The RSPT has morphed into the Minerals Resources Rent Tax. I can’t find an official press release yet, but from the press conference the main changes seem to be as follows:
- We have a tax rather than a revenue sharing arrangement.
- The headline rate is down from 40% to 30%.
- The uplift rate is 7% above the long term bond rate.
- The tax applies to iron ore and coal only. The coal seam gas industry will be taxed according to the PRRT. The number of companies affected is reduced from about 2,500 to 320.
- The cost to revenue is $1.5 billion in the first year, down from $12 billion to $10.5.
- The main change to benefits is that the company tax will go to 29% rather than 28%. Everything else stays the same.
A transition group is being set up under Don Argus (ex CEO of NAB and chair of BHP Billiton) with minister Ferguson to take the “heads of agreement” from here and finalise the design. So there will be more consultations before any legislation is drafted.
Perhaps the main change is in the government’s style of doing things. Gillard made a specific point about this in answer to a question. Rather than impose preconceived plans, policy was finalised with direct feedback from the interests affected.
I have no problem with this, but I think we should be looking at our laws relating to corporations making political donations and engaging in direct political advertising.
The Australian apparently is saying that Swan was grumpy in the negotiations. He has just explained to Madonna King that he was tired and a bit jet-lagged. He said that there had been a distinct change of tone since Gillard made her offer of consultations to the industry.
The agreement was hammered out with Ferguson and Swan with Gillard coming in and out of the meeting. You can bet that they had the tick from Cabinet to do what they did.
Everyone understands that the Senate will have its say. Brown has said that the Greens will want a comprehensive Senate Inquiry before they vote on it, as you’d expect. So the legislation will not be formulated until after the election.
The callers on local radio here are determined to be negative about the whole thing, but I doubt that they are at all representative.
There has been an immediate jump in the mining stocks and the dollar.
Elsewhere: (RM) Peter Martin has Gillard’s full statement. Martin is well worth your time on this issue more generally.
Brian, the media release is here: http://www.futuretax.gov.au/documents/attachments/100702%20MR%20JT%20JG%20WS%20MF%20Resources%20Taxation%20Agreement.pdf
Brian, the media release is here: http://www.futuretax.gov.au/documents/attachments/100702%20MR%20JT%20JG%20WS%20MF%20Resources%20Taxation%20Agreement.pdf
The ability of the miners to influence public debate has been disgusting.
And where the hell were the small and large businesses who wanted tax cuts? Why didn’t Wesfarmers or someone like that say “well there’s two sides to this story..”
That said, it seems like a reasonable outcome, and for the overwhelming majority who weren’t paying close attention, it will give a positive impression of JG as a Ms Fixit.
The ability of the miners to influence public debate has been disgusting.
And where the hell were the small and large businesses who wanted tax cuts? Why didn’t Wesfarmers or someone like that say “well there’s two sides to this story..”
That said, it seems like a reasonable outcome, and for the overwhelming majority who weren’t paying close attention, it will give a positive impression of JG as a Ms Fixit.
Wilful,
Yes, I’ve read a number of comments online in the past few hours from business owners who are frustrated that their tax rate is only being cut to 29% rather than the promised 28%. Where were those people two weeks ago, or a month ago?
Wilful,
Yes, I’ve read a number of comments online in the past few hours from business owners who are frustrated that their tax rate is only being cut to 29% rather than the promised 28%. Where were those people two weeks ago, or a month ago?
So the Government sacrifices $1.5 billion in revenue but is still able to deliver increased super and half of the proposed corporate tax cut. Sounds like a win-win to me, although I am troubled by the optics of the whole thing.
So the Government sacrifices $1.5 billion in revenue but is still able to deliver increased super and half of the proposed corporate tax cut. Sounds like a win-win to me, although I am troubled by the optics of the whole thing.
I think the deal also demonstrates how badly the government misjudged and sold the original proposal from the beginning.
I think the deal also demonstrates how badly the government misjudged and sold the original proposal from the beginning.
@3. Oh ACCI were out there. They wanted the tax cut even if the whole RSPT fell over.
@3. Oh ACCI were out there. They wanted the tax cut even if the whole RSPT fell over.
Just a few points:
- There is no ‘deal’. It has to pass both houses of parliament.
- An ex-miner is in charge of the transitional blah blah blah.
- Could an economist explain to me how the sums add up. Is there a magic pudding in there somewhere?
- Gillard met her News Ltd imposed deadline of course.
- It’s a great win for the Australian people moving foward. No seriously.
Just a few points:
- There is no ‘deal’. It has to pass both houses of parliament.
- An ex-miner is in charge of the transitional blah blah blah.
- Could an economist explain to me how the sums add up. Is there a magic pudding in there somewhere?
- Gillard met her News Ltd imposed deadline of course.
- It’s a great win for the Australian people moving foward. No seriously.
Adrian,
The sums add up for three reasons:
-the company income tax is only being cut to 29%, not 28%, saving ~$1.15b over the forward estimates;
-the exploration rebate will not be paid, saving $1.8b over the forward estimates; and
-Government will no longer bear 40% of the losses of mining projects, saving an unknown amount over the forward estimates.
Adrian,
The sums add up for three reasons:
-the company income tax is only being cut to 29%, not 28%, saving ~$1.15b over the forward estimates;
-the exploration rebate will not be paid, saving $1.8b over the forward estimates; and
-Government will no longer bear 40% of the losses of mining projects, saving an unknown amount over the forward estimates.
The change of name takes much of the heat out of the arguement.
Like all Australian taxpayers, I am disheartened that 3 overseas companies Xstrata, Rio and BHP can dictate taxation arrangements to the elected Australian government. (Stephen Mayne elucidated at the Rio AGM that only 15% of its shareholders are Australian residents). The agreement doesn’t help other mining, exploration, or any other business in Australia.
Bernard Keane @ Crikey noted that an Xstrata subsidiary in the Northern Territory, Macarthur River operating for more than 10 years, has been taxed on profits and so far it has successfully received more subsidies than it has paid in royalties/tax.
It’s a pity mining companies are not taxed on their revenue rather than their profits.
The change of name takes much of the heat out of the arguement.
Like all Australian taxpayers, I am disheartened that 3 overseas companies Xstrata, Rio and BHP can dictate taxation arrangements to the elected Australian government. (Stephen Mayne elucidated at the Rio AGM that only 15% of its shareholders are Australian residents). The agreement doesn’t help other mining, exploration, or any other business in Australia.
Bernard Keane @ Crikey noted that an Xstrata subsidiary in the Northern Territory, Macarthur River operating for more than 10 years, has been taxed on profits and so far it has successfully received more subsidies than it has paid in royalties/tax.
It’s a pity mining companies are not taxed on their revenue rather than their profits.
OK, the big miners are happy. What about the smaller ones?
OK, the big miners are happy. What about the smaller ones?
The short-term optics aren’t great, but I suspect that will be quickly forgotten. Everything else is, and the Coalition can’t run with ‘cave in’ for obvious reasons. Also wilful is right that the way it played out makes Gillard look like she can fix Rudd’s problems, a huge win for her.
In the long run we just got an extra $10.5 billion per year – a huge win for the Australian people, businesses and the super industry. An excellent outcome IMHO.
The short-term optics aren’t great, but I suspect that will be quickly forgotten. Everything else is, and the Coalition can’t run with ‘cave in’ for obvious reasons. Also wilful is right that the way it played out makes Gillard look like she can fix Rudd’s problems, a huge win for her.
In the long run we just got an extra $10.5 billion per year – a huge win for the Australian people, businesses and the super industry. An excellent outcome IMHO.
gutless
gutless
I think the “optics” are great. Gillard has fixed Rudd’s big problem, hasn’t backed down, but has compromised.
Bring on the election.
Oh, but there ought to be a special tax just for Clive Palmer. I didn’t realise quite what a repulsive person he was before this debate.
I think the “optics” are great. Gillard has fixed Rudd’s big problem, hasn’t backed down, but has compromised.
Bring on the election.
Oh, but there ought to be a special tax just for Clive Palmer. I didn’t realise quite what a repulsive person he was before this debate.
Brian asked:
Too bad for them. I’d be very happy to see them all go to the wall. That would be a silver lining on this very dark day.
Seeing the extractive industry thugs eat their own screaming children would be kind of nice. I’m just sorry the government didn’t abandon the tax cut to business, or perhaps put it up to say, 32%, “in the interest of preserving the integrity of the budget”.
It would be good to see some serious collateral damage to business. There’s a lot to be said for that kind of “moral hazard”.
Brian asked:
Too bad for them. I’d be very happy to see them all go to the wall. That would be a silver lining on this very dark day.
Seeing the extractive industry thugs eat their own screaming children would be kind of nice. I’m just sorry the government didn’t abandon the tax cut to business, or perhaps put it up to say, 32%, “in the interest of preserving the integrity of the budget”.
It would be good to see some serious collateral damage to business. There’s a lot to be said for that kind of “moral hazard”.
oops … that was Robert who asked …
oops … that was Robert who asked …
From $0 tax revenue to $10.5b for a couple of months work. Can Swanny find any other “back downs” out there??!!
Seems like a variation on union power bargaining – the ambit claim, the protests/strikes followed by negotiation and compromise.
Poor Kevin didn’t quite get the communication right on the ambit claim and ended up being a bit of collateral damage.
Open and transparent consultation and neogtiations with powerful vested interests such as the mining industry just doesn’t work as we have seen with the CPRS process.
From $0 tax revenue to $10.5b for a couple of months work. Can Swanny find any other “back downs” out there??!!
Seems like a variation on union power bargaining – the ambit claim, the protests/strikes followed by negotiation and compromise.
Poor Kevin didn’t quite get the communication right on the ambit claim and ended up being a bit of collateral damage.
Open and transparent consultation and neogtiations with powerful vested interests such as the mining industry just doesn’t work as we have seen with the CPRS process.
I really have to fly, but a couple of comments.
First, to say that the big miners have “determined” government policy is crap. They obviously preferred the COALition’s position.
Second, what we have been discussing here and on other threads just skims the main points on what seems to be a quite complex proposal. Hence the need for a transition group.
Third, Don Argus has experience in banking as well mining and as such he has an ideal skill set to be involved in the transition group. He’s doing it with Ferguson and whatever they come back with has to go to the parliament and be scrutinised by the Senate.
Fourth, the positive reaction by the markets was really quite small and within the range of daily movements. If it was a big win for the miners there would have been a far bigger jump.
Fifth, a positive reaction from the industry is a good thing. Positve sentiment means a fair bit as to how capitalists behave. They, like everyone, act out of emotional reasons rather than rational thought
Finally, we are $10.5 billion better off, which ain’t bad.
I really have to fly, but a couple of comments.
First, to say that the big miners have “determined” government policy is crap. They obviously preferred the COALition’s position.
Second, what we have been discussing here and on other threads just skims the main points on what seems to be a quite complex proposal. Hence the need for a transition group.
Third, Don Argus has experience in banking as well mining and as such he has an ideal skill set to be involved in the transition group. He’s doing it with Ferguson and whatever they come back with has to go to the parliament and be scrutinised by the Senate.
Fourth, the positive reaction by the markets was really quite small and within the range of daily movements. If it was a big win for the miners there would have been a far bigger jump.
Fifth, a positive reaction from the industry is a good thing. Positve sentiment means a fair bit as to how capitalists behave. They, like everyone, act out of emotional reasons rather than rational thought
Finally, we are $10.5 billion better off, which ain’t bad.
And I see that most hysterical cheer leader and bitch of the mining industry, Gottliebsen, has claimed credit for the changes. Disgusting
And I see that most hysterical cheer leader and bitch of the mining industry, Gottliebsen, has claimed credit for the changes. Disgusting
What exactly is it that’s so outrageously offensive about this compromise arrangement? From some of the carryon on these threads, you’d think Gillard and Swan had just reneged on a promise to abolish slavery or something.
The original proposal was hardly heroically left-wing, and it contained not only benefits in the form of increased revenue, but also significant risks for taxpayers, which have now been removed from the compromise arrangement.
Why not find something actually worth getting outraged about?
What exactly is it that’s so outrageously offensive about this compromise arrangement? From some of the carryon on these threads, you’d think Gillard and Swan had just reneged on a promise to abolish slavery or something.
The original proposal was hardly heroically left-wing, and it contained not only benefits in the form of increased revenue, but also significant risks for taxpayers, which have now been removed from the compromise arrangement.
Why not find something actually worth getting outraged about?
BTW, I understand Argus is Ex chair of BHP Billiton and Jack Nasser is the current person.
Re smaller miners, if they are not in coal or iron ore they are home free.
Apart from the provision for an instant write-off of equipment purchases. I assume this applies to them too. Also I don’t know whether they benefit from any changes in the net effect of how royalties are paid.
BTW, I understand Argus is Ex chair of BHP Billiton and Jack Nasser is the current person.
Re smaller miners, if they are not in coal or iron ore they are home free.
Apart from the provision for an instant write-off of equipment purchases. I assume this applies to them too. Also I don’t know whether they benefit from any changes in the net effect of how royalties are paid.
The big question is why the government didn’t do this in the first place – release the Henry review back in December when it was delivered to them and begin “consultations”.
It was always going to come down to a negotiation, whatever they did. But maybe they wouldn’t have burned through a prime minister in the process.
Still, despite the knee-jerk “Backdown”, “Backflip”, “Cave-In” headlines, the politics of this must be good for Labor. The leakage over the forward estimates is a pretty modest $1.5 billion (which they might make up from the NBN savings) and they earn additional revenue of $8.4 billion.
Plus, Gillard is seen as a fixer and arms-length consensus politician in the chairman-of-the-board Hawke mould, instead of the perpetually hands-on chief operating officer style that got Rudd into so much trouble.
As for the resource stocks, this is a mild positive. Just as the negative impact of the tax was overplayed by right-wing media commentators like the now clearly unhinged Gottliebson, the positive impact of the compromise isn’t a huge deal.
By far the biggest influence on miners right now is the growing fear of a double dip global recession and the depressing impact that is having on commodity prices.
The big question is why the government didn’t do this in the first place – release the Henry review back in December when it was delivered to them and begin “consultations”.
It was always going to come down to a negotiation, whatever they did. But maybe they wouldn’t have burned through a prime minister in the process.
Still, despite the knee-jerk “Backdown”, “Backflip”, “Cave-In” headlines, the politics of this must be good for Labor. The leakage over the forward estimates is a pretty modest $1.5 billion (which they might make up from the NBN savings) and they earn additional revenue of $8.4 billion.
Plus, Gillard is seen as a fixer and arms-length consensus politician in the chairman-of-the-board Hawke mould, instead of the perpetually hands-on chief operating officer style that got Rudd into so much trouble.
As for the resource stocks, this is a mild positive. Just as the negative impact of the tax was overplayed by right-wing media commentators like the now clearly unhinged Gottliebson, the positive impact of the compromise isn’t a huge deal.
By far the biggest influence on miners right now is the growing fear of a double dip global recession and the depressing impact that is having on commodity prices.
