Ken Henry Tax Reform

[Julia]

Love to see a list from the opposition saying which Henry recommendations they intend to implement. Shouldn't be hard, surely...

Tony Abbot on ABC Radio this evening did in fact list several of the suggestions in the Henry Report, ignored by Rudd & Co., that the opposition would seriously look at.

If Tony Abbott has even half a brain, Malcolm Turnbull's first job will be to read the detail of the Henry Review.

The Coalition should also reach out to resource business leaders with the aim of reaching some sort of agreement about the rate and threshold for this tax (such that it does not erode international competitiveness) before the ALP do.

He has a Coalition ally in the WA government so he can potentially use this to negotiate a more efficient underlying structure than what the government has put forward.

Yes, it's well and truly time for the opposition to start coming up with alternative policies. There are now sufficient disaffected groups for them to be able to make good capital from these with carefully thought out policies.

What! You name one politicial leader who has fully adopted any report handed to them, let alone by a public servant. That
would be a very short list if a list at all.

That's fairly silly, Whiskers. Given the detailed thought, time, energy and consultation that went into the Henry Report, producing a total of 138 suggestions, one would reasonably expect the government to have adopted more than three of them, particularly in view of their having introduced something not even recommended by Dr Henry.

I don't know if you have ever been in a position to delegate someone to research and report on something, but I certainly don't adopt as a matter of course everything that someone suggests in a report.

With due respect to your business and entrepreneurial skills, and quite possibly your equivalent qualification to that of Dr Henry as an economist, I think comparing what you would do with any 'report' handed to you with what the Australian government should do with a report prepared by the Treasury Secretary is ever so slightly irrelevant, farcical even.

In this case Henry makes his recomendations from his economist perspective in the public service.

Of course he does. That is his job and that is what he was charged with doing.

I expect you would. Quick to launch mouth into gear before engaging brain! :

I would be so grateful if we could have a discussion without all the gratuitous and meaningless personal insults.

I don't read Huntly. He's just another Journo, analyst trying to flog a product.

No, I don't imagine Ian Huntley's musings would appeal to you. He is too capable of seeing through the mirage that constitutes this government.

. I personally would rather a tax cut than pay more super to the "faultless" financial planning industry especially after their flawless 10/10 performances during the financial crisis.

Exactly right. No wonder they have been so enthusiastic about the increase in the SGL. All salivating at the increased flow into their own pockets.
What a great excuse to ramp up "advice only" charges.
It will take the major institutions which employ about 80% of all financial planners about a minute and a half to come up with suitably tailored products to fit the majority of ignorant clients looking for 'personal advice'.

 

[GumbyLearner]

A recent story re Qld royalties. One could check with the Department of mines and energy for exact figures.http://news.ninemsn.com.au/national/1037110/no-mining-royalties-for-qld-opponents

The corruption political favors issue has surfaced here in the press and parliament question time ocasionally over recent years and more so in WA over many previous years.

There was a couple of court cases in particular in WA involving companies that had prospects taken off them and handed to another company on ministerial descretion and some getting faster passage or priority through all the approval processes etc.

Other issues include emerging producers having to challenge BHP and RIO in court to gain access to their rail network. An example of the conglomerate's trying to corner the market and squeeze out competition.

Yeah so, ever heard of this

http://en.wikipedia.org/wiki/Profit_(real_property)

 

[GumbyLearner]

That's fairly silly, Whiskers. Given the detailed thought, time, energy and consultation that went into the Henry Report, producing a total of 138 suggestions, one would reasonably expect the government to have adopted more than three of them, particularly in view of their having introduced something not even recommended by Dr Henry.

You are right Julia. Silly is the precise word to use here IMO. 3/138
What percentage of tax review reform is that??? 0.0XXX??

 

[The Muffin Man]

As every day passes I become less and less impressed with this Government's Economic Management skills.

Basically, the Government has decided to make our most important industry a whole lot less competitive internationally, while reducing the level of retained earnings mining companies can access to re-invest in further growth opportunities. We might have had a slightly two speed economy, now we will have a very slow speed economy. To put it as others have, the golden goose of the Australian economy has been cooked, and all of this to gain votes. Disgusting.

