Mining Tax Grab - How will it pan out?

RSPT will remain Australians deserve a fairer share says Gillard, sounds like Rudd in a skirt, was hoping they would can the tax altogether nope can't see Labour party doing any better it will be all the same crap recycled

Bring on the election need to vote them all out.

With the death of the ETS, Rudd politically had to make the RSPT stick - he had painted himself into a corner.
Gillard does not have the same problem - there are no littany of backflips shadowing her every decision (although she does take responsibility for being part of Labour decisions).

It will be very interesting to see how this plays out now. I am convinced that whatever form it takes there will be major structural changes to appease the sitting Labour WA & Qld ministers - she gained the caucus numbers far too easiliy for deals to have not been done on key policy issues.

My guess will be, the mining tax will stay but in a modified format. One of Gillard's supporters is the mining unions and they are not in favour of the tax. The Govt needs the money so it will be some sort of compromise, me think.

The underlying principal of a national resources rent tax to replace state royalties is sound.

Now, hopefully, minds will be a little more open as to the detail.

Loved this quote in todays Australian....

Mike Young, managing director of emerging Pilbara miner BC Iron, said Ms Gillard needed to distance herself from Mr Rudd’s strategy and start consulting with the sector.

"The industry has always said we are happy to consult on the tax but the lack of consultation really got the sector offside," he said.

"No one is saying she wasn't in the gang of four that decided on the tax but the ultimate decision wasn't hers.

"The government, treasury, anyone involved in politics would have been surprised by the veracity of the industry's campaign."

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Politics and veracity in the same sentence - unthinkable

Can anyone see the irony in this picture? Is that Twiggy in the background?

drsmith said:

The underlying principal of a national resources rent tax to replace state royalties is sound.

Now, hopefully, minds will be a little more open as to the detail.

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Yes this is the reality hopefully Gillard will not be dim witted in the implementation and listen to the likes of Peter Walsh

Re: Mining Tax good idea

australia is one of the richest countries in the world with minerals and all other aspects of the minning trade.
Yes maybe Mr Rudd should have been a bit more diplomatic in his negotiations and talks but I liked his plans, now who's gonna pay more tax?
It wasn't us that pushed him out it's all inside caucus and a few others,what a joke and guess what the elections are up soon......
To make this plan and simple as soon as the government says raise your taxes to these big minning companies they use every tactic in the book such as their adverts "or loose your jobs", what a load of crap!
They have been on such a good wicket for so many years go have a look at their opualence living castles and money they send in o/s accounts and out of Australia at the same time using all our water when we go on rations and so on.

Re: Mining Tax good idea

wynsum said:

australia is one of the richest countries in the world with minerals and all other aspects of the minning trade.
Yes maybe Mr Rudd should have been a bit more diplomatic in his negotiations and talks but I liked his plans, now who's gonna pay more tax?
It wasn't us that pushed him out it's all inside caucus and a few others,what a joke and guess what the elections are up soon......
To make this plan and simple as soon as the government says raise your taxes to these big minning companies they use every tactic in the book such as their adverts "or loose your jobs", what a load of crap!
They have been on such a good wicket for so many years go have a look at their opualence living castles and money they send in o/s accounts and out of Australia at the same time using all our water when we go on rations and so on.

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Wynsum you really should read alittle more, most miners are open to talks on tax even Andrew Forrest who runs Fortescue Metals today mention a profit based tax would be fine by him rather than royalties, all miners are paying company tax anyhow as there profits increase so does the return to the taxpayer, Miners such as Mr Forest are super wealthy because he is a major shareholder in FMG, if you would have brought that stock when it was trading at 1cent you to would have made alot of money.
The problem with Rudd was his my way or the highway approach do you believe the country would benefit if international investors ran for the exit how would that benefit Australia? You going to cough up the money to build mines? Many dont make super profits and alot go broke in which case you kiss your money goodbye.

