The planned resources super profits tax on resources

You can’t blame Hope Rinehart for trying to get her Mum to pay for a cook, a housekeeper and a bodyguard. Optimism isn’t even her middle name - it’s right up there.

And who among us wouldn’t have a fairly ambitious birthday wish list if Mum was the richest person in Australia?

So Hope asked Mum for a cook (AND showed her willingness to negotiate by including a salary ranging from $40,000 to $225,000+ which means she’d presumably gun for Jamie Oliver but be happy with a Subway “sandwich artist”). 

Continue reading "The Rinehart whine came straight from the heart" »

The announcement by Toyota of several hundred job losses this week is certainly alarming and it will have had and will continue to have ramifications for the broader industry.

But it will only mark the end of the industry if we as a society say we don’t want manufacturing and we are happy to simply be China’s quarry and maybe a second tier tourist destination.

In all the hyperbole and wild statements we hear about our mining industry, we rarely hear some of the uncomfortable truths. That it’s only 9 per cent of the economy, that it is the cause of the high Australian dollar which is putting pressure on our manufacturers and farmers, and that, at its best, it really only represents the highest aspirations of the average third world dictator.

Continue reading "A bloody good reason to subsidise car making" »

In the iconic Kimberley region of West Australia one of Australia’s biggest recent environmental battlegrounds has emerged in the red cliffs and turquoise waters of James Price Point, about 20 km north of Broome. This is a battle that might ultimately be won in the investor board rooms rather than on the front lines of blockades.

The Browse Basin gas hub development has stoked up so much opposition on so many fronts that many investors are now asking if the project is still economically viable, or if in fact Woodside’s ‘social licence’ to proceed has disappeared in the red dust that graces the Kimberley coastline.

Australian business is all too familiar with the impact strident community opposition can have on controversial major projects, yet some large corporations and investors continue to discount the importance of maintaining their social licence and protecting the environment.

Continue reading "Has Woodside hit its price point on the environment?" »

He’s a self-confessed “cashed-up bogan” earning $800 a day or more than $208,000 a year in Western Australia’s booming mining industry.

Since dropping out of Mandurah Catholic College in year 10, James “Jimmy” Dinnison, 25, has earned more than a million dollars, bought a house at aged 18, but sees no problem in splurging most of his hard-earned on boy’s toys.

Jimmy works extremely hard in tough, hot and dangerous conditions as a fly-in, fly-out driller working 12-hour shifts in the WA’s north-west, but he has also sparked fierce debate about the fall of the American economy, thanks to an intriguing profile in that country’s highest circulating newspaper, the influential Wall Street Journal.

Continue reading "He drills. He earns. He spends. He doesn’t apologise" »

The Government gets a piece of totem legislation through the House of Representatives and immediately turns the victory into an extraordinary case of excessive executive secrecy.

In partnership with Greens Leader Bob Brown, the Government decided it was perfect reasonable to deny Parliament, its own MPs and the general public details of how it would pay to ensure support for the mining profits tax legislation.

If a private individual tried this, offering cash in secret to get a law passed, they would end up in jail. Probably they would share a cell with the member of Parliament who took the money.

Continue reading "Labor and Greens did a dodgy deal on mining tax" »

When Julia Gillard rises at the ALP national conference Sunday week to urge uranium exports to India she will anger some of her closest supporters - women.

She will also rile the ALP left who will argue against yellowcake to the sub-continent, but it is a long time since Julia Gillard has been considered a leftie.

Of greater importance might be the response of women voters in general, a significant number of whom have stuck by Gillard since she toppled Kevin Rudd, bungled an election campaign and scraped together a ragged agenda of her own.

Continue reading "Gillard needs to bring women to the yellowcake party" »

Update 6:45am: The Minerals Resource Rent Tax Bill 2011 passed the lower house in the early hours of this morning after a marathon sitting day. Voting on the bill and 10 associated pieces of legislation didn’t begin until almost 12.30am AEDT.The vote on the bills finished at 2.42am. Treasurer Wayne Swan said the historic reform meant all Australians would share in the benefits from the country’s non-renewable resources.

It’s no secret, many Australians are doing it tough. With the constant demands of the mortgage, bills and school fees, it’s difficult for many to provide for their families.

Meanwhile, at the other end of town, big mining has not only remained immune to the financial squeeze, they’re doing better than ever.

Australian mining darling Fortescue Metals last week announced a $1 billion profit for the last financial year, a profit made without one cent of corporate tax. This comes on the back of a record $22.5 billion profit announced by BHP Billiton earlier this year and Rio Tinto’s 30 per cent increase in first half profits.

Continue reading "The mining pie is more of a magic pudding" »

West Australia’s Pilbara is populated by oversized creations, from trucks which can carry 360 tonnes to ships which can cart close to 150,000 tonnes of ore around the world.

But perhaps nothing is bigger than the brawl between the big iron ore producers, and the smaller outfits represented most loudly by Fortescue Metals Group.

This is an eye-gouging, rolling-in-the-red-dust, steel-capped boots affair which will barrel into Parliament this week as the Government attempts to pass the $11 billion Minerals Resource Rental Tax (MRRT).

Continue reading "Shock and awe in the war over ore" »

Roma, some 600km west of Brisbane, used to be a country town where you could drive your car onto the airport tarmac to pick up friends arriving on the few flights servicing the place.

It had a small motel many years ago when I lived there but most travellers stayed at pubs with names such as The School of Arts.

The population back all those decades ago when sheep and cattle ruled was nudging 5000. Compared to some of the neighbouring towns such as Injune and Wallumbilla, it was a big place.

Continue reading "Coal seam gas a blast of hope for rural communities" »

It was an extraordinary complaint from Tony Abbott. “It’s very difficult to have a sensible debate,” he said, “when you are confronted with a feral government”.

Politicians don’t come any more ferocious and brutal than Abbott. He reverted to the wild the moment he got his paws on the Liberal leadership. His style is pure attack dog, as feral as you’d get. Everything, irrespective of merit, has to be opposed and torn to pieces.

The mining tax is a case in point. It is now glaringly obvious that the benefits of the mining boom should be shared around so that the overall economy benefits rather than just a small and privileged section. Opposition to the tax is shrinking.

Continue reading "Who’s feral now, Tony?" »

Of all the voodoo economic nonsense circulating at the moment, none is more curious than the idea that the current mining boom is more trouble than it’s worth. You’ve probably heard the claims.

