Twiggy sticks a great big log up Rudd

[Eagle87]

Whats the matter, MCA havent given you their talking points on this one?
Go and do your homework and come back and tell me I am wrong.

I advise mining companies on tax in Australia and Asia. I have advised in Australia for over 20 years.

You are wrong.

 

[Keys]

Then you will understand that under our income tax systems you pay a higher % of your income in tax as you earn more.



Thats correct before any deductions both taxpayers earning $100k per year will be liable for the same % of income to be paid by them.

$45k p.a. is a 'fair' salary
Hell, at $100k he's only paying 25.5% tax

$45,000 are liable for 16.3% of their salary to be paid in income tax before any offsets are taken into account

The person on $100,000 pays 22.5% according to you.

Someone on $180,000 pays about 31% of their income in tax.

You've completely missed the point.

The super profits tax will mean mining companies pay more tax than other companies earning the same amount based on the premise that the resources they are mining are owned by all Australians.

Workers in the mining industry also derive their income from digging out those same resources that all Australians own so it follows that they should pay more tax than taxpayers earning the same amount in other industries.

 

[r dub 19]

When American University students are dictating Australian economic policy, I think it's time we all moved to Canada.

 

[Scotland]

You've completely missed the point.

The super profits tax will mean mining companies pay more tax than other companies earning the same amount based on the premise that the resources they are mining are owned by all Australians.

Workers in the mining industry also derive their income from digging out those same resources that all Australians own so it follows that they should pay more tax than taxpayers earning the same amount in other industries.

Ding ding, we have a winner.

But.. but... corporations!

 

[r dub 19]

You've completely missed the point.

The super profits tax will mean mining companies pay more tax than other companies earning the same amount based on the premise that the resources they are mining are owned by all Australians.

Workers in the mining industry also derive their income from digging out those same resources that all Australians own so it follows that they should pay more tax than taxpayers earning the same amount in other industries.

Don't the people living in the states where said resouces are found own them? Not all aussies?

 

[fairdinkum]

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

Would love to see some verification of this claim.

Surely cannot be true.

EDIT: Posts since reveal that it probably isn't true. Interesting.

They are.
$0-6000 tax free
$6001-$35,000 15%
$35,001-$80,000 30%
$80,001-$180,000 38%
>$180,001 45%

Well played.

 

[r dub 19]

The Federal Government’s claims that the mining sector pays between 13 to 17 per cent corporate tax are
comprehensively contradicted by official data from the Australian Taxation Office.
Analysis of the ATO’s Taxation Statistics 2007-08 shows the following:​

•

the average corporate tax rate paid by the mining sector is 27.81 per cent

• ​

​

when mining company royalty payments are added, the effective tax rate paid by Australia’s mining

sector increases to 41.3 per cent
Rather than relying on a graduate research paper from South Carolina, the Government could have obtained​

accurate data from its own Tax Office.
​

When mining royalties are included, the effective rate of tax for mining companies – ​

on the ATO’s own data
– is 41.3 per cent. This compares with an average across all sectors of 27.18 per cent.
​

Mineral council report.
​

 

[pazza]

If people actually listened to Parliament yesterday as I did, Swan has said that as part of the tax reform..the royalties paid by the states are going to be EFFECTIVELY REPLACED by the RSPT.

So by extension, the states will lose the royalties.

Further - that because of the subsidies the mining industry currently gets, the effective tax rate is further lowered.

Therefore, a combination of the lower company tax rate and the subsidies would see the mining companies pay nowhere near what they say they are.

The Minerals Council - fudging the figures for themselves and beaten by Swan in Parliament.

 

[Womble]

Who pays what? 14%, 17%, 57%, 58% ??

Like I said yesterday, the truth will be somewhere in the middle

http://www.treasury.gov.au/contentitem.asp?NavId=002&ContentID=1815

Is Treasury's latest crack at it - from my quick reading of it 17% is about right, possibly add in the royalties so 30% ish? either way the RSPT rebates the royalties so getting 57% or 58% is drawing a VERY long bow.