Habby @ 16:
I agree. I would have thought that was standard practice in these kind of negotiations, that you include a margin in your initial proposal, fully expecting to have to bargain down a little but with some baseline level of acceptable compromise in mind.
Habby @ 16:
I agree. I would have thought that was standard practice in these kind of negotiations, that you include a margin in your initial proposal, fully expecting to have to bargain down a little but with some baseline level of acceptable compromise in mind.
IS THE REAL RATE 22.5% ?
My colleague Karl Fitzgerald has drawn my attention to the following paragraphs from the Government’s statement:
“Iron ore and coal will be subject to a new profits-based Minerals Resource Rent Tax (MRRT) at a rate of 30 per cent.
MRRT assessable profits are calculated on the value of the commodity, determined at its first saleable form (at mine gate), less all costs to that point.
Projects will be entitled to a 25 per cent extraction allowance that reduces taxable profits subject to the MRRT. This allowance recognises the contribution of the miner’s expertise to profits at the mine gate.”
It’s not clear to me whether this allowance is applied to the base of the MRRT. If it is, the effective tax rate is 22.5%, not 30%.
Brian
First they forced a change of PM. The new PM was charged with the responsibility of securing a deal that the people who forced the change of PM could live with — one apparently more favourable than the ex-PM was willing to concede.
The point has thus been made. The mining thugs have first and last say over policy.
That should have already been clear enough for most — following the CPRS debacle — but again, for those in any doubt, it makes it clear that no future government can even discuss this area of policy. The policy tramtracks are clear.
Brian
First they forced a change of PM. The new PM was charged with the responsibility of securing a deal that the people who forced the change of PM could live with — one apparently more favourable than the ex-PM was willing to concede.
The point has thus been made. The mining thugs have first and last say over policy.
That should have already been clear enough for most — following the CPRS debacle — but again, for those in any doubt, it makes it clear that no future government can even discuss this area of policy. The policy tramtracks are clear.
Clive Palmers still upset. That has to be a good thing.
http://www.abc.net.au/news/stories/2010/07/02/2943091.htm?section=justin
Clive Palmers still upset. That has to be a good thing.
http://www.abc.net.au/news/stories/2010/07/02/2943091.htm?section=justin
Fran the notion that “they forced a change of PM” is completely overplaying the role of the mining industry in what happened. And they don’t have last say, the Senate does.
Fran the notion that “they forced a change of PM” is completely overplaying the role of the mining industry in what happened. And they don’t have last say, the Senate does.
OK so the cost of replacing a PM is $2bn paid by the Australian people on behalf of the Labor Party power brokers.
Alternatively it costs the Autralian people $2bn per annum to get the mining industry to stop hurting the Labor Party’s electoral prospects with their advertising.
Nice way to corrupt the office of PM.
OK so the cost of replacing a PM is $2bn paid by the Australian people on behalf of the Labor Party power brokers.
Alternatively it costs the Autralian people $2bn per annum to get the mining industry to stop hurting the Labor Party’s electoral prospects with their advertising.
Nice way to corrupt the office of PM.
The costs of the extremely effective industry PR campaign are tax deductible.
The government has been bent over and had it given to them, old school, in the tradesman’s entrance.
And all they can do about it is smile.
Clive Palmer is not smiling because this is bad for the Liberal Party.
The costs of the extremely effective industry PR campaign are tax deductible.
The government has been bent over and had it given to them, old school, in the tradesman’s entrance.
And all they can do about it is smile.
Clive Palmer is not smiling because this is bad for the Liberal Party.
Please oh please, someone now tell me there is no ruling class in Australia and the ALP is not dedicated to running the country in their interests, please…
Please oh please, someone now tell me there is no ruling class in Australia and the ALP is not dedicated to running the country in their interests, please…
I think we just need to take the PM’s advice, and you know, move forward.
I think we just need to take the PM’s advice, and you know, move forward.
Brian said:
Obviously, it was the decisive element. The key players in the ALP agreed that Gillard’s first order of business was to get this fixed at any price so the government could have “oxygen”. Rudd was talking about months of negiotations and possibly an election in 2011. Wasn’t there some deal with Telstra about optical fibre released the same week? I’m sure there was.
$7 million dollars worth of advertising later, Rudd is gone — the first PM to be rolled by his party without contesting an election. The first PM to be rolled while ahead on 2PP.
Whatever the precise weight of the mining thugs in the ejection of Rudd, this is how it will be recalled.
Nope. The winning party will have the last say, because the losing party won’t dare oppose what the winning party does on this. The Greens* won’t have anyone in the senate willing to support their version of resource sharing. We can therefore exclude the possibility of anything good coming out of this facet of policy post-election.
* I exclude the possibility of The Greens or some socialist party achieving a senate majority and forcing the ALP to depend on them in the reps.
Brian said:
Obviously, it was the decisive element. The key players in the ALP agreed that Gillard’s first order of business was to get this fixed at any price so the government could have “oxygen”. Rudd was talking about months of negiotations and possibly an election in 2011. Wasn’t there some deal with Telstra about optical fibre released the same week? I’m sure there was.
$7 million dollars worth of advertising later, Rudd is gone — the first PM to be rolled by his party without contesting an election. The first PM to be rolled while ahead on 2PP.
Whatever the precise weight of the mining thugs in the ejection of Rudd, this is how it will be recalled.
Nope. The winning party will have the last say, because the losing party won’t dare oppose what the winning party does on this. The Greens* won’t have anyone in the senate willing to support their version of resource sharing. We can therefore exclude the possibility of anything good coming out of this facet of policy post-election.
* I exclude the possibility of The Greens or some socialist party achieving a senate majority and forcing the ALP to depend on them in the reps.
Well I see it as a victory for struggling billionaires everywhere, not just in Toorak and Point Piper, but in Belgravia, Park Avenue and even Pretoria.
Well I see it as a victory for struggling billionaires everywhere, not just in Toorak and Point Piper, but in Belgravia, Park Avenue and even Pretoria.
The mining industry still has to cough up an extra $10 billion per annum in revenue under this deal.
I would have thought that, if teh evil mining thugz are as in control as the trots seem to think they are, this ‘spineless government backdown’ ought to have left them better off than the status quo, rather than $10 billion a year worse off.
The mining industry still has to cough up an extra $10 billion per annum in revenue under this deal.
I would have thought that, if teh evil mining thugz are as in control as the trots seem to think they are, this ‘spineless government backdown’ ought to have left them better off than the status quo, rather than $10 billion a year worse off.
Say…Tim…if we’re on a level playing field I expect the unions to be able to successfully request their members be granted exemptions from any tax increases from the Labor government…
Say…Tim…if we’re on a level playing field I expect the unions to be able to successfully request their members be granted exemptions from any tax increases from the Labor government…
We have another announcement, which will be subject to further discussion, with legislation to be drafted at some indeterminate future date, followed by referral to a Senate committee, and deliberation by parliament. We have no idea what nods and winks have been given privately.
In other words we are no closer to knowing what changes to the taxation regime on mining companies will be implemented than we were yesterday. If the ETS is any precedent the whole thing will be abandoned about next August. But as a few people have said, the illusion has been created of a problem solved and that’s all that ever mattered.
Perhaps we can look forward now to a NSW Labor-style series of announcements of magnificent new infrastructure projects. None will ever get built, but it will take voters a couple of election cycles to realise that.
We have another announcement, which will be subject to further discussion, with legislation to be drafted at some indeterminate future date, followed by referral to a Senate committee, and deliberation by parliament. We have no idea what nods and winks have been given privately.
In other words we are no closer to knowing what changes to the taxation regime on mining companies will be implemented than we were yesterday. If the ETS is any precedent the whole thing will be abandoned about next August. But as a few people have said, the illusion has been created of a problem solved and that’s all that ever mattered.
Perhaps we can look forward now to a NSW Labor-style series of announcements of magnificent new infrastructure projects. None will ever get built, but it will take voters a couple of election cycles to realise that.
Chav, if you could point out the proposed tax increases which affect union members and show how the Government is refusing to discuss or negotiate those tax rates with unions, your analogy might make sense.
Chav, if you could point out the proposed tax increases which affect union members and show how the Government is refusing to discuss or negotiate those tax rates with unions, your analogy might make sense.
Dear Ms Gillard,
Thank you so much for obeying your friends in the mining industry. Us mining bosses were facing a very bleak period under Kev’s mining tax and it is great to know that you listened to us billionaires when we are in need. It is good to know that you have kindly donated 1.5 billion dollars to us in your backflip (oops, I mean settlement). Yes, that money could have gone to nurses or schools but it is far better in our pockets. Thank you Julia, you are as good as and probably better than any Liberal Pm could be. And those brainwashed ALP supporters will still vote for you to do our bidding.
Yours faithfully,
The mining industry.
P.S. If you don’t obey us next time we will rpelce you too.
Dear Ms Gillard,
Thank you so much for obeying your friends in the mining industry. Us mining bosses were facing a very bleak period under Kev’s mining tax and it is great to know that you listened to us billionaires when we are in need. It is good to know that you have kindly donated 1.5 billion dollars to us in your backflip (oops, I mean settlement). Yes, that money could have gone to nurses or schools but it is far better in our pockets. Thank you Julia, you are as good as and probably better than any Liberal Pm could be. And those brainwashed ALP supporters will still vote for you to do our bidding.
Yours faithfully,
The mining industry.
P.S. If you don’t obey us next time we will rpelce you too.
Tim, I said if any tax increases were proposed. I’m not aware of any at the present time, but undoubtedly there will be some.
The same goes for individuals, why I can’t I stroll in and bargain with Gillard and not have to pay any proposed tax increases, I mean, we’re all on a level playing field and the super-profit earning mining companies are only just an interest group…
Tim, I said if any tax increases were proposed. I’m not aware of any at the present time, but undoubtedly there will be some.
The same goes for individuals, why I can’t I stroll in and bargain with Gillard and not have to pay any proposed tax increases, I mean, we’re all on a level playing field and the super-profit earning mining companies are only just an interest group…
Tim @32: “…better off than the status quo, rather than $10 billion a year worse off.”
That would be a hypothetical $10 bn, I reckon.
Remember this bit:
“MRRT assessable profits are calculated on the value of the commodity, determined at its first saleable form (at mine gate), less all costs to that point.”
Firstly, commodity prices can change, and it all depends on whether the Chinese demand continues to stay high, which depends on whether the world has a “double-dip” recession.
Secondly, the company accountants will all be sharpening their pencils to an extra fine point and looking for every last cost item to deduct from profits. In particular:
“The government will allow companies to insert their mines into the new tax regime at market value rather than book value, thus allowing them to claim back against depreciation of the assets.
This will make a major difference to operations like the giant iron ore mines of BHP and Rio, which have been operating for decades and have book values written down well below market value.”
Market value is not a fixed figure, as those who watch the stockmarket would know.
Fine if the government does get the estimated $10 bn, but should we be counting on it?
Tim @32: “…better off than the status quo, rather than $10 billion a year worse off.”
That would be a hypothetical $10 bn, I reckon.
Remember this bit:
“MRRT assessable profits are calculated on the value of the commodity, determined at its first saleable form (at mine gate), less all costs to that point.”
Firstly, commodity prices can change, and it all depends on whether the Chinese demand continues to stay high, which depends on whether the world has a “double-dip” recession.
Secondly, the company accountants will all be sharpening their pencils to an extra fine point and looking for every last cost item to deduct from profits. In particular:
“The government will allow companies to insert their mines into the new tax regime at market value rather than book value, thus allowing them to claim back against depreciation of the assets.
This will make a major difference to operations like the giant iron ore mines of BHP and Rio, which have been operating for decades and have book values written down well below market value.”
Market value is not a fixed figure, as those who watch the stockmarket would know.
Fine if the government does get the estimated $10 bn, but should we be counting on it?
It’s hard to get outraged at the government only getting 10.5bn instead of 12bn. The government proposal was probably padded a bit anyway. Will be interesting to see if the greens are willing to block it meaning 0bn will be collected instead of 10.5bn.
Mr Denmore – I think Rudd overestimated the appeal of sticking it to middle aged fat rich white guys would be. He thought that on the basis of their unpopularity it would be easy to push through. Have to wonder if they could have got to the same point through negotiating In the first place.
It’s hard to get outraged at the government only getting 10.5bn instead of 12bn. The government proposal was probably padded a bit anyway. Will be interesting to see if the greens are willing to block it meaning 0bn will be collected instead of 10.5bn.
Mr Denmore – I think Rudd overestimated the appeal of sticking it to middle aged fat rich white guys would be. He thought that on the basis of their unpopularity it would be easy to push through. Have to wonder if they could have got to the same point through negotiating In the first place.
A rose by any other name
JULIA:
Is it the name that is your enemy?
Those few words: ‘Resource Super Profits Tax’?
Is it ‘Profits’ that does not say it well?
Perhaps ‘Super’ – or any other part
Put forward by that man? O, choose some other name!
What’s in a name? That which we call a rose
By any other name will smell as sweet;
‘Super Profits’ if not so crudely named
Still keeps its dear perfection and still owes,
Without that title, much to us. Change the name!
And for that change still pay a ‘rental’ tax.
Then leave me be!
A rose by any other name
JULIA:
Is it the name that is your enemy?
Those few words: ‘Resource Super Profits Tax’?
Is it ‘Profits’ that does not say it well?
Perhaps ‘Super’ – or any other part
Put forward by that man? O, choose some other name!
What’s in a name? That which we call a rose
By any other name will smell as sweet;
‘Super Profits’ if not so crudely named
Still keeps its dear perfection and still owes,
Without that title, much to us. Change the name!
And for that change still pay a ‘rental’ tax.
Then leave me be!
Put it this way.
People working in the aged care sector with vulnerable people are dramatically underpaid. It was estimated recently by their union that bringing their wages into parity with others doing similar work outside of aged care woul, over four years, cost the government something like $600million.
Last I heard though, they weren’t able to threaten the government’s collapse over the issue.
Put it this way.
People working in the aged care sector with vulnerable people are dramatically underpaid. It was estimated recently by their union that bringing their wages into parity with others doing similar work outside of aged care woul, over four years, cost the government something like $600million.
Last I heard though, they weren’t able to threaten the government’s collapse over the issue.
Its hard to feel sorry for the poor little mining companies bleating on Lateline last night who liked the original proposal and expect to be harmed by the proposed legislation. They allowed themselves to be silenced by 4 large overseas corporations thus forcing a compromise that has made all Australians worse off, so BAD LUCK!
Its hard to feel sorry for the poor little mining companies bleating on Lateline last night who liked the original proposal and expect to be harmed by the proposed legislation. They allowed themselves to be silenced by 4 large overseas corporations thus forcing a compromise that has made all Australians worse off, so BAD LUCK!
The Greens should have the BOP in the next Senate. I can’t see any reason why they’d want to block a tax that involves transferring billions of dollars from greedy environmentally destructive mining companies to government coffers, even if it’s slightly fewer billions of dollars than were originally planned.
The Greens should have the BOP in the next Senate. I can’t see any reason why they’d want to block a tax that involves transferring billions of dollars from greedy environmentally destructive mining companies to government coffers, even if it’s slightly fewer billions of dollars than were originally planned.
