Bloody Huge Profit

acotrel says:

06:12am | 25/08/11

Everybody else must pay tax on their earnings.  Why is an exception made for a company which is mainly owned by one particular sector of our society ?
‘The system runs on bullshit ! ’

Reg says:

07:23am | 25/08/11

@ acotrel

Mining companies do pay tax on their earnings, just like everyone else. The government just wants them to pay more than everyone else, percentage wise, above and beyond for taking a massive risk and being successful.

It’s almost a jealousy tax. Government doesn’t want to take any risk in doing the actual mining themselves but is there front and centre to take a share of the profit made.

And, being greedy, the government always wants more.

You surely aren’t that stupid to think they pay no tax at all.

Fiddler says:

07:55am | 25/08/11

I have to say it is a Labor policy I agree with. These resources are owned by the crown, hence the people of Australia, not all of whom can afford to buy large amounts of shares in BHP. The coal mining companies are making around 1 million dollars profit per employee per year. Note a lot of these companies are also foreign owned. I would love some if this money to fix up the countries infrastructure and invest in our future. I am all for companies being successful but when they are making obscene profits on what is essentially our resources well….

Eskimo says:

08:27am | 25/08/11

BHP will pay more than $10Bn tax on this profit. Shareholders in turn will pay additional tax on their share of the dividends and capital gains at their marginal tax rate. The government will collect well over 30% of this profit as tax, a fair percentage in my view.

TimB says:

08:34am | 25/08/11

Are you honestly trying to tell us that this company doesn’t pay tax?

There’s a smell of bullshit alright Acotrel. And it’s coming from you.

Tubesteak says:

08:56am | 25/08/11

Matt
You don’t know much about political history if you’re truly asking that question.

Reg
The RSPT was asked for by the miners as part of the Henry review as it was meant to replace the annoying State based system. They got annoyed when the govt asked for a higher interest rate than they had proposed.

The RSPT was only to kick in when profits had reached a certain level above the bond rate. Moreover, it is only because using the resources of the nation is an unsustainable economic model that is causing Dutch Disease across the rest of the country (higher interest rates, higher wages, higher inflation etc).

As for “massive risk” it’s not like there is a huge risk in mining. The resources are there in the ground. You know what price you can get. All you need is an overdraft facility and some forward contracts to fund the time difference between digging it up and selling it. Very few industries know what price the market will pay for their goods.

MarkS says:

09:07am | 25/08/11

When it formed the ALP was meant to be the unions mouthpiece

@Reg
I earn more then most & pay more then most, at a much higher percentage. If it is good enough for me it is good enough for BHP

DocBud says:

09:55am | 25/08/11

@ MarkS

If governments try to tax companies or individuals too much, tax revenue actually goes down (google the Laffer Curve). Global companies will invest based on a variety of factors but clearly the tax regime is a significant factor. I remember many years ago how the government in Swaziland tried to “milk” a mine by putting up tariffs for the state owned rail and electricity suppliers. Result, mine closed, no taxes and 400 out of work. People should be wary of killing the golden goose.

Randal says:

12:01pm | 25/08/11

@acotrel, are you saying that BHP does not pat tax on their earnings??

I mean what a scandal, and you know what is worse they have lied about in their annual report by stating that they paid over 7 billion dollars in tax.

Somebody should call the tax office, as this warrants and investigation!

Glad you where on the case to bring this to public attention, nice work comrade.

bananabender says:

09:14pm | 25/08/11

@Tubesteak:

“As for “massive risk” it’s not like there is a huge risk in mining. The resources are there in the ground. You know what price you can get. All you need is an overdraft facility and some forward contracts to fund the time difference between digging it up and selling it. Very few industries know what price the market will pay for their goods. “

What a crock.

a) Mining companies have absolutely no idea how much commodities will be worth in 10-30 years (the mine life).

b A company may spend over a billion dollars developing a mine before they earn a cent in revenue.

b) Mining companies aren’t even sure of what is in the ground until they actually start mining.  Sometimes apparently good prospects turn out to be totally uneconomic.

VVS says:

05:59pm | 24/08/11

Maybe you should buy shares in BHP instead of whingeing…?

Just a thought.

Don says:

07:13pm | 24/08/11

Keep squaaking Labor parrot. Seriously, BHP is not the only mining company in Australia and I can assure you that they are not all rolling in money. A mining tax will basically drive mining towards large companies only whilst the smaller ones bear the burden. Stick to writing what you know about…....what is that exactly?

stephen says:

07:13pm | 24/08/11

Buying shares would only help myself.
Getting these mainly overseas companies to pay their proper tax would assist us all.
Nice thought of yours though ... a Miner’s thought ?

