Grasping the MRRT's property peril

[redwing]

By Robert Gottliebsen

Clicky Link

The value of Australian houses and the level of the Australian stock market weigh heavily of the shoulders of Resource Minister Martin Ferguson and his “assistant”, former BHP Billiton chairman Don Argus.

The Ferguson-Argus committee has the task of refining and detailing the so-called MRRT which was the previous government’s second attempt at a mining tax

Australian house prices are maintained at current levels because the world money markets are prepared to lend vast sums to Australian banks – funding about 40 per cent of every loan the banks make.

The overseas institutions lend big sums to Australian banks in part because they have confidence that the country’s economy will be underpinned by hundreds of billions earmarked for new Australian mining projects. If the overseas institutions think that Australia will take actions that will halt much of this mining investment, the overseas banks will reduce the amount they are prepared to lend to Australian banks

In turn that will mean that there will be less money available to fund Australian houses and/or interest rates will need to be increased to attract a much bigger proportion of the Australian savings market into bank deposits. If either of these events take place house prices will decline sharply and the stock market will be ravaged slashing the value of Australian superannuation savings

Argus points out that Australia has only 15 per cent of global iron ore and just six per cent of black coal. So if we make it uneconomic to develop our iron ore or coal mines, then there is plenty or ore to be mined around the world. Much of that additional iron ore is in Africa and its true that African politics makes miners, even Chinese miners, a tad nervous.
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It will be interesting to see how the revamped RSPT as a MRRT will play out over the coming months

 

[Timeshift]

Thanks for the link, scary stuff if Bob Brown gets his way.

 

[redwing]

MRRT

= Mafia Rorts Regular Taxpayers

 

[Aaron Sice]

Morons Rip Regional Taxpayers.

 

[redwing]

All went to the High Court this week with Andrew Forrest and FMG challenging the MRRT as being unconstitutional

 

[Crabnet]

All went to the High Court this week with Andrew Forrest and FMG challenging the MRRT as being unconstitutional

Yes, and one of the judges had to excuse himself because he advised the Government when they set up the tax.