Xstrata is just playing chicken with the Government

Dave says:

02:42pm | 04/06/10

Gold star to Bruce, who would vote against a levy on billionaire mining companies that would cut tax for all Australian businesses, and mean a $450 cut for all citizens. Why do people vote against their own interests for purely partisan reasons>

Confused fuddy duddy says:

03:35pm | 04/06/10

@ Dave 02:42pm. I’m a small business, but like thousands of others I am not incorported, ergo I pay personal income tax at personal income rates. How does a reduction in Company tax rate help me, or any of my non incorporated business peers. This is NOT a tax cut for all Australian businesses.

Bruce says:

05:43pm | 04/06/10

Dave: That depends on mining companies remaining “billion” dollar entities and not having alternatives in other tax friendly countries. Whilst none of us experts knows the final make of this tax, if I we the mining companies, the first thing I would do, is work out how to avoid or minimise my tax liabilities. All BIG companies do this. It beggs the question “are the mining companies going to work or invest harder so they can pay more tax ?”

Wayne Fehlhaber says:

05:59pm | 04/06/10

Bruce you are spot on , it’s a dumb tax . Primarily , it is designed to refill the nation’s coffers plundered by Rudd/Swan during Krazy Kev’s attempt to buy back his depleted popularity.
Tony Maher would be in difficult dual roles here , as a mouth for the unions , to soothe mining workers flayed nerves , as mouth for the A.L.P. , to defend the lunacy of a RSPT being foisted on the mining industry by the Rudd government , putting at great risk 3250 potential jobs.
What is passing strange , is that a Labor government would seek to implement a tax on an industry which is currently sustaining the wealth of a nation in acutely difficult economic times.
What also is passing strange , is that a Labor government sees fit to put at risk 3250 potential jobs that would be quickly snapped up by workers waiting to enter the industry’s workforce- is plain cruel to these workers , their families and communities.

Evan Findlay says:

07:19pm | 04/06/10

Correct Wayne, “Potential” jobs. The jobs don’t actually exist as the mines aren’t operational. Reporting on Thursday morning on Sky news was that Xstrata had no intention of beginning mining. Just another lie by the mining industry to push their case.

Similar to Andrew “Twiggy” Forrest stating that investment will be destroyed by the tax and in the following sentence stating that he had overseas interests already jockeying for his mines if he could not obtain funding. I suppose in the scheme of things Twiggy just not as big as he thinks he is. Twiggy also stated that by not progressing with his mines and the subsequent loss of “potential” jobs,  jobs that don’t exist, his share price would take a hammering. In the Courier Mail business section dated the 20th May, Deutsche Bank analyst Paul Young stated “that putting Solomon and the Western Hub on hold was not that significant to our valuation on Fortescue.”  RBC Capital Markets Chris Drew stated “Importantly, they’re continuing with the Chichester Hub. If they were genuinely concerned with the implications of the tax, they might of considered putting that on hold” It seems that Twiggy, like Xstrata like to mislead the Australian people in order to continue ripping off the Australian shareholders of our natural resources.

annie says:

09:02pm | 04/06/10

dont forget for mining companys to make a profit it may take up to 10 years of planning and building infrastructure and wages costing many millions before they even start making and money. so consequently they have a heap of catching up to do and an extra 40 percent tax on profits over 6 percent is a really big deal and will defer or cancel planned projects.

Jack says:

12:56am | 05/06/10

Xstrata is the obvious choice by the Mining Council to make these blustering threats because they are not answerable to the ASX.  The others must notify the ASX of any changes which as far as I can see, they haven’t been rushing to do.  Maybe, just maybe,  they are worried that other countries will like the idea and follow suit.  Less tribalism and more observation of facts might be a good idea.

Swinging Voter & Former snag says:

07:14am | 05/06/10

@ Wayne Fehlhaber, correct, even if this is a smart tax & exactly the right thing to do for the industries future.

To be introducing it at this time of market jitters, is economic lunacy of the highest order. Guaranteed to damage our economy & lose jobs.

These fools say that Xstrata is an evil, Multi National company as part of their justification for suggesting that Xstrata is bluffing.