It still all comes back to one simple fact - the FINITE resources can only be dug up and sold ONCE - when it's gone, it's gone - unlike just about every other industry where we can tax their ongoing production over and over - so it makes sense to me to tax mining harder. The model needs improving but the principle is spot on.

 

[Metal]

From The Age

http://www.theage.com.au/business/mining-companies-lying-or-ignorant-swan-20100524-w819.html

Mr Swan released Treasury calculations showing that mining companies paid an average company tax rate of just 17 per cent in the 10 years to 2004-05 - well below the average for all industries of 26 per cent.

Also in the same article -

Mr Swan denounced the industry for spreading what he described as ''myths'' - in particular that every return over 6 per cent would pay the tax.

''I regret to say this is a calculated and deliberate misrepresentation,'' Mr Swan told Parliament.

''If you hear a mining executive saying it, they are either lying to you or they are ignorant - either way it should be of concern to their shareholders.''

He said their argument ''deliberately ignores'' three offsetting elements - that royalties are being rebated, that the resources tax will be deductible against company tax, and that the company tax rate will be cut.

''Once you add the combined effect of these elements, a project earning 6 per cent in fact pays substantially less tax under our reforms,'' Mr Swan said.

The calculations that Mr Swan released were based on a report by three officials of Treasury's business tax division.

The report looks at differences in average company tax rates across industries. It was originally scheduled to be released next month.

The paper found that ''contrary to expectations'' the mining industry's average tax rate appeared to be relatively low. And mining's proportional contribution to corporate tax collections did not appear to have risen, despite the beginning of boom conditions around 2003-04.

 

[King Elvis]

I can't believe the Government is willing to provoke and engage in a shitfight with our most important industry.

And considering their willingness to exclude the royalty figures when they've discussed the level of tax paid by the mining industry, how do we know they aren't being selective with their figures again?

And how can there be such a massive disparity between that, and the ATOs figures?

 

[Dawson]

Would love to see some verification of this claim.

Surely cannot be true.

EDIT: Posts since reveal that it probably isn't true. Interesting.

Read on then and you see what I said was correct.

Edit: Swan also confirmed it Parliament

 

[morgoth]

From The Age

http://www.theage.com.au/business/mining-companies-lying-or-ignorant-swan-20100524-w819.html

Mr Swan released Treasury calculations showing that mining companies paid an average company tax rate of just 17 per cent in the 10 years to 2004-05 - well below the average for all industries of 26 per cent.

Also in the same article -

Mr Swan denounced the industry for spreading what he described as ''myths'' - in particular that every return over 6 per cent would pay the tax.

''I regret to say this is a calculated and deliberate misrepresentation,'' Mr Swan told Parliament.

''If you hear a mining executive saying it, they are either lying to you or they are ignorant - either way it should be of concern to their shareholders.''

He said their argument ''deliberately ignores'' three offsetting elements - that royalties are being rebated, that the resources tax will be deductible against company tax, and that the company tax rate will be cut.

''Once you add the combined effect of these elements, a project earning 6 per cent in fact pays substantially less tax under our reforms,'' Mr Swan said.

The calculations that Mr Swan released were based on a report by three officials of Treasury's business tax division.

The report looks at differences in average company tax rates across industries. It was originally scheduled to be released next month.

The paper found that ''contrary to expectations'' the mining industry's average tax rate appeared to be relatively low. And mining's proportional contribution to corporate tax collections did not appear to have risen, despite the beginning of boom conditions around 2003-04.

Did you stop to ask why they used 2004/05 numbers???? Why not something a bit more recent? The data is sitting on the ATO site all they have to do is look.

Also please remember that companies are requried to correctly state their tax under the corporations law, which in turn is audited. Directors can go to jail for making false and misleading statements so they have an incentive to get it right.

This is the data the mining companies are using and it seems to correlate with ATO figures.

 

[r dub 19]

The mineral council report is based on ATO figures. I guess the ATO have a reason to lie right? Why don't some people actually read the BHP annual report? You can see how much tax they pay for yourself.

 

[Scotland]

Read on then and you see what I said was correct.

Edit: Swan also confirmed it Parliament

Swan said it? Well in that case it must be correct - end the debate now!

