Twiggy sticks a great big log up Rudd

[pazza]

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?

I work in an low income industry (okay security) and am sick to death of the Liberal apparatchiks trying to run debate in this country...the "born to rule" mentality is over folks...time to fix problems not hide away from them...that is what the coalition has always been about and is supported by way too many people on here.

 

[r dub 19]

Swan's speech doesn't address anything. He is beating around the bush as usual.

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.

This is what annoys me... wtf is lower profit levels???

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.

If it's not 6% wtf is it? He doesn't even say what is deemed a super proft.

Sorry Pazza, but you just lost all credibility. It is fair to assume you have no idea about economics. You just keep them robbers at bay okay

 

[1jasonoz]

Both sides need to sit down and STFU.

Swan needs to bite the bullet and admit(which he will not do)that he shouldn't have brought out this proposal without first talking to the MCA and then only after consultation made these policy decisions.

Various mining managers also need to drop their sudden found patriotism they are rolling out as part of their campaign, when the reality is they only have one single purpose as company directors-increased shareholder value.

 

[r dub 19]

Question for you labor fan boys.

If companies are "lying" about the tax they pay, why doesn't the govt take them down as it is against the law for companies to do so?

Good to see CNBC headlines " Rio Tinto says Australian is top sovreign risk". Really does wonders for the dollar.

 

[Dawson]

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

Gee Princess you suddenly believe in Unions and all that they say is truth

 

[PottSie2]

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?

So can anyone clarify this whole American PhD document that Swan and Tanner are basing their lies on ?

From what I understand the %17 figure cam from this report, which was a draft. The final version of the report has seen this figure dumped ?

So were Swan and Co. seriously spruiking this figure, and calling mining bosses liars (even though mining bosses are answerable to ASIC) based on this draft report ?

And what on the ATO figures that showed the 41.3% tax figure as opposed to 17%.

Were Swan and Co. just blatantly lieing ? or just blatantly incompetent ? (excuse the spelling)

 

[Scotland]

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.

• Mining paid $80 billion in tax over the last decade
• Mining pays a higher effective tax rate than any other industry
• Mining paid eight times more tax last year than a decade ago
• In fact, last year mining paid more than one in three dollars of profit in tax
• Government figures exclude company tax, which represented more than half of the tax and royalty contribution of the mineral resources industry in 2008-09

So, which is it?

Mining companies prepare records, pay hundreds of thousands of dollars to have them audited by accountancy firms and submit them to the ATO.

Swan pulls figures from US graduate research papers, has Treasury hastily knock up papers to support his position and formulates policy on the fly without consultation with, well, anyone.

It's not exactly good vs evil but I reckon I'll back the self-interested over the inept.

I work in an low income industry (okay security) and am sick to death of the Liberal apparatchiks trying to run debate in this country...the "born to rule" mentality is over folks...time to fix problems not hide away from them...that is what the coalition has always been about and is supported by way too many people on here.

I have little interest in mocking your intelligence etc. based on what you do, but with nonsense comments like this you're opening yourself up for others to do so.

This issue has nothing to do with a 'born to rule' mentality. This issue has nothing to do with hiding from existing problems. This issue has nothing to do with the Coalition.

This issue is a matter of poorly thought out policy being proposed by Rudd and Swan. It's targeted taxation aimed at the current booming industry (ie, the cashcow) and designed to swell the govt. coffers in the short term to cover wasteful past (and probably future) spending.

Australia needs tax reform and the Henry report was for all intents and purposes binned save for 2 or 3 recommendations. Simpler, fairer. Yeah, right.

 

[King Elvis]

Does anybody else find it absolutely incomprehensible that a Government would behave like this?

Zero consultation with industry, and now a refusal to enter consultation properly. Forrester and Rudd were friends and Rudd used to bounce ideas off of him - now, he refuses to speak to him.

We've got our Prime Minister and Treasurer labelling the heads of our biggest companies as ignorant liars; do they not realise how stupid and harmful that is?

And Scotland is right, why are we using a draft paper from an American student instead of the figures published by our own Tax Office? Swan does nothing to dispute the ATO figures in that speech, does he?

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.

A project with a risk free return?

pazza - it's the Labor Party who are indulging in class-warfare, not the Liberal Party.