Well HELLO fools Xstrata can take their capital to other countries where the Tax/Regulatory regime is less onerous.

Wayne Fehlhaber says:

09:20am | 05/06/10

Evan Findlay :  Tell that interpretation to Queenslanders and West Australians Evan , i’m sure they will give you a ” warm welcome “.
Potential jobs obviously mean little to you and mean nothing at all to the Rudd government in this instance.
Project suspensions , halted investment and exploration are current , and as sure as night follows day , cancellations and investment withdrawal from the resourse industry will follow if the RSPT in it’s current design , is foisted on mining.

Steve says:

10:36am | 05/06/10

@Jack

“Xstrata is the obvious choice by the Mining Council to make these blustering threats because they are not answerable to the ASX.”

The Xstrata announcement was made as part of their continuous disclosure obligations to the London Stock Exchange. There would be severe penalties if they had failed to disclose, or if they mislead the market about the nature of the decision or the reasons. They cannot hide behind parliamentary privilege. Therefore, you can be fairly confident that they were telling it exactly like it is.

Adam Diver says:

07:48am | 05/06/10

” Xstrata’s been sitting on the lease in the Surat Basin for many years” but “If Xstrata doesn’t want to develop that resource, there are plenty of others who will.”

Perhaps I don’t understand but if Xstrata have a lease on the coal rich area eactly how are others going to mine it?

Beagle says:

04:45pm | 04/06/10

or the conservative rabble?

persephone says:

02:53pm | 04/06/10

So look at what the economists and other experts are saying.

And look at the established, verifiable evidence - one bit of which you’ve referred to, which is that all parties agree royalties should be replaced by a tax on profits.

shane says:

03:30pm | 04/06/10

Yes, there is some information which can be gleaned from the media and the more “rational” statements of interested parties. And you are right in suggesting that experts, economists, treasury etc are probably the opinions worth trusting, and I do.
From a political perspective though, the massive amounts of spin and lies being thrown about obscures most of the intelligent thought on the issue. Add to that, the media is only interested in reporting extremes (on both sides), meaning that the average person who probably doesn’t think much about the details of a mining tax absorbs information that even if true, is in the “extremely unlikely to occur” catagory.
Lastly, its seems to me that economists, government beureacrats such as those from treasury, and people who DO probably know are dismissed by the right wing as “academic”, “removed from the real world” etc etc. Derided, insulted and discounted as leftie dreamers or commies (somehow). Perhaps anti-intellectualism, I don’t know. It seems to me there is a growing sense in society that “experts” are lying. Climate change, mining tax, evolutionary biology, pick your issue.
Its sad, pathetic, and deeply cynical on the part of both the public, the media, and those seeking to gain from the loss of public confidence in any largely decided issue where their is a large and powerful vested interest attempting to maintain the status quo. Climate change is a good example.
So, whilst I agree (at the risk of sounding like Fox Moulder), the truth is out that, all the bull***t obscuring the debate distracts from a truth which is consequently found only by a minority who look. The public at large swallow the sound bite of their affiliated party and rant accordingly on these sites.
Obviously you are likely in the “think” catagory persphone.

Diamantina Dick says:

03:34pm | 04/06/10

Sorry Pers but it’s not about the tax anymore. The way it was conceived and has entered the public domain has ensured it never would be. The process is now the issue and there is only one person to blame for that and it’s not Tony Abbott. Suck it up.

persephone says:

04:16pm | 04/06/10

DD

nonsense.

There’s been virtually no argument about the process, the arguments are all about the tax.

Anyway, that has nothing to do with Shane’s points about the difficulty of wading through a debate cluttered with vested interests and hidden agendas.

I would suggest a mixture of Occam’s razor and the “Who benefits?” rule.

Occam’s razor: is it simpler to believe that the government is trying to ruin one of Australia’s major industries or is it simpler to believe that a major industry would like to pay less tax?

Who benefits: who benefits most by creating confusion and uncertainty about the tax? The government, who wants the Australian public to embrace the idea? Or the miners, who don’t want to pay it?

