Mining Tax Grab - How will it pan out?

[Aston]

Mr Swann is saying that "multinationals such as BHP Billiton and Rio Tinto pay just 13 to 17 per cent tax". BHP and the opposition are stating that this is a misrepresentation. The following link points out that "BHP Billiton clearly stated that in the 2009 financial year it paid total taxes to Australian governments of A$6.3 billion, resulting in an effective tax rate of around 43 per cent.” Given the Corporations Act has a number of provisions relating to a company officer making false and misleading statements, then can we conclude that the BHP CFO is making an accurate statement.
So who is telling the truth and can the government reconcile the discrepancy?

http://preview.bloomberg.com/news/2...entation-of-level-of-australian-tax-paid.html

 

[Julia]

It really is nuts that the Government is willing to take a 40% stake in risky mineral exploration, indexed to the government bond rate.

2. it will not be politically viable to write out big cheques to failed mining ventures. It will be a massive storm when, as the author alludes to, the administrators for a Pasminco come knocking on Treasuries door for a big tax refund due to poor zinc price forecasting; and
3. This is why financiers will not accept the 40% 'government bond' in their modelling - they do not trust the political will to open up the coffers for mining losses racked up.

Also imagine the impact on the budget when China has its correction and commodity prices crash or the gold 'bubble' pops? There could be a bill well into the billions which will have to be funded by tax payers!

Exactly. I'm amazed that more focus has not been attached to this utter nonsense (Tom Albanese described as 'bizarre') by the Opposition, and the Minerals Council, for that matter.
As a taxpayer, I'm damned if I want to be funding any portion of failed mining ventures!.

This will just not sell electorally IMO.

So far, I rather doubt this has actually registered with the electorate at large.

My tip is that the RSPT will be watered down to become like the petroleum profits tax - thus a flat 40% rate will kick in after a project return of the bond rate + 500-600 basis points with a tax write-off allowed for royalties but no government refund for capital losses. This can then easily and fairly be transferred on existing assets, with an allowance made for written-off depreciation. The tax will then not apply to low margin operations like quarrying etc because the return on those projects will be below or on the 11% margin.

Agree, and I reckon the miners would probably accept that, as long as the deal stays which sees them reimbursed for the royalties paid to the States.

Mr Swann is saying that "multinationals such as BHP Billiton and Rio Tinto pay just 13 to 17 per cent tax". BHP and the opposition are stating that this is a misrepresentation. The following link points out that "BHP Billiton clearly stated that in the 2009 financial year it paid total taxes to Australian governments of A$6.3 billion, resulting in an effective tax rate of around 43 per cent.” Given the Corporations Act has a number of provisions relating to a company officer making false and misleading statements, then can we conclude that the BHP CFO is making an accurate statement.
So who is telling the truth and can the government reconcile the discrepancy?

http://preview.bloomberg.com/news/2...entation-of-level-of-australian-tax-paid.html

Given the paper alleging the 13 to 17 % tax rate was written by a student who this evening was alleged to still not have graduated, granted with supervision by his Professor of Taxation, I wouldn't have to think too hard to put my money on the veracity of the BHP Company statement.

Andrew Robb has quoted one part of the student's paper where he says the student didn't know where to put the figures from New Zealand, so he just tacked them on to those for Australia!.
I have no idea whether that's true. No reason to think Mr Robb places any more value on truth than does Mr Swan.

 

[trainspotter]

Kevin's SPT; snatching defeat out of the jaws of victory.

Hear Hear ! Just when we were getting somewhere as a country of true "worth" globally. Now we will be seen as the idiot savante that picked the wrong answer on "Who wants to be a millionaire?"

 

[Whiskers]

My 2c - lets see how it plays out. Without a doubt, though, some variant of the super profits tax will exist going forward.

Yes, I think there's a better chance of getting some variation of this through than the ETS.

I also agree that the gov cannot be held liable for refunding money for failed projects. It will have to always be that losses can be carried forward against future income, maybe not as strictly as the same project, but within the same company.

Re the current effective net tax (including royalties) paid at present, it's damn hard to know because of all the variable royalty rates, including the significantly reduced royalties that BHP and RIO have paid in WA since the 60's to allow for their infrastructure development in the Pilbara.

Many of the junior explorers/miners who now have projects in the area are at a competative loss to BHP and RIO because of those outdated royalty concessions and have had to go to court to win the right to use that infrastructure albeit on BHP and RIO's terms.

There's a lot of criss cross, argy bargy going on between the fed and states, the miners and states, the miners and fed and miner against miner.

It's all a hell of a mess that is beyound the comprehension of most, hence I think Rudds simplistic headline arguement that the people should have a better share.

