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Mining Tax Grab - How will it pan out?

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This mining tax has absolutely nothing to do with Australians getting their fair share of the minerals buried in this land (if it did then surely the bulk of the share should go to our indigenous brothers who "owned" the land before all migrants arrived). What it really is is a desperate grab for cash to pay for this governments obscene waste of public funds.

Why we let this waste continue in the face of one of the potentially worst economic climates Australia has faced is beyond me. Just when we should be saving every cent we can (or at least spending it very very wisely and frugally), we have a government wasting as much money as it can!

In one example we have the situation where the government is going to waste (and I can't help but emphasise the use of this word) $38.5 million (yes million) on a ad compaign which I am sure the public don't want and more importantly will not influence the debate one way or the other (just as the mining ads will not influence the public). In fact I am sure the majority of the public will not even read any of the propoganda from both sides.

It is obscene that past governments and the current government use huge amounts of our money to foster their own parties. As for the excuse that this government is using to justify this waste - "we are not wasting as much as the Howard government" (my quotations) and to get around Kevin Rudds backflip on government advertising spending is a joke of the highest order.

Unfortunately this joke (and the other jokes) that this current government has foisted on us is costing us big bucks.

The Rudd governments claim that it has saved Australia from the GFC (which I personally doubt and despite Mr Henry's claims) is at least debatable.

Unfortunately Australia will not only suffer to some unknown extent from the GFC (which is still hovering over the world) but it certainly will not survive the KRFC , which is much worse.

This KRFC will hit the lower socioeconomic levels of our society in a hard way. It will not affect Mr Rudds standard of living but it is a great impost on our society for him to continue, period.
 
Hear, hear Dutchie.

It is a tax grab because the tax is retrospective. Also, the retrospectivity means that 40% of these existing long-life mines will be nationalised. That, more than anything else, is preposterous! If they are fair dinkum about this tax, then they would value all retropsective mines at current market value and issue an upfront government bond (indexed at the long-term bond rate) at 40% of this value.

The bit about 'all Australians own the minerals' is galling because without the expensive capital provided by investors (equity and debt), the land is essentially worthless dirt with no economic value. It is the investment (and risk of this) that provides value to Australian public, not the worthless unimproved land. Investors deserve the lion share of this profit as they have taken the most risk. This is capitalism!

As for the government taking a 40% stake in all speccie minerals projects, this is an inefficient allocation of scarce capital into marginal projects. Also, this committment is hollow unless the government issues a redeemable government bond to the shareholders of these companies, that is indexed to the government bond rate, on an annual basis. This will then need to be fully-funded out of Treasuries budget forecasts. Otherwise there is no guarantee that a Pasminco will be paid out and therefore financiers will not use the credit in their credit analysis.

Sure, looks great in an economic model (a la EMH et al).
 
I read somewhere that Krudd had requested the 38.5 million aussie pesos for the advertising blitz on April 10th or 11th and NOT May 10th as previously stated and at least 2 weeks prior to the Henry Tax Review being released on May 3rd ?? This can't be right can it? Is this what he meant when he was sitting on the couch with Swanny tapping away at a piece of paper saying "Hmmmm ..... this one will be hard to sell?" with the media throng lapping it up? So therefore he KNEW that there would be a backlash and needed the extra funds to brainwash us into submission.

Oh dear ! Me thinks things are starting to unravel over there in CANTberra. The proletariat are starting to wake up to this shyster.
 
End of democracy in Australia

Mining company's will soon rule via Abbott and co

Received a flier in the mail post card size with blatant propaganda crap complete with miss information. It is completely overt political.

No identification of who put it out there but the whole thing is slickly produced so I guess it comes from mining company money.

Completely disgusting political interference from an mining industry led campaign.

Presenting an argument based on facts is one thing but clearly they don't have any and resort to propaganda
 

If that waste of 39 million is obscene what do you call the 500+ million the Howard Govt spent on advertising "work no choices" and the "help keep Aust safe" ads.
 

That's funny, I could say the same about what I'm hearing from Government advertising.
 
So_Cynical said:
If that waste of 39 million is obscene what do you call the 500+ million the Howard Govt spent on advertising "work no choices" and the "help keep Aust safe" ads.
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Ah yes, the "Howard did it too" argument. Rudd went to the electorate on the back of being different to Howard, describing Government advertising as a "cancer." By taking this line, he can't use the "Howard did it too so it's OK if I do" line without people laughing in his face at the absolute hypocracy and lack of spine to stick to his supposed beliefs.
 