Mining is racing ahead of the rest of the economy, soaking up skilled workers and other factors of production, leaving the non-mining industries in a state of semi-permanent weakness.

According to the script, the boom is the sole cause of the soaring Aussie dollar and - according to one of the more hysterical assessments offered last week - tearing apart the very fabric of our economy. A sober look at the facts paints a very different picture.

Continue reading "If you’re blaming mining you’ve got rocks in your head" »

The Australian economy is in danger of being torn apart by the resources boom.

The high prices being paid for our minerals, the unprecedented foreign investment to dig up those minerals and the rising value of the dollar are already reshaping our economy.  This is only the beginning.

It will end, all booms do, but this one will take some time and it will bring great change.

Continue reading "The carbon tax won’t kill the economy, greedy miners will" »

You get the feeling not much happens on a Saturday morning in Merriwa. The sleepy country town in the Upper Hunter region of New South Wales just hums along quietly. Except for its proud and tidy RSL, where the front bar opens at 10am, horse races flash across the television screens and tickets pump out of the Club Keno machine.

In a stuffy back hall, on neat rows of red vinyl chairs sit the Merriwa Healthy Environment Group; a group of local farmers and landowners who came together in February to unite against the coal seam gas companies as they rode into town.  Seven months later, they feel under attack. 

Their enemy? PEL 456, PEL 468, PEL 4 and PEL 433; coal seam gas exploration licences for Merriwa and its surrounding areas of cattle, sheep and cereal farming land, up for sale to the highest bidder.

Continue reading "Community is the real cost of coal seam gas" »

To put it bluntly, which job would you pick for your child: Ripping precious minerals from the soil for sale to Chinese billionaires, or mixing daiquiris for sale to Chinese billionaires?

It’s not an easy choice for a parent to make, and it has been just as hard for the Government.

Just 18 months ago the general idea was that the best labour management strategy was make sure all hands were on the mining boom pump.

Continue reading "Mixing daiquiris and mining a top cocktail for economy" »

By many counts, Australia’s economic position is to be envied by the world. Assuming the Gillard government can deliver on its promise, there will be a surplus for the 2012-13 budget. We are experiencing historically high terms of trade: importing on the cheap while exports sell high.

Unemployment is only a touch over 5%. Our dollar has overtaken the US Greenback. We have the second lowest public debt (proportional to our GDP) in the industrialised world. And If you’ve listened to Treasurer Wayne Swan open his mouth in the last 6 months, you’ll know that our economy’s “fundamentals are strong”.

It may surprise some therefore, that I would suggest that this is no time for complacency about our future. Indeed, our position is more precarious that one might initially think. For there’s another side to the Australian story: lopsided growth, struggling non-resource exporters, depleting natural resources, coming challenges of an ageing population and climate change, and a vulnerability to oscillating commodity prices. Considering these factors, it is best that the orthodox optimism surrounding our economic future be taken with a grain of salt. 

Continue reading "Australia must have a sovereign wealth fund" »

It’s a management case study that will live on in textbooks for decades.

Just weeks after banning employees from leaving post-it notes on computers or eating lunch with strong odours, resources giant BHP has announced a whopping great profit of $A22.5 billion, up 85.9 per cent.

Of course it wasn’t only the absence of messy post-it notes that pushed profits into the stratosphere. There was also the company’s nation-wide crackdown on jackets slung over the backs of chairs. Oh, and record prices for Australian coal, iron ore and gas.

Continue reading "Bloody Huge Profit" »

Australia is not heading for a recession but our precise economic destination over the next few years can’t be forecast because of the swirl of factors buffeting certainty around the globe.

We simply don’t know exactly what is going to happen in Greece, Spain, Portugal, the United States and China. Or even in Australia.

This means the Government will have to be careful as it tip-toes towards a Budget surplus in 2012-2013; and the Opposition will have to use caution when predicting calamity from carbon pricing.

Continue reading "Forget the cat calls, the economy still has claws" »

Bob Katter gave a press conference today, to announce that he may or may not form a new party. In the end, that was hardly the point.

If the independent member for Kennedy was sketchy on the details of his immediate political future, he was as forthright as a charging bull on his concern for the future of the Australian economy, a concern the nation’s leaders appear to have forgotten.

As usual this week, our leaders are banging on about big picture crap. Gillard is flogging her dead horse of a carbon tax, Abbott’s busy telling us the sky is falling under the weight of asylum seekers, while Bob Brown continues to rail against everything except the destruction of the trees he was originally elected to protect.

Continue reading "If this hatter’s mad then invite me to the party" »

By the time Francis Ona and the various factions of the Bougainville Revolutionary Army permanently laid down their arms on 30 April 1998, it is estimated that more than 15,000 Bougainvillians had lost their lives.

The decade long conflict – part war of independence, part civil war - had been the most bloody and costly war in the Pacific since WWII. At the turn of the millennium, Bougainville was a place of devastation.

Bougainville has long loomed large in the consciousness of many Australians.

Continue reading "Bougainvillians deserve the chance to say “it’s mine”" »

On the eastern side of Geelong is Point Henry. On it stands a fifty-year-old aluminium smelter and accompanying rolling mill.

This complex provides jobs for a thousand people and contributes to the livelihood of thousands more. Operated by Alcoa, Point Henry is, along with the Ford plant, one of the largest economic centres in Geelong.

The electricity consumption of Point Henry is massive. This is not Alcoa’s fault. While other industrial processes may use combustion or a chemical reaction, aluminium is made by passing a very large electric current though alumina.

Continue reading "Not pricing carbon would cost us dearly" »

Since the Multi-Party Climate Change Committee made its announcement regarding a price on carbon late last month, Australians may well be feeling a slightly creepy sense of déjà vu.

An increasingly frenzied federal Coalition is foaming at the mouth and making ludicrous predictions about the future of the country. CEOs of multibillion-dollar companies are wailing about the certain demise of their industry. And a small group of right-wing cheerleaders is screaming from the sidelines, predicting nothing short of the complete collapse of the Australian economy.

Does this scenario feel familiar to anyone else? Of course it does, because we saw the exact same thing last year over the proposed mining tax.

Continue reading "Creepy sense of déjà vu over carbon tax" »

The series of natural disasters that have caused so much damage in Queensland are creating new medium and longer term challenges for the Australian economy. 