VVS says:

07:23pm | 24/08/11

I’m actually a rock star…

TheRealDave says:

08:38pm | 24/08/11

I agree Don. For every giant like BHP there’s the struggling little blokes in mining like Clive Palmer and Nathan Tinkler….

stephen says:

08:52pm | 24/08/11

...and I’m a dirt-bag.

Tom says:

09:18pm | 24/08/11

What’s a proper Tax that these blokes should pay? Stephen, I bet you must have some Superannuation somewhere! What are you bleating about? BHP have just added to your coffers as they have to mine so enjoy it whilst you can because it can’t last forever. As a self funding retiree & holding BHP shares direct I say ..wacko. It puts the day off further when I’ve got to put my hand out for some form of welfare payments. As Kerry Packer said, why would you want to pay anymore Tax than you’ve got to when you see how the Govt wastes it.

Babe in the Woods says:

07:35am | 25/08/11

You do realise that BHP paid 10.3 Billion dollars in tax don’t you?  sounds like a lot of money to me

Steve says:

09:45am | 25/08/11

VVS, and maybe you should buy shares in renewable energy companies instead of whingeing about the Carbon Tax…..

Just a thought.

Chris L says:

11:46am | 25/08/11

@Don - I don’t think those smaller companies make super profits, so the tax would not apply.

Randal says:

12:06pm | 25/08/11

Absolutely Stephen, how dare they make money, and let’s face it 7 billion paid in tax is not enough, they should pay 20 billion.

I agree with you comrade, all profits should be outlawed immediately and the money made given to the people.

I mean come on, this worked so well in Russia, look what a success they where until that idiot Gorbachev ruined everything.

Tell me where this rally is, as I will be there, and so will millions of our comrades.

Viva Le Revolution!

Steve says:

02:29pm | 25/08/11

Yup, asking a company who digs up our countries resources to pay extra tax ONLY when they make a SUPERprofit, which is driven by higher commodity prices, not from extra productivity or investment (necessarily), is socialism.

Don’t you just love that insult. It really hurts when some nuffnut says that. You win at life. I wish I could be just like you.

Still waiting on a VVS reply, guess I have snookered him though….

John A Neve says:

03:12pm | 25/08/11

Steve @ 1429hrs,
Please tell, how is paying tax a super profits “socialism”?
I look forward to your response.

TheRealDave says:

04:09pm | 25/08/11

John - you are mature and educated enough to know that these idiots that scream ‘SOCIALISM!!!’ don’t actually know what ‘SOCIALISM!!’ is

Never underestmate the value of a good marketing team, plenty of proof in the pudding around here

Shooter says:

06:21pm | 24/08/11

Why does the Liberal & Labor party hand out welfare payments to the rich?

laborminion says:

02:50pm | 25/08/11

The Labor govment should triple the tax rate until BHP packs up and goes to some other country, that would show em!

Tony H says:

06:34pm | 24/08/11

Don’t forget one day he’ll be parachuted into a safe Labor safe seat, they’ll   lie their way into office again and then he’ll be put in charge of some finance related portfolio. Its just laughable.

Shane From Melbourne says:

09:22pm | 24/08/11

Umm…no. Maximizing profits is only one of their obligations. They also have legal obligations to ensure that company does not conduct criminal activity, complies with state OHS acts, various EPA and environmental acts as well as workplace awards and agreements that may exist. I think that Stan Darsh and Tony H have a simplistic view of a Director’s duties and responsibilities.

Reg says:

07:28am | 25/08/11

@ Shane

What has any of your rant got to do with a MRT…?

Of course they have to not conduct criminal activity and comply with OHS legislation…

But paying more tax is not in the shareholders’ best interests, therefore they should be opposing it. It would be derelict of them not to…

acotrel says:

08:09am | 25/08/11

@Stan Darsh
Do you believe that investing in your company to make it more competitive in a globalised economy,  to be ‘bailing out’ ? That’s the mentality which is destroying Australian industry.  It expresses our inability to address change !

Stan Darsh says:

09:20am | 25/08/11

@ actorel

Actually it is called a bad investment.

And I should know because I am one of many people who are rich from avoiding such bad investments.

JuzzyD says:

06:46pm | 24/08/11

Cause BHP does so much to have Fathers home with their kids, frowning on FIFO and investing in communities to make them livable, preferring fathers go home to their kids instead of in an ocean of dongas and all.

Damien says:

07:58pm | 24/08/11

A well-designed mining tax which eliminated inefficient state royalties and was not retrospective would have been a good idea.

but federal labor could not organise itself a root in a brothel (apart from Craig Thomson) so of course they butchered it.

