The government's RSPT spin is a disgrace

From Allan Kohler......
http://www.businessspectator.com.au...nt-Rudd-pd20100603-62SPZ?OpenDocument&src=kgb

There are three parts to this disaster:

1. The fact that it would raise the effective tax rate to the world’s highest for mining projects and therefore curtail new development;

2. The way it was introduced with no consultation or warning, which has separately damaged Australia’s reputation among all global financiers as a stable, sensible place to do business;

3. And the way the government now seems to think it’s in a political battle with global mining leaders – a battle it can win through advertising spin and lies, as it usually does against political opponents. But these are people who make decisions based on arithmetic and risk, not emotion or public opinion.

As the managing director of Xstrata, Mick Davis, wrote in a letter to London’s Financial Times this morning (and it’s worth quoting at length):

“Australia's reputation as a stable regime for foreign investment has already been damaged and investments in Australian resources are at risk of being delayed or cancelled. The consequences will be borne by mining communities, prospective employees, superannuation funds, customers, service providers and suppliers, impacting on Australia's prosperity, particularly in resource-rich remote or rural locations.

“Resources are immovable but diversified mining companies have a choice of countries in which to invest. The government has shown itself willing to breach investors' trust and damage the economic case on which multi-billion dollar investments were made. In developing countries, we manage this risk by availing ourselves of fiscal stability agreements. Sovereign risk concerns about Australia may once have seemed absurd. Sadly, today they are foremost on every mining company board's agenda.

“The mooted risk of other countries following suit is largely overdone. No other country is considering imposing such a punitive tax on its mining industry. Australia's resource taxation will be isolated as the highest in the world at 57 per cent. Indeed, many resource-rich nations regard this tax as an opportunity to gain a larger share of global mining investment – unfortunately for Australia, it is.”

It is a huge miscalculation to think this letter and other similar statements by mining leaders are part of a “scare campaign” as Wayne Swan claimed this week.
 
the problem with the new tax is that it gives an effective tax rate on net profits of 56% instead of the usual business 30%, so they are paying nearly double tax rate, which means less money to reinvest back in the company.

also means that the local steel makers (of which there are very few left), will have to pay a higher cost for raw materials and will have to either absorb the higher cost, or charge more for their steel - onesteel mines it's own ore for it's mills, but will have to pay tax on the internal transaction between sections of the company. this would mean they are no longer competitive against cheap chinese steel imports.

this puts the mill at whyalla in jepordy as it's only there due to being close to the ore - but will no longer be profitable with the tax and runs the risk of being closed, so puts a town of 30,000 reliant residences at risk.

i'm not saying to protect our local steel industry, but why should one industry have to pay double the tax rate that other businesses do?
 
i'm not saying to protect our local steel industry, but why should one industry have to pay double the tax rate that other businesses do?


I wasn't going to reply to this thread, as I've said everything already.

Any way, listening to the governments spin yesterday, all they could say over and over is,

"The miners can afford it".

Yes they can afford it. They are making a profit, a big profit. So they can afford it. But the government just don't get it. If this drives down investment and production in our one industry that we are globally dominant at, it will be counter productive. Mining will happen where the most profit will be made, and currently that won't be Australia. So mining will move to where the companies will make the most profit. It makes no difference if the miners can afford it or not.

I'll predict if the RSPT goes through there will be a big drop in mining exports, and this will make our current account deficit much bigger. We will look more and more like Greece and the Poms and everyone else. Aussie dollar will plumit even more.

A 50c $A will be good for me, but not for the average city consumer.

I'm over it.


See ya's.
 
Hi,

I read that the tax also applies to everything dug out of the ground, ie. every mining operation

This means that sand, soil and clay used for building construction and general household gardens will also get hit by the tax.

Like the Batts in the Belfry, the School rorts and most things they have tried there is clearly very little thought of the consquences been done beforehand.
 
so puts a town of 30,000 reliant residences at risk.

i'm not saying to protect our local steel industry, but why should one industry have to pay double the tax rate that other businesses do?

well Im sure the gov has thought through some of those implications ( not) and to those 30 000 and to the many others that work in related industries will be affected by the same political idealogy that is supposed to support those people.

To be fair, its a BIG sudden shift of tax burden and there are middle term implications that havent surfaced yet........