As expected, the Minerals Council disagree.

http://www.minerals.org.au/__data/a...truth about the super tax-myths and facts.pdf

 

[r dub 19]

Rudd is in for a real fight. Twiggy put this letter out to all shareholders:

Dear fellow Fortescue Shareholders,

FORTESCUE RESPONSE TO RESOURCE SUPER PROFITS TAX

We are bewildered by the Governments inability to consult on this poorly
thought out proposal. They introduced the tax with no consultation before they took it into their budget and no real consultation since. Its now clear that this means they have dropped on the Australian people a socialist style funding and tax device where the Government is now your silent partner, as per the alarm first raised by your CEO. The tax is simply a huge new take dressed up as a project funding contribution where it makes none. In short, we believe the Resource Super Profits Tax (RSPT) is bad for every Australian. It harms the mining industry and especially Fortescue and we are urging the Government to drop this proposal and to open a new forum for dialogue with all industries to discuss tax reform.

We acknowledge Australia needs tax reform and are pleased to be working withthe Treasury consultation panel to consider and make input to a new and fairer tax system. Unfortunately the existing consultative process does not allow for any negotiation or discussion on the key parameters of the Governments proposal. The panel had their hands tied behind their backs by the Government before consultations started. Hence previously healthy projects become unfinanceable. We now have a huge
new tax on the mining industry that will ultimately decimate future investments
in new projects and have a negative impact on the value of your investment in
our Company.

Put simply, our major concerns about this retrospective tax are:

1 Increasing the rate of tax for mining companies to such a high rate
will make it almost impossible for Australian companies to finance
new projects;
2 The 40 per cent tax component is applied prior to paying interest and
other taxes, increasing the overall tax responsibility on a company to
around 58 per cent, which makes the Australian mining industry the
highest taxed in the world;
3 The Governments 40 per cent guarantee, which is the key to the
model for the RSPT, is of little to no value to banks and project
financiers: the model is fundamentally flawed;
4 You, our loyal shareholders, may continue to see the value of your
shares negatively impacted along with all Australians who invest in
the resources sector through their superannuation; and
5 Jobs will be denied to tens of thousands of Australians who would
have been employed on new projects.


You may have been told that the RSPT proposal is similar to the Resources
Rent Tax that has applied to the petroleum industry. Its not. Its much, much
worse. Even though that tax was not particularly successful either, the projects
that finally proceeded under it have waited decades in the international queue
as more attractive projects went first. Those overseas projects which were
developed before ours did not employ Australians nor generate wealth for our
country. Where the same Australian economist applied a similar tax, it
suffocated exploration and development in Papua New Guinea to a fraction of
what it could have been. However, the RSPT is much worse as kills the
financing of a project as well as the returns expected from it, not just the
returns.

Australia has maintained a proud history of being viewed as a safe international
investment destination. However, with no consultation, the implementation of an
additional 40 per cent take, before all other taxes and obligations on existing
and new mining businesses, has changed this perception forever. It is
incumbent upon us all to get rid of the RSPT to limit the damage to our
countrys reputation.

This tax was not designed by anyone with a working knowledge of project
finance; the keystone of this tax rests on a Government guarantee to refund 40
per cent of any losses not rebated through the tax system. It waits until a project
has failed or reached the end of its life without having redeemed the tax credits.
It is of course theoretical nonsense. Who believes that companies could fund 40
per cent of an investment on the strength of some future unbudgeted
Government tax credit after it failed? No bank wants to fund a failed project on
the premise that 40 per cent can subsequently, perhaps, be reclaimed through
tax.

To make the point, imagine for a moment that your home loan was based on
you failing to make your mortgage repayments and the house being sold in a
mortgagee-in-possession auction. Do you think your banker would be happy
that someone would make good 40 per cent of the loss as a reason to lend you
the money - in return for taking 40 per cent of your income? The same income
they were relying on to allow you to repay the loan? Clearly the banker would
have stopped you buying the house because they rely on believable repayment
schedules, not bankruptcy events.