RyaN says:

10:49am | 25/08/11

@Damien: maybe they were trying to lift their standards by electing someone who could actually organise a root in a brothel!

Ed says:

06:06pm | 24/08/11

Cause most people are lazy and want something for nothing…?

Jason Smith says:

06:32pm | 24/08/11

because they don’t own whats in the ground… tool

Tim says:

06:48pm | 24/08/11

Um perhaps because the minerals they’re digging up are owned by us?

jf says:

07:32pm | 24/08/11

Tim says: 06:48pm | 24/08/11

“Um perhaps because the minerals they’re digging up are owned by us?”

Yes. And BHP and all the other miners already pay us to access it.

BHP have invested massive amounts of capital to enable them to generate the revenue they generate. They pay huge costs, including resource royalties to various governments, payroll taxes, company tax, stamp duty etc… to remain operational.

They are resposible for the profitable investment of capital entrusted to them by investors including the little old granny next door (won’t someone think of her).

They have done this over decades, managing through lean times and rich.

The people who took the risk and invested in this company are entitled to be rewarded for that risk. I’m sure that all those people lining up for their share of the lucre now weren’t so quick to do the opposite during the lean times.

If you think that BHPs returns are to big, invest in it. It’s easy. It’s cheap and it’s, apparently, easy money.

MarK says:

08:26pm | 24/08/11

Tim and Jason are off to risk their own capital - cya guys later. I truly hope your mining venture goes well

Steve the Smart Investor says:

08:29pm | 24/08/11

Sam is right. 

However, They already do share the spoils The chances are, your superannuation funds hold shares in them.  But, instead of everyone bleating about it, how about you go and risk your capital and buy shares in them, or better still, risk more capital in starting up your own business, in a game where you’re not guaranteed on finding anything to market in the first place, let alone have any customers or be able to sell it at a good price, then have to plough back most of the profits into the business to find more projects to work on (at least in the early stages) - because that’s what mining companies do.

No takers ?  Didn’t think so.  So, why the hell should anyone who risks their capital to try and make money give some up to the bludging couch loafers who don’t have the guts to get up and dig a hole in the ground, let alone walk over to their PC and buy up through their online broker.  No, it’s easier for people to give them money because of the entitlement mentality, so that they can spend it on plasmas, ciggies and booze.

We already have a business partner who takes money and does no work, it’s called the Tax Office.

If you translated the above idea to ‘farmers’ (indeed, replace BHP with the word ‘farmers’) and the recent spikes in global food prices, farmers also risk their capital to try and find something to market, deal in commodities as well, may not have a customer to buy and therefore, are subject to the same kind of prevailing price fluctuations and conditions as miners, there would be uproar because of the little Aussie battling farmer. 

But hang on, going by the same logic, that same land belongs to all Australians and therefore all the food grown on that land.  All Aussies should have enough food to eat, yes ?  So the country should share in the same boom in food prices !

(How dare anyone make a profit ?!)

Tim says:

08:55pm | 24/08/11

The typical response I see, buy some shares. Yep already got plenty both personally and through my Super.
Doesn’t take away from the fact that these companies are majority foreign owned and that the current royalty system is unfair and allows the companies to wholly take windfall gains whilst the owners of the minerals, us, get shafted. A resource rent tax is much fairer and will smooth out the large peaks of the boom times, allowing us, the mining companies and the rest of the economy to have a more sustainable growth in the long term.

Gusss says:

10:43pm | 24/08/11

The problem for us, as the owners of the minerals, is the price we sell the goods to the miners are fixed in contracts over long periods of time and do not fluctuate to suit the current level of demand.

As it is now, when the iron ore price triples, the mining companies make super profits and we get the same old royalties along with high interest rates, a high exchange rate and higher inflation.

If the miners had to pay the market price to access the minerals the economy wouldn’t be out of wack like it is now. Super profits don’t exist when a market is competitive.

As the owners of the minerals it is foolish for us to sell our assets to the miners below the equilibrium price.

Kipling says:

06:48am | 25/08/11

Because that is what paying tax is all about.

Don’t you pay your way?

Cobra Kai says:

07:33am | 25/08/11

@ Guss - take that up with your state government… that’s whose responsibilty it is.

@ (Rudyard) Kipling - BHP et al pay billions in tax, billions with a B. To say they don’t pay their share (when you probably pay scant little) is pretty offensive,

But hey, since you can’t defame a corporate entity, go right ahead.

acotrel says:

07:55am | 25/08/11

@ Ed
‘Cause most people are lazy and want something for nothing…? ‘

Looks like BHP don’t intend ‘to share the spoils’ with the workers who actually did the work to make the profits? Lazy bastards all of ‘em ?

