It's certainly a very emotive issue so here's a couple of facts for the everyday punter.
* The tax would effectively see Australia as the highest taxing and therefore most expensive mining country in the world. This simply means that our resources become more expensive, and the worlds users of minerals would simply buy elsewhere.
Only if you return more than 6 times capital invested
* If the increase in cigarettes was to stop people smooking; what does the government think an increase on mining tax will do?
* The superannuation of every Australian has shares in mining companies;
ABS figures project that since the inception of this new super tax, the average superannuation balance has fallen a whopping 20-30% and the tax hasn't even passed the senate yet. This affects every one of you.
* The mining sector kept our economy out of recession, why kill it?
The mining sector has kept parts of the ecconomy out of reccesion, some parts saw a huge downturn and a rise in costs because of mining related activity
* The resources do not belong to Australians, they belong to the states. As such, the miners pay huge royalties to the states to ostensibly purchase the minerals and then they themselves spend money removing them from the ground. What the federal government is saying to curry favour is ostensibly a lie, as it would take a constitutional re-write to allow royalties to be paid to the federal government as well.
Under the scheme the federal government pays the royalties back to the miners. This way there is no constitutional infringements and states are free to negotiate any policy thay like
* This is not about super profits, it's about scale. After licences are purchased, leases paid for, royalties are paid, capital costs are paid and then company taxes are paid; the leftover is profit. After paying over 40% of all revenues in taxes and levies then to pay equipment costs as well as salaries and allowances, the profit on most of these companies lies in the range of 10-20%. Sounds little but due to the scale of the projects, the profits in dollar terms sounds huge.
The tax is applied to any profit over 6 times the return of capital invested and costs. If all these mining companies are only making 10-20% returns then they wont pay any extra
* Last year alone BHP spent 4 billion on a mine that didn't yield, and later sold it for 400 million - one tenth of its setup cost. This would mean on this alone taxpayers would have to foot a further 3.6 billion to cover the losses of this one project.
* Rio and BHP lost over 8 billion collectively on the first day this was announced.
They lost 8 billion in value, they haven't lost any money. Saavy business minded people with a solid understanding of business taxes were buying up BHP/Rio tinto shares. (Peter Dutton for example)
Sorry, but this is not thought out policy, it is an electioneering stunt bringing on class war and it is fraudulent to say the least. The government relied upon taxation figures produced by a university student in the united states of america (17%) as opposed to even treasury figures (36-42%) for the level of taxation.
I don't think it was a stunt as it is a legitmate tax policy reccomended by Ken Henry and approved by Ross Garnut (Garnut also sits on the board of a gold mine) both of which are Australia's go to men on financial and ecconomic policy
03-06-2010, 12:19 PM
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