Just touching on the justification of higher taxes especially for mineral resources... the BP oil spill in the US, Santos in New Guinea a few years ago and even BHP among others causing serious degradation of the local enviornment from accidents, deliberate concealed toxic waste desposal and often poor rehabilitation of mined areas, is a powerful public arguement to make them pay higher taxes, despite the high risk nature of the exploration and development of these resources.

 

[Bushman]

Given the paper alleging the 13 to 17 % tax rate was written by a student who this evening was alleged to still not have graduated, granted with supervision by his Professor of Taxation, I wouldn't have to think too hard to put my money on the veracity of the BHP Company statement.

Andrew Robb has quoted one part of the student's paper where he says the student didn't know where to put the figures from New Zealand, so he just tacked them on to those for Australia!.
I have no idea whether that's true. No reason to think Mr Robb places any more value on truth than does Mr Swan.

Can you believe that Swan tried to use these shonky figures? The man has some gumption. ATO figures released today contradict this, saying the tax rate is more like 27%, with royalties taking this up to 40%.

Someone should re-instate the 'guilty party' slogan with this mob!

 

[trainspotter]

Can you believe that Swan tried to use these shonky figures? The man has some gumption. ATO figures released today contradict this, saying the tax rate is more like 27%, with royalties taking this up to 40%.

Someone should re-instate the 'guilty party' slogan with this mob!

41.3% effective tax rate in fact direct from the ATO.

Massive faux pas from the Guvt on this one especially from Swan who has once again been caught lying to the sheeple. YAY !

 

[-Bevo-]

http://www.2gb.com/index2.php?option=com_podcasting&task=playaudio&id=2&f=1&Itemid=41

Tell it like it is Alan, Krudd government incompetence pilled on incompetence.

 

[trainspotter]

BHP, Rio, FMG have just ordered their new fleet of dump trucks. Industry insiders claim that if Rudd wants a small business then he will get one.

 

[Julia]

Given the paper alleging the 13 to 17 % tax rate was written by a student who this evening was alleged to still not have graduated, granted with supervision by his Professor of Taxation, I wouldn't have to think too hard to put my money on the veracity of the BHP Company statement.

Andrew Robb has quoted one part of the student's paper where he says the student didn't know where to put the figures from New Zealand, so he just tacked them on to those for Australia!.
.

It has further emerged that the paper from which the government quoted the 13 to 17% tax paid by the miners was not even a final draft.
Had they bothered to obtain the final draft, it's alleged today, they would have seen that the above figures have been eliminated.!!
Their incompetence and duplicity is nothing short of farcical.

 

[Julia]

John Ralph has now reluctantly entered the debate:

http://www.theaustralian.com.au/bus...-mine-loans-hike/story-e6frg96f-1225870757474

Extract:

Ralph warns of mine loans hike

THE man who oversaw business tax reform for the Howard government, John Ralph, has attacked the proposed resource super-profits tax, saying it will cut industry investment at all levels and harm the national interest by jacking up sovereign borrowing costs.

In his first comments on the tax, mining industry legend and former Commonwealth Bank chairman John Ralph writes in The Australian today that his biggest concern is the elevated sovereign risk flowing from the tax's retrospective application.

"This will heighten -- significantly -- the sovereign risk assessment of Australia when it comes to investment in, and lending to, Australian entities," says Mr Ralph, who reviewed business taxes in 1999 for John Howard.

 

[glenn_r]

There is a new technical pattern, it's called the " Rudd Waterfall " , currently being seen on the AUD daily chart....

Stupidity 101 in how to wipe US$278,000,000,000 off the market cap of the ASX200, who let the lunatics drive the bus....

 

[brty]

$Aus down 13%, Rudd's fault.

XAO down 14%, Rudd's fault.

CAC (France) down 21% Rudd's fault.

Nikkei (Japan) down 15% Rudd's fault.

Swiss Franc down 10% and 14% since November, Rudd's fault.

All the above over the last month.

Gee, that Rudd is an influential Bloke..

brty

 

[trainspotter]

Don't forget ear wax eater ...... who's that guy with Kruddy .... he looks kinda important ?

The Aussie dollar is considered by the global investment community as a risky option in times of economic uncertainty due to the nation's leverage to the commodity prices and and concerns about the mining super profits tax. The US dollar is seen as a safe haven.

http://www.news.com.au/business/euro...-1225869409039

 

[glenn_r]

I only mentioned the AUD and the ASX, with which both are underpinned by our resources, both are doing a Swan dive, pun intended.

Every market commentator is shaking their head about the stupidity of the RSPT and the timing of the announcement by the numb nutted PM.

The current retracement was not caused by the RSPT but it sure as hell it has made the depth much deeper.

We all know Kevin is grooming himself for a future job as a statesman with the UN and really couldn't give two hoots about the Aussie battlers super.