Sr #4
How does the “Government” deliver increased super? They will pass a law compelling employers to pay it, the government isn’t kicking in anything, never was.
No matter the outcome, the Bogan Princess has shafted small business.
Sr #4
How does the “Government” deliver increased super? They will pass a law compelling employers to pay it, the government isn’t kicking in anything, never was.
No matter the outcome, the Bogan Princess has shafted small business.
The question is then to all those outraged people on this thread, what are you going to do about it? My bet is that most of them will obediently turn up on polling day and vote ALP or Green then ALP. By doing this you are voting for the mining industry and ALP factional leaders. And we wonder why politics never changes. if you vote or preference ALP you are to blame. A non specific put LAbot last campaign is needed. The ALP have for too long traded on being freinds of the workers whilst being worse than Liberals. Vote them out.
The question is then to all those outraged people on this thread, what are you going to do about it? My bet is that most of them will obediently turn up on polling day and vote ALP or Green then ALP. By doing this you are voting for the mining industry and ALP factional leaders. And we wonder why politics never changes. if you vote or preference ALP you are to blame. A non specific put LAbot last campaign is needed. The ALP have for too long traded on being freinds of the workers whilst being worse than Liberals. Vote them out.
It’s a tax expenditure because super is taxed concessionally at 15%. So it’s revenue foregone.
It’s a tax expenditure because super is taxed concessionally at 15%. So it’s revenue foregone.
Chav, my comments @32 were in response to the claims to the effect that the mining industry ‘forced a change in prime minister’ in order to get a deal more favourable than the one the previous PM was prepared to offer. I never said there was a “level playing field”, nor would I make such a naive claim. You don’t have to be a doctrinaire Marxist to work out that business interests are privileged in Australia’s policy-making architecture. However, ‘privileged’ is different from ‘calling the shots’.
Chav, my comments @32 were in response to the claims to the effect that the mining industry ‘forced a change in prime minister’ in order to get a deal more favourable than the one the previous PM was prepared to offer. I never said there was a “level playing field”, nor would I make such a naive claim. You don’t have to be a doctrinaire Marxist to work out that business interests are privileged in Australia’s policy-making architecture. However, ‘privileged’ is different from ‘calling the shots’.
How exactly? By reducing company tax?
How exactly? By reducing company tax?
Obviously not Elise, but the same goes for the $12 billion that the previous RSPT would have notionally yielded.
Obviously not Elise, but the same goes for the $12 billion that the previous RSPT would have notionally yielded.
40% reduced to 30% isn’t exactly an insignificant drop. Personally I’d hope the Greens will be wanting 80% of the take and the o/s shareholders can swallow it or get ph*cked or go mine in somewhere as stable as Africa.
40% reduced to 30% isn’t exactly an insignificant drop. Personally I’d hope the Greens will be wanting 80% of the take and the o/s shareholders can swallow it or get ph*cked or go mine in somewhere as stable as Africa.
Comment on another blog:
I am particularly interested in the assertion that the headline rate is actually only 22.5%. The market value, rather than book value component is also rather concerning.
Anybody applauding this as a great win for the Australian people moving forward should start looking at the detail.
Comment on another blog:
I am particularly interested in the assertion that the headline rate is actually only 22.5%. The market value, rather than book value component is also rather concerning.
Anybody applauding this as a great win for the Australian people moving forward should start looking at the detail.
This also looks like a major, major concession to the mining industry:
“Under the revised MRRT proposal, investments made after July 1, 2012, can be written off immediately, rather than depreciated over a number of years, allowing miners to access deductions immediately.
The government said this meant mining projects won’t pay any MRRT until it has made enough profit to pay off its upfront investment.”
This looks like a big concession. Hope they haven’t also guaranteed reimbursement of the state royalties?
In any case it could be a while before they see any MRRT benefit from new mines.
“The new regime will also allow miners to transfer deductions from one mining project to another.”
Soo, does this mean that a mining company could use something like BHP’s disasterous Ravensthorpe adventure to offset any profits from other mining operations? Pretty handy little bit of fine print, that one!
Looks very much like the devil is in the detail.
This also looks like a major, major concession to the mining industry:
“Under the revised MRRT proposal, investments made after July 1, 2012, can be written off immediately, rather than depreciated over a number of years, allowing miners to access deductions immediately.
The government said this meant mining projects won’t pay any MRRT until it has made enough profit to pay off its upfront investment.”
This looks like a big concession. Hope they haven’t also guaranteed reimbursement of the state royalties?
In any case it could be a while before they see any MRRT benefit from new mines.
“The new regime will also allow miners to transfer deductions from one mining project to another.”
Soo, does this mean that a mining company could use something like BHP’s disasterous Ravensthorpe adventure to offset any profits from other mining operations? Pretty handy little bit of fine print, that one!
Looks very much like the devil is in the detail.
Adrian @52: “The miners real saviour though is allowing market value not book value. There is devil in the detail that means we could pay very little extra tax.”
SNAP!!!
Adrian @52: “The miners real saviour though is allowing market value not book value. There is devil in the detail that means we could pay very little extra tax.”
SNAP!!!
Hmmm. So it would appear.
Hmmm. So it would appear.
From Bernard Keane in Crikey:
From Bernard Keane in Crikey:
“Seeing the extractive industry thugs eat their own screaming children would be kind of nice.”
That is a seriously disturbing comment. I feel deeply sorry for you.
The tax will raise 10% less than the original proposal- $10.5 billion rather than $12 billion. The bounce in mining company share prices alone is probably worth some tens of millions of dollars to the value of workers’ superannuation entitlements. All in all we have a good outcome for working families. Not great but good, and that’s sufficient methinks.
“Seeing the extractive industry thugs eat their own screaming children would be kind of nice.”
That is a seriously disturbing comment. I feel deeply sorry for you.
The tax will raise 10% less than the original proposal- $10.5 billion rather than $12 billion. The bounce in mining company share prices alone is probably worth some tens of millions of dollars to the value of workers’ superannuation entitlements. All in all we have a good outcome for working families. Not great but good, and that’s sufficient methinks.
Vote Liberal@46 said:
The thing is that they aren’t worse than the Liberals.The Liberals want to hand the whole box and dice the the mining thugs.Indeed they may want to even sweeten that deal.
A vote for the Liberals is a vote for a Minerals Council government as opposed for one where they have power of veto. The people in the ALP advocating crossing the street to compete with Abbott as their playthings would be strengthened. We’d get change — just not as we want it.
That is why the whole exercise is so scandalous and why we need a complete overhaul of governance in this country. There simply is no vehicle for public policy to be evaluated on merit by all those with a legitimate interest in it.
Vote Liberal@46 said:
The thing is that they aren’t worse than the Liberals.The Liberals want to hand the whole box and dice the the mining thugs.Indeed they may want to even sweeten that deal.
A vote for the Liberals is a vote for a Minerals Council government as opposed for one where they have power of veto. The people in the ALP advocating crossing the street to compete with Abbott as their playthings would be strengthened. We’d get change — just not as we want it.
That is why the whole exercise is so scandalous and why we need a complete overhaul of governance in this country. There simply is no vehicle for public policy to be evaluated on merit by all those with a legitimate interest in it.
How can anyone be upset with the influence the big miners have – ON THE AUSTRALIAN VOTING PUBLIC.
We finally got a rent based tax that has been proposed (within government resource economists) for 20 years – the miners knew it was coming – the shock was that the Govt initially swallowed the treasury mspt without any seeming knowledge of the history of these taxes and their implimentation. The ongoing failure is the continuance of the inefficient State royalties with a rebate. All that administration for nothing.
Good overall outcome – pathetic process.
How can anyone be upset with the influence the big miners have – ON THE AUSTRALIAN VOTING PUBLIC.
We finally got a rent based tax that has been proposed (within government resource economists) for 20 years – the miners knew it was coming – the shock was that the Govt initially swallowed the treasury mspt without any seeming knowledge of the history of these taxes and their implimentation. The ongoing failure is the continuance of the inefficient State royalties with a rebate. All that administration for nothing.
Good overall outcome – pathetic process.
Guess who will be doing high-fives behind closed doors today?
Guess who will be doing high-fives behind closed doors today?
Keane again:
http://www.crikey.com.au/2010/07/02/the-political-maths-of-caving-in-to-the-miners/
Keane again:
http://www.crikey.com.au/2010/07/02/the-political-maths-of-caving-in-to-the-miners/
Salient said:
That we will have to see. It’s possible the write-offs will result in a big fat zero as mines paid off years ago get written off again.
I call that a dreadful result. There were other models for taxing profits they could have adopted. (I actually suggested one here). They could also have dropped their diesel fuel subsidies and made them pay for fuel out of after-tax income.
What was most important though was that this not be seen as a cave-in to these thugs. Yet that is exactly how most see will come to see it.
Salient said:
That we will have to see. It’s possible the write-offs will result in a big fat zero as mines paid off years ago get written off again.
I call that a dreadful result. There were other models for taxing profits they could have adopted. (I actually suggested one here). They could also have dropped their diesel fuel subsidies and made them pay for fuel out of after-tax income.
What was most important though was that this not be seen as a cave-in to these thugs. Yet that is exactly how most see will come to see it.
in a loathsome article in the herald, Pascoe is claiming that the 75% is on the original 40%, not the revised 30% (and he gives an example).
He also points out that this means the mining companies will be paying a top marginal tax rate equivalent to the top marginal income tax rate.
If this is true it seems like a win to me, especially since they’ve also dropped the risk-sharing part of the deal. I really didn’t like that part of it, and I don’t think the mining companies believed they would ever get to use it if they really needed it.
Also I don’t object to ditching the retrospectivity. It’s nice to turn the screws on the rich bastards, but it’s also a bad precedent. If we get to keep the good laws, ditch teh risk and tax them at the top marginal rate, I’m happy.
Also I agree with what others said – the original 40% was probably always an ambit claim (or should have been) and probably they always planned to drop the rate and drop the risk-sharing bit together. Either way, it seems Rudd screwed up a bit in the implementation, by either not setting out with an ambit claim, or not making it clear to his supporters from the start that that’s what it was.
in a loathsome article in the herald, Pascoe is claiming that the 75% is on the original 40%, not the revised 30% (and he gives an example).
He also points out that this means the mining companies will be paying a top marginal tax rate equivalent to the top marginal income tax rate.
If this is true it seems like a win to me, especially since they’ve also dropped the risk-sharing part of the deal. I really didn’t like that part of it, and I don’t think the mining companies believed they would ever get to use it if they really needed it.
Also I don’t object to ditching the retrospectivity. It’s nice to turn the screws on the rich bastards, but it’s also a bad precedent. If we get to keep the good laws, ditch teh risk and tax them at the top marginal rate, I’m happy.
Also I agree with what others said – the original 40% was probably always an ambit claim (or should have been) and probably they always planned to drop the rate and drop the risk-sharing bit together. Either way, it seems Rudd screwed up a bit in the implementation, by either not setting out with an ambit claim, or not making it clear to his supporters from the start that that’s what it was.
The market rate vs book rate is an issue that only applies to existing mines, so it’s significant now but won’t be forever.
Some of the other fine print raised here is a worry – we’ll have to see if the govt has adequately accounted for that in its revised estimate of $10.5bn
The market rate vs book rate is an issue that only applies to existing mines, so it’s significant now but won’t be forever.
Some of the other fine print raised here is a worry – we’ll have to see if the govt has adequately accounted for that in its revised estimate of $10.5bn
Josh #49:
From #45
Josh, this would work if a small business’ taxable income was in the region of 3x the payroll.
I’ve yet to encounter a business where taxable profit exceeds the payroll.
Perhaps (?) you have spent your life in businesses where profits exceed payroll. But the lived experience of a vast chunk of operators is the opposite.
Josh #49:
From #45
Josh, this would work if a small business’ taxable income was in the region of 3x the payroll.
I’ve yet to encounter a business where taxable profit exceeds the payroll.
Perhaps (?) you have spent your life in businesses where profits exceed payroll. But the lived experience of a vast chunk of operators is the opposite.
If anyone was in any doubt about Labor’s identification with corporate interests, click here and note some of the bedfellows (as well as admiring the disturbingly phallic Ayn Rand-esque cityscape.)
If anyone was in any doubt about Labor’s identification with corporate interests, click here and note some of the bedfellows (as well as admiring the disturbingly phallic Ayn Rand-esque cityscape.)
Mr. Denmore #47
Please help with the arithmetic on that. The government forces a small business to pay an extra 3%, and gains EXTRA taxation of 15% on that 3%. This somehow is “revenue foregone” of a further 15% of 3%.
How does that help the small business pay the 3% in the first place?
Mr. Denmore #47
Please help with the arithmetic on that. The government forces a small business to pay an extra 3%, and gains EXTRA taxation of 15% on that 3%. This somehow is “revenue foregone” of a further 15% of 3%.
How does that help the small business pay the 3% in the first place?
SATP, if the 90s are a guide, the superannuation increases will replace wage increases, not add to them.
SATP, if the 90s are a guide, the superannuation increases will replace wage increases, not add to them.
The whole exercise has put the big mining companies in a bad light. So it is going to be harder for them to gain future concessions or to argue for the other changes that will flow out of the Henry report after the election or from climate action.
The miners should also be nervous about the opposition. If it continues its great big NO about everything the government will have to negotiate with the Greens to get the legislation through. The concessions the greens will be demanding are not going to help the miners.
The Greens may take votes off Labor for not striking a harder deal but I can’t see anyone moving to the coalition because Gillard conceded too much.
The whole exercise has put the big mining companies in a bad light. So it is going to be harder for them to gain future concessions or to argue for the other changes that will flow out of the Henry report after the election or from climate action.
The miners should also be nervous about the opposition. If it continues its great big NO about everything the government will have to negotiate with the Greens to get the legislation through. The concessions the greens will be demanding are not going to help the miners.
The Greens may take votes off Labor for not striking a harder deal but I can’t see anyone moving to the coalition because Gillard conceded too much.
Josh @68 – it is rather odd to see people celebrating having the government make them do something that could do themselves at any time throug voluntary contributions
Josh @68 – it is rather odd to see people celebrating having the government make them do something that could do themselves at any time throug voluntary contributions
Who honestly thinks the Liberals won’t impose a Resources Rent Tax or raise it now that the idea has been aired.
While Bernard is worried that other wealthy people will see how easy it is to push the Labor governmnet around, there aren’t many wealthier than this mob. The mining companies represent 70% of the capital at play on the Australian Stock Exchange and News Corp has jealously guarded its right to install Prime Ministers of its choice and has been slowly buying up well respected Fairfax journalists for the past few years
Who honestly thinks the Liberals won’t impose a Resources Rent Tax or raise it now that the idea has been aired.
While Bernard is worried that other wealthy people will see how easy it is to push the Labor governmnet around, there aren’t many wealthier than this mob. The mining companies represent 70% of the capital at play on the Australian Stock Exchange and News Corp has jealously guarded its right to install Prime Ministers of its choice and has been slowly buying up well respected Fairfax journalists for the past few years
It’s revenue foregone by the government because instead of receiving an average tax rate through PAYE of 30 per cent, it gets only 15 per cent through the super guarantee levy.
