Twiggy sticks a great big log up Rudd

[Grin]

Grin has done a bunk ever since he was asked on his own thread to indicate which of Abbott's 12 policies he disagreed with.

Apparently he has to wait for ALP HQ to tell him

I guess it's not surprising that you born to rule types who live off a stipend provided by daddy, or those in the finance industry who seem to have oodles of spare time, are so surprised that many professionals, who also have young families, don't have the inclination or the time to spend much of every day on this board.

 

[Grin]

Grin's no more an ALP voter than I'm ever going to be, so that shot of yours is about as accurate as a US "smart" missile there Jane. Methinks you're just trying to play "gotcha" - and obviously it ain't working yet

Thanks mate.

GJ new she was telling porkies. She was just desperate to copy my accusation of her because, not only did it get under her skin, she found it insightful.

Unfortunately the poor little Toff couldn't come up with anything original.

 

[Eagle87]

Agree all you want.

These threads directly contradict you, the bulk of us are supportive of a profit-based resource tax; just not one which will reduce long term investment and consequently tax revenue.

As I have long suspected, you simply don't understand this issue at all.

A "profit based resource tax" is exactly the same as company tax. If however you meant a rent resource tax then, yes, that has significant merit, particularly if it replaces royalties. That won't happen though because states won't give up their income stream.

A resource rent tax that sits on top of existing taxes is simply a cash grab. A reduction in after tax returns on investment will reduce NPV's - this will reduce the attractiveness of the sector which will inevitably lead to less investment.

The PRRT has resulted in no growth in that sector for over 20 years EXCEPT in the segments that are exempt.

It's a stupid idea to neck our most important industry for the purpose of funding recurrent expenditure.

You need to make your case or stop asserting that "almost all of us were supportive of increased taxation on mining". That's just dumb or illl-informed.

 

[Eagle87]

I agree that whay Elvis said is untrue. The right wing do not want mining to pay more tax.

But the simplistic view is that minerals are owned by Australians, are finite, and therefore we should be getting as much for them as we can.

Think of it this way. You've got a bit of spare furniture at home, so you invite the 2nd hand dealer around, and he takes some and pays you $10 per item. Then you see him selling it at $1000 in his shop.

Do you say "oh well", or do you make him pay more next time.?

So much wrong with this it's hard to know where to start. Entertaining you basic premis gives legitimacy to idiocy ....

I guess though one should always try and educate the savages.

Perhaps if the guy selling it in his shop had spent $500 in renovating the chair, had massive overheads from a high street address and large marketing campaign and needed to punt that investment (in branding, systems, infrastructure etc) then $1,000 might be the minimum required return to make it a worthwhile venture.

Sure, in isolation, it might look bad but if so, why didn't I invest my time, money and expertise and sell it for $1,000 myself?

Of course I could ignore any actual business logic and instead just whack my prices up, safe in the knowledge that the other 20 or 30 sellers of chairs, still happy to sell at $10 an item, are of no consequence because investment decisions are not made relative to such cost issues - I know this because Treasury say so.

Just keep saying "super profits" and talking about "billionaires" while the rest of the world laughs at us - because we use Dr Jolly style analysis to make such massive decisions.

 

[King Elvis]

Eagle, you clearly do have a better understanding of this than myself, and I've no doubt mixed up some terminology, and with all of the misinformation out, it's hard to get a clear picture anymore, but this is what the MCA proposed;

In a 20-page submission to the Henry Review in November 2008, the Minerals Council of Australia (MCA) said the inefficiency of volume-based royalty levies distorts orderly investment and should be replaced by higher taxes on profits with the revenues used to lower company taxes.

They persuaded the government so successfully that their tax proposal is now set to be presented to Parliament as new legislation. But rather than celebrate their lobbying prowess, the contagion since stirred up has seen billions of dollars wiped from mining company stock market capitalisations, in turn leading to claim and counterclaims that required some mining companies to issue clarifications to the Australian Securities Exchange.

The MCA's Henry Review submission stated that "Consideration is being given to introducing nationally consistent hybrid ad valorem net income royalty systems which use a low first tier ad valorem royalty accompanied by a second tier profit based royalty.

"The first tier [should] provide a regular royalty cashflow which begins when mineral sales start, and the second tier royalty is paid in addition to the first tier, if and when the project becomes profitable."

The MCA's concern in moving away from ad valorem royalties, i.e. royalties based on a fixed percentage of the value of production, was to avoid taxing miners at the start of projects before revenue had been achieved and so discourage exploration and new ventures.