However the Gillard Labor Government is unable to take the necessary action needed to stop the inflationary and multiplier effect its re-regulation of the labour market is bound to cause.

Unfortunately for all of us the Government can’t and won’t say no to its trade union masters.

Continue reading "Gillard continues to recognise faceless men" »

Last year BHP helped prove that crying wolf works, provided you crank the volume up to 11. Along with the other mining giants, they managed to convince Australians that paying anywhere near a fair amount of tax would somehow cripple their companies – and the nation.

We know now how the scare campaign played out: a Prime Minister was rolled, a new one installed and the Resources Super Profit Tax became the Mineral Resources Rent Tax.

Within 24 hours this week, in what can only be attributed to a divine act of timing, Australians have discovered how much mining wealth the nation lost and how quickly it’s made by those who squealed so loudly. Yesterday, BHP Billiton announced half-year net profits had surged 72 per cent – to $10.6 billion dollars.

Continue reading "$10.6 billion profit leaves plenty to go round" »

Opening this week is a small, yet powerful, documentary on the ill-effects of using the controversial “fracking” technique to extract natural gas.

Now, I’m not a scientist, or a geologist, but I am a film reviewer, and watching Gasland was illuminating enough to allow the mere mention of natural gas to prompt a range of pretty terrifying images.

So when a story broke over the weekend that suggests natural gas mining may soon become a reality for inner Sydney, it’s clear that the timing for the release of this powerful documentary film could not be more apt.

Continue reading "Clover, before you mine Sydney, watch Gasland" »

With Parliament set to wind up in the coming week and the ructions of an explosive year beginning to fade, the reality of a more featureless landscape in the next two years is becoming clearer.

Such apparent predictability seems almost foreign after 2010 which kicked off with the game-changing retreat on emissions trading and then lurched from one crisis to the next - think the rise and fall of the mining super-profits tax, various boat controversies, the spectacular Rudd / Gillard coup, and of course the closest election in history.

Nonetheless, barring the disappearance of the Government’s numbers in some unforseen crisis of confidence, 2011 and 2012 should by rights be years of sound governance - unaffected by elections. The country needs it and in their own ways, both leaders are depending on it too.

Continue reading "For Gillard it will all be about the tough decisions" »

Spare us the whingeing woman. Julia Gillard whinges that an Opposition member elected as an endorsed Coalition member won’t defect to the ALP to help her out.

She’ll “honour parliamentary reform” she says but she won’t honour her election promise to the Australian people that “there will be no carbon tax under a government I lead”.

“Be a realist – circumstances have changed” chanted Gillard on Sunday morning TV. How we might ask?

Continue reading "Spare us the whingeing Julia" »

I was at a pub a couple of weeks ago and a friend asked my prediction about the election. Not much into making predictions I speculated that Abbott would do better than anyone expected and the ALP were running a campaign that could ruin them. One of my other friends jumped in and said, ‘it’s the tax, the mining tax, the idiots should never tax the one thing that makes us rich’.

An interesting debate followed that only ended when someone reminded me that it was ‘my shout’. Being a Saturday night and with the footy on the big screen, I think we simultaneously decided that this discussions about tax do not make for an ideal night out.

While the country remains in political limbo and the power brokers are cutting deals, the mining tax is one of those issues that seem to be bubbling below the service.

Continue reading "Why the Independents should dig the mining tax" »

There’s a Liberal campaign ad running frequently on Perth television that seeks to remind voters how reliant the rest of the country is on the Western Australian mining boom:

“Labor = Labor’s cash cow” goes the punchline.

This plays into a common perception in the west: we’re the backbone of this economy and the bludgers over in the east are milking us dry.

Continue reading "A journey into the ALP’s western heart of darkness" »

Next time you watch election coverage and ask whether the people writing this stuff are on drugs, you can now safely say the answer is no. Julia Gillard and her press pack are officially conducting a drug free election.

As is the custom before entering Gregory Mine in Queensland, the Prime Minister’s entourage were today subjected to random drug tests through a marble lottery.

There are conflicting reports as to whether the Prime Minister herself was subjected to the piss take along with two female TV journalists, with some journalists on site claiming she was but her office saying it was an unnamed third person.

We can rest easy that all three were cleared.

Listening to Wayne Swan’s press conference to update us on the state of the economy yesterday it was as if Little Britain’s Vicky Pollard had been asked to explain our finances.

(Dramatic recreation)

“Treasurer: Yea but, no, but yea, but no but. That wasn’t even there before da mining tax cause so we didn’t lose da $7.5 billion. Anyway commodities are worth more now. Anyway shut up!”

Listening to it you were conscious of the fact the words were English, but as it progressed it became apparent those words had no necessary connection to one another. It was a kind of absurdist, avant-garde approach to answering questions which could see our treasurer hailed at the forefront of the “Aussie new wave” of economic analysis.

Continue reading "Campaign countdown: Yeah but, no but, Swan explains" »

Julia Gillard is expected to announce her people smuggling policy today, after a Cabinet meeting yesterday to determine just how un-PC the Government could afford to get on the issue. Tony Burke had the fun task last night of going on Q and A without giving away what might be in the announcement, a piece of rhetorical gymnastics he performed admirably.

But Tony Abbott might have blinked first - with this morning’s Daily Telegraph reporting his new “get tougher” stance on boat people would include a presumption against refugee status for anyone believed to have destroyed their own documentation.

According to Simon Benson: “The power to rubber-stamp applications will also be removed from assessors at Christmas Island, with the minister for immigration under a Coalition government granted the right to intervene in any case to refuse entry through the courts.”

Continue reading "Campaign countdown: and then a jump to the riiiiiight" »

Julia Gillard might be excused for thinking this leadership business is pretty straightforward after swapping a few ministers around and fixing the mining tax. But this was not so much political genius as common sense. From here on in however, it gets harder.

At her first press conference as Labor leader, Julia Gillard said she wanted to get three things sorted before she pulled the election trigger. First order of business was the issue du jour, resolving the Resource Super Profits Tax. Then came asylum seekers and community anxiousness over continuing boat arrivals, and finally, repairing Labor’s standing on climate change.

But first things first. Kevin Rudd’s clumsy reversal on emissions trading aside, it was his self-started fight over the RSPT more than anything else, that was killing the Government.