As for the impact on small business, we are talking about an additional 3 per cent contribution phased in over a decade. That is not particularly onerous and it is always in the remit of businesses to offset this against future salary increases. That’s what happened in the ’90s in many cases and helped to keep wage cost inflation lower than it would otherwise be.
It’s revenue foregone by the government because instead of receiving an average tax rate through PAYE of 30 per cent, it gets only 15 per cent through the super guarantee levy.
As for the impact on small business, we are talking about an additional 3 per cent contribution phased in over a decade. That is not particularly onerous and it is always in the remit of businesses to offset this against future salary increases. That’s what happened in the ’90s in many cases and helped to keep wage cost inflation lower than it would otherwise be.
Indeed Chris, but count me in as someone who appears to need to be compelled to adequately save for my retirement (I even missed the deadline for co-contributions again!)
Indeed Chris, but count me in as someone who appears to need to be compelled to adequately save for my retirement (I even missed the deadline for co-contributions again!)
JohnD @69: “I can’t see anyone moving to the coalition because Gillard conceded too much.”
Precisely.
Not even the miners, since they are probably better off with this arrangement than with the old royalties arrangement. Loads of deductions, a low tax rate, no upfront costs, and a rebate of royalties. How good does life get?
I’m just waiting for someone like Access Economics to pick through the fine print and tell us that the miners are going to get off virtually tax and royalty free for the next umpteen years.
Soo, if the state governments still claim their royalties, but the companies get royalties reimbursed by the federal government, and no MRRT is paid until they pay off their mines and other expenses, then who effectively foots the bill for the royalties?
JohnD @69: “I can’t see anyone moving to the coalition because Gillard conceded too much.”
Precisely.
Not even the miners, since they are probably better off with this arrangement than with the old royalties arrangement. Loads of deductions, a low tax rate, no upfront costs, and a rebate of royalties. How good does life get?
I’m just waiting for someone like Access Economics to pick through the fine print and tell us that the miners are going to get off virtually tax and royalty free for the next umpteen years.
Soo, if the state governments still claim their royalties, but the companies get royalties reimbursed by the federal government, and no MRRT is paid until they pay off their mines and other expenses, then who effectively foots the bill for the royalties?
It’s a mish mash of nonsense. she will get destroyed on the detail for this. Not that is a bad thing of course.
It’s a mish mash of nonsense. she will get destroyed on the detail for this. Not that is a bad thing of course.
As predicted, a massive sell out and back flip. True ALP style! Thank you Julia for proving to one and all that you will be no different and will continue to side with big business any day. A tru capitalist prepared to dance to the tune of unelected CEOs. You have handed mining executives 1.5 billion to bribe them to lay off on their advertising campaign. At least Rudd was standing up to the miners.
Gillard may as well join the Liberal party. As I have always said, she is a right winger. Anti union and now the flip side, pro mining bosses.
Shame ALP shame.
As predicted, a massive sell out and back flip. True ALP style! Thank you Julia for proving to one and all that you will be no different and will continue to side with big business any day. A tru capitalist prepared to dance to the tune of unelected CEOs. You have handed mining executives 1.5 billion to bribe them to lay off on their advertising campaign. At least Rudd was standing up to the miners.
Gillard may as well join the Liberal party. As I have always said, she is a right winger. Anti union and now the flip side, pro mining bosses.
Shame ALP shame.
Explain to me again why there were negotiations.
The mining industry would run away and leave all our iron ore and other minerals in the ground, declaring that multi billion profits each year will not be enough?
This has all the hallmarks of payback from the Labor Party to the mining industry for forcing the replacement of Rudd, and to pay for the stopping of anti-Labor advertising. Could a government and the office of Prime Minister be more fully abused than this? (excepting the rodent).
JGillard gets the cheers of the MSM for selling out, and for paying off MSM mates. I suppose we can expect the MSM to see an increase in advertising revenue in the second half of this year. That will be interesting to monitor.
There is nothing good in this ‘negotiation’ (getting the pests of Labor’s back) for Australia except setting an awful precedent.
I am also a bit concerned that Swan got grumpy, oh noes, didn’t he see what the MSM did to Ruddy with that sort of behaviour. Farewell Swan, the writing is on the board, you are impossible to deal with, inaccessible and always grumpy.
Explain to me again why there were negotiations.
The mining industry would run away and leave all our iron ore and other minerals in the ground, declaring that multi billion profits each year will not be enough?
This has all the hallmarks of payback from the Labor Party to the mining industry for forcing the replacement of Rudd, and to pay for the stopping of anti-Labor advertising. Could a government and the office of Prime Minister be more fully abused than this? (excepting the rodent).
JGillard gets the cheers of the MSM for selling out, and for paying off MSM mates. I suppose we can expect the MSM to see an increase in advertising revenue in the second half of this year. That will be interesting to monitor.
There is nothing good in this ‘negotiation’ (getting the pests of Labor’s back) for Australia except setting an awful precedent.
I am also a bit concerned that Swan got grumpy, oh noes, didn’t he see what the MSM did to Ruddy with that sort of behaviour. Farewell Swan, the writing is on the board, you are impossible to deal with, inaccessible and always grumpy.
Can we all calm down for a minute?
There are aspects of this I don’t like, either. But the details of a mining tax are not the great moral issues of our time. When it comes down to it, the big miners are going to pay a lot more tax to the government, which can then be spent on a bunch of useful things down the track. Y’know, like education, health, pensions. The kind of things that we’d like a left-of-center government to do.
If a Labor government was to go down on a matter of principle, I’m not sure a few hundred million dollars of annual tax revenue is all that high on my list of things worth the fight.
Can we all calm down for a minute?
There are aspects of this I don’t like, either. But the details of a mining tax are not the great moral issues of our time. When it comes down to it, the big miners are going to pay a lot more tax to the government, which can then be spent on a bunch of useful things down the track. Y’know, like education, health, pensions. The kind of things that we’d like a left-of-center government to do.
If a Labor government was to go down on a matter of principle, I’m not sure a few hundred million dollars of annual tax revenue is all that high on my list of things worth the fight.
And now some fun starts …
Emerging Pilbara miner BC Iron’s managing director Mike Young said the government had been “done over” by the major miners.
And now some fun starts …
Emerging Pilbara miner BC Iron’s managing director Mike Young said the government had been “done over” by the major miners.
We won’t know what this actually means until tax receipts actually come in. As much as anything this shows that democracy is made more difficult when income disparities are as large as they are now, and that the lack of decent media is similarly disadvantaging democracy in this country.
We won’t know what this actually means until tax receipts actually come in. As much as anything this shows that democracy is made more difficult when income disparities are as large as they are now, and that the lack of decent media is similarly disadvantaging democracy in this country.
That’s right Fran. Now that Australian dirt realises that they’ve been shafted by international big dirt the loyal Aussie dirtists are going to get all patriotic about how the gummint has been tricked. Pathetic. Bet they were happy enough with big dirt’s adds though, eh? What did they expect, loyalty to Aussie dirtists from international dirt? What a joke.
That’s right Fran. Now that Australian dirt realises that they’ve been shafted by international big dirt the loyal Aussie dirtists are going to get all patriotic about how the gummint has been tricked. Pathetic. Bet they were happy enough with big dirt’s adds though, eh? What did they expect, loyalty to Aussie dirtists from international dirt? What a joke.
@Robert Merkel,
Seconded.
As mentioned by somebody upthread, this is also just about the details in the bill that Labor is going to initially table in parliament. What bill ever goes through from that stage without being changed in response to challenges from the Opposition in the Lower House and Senate, and from the Greens and Independents in the Senate? Especially when the Balance of Power in the Senate is likely to look awfully green after this coming election?
@Robert Merkel,
Seconded.
As mentioned by somebody upthread, this is also just about the details in the bill that Labor is going to initially table in parliament. What bill ever goes through from that stage without being changed in response to challenges from the Opposition in the Lower House and Senate, and from the Greens and Independents in the Senate? Especially when the Balance of Power in the Senate is likely to look awfully green after this coming election?
How are the Australian mining companies disadvantaged by the changes btw? Is all this ‘we were not consulted’ about actual policy issues or just a new line in whinging?
How are the Australian mining companies disadvantaged by the changes btw? Is all this ‘we were not consulted’ about actual policy issues or just a new line in whinging?
I really don’t know why the government didn’t explain it to people by saying that like high income earners, the miners had gone into a higher tax bracket.
Most workers accept that a progressive tax system in respect to their own income, yet the mining industry has a regressive system for its profits.
The increase in profitability in the last decade was overwhelmingly due to the higher price of the publicly owned raw materials, not to the endeavour of the companies digging it up.
Why is that so hard to understand?
I really don’t know why the government didn’t explain it to people by saying that like high income earners, the miners had gone into a higher tax bracket.
Most workers accept that a progressive tax system in respect to their own income, yet the mining industry has a regressive system for its profits.
The increase in profitability in the last decade was overwhelmingly due to the higher price of the publicly owned raw materials, not to the endeavour of the companies digging it up.
Why is that so hard to understand?
The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs.
I don’t think that view is consistent with the idea of popular sovereignty. The money raised, whatever it amounts to, is almost entirely beside the point. You just can’t let these thugs win and have an ounce of self-respect. Better to be utterly devastated than to concede that.
I’d sooner we went down swinging than concede that point because at some time, sooner or later, we would recover, campaigning on the basis of opposition to boss class government and if and when we won, we could reverse this wrong — with interest. Then we could move forward.
I’d sooner go to my grave without ever seeing that day come than yield such explicit control to the boss class in pursuit of victory.
The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs.
I don’t think that view is consistent with the idea of popular sovereignty. The money raised, whatever it amounts to, is almost entirely beside the point. You just can’t let these thugs win and have an ounce of self-respect. Better to be utterly devastated than to concede that.
I’d sooner we went down swinging than concede that point because at some time, sooner or later, we would recover, campaigning on the basis of opposition to boss class government and if and when we won, we could reverse this wrong — with interest. Then we could move forward.
I’d sooner go to my grave without ever seeing that day come than yield such explicit control to the boss class in pursuit of victory.
Gabby Millgate as Julia Spillard:
Gabby Millgate as Julia Spillard:
Fran – we’ve just had plenty of comments on threads about how detached the MPs are from ‘the people’. Would you be happy for those MPs to govern, sort of like a dictatorship for 3 years, without consulting and negotiating with community/industry/unions etc groups?
The government has just bargained a new kind of tax for the largest mining companies that should give us more of the wealth they/ve been getting. Of course money talks, but this is still a win for the community.
Fran – we’ve just had plenty of comments on threads about how detached the MPs are from ‘the people’. Would you be happy for those MPs to govern, sort of like a dictatorship for 3 years, without consulting and negotiating with community/industry/unions etc groups?
The government has just bargained a new kind of tax for the largest mining companies that should give us more of the wealth they/ve been getting. Of course money talks, but this is still a win for the community.
Now that the smoke has cleared on the Great ALP Leadership Crisis of ’10, can someone enlighten me as to the important policy issues that justified an extraordinary move to replace the PM? Because even adopting the imprecise meaning that journalists give to the word, I’m buggered if I can see how this deal reflects any significantly different government policy from the original proposal.
Now that the smoke has cleared on the Great ALP Leadership Crisis of ’10, can someone enlighten me as to the important policy issues that justified an extraordinary move to replace the PM? Because even adopting the imprecise meaning that journalists give to the word, I’m buggered if I can see how this deal reflects any significantly different government policy from the original proposal.
Fran Barlow says:
2 July 2010 at 4:45 pm
“The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs.”
Sorry but the miners only get away with what the voters let them get away with.
Voters decide what principles politians should have. Miners fooled them? They are voting on fear and greed – you get pollies and decisions like today’s from both sides.
The Miners are the only ones with clear motives – naked self interest – voters support that? They have in the past they will in the future.
Don’t blame the wolves for being predators – blame the sheep – they really don’t have an excuse for apathy.
Fran Barlow says:
2 July 2010 at 4:45 pm
“The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs.”
Sorry but the miners only get away with what the voters let them get away with.
Voters decide what principles politians should have. Miners fooled them? They are voting on fear and greed – you get pollies and decisions like today’s from both sides.
The Miners are the only ones with clear motives – naked self interest – voters support that? They have in the past they will in the future.
Don’t blame the wolves for being predators – blame the sheep – they really don’t have an excuse for apathy.
Well the detail and the full implications are hazy to me and I’m taking the details in Brian’s post as given.
As such it seems to me that the extra $10.5 billion from the mining companies to the people is a pretty good deal.
A lot better than a smack in the face with a wet fish.
Well the detail and the full implications are hazy to me and I’m taking the details in Brian’s post as given.
As such it seems to me that the extra $10.5 billion from the mining companies to the people is a pretty good deal.
A lot better than a smack in the face with a wet fish.
Brian
“The cost to revenue is $1.5 billion in the first year, down from $12 billion to $10.5″
A very balansed post and summary of key points , well done
Govt started with a NEGOGIATING top bid , just like a Shop Steward does We all discussed at th time it would end up less in normal argy bargy genuine negogaitions….but that it would be “PRESENTED” falsely when that occurred as a ‘cave in’….and this has predict occurred as well
pity that idealology and partisian rules over sensible dealing with Business outcomes….Govt ie Public now will get Billions more per year in tax , and Big Miners lose that yearly from thee hip pockets
(Big Miners were not saying this before , that seems forgot)
Brian
“The cost to revenue is $1.5 billion in the first year, down from $12 billion to $10.5″
A very balansed post and summary of key points , well done
Govt started with a NEGOGIATING top bid , just like a Shop Steward does We all discussed at th time it would end up less in normal argy bargy genuine negogaitions….but that it would be “PRESENTED” falsely when that occurred as a ‘cave in’….and this has predict occurred as well
pity that idealology and partisian rules over sensible dealing with Business outcomes….Govt ie Public now will get Billions more per year in tax , and Big Miners lose that yearly from thee hip pockets
(Big Miners were not saying this before , that seems forgot)
“can someone enlighten me as to the important policy issues that justified …”
I haven’t seen many (any?) suggestions that it was policy differences. I think it was managerial and presentation differences, and they’re both important skills for a PM – but that’s a different thread.
“can someone enlighten me as to the important policy issues that justified …”
I haven’t seen many (any?) suggestions that it was policy differences. I think it was managerial and presentation differences, and they’re both important skills for a PM – but that’s a different thread.
Agree with Robert on this.
Is it the optimal way to tax the mining sector? No, but the chaos of the past few months meant that possibility was shot anyway. The government simply didn’t lay the appropriate groundwork for the RSPT. If mining companies were running the government then they wouldn’t be facing any additional tax at all. While commodity prices remain high the new arrangements will generate significant revenue. It was always the case that most of the revenue was going to be generated from the existing projects of the Big 3.
