Australian (ASX) Stock Market Forum

Ken Henry Tax Reform

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trainspotter said:
40% tax on resource companies? Wtf ?? This is not a tax reform? This is just a tax grab. I would be predicting that a lot of mining companies will now not proceed on many future projects due to reduced profit margins involved. :2twocents
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yes, they are already talking $150 billion in cap-ex reduction. AS ANDREW fORESTER SAID, "Rudd will kill the goose that lays the golden egg"!!!!!!!!
!!!!!!!
 
sammy84 said:
How long again did it take Ken Henry to come up with this review?! That was an utter waste of time and resources. Instead of reform we got a few tweaks to the system.
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I don't know what was contained in Ken Henry's final document, but let's remember the government has taken months to digest it and cherrypick what they are prepared to adopt, i.e. what is most likely to get them re-elected.
Tax reform? Hardly.
It will be interesting to hear the mining companies' response tomorrow.
 
Pretty mild, timeframe is fairly large on some of the reforms. Small business changes are a small small step in the right direction. Be interesting to see what the libs come up with.
 
It will be even more interesting to see if China catches an economic cold by the time the so called resources super profit tax kicks in.
 
I do hope that the public has had time to consume this information and really understand it.

I have no idea how it will effect miners, and I've been studying them for a bit.

eeeek

:eek:
 
Whiskers said:
But the "stimulus scheme" in so far as stimulating the economy was almost too much of a success, what with inflation looking like popping out the top end of the ideal range.
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The stimulus packages were designed to waste money and in this sense they were a success.

PS: I'm having a quiet ale atm (including the damn cat having a lick of the bottle while my back was turned) and wondering whether you may have had one too many today, Calliope.
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Why the snide remark?
 
The time frame is interesting.I would love to see a list of allowable right offs for small business, and junior explorers.
It will be interesting to see the effect on the superanuation options markets:cautious:!
 
It is not tax reform. It is a political document put together by cherry picking Ken Henry's recommendations.

It is a pre-election manifesto designed to please more people than it will annoy.

Meanwhile Ruddy and Swanny are leading the Labor Party Holiday march in Brisbane, both wearing big smirks as well they might.
 
kennas said:
I do hope that the public has had time to consume this information and really understand it.

I have no idea how it will effect miners, and I've been studying them for a bit.

eeeek

:eek:
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Tax will go from 43% to 57% for the miners on their profits. Interesting to note that the mining companies have contributed most to the governement in the way of taxes over the last three years. Media and Labor is portraying this as a "distribution" of Australias wealth? Tax Grab IMO. Apparently justifiable because he Govt needs this money to fund the SGC from 9% to 12% by the year 2020.

Ummmmmmmm I must be really thick (flame on) but as an employer I am the one that pays the Superannuation Guarantee Contibutions into my employees compliant funds. The Govt does not assist me in this at all ?

1) Tax the living Bejeezus out of the only sector making a profit.

2) Top up super funds to 12% contributions by the year 2020 with employers money.

3) Drop company tax from 30% flat rate to 28% by 2013/14??? WTF ??? Let's say one of my companies makes $100,000 profit nett. SO therefore I am better off by NOT paying the tax man a lousy $2,000? When that 2k could have gone into paying a policeman, nurse, school teacher wage?

Yeppers ....... Great stuff here ..... thank you Mong Khan Kluddy for these scintillating tax reforms. But wait, there is more ..... this in only the "first wave" of the reform. I better go and get my surfboard (the real big one) to be able to catch these tsunami like monsters broaching the reef. :eek:
 
Factored in Sammy? Miners are getting spanked in early trade. See BRM and other I/o hopefuls...
 
trainspotter said:
Tax will go from 43% to 57% for the miners on their profits. Interesting to note that the mining companies have contributed most to the governement in the way of taxes over the last three years.
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TS, can you - or anyone else - explain how this works?
How does it fit with the current system of royalties (which I don't really understand either)?
I get the impression the additional 40% is not going to apply across the board and some explorers will be better off.

If anyone has worked all this out and can explain it in a simple form, I'd be appreciative.

So far the miners are surely getting hammered this morning, plus companies in mining related industries. In my p/f only the banks are slightly up!
 
I think the mining sector has over reacted. The proposed tax reforms are by no means a foregone conclusion. It still has to be agreed by the States and then go through both houses of parliament and the senate.

The mining companies especially BHP & RIO and the Unions are very powerful lobby groups. I doubt very much that the proposed tax changes will ever become law in it's present form.

I am betting on significant changes to the proposed tax reform and start accumulating some mining shares, afterall isn't it pure madness to kill the goose that lays the golden eggs? Force it to lay a few more eggs but don't kill it.
 
Articles in the press mention royalties paid to the states will be refunded. I don't understand the mechanics of how that works yet, but taken at face value, wouldn't that be an incentive for the states to raise royalties (if they are allowed do that). They will only be clawing back some of what would have gone to Canberra. It would be no extra impost to the miners.
 
Miners that have their mines o/s are unaffected, eg PDN, MBN, EQN etc... In fact I think they'll benefit from the lower company tax (28%)
 
Whiskers said:
I haven't studied all the detail yet, cos I had a Sunday arvo nap (after a hard morning of course) and missed the news. :eek:

But, I'm curious about which "bad" bits you think they should adopt.
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Firstly, Rudd has only selected 3 out of 138 reforms set up by Henry at a cost of $10million over 18 months.

* Rudd chickened out out on 'land tax on the family home'.
* Rudd chickened out on 'the fuel excise tax'.
* Rudd chickened out on 'the congestion tax'.
Just to name a few.

Why? because it would affect his poll ratings before the slection. But surprise, surprise, you won't like their next budget in 2011 if they get reelected

He wants to impose an increase of the supperannuation from 9% to 12% on business, something Henry did not reccomend. Another sweetner for the rax payers.

His 40% profit sharing tax on miners is absolute madness. The Miners are already talking a cut back on cap-ex to the tune of $150billion. How will that affect supporting business? No doubt a loss of jobs!!!!
 
Sorry guys, should have qualified the nitty gritty a bit better. I should have written that it is the "effective tax rate" applicable to these numbers.

Mining companies are currently paying around 43 cents in the dollar on profit that they make. This is made up of 30% company tax, land tax, state royalties along with a plethora of other indirect taxes resulting in the magic number. Extraction costs I believe have some tax surrounding them as well?

Under the plan, from July 1, 2012, resources companies will be liable for a 40 per cent tax on profits made from the exploitation of non-renewable resources. Add in all the other taxes mentioned above and Viola ! 57 cents in the dollar GONE to Ming Pong Kuddy and the ATO.
 

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