 

[r dub 19]

The sad thing is most voters don't have any idea about what the govt are up to.

 

[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.

MODS : This is very long. If you have to remove, do so. Was sitting in an airport and inspired by pazza

The government’s plan for a stronger, simpler,
fairer tax system was announced three weeks ago.

Well, the government actually ignored most of the Henry Tax Review (they adopted in full or part only 3 of 138 recommendations!). This wasn't tax reform, it was a new big tax on mining with a couple of politically targeted handouts of minimal benefit.

So a couple of new measures + an extraordinarily complicated new tax levied solely on one sector = stronger, simpler, fairer .... So Wayne started with BS & spin, let's see where this heads.

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.

That has been the only debate. Because it's the only real change. By constructive, we assume that means "agree with us or else .... We might call you names". I mean the consultative committee is not free to change the 40%, the 6% or anything else that's "key" but apart from that, we want your input....

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.

I read "risk getting in the way of this" as " causes the government to worry that we might lose some votes, so please stop" ....

Oh, there's a "working families" reference ... Labors go to phrase.

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.

Sounds great. Taking money of the better off to hand to the less better off and who doesn't want more roads,schools etc. Great stuff.

So royalties are replaced? Well, no but sort of via a refundable tax credit. Of course it doesnt just replace royalties, it increases total tax cost for profitable projects. I mean Wayne helpfully advises that for a project with a 15% rate of return, it will have an effective tax rate of 45%. Thats only 50% more than the Banks & Coles & Woolies and every other company in Australia. Awesome. Fairer.

But it does boost retirement savings. Well, sort of. If you earn less than $37,000 then the government will whack some money in your Super equal to the tax paid on your employer contributions from the previous year. So that's handy. As long as you have an employer. Who pays Super. And you earn less than 37k.

Otherwise, the bump to superann is by imposing an additional 3% impost on business. Including small business. 3% more on gross salaries. Whether you make money or not. A cost to business. Cool. Thanks Wayne.

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.

Well, it's debatable who owns what. Technically, Tasmania owns Tasmanian resources, WA owns WA's etc. But yes, we get the point.

If they are "ours" Wayne, why don't we put up all the capital and develop them ourselves and keep ALL the profits? Makes sense surely?

Or is it possible that the government that can't install pink batts correctly, can't build a school canteen for less than 3 times the going rate, might struggle to manage a $20 billion dollar mining project?

Much better to tax those who know what they are doing and then, if they do too well, tax them some more. We need to make sure that Holden stays open. Hasn't made any money for decades, costs the taxpayer hundreds of millions annually but, hey, it's Holden. Let's tax the companies that do well a lot more and hand it out to those who do badly! Winner. I love governments picking winners...

They should do more of this. Brilliant.

On the $1 in $7 thing Wayne, is that actually true? I mean really? Last year the mining sector paid about 18% of corporate taxes in Oz despite being about 9% of the economy. Someones freeloading off the back of the miners Wayne...

Also, don't mining companies pay the same rate of tax as every other company? Oh, "subsidies" you say. Aren't you the same government that just announced changes to the withholding tax regime in the Budget to make us more "attractive as a financial centre". The advantages mainly benefit banks. They also have a range of different rules in other areas (GST etc). Please tell me what a "subsidy" is Wayne? Is it like the special farming provisions or the rules that allow builders to split income with their spouses despite everyone really knowing they are "employees"? I mean Wayne, c'mon ...

By the way, which other company pays MORE as their income goes up? Don't they all pay 30% on taxable income?

Comparing ANY company with individuals who pay via a marginal tax scheme, seems, well, odd ...

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.

Trust us, we are nice people.

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.

It will ensure we can afford to keep handing money to Holden. Who pay no tax.

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.

I suspect the RSPT may actually save the world from famine and pestilence.

Provided you set the parameters for any study correctly and then selectively quote the results ;-)
Might help if we use Rudds former bosses too.

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.

I think we can safely say that with this tax in place many businesses will pay less. I mean the lack of investment, the scaling back of projects should ensure a lot less profits for everybody. Definitely the easiest way to reduce tax.

Wayne, "important tax reforms"? - it's one big new tax. That's it.

I like a bloke who has a "conversation" after making the decision. Smacks of being patronizing as well as arrogant. A nice double.