Michael says:

10:39am | 25/08/11

Wages acotrel, that’s sharing the wealth, dividends on shares or even higher share values, that’s sharing the wealth.

Super contributions, that’s sharing the wealth.

10 billion in taxes, that’s sharing the wealth.

I want a share of your wealth acotrel, all i’m prepared to do to get it is bitch about it on the punch, how do you think i will go?

Andrew says:

12:52pm | 25/08/11

Should AUSTRALIAN’S get a better share of what we own, I don’t see why not.

andye says:

02:57pm | 25/08/11

Under the famous marxist Sarah Palin, the communist state of Alaska made the oil companies pay every single Alaskan a few thousand bucks a year. Still does.

Furthermore, that filthy leftist Palin also paid a one off cash payment to every Alaskan to help with heating bills.

This is clearly wrong and dirty dirty communism. Why should Alaskans benefit from Alaska’s natural resources? Same with Australia. Australia’s natural resources (during this unprecedented boom) should be for the benefit of mostly foreign owned mining companies. Copmpanies who I am sure will invest the money in our future in the selfless way massive faceless corporations do things.

stephen says:

08:13pm | 24/08/11

That point reminds me of one of my bosses, from long ago.
She pointed out - after three of us employees wanted a pay-rise - that she paid so much in wages, so much in power bills, so much in insurance, security, technology, (‘on a farm’ ? ‘Shut up and listen.’) and on pesticides.
Of course, whenever you get this, one must be fair, and then ask what the net-profit was ... just to get a fair distribution curve.
Point is, never get the bad news without the good, cause it’s the ‘good’ which might change the story from need, to greed.

TheRealDave says:

08:41pm | 24/08/11

and you honestly think companies like BHP pay anywhere near the amount of tax they are supposed to?? They have far better tax lawyers and accountants than the bloody ATO does!

LOL!

Bend over people!

Tony says:

06:26pm | 24/08/11

Maths not your strong suit eh Pat?
When BHP make more profit they do pay more tax, thats how paying a %  works.

jf says:

06:48pm | 24/08/11

I can’t for the life of me understand how people are not investing in BHP, particularly if they think that they are earning far more in profit based on the capital invested and on a risk-weighted basis.

DocBud says:

06:53pm | 24/08/11

Quite right, Pat. They are such a bunch of swines; investing millions in exploration and developing new mines, pay taxes and royalties, employing people who pay taxes. If you don’t want the bare minimum, get off your backside and earn a good, honest living like the miners (who have a large chunk of their earnings siphoned off by the unions in order to pay the union bosses fat salaries and ‘perks’).

Kurisu Sonsaku says:

07:19pm | 24/08/11

Why should BHP pay more tax, are you drunk or ignorant????

They have payed corporate tax like every other business, payroll tax like every other business, royalties (unlike every other business), their employees have paid income tax.

Ordinary Australians invest their money with BHP, Australian super funds invest with BHP, and, contrary to the greens 85% of mining companies are not owned overseas. That is a steaming crock of shit.

According to your reasoning any successful, publicly listed company should cough more because they are successful, using your perverted logic they should be recompensed when they run at a loss.

No wonder you’re still on the dole.

Paul Murray says:

06:25pm | 24/08/11

The golden eggs are in the ground and are property of the commonwealth, which provisionally *allows* concerns like BHP to mine them and sell them for a profit. We - Australia - have every right in the world to to permit those minerals to be taken from our soil only on terms that suit us.

jf says:

07:23pm | 24/08/11

“We - Australia - have every right in the world to to permit those minerals to be taken from our soil only on terms that suit us.”

True. And we do in the form of royalties. If this government was even remotely competent it would be now have negotiated with the states for a fairer and more efficient way of charging mining companies for access to state resources.

Sadly, they’re not.

stuart says:

07:32pm | 24/08/11

Exactly Charles…...There is a whole lot of people here that were sung about in this ballad in 1928:  http://www.youtube.com/watch?v=8uKbIkYGsIg&feature=artist  who think the world owes them a living.

Moby says:

11:55am | 25/08/11

@ Paul Murray

No, the ‘golden eggs’ in the ground are NOT property of the commonwealth as such, but are property of the states in which they lie.  Hence why there is a state royalty amount paid by the relevant people, and potentially one reason the super profits tax has stalled, as there are potentially lots of constitutional law issues arising from such

Mick says:

01:03pm | 25/08/11

If mining was that easy, the government would start a mining company.  It is actually hard work, and the majority or resources in the world can not be economically mined.  Without the mining companies, all that dirt you are so protective about is worth… dirt.