Continue reading "Now for the hard part, Julia" »

In May, Kevin Rudd announced the super-profits mining tax – which, after the shelving of the ETS and back flip on climate change – seemed to put the final nail in Rudd’s political coffin. PM Julia Gillard inherited this fiasco; but with a quick side step and gestures of reconciliation and camaraderie, she’s managed to get both government and miners beating their drums to a far less war-like rhythm. 

The mining tax was announced in response to the Henry Tax Review, and was intended to provide a more equitable distribution of the wealth derived from Australia’s (limited) natural resources. A 40% tax on mining super profits would also provide a surplus of $2.5 billion and could be used to invest in a more sustainable, renewable energy industry (… one can dream).

All in all, the mining tax had a rather alluring Robin Hood-esque tinge. Indeed, it had all the fairy-tale spin that one might think would woo working voters’ support. Take money from the wealthy who are leaching off the limited supply of natural resources in our soil, and give it back to the workers’ who have toiled upon that land.

Continue reading "One week in and Gillard’s looking giddy" »

It’s being heralded as a breakthrough and a huge win for the new Prime Minister Julia Gillard - a deal with the biggest three miners on what was once called the Resource Super Profits Tax.

Aside from a less scary new name (the Mineral Resource Rent Tax) eight days into her tenure Gillard has dropped the rate from 40 per cent to 30 per cent, and increased the threshold for kick-in from about 6 per cent to about 13 per cent. The latter will ensure the number of companies effected will be slashed from the many thousand to the few hundred.

The backdown (let’s call it what it is), will cost the Government’s Budget bottom line about $1.5 billion. To compensate the Government has decided not to cut the across-the-board company tax rate from 30 per cent to 28 per cent, instead cutting it to 29 per cent from 2013-14.

Continue reading "Compromise or capitulation? Gillard’s mining backdown" »

By the time most of you read this article, Julia Gillard will have pulled off an extraordinary political coup - her second in one week - and one which again puts Labor in the box seat to win a second term. At 8.30am the new Prime Minister is expected to stand up and announce that a deal has been struck on the mining tax, killing stone dead the one issue which more than any other was threatening to derail Labor’s campaign for re-election.

If Kevin Rudd was the major personality flaw in Labor’s re-election equation, the Resources Super Profits Tax was its biggest policy failing. There were three key problems with the tax - many voters could not understand why Canberra was going after the one industry sector which had helped us weather the global financial crisis, Kevin Rudd was proving inept and ineffective at negotiating with the miners over its operation, and the proposed use of $38 million in public money to fund an advertising campaign extolling its virtues had offended the taxpayers deeply.

In just one week Julia Gillard has killed each of these three problems - she appears to have struck a deal which the miners are prepared to wear, she’s done so by sitting and down and negotiating in a manner which Kevin Rudd could only dream of, and she’s already killed off the prospect of a damaging and expensive advertising war on the eve of the election campaign. It’s a massive win for her so early in her prime ministership and a very serious blow to Tony Abbott who has been campaigning on little else for the past few months.

Continue reading "Campaign countdown: Julia on the cusp of another coup" »

The big question on everybody’s lips right now is whether Prime Minister Gillard will be any different to her predecessor Kevin Rudd. But it’s difficult to see how Julia Gillard can legitimately claim to be different unless she adopts a completely different approach to running the national economy.

So it seems passing strange that she has decided to keep the architect and principal manager of the economy, Wayne Swan, on as treasurer. And stranger still that he has been promoted to deputy prime minister.

Notwithstanding Kevin Rudd’s faults as Prime Minister – and there were many – Wayne Swan’s failings as Treasurer are equally appalling.

Continue reading "Gillard and Swan are failures, not leaders" »

I keep hearing how we have dodged a bullet.  How the stewardship and steely nerve of our Prime Minister and the gang of four averted a recession (the GFC, so called, if you like acronyms), and how the RSPT (another acronym) is going to fix all our ills and bring the nasty billionaire miners to heel and “make them pay their fair share”. 

He’s got cred after all, he wrote an essay on the evils of unbridled markets and the greedy speculators in the monthly, and how the age of the neo-con was over and the social democrats would restore balance to public policy.

The problem is that from where I am situated as the owner of a modestly small electrical contracting firm that is responsible for the livelihoods of 5 people, things aren’t that great.

Continue reading "A postcard to the PM from the real world" »

Well Kevin Rudd might be at war with the miners, but yesterday he was finally able to announce a major deal - with Telstra. The PM, who’s been clutching at small pieces of good news lately was pretty happy to demonstrate: “what can be yielded through a process of negotiation.”

Announcing the agreement for Telstra to shift large chunks of its operation onto the National Broadband Network was a rare moment of respite for Rudd, who this morning woke to more Newspoll pain. According to the latest survey, Tony Abbott has narrowed the gap in the preferred PM stakes.

And judging by the very clever new Minerals Council ad I saw on Masterchef last night, clearly the “process of negotiation” with the miners hasn’t progressed much.

Continue reading "Campaign countdown: deal done, but will it count?" »

Just as appearances of hatred in politics can be deceptive, periodic appearances of civility can be equally so.

A combination of last night’s annual Press Gallery Ball and the calming effect of two women leading question time today lead to a more conciliatory day in Parliament.

But don’t let it fool you, MPs are nervous and tetchy right now, and pretty sick of the sight of each other and the weather.

Continue reading "Appearances in politics can often be deceiving" »

So what is the Resource Super Profits Tax all about?  And what is a resource rent tax anyway? 

As it happens, I did a PhD in economics on these very questions, under the supervision of Professor Ross Garnaut.  And as an economic adviser to Resources and Energy Minister, Senator Peter Walsh in the Hawke Government, I had the opportunity to implement my PhD findings by helping design the Petroleum Resource Rent Tax in 1984.

Let’s start with resource rent.  Minerals like iron ore, coal, oil and gas possess two special features – they are non-renewable and deposits of them vary in quality and closeness to markets.  These features give rise to resource rent.

Continue reading "Going boom: the economic case for the mining tax" »

Prime Minister being photographed with babies – check. Opposition Leader warning MPs they remain underdogs – check. Character-questioning stories about the Prime Minister’s past behaviour out on the town emerging – check.

When can we just call this a campaign?