What's your take on that?

 

[Eagle87]

Eagle, you clearly do have a better understanding of this than myself, and I've no doubt mixed up some terminology, and with all of the misinformation out, it's hard to get a clear picture anymore, but this is what the MCA proposed;



What's your take on that?

Who wrote it?

It is true that the MCA proposed a new system which replaced much of the existing royalty regime with a profit based rent resource tax. The issue with the current system being the requirement to pay a fixed amount per tonne (say) for resources extracted regardless of profitability. So loss companies pay royalties.

This was to be replaced with a system of increased "royalties" (resource rents) on profits. These increased royalties were to be used to fund cuts in company tax rates. It was essentially a revenue neutral approach that reduced taxes on the non-profitable projects, increased them on profitable projects and allowed a reduction in company tax rates. Overall a revenue neutral but more efficient tax regime.

There is no suggestion that the MCA submission was to result in a massive tax increase on mining. It was part of a reform review of taxation. A review aimed at simplifying and modernizing the tax system - not a review aimed at reaming our most competitive (internationally) industry.

Henry used elements of the submission to argue for his "baby" and then buttressed it with modeling that included the ludicrous notion that capital is always available (effectively infinite). He then came up with a ludicrous tax plan that used some similar terms as used in MCA submission and here we are.

There is a big difference between supporting a resource rent tax to replace much of the royalty regime and supporting an increase in tax on miners.

That said, even Henry argued for a cut in company tax to 25% in the short term and the removal of all royalties. The government couldn't manage either, just the tax grab.

 

[Clay Davis]

Yes, essentially what the government proposed was an abortion that nobody wanted, asked for, or designed.

 

[morgoth]

Good read in the AFR today on page 65 re the taxes and system in Norway. Can't link but for those interested in a positive view on a RSPT it is there in black and white.

 

[Doctor Jolly]

So much wrong with this it's hard to know where to start. Entertaining you basic premis gives legitimacy to idiocy ....

I guess though one should always try and educate the savages.

Nice start.

Perhaps if the guy selling it in his shop had spent $500 in renovating the chair, had massive overheads from a high street address and large marketing campaign and needed to punt that investment (in branding, systems, infrastructure etc) then $1,000 might be the minimum required return to make it a worthwhile venture.

Sure, in isolation, it might look bad but if so, why didn't I invest my time, money and expertise and sell it for $1,000 myself?

What rubbish. They are not add $500 to the chair, or paying $400 in shop rental.
More like $50 and $40.

Of course I could ignore any actual business logic and instead just whack my prices up, safe in the knowledge that the other 20 or 30 sellers of chairs, still happy to sell at $10 an item, are of no consequence because investment decisions are not made relative to such cost issues - I know this because Treasury say so.

Another stupid statement.
If someone wants to sell chairs with a retail value of $1000 for $10, so be it. Doesnt mean we have to.

Just keep saying "super profits" and talking about "billionaires" while the rest of the world laughs at us - because we use Dr Jolly style analysis to make such massive decisions.

Mining only employs 200,000 people in Australia. Bugger all. Ever since the super profits tax was introduced, employment has increased (No detremental effect).

So the workers dont seem to mind it. Their unions dont mind it. Other parts of the economy dont mind it (they see company tax down, and super up), so that leaves only the billionaires complaining.

... And Abbott, who today (via McFarline) have said they will abandon (and block) ANY new mining tax.
Elvis, that implies the liberals do no think mining should pay more tax.

 

[Doctor Jolly]

It is true that the MCA proposed a new system which replaced much of the existing royalty regime with a profit based rent resource tax. The issue with the current system being the requirement to pay a fixed amount per tonne (say) for resources extracted regardless of profitability. So loss companies pay royalties.

This was to be replaced with a system of increased "royalties" (resource rents) on profits. These increased royalties were to be used to fund cuts in company tax rates. It was essentially a revenue neutral approach that reduced taxes on the non-profitable projects, increased them on profitable projects and allowed a reduction in company tax rates. Overall a revenue neutral but more efficient tax regime.

There is no suggestion that the MCA submission was to result in a massive tax increase on mining. It was part of a reform review of taxation. A review aimed at simplifying and modernizing the tax system - not a review aimed at reaming our most competitive (internationally) industry.

What a suprise. The minerials council didnt want to increase taxes on mining. Shock horror. Who would have thought ?

Just because the MCA doesnt want it, doesnt mean it shouldnt happen.