With this premise discredited, so too is the notion that the Government is
justified in taking an additional 40 per cent of a companys normal profits.
To imagine that earning a rate above six per cent constitutes a super profit just
further diminishes the basis upon which this nonsense has been developed.
The sad outcome of this flawed economic logic is that the Fortescue Board has
taken the tough decision to place our Solomon and Western Hub projects on
hold. These projects are of national significance and if developed would
produce as much iron ore as the equity owned in existing iron ore projects in the
Pilbara by Rio Tinto and BHP Billiton. To delay, or worse still, possibly cancel
two of the worlds greatest undeveloped resource projects will impact the
Australian economy for decades.

Finally, all Australian companies must make a profit to survive. This protects
Australia from sub-economic projects being developed. An unintended
consequence of this new tax is that sub-economic projects can now be
developed with taxpayers money being used to subsidise these projects
through the refunding of royalties paid to the States.
Major commodity importers often invest in projects to guarantee supply, without
necessarily needing to make profits. It is entirely possible that such an overseas
party could mine the ore, send it overseas where they need it and make a loss
in Australia. Another unintended consequence of this tax is that this foreign
entity could then send the bill for 40 per cent of the unrealised tax credits to the
Australian people when the project came to the end of its life. As resource
projects are huge, so too could be the loss borne by the Australian people. All
100 per cent out of the governments budget.

As your CEO has said, Fortescue in its current form would not exist if this tax had been in place at the time of its inception. If the tax remains as proposedcertain future projects will not be possible.
Two years from now, and nine years after Fortescue was founded, we expected
to be able to begin rewarding shareholders with dividends to add to continuing
capital growth. Many of you took a risk on investing your money in a company
that merely had unexplored land and the idea of building a new iron ore
company - if that exploration proved successful. Now all our shareholders are
facing a future with no immediate prospect of dividends and even the possibility
of declining capital return from their investment going forward.

 

[Scotland]

Not much of a wordsmith, but he makes some reasonable points.

 

[pazza]

Scaremonerging at its finest. Too gutless to take the Government on except through the media and its mates on the Coalition benches.

Swan has won the debate...and the Minerals Council now know this....when the full speech is available I'll put it up...it was damning of the entire mis-information campaign conducted by the greed merchants.

 

[r dub 19]

Scaremonerging at its finest. Too gutless to take the Government on except through the media and its mates on the Coalition benches.

Swan has won the debate...and the Minerals Council now know this....when the full speech is available I'll put it up...it was damning of the entire mis-information campaign conducted by the greed merchants.

How else do you take the government on?

 

[pazza]

Here we go:

http://www.aph.gov.au/hansard/reps/dailys/dr240510.pdf

Mr SWAN (Lilley—Treasurer) (3.57 pm)—by
leave—The government’s plan for a stronger, simpler,
fairer tax system was announced three weeks ago.
Since that time, it has been the subject of robust debate
around the country—particularly on the Resource Super
Profits Tax. We welcome this debate about the future
of our economy, and we hope it continues. It is
important that debate remains constructive—
contributing to increased public understanding and a
robust design for the RSPT.

Inaccurate information and
scare campaigns risk getting in the way of this, undermining
the important work we must do to strengthen
our economy and secure higher living standards for
working families.

We must not lose sight of the key aim of the policy—
to ensure a fairer share of the proceeds of the resources
boom are invested in a stronger economy for
all Australians. We will do this by replacing royalties
with a Resource Super Profits Tax and directing the
proceeds to higher retirement savings for Australians
more roads, rail and ports, and less business tax and
red tape, especially for small business.

The Australian people own 100 per cent of Australia’s
natural resources and they deserve a fairer share of
the superprofits mining companies make, particularly
during this boom. As these profits have risen in recent
years the Australian people’s share of those profits has
fallen. Before the last boom, the country got $1 in
every $3 of mining profits through royalties and resource
charges, but at the end of that boom that was
down to just $1 in $7. It is impossible to justify a system
where Australians pay proportionately more tax as
their income goes up, while mining companies pay
proportionately less as their profits go up. The companies
have been unable to justify this, and I cannot let
the situation stand.