Tim says:

08:42pm | 24/08/11

Except for the fact that the majority of these mining companies are owned by overseas investors. The super line doesn’t wash.
We own the minerals in the ground and should make sure that we get the best return on a one off deal.
A resource rent tax takes into account varying commodity prices and ensures that our country benefits from these boom time windfall gains. It is much fairer than the current royalty system, both for miners and our country.

TheRealDave says:

08:48pm | 24/08/11

Checking my super last week Tony….whilst BHP might be doing well apparently my super isn’t…..by the looks of it, despite record profits in the banking and mining sector, I was part of the ‘panic selling’ and ‘mark down’ of the past few weeks…..I hate it when I do that….oh well, another 27 more years of work to go - unless the Libs get in again and raise the age limit - again….surely enough time to rebound from those record profits….

Steve the Smart Investor says:

07:44am | 25/08/11

Tim, how about you apply the logic to farmers.  Parmalat, anyone ?  hush-hush Chinese investment into massive tracts of arable Aussie land, anyone ?  Where are all our food (and I don’t mean Woolies / Coles) and Ag companies ?  Answer, they got bought out and shipped off, just like ‘foreign investment’ in arable land.

By the same token, WE own all the food above the ground too, as well as all the stuff that grows in it (carrots, potatoes etc).

Oh no, can’t hurt the little Aussie battler, but can when it’s the Big Australian.

MarK says:

08:11am | 25/08/11

I can’t wait to see Tim criticise the Labor government for rewriting and relaxing the foreign investment rules that allows overseas investors to buy land more easily.

Tick tock

Tim says:

09:00am | 25/08/11

Yep MarK,
that was a horribly bad decision at the time although I can see why they did it. Artificially propping up house prices is not a good idea in my opinion.
If you haven’t noticed I don’t like any of our political parties and that makes it easier for me to judge each issue on its merit.
Perhaps you should try it some time?

MarK says:

11:55am | 25/08/11

Oh I judge each on its merits.

All the time.

I just like pointing put stuff is all. As do you.

Maybe you would like to admit it sometime too. Seen so many of you “impartial” judges in my time now as to lol at you. You and economist make a good pair actually.

Tim says:

12:08pm | 25/08/11

You must be in some sort of symbiosis with Tony Abbott then MarK.
But hey, I suppose it’s possible.
And yeah Economist makes some good posts but he’s a bit too Left for me.

PeteD says:

03:28pm | 25/08/11

Does it matter that the majority of the BHP profit may not have been earned in Australia from Australian resources, when considering that the majority of shareholders aren’t Australian?

Rolling in it says:

11:44pm | 24/08/11

“Come up here and talk to some non-mining locals, and see how much sympathy there is for the “poor” miners.”

Pure, immature, envy. Some non-mining locals want what the miners have but are not prepared to work 12 hour shifts and live out in the bush or spend nights away from home to get it. Their constant bleating is like water off a duck’s back, cannot really hear it over the sound of the finely tuned engine of the prestige motor, the crashing of the waves outside the beach front mansion or the laughter of friends enjoying fine, expensive wine.

“These blokes get conditions that others wouldn’t ever dream of in a million years,”

Supply and demand, IHP, supply and demand.

Kipling says:

06:46am | 25/08/11

LOL right at ya Rolling….

Workers in the mining industry also demonstrate little or no regard for their “fellow” Australians. Every couple of twelve hour shifts done or extra days worked equates to yet another job someone could have filled, but then our highly esteemed hole diggers would be a few bucks shorter at the end of the week.

What scabby bunch…

I hate pies says:

07:59am | 25/08/11

You seem to have missed my point Rolling. It’s nothing to do with envy; my point is that these blokes have absolutely nothing to complain about when it comes to their conditions, and their push for even better conditions is driven by nothing but greed; the locals understand this. They are over compensated for the time they spend away from home and their skill level. It is absolutely supply and demand.
Non-mining locals are prepared to make the sacrifices, they just can’t get the foot in the door.
I’m guessing you’re one of those that thinks they earn more than they really do, and you’re up to your earholes in debt. Be careful, because when the boom is over you’re likely to end up with nothing. Make the most of your good fortune and invest your money wisely; don’t waste it on SS utes and jetskis.
By the way, I’m one of the rich miners we’re talking about - I just recognise the quality of the wicket I’m on, and feel very fortunate, not entitled.

Rolling in it says:

08:01am | 25/08/11

Most miners would be happy to do no overtime, Kipling, they don’t need to and would rather be fishing or whatever else they do for relaxation, but there are too many whingers sitting on their backsides waiting for the mining boom money to come rolling in without effort rather than being prepared to get up and do some work.