(Of course, I exclude from this process the Liberal spruikers on this site, who are incapable of doing anything other than repeating whatever argument Tony or Joe or Andrew R has just come up with).

Super D says:

04:45pm | 04/06/10

Royalties should be replaced by a tax on profits eh?  Perhaps you want to think this one through a little.  What you are essentially arguing is that if the miners don’t make any profits the Australian people don’t get paid for their resources.  Remember these are finite, irreplaceable resources and here you are prepared to give them away for free.  This is the problem with the replace royalties with a profits tax argument.  It’s far more elegant on paper and the miners would actually like it, though not the oppressive regime proposed, but this doesn’t address the Australians getting paid for their finite resources issue.

As it stands we get a fixed price or a % of revenue for our resources.  I’m willing to argue the fixed price or % isn’t high enough.  There isn’t any room for this argument though, you either accept this stupid proposal or you’re on the side of the miners.

If a miner can’t pay the royalties and then make a profit then thats their business, the resources are still there when times change and they can be extracted profitably. 

This is exactly the same sort of rhetoric used on the CPRS which was another nonsense regime.  We had to accept it or we hated the environment.

The fact that economists and experts love it just shows they should get into the real world where investment decisions are made.  Talk about clueless.  Lets not forget, the insulation program looked really clever on paper too.  It seems to me that the boffins in the treasury know as much about mining as the greenies at the department of environment did about roofing insulation.  I suppose all the warnings about the dangers were just a scare campaign from the heavies in the insulation industry?

Diamantina Dick says:

05:05pm | 04/06/10

“There’s been virtually no argument about the process, the arguments are all about the tax.” Not on the street where I live.

luke09 says:

06:19pm | 04/06/10

This is what the government’s own expert super fund manager just said reported by ‘the australian’.

David Murray, the chairman of the government’s superannuation investment fund, said the “tax has to be changed or abandoned” as it contained “several significant flaws”.

“If we can’t achieve a design that does not penalise the existing projects, that’s a sovereign-risk issue and a design that does not discriminate between recurrent spending and long-term inter-generational wealth creation,” Mr Murray was quoted as saying by the Business Spectator in an interview.

“If those things can’t be done, the tax should be abandoned.”

It seems, the more the details of this tax is examined, the more flaws are found. It is a pity the flaws aren’t diamonds, then this tax could pay for itself.

Evan Findlay says:

10:06pm | 04/06/10

Diamantina Dick, I googled RSPT and sovereign risk. What you failed to say is that a majority of those articles debunk the claim that the RSPT is a sovereign risk. In fact the more accredited sites like Economic outlook firmly agree with the tax. Even the Australian tabloid has an article that suggest’s that the correlation is unjustified. Nice try. More scaremongering.

persephone says:

07:37am | 05/06/10

Super D

yes, that’s what the miners would prefer - as they have made clear on multiple occasions now - and what makes the most sense.

Firstly, royalties vary between state to state and are distorted in many ways - some states use them as a competitive advantage, as a way to compete for business from other states, some states use them as a revenue raiser.

If you’re planning long term, as miners do, then royalties create uncertainty.  They are far more likely to change on a budget to budget basis than a profits tax is.

Secondly, royalties are charged from the second a miner digs something out of the ground, regardless of the economics of mining that particular commodity or whether the miner is making a profit or not. So some minerals which could be mined - at a marginal profit - aren’t seen as desirable, and mines which don’t make enough profit to deliver a return when royalties are factored in either don’t start up to begin with or are abandoned when there’s still a resource there to be exploited.

Australians will also get a fairer return (on average) for the resource. At present, it doesn’t matter what iron ore is selling for, the state gets the same royalties regardless of whether it’s selling for $20 a tonne or $120. Yet the pressure on the states to provide infrastructure in boom times is far greater.

If the government, economists, and miners all agree that a certain course of action is desirable (and in this case, that applies to the idea of replacing royalties with a profits tax) chances are they’re all right.

Diamantina Dick says:

04:12pm | 05/06/10

Evan, it’s certainly out there as an issue eh!

