Resources Super Profits Tax
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.
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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.
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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”.
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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.