Twiggy sticks a great big log up Rudd

[Eagle87]

Eagle, quick question for you. In the long run what happens to the price of a finite resource?

Will a potential small drop (or even larger) in investment now lead to much greater return in future?

To quote the Saudi guy, "The Stone Age didn't end because we ran out of stone".

Theoretically, the world where treasury lives, a finite resource will increase in value but this assumes continuing demand AND reducing supply.

Quick question fot you. In the long run can you guarantee that alternative sources of supply won't be found (outside Australia)?

Following on, can you state with certainty that "resources" won't become less valuable due to changes in technology? Changes in laws? Political changes? What about continuing cost advantages for other suppliers?

Even if they do become more valuable, can see you an issue over the next 20,30,40 years for Australia in knee capping an industry that is our largest export earner and our largest taxpayer (relative to it's size per GDP)? I mean are you satisfied with a drop in per capita GDP (and the accompanying drop in living standard) so that theoretically our great great grandchildren will make some coin?

 

[GuruJane]

The FACT is, it isn't. Any open minded analysis of remotely knowledgeable media in Australia or overseas would show that.

Fortunately for you Dawson the majority of voters have NFI

I don't know that this holds true, particularly in the marginal seats in Qld and NSW and SA that Rudd took off Howard in 2007 by promising he was fiscal conservative and Howard-lite.

I know my own financial planner (mid/late 50s guy) was prepared to take the risk of replacing Howard/Costello with Labor because of that. His issues at that time were Kyoto, saying "Sorry" and Howard has been there too long.

Interestingly, Eagle, he was shocked enough by Rudd's very first budget in 2008! Then came the stimulus spending spree .... and that was it.

It's not the resources tax itself that seems to have all the financial services and their clients reeling - it's the way Rudd sprang it on before consultation and immediately launched a full frontal assault on the "greedy miners" campaign using an AWU attack dog.

Big End of town has never expected this ever from Labor and unions because of the trust hard won by the Hawke/Keating/ACTU years. Just look at Twiggy Forrest for shock and betrayal. It's going to take a lot of work from some future Labor leader (Greg Combet?) to repair this because even if Rudd compromises they will only think its for pure political gain. Untrustworthy. And Gillard, Swan, Tanner are as fatally compromised by this as the succession of liberal leaders were by workchoices.

 

[evo]

I think you are overplaying how badly this will hit Labor at the balliot box, Jane. But it is interesting analysis, nevertheless.

I pretty much in agreeance with Eagle87. Most of the punters either gobble-up attacks on the 'greedy' miners, or shrug their shoulders. It may cost them a seat or two in WA and QLD, but that would be it.

At a guess, your accountant probably lives in a safe Lib seat anyway.

Swan is a clown, and Ken Henry is not much better but I don't think we are at Khemlani stage, just yet.

 

[Relativity]

Then why don't they?

Perhaps we are watching them do as much now.

 

[Dawson]

Perhaps we are watching them do as much now.

Really, so all the billions (many billions more than this tax will ever take) of $ they have invested in infrastructure, markets, workforce etc, will just be left to rot in the ground because they are going to be taxed 40% on super profits.

............. and of course there is that Santa and Easter Bunny thing going on too

 

[Eagle87]

Really, so all the billions (many billions more than this tax will ever take) of $ they have invested in infrastructure, markets, workforce etc, will just be left to rot in the ground because they are going to be taxed 40% on super profits.

............. and of course there is that Santa and Easter Bunny thing going on too

Your refusal to engage on the ACTUAL issue is enjoyable as always Murray...

As you are well aware, the projects already underway, with the billions already invested (with no input from government) will proceed/continue...

Its what happens with the billions not yet signed off on thats at issue here...

The governments effective nationalisation of existin projects with the tax applying to existing projects is just part of the disgrace that this new tax is ...

Feel free to engage on the issues Murray, otherwise some of us will dismiss you for the party funded clown you are .... oh wait ....

 

[Relativity]

Really, so all the billions (many billions more than this tax will ever take) of $ they have invested in infrastructure, markets, workforce etc, will just be left to rot in the ground because they are going to be taxed 40% on super profits.

............. and of course there is that Santa and Easter Bunny thing going on too

It's not totally about the existing miners in Australia. There are other miners oversees who may be the beneficiaries of future investment and mineral sales at the expense of Australia's mines. We are talking about a market place here. If mining in Australia becomes more expensive than in Argentina then, yes, infrastructure in Australia "will just be left to rot in the ground". It has happened before. Santa and Easter bunny might be your best friends at the moment.

 

[Scotland]

I think you are overplaying how badly this will hit Labor at the balliot box, Jane. But it is interesting analysis, nevertheless.