Chewy says:

01:38pm | 04/06/10

On further reflection perhaps Tony just wants a senate seat…

Diamantina Dick says:

03:27pm | 04/06/10

Super D,

We are already in sovereign risk territory, I’m sure you meant FURTHER INTO sovereign risk territory.

And Tony Maher, here are the facts of life; Money Talks, Bull$&!# walks.

All those advocating this tax should understand, it’s not about the tax anymore, sorry. Perhaps it never was.

persephone says:

04:19pm | 04/06/10

Oh dear.

I suggest some of you guys get your head around what ‘sovereign risk’ means.

In most countries, it means your mining operation is in danger because the military is about to take over the government and take control of all assets.

Unlikely to be happening here soon.

(Mind you, much more of this silliness from the miners and I’d be sorely tempted…..)

persephone says:

04:22pm | 04/06/10

OK, here’s a definition:

‘sovereign risk   Definition Probability that the government of a country (or an agency backed by the government) will refuse to comply with the terms of a loan agreement during economically difficult or politically volatile times. Although sovereign nations don’t “go broke,” they can assert their independence in any manner they choose, and cannot be sued without their assent. Sovereign risk was a significant factor during 1970s after the oil shock when Argentina and Mexico almost defaulted on their loans which had to be rescheduled.’

Be fascinated if someone could explain how that fits with what’s happening at present.

Diamantina Dick says:

05:04pm | 04/06/10

The fact that Financiers do not appear to value the Rudd Government promise to refund 40% of failed projects appears to fit.

Diamantina Dick says:

05:53pm | 04/06/10

Australia only Google search “RSPT Sovereign Risk” returns 15,100 results in .25 seconds.

The horse has bolted, you can shut the gate now Pers.

TC says:

07:14pm | 04/06/10

Here’s my definition for you Pers.

Sovereign Risk:
A perceived risk resulting from self interested national leadership changing the risk / reward relationships on your investment after you have done the due diligence, planning, budgeting and investing because you have been successful.

Super D says:

07:34pm | 04/06/10

Ok not wanting to quibble but the definition you are after is country risk.  Sovereign risk is not the same thing though in general usage the two are interchangeable.  From wikipedia”

“Country risk refers to the risk of investing in a country, dependent on changes in the business environment that may adversely affect operating profits or the value of assets in a specific country.”

So lets all recognise that this ill founded tax is amping up the country risk and even Persephone will be happy and may even concede that the RSPT falls well within the definition….

persephone says:

07:41am | 05/06/10

DD

just because a lot of people are being encouraged to misuse a term does not change its meaning.

Please define what you mean by ‘sovereign risk’ and let’s see if that aligns with any of the definitions of the term as it is properly used.

If you can’t do this, work out where you got your understanding of the term from and whose interests it is in for you to misuse it in this way.

You’re being played like a violin.

luke09 says:

01:38pm | 04/06/10

Maybe union members should start a new union to protect union members from union officials threatening future jobs.

dovif says:

01:55pm | 04/06/10

Of course Tony is just looking after himself, does anyone really thinks he looks after the workers?

When does the next safe Labor seat opening up?

Any year 9 economics student will tell you Supply and Demand for investment can be plot on a graph, if returns are lowered, the demand for investment is reduced… maybe Henry need to go back to read his economics books

Super D says:

02:37pm | 04/06/10

Union leaders only need workers so they can stand on their shoulders while they grab for power and glory.  Similarly Industry Super funds (and all super funds for that matter) are more interested in growing funds under management than safeguarding their clients retirements.

Budz says:

03:45pm | 04/06/10

This is exactly what I was wondering! How can a union boss vote for a tax that is likely to see more of his members leave the union without a job? This is ridiculous!

Steve Putnam says:

06:09pm | 04/06/10

Unions formed the ALP in 1891 as its political wing which has since broadened its appeal to other sections of society. Political representation was the only way to oppose draconian anti-union legislation that the owners of capital were proposing in the Parliaments of the Australian colonies. A more recent example of this was Workchoices which sought to remove unions altogeather. Though relations between unions and ALP governments haven’t always been amicable (eg: pilots v Hawke govt) unions, not un-fairly, support the party that doesn’t try and enact such legislation.

worker says:

10:48am | 05/06/10

Because keeping abbott and his return to workchoices out of government is the best way to protect future workers as well as the current ones

Robert Smissen , rural SA says:

11:14pm | 06/06/10

Why would you trust ANY economist, just look at the AAA rating Enron got just before it went bust. As for union leaders when was the last time you met one that had ever raised a sweat? ?