And I have to laugh about the complaints from small miners and business groups that won’t get as large a reduction in the company tax rate. That is the price you pay for allowing your interests to be hijacked by the big miners and the Liberal party.
Finally, Ken, surely you can see that the final policy is a long way from the RSPT. The original proposal was for a Brown like tax. This proposal is nothing like a Brown tax in that the government will no longer directly share the risk in mining projects. Also, the effective tax rate is significantly lower, it only applies to iron ore and coal, and it is less retrospective.
We never needed to have gone through the past 2 months. If Kevin had been clever he would have issued a green paper with various proposals, then negotiated something like this behind closed doors, and then announced a final policy with the agreement of the key stakeholders.
Agree with Robert on this.
Is it the optimal way to tax the mining sector? No, but the chaos of the past few months meant that possibility was shot anyway. The government simply didn’t lay the appropriate groundwork for the RSPT. If mining companies were running the government then they wouldn’t be facing any additional tax at all. While commodity prices remain high the new arrangements will generate significant revenue. It was always the case that most of the revenue was going to be generated from the existing projects of the Big 3.
And I have to laugh about the complaints from small miners and business groups that won’t get as large a reduction in the company tax rate. That is the price you pay for allowing your interests to be hijacked by the big miners and the Liberal party.
Finally, Ken, surely you can see that the final policy is a long way from the RSPT. The original proposal was for a Brown like tax. This proposal is nothing like a Brown tax in that the government will no longer directly share the risk in mining projects. Also, the effective tax rate is significantly lower, it only applies to iron ore and coal, and it is less retrospective.
We never needed to have gone through the past 2 months. If Kevin had been clever he would have issued a green paper with various proposals, then negotiated something like this behind closed doors, and then announced a final policy with the agreement of the key stakeholders.
“then negotiated something like this behind closed doors, and then announced a final policy with the agreement of the key stakeholders.”
Like Premier Barnett did with BHP and Rio to increase the royalties for W.A.
“then negotiated something like this behind closed doors, and then announced a final policy with the agreement of the key stakeholders.”
Like Premier Barnett did with BHP and Rio to increase the royalties for W.A.
Ron, I’m coming round to the idea that you have stuff to say that’s worth reading. You’re a bit combatative, but that’s no reason to stay away from a blog comments thread.
But dude, you’d get a shitload more engagement with your ideas if you put just a little more time into your writing.
Compare this:
…with any paragraph from any of the last fifty commenters here, and ask yourself who has given the reader a better shot at understanding the material.
If you still think your writing’s okay, ask a friend. If they think it’s okay, ask a neutral third party at random.
Ron, I’m coming round to the idea that you have stuff to say that’s worth reading. You’re a bit combatative, but that’s no reason to stay away from a blog comments thread.
But dude, you’d get a shitload more engagement with your ideas if you put just a little more time into your writing.
Compare this:
…with any paragraph from any of the last fifty commenters here, and ask yourself who has given the reader a better shot at understanding the material.
If you still think your writing’s okay, ask a friend. If they think it’s okay, ask a neutral third party at random.
And no, I don’t need you to explain that paragraph – I was able to work it out. But that’s the point – I had to make a real effort.
And no, I don’t need you to explain that paragraph – I was able to work it out. But that’s the point – I had to make a real effort.
I’m watching SBS news right now, where Wayne Swan’s smile looks a bit forced, and Bob Brown characterised it as a surrender to the barons of the mining industry.
I’m watching SBS news right now, where Wayne Swan’s smile looks a bit forced, and Bob Brown characterised it as a surrender to the barons of the mining industry.
LO those are the components of a particular proposal, they are not policies. The Cambridge Dictionary definition of policy is ‘a set of ideas or a plan of what to do in particular situations that has been agreed officially by a group of people, a business organization, a government or a political party’. A tax isn’t a policy, but a government should be able to explain the policy or policies that have guided a decision to introduce a new tax. Governments what can’t place decisions within a clear policy framework are simply being opportunistic or reactive.
It may be that the government used to have a policy that it should share the risk of mining projects with the private sector and it now has a new policy that it will not. However nobody has suggested that is the case. All we have seen is a hastily cobbled-together deal that lacks any apparent policy dimension at all. Regrettably, it is all of a piece with the way the ETS and the home insulation schemes were handled: half-baked initiatives that don’t fit into any bigger policy framework. When they run into trouble therefore they don’t have any champions who can demonstrate the long-term objectives that will be lost if the scheme is changed or cancelled. Political expediency rules.
The overall impression is of a government that lacks any over-riding sense of direction or purpose. Usually that’s a hallmark of governments that have run out of ideas. To see it so early in the life of a progressive government is depressing.
LO those are the components of a particular proposal, they are not policies. The Cambridge Dictionary definition of policy is ‘a set of ideas or a plan of what to do in particular situations that has been agreed officially by a group of people, a business organization, a government or a political party’. A tax isn’t a policy, but a government should be able to explain the policy or policies that have guided a decision to introduce a new tax. Governments what can’t place decisions within a clear policy framework are simply being opportunistic or reactive.
It may be that the government used to have a policy that it should share the risk of mining projects with the private sector and it now has a new policy that it will not. However nobody has suggested that is the case. All we have seen is a hastily cobbled-together deal that lacks any apparent policy dimension at all. Regrettably, it is all of a piece with the way the ETS and the home insulation schemes were handled: half-baked initiatives that don’t fit into any bigger policy framework. When they run into trouble therefore they don’t have any champions who can demonstrate the long-term objectives that will be lost if the scheme is changed or cancelled. Political expediency rules.
The overall impression is of a government that lacks any over-riding sense of direction or purpose. Usually that’s a hallmark of governments that have run out of ideas. To see it so early in the life of a progressive government is depressing.
I also see SBS followed the ABC in characterising it as a backdown as well as a breakthrough:
http://www.abc.net.au/news/stories/2010/07/02/2943432.htm?site=thedrum
Make of that what you will.
I also see SBS followed the ABC in characterising it as a backdown as well as a breakthrough:
http://www.abc.net.au/news/stories/2010/07/02/2943432.htm?site=thedrum
Make of that what you will.
Russell@87
They ignored the community and “negotiated” with the Minerals Council. The public never really got a look in. About the same numbers of people supprted and opposed the RSPRT, according to polls, and that largely reflected the fact that the ALP ran dead on it.
As I’ve said a number of times — I’d like a government composed of and selected by an engaged public. I’d also like direct democracy to apply on seriously controversial issues.
Russell@87
They ignored the community and “negotiated” with the Minerals Council. The public never really got a look in. About the same numbers of people supprted and opposed the RSPRT, according to polls, and that largely reflected the fact that the ALP ran dead on it.
As I’ve said a number of times — I’d like a government composed of and selected by an engaged public. I’d also like direct democracy to apply on seriously controversial issues.
Heh.
On balance Im with Brian. I was expecting a much more grovellling backflip than this,
Way I read it – the public’s up $10.5b, the mining co’s down same – and the latter reckon they had a win. LOL!
Somebody got foxed. I have to hand this one to the government. Best of all, only half the co. tax cuts – with the rest now blaming the mining co’s.
Id call it a result, frankly.
Heh.
On balance Im with Brian. I was expecting a much more grovellling backflip than this,
Way I read it – the public’s up $10.5b, the mining co’s down same – and the latter reckon they had a win. LOL!
Somebody got foxed. I have to hand this one to the government. Best of all, only half the co. tax cuts – with the rest now blaming the mining co’s.
Id call it a result, frankly.
I thought compromise was about differing parties meeting each other half way and hopefully getting a 50:50 deal after negotiations.
I’m not good at sums so correct me if I’m wrong.
1) 30% looks like three quarters of 40% to me.
2) $10.5 billion looks like 87.5% of $12 billion
3) Mining industry agreed to a tax it wanted dropped.
4) Companies get 1% instead of 2% tax reduction after no engagement in negotiations!
So why is this such a shameful backdown by the government and a caving in to the mining industry?
PS And Tony Abbott looks like an idiot working so hard for Clive Palmer and mates.
I thought compromise was about differing parties meeting each other half way and hopefully getting a 50:50 deal after negotiations.
I’m not good at sums so correct me if I’m wrong.
1) 30% looks like three quarters of 40% to me.
2) $10.5 billion looks like 87.5% of $12 billion
3) Mining industry agreed to a tax it wanted dropped.
4) Companies get 1% instead of 2% tax reduction after no engagement in negotiations!
So why is this such a shameful backdown by the government and a caving in to the mining industry?
PS And Tony Abbott looks like an idiot working so hard for Clive Palmer and mates.
Amusing to see ‘Twiggy’ Forrest complaining about being left out of the negotations, after having “led the fight”.
Amusing to see ‘Twiggy’ Forrest complaining about being left out of the negotations, after having “led the fight”.
Twiggy shoots his mouth off about confidential discussions with Ken Henry about the mining tax.
Twiggy again shoots his mouth off about a secret agreement with Rudd, and trys to strong-arm Gillard on those supposed terms.
Twiggy is aggrieved at being left out of the final negotiations.
Diddums.
Twiggy shoots his mouth off about confidential discussions with Ken Henry about the mining tax.
Twiggy again shoots his mouth off about a secret agreement with Rudd, and trys to strong-arm Gillard on those supposed terms.
Twiggy is aggrieved at being left out of the final negotiations.
Diddums.
“Life of Brian”
Haggle.
“Life of Brian”
Haggle.
Amidst my profound disgust at today’s developments I’ve been trying to imagine a semi-plausible narrative in which a positive result could emerge. I am really at somewhat of a loss as to what to do. I had been willing to break with tradition and support the ALP, but after today, I am wondering whether I’d not be best to stick with my traditional policy of voting informal.
I can imagine a situation in which the government is returned but needs the Greens to get legislation through the senate. When MRRT comes up the Greens force revisions.
1. The headline rate is reinstated
2. The uplift rate is placed at the bond rate
3. The scope of the tax is widened to include all mining
4. No projects are exempt and write-offs are abolished
5. Diesel fuel rebate is removed
6. The tax has no transitional arrangements — it starts in July 2011
The Libs refuse to assist the government on ideologiocal anti-big tax grounds
The government has no choice but to abandon the measures or accept the Greens’ changes.
The mining thugs and their ALP jellybacks are routed. Cheering all round.
Amidst my profound disgust at today’s developments I’ve been trying to imagine a semi-plausible narrative in which a positive result could emerge. I am really at somewhat of a loss as to what to do. I had been willing to break with tradition and support the ALP, but after today, I am wondering whether I’d not be best to stick with my traditional policy of voting informal.
I can imagine a situation in which the government is returned but needs the Greens to get legislation through the senate. When MRRT comes up the Greens force revisions.
1. The headline rate is reinstated
2. The uplift rate is placed at the bond rate
3. The scope of the tax is widened to include all mining
4. No projects are exempt and write-offs are abolished
5. Diesel fuel rebate is removed
6. The tax has no transitional arrangements — it starts in July 2011
The Libs refuse to assist the government on ideologiocal anti-big tax grounds
The government has no choice but to abandon the measures or accept the Greens’ changes.
The mining thugs and their ALP jellybacks are routed. Cheering all round.
Those defending this ALP sell out as an acceptable compromise are forgetting a few things.
1. The government does not need to “negotiate” its right to tax massive super profitable mining companies who are ripping our resources out of the ground. Mining companies are a tiny ruling class minority. To go along with the joke of them being hard done by equal partners in a negotiation cedes Australian’s sovereignty.
2. This sell out was only about getting the miners off Gillard’s back because an election is due. She has thrown away 1.5 billion to the miners as a downpayment on their silence during the election campaign.
3. Whilst not being the only reason Rudd was rolled, the mining tax and Rudd’s principled stance played a part. So we have the horrific corrution of democracy where a PM is rolled based on opinion polls in a few marginal seats which scared the factional heavies. Once Rudd was rolled to allow the sell out to occur, Gillard as a puppet was quick to back down. This has serious implications for who runs this country.
4. Gillard has exposed once and for al that being from the left just means there is more to sell out on.
And still these extreme ALP capitlaists will ask for workers votes.
Those defending this ALP sell out as an acceptable compromise are forgetting a few things.
1. The government does not need to “negotiate” its right to tax massive super profitable mining companies who are ripping our resources out of the ground. Mining companies are a tiny ruling class minority. To go along with the joke of them being hard done by equal partners in a negotiation cedes Australian’s sovereignty.
2. This sell out was only about getting the miners off Gillard’s back because an election is due. She has thrown away 1.5 billion to the miners as a downpayment on their silence during the election campaign.
3. Whilst not being the only reason Rudd was rolled, the mining tax and Rudd’s principled stance played a part. So we have the horrific corrution of democracy where a PM is rolled based on opinion polls in a few marginal seats which scared the factional heavies. Once Rudd was rolled to allow the sell out to occur, Gillard as a puppet was quick to back down. This has serious implications for who runs this country.
4. Gillard has exposed once and for al that being from the left just means there is more to sell out on.
And still these extreme ALP capitlaists will ask for workers votes.
Okay Ken, we can play it your way.
The government has a policy to more efficiently tax the resource sector, within a broader policy of improving the efficiency of the tax system. The RSPT was the vehicle for implementing the first element of the policy. But the government botched its communications strategy, not just with the key stakeholders, but with the broader electorate, and so the new leadership have fallen back on an alternative, almost certainly less efficient vehicle for implementing the policy that achieves some, but not all of its original policy aims, with fewer political costs.
I can’t imagine it is news to anyone that the new version of the tax is reactive. They are now trying to solve a political problem.
The key lesson is, it doesn’t matter how welfare improving your policy is, or the vehicle to implement the policy, if you don’t have a credible strategy to implement it, the policy is next to worthless.
More broadly, the government has lacked an overriding sense of purpose and direction for at least 12 months, in large part due to the scattergun approach to policy and implementation of the previous PM.
You can’t overturn that problem overnight and we won’t know until after the election whether Gillard is capable of it at all.
Okay Ken, we can play it your way.
The government has a policy to more efficiently tax the resource sector, within a broader policy of improving the efficiency of the tax system. The RSPT was the vehicle for implementing the first element of the policy. But the government botched its communications strategy, not just with the key stakeholders, but with the broader electorate, and so the new leadership have fallen back on an alternative, almost certainly less efficient vehicle for implementing the policy that achieves some, but not all of its original policy aims, with fewer political costs.
I can’t imagine it is news to anyone that the new version of the tax is reactive. They are now trying to solve a political problem.
The key lesson is, it doesn’t matter how welfare improving your policy is, or the vehicle to implement the policy, if you don’t have a credible strategy to implement it, the policy is next to worthless.
More broadly, the government has lacked an overriding sense of purpose and direction for at least 12 months, in large part due to the scattergun approach to policy and implementation of the previous PM.
You can’t overturn that problem overnight and we won’t know until after the election whether Gillard is capable of it at all.
On my reading the mining companies are not going to be paying $10.5 billion under the MRRT. You arrive at $10.5 billion by (i) believing the ALP when they say the new package reduces revenue in forward estimate years by $1.5 billion when compared with the old package; (ii) minusing $1.5 billion from $12 billion, which was the amount to be raised by the RSPT; and (iii) somehow forgetting entirely the fact that the $1.5 billion is the net outcome of both the MRRT and the decision to reduce company tax to 29% and not 28% as previously proposed.