Re: Mining Tax good idea

-Bevo- said:

Wynsum you really should read alittle more, most miners are open to talks on tax even Andrew Forrest who runs Fortescue Metals today mention a profit based tax would be fine by him rather than royalties, all miners are paying company tax anyhow as there profits increase so does the return to the taxpayer, Miners such as Mr Forest are super wealthy because he is a major shareholder in FMG, if you would have brought that stock when it was trading at 1cent you to would have made alot of money.
The problem with Rudd was his my way or the highway approach do you believe the country would benefit if international investors ran for the exit how would that benefit Australia? You going to cough up the money to build mines? Many dont make super profits and alot go broke in which case you kiss your money goodbye.

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Mate companies pay company tax what about what Forrest is digging up and paying pittance for it,why do you think he is worth so much,it's a very basic form of mining,they get the raw product for nicks.
Sooner or later we are going to need more money with an ageing growing population rather the fat cats pay it than me.
Fines price just doubled to about $120 US and we about 5% royalty,$6 woohoo
FMG are iron ore producers they cant hide like Rio and Bhp

Conspiracy theory - One of the big 4 miners is behind the removal of Rudd in order to get a fairer deal on the RSPT.

but seriously I think the labor government will meet the miners half way.

Hello all,

Australia is seen as such a great place to mine because of the vast data base of drilling, massive exploration, pro-mining history, plus formerly stable political & legal systems for miners. There are vast areas of the earths crust not properly explored, we are not as unique as people think in mineral endowment terms. Australia was unique in some respects because of a combination of all of the above - particularly the low sovereign risk factor being even above Canada.

Investment in mining is high risk so the rewards should be high. Risk / reward must be in balance or no investment, income, jobs, royalties, company tax, GST or massive knock on effect in economy. Weak mining industry in total = weak Australian economy (forget about the few that make it to the top because they are the minority).

Due to the massive scale of some projects, only a few, the big operators can get rich taking just a tiny part of the unit cost. Lots of units - maybe 50c per tonne x 10B tonnes = $5B. This is why Mr Forest is wealthy now. Probably 100 times his cut goes to other parts of the overall equation including investors, taxes, wages, contractors etc. My figures are indicative not actual - for example only.

For every "Twiggy" there are thousands of smaller operators that make up this industry that are still hit by the tax whenever they have a good year or two. They live in the hot and the dry dust risking all and not many ever get rich however if they happen to get lucky the government is standing there to take 57% - wow how fair is that? What about all the non profitable times for this industry when commodities were not in a boom time - did the Government assist them then - NO.

Now things are finally good and investment is booming creating; jobs, company tax, GST receipts, contractors, related businesses of all descriptions supplying engineering, tyres, shop keepers, consultants, investors, finance and you name it - the Government seeks to make it uncompetitive. Blunders in and ruins the risk / reward balance stalling all of the above via investment in new projects right in its tracks.

The cost is so large and widespread that those without a significant understanding of commercial reality and macro-economics cannot possibly imagine how much damage has been done. The government that governs best governs least.

Government needs to provide a stable safe environment for all of us to make a living, pay off our mortgages (= having a job), create businesses, bring up our children, breathe, eat etc. Imagine if they did this RSPT to the farming industry in good years, after all look at their wealth controlling vast area of our country - the big guys - similar argument? Imagine if food got disrupted? Well look at how we all live, metal in computers, houses, cars etc - just as essential to modern lifestyles when you want to drive, eat, turn the light on etc.

The economy has benefited massively from this once in a generation mining boom at a very difficult time in the worlds economy - a time when the biggest debt bubble in history threatens to burst. Ideological fools have just decreased the future benefit to all of us threatening the welfare budget, taxation revenues, in short our way of life and affluence.

Wake up Austalia your future depends on a strong mining sector at this point in history and this government, led by Gillard and Swan (formally Rudd) have been at the helm overseeing massive wastage, incompetent interference, mismanagement and some excellent social reforms. Overall I liked Rudd on a personal basis and am not a Liberal supporter as such I just want the best for Australia - my kids etc - and a fair go to get on with business.

