Download the report from this link in Sir Osisofliver post earlier on this page and
there is a list of recommendations from page 105
Not so with Rudd's new tax. It assumes China will keep booming and its money will keep pouring into our resources industry.
The stimulus packages were designed to waste money and in this sense they were a success.
You certainly make some bewildering statements, Calliope.
Why the snide remark?
Not snide at all (Snide: Derogatory in a malicious, superior way) compared to the 'snide' remarks you continually lob on me and others on this forum.
T'was rather conversational to try to rationalise some of your incongruent critique. Simply, you're sounding like the proverbial 'winger'.
Dare I try to get you to make a 'constructive' comment... what Henry tax reform measures do you think the gov should implement, or not impliment and a brief reason explination would also be good?
Terry McCrann
And they would not be so silly to know otherwise and propose this profit tax. The Mid West iron ore of W.A is being opened up, the gas/oil business is growing, the Pilbara is expanding. Don't know what's happening elsewhere. Maybe uranium mining will be allowed to expand.
Plenty of opportunities. That outlier is waiting with open arms.
It would be interesting to know from where the above numbers are sourced and how our overal tax percentages of resources compare with other resourced based economies globally, both current and post RSPTMining 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.
If it replaces state royalties then the underlying principal sounds fair to me. The questions though are the minimum rate of return where the RSPT kicks in and then the tax rate to be levied. Fundamentally, they need to be set at rates so the overall tax take is internationally competitive to attract future capital investment. These matters I suspect are ultimately what resource industries and government will haggle.The RSPT will apply a 40 per cent tax to profits from resource projects after allowing for extraction costs and recouping capital investment.
Companies will not pay RSPT until after they provide shareholders with a normal return on capital investments (In relatio to a normal I've seen references to the 10yr bond rate in the mediea in relation to this, currently ~6% or so reported). The generous tax treatment of capital investment under the RSPT, compared with the royalty regimes, will improve the viability of many less immediately profitable mining ventures, boosting investment and jobs in the sector.
So the RSPT will help mining both during set up and during economic downturns.
When resource prices are high, the community will receive a fairer share of the profits.
State royalties will be offset against the RSPT so the RSPT is not in addition to state royalties. The approach though is messy and hence closer to a simple tax increase rather than true reform.The States will be able to keep their existing royalties, but current State royalty payments will be refunded to companies. Refunding State royalties under the RSPT will remove their economic effect.
Introducing the RSPT, along with refunding State royalties and removing Australian Government resource charges and taxes, is expected to increase GDP in the order of 0.3 per cent in the long run.
Sorry. I Know you are being deliberately provocative, but I am not taking the bait. Try to stick to the topic.
In addition, Wayne Swan indicated in a Radio National interview this morning that the 40% was more or less nominal at this stage and that he expected some 'consultation' with the mining companies.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.
I'm probably being dumb, but how does this tie up with the Qld Treasurer this morning saying they were in favour of the change as it would not affect Queensland's royalties?The States will be able to keep their existing royalties, but current State royalty payments will be refunded to companies. Refunding State royalties under the RSPT will remove their economic effect.
I suspect the return on investment threshold is in the same boat.In addition, Wayne Swan indicated in a Radio National interview this morning that the 40% was more or less nominal at this stage and that he expected some 'consultation' with the mining companies.
There's an old saying that if you are intent on criticising something, unless you have a better alternative, t'is wise to shut up.
Henry: what a sick joke
Ian Huntley | 03 May 2010 | | | Increase | Decrease
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My initial take on the government's "root and branch" tax reform is that:
(a) The prime minister, who admitted in March that he had not read Henry, still hasn't, and
(b) that Dr Henry himself should be seriously considering resigning as he appears to have wasted an awful lot of serious effort.
Henry recommended the resource rent tax (RRT) be implemented with recognition of state royalties, which it now does. Today, BHP (BHP) issued a statement clearly outlining the taxes it pays, and hopefully suggesting that discussion of details may lead to a better outcome. To be exact, the BHP statement says the RRT will increase Australian-based taxation from “around 43 per cent currently to 57 per cent from 2013.”
The tax particularly hits mature, profit-generating miners such as BHP and Rio Tinto (RIO). Goody goody gumdrops for the explorers and those in the heavy duty development stage, who appear at first blush to have gained some wins. But the RRT looks like it takes away a lot of the aim of the game - the generation of profits commensurate with the risks involved.
I would continue to hold mining stocks, BHP and Rio in particular, as there is a lot of water to go under the bridge on this issue yet.
Again, the Rudd spin makes a gentleman leaving the pub at midnight look good. Hey - we are trying to adjust for the two-speed economy, say the spin doctors. But this tax threatens to bring the economy back to slow speed, gutting the golden goose.
The "two-speed" issue was firstly based on the growth generated by the mining industry and secondly focused on some of the harsher issues, but on balance argued that it was good overall for the country.
Given our top three exports are resources, that is stating the bleeding obvious. And they got there by exceptional risk taking, at times kicking ill-conceived government policies - like keeping the iron for future generations - and through some excellent management.
Lifting super concessions down the track is Australian Council of Trade Unions (ACTU) policy and was not mentioned by Henry. It simply means the workforce gets that much less take home pay as it is the total employment cost that drives business - the superannuation contribution is not some bonus. Super has some very good benefits too, some I emphasised during the global financial crisis. But much of the applause is coming from those who benefit from managing the larger pie.
Henry suggested a 25 per cent company tax. Some time down the track in this package - hurray hurray - a 2 per cent cut to 28 per cent has been suggested. I would laugh if it wasn't such a sick joke. The bottom line has many parts including the various ways depreciation and amortisation are treated for the purpose of actual taxation payments, as against international financial reporting standards (IFRS).
It also means the government is relying far too heavily on a resources boom to bolster its revenues and resources are very tricky beasts historically. As a good farmer aims to develop, the government needs to further diversify its revenue streams - something Henry was guiding towards, though in some preposterous manners.
The budget will show where the real problems are. What is this government planning for its expenditures, and will it then release its forecasts as required, which was not done at the weekend?
My personal view is that Tony Abbott, foot in mouth and all, looks better each day.
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.
After two years in the making and after sitting on the thing for almost 5 months we finally have the Rudd Government response to the Henry Review: tax the hell out of mining companies.
The Rudd Government’s revolutionary proposal following the release of the Henry Tax Review yesterday is pretty astounding in its lack of vision.
It’s not so much a “root and branch” overhaul of the tax system as it is a rocks and dirt one.
This is not to say that the idea to place a 40 per cent tax on some mining company projects to fund Super changes and company tax breaks is a bad idea, but why did we need an entire tax review to do this?
Kevin Rudd had painted this review as the panacea for structural problems within Australia’s tax system, but his response looks more like budget leaks in an election year.
Its release only months before an election and only a week before a budget means that the waters around this thing have been muddied beyond all recognition.
After looking at all the pros and cons on this matter I am in favour of the resource tax. What needs to be born in mind is the foreign ownership of a very large percentage of our resource companies. This ownership increased dramatically over recent years at very low prices. I look at this tax as going some of the way to reclaiming back some of the farm.
If these companies facing the cost of the tax were basically Australian owned my view would be different. They aren't.
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