The government's RSPT spin is a disgrace

[MissMuffitt]

I am very confused about this "40% Super profits tax" on the mines.
Can anyone tell me how much they were getting taxed before? And is this 40% on top of what they are already getting taxed?
It sure sounds like Rudd is trying to kill the goose that lays the golden eggs to me...
Any links to articles that would explain how it all works would be very much appreciated.

 

[Sunfish]

hopefully a few generations will never vote labor again.....and the public service will be purged of blatant socialist bias.

Not so sure. Socialism is a heady narcotic for the great unwashed. France and Italy (I must've missed Greece ) have been socialist since soon after the war.

Young, dynamic nations such as the US, Aus and Can were immune but as the political systems age those with their hand out outnumber those with their finger out and "democracy" takes hold. It's all downhill from there. :bummer:

 

[Sunfish]

And is this 40% on top of what they are already getting taxed?

'Tis 40% over and above their company tax obligations, AFTER state royalties but BEFORE financing costs. A new mine must pay royalties on the first ton of ore dug with no consideration of profitability.

Edit: but BEFORE financing costs. This is as if they taxed your rental income without allowing your mortgage costs. It is possible this fact alone could destroy the value of Fortesque.

 

[Bargain Hunter]

It sure sounds like Rudd is trying to kill the goose that lays the golden eggs to me...

K.Rudd is set to prove to the masses that fairy tales can come true... MissMuffitt.

 

[MissMuffitt]

So SunFish... when does the super profit tax cut in? So company tax is 30% + the 40% would mean 70% tax??!!
Sounds extreamly high to me!

 

[Strannik]

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.

you've been misled by miners' propaganda

the tax only applies to those companies who produce super profits.

majority of mining companies won't have to pay it

 

[Strannik]

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.

Just what i wanted to mention!

 

[The Fence]

What is a super profit then...???

 

[Token Funder]

The industry itself supports (to the extent any business supports a tax) as it is seen as fairer than volumetric royalties etc. And it is too easily forgotten that an identical tax already exists in Australia for offshore oil and gas production. For example, the Gorgon project is subject to this tax regime.

The industry has two issues: firstly the fact the tax kicks in on. Profits in excess of the long-term bond rate and secondly that it applies to existing projects.

Now, if your interested in going beyond the tax is good/tax is bad over-simplifications, have a read of this http://www.theaustralian.com.au/business/the-new-australian-resource-rent-tax/story-e6frg8zx-1225869337321

 

[WinstonWolfe]

three ways to reduce super profits to normal profits

- pay the directors and senior mgt super salaries.
- increase debt to equity ratio
- spend more on higher risk exploration

or, just go do a deal with Mgabe and open mines in Zimbabwe.

 

[Strannik]

three ways to reduce super profits to normal profits

- pay the directors and senior mgt super salaries.

i'm fine with that
let them pay super tax on their earnings

 

[Bill.L]

Hi all,

TC,

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.

Don't laugh that one off so quickly, I have read such suggestions in government reports on water as future possibilities.

For everyone..

Now, putting my hard hat on, the flaq jacket, strong boots, riggers gloves and safety goggles....

If the world is so awash with all these resources that mining companies can just pick and choose what to develop, then why are many commodity prices so high in historic terms??

If the world is indeed close to, or at peak oil and 'peak everything' then why would it hurt to make it much more expensive for the mining companies to take the remaining resources??

Do all of you who are so aghast at the new tax believe we have unlimited resources to be plundered by the cheapest means, as quickly as possible??

Are we so short sighted that we need development now at the expense of future generations who may be able to use the resource more efficiently??

bye

 

[Rolf Latham]

Now, if your interested in going beyond the tax is good/tax is bad over-simplifications, have a read of this http://www.theaustralian.com.au/business/the-new-australian-resource-rent-tax/story-e6frg8zx-1225869337321

nah, the tax is all good if u read the story backwards...... it starts with this

At this dangerous time for the world and for Australia, it is important that we restore a capacity for Australian Governments to implement policy in the public interest, independently of pressures from private interests.

In context, the rest of the "story" will be laced with the same undertone

Out of context, If we were to apply such theory in a consistent manner , capitalism and free enterprise would not have a chance. Indeed we would not need another election for the next x years, because demonstrably the incumbent gov has the public interest at heart, and all others have their wallet at heart..........the recent ATCU radio ads say so
ta
rolf

 

[WinstonWolfe]

I wish some journo would dig up what % tax Therese has paid for the last 5 years, whether Australia or UK.

BillL I agree we should be thinking more strategically about how fast we allow the world to consume our resources.....but let's give the miners and fair notice...

 

[lizzie]

So SunFish... when does the super profit tax cut in? So company tax is 30% + the 40% would mean 70% tax??!!
Sounds extreamly high to me!

hubby's company has worked it out that they will effectively pay 56% tax on profits - and as mentioned, this net profit doesn't include any debt repayments or research/developoment costs.

i understand that it also touted to be pay retrospectively - so if the company's have to pay tax for past profits, with money they've already spent on either dividends or debt reduction or improving infrastructure, then they're up the creek financially.