The phrase “it’s on like Donkey Kong” is the first line of a 1992 song by Ice Cube, Now I Gotta Wet’cha. It was more recently popularised by Seann William Scott’s character, Steve Stifler, in the American Pie movies. Explanations of the phrase offered by Urban Dictionary say it signifies “the highest level of go time” and of course is a significant escalation to “it”, whatever “it” is, being merely “on”. The signs are that in federal politics as of this week it is indeed on like Donkey Kong.

Continue reading "Campaign countdown: when it’s on like Donkey Kong" »

The Liberal leadership was his for the taking but Peter Costello thought better of it judging he would spend two terms in opposition and maybe more.

Now however, as Kevin Rudd’s star plummets earthward, it is arguable that Costello might have been happily ensconced in The Lodge by the coming summer. He of course walked away but for those there now, such “what might have been” frustrations are small beer.

Labor’s hapless backbenchers know the real thing. With their careers on the line, they have real skin in the game yet about as much say in Government strategy and policy as the former Liberal treasurer - to wit, none. The question is: what should they do about it?

Continue reading "Loyalty isn’t always the most honourable route for an MP" »

Lindsay Tanner was just on AM and made an observation so obvious it was almost funny. He said people only complain about the consultation process when they don’t like the outcome.

That might explain why people in the ALP are now complaining that Kevin Rudd and Wayne Swan came up with the Resources Super Profits Tax all on their own, without even consulting the other half of the so-called “kitchen cabinet”, Tanner, and Julia Gillard.

Tanner denied the claims, saying as Finance Minister he’s a key part of the Budget process, but he did stop short of asserting anyone else in Rudd’s increasingly invisible cabinet was brought into the loop. If Rudd and Swan were responsible for formulating the RSPT, their back bench is now holding them responsible for stopping the bleeding it’s caused.

Continue reading "Campaign countdown: Just fix it Kevin and Wayne" »

As someone who has worked as an accountant or financial analyst for most of the last couple of decades, including in the mining sector, I have been watching the debate about the mining resources super profit tax with some bemusement. People like me understand tax and why businesses make – or don’t make – investment decisions. It is becoming disturbingly apparent that ordinary punters are not getting the information they need to make a reasonable assessment about the merits of this proposal.

Frankly, there is a lot of nonsense being talked at present.

Firstly, you can discount almost everything that has been written by journalists, since virtually none of them seem to know anything about business or economics. Most appear to be simply regurgitating other people’s words. I put most business and economics writers into this category, by the way.

Continue reading "An accountant’s view: The nonsense on the mining tax" »

Congratulations to all comrades who attended the official launch of the Rich Bastards Union (RBU) at our official launch in Perth last week.

It was inspiring to see so many of you prepared to join together and protect the billions you have worked so hard to earn. The message to the Prime Minister could not have been clearer – keep your grubby hands of our minerals!

It was also heart-warming to see the support that so many ordinary millionaires offered as we take this principled stand for the fundamental right to make a fortune digging up bits of Australia and shipping it off to the highest bidder.

Continue reading "Minutes of the first meeting of the Rich Bastards’ Union" »

Just when does spin become a lie? Answer – when the overwhelming objective is to deceive.

Harsh? Certainly! True? Most definitely.

Particularly when the advertisements to convey the lie is paid for by theft from the taxpayer ie advertisements to promote the Labour Party’s great big tax on mining, have avoided complying with the advertising guidelines but is none the less paid for by the taxpayer. Bargain at $38 million!

Continue reading "The mining ads are all spin, and the Budget shows it" »

Leadership destabilisation has a habit of becoming self-fulfilling. The more people in a party diss the boss the lower he drops in the polls.

The lower he drops in the polls the more people in his party diss him. Rudd seems to be in a death spiral this long weekend. Crusty old party elders such as Graham Richardson and Keith De Lacy are joining the pack of baying wolves.

Rudd’s about as popular as Tim Cahill in his camp this morning.

But as Matthew Franklin and Samantha Maiden quote a Labor source in this morning’s Australian: “Nothing will happen unless Julia acts. And there is no sign she will. She is being a very loyal deputy.”

Continue reading "Campaign countdown: The woman holding the Ace" »

IN the round-ball game, they call it getting one back - a quick reply to a goal scored by your opponent.

For Tony Abbott, a conservative true believer as passionate as any football fan, his chance is rapidly approaching.

Kevin Rudd is labouring under the weight of some disastrous polling and a needlessly messy fight with the country’s miners.

Continue reading "Quick equaliser needed for Libs to change run of play" »

It’s been a long week for the Prime Minister. He’s gone from more shocking poll results, to being bashed around by mining magnates in Western Australia and will head to Queensland today to face more of the same.

Perhaps though he can take the weekend and reflect on his communication skills, because lately, despite his arguments to the contrary, they’ve been lacking.

Think about this: if the consultation process over his mining tax has been as good as the Government claims, why was yesterday the first serious meeting between Kevin Rudd and Twiggy Forrest over a month after the policy was announced?

Continue reading "Campaign countdown: the failure to communicate" »

Prime Minister Kevin Rudd gave no quarter, nor was any apparently sought, when he strode before the Perth Press Club on Wednesday to defend his resource super-profits tax.

Many in the Perth media felt the PM’s address provided the perfect backdrop from which Mr Rudd could make a form of policy detour, to deftly change tack, and to somehow head off a simmering confrontation with the nation’s powerful mining lobby - a swordfight that is showing every sign of looming into an electoral bloodbath in the state.

A Westpoll conducted for The West Australian a fortnight ago suggests the Federal Government is on a hiding to nothing in WA, with the prospect of it holding just two seats at the next election, Perth and Fremantle, from a possible 15. Labor holds only four in the state.

Continue reading "Anger mounting against Rudd in the wild west" »

It was the trip up the Swan River that Kevin Rudd was always going to have to take.

He could no longer fight the urge to visit Perth and head deep into the heart of that state that fears his new tax above all others.

Yesterday was a first for this Prime Minister: he showed up somewhere and was greeted by an angry mob of protestors. He couldn’t very well tell them to “go get a job” like Paul Keating did to rowdy university students.

Continue reading "Campaign countdown: Visit to the heart of darkness" »

Two weeks ago I wrote for the Punch a piece about Kevin Rudd breaching his election commitment and dumping the Auditor General from the advertising process.

This was in response to the politically motivated advertising on the so-called health reforms that were launched by Rudd Labor.

However it turns out Kevin Rudd wasn’t satisfied with simply breaking part of his pre election commitments on government advertising; he wanted to go all the way. The advertising campaign for the mining tax was born. 