Profits were over $80 billion higher in 2008-09 than
in 1999-2000 yet governments only collected an additional
$9 billion in revenue. The government simply
wants to take the Australian people’s share of mining
profits back to around where it was in the early 2000s.
The Howard government was not overtaxing the resource
sector then, and this government won’t either. In
fact, we will get the same share with a more proinvestment
tax structure.

The reforms will broaden and strengthen the economy,
ensuring all sectors grow in a sustainable way
that benefits all Australians. We must finally grapple
with the policy failures of past mining booms by ensuring
the resource and non-resource sectors grow together,
not apart.

Of course, we have analysis to support this. Independent
modelling by KPMG Econtech of the RSPT
and the effective abolition of royalties says resource
investment increases by 4.5 per cent, resource sector
employment by seven per cent and resource sector output
by 5.5 per cent. The modelling also shows that the
tax reform package—including the RSPT and our cuts
to company tax—will actually reduce the price of food
and housing.

National conversation

In the last week I have travelled across most Australian
states discussing the story of our budget, a story of
our nation’s successful navigation of the global recession.
I have also been discussing our economic plans
for the future, including our important tax reforms.
I have met with big miners, and smaller miners. I
have met with some of the people who will pay more
tax given current high profits under our proposal. I
have also met with many of the businesses who will
pay less.

People have explained their concerns about how the
last boom was handled, how capacity constraints and
an infrastructure deficit choked growth. I have also
spoken to South Australian and Victorian manufacturers
and Queensland tourism operators, who have outlined
the challenges created for them when the dollar is
high.

As a Queenslander, I recognise the particular importance
of resources to my home state, but also to Western
Australia. I have seen the problems of infrastructure
deficits in cities and towns along the Queensland
coast. My many visits to Western Australia have convinced
me of the need to keep reinvesting in the resource-
producing regions.

The government’s infrastructure fund is designed to
do just this. It will provide a permanent structural
source of funding for infrastructure, especially targeted
at resource states and regions. It will start at $700 million
in 2012-13, and grow over time, delivering more
than $5.6 billion in additional funding over the next
decade.

Countering the myths

I welcomed the opportunity over this past week to
get out and engage directly with businesses, especially
the mining sector. Now, I am the last person to stand
here and tell this House that the miners are all thrilled
with our plans. Those who will pay more tax are unhappy,
and I will not whitewash that.

But you cannot make big reforms, and you cannot
attempt to remedy the policy failures of past mining
booms, while keeping everybody happy. It might be
the job of those opposite to pretend you can, but government
is a very different and a much harder business.
I used my time with miners this week to explain the
core design features of our RSPT. I discussed with
them that we were effectively abolishing royalties by
refunding them against the RSPT. That the 40 per cent
rate is fair because it gets us closer to where our tax
take was in the past. It is also the rate of the existing
resource rent tax that has been operating for 23 years.
Sometimes in these discussions I heard a few myths,
and I want to deal with those now.

The first is that this tax threatens Australia’s economic
prosperity.
Nobody disputes that the existing arbitrary and continually
changing state royalty regimes result in less
mining investment, fewer mining jobs and less mining
production. Royalties tax production and ignore the
costs involved in generating that output. Many of our
mines shut down too early, while others can’t ever get
off the ground. It also means we poorly manage our
resources—we leave too many commercially viable
resources in the ground, purely because royalties make
them uneconomic.

Similarly, all reputable economists agree that resource
rent taxes like the RSPT do not affect investment,
jobs or production. I encourage members to read
the article by Ben Smith from the Australian National
University in today’s Canberra Times, or other pieces
by Professor John Freebairn from the University of
Melbourne and, of course, Professor Ross Garnaut.
Second, some have claimed the RSPT is a triple tax
on mining.

The leader of the miners’ campaign, Clive Palmer,
even talked about a 70 per cent tax. This is blatantly
false and has never been substantiated. The RSPT will
not be imposed on top of royalties and company tax. It
will effectively replace royalties by providing firms
with a refundable tax credit for royalties. Where royalty
payments are higher than the RSPT liability, firms
will get a cash refund for the difference.

