Australian (ASX) Stock Market Forum

Mining Tax Grab - How will it pan out?

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In USD the ASX has dropped over 22% but as you say it's good for the exporters, hang on the resource sector is our biggest exporter, oops...

Personally the volatility is great, doing a lot of short term trades on SPI and AUD .
 
Whiskers said:
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.

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Maybe comparing our falls to other mining driven nation’s currency (rand or the looney). I think it has affected our dollar to a degree. Mainly bad timing from our esteemed numbnut of a leader.
 
Considering that Canada exports close to 2mil barrels of oil a day (and growing) to the US and has reserves in the tar sands of 250-400 Gb, it is a little difficult to assume anything about the ~9% decline of the Looney compared to the $Aus decline.

brty
 
I have read a few articles stating that Constitutional challenges are likely if this tax gets implemented. On shore minerals are owned by the states, not by the federal government so the states have the power to decide what royalties are paid by mining companies. This differs from off-shore minerals - and the Petroleum Rent Tax - which the commonwealth has ownership over.

http://www.theaustralian.com.au/new...for-resource-tax/story-e6frg6nf-1225869370753

Will have to do some more reading on this.
 
Jimbob, that's interesting. Could you post up anything further you find about this?

Given that WA and Qld have both registered their unwillingness to back the tax as it stands, the government could be in for an even bigger fight than they had anticipated.

The following is a further commentary on state of play from Business Spectator:

http://www.businessspectator.com.au...lliton--pd20100524-5RALD?OpenDocument&src=kgb
 
This article in The Australian explains some of the potential problems:

http://www.theaustralian.com.au/bus...pen-to-challenge/story-e6frg97x-1225869371347

Section 114 of the Constitution prevents the commonwealth and the states from imposing "any tax" on their respective "property of any kind". By law, onshore mineral resources are owned by the states -- not the commonwealth. Unless the legislation imposing the tax differs significantly from the government's public statements, Mr Blakiston and several senior lawyers believe it could come extremely close to being an impermissible federal tax on state-owned property.

Section 55 of the Constitution could also present the commonwealth with some drafting challenges. This section says laws that impose taxes can be used to achieve only one purpose -- taxation. But the super-profits tax would also commit the government to taking on a proportion of the losses of resources projects. Because of this, some lawyers believe a case could be made that at least part of the scheme is not really a tax and therefore falls outside the federal government's extremely wide constitutional power to impose taxes.

It will all depend on the wording of the legislation, but it looks like they will need to put careful thought into it or else it could be ruled invalid.
 
Good the better this thing end and the tax is thrown out the better Australia will be ... :D
 
ROE said:
Good the better this thing end and the tax is thrown out the better Australia will be ... :D
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I'll go one step further and say the sooner the inept Krudd Government is thrown out the better Australia will be.
 
Mofra said:
Haven't even started with senate negotiations and we are getting fairly substantial amendments:


http://www.news.com.au/business/pri...-mining-tax-rate/story-e6frfm1i-1225871830341
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All for the better imo. A sensible move, if it goes ahead.

It was now expected to increase the threshold at which its proposed super-profits levy kicks in from 6 per cent to 11 or 12 per cent.

The backdown comes only three weeks after the Government unveiled the new resource super-profits tax and comes after a ferocious campaign by the mining companies,

Despite this expected backdown, the big mining companies have already declared the changes do not stop the risk to investment in Australia.

To offset the lost revenue in raising the threshold to the same level as the existing petroleum resources rent tax, which applies to offshore gasfields, the Government intends to withdraw the 40 per cent taxpayer-funded compensation originally offered for mining projects that fail, The Australian reports.
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I agree with Henry that the soverign risk issue is a very minimal amount, but with the above ammendment, it's effectively non existant.

And I agree there will likely be more tinkering, cos at the end of the day it all needs to be simpler. There really needs to be a COAG type state agreement to standardise royalty rates also.
 
They need to get rid of retrospective on the existing projects...
only apply to new projects, this is communist style of law rather than free and
open country.

Imagine you make your property investment based on the existing laws
ten year down the road ..oh property gone up so much let tax these guys 40%
on all their capital gains, no concession nothing :D

and while you at its tell some lies like you leech off all the renters all these years
Australian people demand their fair shares of this capital gain :)

you be up in arms as well

that the sort of government you want in this country?
 
ROE said:
They need to get rid of retrospective on the existing projects...
only apply to new projects, this is communist style of law rather than free and
open country.

Imagine you make your property investment based on the existing laws
ten year down the road ..oh property gone up so much let tax these guys 40%
on all their capital gains, no concession nothing :D

and while you at its tell some lies like you leech off all the renters all these years
Australian people demand their fair shares of this capital gain :)

you be up in arms as well

that the sort of government you want in this country?
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I like Abbott's assessment that the government has disqualified itself from being worthy of running the country.
 
Read post 112 ... It's a CRACKER ! Well done Whiskers ........ purrrrrring along just nicely aren't we !! Tell me again how this tax has not effected the AUD ??

Sorry Joe Blow .... I could not resist ........ infraction away.
 
Mofra said:
Haven't even started with senate negotiations and we are getting fairly substantial amendments:

http://www.news.com.au/business/pri...-mining-tax-rate/story-e6frfm1i-1225871830341
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A few weeks after the budget is released and it looks like Labor's surplus is gone already.

As ROE mentioned, they need to get rid of the retrospective aspect of the tax and only apply it to new projects as this aspect is damaging Australia's reputation for low sovereign risk IMO. You cant change the goalposts mid game.
 
It's Snake Pliskin said:
There's more in the Australian regarding the TAX PAYER funded ads. When will the nonsense stop?
http://www.theaustralian.com.au/pol...uper-profits-tax/story-e6frgczf-1225872477179
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Rudd is obviously a master of slick marketing to get what he wants. Remember the massive marketing that got him voted on 07? The sheeple (whose money he spends so freely) are very easily manipulated with a little know how and funds for extensive advertising. And, IMO, that is one thing Rudd does know how to do. Might be all he knows, but dangerous if it gets him and Swan back into the Aussie purse - or whatever is left of it.
 
As a little light relief from all the angst the following are purported to be from Wikileaks, and are quoted in the "Weekend Australian" by James Valentine.

Personal email from Jan Du Plessis, chairman, Rio Tinto To Jacques Nasser, chairman, BHP Billiton.
Subject: Bloody Kevin Rudd's Bloody Super Tax.

If the resources belong to the Australian people, maybe they'e like to head west and dig the bloody stuff up. Perhaps they'd like to negotiate with the Chinese government and risk a few years in a Bejing Prison when they get it wrong. Perhaps the Australian people would like to live in the Pilbara in a small tin hut and stand behind a bloody great drill for 12 hours at a time. Are the Australian people free for a working bee next Sunday?

There's still 40 bloody ships off Newcastle they could come and load some coal into. Would the Australian people like to come and take some of the risk involved in being in the commodity game? Zinc isn't always rock of the month, you know.
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Email from Jacques Nasser to Jan Du Plessis
Don't think that's quite the tone we should take, but LOL.
Make sure yo delete it.
See you at the World Cup.
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