Mining companies are going to be faced with certain investment decisions in the future that may not bode well for Australia. Other parts of the World are opening up, and as far fetched as it sounds, places like Africa are beginning to understand the importance of opening their arms to mining companies. Look at the investment opportunities opening up in places like Guinea, and look at the companies that have land holdings there. Effectively being taxed over 50% in Australia will no doubt alter investment decisons into the future when companies are comparing possible projects and their return levels. Couple this possible new tax with issues such as industrial relations and a CPRS arrangement on the horizion, and you have to wonder how much harder is it going to be for mining companies operating in this country into the future?

Boosting the Superannuation Guarantee to 12% from 9% is a great idea in theory, but I don't know whether it's going to have the desired results if it is not coupled with other reforms as well. I can tell you how small businesses in particular will react to this news. Wage growth will slow, and new employees will be offered lower starting salaries. What the Government is doing is placing further stress on cash flows of businesses. They tried to offset this with a cut in company taxes. I have a little piece of information for this Government, a lot of small businesses are borderline profitable anyway so won't see many benefits in a 2% company tax drop, and a lot of small businesses aren't structured as companies.

This so called reform, the implementation of basically 2 recommendations from nearly 140, is mind-bogglingly poor.

Australia needs a sovereign fund. The Liberals set up the Future Fund (after paying off $90Bn+ in Government Debt left by the previous Labor Party), and also set up a Higher Education Endowment Fund. It comes as no surprise that Labor has already raided the Higher Education Endowment Fund (named differently now), as well as other funds set up for our future. Labor spends, to fund this spending they need to raise taxes and raid future funds. The issue with Labor spending is that they don't look to the future.

 

[trainspotter]

Clive Palmer has already come out and blamed Rudd and Co 40% tax grab for his choice to start mining in New Guinea instead of developing and prospecting more possible sites in Australia. He also eluded to shifting more of his company offshore. Oh dear ..... the rot has set in already. Like rats leaving a sinking ship.

 

[Whiskers]

Please refrain from using my posts as your soap box. Use your own research and post the approppriate link to correspond with your allegedly factual posts in future please.

Hardly using your posts as a soap box! Not near sound enough for me to stand on! :

In fact all I did was highlight to your cohort noco, that even you recalled that what he was being so critical of me as hearsay, was in fact part of the gov speech.

"I expect you would. Quick to launch mouth into gear before engaging brain! :" ... Have you learned nothing Whiskers? You cannot sell yourself up by putting others down. Try and stick to the subject matter at hand and leave the cheap shots in the playground thanks.

Coming from one of the most animated posters on the forum...

 

[GumbyLearner]

Is the adoption of 3/138 recommendations of the Henry Tax Reform value for taxpayer money and future taxpayer's money? Or just more sellable crap from the incumbents in Canberra?

 

[Calliope]

Fine to call other people naive, but when you are labelled such it's 'gutter language'. geesh

geesh indeed You should do your homework before you join in. This guy is the master of insults, and obviously has some sort of grudge against me.

I have bent over backwards to avoid a slanging match with him after being subjected to his abuse on the thread "Health Reform: Where is it Heading?" I refer you to his unprovoked tirade including the gutter language in Post #137 on that thread.

You of all people should know that I cannot respond to provocation.

 

[nioka]

Clive Palmer has already come out and blamed Rudd and Co 40% tax grab for his choice to start mining in New Guinea instead of developing and prospecting more possible sites.

What else would you expect the MINING BILLIONAIRE to say when he may lose a million or two. If he states now, so soon, that he will mine in New Guinea he must have had that intention anyway.

 

[Whiskers]

That's fairly silly, Whiskers. Given the detailed thought, time, energy and consultation that went into the Henry Report, producing a total of 138 suggestions, one would reasonably expect the government to have adopted more than three of them, particularly in view of their having introduced something not even recommended by Dr Henry.

BUT, if you'd have read my following post...

It's early days yet and really if you didn't expect the relative goodies before the election and the gut wrenchers after, then you're pretty naive.
But the bottom line is... be carefull what you wish for... you might get it (more of the Henry recomendations... and there are some shockers there yet)!