Don't listen to or believe in corporate or government spin they do it to cover their mistakes, lack of checks and balances etc but never do it for us the real Aussies. This tax hurts all of us so a government with no commercial experience can cover excessive spending (will keep going is the nature of this beast). When mining goes flat we will all have to pay the balance off via higher taxes - this is truth. Due to the way the RSPT hurts and weakens the whole industry we will be paying more sooner rather than later. I cannot stress the knock on effect any stronger - we lose!

Very best to all I am enjoying your stimulating posts and ideas,
AUcomm
www.goldoz.com.au

Australia is seen as such a great place to mine because of the vast data base of drilling, massive exploration, pro-mining history, plus formerly stable political & legal systems for miners. There are vast areas of the earths crust not properly explored, we are not as unique as people think in mineral endowment terms. Australia was unique in some respects because of a combination of all of the above - particularly the low sovereign risk factor being even above Canada.

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Africa would have multiple times more mineral wealth than Australia and fortunately for Australia (competition wise) there isn't the political/social stability in many African countries to allow greater exposure of their mineral wealth. Unfortunately it is also the home of precious free range animals and rare wild Earth.

Wysiwyg said:

Africa would have multiple times more mineral wealth than Australia and fortunately for Australia (competition wise) there isn't the political/social stability in many African countries to allow greater exposure of their mineral wealth. Unfortunately it is also the home of precious free range animals and rare wild Earth.

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... and a continent that is attracting billions of $$$ in Chinese investment.

I hope Australia's long term future isn't consigned solely to digging up minerals from the ground. One or two stable African governments could change the international minerals landscape markedly.

http://www.abc.net.au/sundayprofile/

This is two interviews by Monica Attard, one with George Jones of Sundance, and the other with Martin Ferguson which are worth a listen.

I've just made calculations that capital gains tax will tax me at the same rate as I would be taxed as a miner. As investors we have had to accept the capital gains tax. Eventually miners will have to accept some form of increased taxation that will return more of Australia's natural wealth to all Australians.

In the words of Kenny Rogers

"You've gotta' know when to hold 'em.
Know when to fold 'em
Know when to walk away..."


http://www.heraldsun.com.au/news/br...ld-mining-shares/story-e6frf7jx-1225885384061

PRIME Minister Julia Gillard is set to face her first political hurdle following revelations a Labor senator sold mining shares a day after the resources super profits tax was unveiled.

South Australian senator Annette Hurley sold shares in home state-based Penrice Soda in early May, ABC Radio's PM program says.

The transaction occurred a day after the Federal Government unveiled its proposed 40 per cent resources super profits tax.

Senator Hurley declined to do an on-air interview with ABC Radio.

nioka said:

I've just made calculations that capital gains tax will tax me at the same rate as I would be taxed as a miner. As investors we have had to accept the capital gains tax. Eventually miners will have to accept some form of increased taxation that will return more of Australia's natural wealth to all Australians.

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There is one sure fix I know and that is for all the Australians who lay claim to the natural wealth to go extract it thy self. Seed capital, expertise, exploration, more capital, feasibility studies, environmental impact studies, more capital, mining, production, shipping. Yeah no worries we will do all that for you .... Like hell.

Massive employment on the periphery of the mining industry so Australians do benefit.

nioka said:

Eventually miners will have to accept some form of increased taxation that will return more of Australia's natural wealth to all Australians.

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We have a choice where we put our money.

If people choose to put in housing, which stagnates money, and does not produce anything, then why should we overly tax an industry the same people could have invested in??

I think we should tax property 55%.
Housing has been generating "super profits" over the past 10 years, and I think that ALL Australians deserve their "fair share"

Would that win any votes?

medicowallet said:

We have a choice where we put our money.

If people choose to put in housing, which stagnates money, and does not produce anything, then why should we overly tax an industry the same people could have invested in??

I think we should tax property 55%.
Housing has been generating "super profits" over the past 10 years, and I think that ALL Australians deserve their "fair share"

Would that win any votes?

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Housing already is supper taxed. Excessive stamp duty and CGT.