 

[brty]

The current retracement was not caused by the RSPT but it sure as hell it has made the depth much deeper.

Deeper than what?? The Japanese market has fallen further than ours. The chinese market has fallen 20%.

Why should our market not have those types of falls irrespective of the RSPT??

brty

 

[trainspotter]

What fails me is the CEO's of these super taxable companies are shooting themselves in the foot by talking down their resilience to these obtuse suggestions by the Government. The constant bleating about going off shore and retrenching workers and stopping development etc ad infinitum is having a WHAT effect on their share price? Effectively they are talking it down. Would they have not been better off saying that it is just a PROPOSAL and it has to get passed the senate blah blah blah instead of it turning it into a political grenade waiting to go off? Makes the punters nervous all this kind of brouhaha you know. Not to mention the good old AUD taking a plunge as the global investors sell us off over something that has not happened yet? Hmmmmmmm .... true glenn_r the timing was exceptionally fortuitous for the Opposition to make a bit of ground in the 2 horse race. Madness takes it's toll.

 

[Whiskers]

Don't forget ear wax eater ...... who's that guy with Kruddy .... he looks kinda important ?

The Aussie dollar is considered by the global investment community as a risky option in times of economic uncertainty due to the nation's leverage to the commodity prices and and concerns about the mining super profits tax. The US dollar is seen as a safe haven.

http://www.news.com.au/business/euro...-1225869409039

The AUD started trending lower from last Nov and many of us were predicting a lower AUD and stronger USD, long before the super tax issue came out.

The reason is simply that a large proportion of international financial transactions are made in USD and the USD has always been the currency of choice when large liquidation of positions occur around the world as has happened lately.

Aus is a spec in the ocean in terms of financial transactions. My opinion is that the AUD ran too high as a result of our higher growth and interest rates after the GFC. This fall is simply a reflection of a rather hurried return of those funds to whence they came, or better yielding or safe position.

Precious little to do with any new tax proposal, in other words the other international events was going to cause the AUD to fall anyway.

What fails me is the CEO's of these super taxable companies are shooting themselves in the foot by talking down their resilience to these obtuse suggestions by the Government.

Talking about shooting... It's the sort of hysterical nonsense like in a lot of your half cocked and completely inaccurate comments, that finds it's way into the media, that drives uncertainty and liquidation of assets like is occurring now.

PS:... and a lower AUD is better for Aus export profits.

 

[trainspotter]

The AUD started trending lower from last Nov and many of us were predicting a lower AUD and stronger USD, long before the super tax issue came out.

The reason is simply that a large proportion of international financial transactions are made in USD and the USD has always been the currency of choice when large liquidation of positions occur around the world as has happened lately.

Aus is a spec in the ocean in terms of financial transactions. My opinion is that the AUD ran too high as a result of our higher growth and interest rates after the GFC. This fall is simply a reflection of a rather hurried return of those funds to whence they came, or better yielding or safe position.

Precious little to do with any new tax proposal, in other words the other international events was going to cause the AUD to fall anyway.



Talking about shooting... It's the sort of hysterical nonsense like in a lot of your half cocked and completely inaccurate comments, that finds it's way into the media, that drives uncertainty and liquidation of assets like is occurring now.

PS:... and a lower AUD is better for Aus export profits.

Excellent post Whiskers ! I liked the part best when you agreed with me that the funds are going whence they came to a better yielding or safe position due to the RSPT causing these global investors to dump the AUD due to our leverage this country has with our mineral wealth and head to the USD instead. Click on the link provided for more info. Aaaaaah the media.

Especially liked the other part where my hysterical nonsense can influence the media. Pure genius.

P.S. Agreed on this matter of fact.

 

[trainspotter]

Not just me saying it either:

Dr Ron Woods of www.roneconomics.com.au, independent funds manager: Whatever the merits or demerits of RSPT the timing of it is wrong. Whether real or imagined, the announcement has drawn undue negative attention onto Australia at a time when markets are especially skittish about any change in the sovereign risk of various countries. Thus this is likely to cause some negative assessments of the economy’s prospects and as these tend to become self-fulfilling it is likely to be a drag on the economy.

Stephen Walters, chief economist, JP Morgan: The debate over the RSPT already is having an impact on the Australian economy and financial markets, including the value of the Australian dollar. The extent of the “damage” is hard to quantify, with the truth somewhere between the two extreme positions currently being debated ”” the government’s assertion that the new tax will boost investment, and the mining industry’s position that the tax will destroy Australia’s golden goose.

What the heck would these guys know anyways?? Just log onto ASF and the truth is out there.

 

[Whiskers]

Trainspotter mate, you've got more twists than a coil of rope. :