Strangely, a straight figure for cash to be raised under the MRRT appears to be unavailable. I wonder why?
BBB
On my reading the mining companies are not going to be paying $10.5 billion under the MRRT. You arrive at $10.5 billion by (i) believing the ALP when they say the new package reduces revenue in forward estimate years by $1.5 billion when compared with the old package; (ii) minusing $1.5 billion from $12 billion, which was the amount to be raised by the RSPT; and (iii) somehow forgetting entirely the fact that the $1.5 billion is the net outcome of both the MRRT and the decision to reduce company tax to 29% and not 28% as previously proposed.
Strangely, a straight figure for cash to be raised under the MRRT appears to be unavailable. I wonder why?
BBB
Continuing on from BBB, the government’s estimates of how much revenue will be generated over the forward estimates under these new arrangements should be treated very cautiously given the uncertainties involved.
Continuing on from BBB, the government’s estimates of how much revenue will be generated over the forward estimates under these new arrangements should be treated very cautiously given the uncertainties involved.
How did the gold miners escape this tax? At some $1250 per ounce at the moment, why did Gillard exclude them? And who knows when nickel might storm back, Poseidon like, to stagger the stock market. No uranium either yet we know this will be on the up and up.
How did the gold miners escape this tax? At some $1250 per ounce at the moment, why did Gillard exclude them? And who knows when nickel might storm back, Poseidon like, to stagger the stock market. No uranium either yet we know this will be on the up and up.
I reckon the small mining companies are complaining they got shafted because they were the ones who stood to gain the most from the capital sharing part of the tax. They didn’t protest the Mineral Councils ads because they thought the MCA would get a backdown on the headline rate without losing the capital sharing part. I say: fuck ‘em.
Or Julia should offer them the old RSPT as a voluntary scheme, with retrospective taxation as the cost of entry. Maybe they’ll take it in order to have some future capital certainty.
I think that’s why the ACCI didn’t interfere too, it didn’t occur to them that a Labor PM would ditch the carrot as well as making the stick lighter. It looks like the ALP played 3 sections of the industry against each other.
If I were a member of the MCA, I’d be asking the management for a “Please Explain,” probably under a letter whose main contents were Patricia WA’s comment at 102.
These people got done like a dinner.
And, also, Ken et al, can you take a becks and have a lie down? Look at this from Ken:
Here we have a policy that taxes miners more than other businesses because they’re taking our natural resources, and uses that money to invest in the future. Sounds like a coherent policy dimension to me, and one that any reasonable leftist would support. Obviously Bob Brown wants more (so do I – I want the bastards taxed at 70% and given a stern talking-to about how they’re going to be shafted for years to come because of those ads), but this is none too shabby.
And now Abbott is meat hanging on a hook. Julia’s gonna go to the election with a brave new tax that everyone can get behind and Abbott is going to look like the mining companies’ pet poodle. Go smuggles!
I reckon the small mining companies are complaining they got shafted because they were the ones who stood to gain the most from the capital sharing part of the tax. They didn’t protest the Mineral Councils ads because they thought the MCA would get a backdown on the headline rate without losing the capital sharing part. I say: fuck ‘em.
Or Julia should offer them the old RSPT as a voluntary scheme, with retrospective taxation as the cost of entry. Maybe they’ll take it in order to have some future capital certainty.
I think that’s why the ACCI didn’t interfere too, it didn’t occur to them that a Labor PM would ditch the carrot as well as making the stick lighter. It looks like the ALP played 3 sections of the industry against each other.
If I were a member of the MCA, I’d be asking the management for a “Please Explain,” probably under a letter whose main contents were Patricia WA’s comment at 102.
These people got done like a dinner.
And, also, Ken et al, can you take a becks and have a lie down? Look at this from Ken:
Here we have a policy that taxes miners more than other businesses because they’re taking our natural resources, and uses that money to invest in the future. Sounds like a coherent policy dimension to me, and one that any reasonable leftist would support. Obviously Bob Brown wants more (so do I – I want the bastards taxed at 70% and given a stern talking-to about how they’re going to be shafted for years to come because of those ads), but this is none too shabby.
And now Abbott is meat hanging on a hook. Julia’s gonna go to the election with a brave new tax that everyone can get behind and Abbott is going to look like the mining companies’ pet poodle. Go smuggles!
Sg @ 112 your condescension would be more appropriate if you bothered to read the arguments you purport to be responding to in their totality. I asked @ 88 about the policy issues that justified a change in PM. Are you suggesting Rudd didn’t want to ‘[tax] miners more than other businesses because they’re taking our natural resources, and uses that money to invest in the future’?
By the way it’s ‘Bex’, not ‘becks’. Smartarse put-downs fall a bit flat when the author clearly hasn’t a clue what they mean.
Sg @ 112 your condescension would be more appropriate if you bothered to read the arguments you purport to be responding to in their totality. I asked @ 88 about the policy issues that justified a change in PM. Are you suggesting Rudd didn’t want to ‘[tax] miners more than other businesses because they’re taking our natural resources, and uses that money to invest in the future’?
By the way it’s ‘Bex’, not ‘becks’. Smartarse put-downs fall a bit flat when the author clearly hasn’t a clue what they mean.
jeez Ken, you are a grouch! But thanks for correcting my spelling of a drug I will never take, and I’ll be sure never to quote John Howard again.
The original policy included the shared capital arrangements. I don’t think they’re as leftist as the new policy. Do you? Do you think that good leftists governments share the capital risk of developments by major international companies, as well as the profit? Would you be happy with a version of the RSPT which bailed out a massive international company for BP-like incidents? Do you think the ALP would even survive as a political party if some Uranium mining company did a BP, poisoned the entire artesian basin, and then got bailed out by the federal govt for its losses?
I know that’s hyperbolic, but really the new policy is much more coherent than the old. Justified dumping a PM? I dunno, but there’s other stuff going on there (marginal seat polling and the management issues) that need to be thought about too. But this Spana-style “Julia is just as right-wing as Smuggles” rhetoric is just ridiculous. Can we ditch it?
jeez Ken, you are a grouch! But thanks for correcting my spelling of a drug I will never take, and I’ll be sure never to quote John Howard again.
The original policy included the shared capital arrangements. I don’t think they’re as leftist as the new policy. Do you? Do you think that good leftists governments share the capital risk of developments by major international companies, as well as the profit? Would you be happy with a version of the RSPT which bailed out a massive international company for BP-like incidents? Do you think the ALP would even survive as a political party if some Uranium mining company did a BP, poisoned the entire artesian basin, and then got bailed out by the federal govt for its losses?
I know that’s hyperbolic, but really the new policy is much more coherent than the old. Justified dumping a PM? I dunno, but there’s other stuff going on there (marginal seat polling and the management issues) that need to be thought about too. But this Spana-style “Julia is just as right-wing as Smuggles” rhetoric is just ridiculous. Can we ditch it?
Fran
The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs
I think if you were to have a chat to those who currently occupy the opposition benches in Parliament House, they might proffer a different voice with an even more final say. I dare say, most here were part of that final say in November, 2007
Fran
The matter of principle was who gets the final say on what the government does. The Gillard regime concedes that it is a handful of very wealthy extractive industry thugs
I think if you were to have a chat to those who currently occupy the opposition benches in Parliament House, they might proffer a different voice with an even more final say. I dare say, most here were part of that final say in November, 2007
“believing the ALP when they say the new package reduces revenue in forward estimate years by $1.5 billion”
These are the Treasury’s estimates, not the Labor Party’s. (I know the wingnut line is that the Treasury has been captured by the socialists, but that is pure wingnuttery.)
The more I see the outcome, the more I like it (as opposed to the process by which we got there). The RSPT had taxpayers on the hook for 40% of the mining industry’s losses. This would have been rorted, sure as eggs, like the old agricultural boondoggles, and the taxpayers would have been bled dry. As it is, the new tax raises in excess of $10.5 billion (remember the touted $10.5 bill is net of giving up 1% on the company tax rate.)
But the process has been horribly flawed. To begin with, the government was genuinely surprised by the reaction of the industry to the RSPT. Why didn’t they see it coming? Because Rudd and Swan cooked this up without consulting the resources minister and the resources department, that is the people who know the industry players and how they think. This was an idiotic way to proceed and emblematic of Rudd’s deepest flaws as PM.
Second, it took them two months and a change of Prime Minister to realise that what they had to do was split the industry. The way to neuter an industry association clike the Minerals Councils is to make sure that the members have confliucting interests. Then they can never agree on a common position and the industry association is rendered useless. If the Mineral Council had been rendered useless then those ads would never have seen the light of day.
The government ended up doing what they should have done from the beginning and play the big miners off against the little miners. They also forgot that BHP and Rio hate Twiggy Forrest’s guts because he is trying to get access to their railways in the Pilbara and the case he has been runningt in the courts has so far cost the majors close to $100 million.
So the outcome is a lump of revenue, the new PM looks good, the Liberal Party has been effectively shafted the industry they went into bat for, and the business sector will start squabbling among themselves over who screwed whom.
“believing the ALP when they say the new package reduces revenue in forward estimate years by $1.5 billion”
These are the Treasury’s estimates, not the Labor Party’s. (I know the wingnut line is that the Treasury has been captured by the socialists, but that is pure wingnuttery.)
The more I see the outcome, the more I like it (as opposed to the process by which we got there). The RSPT had taxpayers on the hook for 40% of the mining industry’s losses. This would have been rorted, sure as eggs, like the old agricultural boondoggles, and the taxpayers would have been bled dry. As it is, the new tax raises in excess of $10.5 billion (remember the touted $10.5 bill is net of giving up 1% on the company tax rate.)
But the process has been horribly flawed. To begin with, the government was genuinely surprised by the reaction of the industry to the RSPT. Why didn’t they see it coming? Because Rudd and Swan cooked this up without consulting the resources minister and the resources department, that is the people who know the industry players and how they think. This was an idiotic way to proceed and emblematic of Rudd’s deepest flaws as PM.
Second, it took them two months and a change of Prime Minister to realise that what they had to do was split the industry. The way to neuter an industry association clike the Minerals Councils is to make sure that the members have confliucting interests. Then they can never agree on a common position and the industry association is rendered useless. If the Mineral Council had been rendered useless then those ads would never have seen the light of day.
The government ended up doing what they should have done from the beginning and play the big miners off against the little miners. They also forgot that BHP and Rio hate Twiggy Forrest’s guts because he is trying to get access to their railways in the Pilbara and the case he has been runningt in the courts has so far cost the majors close to $100 million.
So the outcome is a lump of revenue, the new PM looks good, the Liberal Party has been effectively shafted the industry they went into bat for, and the business sector will start squabbling among themselves over who screwed whom.
I’m still struggling to see how the government’s numbers add up. There’s no way the concessions they’ve nade to BHP, RIO and Xstrata add up to just $1.5bn.
I’m still struggling to see how the government’s numbers add up. There’s no way the concessions they’ve nade to BHP, RIO and Xstrata add up to just $1.5bn.
Andrew, they come to more than $1.5 billion because the government is cutting company tax by only 1%, not 2% as with the previou package.
But mainly, the government no longer has to factor in compensating miners for their losses.
Andrew, they come to more than $1.5 billion because the government is cutting company tax by only 1%, not 2% as with the previou package.
But mainly, the government no longer has to factor in compensating miners for their losses.
It never made sense to introduce a big new charge just before an election when the new charge was going to take effect in 2012 unless you were trying to prove you needed bigger budgie smugglers that big Tony.
It didn’t make sense to introduce a complex new scheme when there was a PPTT scheme that had been working for years in the offshore petro-gas industry despite the initial protests.
It didn’t make sense to introduce a revenue raising system that would leave the government open to compensating people who made lousy decisions.
It didn’t make sense to have the sweeteners too small to get the beneficiaries excited when the pain was well and truly big enough to get the big miners excited.
when you knew there would be a big fight it didn’t make sense to introduce something that most of us would struggle to understand.
Sure, a government could introduce a new tax without getting agreement but Julie has to get across what she is going to do instead of letting the debate on Kevin’s tax absorb all the attention that should be on what Julie plans to do about emissions, mental health etc. So if Julie has taken the heat out of the tax debate while retaining billions of new revenue she has done rather well.
It never made sense to introduce a big new charge just before an election when the new charge was going to take effect in 2012 unless you were trying to prove you needed bigger budgie smugglers that big Tony.
It didn’t make sense to introduce a complex new scheme when there was a PPTT scheme that had been working for years in the offshore petro-gas industry despite the initial protests.
It didn’t make sense to introduce a revenue raising system that would leave the government open to compensating people who made lousy decisions.
It didn’t make sense to have the sweeteners too small to get the beneficiaries excited when the pain was well and truly big enough to get the big miners excited.
when you knew there would be a big fight it didn’t make sense to introduce something that most of us would struggle to understand.
Sure, a government could introduce a new tax without getting agreement but Julie has to get across what she is going to do instead of letting the debate on Kevin’s tax absorb all the attention that should be on what Julie plans to do about emissions, mental health etc. So if Julie has taken the heat out of the tax debate while retaining billions of new revenue she has done rather well.
Sam – just to reiterate, I think you (and others, from Brian onwards) are looking at this the wrong way. The $10.5 billion figure is not how much extra the government will get vs. the status quo. The $10.5 billion is what you get when you take the original RSPT revenue figure ($12 billion), then look at the ALP press release, which says that the new deal will reduce revenue by $1.5 billion, then minus one from the other. The problem with doing that should be obvious: the $1.5 billion figure is itself a function of both the difference between the RSPT and the MRRT and – crucially – the decision not to cut company tax all the way down to 28%.
BBB
Sam – just to reiterate, I think you (and others, from Brian onwards) are looking at this the wrong way. The $10.5 billion figure is not how much extra the government will get vs. the status quo. The $10.5 billion is what you get when you take the original RSPT revenue figure ($12 billion), then look at the ALP press release, which says that the new deal will reduce revenue by $1.5 billion, then minus one from the other. The problem with doing that should be obvious: the $1.5 billion figure is itself a function of both the difference between the RSPT and the MRRT and – crucially – the decision not to cut company tax all the way down to 28%.
BBB
And now that I have watched a video of bottle smashing over head attempts and compared it to the July Ist 20012 start of the tax,I cannot laugh , they seem to be both coalescing in the mind.So I wonder what both the bottle breaking attempt and Gillard shows sound like backwards for evil intentions and real dates.What the hell is going on!?
And now that I have watched a video of bottle smashing over head attempts and compared it to the July Ist 20012 start of the tax,I cannot laugh , they seem to be both coalescing in the mind.So I wonder what both the bottle breaking attempt and Gillard shows sound like backwards for evil intentions and real dates.What the hell is going on!?
Gotcha! Dropping the naughties!
Gotcha! Dropping the naughties!
Some of the early comments were more akin to what you see at Tim Blair’s place than I welcome here, but it seems to have settled down a bit.