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.

Yep, massive growth is bad. It makes things tough, leading to increased wages and improvements in overall wealth. But those industries no longer suited to an expensive developed economy need to be retained. Because I really really like Holdens.

Also, my voters like tourists. There aren't enough of them because the dollar is high, due to our mining industry creating all this wealth. We need to nip that in the bud. Reduce the value of the dollar (mission well under way by the way Wayne ) by punishing mining and then handing back that tax to, well, Holden ... Brilliant! Glad you are listening to the concerns of our dud businesses and calling the leaders of our most successful businesses liars and ignorant... (more on that later)...

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.

Yes, you and Kev are both Queenslanders. Which, for clarity, isn't good.

Yes, the infrastructure constraints have generally been handled by the mining companies building all their own infrastructure .... but you still want to "share" in their profits. Hmmm...

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.

So you will take $3 billion+ in tax, stick 20% in a fund and then allocate it as you see fit for infrastructure? 700 million.?

You do realize that FMG spent over 4 billion on rail and ports in 2008? Just saying.

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.

Well, describing it as "unhappy" IS whitewashing it.

Thats like saying my wife was unhappy when she cam home and caught me in bed with 4 women. Unhappy is not quite strong enough Wayne.

They think you are an idiot and a clown but they have to deal with you because some party faction pushed you up as treasurer.

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.

It's true that many agree that a resource rent tax is better than royalties.

That said, there is a big difference between agreeing with that and agreeing that your RSPT is any good.

Claiming Garnaut as on side is again to miss the point. Garnaut suggests that the tax as currently constructed is flawed and needs amending. He does agree in principle with a resource rent tax. Many agree. The issue is the one proposed by this government. It's a bad version, rolled out without consultation and appears to have been written by people who have never had any experience in real world business ... Oh wait ...

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.

Clive Palmer is the leader? Really? Must be a Queensland thing.

Sensible people have talked of a 57% rate. You don't dispute this Wayne, because you know it's accurate. In fact....

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.

But you agree that if it makes profits that you and Kev describe as Super, they can pay tax at 57%. Cool. That seems a fair way from the assertion that they currently pay 13% ... I mean if what you are introducing is just a fairer way of doing things and a replacement of royalties ....

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.

So companies that make a "risk free return" of 15% pay an effective rate of tax of 45%. But it's not really a tax rate of 45% because they get to claim allowable deductions?

"Generous company tax concessions" - what does that mean Wayne? I suspect you don't know. Do miners get to claim deductions under the Tax laws? Of course. Are some of then not available to other industries? Well, yes, I suspect that banks and Holden (for example) spend little on exploration or mining information etc etc ... It's an absurd tack to take that miners making 15% "risk free" (does anyone including Swan not what he even means by this?) pay tax at an effective rate of 45% and then to say that the estimate he has just provided is an over-estimate! When you start disputing yourself Wayne, frankly, it's time to hand over to others ....

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.

So RIo & BHP pay 13% effective tax rates but they will pay as much as 57% or 45% or something. This sort of change will lead to increased investment? Really?

By the way Wayne, they currently pay 30% company tax. The same as every other company in Australia. With respect the 13% and 17% rates are silly and misleading. The sorts of things you tell others off for, in this same speech. Genuinely funny stuff.

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.

Genuinely good stuff Wayne. Misleading but good.

We get you are replacing royalties. But it's WAY more than that. If you were just replacing royalties no one would mind.

Nice straw man by the way. You either just created a fake mining company exec and lambasted him or you are calling the heads of mining companies either ignorant or liars. Straw man alert ....,

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.

More tax on the successful to subsidize the unsuccessful. Labor 101.

That together with more dribble about the RSPT v Royalties ... Wayne you do realize you are raising the overall tax take don't you? Stop with this diversion that it's merely replacing one with the other. It isn't.

By the way your connection between taxes and growth ... fantastic. One could read that and actually believe that taxes create growth. Which is of course bollocks. You are massively increasing taxes. Sure, you are removing royalties but it's frankly like my bank saying they are reducing my monthly fee from $10 to zero and replacing it with a new $500 annual fee. Then explaining that I will be better off 11 months of the year. Wayne, we are $380 a year worse off ... so stop talking about the $120 you are saving us! K?

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.