So_Cynical said:
If that waste of 39 million is obscene what do you call the 500+ million the Howard Govt spent on advertising "work no choices" and the "help keep Aust safe" ads.
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They are both obscene. An obscenity only one tenth of a obscenity does not make it any less so.

Both governments have/are obscenely wasting our money when it could be put to much better use.
 
IFocus said:
Political Parties Bul$hiting is way different to big money propaganda.
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Why?
If anything the 'big money' is more honest. They are supposed to be in business to make money, and should rightly be able to defend their means of doing so when the government is attempting to land them with a totally unreasonable, retrospective tax.
They have not said they are opposed to a change in the taxation arrangements, but why should they be expected to just wear the ridiculous figures being quoted by the government in terms of how much tax they routinely pay, e.g. 17%!!!

For the government to try to persuade the electorate that their advertising is in the national interest, as distinct from the interest of the Labor Party, is disingenuous at best, and something it seems most voters are quickly seeing through. Fine for the government to advertise, but let the Labor Party pay for it, not the taxpayer.

And yes, of course Howard did it too. But the main point at the moment is Rudd's hand on heart avowal that such advertising was a 'cancer on democracy" and it would never, ever happen on his watch.
What a joke.
 
Julia said:
And yes, of course Howard did it too. But the main point at the moment is Rudd's hand on heart avowal that such advertising was a 'cancer on democracy" and it would never, ever happen on his watch.
What a joke.
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What did John ever promise with his hand on his heart? just pointing out he never really stood for anything...wouldn't even stand up against that Hanson abomination, John was against some things but never really for anything, except work no choices.

The Coalition spent more than half a billion dollars on advertising there policy's, Rudds 40 odd mill backflip is almost nothing in comparison...40 million is somewhat obscene for sure and im disappointed in there decision, but the coalitions half a billion is totally offensive and deserving of absolute disgust and total contempt.
 

Not sure if this is quite correct. SOME of the money was spent on advertising work choices (individual workplace agreements) which by the way stopped the Union rorting of "no ticket no start" policy but that is by the by. A lot of it was spent in regards to the "security" of the Nation about dobbing in illegal and unwarranted activities (Steve Liebman was the spokesman) after 911. Another proprtion was spent on Road Safety awareness as well ..... I could go on but I will not bore you with facts and figures.

The thrust of the argument is that our PM Kevin Rudd in 2007 said he would cure this cancerous growth on the taxpayers wallet. It has not happened. FORGET THE MONETARY VALUE. Look at the MORAL values of what has been said.

Late yesterday, Senator Ludwig released cabinet documents showing that Wayne Swan first sought his approval for an exemption of normal rules for the RSPT commercials on May 10 - after the Minerals Council of Australia had begun funding anti-RSPT ads.

But despite Mr Swan asking Senator Ludwig to act urgently, it took him two weeks to respond.

However, the documents also revealed that Mr Rudd's kitchen cabinet - the strategic priorities and budget committee - approved the money for the campaign on April 20, well before the new mining tax had been announced.

http://www.theaustralian.com.au/pol...rd-to-excuse-ads/story-e6frgczf-1225873777161

Now let's all grow up and start looking at the big picture here and stop saying "John Howard did it so we can too !" Alice through the looking glass style. If John Howard told you to put your hand in the fire would you?? Is that like saying "Gough Whitlam was allowed to bankrupt the country so we should too?"

GET A GRIP !!!! Look beyond what is laid bare before you. Have a motion of discovery of a modicum of truth and SEE the lies that you are absorbing.
 
Qualification and nuance discounts affirmations of all kinds, particularly when you are trying to sell somebody something.

So that's probably the reason the federal government has opted to omit the grey area when it comes to the advertising campaign currently on air at your expense - the one that intones reassuringly that the Australian Government ''will deliver better health and better hospitals''.

Like the fact that Western Australia has not yet agreed to the Commonwealth's health and hospital reforms.

Or that the Senate is yet to consider any legislation that might be required to give effect to that agreement.

Best keep it simple.

Eventually the degree of taxpayer-funded self-congratulation going on under the Howard government drove us all stark raving mad.

This particular Rudd government actually had an accountability agenda.