I’ve been out since late morning. Too many points to respond to.
Andrew @ 117, I heard Swan answering questions this morning and the $10.5 billion is a net figure. Under the RSPT they’d calculated a sum of over $1 billion, from memory as outlays for failed projects.
sg @ 112, the small miners weren’t shafted. Companies with less than $50 million profit pa are left out of the scheme. This can be verified by looking at the attachment to the media release.
There was an interview with Michael Roche of the Queensland Resources Council on local radio today. He said that they (who represent small companies also) were feeding stuff into the reps of the big three in the negotiations. He said that the ABC latched onto someone in WA who was out of the loop and who had just gotten out of bed WA time.
He also said that Clive Palmer was in Germany and wouldn’t know what was going on. He reckoned that when he got back home and worked the numbers on his projects he might relax a bit more.
Mitch Hooke from the Minerals Council reckoned that the agreement ticked most of the boxes, including international competitiveness, and was in the right space.
I’ve always said that the miners knew they’d have to pay more tax and would be happy with something that was close to emerging international norms. I reckon that’s what happened.
Heather Ridout was quite disappointed about the whole thing. She says the Henry idea was to get company tax down to 25%. Now she says 29% is inadequate and there is no ambition to go further. Her concern was the two speed economy and the distortion from the mining industry that adversely affects other sectors. I guess manufacturing is her bailiwick.
She was also critical of the process and said that the concept needed to be “road tested” with the industry.
Frankly I think she’s right. LO’s idea of a green paper sounds good to me. People in government offices can’t be expected to know how detailed plans like this impact in the real world. All this bleating about it’s undemocratic to talk to companies is giving me the irrits.
As to whether the govt negotiated with us about our tax, in effect they do over the years as they get feedback and we vote.
But I do think, as I said in the post, that we need to think about the laws as they relate to party donations and political advertising.
Some of the early comments were more akin to what you see at Tim Blair’s place than I welcome here, but it seems to have settled down a bit.
I’ve been out since late morning. Too many points to respond to.
Andrew @ 117, I heard Swan answering questions this morning and the $10.5 billion is a net figure. Under the RSPT they’d calculated a sum of over $1 billion, from memory as outlays for failed projects.
sg @ 112, the small miners weren’t shafted. Companies with less than $50 million profit pa are left out of the scheme. This can be verified by looking at the attachment to the media release.
There was an interview with Michael Roche of the Queensland Resources Council on local radio today. He said that they (who represent small companies also) were feeding stuff into the reps of the big three in the negotiations. He said that the ABC latched onto someone in WA who was out of the loop and who had just gotten out of bed WA time.
He also said that Clive Palmer was in Germany and wouldn’t know what was going on. He reckoned that when he got back home and worked the numbers on his projects he might relax a bit more.
Mitch Hooke from the Minerals Council reckoned that the agreement ticked most of the boxes, including international competitiveness, and was in the right space.
I’ve always said that the miners knew they’d have to pay more tax and would be happy with something that was close to emerging international norms. I reckon that’s what happened.
Heather Ridout was quite disappointed about the whole thing. She says the Henry idea was to get company tax down to 25%. Now she says 29% is inadequate and there is no ambition to go further. Her concern was the two speed economy and the distortion from the mining industry that adversely affects other sectors. I guess manufacturing is her bailiwick.
She was also critical of the process and said that the concept needed to be “road tested” with the industry.
Frankly I think she’s right. LO’s idea of a green paper sounds good to me. People in government offices can’t be expected to know how detailed plans like this impact in the real world. All this bleating about it’s undemocratic to talk to companies is giving me the irrits.
As to whether the govt negotiated with us about our tax, in effect they do over the years as they get feedback and we vote.
But I do think, as I said in the post, that we need to think about the laws as they relate to party donations and political advertising.
billie @ 71, I think you’ll find that the resources sector is about 30% of the market capitalisation of the ASX. So you’ve got it the wrong way around AFAIK.
billie @ 71, I think you’ll find that the resources sector is about 30% of the market capitalisation of the ASX. So you’ve got it the wrong way around AFAIK.
I’ll try again. (Either my comments are dropping out or I’m forgetting to hit the submit button.)
The MRTT doesn’t bother me so much. Anybody who didn’t think Labor was going to cave into the big end of town had rocks in their head. It would’ve happened under Rudd and did under Gillard. Apart from the fact I don’t think Julia should’ve given the mining bosses all that taxpayer funded champagne. Ever. However, the Government gets more tax than it usta, business get some bones and everybody who lives till when their super kicks in (be 67, won’t it?) gets a little bit of pin money.
And Abbott gets snookered.
Not bad all round, really.
I’ll try again. (Either my comments are dropping out or I’m forgetting to hit the submit button.)
The MRTT doesn’t bother me so much. Anybody who didn’t think Labor was going to cave into the big end of town had rocks in their head. It would’ve happened under Rudd and did under Gillard. Apart from the fact I don’t think Julia should’ve given the mining bosses all that taxpayer funded champagne. Ever. However, the Government gets more tax than it usta, business get some bones and everybody who lives till when their super kicks in (be 67, won’t it?) gets a little bit of pin money.
And Abbott gets snookered.
Not bad all round, really.
It is the consensus amongst the key mouths on this issue that this deal could not have been agreed if Rudd had remained in place. Rudd had been talking about months of negotiations and Twiggy Forrest at one point implied a less generous deal to the mining morlocks was in the offing prior to Rudd’s removal.
We will never know for sure, but every time I hear someone saying this, my retrospective disdain for Rudd ebbs a touch.
I suppose there is still the possibility that defensive fiscal action by individual governments in the EU might lead to a breakdown in EU financial governance, and that this and problems in the US might slash demand from the EU and America from Asia, and that this might in turn put downward pressure on coal and iron ore prices that persists for long enough for them to driven into marginal operation, rendering this deal of little use to the Minerals Council.
This would have the advantage of buying us some more time on GHGs and greatly weaken the political power of these thugs and of their West Australian governmental playthings.
One can hope.
It is the consensus amongst the key mouths on this issue that this deal could not have been agreed if Rudd had remained in place. Rudd had been talking about months of negotiations and Twiggy Forrest at one point implied a less generous deal to the mining morlocks was in the offing prior to Rudd’s removal.
We will never know for sure, but every time I hear someone saying this, my retrospective disdain for Rudd ebbs a touch.
I suppose there is still the possibility that defensive fiscal action by individual governments in the EU might lead to a breakdown in EU financial governance, and that this and problems in the US might slash demand from the EU and America from Asia, and that this might in turn put downward pressure on coal and iron ore prices that persists for long enough for them to driven into marginal operation, rendering this deal of little use to the Minerals Council.
This would have the advantage of buying us some more time on GHGs and greatly weaken the political power of these thugs and of their West Australian governmental playthings.
One can hope.
Another possibility is that the High Court challenge Barnett is mooting about “taxing minerals” rather than profits means that the deal is scuppered.
This obviously can’t occur until legislation is passed, so the Feds could campaign for the deal going into the election with the opposition running a new iteration of the Joh for PM campaign, which even the mining thugs themselves (apart perhaps from Palmer) can’t endorse. This leads to a public bunfight amongst these thieves and allows us a very public entree into the utterly venal nature of these schysters.
When the election is held, the government gets advice that the legislation may well be unconstitutional and then does another deal, this time with The Greens along the lines I outlined @106 above.
Hubby, who is a lot more sympathetic to Rudd and Gillard than I am, suggested this might all be part of a clever plan, in which the mining thugs first get sandbagged by signing onto the deal and then double-crossed after the election. Rudd makes his triumphant return, perhaps as Resources Minister and really sticks it to them with Green support, agreeing that the election really was, as Tony Abbott suggested, a referendum on the right of the government to ensure that the mining industry paid its fair share.
The government uses the funds to implement the tax cuts to business, renewing the Henry proposal to cut taxes on business to 25% (but excludes mining from this relief) and adds even more to super.
I could probably live with that.
Another possibility is that the High Court challenge Barnett is mooting about “taxing minerals” rather than profits means that the deal is scuppered.
This obviously can’t occur until legislation is passed, so the Feds could campaign for the deal going into the election with the opposition running a new iteration of the Joh for PM campaign, which even the mining thugs themselves (apart perhaps from Palmer) can’t endorse. This leads to a public bunfight amongst these thieves and allows us a very public entree into the utterly venal nature of these schysters.
When the election is held, the government gets advice that the legislation may well be unconstitutional and then does another deal, this time with The Greens along the lines I outlined @106 above.
Hubby, who is a lot more sympathetic to Rudd and Gillard than I am, suggested this might all be part of a clever plan, in which the mining thugs first get sandbagged by signing onto the deal and then double-crossed after the election. Rudd makes his triumphant return, perhaps as Resources Minister and really sticks it to them with Green support, agreeing that the election really was, as Tony Abbott suggested, a referendum on the right of the government to ensure that the mining industry paid its fair share.
The government uses the funds to implement the tax cuts to business, renewing the Henry proposal to cut taxes on business to 25% (but excludes mining from this relief) and adds even more to super.
I could probably live with that.
As usual Ross Gittins to get to the heart of the matter:
As usual Ross Gittins to get to the heart of the matter:
Fran @ 127.
Love the conspiracy theory. Magnificently elegant. Don’t think its true though. The quote adrian provides from Ross Gittins is more on the money.
Fran @ 127.
Love the conspiracy theory. Magnificently elegant. Don’t think its true though. The quote adrian provides from Ross Gittins is more on the money.
Brian @123: You ar talking sense. My big beef is that Rudd brought on something that would require time to sort out far too close to the election.
They should have got on with implementation of the Henry report much sooner with the intention of implementing some items this budget and/or deferred any major action on the Henry report till after the election.
Brian @123: You ar talking sense. My big beef is that Rudd brought on something that would require time to sort out far too close to the election.
They should have got on with implementation of the Henry report much sooner with the intention of implementing some items this budget and/or deferred any major action on the Henry report till after the election.
It is still galling how much it costs to buy and sell Prime Ministers in Australia. Also how easily Gillard was tempted to betray her Prime Minister and how much she was willing to give away for it.
I get the feeling JGillard has given away far more than this from some ‘quick’ on-line envelop analysis I have read that suggest that it may be possible for companies to pay very little. The miners are not sitting back quite pleased with themselves because they have to pay up $10bn a year I can tell you.
This was a substantial capitulation by JGillard. Yes I know it clears the decks for Gillard Labor to have a better chance at election victory. But is that the criteria we should be judging it? It was highly successful because it helps Labor win? Australia foregoes up to $10bn in revenue is a steep price for a power grab.
It is still galling how much it costs to buy and sell Prime Ministers in Australia. Also how easily Gillard was tempted to betray her Prime Minister and how much she was willing to give away for it.
I get the feeling JGillard has given away far more than this from some ‘quick’ on-line envelop analysis I have read that suggest that it may be possible for companies to pay very little. The miners are not sitting back quite pleased with themselves because they have to pay up $10bn a year I can tell you.
This was a substantial capitulation by JGillard. Yes I know it clears the decks for Gillard Labor to have a better chance at election victory. But is that the criteria we should be judging it? It was highly successful because it helps Labor win? Australia foregoes up to $10bn in revenue is a steep price for a power grab.
Ahh but you see PB, that’s just what these Macchiavellean spinmeisters want you to think … It’s all part of a cunning plan.
Ahh but you see PB, that’s just what these Macchiavellean spinmeisters want you to think … It’s all part of a cunning plan.
He was going on the assurances and strong urgings of his Treasurer that this was the way to go.
Your beef is with the Prime Minister trusting his Treasurer. OK if it were Howard and Costello you know Howard would never listen. But Swan and Gillard?
I do suspect that Mr Swan may have been just a tad disingenuous with Mr Rudd on this issue.
He was going on the assurances and strong urgings of his Treasurer that this was the way to go.
Your beef is with the Prime Minister trusting his Treasurer. OK if it were Howard and Costello you know Howard would never listen. But Swan and Gillard?
I do suspect that Mr Swan may have been just a tad disingenuous with Mr Rudd on this issue.
I would be guessing that when this thing or its children come to be law the mining industry and such will somehow end up paying very little, or what they pay will mysteriously be able to be given back by the ‘left’ hand, as it were.
I would be guessing that when this thing or its children come to be law the mining industry and such will somehow end up paying very little, or what they pay will mysteriously be able to be given back by the ‘left’ hand, as it were.
Thomas it seems to me the government failed comprehensively to develop a coherent response to the Henry Review and instead cherry-picked a handful of individual items. Presumably they thought it would be clever politics and it’s backfired in spectacular fashion.
Rudd has to bear the major blame for this failure to develop a viable tax policy but the rest of the cabinet cannot avoid some responsibility, especially Swan, Tanner and Gillard. I’d like to see some honest reflection upon these kinds of failings as the justification for the leadership change, instead of vague assertions about ‘losing direction’ and abandoning the idea of a big Australia.
Thomas it seems to me the government failed comprehensively to develop a coherent response to the Henry Review and instead cherry-picked a handful of individual items. Presumably they thought it would be clever politics and it’s backfired in spectacular fashion.
Rudd has to bear the major blame for this failure to develop a viable tax policy but the rest of the cabinet cannot avoid some responsibility, especially Swan, Tanner and Gillard. I’d like to see some honest reflection upon these kinds of failings as the justification for the leadership change, instead of vague assertions about ‘losing direction’ and abandoning the idea of a big Australia.
What I’ve heard from Swan in the press conference yesterday leads me to believe that the tax is very complex. This makes it impossible for any of us to make an intelligent comment on the likelihood of companies rorting the system and avoiding the tax. I’d expect a lot of this to be ironed out in the transition process and in the extensive senate review that the Greens are promising.
So I’m saying that statements that the miners will pay very little tax are uninformed guesswork, based on prejudice.
Of course if the major economies go bad and Chinese growth falters there will be less tax paid.
For the time being I’m taking the $10.5 at face value, recognising as LO (who is an econometrician, I understand) says that estimates that far out can’t be taken as gospel. At the same time we need more than supposition to vary them. On this basis, then, one side has an ambit claim of $12 billion, the other zero. It’s pretty simple to see who was the most successful at pushing the other side around. At the same time we’ve shed the risk of paying out on unsuccessful projects, which is worth something.
What I’ve heard from Swan in the press conference yesterday leads me to believe that the tax is very complex. This makes it impossible for any of us to make an intelligent comment on the likelihood of companies rorting the system and avoiding the tax. I’d expect a lot of this to be ironed out in the transition process and in the extensive senate review that the Greens are promising.
So I’m saying that statements that the miners will pay very little tax are uninformed guesswork, based on prejudice.
Of course if the major economies go bad and Chinese growth falters there will be less tax paid.
For the time being I’m taking the $10.5 at face value, recognising as LO (who is an econometrician, I understand) says that estimates that far out can’t be taken as gospel. At the same time we need more than supposition to vary them. On this basis, then, one side has an ambit claim of $12 billion, the other zero. It’s pretty simple to see who was the most successful at pushing the other side around. At the same time we’ve shed the risk of paying out on unsuccessful projects, which is worth something.
