Nah, he's not reading the forum, he's sitting down getting ready to spend your pay cheque.

I guess some of it will come my way.

Thanks!

The budget was interesting today, I thought it was excellent

cisco said...

nebbian said...

The budget was interesting today, I thought it was excellent

IF the mining companies accept the new resources taxes.

Funny buggers those mining companies saying that they will shut shop and leave...er der you are resource companies you go to where there are resources.
Let them go...they will be back and our resources will be worth **** loads more,not exactly sure what rates of tax they pay in every state but here in SA i read that it was 7% which is stuff all consdering what they are making.

They're hardly in the same bracket as other companies.

There is a competitive advantage to exploiting minerals in this country over others where similar resource deposits may be. Access to markets, investment capital, infrastructure and stable government.

I think the Government should be getting what they can. They're making profits from digging holes and taking a countries fixed natural wealth. It's non-renewable and not exactly benign compared to many industries (relatively high levels of pollution, environmental degradation, some in culturally distinctive locations). While companies are making SUPERprofits from very high resource prices the federal government has every right to get in there and get a bit of the golden goose - it should intuitively be in the form of higher resource rents but that only flows to the states.

Who's going to pack up and leave when they're making money hand over fist!! It's actually similar in concept to a progressive taxation system which we all accept for payroll...those that can afford to pay more pay a higher rate. It does need to be flexible so if resource prices head south it turns around though.

Kevin Rudd is only finished because he is not able to sell his message effectivley.

A resource rent type tax already exists for the energy industry, but I haven't seen them leave Australia - or more particularly WA - yet. The top end of Saint George's Terrace (little Houston) is likely to stay very busy for quite a few years yet.

No doubt the introduction of the new tax will have an effect on activity, but maybe it will be more of a temper / brace on the volatility within the market and extend the time horizon of the projects in question. Not such a bad thing really.

Also, it is hardly as if the resource rent tax is for the average punter, unlike the GST. The target is a very specific group of companies reaping some pretty obscene profits coutesy of some extraordinary commodity price circumstances that currently exist. Why not make sure that ALL AUSTRALIANS share in it.

The opposition and the heads of the large mining companies should stop making such misleading statements about this. Their lack of credibility is obvious on this one. This is not another one of Abbott / Hockey's "great big taxes on everything".

getfunky said...

... the cash handouts worked a treat and now it's time to wind back

Funny that half the school building monies ($8b) haven't even been spent yet, and a large proportion of the cash went to major construction companies in management fees. Not really sure how that contributed to creating all those new jobs and saving us from a recession.

The resource rent tax (renamed super profits tax to make it very desirable to working families) is a good idea in principle. It is a tax on profits. The current royalties paid by mining companies must be paid regardless of the economic outcome for the miner.

However, the tax amount proposed is absurd. As beautifully stated, mining is about risk and reward. Some projects just don’t work (enter Ravensthorpe and South Hedland - hot briquettes plant). Is the government prepared to share this risk as the potential rewards are much greater than the long-term bond rate (which is the safest possible investment and used as the benchmark to define a “super” profit).

The tax will reduce the number of projects that are financially viable. It will reduce mining companies capacity to pay debt. This will impact jobs; and not just mining jobs. It will impact all that are employed during construction of projects (1000-2000 skilled people for ~2 years) and it will also impact people who service (directly and indirectly) the mining industry. I guess it is lucky we have a skills shortage

The clincher for me is the pool of money that is there for the government to grab will become smaller as projects don’t make it. Less income tax. Less GST revenue (did anyone mention WA only gets 68c back in the dollar, compared NSW 95c?). All of this is before the mining industry enters another downturn, as it does...

I like the idea of spreading the taxing around. Banks are mining the pockets of working families. Where is the government action on that one?

If the government does get a mandate to introduce this tax at the next election, I hope they think about subsidising my basket of groceries as the cost of living here in WA is high compared to other states. Boo hoo, it's just not fair... $20 for two pints is stupid!

BTW, the terms working families and basket of groceries make me feel ill

evlPanda said...

The tax will reduce the number of projects that are financially viable.

You don't pay tax until you make a profit. Tax can only reduce the profit, it can't push income into negative. Think about it.

The capacity for companies to repay debt will be reduced as they have 40% less money. Companies that need to borrow money to start new projects (mines) are now in a completely different financial circumstance. Think about it.

Another thing on royalties... They are paid to the states, as it is the states that "own" the resources.

Just one more thing... There is a big difference between a budget surplus and the federal debt (>$100 billion)...

I think a lot of people are confused on this one. I read some mining CEO saying company was going to be paying 70% tax now.

An accountant dog?! what!?

You only pay tax on profit. Of course : )

Any company not making a profit is not affected by tax, no matter what the tax rate is. Right? And if you make a loss of $10/year for 5 years, you won't pay any tax at all until you earn over $50.

Don't tell me a mining company told you they can't afford to invest any more because of tax. That makes no sense.

Tax is after profit, which is after any and all expenses. You won't pay tax on an expense.

Exploration is tax deductible

Tax can never, ever put something out of business. It can only take profit, after wages et al, down to $0, and it would have to be 100%. Think about it.

He he he... funny panda

It is fact that there will be less returns on what may be risky investment... Risk vs reward is always taken into account by companies when deciding where to invest and what to develop...

Maybe we see less of the big $$ that has been pouring into Aus from China.

We will see a lot of uncertainty in the industry here. The budget depends on growth of the industry and does not take into account inflation. The uncertainty will delay projects and will slow the short-term recovery of the industry...

your realise that the national poll is based upon how many green thumbs he receives in this thread on seabreeze?

the super tax is a stupid idea and the labor party are dumb idiots.

was that too harsh?

As usual, I respectfully disagree with Gestalt

Good to see the different points of view stated well, without any personal attacks

I'm enjoying reading this

swoosh said...

I'm not sure your point about stability is a good one, things like introduction of a Supertax don't make australia look "very very stable" in the eyes of companies.

Secondly, risk is only part of the equation. Cost is also a massive part of the equation, and in many 3rd world countries labour is often orders of magnitude cheaper, which can half the capital costs of large projects.

We have cheap labour arriving by the boatload. We just have to put them to work.
We offer them citizenship after 10 years of slave labour in the mines. And just to sweeten the deal we wouldn't tax them.