Jacquie Butterfield says:

11:35am | 05/06/10

As an example of letting go “workers”.  How would a firm justify maintaining 80 contractors working on say the feasibility study of a potential project that, without even completely their study, appears now to have become glaringly unviable?  How would 80 times say $1500 per day x 22 x 4 or more months be justifiable in a business sense?  MIning pays well, any kind on contractor work pays very well, particularly as the qualified professional contractor may sit out of an industry for a few months in the year which are probably spent learning latest skills, or say if a trainer, learning new techniques to apply to a particular sector and then designing and preparing new trainingcourses, without any income earned for that time?  Wake up little Australians!

Flubber says:

01:38pm | 06/06/10

Then, when it suited them, Rio dumped the Chinese executive and cut him loose to languish in a Chinese jail for years, just for doing the company’s dirty work.

paul says:

02:19pm | 04/06/10

Every time Paul Howes opens his mouth on this Resources tax issue I just shake my head. How does this fit into his job description to be the main voice for the Government. The logic that you tax these companies more so they have less profits to reinvest and this somehow helps his Union member workers is mind boggling.

Andrew says:

02:34pm | 04/06/10

There is only one person more annoying than Rudd and it is Paul Howes. All Paul Howes is interested in is himself and Kevin Rudd. If Rudd wanted to blow up NZ Paul Howes would agree with him. He seems to think he is Rudd’s mouth piece. Don’t ask me why he thinks he has such a big role to play in all of this.

Jane says:

03:08pm | 04/06/10

What was Paul Howes doing taking on Clive Palmer at the National Press Club the other day? He sat there like the smart assed, sarcastic, Rudd apologist he is. Is he running for Labor Leadership or something? He’s a very strange fellow, he actually reminds me alot of Rudd himself. A vote for Labor is a vote for the Unions, he’s living proof of it.

Steve Putnam says:

09:43am | 05/06/10

In case you didn’t know ALP governments brought in virtually every benefit the worker enjoys in this country: unemployment benefits, the minimum wage, workers compensation and the right to organise as labour unions. Try going to your employer cap in hand asking for improvements to wages and conditions….united you stand, divided you beg. Anyway there is a lot more at stake than jobs for miners. At present the mining companies are paying tax at a rate less than half the rate of personal income tax for resources that are the birth-right of every Australian not nearly enough!

Jacquie Butterfield says:

02:55pm | 06/06/10

I got the distinct impression that Rudd listens to the views of Howes rather than the other way around.  He is the one who said he is absolutely sure the higher tax will not impact the level of mining (and therefore our annual GDP returns).  They’ve all come out now, we know who they are!  They’ve been sleepers for quite a few decades, they will always be there in hidiing, ready to pounce and destroy.  Nothing good ever came from limiting potential.

Jacquie Butterfield says:

03:02pm | 06/06/10

Paul, everyone is speaking for the Prime MInister because he can’t.  He isn’t capable.  He can’t even define net profit.  And many now turn off when he’s on telelvision.  This is why he now hides behind Henry, Maher and Howes.

persephone says:

03:00pm | 04/06/10

Except that the resource isn’t going to move (and if it isn’t mined, it goes up in value).

And the tax is such a good idea, if it gets through, indications are that several other countries will take it up.

This is what terrifies the mining industry, of course - not only will they pay more in Australia, but they’ll pay more elsewhere as well.

N says:

03:24pm | 04/06/10

Persephone; exactly why I said that they would hold the leases but defer production mining. It’s all about pressure, the question for the government in this instance is would they rather 1% of something or 100% of nothing in terms of tax revenue. If it somehow became a globally implemented tax, then obviously Australia once again becomes a lucrative market for miners once again, but until that time, its way down the list.

“Indications are that several other countries will take it up”; that’s very loose wording, something I would expect from our beloved PM, care to elaborate on these indicators and countries?