Genuinely humorous. I restate, cos Wayne did, that the "tax reform" brings in some parts of 3 of 138 recommendations from Henry. I mean if Henry and Treasury are so good, why rule out 12 other recommendations and ignore the remaining 123.

Henry recommended a 25% company rate to ensure we remain competitive. But we should be thankful for a 28% rate in 5 years funded by exorbitant taxes on our major export earner? Cool.

The $5,000 write off for small business is a concession, will Swan use that in future years to argue that small business don't pay their fair share? To argue they have a, say, 15% effective rate when concessions are taken into account? Or are some concessions more equal than others?

. 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.

Squandered the last boom? By tax cuts? Sound government finances? What were they supposed to do? Oh, that's right, tax more so we could have had more pink batts and $1 million school canteens earlier ....

Nice to see Swan pointing out what the miners are paying for. Not much.

. 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.

Yeah Wayne, let's not get into trite and silly arguments here ....

Is there a politician alive who actually said "the mining industry will totally collapse"?

More empty rhetoric then.

BHP will still make money, it's just that going forward they will likely seek to make more of it outside Australia. They are a very good operator.

Pretty simple Wayne, surely?

. 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.

Well, Ross Garnaut said it needs changing. Hewson agrees.

Ben Smith? Well, he said some stuff, that's it then. Game over.

Is Swan really this shallow?

. 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 tk
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.

Their own submission did NOT call for this tax. Wayne, you want by bank fees example again?

Fairer is VASTLY different to what's being proposed. I have no doubt whatsoever that everyone in Australia,".. in their heart, would know that there is a rolled-gold case for a fairer way to tax ..." everything. Hardly the point though.

. 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.

We will not be swayed, so do what your told and bend over ....

I mean imagine running a strategic public campaign. Would never happen with the current federal government. Surely? ;-)

. 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.

So we can then ignore them.?

I mean seriously. They rolled out a massive, complex new tax on our key industry because they saw it as a soft target. They could have raised way more tax with the 12 Henry recommendations that they ruled out. They didn't, because each of those was politically difficult, more difficult than "rich" miners.

They then complain about miners complaining.

He is right though, it is the right of government to govern. This government is doing that. Buttressed with spin, diversion and misinformation. I'd like someone to ask this government why they ruled out 12 proposals of Henry and only adopted 3. Why they ignored 123. The 12 they ruled out were also modelled, also seen as a better way. So if Treasury and the government modellers are so good, why were they canned?


It's all about politics folks.

. 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.

I have to go throw up now. My BS gag reflex can take no more

 

[morgoth]

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.

I am still waiting for an explanation as to why the Govt is using figures from 2004/5 when we are now in 2010.

 

[Dawson]

The sad thing is most voters don't have any idea about what the govt are up to.

Just delete the last 7 words for yourself

 

[Eagle87]

I am still waiting for an explanation as to why the Govt is using figures from 2004/5 when we are now in 2010.

I think we all believed your question was more comment than actually question.

The government has seized on any set of numbers that it feels serve it's purpose.

No one believes their numbers, whereas Swan, in his speech acknowledges the numbers provided by the mining industry as accurate - he just tries to minimize their meaning. 45% isn't too much apparently because of the concessions, it's all about the concessions ...

 

[morgoth]

I work in an low income industry (okay security) and am sick to death of the Liberal apparatchiks trying to run debate in this country...the "born to rule" mentality is over folks...time to fix problems not hide away from them...that is what the coalition has always been about and is supported by way too many people on here.

If you really think Kevvy will make any difference to your lot you are sadly mistaken. Fact is you have had state labor Govt's in nearly every state controlling public transport, health and housing and how has that gone?

Most people who get some where do it through hard work and sacrifice. Communism produced the poorest people in the Western World and the Govt was there to help them.

 

[Scotland]

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.

A royalty says 'this rock is potentially contains $100 worth of refined product so it will cost you $10 for the right to dig it up and you must then pay tax on the profits you make from selling it'.

The RSPT says 'this refined product is worth $100 so you shall pay tax on all profits you make on selling it and any profits you make above 6% on your investment will be taxed at a higher rate'.

Essentially we're want to penalise companies more for extracting resources efficiently rather than extracting them in large volumes with little value adding. That's a sound approach to ensuring our resources aren't pillaged overseas.

