonna employ your average joes? Sure, some average Joe will take up the rich man’s business but he/she may lack the intelligence or entrepreneurship as the rich man that the business doesn’t run as efficient as it used to. Intelligence and the will to succeed is what makes most honest rich people rich. Even if your new average Joe becomes successful, he/she will end up being taxed more and realise there are other places to go and live. Endless vicious cycle we have. Australians have a bad habit of tall poppy syndrome. If you’re jealous of other people’s success, then why don’t you strive to be successful too? But no, as expected as your sort of “negative-whingers-of-the-rich”, you’re just going to sit in front of the tv or computer and be too lazy to try.

henry says:

03:01pm | 16/05/10

Cobblers.  Pure socialism.

SPOTTER says:

05:43pm | 16/05/10

The Only reason why Rudd is inventing new taxes is because he has got Australia in such a huge debt , that he has to rat around looking for money .
Beware people !  IF he gets a chance to win the next Elections he will mandate the ETS TAX and that with the Mining tax will see many Australians suffer financial hardships !  Everything will be more expensive to buy and your Bills will go through the roof ! If you think for one moment that Rudd/ Labor cares for “Working Families ” then you would have to be living in Disneyland .

WAKE UP Australia ! Wake Up !
.

HB says:

09:02pm | 16/05/10

Come on, the name calling and the nastiness has certainly intensified in the past week by the ALP which is very common when they are on the back foot, so I think they are their own worst enemy. They blame Abbott and Co but there are only a certain few to blame..  Krudd/Swan/Gillard/Emmerson/Tanner/Conroy they are causing all the ALP’s woes and they have all been very guilty in the past week for name calling and very unnecessary comments.