What I find more of an immediate disconceting issue for the miners at the employee level is that the Union movement is supporting this gov idea that the industry is all scare talk.

Is it not obvious that the ACTU et al are more in support of their political alliances than their membership who pay their dues ?................I think we call that biting the hand that feeds u.

Now who stole my bananas ?


ta
rolf
 
Hi,

I read that the tax also applies to everything dug out of the ground, ie. every mining operation

This means that sand, soil and clay used for building construction and general household gardens will also get hit by the tax.

.


Yep. I can see lots of little tiny family gravel operations simply shutting down, or at least they will at first, then prices would rise, and then they'd start up again, with the consumer then footing the bill.


See ya's.
 
well Im sure the gov has thought through some of those implications ( not) and to those 30 000 and to the many others that work in related industries will be affected by the same political idealogy that is supposed to support those people.

To be fair, its a BIG sudden shift of tax burden and there are middle term implications that havent surfaced yet........


What I find more of an immediate disconceting issue for the miners at the employee level is that the Union movement is supporting this gov idea that the industry is all scare talk.

Is it not obvious that the ACTU et al are more in support of their political alliances than their membership who pay their dues ?................I think we call that biting the hand that feeds u.

Now who stole my bananas ?


ta
rolf

Does the mining union have membership at all mining sites? I heard something briefly on the news this morning, that some of the xStrata sites are not unionised. Not sure how accurate that is. If it is, I can see why the union is singing the same hymn that their political masters are.
 
At least the Liverpool Plains will be protected from the coal miners. :D


Lucky we mined the soil of all it's nutrients by 1980. In theory, all those nutrients farmers took out for free should have been taxed too. It's all just crazy.

Why don't they tax me for the rain that falls on my land then. I get 6.7 million tonnes of water fall on my farm, or 6.7 billion litres. That will be next.


See ya's.
 
What I find more of an immediate disconceting issue for the miners at the employee level is that the Union movement is supporting this gov idea that the industry is all scare talk.

Is it not obvious that the ACTU et al are more in support of their political alliances than their membership who pay their dues ?................I think we call that biting the hand that feeds u.

Come on Rolf, anyone with even a speck of understanding regarding the union leaders over the last 20 years knows they couldn't give a stuff about the members.

Unfortunately most union blokes are so blinded by loyalty to their working roots, they can't see they they're getting bent over. I'm a strong union supporter (that is, I support the workers themselves, not the leaders), but I wouldn't ever consider joining a union. If I wanted to waste money in such a manner, I could just throw my cash on the ground, unzip my pants and go for my life.

Union leaderships, much like left wing political parties, have been moving steadily to the right for a while now (it's why I don't vote) and have lost sight of what really should matter to them.
 
Yep. I can see lots of little tiny family gravel operations simply shutting down

I can see that the fear campaign is working a treat.

It probably depends on the newspapers you read and the radio stations you listen to. I read the Sydney Morning Herald. I like the clarity of Ross Gittins explanations. He's written about this thing a couple of times recently. But I'm guessing I might be alone here in reading him - except for when he say positive things about property.
 
Lucky we mined the soil of all it's nutrients by 1980. In theory, all those nutrients farmers took out for free should have been taxed too. It's all just crazy.

Why don't they tax me for the rain that falls on my land then. I get 6.7 million tonnes of water fall on my farm, or 6.7 billion litres. That will be next.


See ya's.

Ssssshhhhhh TC......sssshhhhh....!

It's the first thing I thought of when the RSPT first came out....what about the nutrients farmers have taken ......it can apply to anything so long as the reaper is making so called "super profits"....still the govt has not explained a 'super profit' for the application to this whole, shemozzle.....

Like TC said...it's all just crazy...:eek:
 
its the carbon tax all over again. something so vague it can be applied ANYWHERE and rape the country of any productivity in the name of tax.
 
Look at the long term benefits. Investment will shift away from Australia and the resources will stay underground. When the rest of the world runs out Australia can charge whatever they want. We will all be rich I tell you, rich, rich, rich, hahhahhahhhahahhah. :eek:
 
Well, all I hope is Rudd and Guillard keep progressing along their ideological bent as self righteously as they have been......eventually the majority will wake up to what they voted for.......and hopefully a few generations will never vote labor again.....and the public service will be purged of blatant socialist bias.
 
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