It promised to be different than its predecessor. And there is evidence to show that on several fundamentals it is different from its predecessor on the issue of taxpayer funded advertising.

But there is troubling evidence too of back-sliding.

In March the government dumped the Commonwealth Auditor-General, Ian McPhee, a man it had appointed (consistent with a 2007 election promise) to the important task of policing government campaigns. McPhee (who sets his own agenda and reports to the parliament) has been replaced with a committee of retired public servants (appointed on shorter contracts and answerable to the government).

That happened in March.

In May, despite the Herculean effort to get the budget back into surplus earlier than forecast, the government found more than $100 million over the forward estimates to fund advertising campaigns. These campaigns are already in the pipeline.

Health is already on the air. Quite apart from its lack of disclosure, this campaign cannot be compared with an eminently justifiable information exercise: get a breast screen, check your prostate, slip slop slap.

It is simply an exercise in informing all of us that the government is doing something, lest you conclude that all that’s happening in Canberra is rave parties or book clubs.

http://www.brisbanetimes.com.au/opi...nore-the-facts-20100526-wcx2.html?comments=16

NOOOOOOOOOOOOOOOOO ........ Kevin Rudd is not spending anywhere NEAR as much as Howard !

Get some facts next time peoples .... the MORAL issue is out there for all to see.
 
trainspotter said:
It is simply an exercise in informing all of us that the government is doing something, lest you conclude that all that’s happening in Canberra is rave parties or book clubs.
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Yes they are doing a great job of spending (putting Australia further in debt) in tough times and making a right royal **** of things.

They should have learnt, do first, brag later.

Wish I could run my business like they run the country.

But in response to this thread, get it through Parliament first, then tell the sheepies how it is going to work.

If I am correct, none of us can vote in the senate.

Ah, politics, damned if they do and damned if they dont.

Cheers

PS. Clients are a pain in the ****, but the pay the bills
 

Yes, and the "howard did it too" argument is about as applicable as using anything previous leaders, with different front benches did against Kevin Rudd.

It is a last resort tactic to save face by Rudd, I wonder if the electorate will be gullible enough to buy his codswallop, but then again, they have so far.
 
Julia,

a totally unreasonable, retrospective tax.
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A retrospective tax would have the companies paying the tax on last years profits. I do not believe this to be the case. If it is because the miners developed the mines thinking one regime of tax was going to stay forever, then they were/are dreaming. Governments change the tax arrangements of all types of industries all the time that affect the companies involved.

It is not called a retrospective tax unless it taxes previous arrangements (ie last years income)

brty
 
:fan

KEVIN Rudd is preparing to deal directly with senior mining bosses over the proposed resource super-profits tax to head off a damaging public brawl between the industry and the government and reach a genuine compromise on tax reform.
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Backlip Kevin at it again. Seems he has no choice but to do a back flip than take on giants larger than him with bigger purses.

What a joke!

He should have first consulted with industry, then compiled a decent assessment and action plan before going public.

Old Kevin I think ya boots are a little big.

Cheers
 

Again with comparing Rudd and Labor to Howard and the previous Liberal Government. Rudd told us, the voters, that he was to hold himself to a higher standard. He described Government advertising as a "cancer" on our society. All we are doing is holding Rudd to his word, it essentially has nothing to do with a previous Government.

And if you want to include all of Howard's half a billion on advertising, you need to include all of Rudd's advertising, not just his $40m in one area. As others have noted, there will be advertising campaigns regarding the budget, as well as the health reforms advertising that is already hitting our airwaves.
 

It is retrospective in the sense that it picks up exisiting long-life mines which are unable to benefit from the 40% capital rebate. So this tax is in no way neutral as it would be if it was only applied to future projects. There is no way that it could add $9b to the budget if it truely was simpy tax reform as opposed to a tax grab.

The central tenent of tax architecture is that it should be neutral. This tax is not neutral in its current form so therefore it is a failure.

There are strong incentives for governments not to change tax regimes for upfront capital intensive industries and it is called a sovereign risk premium in our cost of capital.

Something that has not been highlighted in the debate is that fact that BHP/RIO recycle 75-80% of their retained earnings into capital expenditure for exploration and mine expansion. There is very little chance that the government will do the same.

On the bright side, the permanently lower AUD and removal of inflationary pressures caused by full employment will be eased which is good for rust-belt state dwellers like me.
 
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