AdamC says:

03:32pm | 04/06/10

“Except that the resource isn’t going to move (and if it isn’t mined, it goes up in value).”

Pers, I know it’s a big call, but that must be the dumbest thing you’ve ever said.

While the minerals can’t move, investment in mines can (and does). Minerals aren’t much good to anyone in the ground, and plenty a valuable mining industry has been destroyed by bad government policies.

And what makes you think commodity prices always go up - the last eight year? What about the thirty-plus years before that when they went down? This is the infuriating thing about lefties: they fetishise their own bloody ignorance.

persephone says:

04:25pm | 04/06/10

Adam C

as something becomes scarce, it becomes more expensive.

If everyone else in the world had used up all their iron ore, and we were the only country left with it, we would obviously get a better price for it.

It’s basic market economics, supply and demand.

troy says:

03:24pm | 05/06/10

Persephone
A 30 sec googal tells me there is 6billion tonnes in Guinia alone waiting on a train line http://us-africa.tripod.com/mrbc/iron.html
VAle in Brazil has 1.5Billion tonnes of reservse.
I think we’d be waiting a long time for this to run out and investers to come looking in OZ again.
The trick is setting up a long term mine to exploit teh reserves and get start to make a profit after 10 or so years. Something we won’t be doing anytime soon if Rudd gets his way.

persephone says:

09:49pm | 06/06/10

Yes, and waiting for train lines - and other infrastructure - is one of the reasons these countries aren’t as appealing.

The availability of transport (one of the reasons the Xstrata project described in this article isn’t going ahead) is one of the biggest factors in determining whether an ore deposit is worth mining or not.

So ‘waiting for a train line’ isn’t a small impediment.

We do about 400 million tonnes a year (the world total’s about 4 times this), so figures like 1.5 billion and 6 billion aren’t that impressive, really.

At present rates, that means Brazil will be out of iron ore in 6 years.

persephone says:

03:02pm | 04/06/10

The Mining council were consulted as part of the Henry review. Given the nature of their submission, this tax should have been welcomed by them.

And the idea of the tax wasn’t some deep secret. The mining industry was discussing it at the start of the year, which is when Clive Palmer nominated 40% as a reasonable rate for the tax.

Doug says:

03:37pm | 04/06/10

So how many times does Rudd plan to consult with them if he already has consulted with them? Why doesn’t he just get on with it?

luke09 says:

04:35pm | 04/06/10

persephone, clive palmer has never nominated a 40% rate, also, why hasn’t he joined in to support the government, if he did? Rudd is on the edge of the cliff and he can’t backdown now or even set a more reasonable rate.

The mining council’s idea has never been proposed, only Rudd’s version was and even Dr Henry is not happy about that.

persephone says:

03:04pm | 04/06/10

Sally

do you honestly think XStrata executives are concerned about Australia? Maybe you should start thinking about the good of your country rather than worrying that a multinational may have to pay a bit more tax than they’d like.

Steve Putnam says:

09:26pm | 07/06/10

As soon as the GFC hit, mining corporations sacked 15,000 workers making them the greatest contributers to a (potential) recession in this country. I think the only utopian visions here are those which ascribe altruistic motives to mining giants.

Marie says:

02:46pm | 04/06/10

Stephen: Agree, skrew the miners into the ground. Then they will go overseas and stop recking our country side. That will make the greens happy. No more damage to our environment.

Saskia says:

03:05pm | 04/06/10

That’s the attitude stephen!  On ya champ.

persephone says:

03:07pm | 04/06/10

Well, with Abbott you’d have to make sure it had all be written down for him before you knew you could believe it, which is an even bigger problem.

Arnold says:

03:31pm | 04/06/10

Ha, and with Rudd it doesn’t matter if it is written down or not, he will change policies regardless.

I think that is definitely a bigger problem, Pers.

persephone says:

04:28pm | 04/06/10

He will change policies if there’s compelling reasons to, Arnold - which is basic common sense.