The RSPT is also deductible against company tax.
Regrettably, even some sophisticated commentators
have talked about the theoretical maximum rate of 56.8
per cent as if every project will pay that rate. This is
also incorrect for a number of different reasons.
One reason these estimates are wrong is that they
ignore that the RSPT only taxes super profits, not all
profits. If a project does not generate super profits it
does not pay any RSPT. And it will benefit from a
company tax cut to 28 per cent and the government
refund on the royalties it pays.

Firms that have lower profit levels will have a lower
effective tax rate—for example, on reasonable assumptions
a project with a risk-free return of 15 per cent—
still a very, very healthy return—might still have an
effective tax rate of 45 per cent.

However, even this calculation is an overestimate,
because it does not allow for the generous company tax
concessions that mining companies already benefit
from.

The effective company tax rate for mining companies
is well below the statutory company tax rate. This
is due to a range of concessions that benefit the mining
industry, most particularly generous deduction concessions.
Independent research published by the National Bureau
of Economic Research, and co-authored by Professor
Douglas Shackelford and Kevin Markle, looked
at company tax concessions across industries and countries.
They found that domestic mining companies in
Australia face an effective rate of 17 per cent and multinationals
face an effective rate of 13 per cent. That is
well below the statutory company tax rate of 30 per
cent.

Perhaps the most pervasive myth is that every return
over six per cent will pay resource super profits tax. I
regret to say this is a calculated and deliberate misrepresentation.
If you hear a mining executive saying it,
they are either lying to you or they are ignorant—either
way it should be of concern to their shareholders.
It deliberately ignores three offsetting elements of
the tax design. Royalties are rebated; RSPT is deductible
against company tax; and the company tax rate is
being cut. Once you add the combined effect of these
elements, a project earning six per cent in fact pays
substantially less tax under our reforms.

So for those—especially those opposite—who say
the uplift factor is somehow a tax on entrepreneurialism,
I say this: compare the RSPT to current royalties,
which tax every dollar of return you get. But they don’t
stop there. Royalties also tax your wage costs, your
operating costs, this on top of applying to your investment
costs. Royalties tax you before you even make a
profit.

Another myth is that the economic impact of taxes
depends only on how much money they raise. Every
serious economic commentator understands that different
taxes have different impacts, depending on how
they are structured. A core finding of the independent
tax review is that raising a dollar of revenue through
different taxes has different impacts on growth. Royalties
are one of the worst taxes for growth; resource rent
taxes are one of the best.

Shifting revenue from royalties to resource rent
taxes increases growth, including in the resource sector.
This is because it reduces the tax paid by the
smaller, more marginal mines, and increases how much
we charge for the use of the highly profitable mineral
deposits. And, because they are highly profitable, production
will continue regardless.

That is why these reforms will improve our economy.
The government’s very strong view—and the
Treasury’s view—is that our reforms will grow the
mining industry and the broader economy in the longer
term. Again this is supported by independent economic
modelling.

Investing the proceeds

So let us talk about the benefits of the package as a
whole for a minute or two. All revenues from the RSPT
will be used to deliver a stronger economy for Australian
families. About a third of the package will directly
assist the resources sector. This will be delivered
through the resource exploration rebate and the new
ongoing infrastructure funding.

Our plan will also improve the competitiveness of
the entire economy. It will deliver a company tax rate
cut for all companies. The general company tax rate
will be cut to 29 per cent from 2013-14, and to 28 per
cent from 2014-15. Small business will get a head start,
with the rate cut to 28 per cent from 2012-13. Small
business will also have access to instant write-off of
assets up to $5,000 and a single depreciation pool for
most other assets. These changes promote growth
across the entire economy, giving some of our other
industries a better chance to compete on the world
stage, even with the continued success of our resource
industry.

We are also determined that Australia should have
something lasting to show from the sale of our nonrenewable
resources. We cannot squander the next
boom like those opposite squandered the last one. That
is why the government will boost national savings. We
will boost savings through an increased superannuation
guarantee, phased over 10 years. We will also boost
savings by making superannuation concessions fairer
for low-income earners, and we will provide more generous
contribution caps for the over 50s looking to
make catch-up contributions to their superannuation.
And we will introduce a 50 per cent tax discount on
interest income, including on deposits held with any
bank, building society or credit union, as well as
bonds, debentures and annuity products.