Continue reading "Labor mates mining Rudd’s new-found cash deposit" »

Can Bob Hawke save Kevin Rudd? Can the man who was so popular and led so much reform in Australia in the eighties help Kevin Rudd sell his mining tax today?

You couldn’t think of two more different Prime Ministers than Bob Hawke and Kevin Rudd, despite the fact both have enjoyed astronomical levels of popularity in the past. But it is perhaps the way that Hawke and Rudd managed the introduction of big reforms that seems to have really set the two apart.

So can Rudd learn from Hawke? Well Hawke’s former resources minister has told The Australian he has to , while The Age reports that Hawke could already be playing some role in negotiations with the miners.

Continue reading "Campaign countdown: Can Bob Hawke save Rudd?" »

With the miners launching the mother-of-all fear campaigns and the opposition leader fanning the hysteria, it’s hardly surprising that the average person understands as much about the resources super profits tax as they do about quantum physics.

Most of us are reliant on private business and media interests to present the information about this substantial reform: business and media organizations that are not elected, are not publicly accountable, and aren’t under any obligation to make sure information is balanced and accurate.

I for one am quite happy for the government to spend $3.27 of my taxes—that’s the total cost per taxpayer—to provide a public information campaign that will provide facts, without spin, about its proposed tax. Indeed, at less than the cost of a hamburger, it’s money well spent if it helps provide a clearer understanding of such an important long term reform.

Continue reading "The mining tax ads counter the miners’ fear campaign" »

Prime Minister Kevin Rudd appears to be embarking upon an interesting election strategy.

It is to remind people that although they are showing many signs of being sick of him and rather suspicious of his policies, the man who is set to replace will, much to their surprise, become Prime Minister: “If what we see in the polls today is reflected on election day, Mr Abbott would be the next prime minister of Australia. Let’s just be upfront about that,” he told the ABC yesterday.

To the untrained eye this is a statement of the bleeding obvious, but this is not the case. It is an advanced campaign political strategy: the double negative.

Continue reading "Campaign countdown: Rudd discovers the double negative" »

Every now and then, a select group from the economic illuminati retire to their monastic study and devise a splendid idea to try and pay off their previous splendid idea.

Splendid idea number one was to borrow so much money that we put ourselves in more strife than the early settlers in our desire to adorn the nation with an eclectic mix of rubbish that apparently was going to save us from Asia ceasing to purchase our minerals. The relationship between our stimulus and mineral exports was as clear as mud, but there was an emphatic defence of this fantastic proposition by Labor.

The Treasury fiddling of the graphs depicting the relationship between our and other nations’ fiscal stimulus packages and the effect on their respective economies shows that when the graphs were corrected the relationship was hardly apparent.

Continue reading "The mining tax: Treasury’s own love formula" »

Several years ago, when senior Labor strategists were considering how to market a major new policy initiative, they commissioned market research to hone their lines.

According to someone involved in the process, a central concept they wished to convey, that of ``fairness’’ or``fair’‘, failed to impress. The words ``tested like dog shit’’ an insider revealed. Respondents apparently found the idea of making something ``fairer’’ pretty meaningless because what is considered fair depends on where you stand.

This is germane right now because, as the Government struggles to defend its new 40 per cent Resource Super Profits Tax, ``fairness’‘, its chosen justification, is again failing to cut the mustard.

Continue reading "All’s not fair in politics" »

If 3,250 jobs never existed, can they still be used to batter a government over the head and frighten the bejesus out of mining communities? That’s what Swiss mining giant Xstrata is testing this week.

There’s been much hysteria about Xstrata’s announcement it will suspend and review two Queensland projects. Prime Minister Kevin Rudd fought back, boldly describing Xstrata’s announcement yesterday as ‘passing strange’. Here are some better descriptors: arrogant, cynical, bullying, fear-mongering.

Anyone involved in the mining industry for any length of time knows how to take this kind of announcement from a mining company, with a big grain of salt.

Continue reading "Xstrata is just playing chicken with the Government" »

It is increasingly apparent that Australia’s well developed cultural bias towards egalitarianism is part of the leverage that the Rudd Government will seek to exploit to ensure its re-election this year.

Since 2007 Mr Rudd and Mr Swan have regularly gone out of their way to promote that they are some sort of modern day Robin Hoods. This carefully crafted illusion has been built around the idea that by taxing the “rich” we can somehow pay for a Mount Everest of around $93 billion of debt, racked up in reckless cash splashes and handed out on sometimes completely illogical grounds.

Now the Rudd Government tells us that we need to increase tax by 40 per cent on the most productive sector of our economy. They argue this is a “Robin Hood style” redistribution of wealth that will make us all richer.

Continue reading "Rudd, Swan and the myth of Robin Hood" »

You couldn’t invent Clive Palmer. Well that’s not quite true, you could invent Clive Palmer, but you’d be told to go back and come up with something that was less of a caricature for a mining boss.

The Queensland mining magnate billionaire is quickly becoming the chief vioce of industry opposition to the Government’s Resource Super Profits Tax, and the Government love it. 

Palmer is an easy target for the Government, epitomising every stereotype of a self-interested fat cat capitalist, a mere monocle and waistcoat away from being a cartoon character. As one Labor strategist said of Palmer “he’s our Joe McDonald.”

Continue reading "Why the Government just loves Clive Palmer" »

The real show in town today was down the road from Parliament House at the National Press Club, where mining boss Clive Palmer debated union pin-up Paul Howes. Leo will file on that shortly.

But join us here for live coverage of Question Time from 2pm.

Following yesterday’s bad Newspoll results for both major parties, Kevin Rudd and Tony Abbott looked like captains of flogged football teams on a dreary Sunday afternoon. It was as though both had made the same clichéd commitments to “go back to basics” and “do the small things right”. 

Kevin Rudd began the day by doing what he does best, lecturing people, specifically a room full of his colleagues.

Not wanting to yell fire in a crowded party room meeting, the Prime Minister told caucus it was a “difficult” time for the Government. He said that two weeks ago when the polls were bad, so the official fire danger remains at “difficult”.

Continue reading "What do you do when you lose? Go back to basics" »

Isn’t it amazing Mr Rudd has a get out clause to allow him to run an advertising campaign worth $38 million of tax payer’s money without any scrutiny at all. How pathetic!