 

[Eagle87]

What a suprise. The minerials council didnt want to increase taxes on mining. Shock horror. Who would have thought ?

Just because the MCA doesnt want it, doesnt mean it shouldnt happen.

Thanks.

Did you read the post I was responding to?

Are you aware of the notion of context?

Just to assist the criminally slow (I.e, you), the point is that the MCA wanting a resource rent tax has often been used in support of the RSPT. The proposal they suggested has nothing at all to do with the proposed RSPT. As long as you and the other (tax illiterate) fanbois stop claiming that then we can agree to move on.

Not that hard I would have thought.

 

[Eagle87]

Nice start.

Thanks

What rubbish. They are not add $500 to the chair, or paying $400 in shop rental.
More like $50 and $40.

In your opinion. Which is basically worthless as you have no idea what you are talking about or how the RSPT works.

FMG are a relatively small player, who spent $5 billion on infrastructure in a couple of years.

The mid-west mining group needs $5 billion in the next 2 years for infrastructure to service 5 projects in the mid-west of WA. They then need an additional 12 billion in the next 4 years of capital.

They are small players relative to RIO & BHP spending over many many years. Rudd was proposing a (largely unfunded) total infrastructure spend in WA of $2 billion, over 5 years ($0.4 billion per annum). A pointless, worthless, futile number.

These guys pay the money, build the infrastructure and take the risk, without that there is no chair. It's a pile of wood sitting in the ground, a million miles from a market, value zero. If we get $10 for it, it's way more than we get if we do nothing with it.

Another stupid statement.
If someone wants to sell chairs with a retail value of $1000 for $10, so be it. Doesnt mean we have to.

Being called stupid by you is amusing.

Your logic has worked well in, say, manufacturing hasn't it?

I mean increased costs have had no impact on growth in manufacturing in Australia and the lesser costs in our competitor markets have certainly been no issue. So be it indeed.

Mining only employs 200,000 people in Australia. Bugger all. Ever since the super profits tax was introduced, employment has increased (No detremental effect).

You get that there are other industries dependent on mining? Surely?

You apparently don't get that at present (a) mining projects already committed to will proceed (b) they have long lead times (c) the impact of this tax will be felt medium term, not next week (d) by now, no-one expects ALP to implement anything like the proposed tax - their stupidity has been exposed.

So the workers dont seem to mind it. Their unions dont mind it. Other parts of the economy dont mind it (they see company tax down, and super up), so that leaves only the billionaires complaining.

You aren't this stupid are you? I thought you and your party had agreed to stop lying while the negotiations were ongoing. No?

... And Abbott, who today (via McFarline) have said they will abandon (and block) ANY new mining tax.
Elvis, that implies the liberals do no think mining should pay more tax.

Correct. Their position is that more tax on our most significant export industry is a bad idea. Especially to fund recurring expenditure. Seems a reasonable position unless you but the piss poor class war bollocks that some in the ALP live off.

 

[Doctor Jolly]

In your opinion. Which is basically worthless as you have no idea what you are talking about or how the RSPT works.

Another cracking start.

<snip>
If we get $10 for it, it's way more than we get if we do nothing with it.

You'll never get nothing for it. You get to keep the chair for another time.

Being called stupid by you is amusing.

Your logic has worked well in, say, manufacturing hasn't it?

Manufacturing employs 1,000,000 Australians (5 x mining).
But even then they are completely different industries. Mining has a finite resource. Manufacturing is labour.

You get that there are other industries dependent on mining? Surely?

Not as significant as you'd like to make out.
Put it this way, the mining industry went into recession during the GFC, yet Australia as a whole didnt. Mining didnt drag us down then, and it wont now.

You apparently don't get that at present (a) mining projects already committed to will proceed (b) they have long lead times (c) the impact of this tax will be felt medium term, not next week (d) by now, no-one expects ALP to implement anything like the proposed tax - their stupidity has been exposed.

Sounds like Miners and Government have reached agreement.

You aren't this stupid are you? I thought you and your party had agreed to stop lying while the negotiations were ongoing. No?

You such a charmer

Correct. Their position is that more tax on our most significant export industry is a bad idea. Especially to fund recurring expenditure. Seems a reasonable position unless you but the piss poor class war bollocks that some in the ALP live off.

Labelling it a class war is just plain stupid. Its nothing of the sort.

My last comment was directed at all lib fan boys, to make sure that their views were consistant with those of Abbott.... who the mining industry seems to have left high and dry.