I pretty much in agreeance with Eagle87. Most of the punters either gobble-up attacks on the 'greedy' miners, or shrug their shoulders. It may cost them a seat or two in WA and QLD, but that would be it.

At a guess, your accountant probably lives in a safe Lib seat anyway.

Swan is a clown, and Ken Henry is not much better but I don't think we are at Khemlani stage, just yet.

Agree.

The masses want low interest rates, high paying jobs for all, cheap imports and expensive houses.

Unless Abbott & Co. are savvy enough (which they aren't) to convince them that Rudd's policies will affect the above then the effect at the polls will be minimal outside WA and Qld.

Of course if mining dies in the arse in future and does affect the above then the masses will be up in arms and will vote for anyone who promises to reverse the damage (even if they can't).

 

[GuruJane]

I think you are overplaying how badly this will hit Labor at the balliot box, Jane. But it is interesting analysis, nevertheless.

I pretty much in agreeance with Eagle87. Most of the punters either gobble-up attacks on the 'greedy' miners, or shrug their shoulders. It may cost them a seat or two in WA and QLD, but that would be it.

At a guess, your accountant probably lives in a safe Lib seat anyway.

No, he's in one of those nice leafy eastern seats that can go either way and is married to one of those "doctors wives" types.

As for the voters in the key marginals - the so called "Howard battlers" - they kept Hawke and Keating in power for 13 years, then Howard in power for 11 and then they elected Kevin Rudd because he represented himself as fiscal conservative, Howard-lite and a tough guy. Government's majority not that big, mate.

But let's look at the scenario where the polls show the punters are backing Rudd's so-called popularist demonisation of the industry "everybody knows" saved Australia from recession. Do we think said foreign capital will flood back into the country? Do we think financial advisors will be saying "Buy" or "keep it in the bank"?

 

[Dawson]

It's not totally about the existing miners in Australia. There are other miners oversees who may be the beneficiaries of future investment and mineral sales at the expense of Australia's mines. We are talking about a market place here. If mining in Australia becomes more expensive than in Argentina then, yes, infrastructure in Australia "will just be left to rot in the ground". It has happened before. Santa and Easter bunny might be your best friends at the moment.

RIO pay 13 cents in the $ on Tax, that is less than I pay.

RIO, BHP and FMG have got to stop bludging on the rest of us and pay their fair share

 

[Financialpanther]

Is this a transcript from Julia from the today show this morning? Seriously - if they are letting the miners pay this amount of tax, perhaps it would have been easier to close loopholes than do the super tax. Its still a weak populist argument from that standpoint.

 

[Dawson]

Is this a transcript from Julia from the today show this morning? Seriously - if they are letting the miners pay this amount of tax, perhaps it would have been easier to close loopholes than do the super tax. Its still a weak populist argument from that standpoint.

....... and you forgot to mention, true

 

[Financialpanther]

....... and you forgot to mention, true

haha - nice touch. Nothing I have heard from either Kevin, Julia, Wayne or Lindsay since 2007 has been anywhere near true (just like anything mentioned by Tony, Malcolm or Brendan). I don't beleive a word of what has been uttered - this policy has been extremely poorly sold. Just because they say it in the media doesn't make it true.

 

[Dawson]

haha - nice touch. Nothing I have heard from either Kevin, Julia, Wayne or Lindsay since 2007 has been anywhere near true (just like anything mentioned by Tony, Malcolm or Brendan). I don't beleive a word of what has been uttered - this policy has been extremely poorly sold. Just because they say it in the media doesn't make it true.

Yep the only truth is the mighty $, yes?

 

[Financialpanther]

Yep the only truth is the mighty $, yes?

Did I say that? The only truth is that both sides of politics are complete rubbish.

 

[Scotland]

RIO pay 13 cents in the $ on Tax, that is less than I pay.

RIO, BHP and FMG have got to stop bludging on the rest of us and pay their fair share

How much tax do say CBA, CCA, WBC and WPL pay in the $?

 

[Womble]

It's looking like we're heading towards a compromise deal - the government will scrap the rebates for loses to pay for a lift in the 6% to 11% or so the same as for petroleum. Not a bad result for mine, I just hope they hurry up and get there - all this arguing about 13% vs 57% when the truth will obviously be somewhere in the middle does no one any good.

Compromise quickly and move on - everybody wins - well actually the mining companies lose but even they admit they should pay more than they have been.

 

[GuruJane]

It's looking like we're heading towards a compromise deal - the government will scrap the rebates for loses to pay for a lift in the 6% to 11% or so the same as for petroleum. Not a bad result for mine, I just hope they hurry up and get there - all this arguing about 13% vs 57% when the truth will obviously be somewhere in the middle does no one any good.

Compromise quickly and move on - everybody wins - well actually the mining companies lose but even they admit they should pay more than they have been.