A leader who sticks to the letter of his policies regardless of changing circumstances would be an idiot.

luke09 says:

04:45pm | 04/06/10

arnold, you are right Rudd is no longer trustworthy. He can’t even commit to a 100% guarantee promise, when he broke the 100% guarantee promise he rewrote the history of what he said. I was surprised he didn’t use ‘I was too dunk to remember’ defence.

persephone says:

07:50am | 05/06/10

Luke

a bit like Abbott’s ‘rolled gold’ election promise on health prior to 2004?

Or his ‘I won’t be introducing new taxes’ followed - within a month - by introducing a new tax?

Politicians break promises - they have to, because circumstances change. What should be looked at when they do is why they did it.

If there’s no compelling reason to explain this, then you can accuse them of lying.

Jacquie Butterfield says:

04:15pm | 06/06/10

Oh, well, at least Rudd has one fan, persephone.

Shane From Melbourne says:

03:13pm | 04/06/10

Yeah? Name one person in AIG, Goldman Sachs or Fannie Mac that has gone to jail…..the notion that Business leaders don’t lie all the time is patently false….

Confused Fuddy Duddy says:

04:35pm | 04/06/10

@ Shane 03:13pm Even though AIG Golman Sachs et al are in a different jurisdiction to Australia, the directors may have not actually broken the law, acted immorally perhaps, but within regulation. It is perfectly legal to own and run a Brothel in many (most?) Australian States, even though it can be considered an inmoral busniess.

AsJohn says “Business leaders that lie about matters relating to share values and income streams can actually go to jail”. Has any politician sufferred the same fate of Alan Bond or potentially, Eddie Groves? I am not supporting these 2 but they lied, they sufferred the consquences.

If you want an American example look at Ken Rice or Andrew Fastow (Enron) or what about Berni Madoff?

persephone says:

07:59am | 05/06/10

Er…Xstrata is a Swiss based company, registered with the Swiss stock exchange, so it doesn’t have to report to the ASX.

So unless it’s misleading the Swiss stock exchange, it’s not in much trouble if it misleads Australian voters.

Chewy says:

04:42pm | 04/06/10

“Xstratas seems to run in and out of this country when it pleases itself”
Really? When? How? If my memory serves me correct they bought out MIM about a decade ago and have been committed to projects here since, well atleast untill Ruddys little tax grab.

persephone says:

04:31pm | 04/06/10

Well, Twiggy Forest said much the same - that he was abandoning a project because he couldn’t get finance, but he was sure that it would still go ahead.

Just because one company doesn’t think something is worth proceeding with doesn’t mean others aren’t happy to take it on board.

luke09 says:

04:57pm | 04/06/10

nosthow, which mines laid off the workers? Rudd could name and shame them in his defence of the rspt. If the miners sacked workers then, it seems more than likely others too will lose their jobs once the RSPT is introduced because companies are in business to make money for shareholders, investors and employees.

Companies don’t go into business to prop up other failing competitors and other industry sectors.

nosthow says:

07:00pm | 04/06/10

luke09 - mines in queensland where I live luke and I believe WA as well - the mineral resources sector contracted 7% during the GFC and the Mines employers responded in the time honoured way - “your sacked !” Dont jump on board such a leaky boat Luke just to support a worn tired Coalition !

TC says:

07:39pm | 04/06/10

A huge tax on already budgeted costings and profits is a manufactured financial crisis on a specific target.

How can this be helpful?

persephone says:

10:01pm | 06/06/10

TC

These profit/loss calculations would (given the long term nature of mining) been done back in the years when the commodities price was (in some cases) several times lower than it is today.

In other words, these mines were viable at a much lower rate of profit than they are presently returning.

So they can pay more in taxes from these profits and still get more of a return than they originally budgetted for.

persephone says:

10:22pm | 06/06/10

luke

a quick google of ‘mines lay off workers’ gives:

http://www.dailytelegraph.com.au/business/news/mining-companies-lay-off-workers/story-e6frez80-1111117943445

listing job losses from Consolidated Mining, Posiedon Nickel, Newcrest, Minara.

http://www.news.com.au/miners-lay-off-500-workers/story-0-1111118333913

lists Xstrata, Macarthur, OzMinerals.