Your name calling hurt a bit so I went and had a look at the bank balance, I feel better now.

DocBud says:

11:14am | 25/08/11

People are worth the value that others place on their services. If you under sell yourself for fear of appearing greedy the only person who benefits is the person who gets your services for less. I’m happy for proper negotiations and have always believed that if people strike then the company should have the right to fire them.

Locals can get jobs, it might just require them showing a little iniative and being patient as there is a limit, for safety reasons, as to how many cleanskins can be taken on at anyone time.

Mining has been my life for 34 years, through good and lean times, I reckon it’ll see me through to a self-funded retirment.

Kipling says:

06:57am | 25/08/11

Wow, I think upon re reading the article it actually articulates very clearly why, specifically BHP should not be proud of THIS PARTICULAR recent profit….
Consequently, the scatter gun statment “a successful person or company should hang their heads because of their success.” is a load of crap….
It is demonstrative though of an overall attitude, the wealthy have some deserving right, regardless of how that wealth was accumulated or who was exploited, hurt or stepped on, yet the poor deserve all they can get. That pretty much sums up this comment…
It is ironic that pointing out a very simple home truth about fairly paying ones way in this country is seen as “fostering a belief of entitlement without hard work…” That is pretty much what BHP shareholders and executive are doing though…
The resources are (fairly constantly reported as) being owned by Australian’s. The article highlights the myth there in that the majority of mining companies are foreign investors. This article further highlights that BHP, whilst being partly Australian owned, does not do anything significant to support Australian industry and, consequenlty, the Australian public. And you blat on about entittlement.
BHP and ALL mining interests have a responsibility, one that is not being met, predominantly thanks to policitical short sightedness in deregulating the industry and throwing the doors open to foreign investment without an effective long term plan for the benefit of Australians… That’d be the people who have an entitlement to earn something from the resources in OUR ground. If they must be dug up, at least a fair share for all.
Oh, and by that I mean money into the Australian economy, that benefits all. Just like taxes. No handouts there really.
No BHP do not have that much to be proud of.

Cate P says:

01:44am | 25/08/11

Two equally nonsensical statements.  You could replace Craig Thomson as chairman of the Economics Committee.

Mayday says:

07:57am | 25/08/11

Old thinking Union, the old collective bargaining tool which became redundant when individual contracts came into place.

The mining industry in particular still operates with the majority of its workforce on individual contracts.

The general population no longer need an uneducated mouthpiece to communicate their needs, the old Us and Them tag is well worn and no longer applies.

jf says:

07:25pm | 24/08/11

So how much tax do they pay not Brian? Or is any amount of profit just to much for someone who would rather take everything and risk nothing.

Kurisu Sonsaku says:

07:45pm | 24/08/11

What!!! you think they get to dig this stuff up for free????

Are you friggin deluded, they pay multiple taxes plus royalties, their employees pay income tax.

Sweet cheeses on a biscuit you clowns want someone elses money without the effort.

stephen says:

07:54pm | 24/08/11

Many spurious defences are available to Miners, but the one which is in favour now is this : the companies have invested huge amounts of money, labour and time in finding the minerals, setting up infrastructure to dig it up, and paying their staff a good wage.
So far, so good, but their puppets say now that the minerals are not ours, i.e. the local’s.
The wealth in the ground, they say, is theirs because they have taken the risk ; furthermore, Australians do not own the ground ; the Company does.
Now I’m not sure of the legality of this, but this Government should still maintain that a fair tax, a tax that bears in mind and fortune the $22 billion in net profit which BHP has pronounced, should be paid.
And the matter should not even get to a Court ; this Government should make it known that it can make it very difficult for overseas companies if they wish to continue to rape our resources.
Other countries, if enticed, may wish to dig ; with new contracts and conditions which favour us more.

Rev says:

08:03pm | 24/08/11

Why aren’t you out there with a shovel then, Brian?
Oh that’s right, because it isn’t that easy.
Mining companies invest (read: risk) billions in infrastructure, and by assuming that risk, aim to make a profit. 

You further point out your idiocy by comparing the mining boom with the availability of resources.  Sit down, perhaps crack a basic high-school economics text and look up scarcity.  And if you’re wondering where the money has gone, call up your super fund and check out your portfolio composition.

St. Michael says:

12:23am | 25/08/11

@ stephen:

“And the matter should not even get to a Court ; this Government should make it known that it can make it very difficult for overseas companies if they wish to continue to rape our resources.
Other countries, if enticed, may wish to dig ; with new contracts and conditions which favour us more.”