With due respect to your business and entrepreneurial skills, and quite possibly your equivalent qualification to that of Dr Henry as an economist, I think comparing what you would do with any 'report' handed to you with what the Australian government should do with a report prepared by the Treasury Secretary is ever so slightly irrelevant, farcical even.

The point is that one who comissions a report ALWAYS has the perogerative to accept or not any or all of the recommendations in the report.

I've asked for examples of where all the recommendations have been announced and implimented immediatly, but no one has given an example. On the contrary, I think it was Calliope whose post the above blue bit responded too, made reference to recommendations that were made about 30 years later.

Further, to my blue bit above it's early days yet. Surely you don't expect all the so called reforms to be announced at once.

I would be so grateful if we could have a discussion without all the gratuitous and meaningless personal insults.

Hey, wooo back there julia... do you mean like when Calliope calls me naive it's ok, but when I demonstrate or suggest he is niave, it's gratuitous and meaningless personal insults or gutter language as he puts it? Hardly a credible arguement.

No, I don't imagine Ian Huntley's musings would appeal to you. He is too capable of seeing through the mirage that constitutes this government.

Now Julia, that smacks of a bit of hypocrisy... that "gratuitous and meaningless personal insults" that you profess to want to refrain from.

I have no problem 'seeing through the mirage'... it's just that too often I find that when colourful rhetoric is mixed with analysis, it's a bit superficial.

The bottom line is I'm just trying to figure out what it all means cos we probably won't be able to change it and need to adapt to the changing dynamics.

Alternatively, some seem very critical of just about everything, but I'm bemused at why they don't tell the politicans what they want instead. This is as good a forum as any to tell the polies and party workers what we want or voice alternatives.

 

[Whiskers]

Yeah so, ever heard of this

http://en.wikipedia.org/wiki/Profit_(real_property)

What's your point? Then I can probably respond more precisely.

You are right Julia. Silly is the precise word to use here IMO. 3/138
What percentage of tax review reform is that??? 0.0XXX??

I'm glad I'm not relying on some of you to research and collect facts for me. You are seriously lacking in effort and accuracy. :

You clearly missed this!

Originally Posted by Whiskers
It's early days yet and really if you didn't expect the relative goodies before the election and the gut wrenchers after, then you're pretty naive.
But the bottom line is... be carefull what you wish for... you might get it (more of the Henry recomendations... and there are some shockers there yet)!

But given Reform means to put or change into an improved form or condition; to amend or improve by change of form or removal of faults or abuses... what is the obsession with wholesale change in a hurry?

Reform can be incremental can't it? I certainly hope Rudd doesn't go ballistic with numerous changes all together and there are quite a few in there I certainly hope he does not impliment.

Given the blunders so far with trying to impliment too much too soon in the stimulus, I'm bewildered why some of you are critical of him for not repeating the performance and guaranteeing the same result.

 

[GumbyLearner]

What's your point? Then I can probably respond more precisely.



I'm glad I'm not relying on some of you to research and collect facts for me. You are seriously lacking in effort and accuracy. :

You clearly missed this!



But given Reform means to put or change into an improved form or condition; to amend or improve by change of form or removal of faults or abuses... what is the obsession with wholesale change in a hurry?

Reform can be incremental can't it? I certainly hope Rudd doesn't go ballistic with numerous changes all together and there are quite a few in there I certainly hope he does not impliment.

Given the blunders so far with trying to impliment too much too soon in the stimulus, I'm bewildered why some of you are critical of him for not repeating the performance and guaranteeing the same result.

I just wish the ALP hacks at the forefront of Krudd's agenda actually did some hard yakka in their time to at least at a bare minimum be able to emphasize who they claim to represent.

Well guess what I have over 6 years unskilled labouring experience. Have a card carrying background. And all I can say is...they don't represent my interests or working families. They represent the interests of their friends in the banks and buy-offs within the union movement (who hate them anyway) but don't have the intestinal fortitude to challenge them because it might make their gravy train shorter and less comfortable for all the years of verbal dogmatic diarrhoea that they claimed to care about but fail to act on. Spineless paid off cowards is how the leadership of the union movement on the east coast of australia can be summarized. All the trimmings, none of the heart.

In conclusion, ****en wimps!