Don't think they are admitting that!!!!!

What they are saying is that they don't have an in principle objection to a profits tax, as long as it is constructed in such a way they don't pay so much more than they do at present and lose their competitive advantage.

But the more serious underlying issue for Rudd is that they do not trust the government any more. Nor does the rest of the big end of town, nor does the financial services industry.

 

[Metal]

An agreement would see the Liberals marginalised and people like Palmer out on their own. This process of consultation is exactly what is needed as there are businesses out there who do want constructive dialogue and not just grandstand on behalf of the Liberal party. Consultation to get it right. But of course, as with any policy, it will never be perfect. But working with industry is a sure way to get some parts acceptable even if there is disagreement about other parts.

The 13-17c effective tax rate paid by big miners is a compelling argument for higher tax and may ultimately leave the Coalition yet again looking irrelevant. I think Gillard nailed it for the masses in that one clip.

 

[MrMeaner]

Will the Chinese government be upset about Twiggy revealing details of its note to Fortescue?

 

[Dry Rot]

An agreement would see the Liberals marginalised and people like Palmer out on their own. This process of consultation is exactly what is needed as there are businesses out there who do want constructive dialogue and not just grandstand on behalf of the Liberal party. Consultation to get it right. But of course, as with any policy, it will never be perfect. But working with industry is a sure way to get some parts acceptable even if there is disagreement about other parts.

The 13-17c effective tax rate paid by big miners is a compelling argument for higher tax and may ultimately leave the Coalition yet again looking irrelevant. I think Gillard nailed it for the masses in that one clip.

I heard on ABC radio this morning that those figures came from a student's paper, not Treasury. Moreover, they don't include the state royalties.

Happy that Gillard and co are telling lies?

 

[Eagle87]

I heard on ABC radio this morning that those figures came from a student's paper, not Treasury. Moreover, they don't include the state royalties.

Happy that Gillard and co are telling lies?

The thing is, the 57% figure quoted extensively is not disputed. Sure, it only applies to very profitable projects but it's not disputed.

The 13% is a fallacy.

It ignores royalties, which apply even when a project makes losses, and it makes assumptions about certain mining "concessions". The reality is that mining companies currently pay 30% of their taxable income ("profits") to the federal government and they pay royalties to state governments. Under the proposed regime they will pay more tax.

Arguments about whether a write off of certain capital costs result in a reduction in taxable income unavailable to other industries are moot. All industries have unique characteristics which result in unique provisions of the tax act. To argue this leads to lower tax being paid is humorous. I mean if I disallowed ALL expenses as tax deductions that would increase everyones tax payable with zero change to the rate. The rate would still be 30%.

The governments assertion is that mining companies get "preferential" treatment v some industries re certain "capital" outgoings (and similar). But this assumes that these costs are capital rather than revenue outgoings. That's essentially a debate for accountants - who agree with the current treatment.

I mean tuis is the same government that in it's 2 week old budget introduced series of withholding tax reductionsv(and ultimately exemptions) for foreign companies and for banks because "this better reflects the unique nature of those arrangements". Is that a reduction in effective tax rates or simply law reflecting reality?

Same issue as the miners.

The 13% argument is completely and utterly baseless. Rank silliness in fact.

 

[Eagle87]

It's looking like we're heading towards a compromise deal - the government will scrap the rebates for loses to pay for a lift in the 6% to 11% or so the same as for petroleum. Not a bad result for mine, I just hope they hurry up and get there - all this arguing about 13% vs 57% when the truth will obviously be somewhere in the middle does no one any good.

Compromise quickly and move on - everybody wins - well actually the mining companies lose but even they admit they should pay more than they have been.

How unsurprising that you don't understand what's going on.

The 57% rate payable by profitable mines under the proposal is indisputable. The 13% is simply fiction.

I mean, if I argued that every tax deductible expense of miners was "preferential", I could argue that they pay a rate approaching zero. Would be a nonsense, just like the 13% is. They currently pay 30% + royalties.

Also, the governments claim for a budget surplus in 3 years CANNOT be met under the "compromise" you suggest. Can we assume that Rudd will come out and concede that before the election?

The tax (adjusted for reduced loss claims) will struggle to raise 50% of it's current estimated amount under the change you suggest.

 

[Dawson]

I heard on ABC radio this morning that those figures came from a student's paper, not Treasury. Moreover, they don't include the state royalties.

Happy that Gillard and co are telling lies?

You Liberals are funny guys

 

[Scotland]

Any danger of this 'paper' being published to the public forum?

Mining companies pay corporate tax at the standard rate of 30% as well as state royalties.

Do people understand that if you dig something up worth $100/t and sell it for $100/t your profit is not actually $100/t?