Here’s the problem with your thesis: the moment the Australian government does this, China and India will say “Okay, fine.  Oh, hey! I see Canada, South Africa, hell, even Nigeria are offering us better terms of trade, and we don’t have to deal with idiot unions or their idiot governments over there.  Your stability of government is nice and all, but we can spend less on guns, compounds, and bribes in those countries and still turn a better buck.  See you later.  Enjoy your mineral reserves.  You’ll have them alll to yourself, assuming you can either rebuild your manufacturing industries to compete with us or convince the unions to take a pay cut in order to make you competitive in the real world.  Call us back when you’re prepared to be reasonable again.”

A transaction is a two way street.

Kipling says:

07:06am | 25/08/11

Ignorance Brian, that is why.
Of course the same level of ignorance will be demonstrated when we have no more resources and are left with no money, less jobs and some bloody big holes to fill in….

Companies will not go overseas either, given the huge investments they have made. What a laugh.

Companies will ultimately toe any line drawn in order to get their hands on the money to be made. Let’s be honest here, even an increase in taxes will not erode a whole lot from huge profits. Companies know this, but use bluster, threat oh and surprise surpries that old conservative favourite, fear to get their way. All by buying expensive advertisments on television, which they will no doubt claim back as a business expense. What’s that you say? Does this mean we pay for their advertising against OUR government implementing a new tax on THEM for OUR benefit…. Yeeeeeesssssssssss it does….

ROFLMAO

How sad the ANZAC legend was worth nothing more than us becoming a country of idiots…

AdamC says:

09:26am | 25/08/11

Yes, and not to mention the 30% of the profit that goes to the Feds in company taxes.

There is a class of people in the community whose main intellectual interest in life is identifying productive, profitable sectors of society and plotting how to loot and despoil them. That class of people tends to include unionists like the author, and their lackeys in the Labor party.

MD says:

08:51am | 25/08/11

Funny you mention that, take a look at the thousands of kilometres of rail that has been built with mining company money, Port upgrades, road upgrades…

Bob Stewart says:

08:54am | 25/08/11

Most of the good ideas come from top of the head of just ordinary folks with imagination rather than that big hole that wobbles up and down at the bottom of it.

The energy demand of the future has been sadly ignored. Domestic need will not expand as fast as industrial and transport. With that at the top of my head as an engineer paid to think, a constant reliable source of large quantities of heat to produce steam to drive existing technology is obvious to maintain the grid 24/7.  If nuclear to provide the heat is not yet an acceptable option and coal is for other nations to use..

Domestic consumption. (2004) about 60% of the grid. Industrial is expected to overtake domestic by 2025 and greater if our mineral ore exports are reduced by processing to value added stock. The notion suggests that the domestic solar array plan with its incentives should be continued as the only practical means to allow the industrial expansion to begin without huge infrastructure changes. Solar adds to the grid during the day and draws on the grid at night. It makes more practical sense than wind, wave kinetics,biogas etc. in that order.

But hot rocks has been largely ignored as a 24/7 heat source to produce steam for existing generator technology. However, there is another dimension using the thermal heat for a different energy source.

At the base of Mt. Makiling near Laguna de Bay in the Philippines there are 2 x 25 Mw Ormat generators driven by pentane to impinge upon turbine blades rapidly evaporated by hot brine from the deep. The heat is sourced from the same geothermal field as 600Mw produced by steam and conventional generators over many years. As the pentane expends the energy and liquefies it is pumped back into storage in a closed circuit system and the now cooler brine is returned to the deep. Interested readers can Google Ormat

Randal says:

12:17pm | 25/08/11

Great idea Josh, and lets just not limit this to mining companies, lets make all businesses who run a successful business model and return strong profits invest that back into industries that we know don’t make any profits.

Why should all this investment dollars be wasted making healthy returns from industries that offer the best returns, whilst other “Green” industries such as wind, solar, thermal etc receive no money because they fail to return profits.

This ridiculous notion that the world has had for centuries of companies and individuals investing in areas of the economy that they believe will return profit simply has to stop. It’s selfish and instead the government should regulate to make them invest in “Green” industries they know nothing about, and are nearly certain to make a loss.

How dare these companies spend their money where they want.

Keep up the good work Josh, as it is people like you that will lead Australia out of this resources boom, and quite rightly have us catch up the rest of the western world on the brink of economic oblivion.

bananabender says:

10:22pm | 25/08/11

@Bob Stewart.
for an engineer you don’t think much.

If you thing hot rocks is great technology for Australia I suggest you talk to some geologists. They will soon explain to you how totally impractical the idea is.

Josh says:

11:08pm | 26/08/11

Randal,

Was offering the option as an alternative to the ‘supertax’ option. Would you rather the govt invest that money in infrastructure or a private company?