....just for starters.

http://www.canberratimes.com.au/news/national/national/general/bhp-axes-400-mining-jobs-in-qld/1470472.aspx

and BHP Billiton.

Could go on, but gives you an idea.

Eye4anEye says:

06:42pm | 04/06/10

No Jeff Kev isn’t worth $50 million - his wife is….wish she was PM

Norma says:

09:26pm | 04/06/10

Xstrata last night reported to the London Stock Exchange. All Stock Exchanges have the same rules - lie to the market and you are in big trouble. Fail to inform the market when a formerly committed expenditure is abandoned, also means trouble.
Full details are available here:
http://www.londonstockexchange.com/exchange/prices-and-news/news/market-news/market-news-detail.html?announcementId=10518002

Marie says:

10:01am | 05/06/10

Norm: Good article. There will be many hear who will NOT want to read this article as it kills their point.

Diamantina Dick says:

07:18pm | 04/06/10

Fair but it will not meet the neccessary objective of this tax; allowing at least a somewhat defensible 1Bn forecast Surplus in 3 years time. That is what this tax is designed for.

Rudd and Swann will drag this on if neccessary because the damage of having to back down on returning the budget to surplus is perceived by them to be a huge negative of the class war they have created that they perhaps view as a positive.

persephone says:

08:08am | 05/06/10

Eye

if you look at effective rates of tax - that is, comparing tax rates now on profit with proposed rates - that’s about the level it kicks in.

Remember, you have to deduct from present tax rates the 2% cut in company tax and the refund of royalties (about 6%). 

So it isn’t until a company pays 10% plus under the new scheme that they begin paying more tax than they do at present.

If you wanted to change it so that they had to be earning 11%, whilst still reducing their company tax and returning royalties, the comparitive rate would be in the region of 16-19% (depending on rates of royalties paid at present).

persephone says:

10:10pm | 06/06/10

Yes, Jacquie, neighbour is fighting neighbour, brother is fighting brother, there’s armed insurrection in the streets, no one knows who to trust….er, what?

Sorry, most people out there in real person land aren’t even discussing it. It certainly isn’t dividing the nation. It’s not even showing up in polling as a vote changer.

At the soccer today - a couple of hundred parents, from all walks of life, most of whom seek me out when necessary for a whinge about politics - no one raised the issue or mentioned it in casual conversation.

Got a few questions about what was happening with the ETS, however.

Even in our local paper, it’s not an issue. There hasn’t been one letter to the editor, for example, and very few articles.

I’m willing to believe it’s different in other states and other communities, but let’s not over rate the issue.

If the miners and the government came to an agreement tomorrow, we’d all have forgotten about it in a week’s time.

Have fun manning the barricades in the meantime, though.

Jeff says:

06:56pm | 05/06/10

Being successful shouldn’t disqualify someone from having an opinion. This debate has turned into class warfare.

PaulB says:

10:08am | 06/06/10

Ian that’s a terrible attitude, and one I find hard to argue against.

Darryl Price says:

07:35pm | 06/06/10

Wow. Thats insightful and thought provoking. Can I take it that you know too much to contribute anything to the discussion?

Jacquie Butterfield says:

10:07pm | 09/06/10

Just read what Norma posted.  Xstrata posted notice to quit projects on the London Stock Exchange, so it’s official.  Bit of a shock to have mafia take over 40% of your business overnight.  There has to be some business risk in this.

stephen says:

04:14pm | 06/06/10

You put this on a tee, I’ll wear it.

Jacquie Butterfield says:

09:57pm | 09/06/10

How about you going through the exercise of exploration, feasibility, funding, scoping, funding, construction, production?  You seem to know quite a bit about the pitfalls?  Project the training types and numbers required and keep them on standby or send them away to hold down other jobs until they’re needed.

married, two kids, and very ordinary says:

07:28am | 07/06/10

here here!

Just occasionally it sounds like we have more faith in companies that exist to make a profit and not give a damn about our nation.  I want the government to make the decisions, not big business.

NedWin05 says:

11:22am | 07/06/10

I think this is exactly right macca. Even if this tax comes in, Rudd won’t be PM forever.