Nature of the debate

Let me comment on how this debate has played out
over the past few weeks. As I said earlier, I did not expect
our reforms to be greeted with singing miners in
the streets. Nor did I expect any support for strong
economic reform from an opposition that showed last
week it has completely lost what little grip it ever had
on economic policy. If you really want to judge
whether to believe the Liberals’ scare campaign, look
at what they do, not what they say. In the very week
they were saying the mining industry would totally
collapse, one of their most senior frontbenchers was
buying shares in BHP because he thought they offered
good long-term value.

But let me talk about the reaction from the sector
more generally. I welcome Ross Garnaut’s call for a
rational and reasoned debate on the RSPT—this of
course is a call that has been echoed by John Hewson.
As Professor Garnaut has said, the campaign against
the RSPT has been long on rhetoric and threats and
very short on reasoned argument. John Hewson has
said that a lot of posturing is going on, but in policy
terms this tax is right. Ben Smith, one of Australia’s
leading resource economists, wrote today that:
… the natural reaction is to think that the industry’s predictions
about its impact may well be correct. In fact, they are
entirely false.

He goes on to say:

In fact, the only danger to future exploration and mining
activity is the possibility that suppliers of finance might believe
the industry’s rhetoric.
And David Buckingham, a former head of the Minerals
Council, has lifted the veil on the hysterical scare campaign
that some miners are still waging.

Company reactions

I have a lot of respect for the leaders of our business
community. I do value their constructive input to any
number of political debates. I say this publicly and I
say it privately to them when we regularly meet or talk
on the phone. I do expect a healthy degree of argybargy
and brinkmanship with some people in business
who do not want to give up any of their super profits. I
understand their position. But even the mining bosses
in their heart would know that there is a rolled-gold
case for a fairer way to tax the industry. Their own
submission called for a profits based tax.

Unfortunately, we have had a relatively small number
of large companies choosing to conduct a vocal and
public campaign. It has also been very strategic: companies
have taken turns issuing threats to investment,
so as to create maximum publicity for minimum share
price impact on their own companies. They have also
been careful to put projects on hold, rather than cancel
them, again to minimise share market impact. They can
always be taken off hold later when needed—as most
think they will. As Professor Garnaut says, any project
that is profitable before RSPT is profitable after. The
opportunities from the mining boom are simply too big
to ignore, even if the super profits are a little lower.
The government will not be swayed by a political
campaign from the miners. So I call on companies to
engage properly in the consultation process. The RSPT
is not going away, but generous transitional arrangements
will be put in place, as we have said all along.

These last three weeks have seen a few very noisy
companies, and many more very quiet ones. I have
been impressed by the quiet, professional engagement
of some companies with our Resource Tax Consultation
Panel. I do not think those companies like our
RSPT any more than the noisy ones, but they do accept
the right of the government to govern, and they accept
our offer of consultation as genuine, and they are engaged
with us in getting the implementation right.

Since our announcement of the policy, we have had
more than 80 companies engaging with the Treasury
consultation process. This is a serious commitment of
time and effort by government and business. We believe
that it is important that all companies engage so
that all views can be taken into account.

Stronger Economy

Every business in Australia and every working family
in every corner of Australia has a stake in sustainable
and broad economic growth. Our tax package is
expected to grow the economy by 0.7 per cent in the
long run, boost investment by 2.1 per cent and reduce
prices by 1.1 per cent.

I invite the House to compare this with the opposition’s
policy to lift the company tax rate by 1.7 per
cent. Our modelling shows this policy will reduce GDP
by 0.2 per cent, reduce investment by 0.55 per cent and
increase consumer prices by 0.25 per cent.
Australia has many significant economic advantages
that can provide the foundation for growth and prosperity
into the future, provided we get the policy settings
right. This side of the House has a pro-growth,
pro-investment policy to leverage Australia’s strengths,
but that side does not.

Our substantial natural resources, strong growth in
demand for our exports from countries in our
neighbourhood and the quality and resilience of our
people—as demonstrated most recently during the
global financial crisis—give us cause for confidence
that Australia’s best days lie ahead.