 

[Bill.L]

Hi again,

What percentage tax do large Wineries pay?? What about Tobbacanists (sp)??
How about Breweries?? Do those industries get plenty of warning and discussion before tax rises??

When GST was introduced, did the population get to vote on it was it just introduced?? How about CGT when it first came in?? Then there was Keatings sudden change to negative gearing as well. There has always been great sudden changes to the tax system, and not just here.

Why do large miners deserve any more warning than anyone else?? All warning does is allow interest groups to campaign against the tax.

bye

 

[Sunfish]

So SunFish... when does the super profit tax cut in? So company tax is 30% + the 40% would mean 70% tax??!!
Sounds extreamly high to me!

Remember, Chipp Goodyear, a past CEO of BHP, says it's beyond him and I am a long way from where he is.

It's the order they are paid that is important. A new mine starts paying royalties from the first ton dug, regardless of profit/loss and typically it takes a new mine a couple of years to show a profit. Once profitable, probably every qtr, the miners will have to post a cheque for 40% of 94% of the profits from any profitable mine with no allowance for exploration of new mines, possibly only for extension drilling of the leases being worked. I have no idea how the royalties paid during these transition years are handled but if the gov was fair-dinkum about helping start-up miners they would rebate it back to the miner but I've never heard anyone suggest that will happen. Most likely it will be capitalised and become part of the cost base on which the 6% "non-super tax" is calculated.

Then annually they will pay their company tax like anyone else ie 30% of what is left after the super-tax has been paid. Theoretically that is 30% of 60%, or 20% which, when added to the 40%, becomes a 60% tax obligation. BHP and RIO say they will actually pay 57% on their cash cow mines.

The most important thing in my mind is that all new mines will need to be funded out of the capital left after the super-tax is paid. All expenditure will be capitalised and only recoverable via depreciation, as is normal for everyone. There may a clue here on why the tax is being introduced: BHP and RIO say they have reinvested all profits generated in Australia back into Australia and depreciation of this expenditure must mean a lot of tax missed. But every business is entitled depreciate capital expenditure!

 

[Sunfish]

If the world is so awash with all these resources that mining companies can just pick and choose what to develop, then why are many commodity prices so high in historic terms??

Because capital and infrastructure is harder to find than coal and iron.

If the world is indeed close to, or at peak oil and 'peak everything' then why would it hurt to make it much more expensive for the mining companies to take the remaining resources??

What gubmint do you know that has admitted "peak oil" yet? No way have we hit "peak coal".

Do all of you who are so aghast at the new tax believe we have unlimited resources to be plundered by the cheapest means, as quickly as possible??

Are we so short sighted that we need development now at the expense of future generations who may be able to use the resource more efficiently??

bye

Emotive claptrap.

 

[Bill.L]

Hi Sunfish,

What gubmint do you know that has admitted "peak oil" yet?

So something is only true if a government says it so. Does that mean that because governments say there is no financial problems and we are in the recovery stage you believe them??

Would the US military do?

http://www.peakoil.net/files/JOE2010.pdf

How about the British Government??

The British government, including energy minister Lord Hunt, responded by staging a closed-door summit meeting with the taskforce on March 22. As the UK’s Guardian reported, the government intended to develop an action plan to contend with a near-term peak, and to “calm rising fears over peak oil.”

Veteran peak oil analyst and taskforce member Jeremy Leggett explained: “Government has gone from the BP position – ‘40 years of supply left, the price mechanism works, no need to worry’ – to ‘crikey’.” He urged the assembly to properly assess the risks of peak oil, and to immediately begin preparing for the end of globalization and an era of oil shortages in the West.

According to reports from attendees, the summit yielded some important conclusions:

* Peak oil is either here, or close enough.
* Prices will have to go higher as demand outstrips supply.
* Governments will be forced to intervene to maintain critical levels of oil supply, and limit volatility.
* Rationing measures may be unavoidable.
* Electrification of transport must be pursued in order to reduce demand.
* Communities will need to work quickly to reorganize around walking instead of driving, producing food and energy locally instead of importing, and generally try to reduce their need for oil.

from here....

http://www.energybulletin.net/node/52311

Emotive claptrap.

Ask the current people of Nauru about the bright idea of the past generation to mine all the phosphate rock as fast as possible and live of the capital the royalties generated.

If you have no answer, don't try to to be a smart @rse by deferring it as if it didn't matter. Do you think we should mine the resources as quickly as possible or not. Got any intelligent reasoning why??

bye

 

[Strannik]

What percentage tax do large Wineries pay?? What about Tobbacanists (sp)??
How about Breweries?? Do those industries get plenty of warning and discussion before tax rises??

good point

tobacco, alcohol and petrol already carries an enormous tax burden

why should miners be any better?