 

[Womble]

Question for you labor fan boys.

If companies are "lying" about the tax they pay, why doesn't the govt take them down as it is against the law for companies to do so?

Good to see CNBC headlines " Rio Tinto says Australian is top sovreign risk". Really does wonders for the dollar.

Simple question - why does this graph still have a royalty element under the RSPT when they are rebated??? i.e. the company gets a credit for the royalties they pay

 

[morgoth]

Well regardless of your views on this, Rudd's timing for this type of debate and the instability it has caused in the mining sector, could not have been at a worse possible time.

Serious problems developing around the world, not a good time to have the engine of the economy in turmoil. Perfect excuse for mining companies to can projects.

 

[Eagle87]

Well regardless of your views on this, Rudd's timing for this type of debate and the instability it has caused in the mining sector, could not have been at a worse possible time.

Serious problems developing around the world, not a good time to have the engine of the economy in turmoil. Perfect excuse for mining companies to can projects.

But these pale into insignificance when compared to the priority issue for this government I.e, re election.

They desperately wanted to be able to go to the election with "back in surplus" as a mantra. Needed a big new tax. They binned the ETS and brought in this tax for an election slogan.

 

[morgoth]

But these pale into insignificance when compared to the priority issue for this government I.e, re election.

They desperately wanted to be able to go to the election with "back in surplus" as a mantra. Needed a big new tax. They binned the ETS and brought in this tax for an election slogan.

As I said regardless of views, the timing is awful. Futures are looking shocking in the US and looks like breaking technical support pointing to a further leg down.

Europe is a basket case.

 

[Eagle87]

As I said regardless of views, the timing is awful. Futures are looking shocking in the US and looks like breaking technical support pointing to a further leg down.

Europe is a basket case.

Agreed. Feels earily similar to 2 years ago.

Fortunately Kev will save us, I shall look forward to my $900 cheque

But I agree with the thrust of your posts. The government needs to look at shelving this idea indefinitely so as not to exacerbate the negativity as it pertains to Oz. I note our dollar is testing 80 cents now and if it drops under that who knows where it ends up. On the upside, Swans tourist operators will be excitedly looking forward to an upswing in tourists with our weakened dollar...

 

[Grin]

One of the problems with a mining boom is that it forces up the value of the Australian dollar which does great harm to the non-mining export sector. Thus when the boom ends (which all booms inevitably do), with other export industries having been damaged or destroyed, we will find ourselves in big problems.

We need to ensure that we have enough revenue collected and saved to rebuild industry after the boom.

It's not good enough to say "Let our children pay the price. We want to send our wealth off shore for very little, if any short term gain".

If collecting the tax for our children means the dollar does't stay so high, the boom doesn't peak as high but possibly lasts longer, surely that's all a bonus.

 

[Keys]

On the upside, Swans tourist operators will be excitedly looking forward to an upswing in tourists with our weakened dollar...

What, all those European tourists that are flushed with cash atm just waiting to travel somewhere and spend their money. The US economy is in really good shape too so I bet there'll tens of thousands of them coming over.

If only we had an industry perfectly placed to take advantage of the one region in the world that is still growing and ensure our own economy continues to defy what is happening in most developed countries.

Perhaps if I dig around for a whileI might stumble across something that the government can encourage.

 

[Dippers Donuts]

As per usual you got nothing.

Applying your logic all those union members working on these sites getting all sorts of allowances should have those stripped away also. After all why should the rest of Australia allow them to be subsidised when they earn those big salaries. Its not fair, they need to pay their fair share.

You just dont make any sense at all. Nice little strawman.

 

[Dippers Donuts]

Here you go, the source data from the ATO.

http://www.ato.gov.au/corporate/content.asp?doc=/content/00225078.htm&page=10&pc=001/001/009/005&

Knock yourself out disproving the ATO figures on mining tax and royalites.

As the treasury document released today pointed out, the mining industry is at the low end of the scale when it comes to total tax take.
Your MCA spin cant hide that.
I think you also need to learn the difference between a tax and royalties.

 

[Dippers Donuts]

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

You are wrong.

Wow. Big. Fu***ing. Deal.
So then hotshot, you should agree then, like many in the mining industry have said, that the industry should pay more.