A ‘cancer in our democracy’ his words for tax payer funded government advertising, when done by someone other than him and his government, suddenly turns into a national emergency to tell porkies about his opponents.

A quick analysis of the so called implementation of his promise to have the Auditor-General be used to give his campaigns legitimacy is interesting.

Continue reading "Since when is an ALP crisis a national emergency?" »

Kevin Rudd’s got a lot of explaining to do over his decision to spend $38 million whacking the mining industry over the head. Question Time is on again today. Join us here from 2pm for live coverage.

IT looks like the Federal Government has dug itself into a hole over the resources super profits tax. The more it tries to justify the proposed tax the more costly it is proving electorally and the harder it will be to dredge a way out of the minefield it has created.

Framing a Budget forecast back in the black based on syphoning the rich profits of the big miners to fill a deep deficit must have seemed like a good idea at the time.

However, the Rudd Government underestimated the protests from the powerful resources lobby. The Prime Minister says the Government’s latest $38.5 million advertising campaign on the RSPT will counter a “scare campaign funded by some very, very big vested interests”.

Continue reading "Rudd’s mining tax sinkhole" »

In the scheme of policy reversals this doesn’t quite rank up there with dumping “the greatest moral challenge of our time”, but Kevin Rudd has now just given up on his quest to find the cure for the “long term cancer on our democracy”.

We should really be angered by the Government’s decision to invoke powers similar to a national emergency to justify a taxpayer funded ad campaign worth almost $40 million defending its mining tax.

But rather than acting outraged and going on about broken promises, let’s see what Kevin Rudd said about this issue when asked about the Howard Government’s use of taxpayer funded advertising.

Continue reading "We are now all the proud sponsors of the mining tax" »

New Guinea, geographically as well as historically, is Australia’s closest relative. Separated from the mainland during the last glacial period, the waters filled-in what now separates them: 150km of the Torres Strait. 

Despite being endowed with enviable mineral stores, economic and political exploitation has left New Guinea housing many of the poorest people on earth – particularly in the western half of West Papua. 

Amidst a program toward independence from the Dutch, the international community neglected West Papua in order to realise a business deal between U.S. mining company Freeport-McMoRan Copper & Gold (“Freeport”) and Soeharto – at the time an Indonesian army general. 

Continue reading "Rio Tinto: A tale of rampant capitalism" »

In Rudd Government-speak “hysterical” is the new “denier”, as in the mining industry is “hysterical” over the RSPT the way people who questioned the details of the ETS were climate change “deniers”.

The Rudd team is once again relying on a simplistic argument to sell a highly complex policy, and this time they’ve gone all in.

Tony Abbott keeps saying the coming election will be won and lost on the Resources Super Profits Tax, which for political watchers’ sakes I hope is an overstatement. Certainly there’s no way Rudd can afford to dump it in the same bin as the ETS.

Continue reading "Can Rudd dig himself out of a super mining tax hole?" »

TONY Abbott’s bizarre 7.30 Report admission that he sometimes gilds the lily to win arguments led off a pretty dismal week for the Opposition.

But with Labor doing so badly at explaining its case, all is far from lost. Liberal MPs shuddered as their ``honest-to-a-fault’’ leader dropped into confessional mode to surrender his singular advantage over the mealy-mouthed Kevin Rudd. ``My jaw just dropped,’’ said one.

Others were similarly mystified. Instead of explaining his volte face on paid parental leave funded by a new company tax he’d previously sworn against, as a change of mind, he went the other way. The original promise on Melbourne radio had come ``in the heat of verbal battle’’ and was therefore not to be taken literally.

Continue reading "Own goals from both teams on the political pitch" »

We might as well abandon the budget process as we have known it.  Traditionally the budget sets out what can be relied upon to occur in the financial year following its announcement.

But no longer – what we get is a good old socialist planned economy.  Where as the forward estimates used to be an indicator of what would flow from the announced budget if nothing is changed in succeeding budgets.

So Mr Swan’s statement that nothing will change to deliver a $1 billion surplus in 2013 is telling us nothing will change before then.  So why bother with the Budget façade?

Continue reading "When a Budget is not really a budget" »

The Rudd Government has arrested its plunge in the polls by convincing Australians that last week’s Budget might not be good for them but it will be in the national interest.

Devoid of the traditional baubles and handouts, the Budget has gone a long way towards neutralising the Liberal Party’s debt offensive that was threatening to drive a stake through Labor’s economic credentials.

In a month of bad news for the government, this has to be classed as a timely victory - despite the problems with the stimulus package and the raging row over the resource rent tax, the majority of Australians think the economy is heading in the right direction.

Continue reading "Government won’t be turfed out for taxing miners" »

Kevin Rudd’s proposed Resource Super Profits Tax on mining companies would raise $12 billion over the next four years, most of it in the fourth year. Pretty handy for a deficit-ravaged bottom-line but its true value is between now and the election. In other words, it’s political.

Wayne Swan’s third Budget and Tony Abbott’s only (he will be either PM or toast) Budget Reply have laid certain things bare.

First, that the Government is back arguing its claim to being fiscally conservative after a damaging, if economically successful multi-billion dollar foray into recession-proofing.

Continue reading "Rudd digs a hole for himself, but Abbott still runs on aggro" »

Royalties and mining taxes are the price mining companies pay to the people of a state and/or country for the right to mine and sell the resources of that state and /or country. Seeing as they can only be sold by the state once, it’s important to make sure that we get the best price we can.

However, if you set the price too high, no-one will buy what you’re selling. The Rudd government’s Resource Super Profit Tax (RSPT), as it is proposed, drives the price too high.

A well designed rent tax is a very efficient and even business friendly tax. With a rent tax, you only pay tax when you are making a decent profit while the government still receives a fair price for its resources. But there is a clear need for three major changes to the RSPT.

Continue reading "A Labor MP speaks out against the mining tax" »

If you hadn’t noticed Kevin Rudd and his Government are in a bit of trouble at the moment. A perception that they can’t be trusted to implement actual policy change and are willing to break election promises with bureaucratic abandon has begun to take hold in the electorate.

It is has been further complicated by the decision of the Government to introduce the 40 per cent super profits mining tax which - if you believe the only poll taken on it thus far - people are yet to be convinced by. 

But if I was to place microphone headset on, roll up my sleeves and fire up a highly inspirational PowerPoint presentation for the Prime Minister I would say this: it’s time to not just pick a fight Kevin, but pick a fight and win it for once.