Every company pays tax Randal, and is therefore contributing to society.

These companies have the ability, knowledge and buisiness models to be able to invest in infrastructure far more efficiently than the govt. and hence provide a ‘greater contribution’ to society than just paying tax. Win - Win.

Whats your beef with that?

Andrew says:

12:54pm | 25/08/11

Listening to too much Aliar Jones i see.

Josh says:

11:17pm | 26/08/11

Are you suggesting Australia is closer to China than Mongolia?

Fendo says:

12:39pm | 25/08/11

Oh Fred, it is sooo easy to start up a mine from scratch.

Ridiculously so. All ya need is a shovel, a ute and a boat. Too easy.

Herp Derp.

bananabender says:

09:38pm | 25/08/11

I suggest you check the facts before commenting.

Billiton made a reverse takeover of BHP and installed a South African management team. BHP Billiton is now a London based company with an Australian subsidiary.

BHP Billiton is owned by two totally separate listed companies that operate as a single entity.

a) BHP BIlliton Plc based in London

b) BHP Billiton Pty Ltd based in Australia. 

BHP Billiton Plc owns the vast majority of BHP Billiton.  So Bob Brown is correct.

Max, of Rocky says:

03:04pm | 28/08/11

Yeah right,

you are forgetting something here, BHP has paid ROYALTIES to state governments from day # 1. 

They pay royalties on everything they sell, to each state, before a profit is made on their investments.  They pay royalties when they do not make a profit.

See link below

http://www.queenslandeconomy.com.au/taxes-royalties-generated-by-resources
extract:
“In 2010-11, the QRC estimates the companies and projects outlined in resources operations will contribute approximately $3.2 billion in royalties”.........

IN QUEENSLAND ALONE,  WA is similar if not larger.

The Labor state governments have been squandering this money on all sorts of things including pork barreling for election after election.

Suggest this also:
http://www.miningaustralia.com.au/news/carbon-tax-to-cost-qld-1-billion-in-lost-royaltie

also on:
Taxation and Royalty Revenue – 2009-10 to 2014-15 (Qld Budget)

http://www.budget.qld.gov.au/budget-papers/2011-12/bp2-appendix-c-2011-12.pdf

When you don’t know the whole story, your opinion is flawed.

Seek truth and facts, not verbal half truths.  B-)

Jim says:

12:19pm | 25/08/11

That’s a very narrow and idealogical view David.

Yes - we do dig up the minerals and export them.

Why? Several reasons;
- To turn the concentrates, iron ore, bauxite etc into metals requires electricity…a LOT of it. We physically don’t have the ability to generate what is required unless we build a shitload more power stations, and that ain’t going to happen.
- Operating costs; compared to the rest of the world (not just third world as the unions will claim), the $/tonne to produce here is obscene, and the output even more embarrassing. This is due to decades of union grubs screwing over industry.
- Location location location….look at every smelter and refinery build last century. All initially in remote locations then had a town built around them. Of course that’s going to bring out the NIMBY’s and people raking for payouts. This alone has closed several plants.
- On-costs; besides the high salary someone in that type of industry will be on, the insurance costs are extreme, the costs to meet regulations, the taxes, compliance costs etc…all amass to push things offshore.

At the end of the day it is a lot cheaper to mine minerals, export the raw material to China, and buy it back as washing machines than it is to produce anything from scratch here.

That is not capitalism, that is consumer choice.

MarK says:

12:23pm | 25/08/11

You could always leave the country.

Plenty of autocratic rule in the middle east for example. Or you could go to Chavez country for a bit of socialism.

Plenty of choices.

Don’t feel sick Dave I hate to see you like that. I encourage you to make a real sea change and leave.

LC says:

03:50pm | 25/08/11

But hey, if you don’t like it there is several socialist/communist countries out there for you too chose from…

Davo says:

01:09pm | 25/08/11

Exactly Randal. The last thing this government needs is more tax revenue. All those folks on this board calling for the likes of BHP to pay more tax, do you think it’s going to end up in the pockets of the disadvantaged or disabled? It’s going to end up in roof insulation and digital tv boxes.

If they government had half a clue they’d be investing money from our Future Fund (if there’s any of it left) into our most profitable companies such as CBA, RIO and BHP.

Let me be clear - big government does hopeless job at redistributing wealth, and as the Thompson saga has shown us, Union/Labor hacks with a bit of money aren’t to be trusted.

All Governments need less money to play with not more. Look how dependent people in our nation have become on Government to solve all our problems. Just look at the disaster the big government experiment has become in the US.

As Reagan famously said: “Government is not a solution to our problem, government is the problem.”