We are also confident that our reforms will maximise
Australia’s opportunities while also meeting the
challenges posed by the ageing of our population and
shifts in the global economy that will see the return of
boom conditions in our mining sector.

We never expected this tax to be applauded by every
company, domestic or foreign. But we do expect our
reforms to build a broader, stronger economy for working
families and that, after all, is why we are all here.

 

[Eagle87]

Scaremonerging at its finest. Too gutless to take the Government on except through the media and its mates on the Coalition benches.

Swan has won the debate...and the Minerals Council now know this....when the full speech is available I'll put it up...it was damning of the entire mis-information campaign conducted by the greed merchants.

Pazza, what do you do? I am staggered that a bloke can be so passionate and yet so completely and utterly clueless.

We currently have a Treasurer calling the CEO's of our largest companies liars. A Treasurer telling us mining investment will increase - when Blind Freddie can see that's not true. I could go on and on and on.

There is little (nothing?) in Twiggys letter that isn't correct. How about you deconstruct his arguments?

The liars in this process are Swan, Rudd and Gillard and when it comes to spin, half-truths and so on they are very very experienced.

On the other hand, the CEO's of public companies are accountable to shareholders and to regulators with regard to many of their pronouncements.

Rudd, Swan & co simply have to satisfy brain dead morons like yourself...

 

[pazza]

Pazza, what do you do? I am staggered that a bloke can be so passionate and yet so completely and utterly clueless.

We currently have a Treasurer calling the CEO's of our largest companies liars. A Treasurer telling us mining investment will increase - when Blind Freddie can see that's not true. I could go on and on and on.

There is little (nothing?) in Twiggys letter that isn't correct. How about you deconstruct his arguments?

The liars in this process are Swan, Rudd and Gillard and when it comes to spin, half-truths and so on they are very very experienced.

On the other hand, the CEO's of public companies are accountable to shareholders and to regulators with regard to many of their pronouncements.

Rudd, Swan & co simply have to satisfy brain dead morons like yourself...

I suggest you and everyone else read the full speech given in Parliament yesterday by Swan. He's owning this. Have a look at it with all objectivity and not just the Mineral Council's spin on it. He's addressed every single issue raised, seemingly without any chance of him being proven wrong.

 

[Eagle87]

Here we go:

Wayne Swann - Lots of empty rhetoric .. But decidedly on message

I tell you what, why don't we get Kloeppers and Tom Albanese to have a debate with Rudd & Swann?

A real debate ... No filibusters ... We could have 2 or 3 decent journos ask direct questions. We could get the participants ask each other, unscripted questions ...

When it comes to factors affecting investment, costs of capital, access to funding, explanations of the tax and the current tax take, who do yup reckon would look like they know what they are talking about?

The government position is, at best, based on studies by academics and theorists .... Industry actually runs business ...

I know who I reckon has more substance, I mean those who can't do, teach ...

 

[Eagle87]

I suggest you and everyone else read the full speech given in Parliament yesterday by Swan. He's owning this. Have a look at it with all objectivity and not just the Mineral Council's spin on it. He's addressed every single issue raised, seemingly without any chance of him being proven wrong.

I've read it. He addresses none of the issues at all. None. He simply stays on message.

He adds the calling of the heads of our biggest companies either ignorant or liars ... He is quality

Again pazza, about from cheer leading and being quite stupid/gullible, what do you do?

 

[pazza]

I tell you what, why don't we get Kloeppers and Tom Albanese to have a debate with Rudd & Swann?

A real debate ... No filibusters ... We could have 2 or 3 decent journos ask direct questions. We could get the participants ask each other, unscripted questions ...

When it comes to factors affecting investment, costs of capital, access to funding, explanations of the tax and the current tax take, who do yup reckon would look like they know what they are talking about?

The government position is, at best, based on studies by academics and theorists .... Industry actually runs business ...

I know who I reckon has more substance, I mean those who can't do, teach ...

When the former head of the Minerals Council in David Buckingham has come out debunking the current campaign of mis-information, that would sound to me like there is a split in the industry itself.