 

[Eagle87]

Sounds like Miners and Government have reached agreement.

Actually, it sounds like Federal Labor is going to hang on until tomorrow, leak a "deal" then call an election.

Will wait to hear from the mining industry and the 3 (and only 3) companies that have been consulted before we decide if it's a deal.

That said, the leaked deal, results in a massive backdown by government. The RSPT as announced is virtually 100% dead and the tax impact (if any) of this deal will be virtually zero. A responsible government will need to ditch all the sweeteners it funded. We shall see.

Labelling it a class war is just plain stupid. Its nothing of the sort.

And yet it'd you that always frames the argument in terms of workers/unions v billionaires ...

It turns out, the billionaires have won.

My last comment was directed at all lib fan boys, to make sure that their views were consistant with those of Abbott.... who the mining industry seems to have left high and dry.

The mining industry has to deal with the government of the day. If they do a deal that eliminates all the negatives of the new tax I.e. It neuters it, then mission accomplished.

 

[Doctor Jolly]

That said, the leaked deal, results in a massive backdown by government.
...
It turns out, the billionaires have won. .

Somehow, I just knew you'd say that... whatever the outcome was.

 

[Eagle87]

Somehow, I just knew you'd say that... whatever the outcome was.

No, I said it because, on the basis of fairfax leaks, it's true ... and you know it..

 

[Dry Rot]

No, I said it because, on the basis of fairfax leaks, it's true ... and you know it..

But it can't be, what about our "children's inheritance"?

 

[Dry Rot]

So much wrong with this it's hard to know where to start. Entertaining you basic premis gives legitimacy to idiocy ....

I guess though one should always try and educate the savages.

Thanks.

Did you read the post I was responding to?

Are you aware of the notion of context?

Just to assist the criminally slow (I.e, you)....

Not that hard I would have thought.

In your opinion. Which is basically worthless as you have no idea what you are talking about or how the RSPT works...

Being called stupid by you is amusing.

Your logic has worked well in, say, manufacturing hasn't it?

I mean increased costs have had no impact on growth in manufacturing in Australia and the lesser costs in our competitor markets have certainly been no issue. So be it indeed....

You aren't this stupid are you? I thought you and your party had agreed to stop lying while the negotiations were ongoing. No?

You know Dr Jolly, I once wondered if my extremely poor view of your village idiot style posts was unfair and maybe it was a personal thing between us, but it seems your idiocy and cluelessness are universal after all.

Well done.

 

[Old Spice]

I know that champions of law and legal tenure will appreciate that where mining is conducted on crown land, that land is owned by the government.

They are merely renters with a contractual arrangement which allows them to mine. They don't own the land or resources they dig up any more than a student owns the house they rent in.

 

[Dry Rot]

I know that champions of law and legal tenure will appreciate that where mining is conducted on crown land, that land is owned by the government.

They are merely renters with a contractual arrangement which allows them to mine. They don't own the land or resources they dig up any more than a student owns the house they rent in.

You'll love Gillard's massive backdown tomorrow - happy about that?

 

[Old Spice]

You'll love Gillard's massive backdown tomorrow - happy about that?

Yep. A revenue stream, even a reduced one, is better than one that would never have seen the light of day under the Liberals.

 

[Grin]

You know Dr Jolly, I once wondered if my extremely poor view of your village idiot style posts was unfair and maybe it was a personal thing between us, but it seems your idiocy and cluelessness are universal after all.

Well done.

Coming from someone clearly inspired by eagles87.

Surely you're being ironic.

You must be a Labor fan boy parodying a nutcase.

There can be no other conclusion.

 

[Dry Rot]

Coming from someone clearly inspired by eagles87.

Surely you're being ironic.

You must be a Labor fan boy parodying a nutcase.

There can be no other conclusion.

Not inspired, just recognising that we have a tax expert on this board unlike most of us.

 

[Old Spice]

Not inspired, just recognising that we have a tax expert on this board unlike most of us.

A tax expert no less, like Barnaby [strike] Rubble [/strike] Joyce. Hold the phones and close the thread.

I've only been on this site for a couple of hours and it's already clear you will go to the swamp time and again to validate your strange views.

 

[Dry Rot]

A tax expert no less, like Barnaby [strike] Rubble [/strike] Joyce. Hold the phones and close the thread.

I've only been on this site for a couple of hours and it's already clear you will go to the swamp time and again to validate your strange views.

Say what you like about me, but do a post search on Eagle 87 before you make that call.