 

[Calliope]

Julia.
I realize that Whiskers, as a Labor apparatchik, has no option but to toe the Party line, but the following quote from his rant shows that even when presented with a rational argument from a newspaper on his side of politics he either doesn't read it or ignores it and attacks the messenger.

Hey, wooo back there julia... do you mean like when Calliope calls me naive it's ok, but when I demonstrate or suggest he is niave, it's gratuitous and meaningless personal insults or gutter language as he puts it? Hardly a credible arguement.

His reasoning is as sloppy as his spelling and grammar, and need not be taken seriously.

 

[The Muffin Man]

What else would you expect the MINING BILLIONAIRE to say when he may lose a million or two. If he states now, so soon, that he will mine in New Guinea he must have had that intention anyway.

That's one perspective. Another perspective may be that Palmer was weighing up the positives and negatives of investing in New Guinea compared to Australia when this new resource tax was introduced. This is what I was referring to in my earlier post. If you don't think that this new tax will alter the investment decisions of mining companies in the future then you are living in a dream world. Mining companies have finite levels of capital to re-invest, which will be reduced even more by this new tax. With these reduced finite levels of capital, the mining companies need to decide which projects and investments will give the greatest level of return for the level of risk they are willing to carry. The pendulum is slowly swinging away from Australia.

Australia is becoming less and less attractive as far as mineral investment goes, and to assume that the mining industry will always be here in the same strength as we have seen over our history is a dangerous folly. This new tax, the ever increasing complex and costly Industrial Relations regime operating in this country, and the CPRS hanging over our heads, all point towards a deterioration in operating conditions for mining companies. No wonder mining companies are starting to court countries like New Guinea and Cameroon (SDL), where the taxation regimes being employed there are looking more and more attractive as time progresses. Mining companies are starting to wake up to Africa's potential, and more importantly, Africa is starting to wake up to Africa's potential. Every further restriction or deterioration in conditions mining companies experience in this country will push them further towards the point of looking elsewhere to invest their capital. Wouldn't it be a crying shame if this policy actually slowed down project investment into the future and all of the benefits that come with it?

I hope mining companies do start identifying overseas projects that would receive their investment instead of Australian projects if this new tax policy was to come into effect. Maybe then the Australian public might realise that Rudd is planning on actually taxing the industry into a point of uncompetitiveness internationally.

Thanks Kevin, and thanks Wayne. This is nothing more than a tax grab to plug leaks in the budget, leaks that were created by over-spending and extremely poorly executed Government policies that have ended up costing billions. If you don't think that revenues from this tax will end up in consolidated revenue for Labor to spend away then I personally think you are a little naive. Rudd is talking about infrastructure funds for the future, well we already had a few of those future funds and Labor has already raided them to pay for such brilliant policy as the BER (Builder's Early Retirement) scheme. Let's not even mention the almost criminal way that the budget surplus was thrown away. Just how much better does this make Howard & Costello's previous performance on Economic Management look?

 

[basilio]

"A resources rent tax on mining companies which earn 'super profits' "

Not a surprise that the mining companies are going apoplectic on that front. I can barely think of a single mining business magnate that could conceive of the possibility of making too much profit. And on the same issue each and every one them will protest that the tax take is always too high and will point to some benighted little country which will gladly roll over for some beads and mirrors and a decent kickback to Il Presidente and his cronies.

The larger issue in this debate is how countries manage the development of their natural resources so that at the end of the day the country itself is better off as distinct from the value free mining companies whose sole focus is extracting maximum return for minimum outlay. Think about Nigeria for example and the effect the massive oil industry has had there. Consider the destruction that BHP / Rio Tinto has wrecked on New Guinea with it's mining activities.

I'm not pretending I have clean hands on this issues. I invest in energy companies with a view to a decent return. But I don't have any delusions that the returns to small shareholders somehow makes up for an overall lowering of living standards in Australia. There is a mountain of evidence that simply making the Palmers, and Hancocks of this world multi billionaires isn't necessarily in our collective interest.