Continue reading "Mad or not, Kevin must fight for the mining tax" »

Kevin Rudd’s fall from grace has been sudden and spectacular. His meltdown on The 7.30 Report on Wednesday night can be seen most charitably as a sign that the bloke has got some ticker. I suspect most people would have seen it as a sign that pressure is getting to him.

When Finance Minister Lindsay Tanner hit the airwaves today to defend his boss as some kind of zen master who is at his calmest and most serene when the pressure is on, he could have chosen his language better. Tanner’s observation that his three-year-old daughter threw bigger tantrums than the PM did with Kerry O’Brien stands as dictionary-definition faint praise.

The next few weeks will be crucial as he tries to use the Federal Budget to restore Labor’s standing in the eyes of voters. In trying to analyse what has gone wrong for the Prime Minister, and whether he can again make things right, there is a consensus across politics as to where the problem lies. The problem lies with the Prime Minister himself.

Continue reading "From fiscal conservative to Krazy Kev, and back again" »

I think I’m with the miners – just why did the Prime Minister and Treasurer let the banks and finance groups off the hook when it came to tax reform and revenues for the common good?

As one mining industry guy said this week, there’s a whole part of the banking and finance sector involved in ‘moving money around and not creating anything of value’, and which does not pull its weight in revenue generation for the common good.

I’m surprised that a Government, that’s more than willing to run on the theme of ‘nasty foreign extraction companies taking our wealth offshore’, couldn’t have come up with an anti-banks campaign.

Continue reading "Forget the nasty miners PM, what about the banks?" »

It’s becoming apparent that the Rudd Government has slaughtered the goose that laid the golden egg – all for one grand pre-election meal.

It’s not so much the $16 billion that was shaved off the share price of resources stock within the first three days of Rudd’s shameful tax-grab-masquerading-as-reform.  That was bad enough and thankfully for the moment stocks have at least stabilised.

Much more significant, however, are the rolling announcements of projects being shelved, expansion plans being abandoned and billions of future investment potentially heading overseas. Of course, we won’t see the effects of these decisions until well after the next election – so hang the long-term consequences for our nation.

Continue reading "Mining tax makes a meal of our future" »

How does a PM with seemingly no intestinal fortitude execute so many superb backflips?

A sticky narrative is weaving itself into the Australian psyche about Kevin Rudd’s flexible floor work in the field of political gymnastics.

Having changed his position on boats, batts and broadband, climate change and building 260 extra childcare centres, it’s no surprise that the metaphorical gym mat appears ready for Mr Rudd to execute a half-twist triple-pike on the recently unveiled mining resources “super profits tax”.

Continue reading "Kevin Rudd, gymnast" »

Pssst? Heard about the good tax? Hopefully after the release of the Henry Tax Review this weekend you will.

It’s called the Resource Rent Tax and, for those of us who want to see the development of frontier mining towns into sustainable communities, it is a thing of beauty.

It is always reassuring to hear the mining industry cry poor when new ideas are put forward to share the benefits of the resource boom.

Continue reading "Why a resources tax can build a better nation" »

It’s a political phenomenon as inevitable as a Troy Buswell indiscretion. Mention tax and people smell a rat.

As the Rudd Government prepares to release the Henry Tax Review, new polling from Essential Research shows what a tough time our leaders face when they want to review the nation’s revenue base.

Sixty one percent of Australians say they pay too much tax while just four per cent say they way too little. And even when you offer to the fix the problems that people want fixed, the majority would rather have the dour status quo than pay more moolah.

Continue reading "Tax is still a four-letter word" »

South Australia stands at the edge of a potential golden era, a golden era of opportunity like the state has never seen before.

It turns out that South Australia sits on a giant bed of yellow cake that, if managed properly, will drive the state for generations.  As China and India continue to grow at nearly 10% per year with no sign of stopping soon, their insatiable appetite for energy resources grows along with it.

For instance between now and 2050 China will require an additional terawatt of power just to sustain their current levels of growth.  Given the desire to build emission free power plants, uranium is in high demand as a fuel of choice around the world particularly amongst developing countries.

Continue reading "The dambusters: tax review’s threat to mining" »

Access to capital and finance is the single biggest issue facing the resources industry at the present time.

There’s not a single exploration company in this state that is struggling to get a project going for want of a desert power circle but there are plenty struggling for cash.

The state government has worked with the chamber in an orderly and disciplined fashion since the SACOME sponsored infrastructure conference in 2006. However, the best thing any government could do to get exploration spending moving would be to introduce a Flow Through Share (FTS) scheme.

Continue reading "Pulling mining out of a big black hole" »

Lately, I’ve got to thinking about the importance Australians place in burning great things – things of immeasurable value.

Take a drive to the Hunter Valley and you’ll see the ugly side of Australia’s predilection for carbon - the precious fossil fuels we peddle round the world and the huge economic power they wield in this country.

Around the mining town of Muswellbrook is a landscape ravaged by mining; farmland gouged away for the sake of the big deposits beneath, its air thick with coal dust and the smell of decay.

Continue reading "Torching God’s country" »

NOW that we’ve all accepted Peter Garrett is a monstrous sell-out, can we get back to the real debate _ should we develop a nuclear power industry in Australia?

It’s a debate Labor desperately doesn’t want us to have. Note how quickly Penny Wong and Wayne Swan yesterday shut down the suggestion from Rio Tinto _ admittedly the owner of our biggest uranium miner _ that Australia should start using nuclear energy to help meet its carbon reduction targets. ``We don’t agree with Rio Tinto on that point,’’ was the Treasurer’s curt response.

Unfortunately, the government’s blanket refusal to accept nuclear energy as a potential solution the planet’s greenhouse woes is fatally undermined by Labor’s own schizophrenic platform on uranium _ pro-mining, pro-exports but anti-power.

Continue reading "...And Labor should nuke its hypocrisy on uranium" »

A funny thing happened on the weekend: the world’s second largest greenhouse gas emitter - the US - took the first step towards establishing a carbon reduction scheme and almost nobody wanted to talk about it.

The Obama-endorsed scheme passed the US House of Representatives and only has to clear their Senate to become law.

In Australia, a few people welcomed the vote and applauded the move, but almost no-one dared to lift the carpet and comment on the design of the US scheme.

Continue reading "Looking to America for some sense on emissions" »