Obviously if you tap the web you can find a million stories to back up almost any point of view. I can throw up a few references but I suggest that when you see a counter story proclaiming just how beneficial and profitable mining activities are for a country check out just who is telling the story.

http://www.revenuewatch.org/news/FSCHearingReport_PWYP1107.pdf
http://eyeonmining.wordpress.com/2009/08/05/bougainville-plaintiffs-celebrate-as-rio-tinto-loses/

Ok Tedi Mine: Some Facts and Figures

The environmental and human tragedy that is still unfolding at the Ok Tedi mine in Papua New Guinea raises fundamental questions about the governance of natural resources. These questions concern the balance of power between inexperienced, cash-poor governments and powerful multinational industries; the provision of and access to information that is technical in nature; communication across language and cultural barriers; and the need for institutional structures that allow for effective complaint and redress when things go wrong. Such issues are directly relevant to the global mining industry’s ongoing efforts to reduce its adverse social and environmental impact and to be more accountable for its actions.
The story in brief

Papua New Guinea, a country of only 5 million people, is a botanical treasure island. Its relatively pristine rain forests, mountains, rivers, and reefs harbor a host of rare plants, animals, and birds, including flying foxes, river turtles, the longest lizard, and the largest orchid, bat, and butterfly species in the world (NRI and World Bank 2002:8).

Yet, in the 1990s, the country became a byword for the ecological destruction that can result when a young, weak government and an international mining corporation ignore environmental concerns and the voices of local communities.

http://archive.wri.org/page.cfm?id=1860&z=?

 

[Bushman]

Maybe they should consider a 'land rent tax' for super profits earned on the family homes?

This tax gain could be used to fund housing affordability solutions.

That way all generations will share in the unpredented housing boom.

Oh i forgot that any tax reform for middle Australia is deeply frowned upon

 

[basilio]

Quick follow up on just how Nigeria has developed - courtesy of mining companies- with it's huge oil/gas resources

The curse of oil still stalks Nigeria delta

Plans to share petroleum wealth were meant to bring peace to Nigeria's troubled oil province. But Daniel Howden finds that an arms amnesty is failing and the Delta remains a powder keg

It is a little after dark in Port Harcourt and the electricity comes on long enough to illuminate a football match on the forecourt of a petrol station. For spectators, the young players have a line of parked cars waiting for a rumoured delivery of fuel the next morning. The dim light shows the exhaust fumes of passing traffic and a game that's as enthusiastic as it is shortlived. After five minutes, the lights go out.

Within a 200-mile radius of the capital of Rivers State there is a higher concentration and larger reserves of sweet, easily refined crude oil than anywhere else in the world. And yet the forecourt friendly gives a glimpse of much of what has gone wrong in the Niger Delta: a toxic cocktail of unemployment, fuel shortages, pollution, poverty and power cuts.


... Natural wealth: Nigerian energy

*Nigeria is the eighth largest exporter of oil in the world as well as being the fifth biggest source of US imports, and contends with Angola to be the largest producer in Africa.

*At full capacity the industry can produce three million barrels a day but militant attacks in the Niger Delta have cut production by an estimated 40 per cent.

*In the last three decades oil has earned Nigeria $300bn (£200bn) but the average Nigerian has grown poorer over the same time span.

*Nigeria has the seventh largest proven gas reserves in the world.

http://www.independent.co.uk/news/w...f-oil-still-stalks-nigeria-delta-1930001.html

 

[Mofra]

3/138 is a little bit of a misnomer.

Rudd is a popularist style politician, in that the polls are more important than getting the right thing done at the right time. I have no doubt that there are more reforms that he may perceive as unpopular that he will include in the first post-election budget, should he be re-elected.

 

[trainspotter]

Banks will want to watch out on the "super profits" tax grab by this Government. Might not be too far away when the budget is leaking even further that they end up in the sights of Robin Hood Kruddy and his band of merry men. Stealing from the rich and giving to the poor is so passe these days. Been done before for limited success.

Do we think that Australia has the monopoly on resources? Just like we think we are big time Charlies on the world stage by trying to lead the world into an CPRS & ETS? Come on people WAKE UP TO YOURSELVES !!

There are 6,697,254,041 in the world and 22,331,101 in Australia which equates to 0.0003345521% of global population. Ya got to be kidding me that this Govt thinks that mining companies wont go overseas and explore other less taxing governements, cheaper labour forces, and richer resourced countries like Africa and Brazil ?

 

[cutz]

When boom turns to bust we'll see who's not wearing clothes.