And likewise Government claims. Hardly prejudice really, how about 30 years of watching what governments do and say. One claim is as good as another.
The entities that really know and understand the effect of this are the mining companies.
Their behaviour will be just a ‘slight’ clue as to what was given away. Advertising hurting the election prospects of Gillard? Ceased. Coordinated campaign attacking the Govt over this? Gone. Squealing like stuck pigs that this will ruin projects….gone. And because $12bn was reduced to $10.5bn? Hardly likely.
I must apologise, it is not Governments that cost a lot to buy, it is mining companies that are bought off cheaply.
If this was a real deal that didn’t sell out you would for certain have these companies moaning at fever pitch, and on with their media blitz.
And likewise Government claims. Hardly prejudice really, how about 30 years of watching what governments do and say. One claim is as good as another.
The entities that really know and understand the effect of this are the mining companies.
Their behaviour will be just a ‘slight’ clue as to what was given away. Advertising hurting the election prospects of Gillard? Ceased. Coordinated campaign attacking the Govt over this? Gone. Squealing like stuck pigs that this will ruin projects….gone. And because $12bn was reduced to $10.5bn? Hardly likely.
I must apologise, it is not Governments that cost a lot to buy, it is mining companies that are bought off cheaply.
If this was a real deal that didn’t sell out you would for certain have these companies moaning at fever pitch, and on with their media blitz.
Ken @ 135, in apportioning blame between Rudd on the one hand and Gillard, Swan and Tanner on the other, you need to read what Laura Tingle said back on 9 June:
She has repeatedly said that Rudd alienated most of the public service and caucus.
David Crowe in yesterday’s Fin Review said that even now “anger sizzles down the phone line when some backbenchers recount his final weeks in power.”
It seems clear that speaking truth to power with Rudd in the final phase was a futile exercise. We can only speculate what transpired between Gillard and Rudd on the fateful Wednesday, but it is easy to imagine that she’d finally had enough.
There was so much bad feeling that it was sensible to send him away to get over it all before bringing him back to cabinet. From Crowe’s article again:
Swan and Gillard have been hinting broadly that while Rudd was there they had little room to move. The mining industry are saying the same.
Ken @ 135, in apportioning blame between Rudd on the one hand and Gillard, Swan and Tanner on the other, you need to read what Laura Tingle said back on 9 June:
She has repeatedly said that Rudd alienated most of the public service and caucus.
David Crowe in yesterday’s Fin Review said that even now “anger sizzles down the phone line when some backbenchers recount his final weeks in power.”
It seems clear that speaking truth to power with Rudd in the final phase was a futile exercise. We can only speculate what transpired between Gillard and Rudd on the fateful Wednesday, but it is easy to imagine that she’d finally had enough.
There was so much bad feeling that it was sensible to send him away to get over it all before bringing him back to cabinet. From Crowe’s article again:
Swan and Gillard have been hinting broadly that while Rudd was there they had little room to move. The mining industry are saying the same.
Thomas @ 137, I’m sorry, but one claim is not as good as another. Swan at the press conference mentioned a series of items on both sides of the ledger that made up the net $10.5 billion. Abbott is calling for the detailed modelling and Swan has told him to bugger off, as he would, but unless you have accounting skills and have your head into the calculations that made up the final figure you are guessing in a manner that is worse than pointless.
When I get around to it I’m going to give some links from Radio National. In one of them a university professor said he couldn’t comment because he hadn’t gotten his head around the figures yet.
I’m not enamoured of capitalism at all, but as a direct investor for 20 years have had a nodding acquaintance with how capitalists behave. What stuffs them more than anything is uncertainty. Also changing the goal posts when they have to plan and take risks over a 5-25 year time frame.
They also have to deal with banks, who are incredibly jittery about lending to anyone. One of the problems with the RSPT is that they couldn’t put a figure on risk. Without banks miners can’t do anything.
Rudd’s modus operandi had become springing nasty surprises on his targets and then telling them to take it or leave it. That’s one of the reasons he’s no longer there.
Thomas @ 137, I’m sorry, but one claim is not as good as another. Swan at the press conference mentioned a series of items on both sides of the ledger that made up the net $10.5 billion. Abbott is calling for the detailed modelling and Swan has told him to bugger off, as he would, but unless you have accounting skills and have your head into the calculations that made up the final figure you are guessing in a manner that is worse than pointless.
When I get around to it I’m going to give some links from Radio National. In one of them a university professor said he couldn’t comment because he hadn’t gotten his head around the figures yet.
I’m not enamoured of capitalism at all, but as a direct investor for 20 years have had a nodding acquaintance with how capitalists behave. What stuffs them more than anything is uncertainty. Also changing the goal posts when they have to plan and take risks over a 5-25 year time frame.
They also have to deal with banks, who are incredibly jittery about lending to anyone. One of the problems with the RSPT is that they couldn’t put a figure on risk. Without banks miners can’t do anything.
Rudd’s modus operandi had become springing nasty surprises on his targets and then telling them to take it or leave it. That’s one of the reasons he’s no longer there.
Counter suit from Mr Abbott.
http://www.smh.com.au/national/super-concessions-but-abbott-warns-its-not-a-done-deal-20100702-zu5y.html?autostart=1
Counter suit from Mr Abbott.
http://www.smh.com.au/national/super-concessions-but-abbott-warns-its-not-a-done-deal-20100702-zu5y.html?autostart=1
I still can’t work out Brian why they didn’t just run with a price-benchmark model, such as I suggested earlier. It would have been simple to calculate liabilities well in advance since the base rate for normal prices would have been highly stable.
I still can’t work out Brian why they didn’t just run with a price-benchmark model, such as I suggested earlier. It would have been simple to calculate liabilities well in advance since the base rate for normal prices would have been highly stable.
Comment #14
Assuming for arguments sake that the above is not the work of a seriously disturbed mind, what does the commenter propose as an alternative means of support for the people employed by small mining co’s, those employed in tertiary support for them, and even (by extension) how the commenter will avoid “going to the wall” if the government hasn’t the cash left to fund the commenter’s own sinecure?
Comment #14
Assuming for arguments sake that the above is not the work of a seriously disturbed mind, what does the commenter propose as an alternative means of support for the people employed by small mining co’s, those employed in tertiary support for them, and even (by extension) how the commenter will avoid “going to the wall” if the government hasn’t the cash left to fund the commenter’s own sinecure?
SATP
Right now, the mining sector contibutes only a tiny fraction of employment in this country, and and the mid-caps even less of it. It competes for skilled labour with other sectors. If they really did got to the wall, the skilled people displaced would readily find work elsewhere.
So net effect? Not very much. A handful of wealthy entrepreneurs would be less wealthy, and their emplyees would probably get jobs elsewhere with the bigger extractors.
Here and there, retail imports might decline a bit for a while.
SATP
Right now, the mining sector contibutes only a tiny fraction of employment in this country, and and the mid-caps even less of it. It competes for skilled labour with other sectors. If they really did got to the wall, the skilled people displaced would readily find work elsewhere.
So net effect? Not very much. A handful of wealthy entrepreneurs would be less wealthy, and their emplyees would probably get jobs elsewhere with the bigger extractors.
Here and there, retail imports might decline a bit for a while.
His modus operandi? This is a perjorative statement. This is of course nonsense, an invention to support the case against Rudd in this issue and to support the notion that Swan or others have no responsibility in this.
Rudd took Swan at his word, why wouldn’t you, and got put in it. Amazing that people have persistently run the meme Rudd is a one man band, then go him for trusting the advice of his most senior colleagues, from Swan and Gillard (ETS).
[They also have to deal with banks, who are incredibly jittery about lending to anyone. ]
Banks wouldn’t care less and in fact anybody paying a tax because of profitability would be a good customer because they make profits. This is totally neutral on the banking score. The banks are more concerned about their exposure to the residential mortgage market and the most likely coming recession next year.
Listen, people should be wary of becoming part of the cult of personality. Yes Gillard is a striking character, and has been reasonably successful in her IR and Education roles I gather, and yes she has done very well to come up in the party. Less well in betraying the PM.
But let us not twist ourselves in all directions to try protect the saintliness of the adulated one.
His modus operandi? This is a perjorative statement. This is of course nonsense, an invention to support the case against Rudd in this issue and to support the notion that Swan or others have no responsibility in this.
Rudd took Swan at his word, why wouldn’t you, and got put in it. Amazing that people have persistently run the meme Rudd is a one man band, then go him for trusting the advice of his most senior colleagues, from Swan and Gillard (ETS).
[They also have to deal with banks, who are incredibly jittery about lending to anyone. ]
Banks wouldn’t care less and in fact anybody paying a tax because of profitability would be a good customer because they make profits. This is totally neutral on the banking score. The banks are more concerned about their exposure to the residential mortgage market and the most likely coming recession next year.
Listen, people should be wary of becoming part of the cult of personality. Yes Gillard is a striking character, and has been reasonably successful in her IR and Education roles I gather, and yes she has done very well to come up in the party. Less well in betraying the PM.
But let us not twist ourselves in all directions to try protect the saintliness of the adulated one.
Brian @ 138 that passage from Laura Tingle sits very oddly with Labor’s NSW right wing leading the move to oust Rudd. Why would they do that if they were driving Rudd’s strategy?
If Gillard or Swan or Tanner comes out with a copy of their cabinet submission recommending a comprehensive tax policy based on the Henry Review, and states that Rudd prevented it being discussed, or rejected it in high-handed fashion, then I’ll see justification for the leadership change. Absent that I’ll ignore insider journalistic gossip and default to the Westminster principle, which allocates responsibility for cabinet decisions to the cabinet collectively.
The Henry Review, much to the discomfiture of the government I suspect, recommended a whole series of measures that would require courage and commitment to implement. There is no sign the government has any intention of treating them seriously.
Brian @ 138 that passage from Laura Tingle sits very oddly with Labor’s NSW right wing leading the move to oust Rudd. Why would they do that if they were driving Rudd’s strategy?
If Gillard or Swan or Tanner comes out with a copy of their cabinet submission recommending a comprehensive tax policy based on the Henry Review, and states that Rudd prevented it being discussed, or rejected it in high-handed fashion, then I’ll see justification for the leadership change. Absent that I’ll ignore insider journalistic gossip and default to the Westminster principle, which allocates responsibility for cabinet decisions to the cabinet collectively.
The Henry Review, much to the discomfiture of the government I suspect, recommended a whole series of measures that would require courage and commitment to implement. There is no sign the government has any intention of treating them seriously.
@145 – Ken, I think the story is that Arbib and co. turned against Rudd when he regretted having backed down on the ETS, blamed them for the advice, and stopped talking to Arbib.
No doubt the polling implications of the backdown were also relevant.
@145 – Ken, I think the story is that Arbib and co. turned against Rudd when he regretted having backed down on the ETS, blamed them for the advice, and stopped talking to Arbib.
No doubt the polling implications of the backdown were also relevant.
Ken: because the hand that giveth, can taketh away…
Ken: because the hand that giveth, can taketh away…
Brian seems to be about as close as we can get to what happened and where we are at with it. A fair bit of wait and see, but at least an attempt to bring certainty to investment and remove a scare campaign from the process of being re-elected.
The politics of it are very good. nowhere for Abbott. If some miners are unhappy, they’ll get nowhere with a protest. The abolition of the risk subsidies makes sense.
Even the public knowledge may be improved. Instead of ‘Are we killing the Golden Goose?’ people might be asking ‘Are we getting a fair return on our natural resource assets?’
And even if, as many posters believe, the answer is ‘no’, well the public may be more receptive to some return than previously.
Brian seems to be about as close as we can get to what happened and where we are at with it. A fair bit of wait and see, but at least an attempt to bring certainty to investment and remove a scare campaign from the process of being re-elected.
The politics of it are very good. nowhere for Abbott. If some miners are unhappy, they’ll get nowhere with a protest. The abolition of the risk subsidies makes sense.
Even the public knowledge may be improved. Instead of ‘Are we killing the Golden Goose?’ people might be asking ‘Are we getting a fair return on our natural resource assets?’
And even if, as many posters believe, the answer is ‘no’, well the public may be more receptive to some return than previously.
@148 – Don, I think it’s important to remember that public opinion on this issue was pretty close to evenly split, which is interesting given that the case for the tax was poorly argued, and it was in the face of a very noisy and almost ubiquitous negative campaign.
@148 – Don, I think it’s important to remember that public opinion on this issue was pretty close to evenly split, which is interesting given that the case for the tax was poorly argued, and it was in the face of a very noisy and almost ubiquitous negative campaign.
@149, not only was public opinion very split, but many people adopted a most unexpected position. Often members of a demographic that could be expected to be in lockstep on all issues (with the occassional closet dissenter) were to the surprise of all, holding diametrically opposing views, to the point they could be called a “chessboard” of opinions. (ie, move among the group at a gathering & every second person it seems has opinion A, whilst just as many has opinion Z.)
@149, not only was public opinion very split, but many people adopted a most unexpected position. Often members of a demographic that could be expected to be in lockstep on all issues (with the occassional closet dissenter) were to the surprise of all, holding diametrically opposing views, to the point they could be called a “chessboard” of opinions. (ie, move among the group at a gathering & every second person it seems has opinion A, whilst just as many has opinion Z.)
@150 – That’s interesting, Steve.
If true more broadly, I think it’s indicative of the fact that partisan alignments have less influence on policy positions than they once had.
@150 – That’s interesting, Steve.
If true more broadly, I think it’s indicative of the fact that partisan alignments have less influence on policy positions than they once had.
From The Drum
From The Drum
Is there any truth in the rumour that the Greens will block the MRRT in the Senate?
Is there any truth in the rumour that the Greens will block the MRRT in the Senate?
Fran 152, internet polls are meaningless, and reflect (at best) the prejudices of the kind of readers who flock to a particular site. You might as well put weight on a poll at a News Ltd which asks whether the government is too soft on asylum seekers.
Jane 153, the tax won’t go before the Senate until after the election, which will be a referendum on the tax (to hear Abbott tell it). If the government wins, not even Bob Brown would have the gall to block it. (Christ, what am writing? Bob Brown would block his mother’s funeral if there was a grandstanding opportunity. Let me rephrase. Not even Tony Abbott would have the gall to block it.)
Fran 152, internet polls are meaningless, and reflect (at best) the prejudices of the kind of readers who flock to a particular site. You might as well put weight on a poll at a News Ltd which asks whether the government is too soft on asylum seekers.
Jane 153, the tax won’t go before the Senate until after the election, which will be a referendum on the tax (to hear Abbott tell it). If the government wins, not even Bob Brown would have the gall to block it. (Christ, what am writing? Bob Brown would block his mother’s funeral if there was a grandstanding opportunity. Let me rephrase. Not even Tony Abbott would have the gall to block it.)
@Sam,
I really hope you’re not suggesting that winning an election nullifies the role of the Senate as a House of Review. I certainly hope that the Greens put the MRRT under close examination and negotiate for improvements to the bill where they see them as necessary.
@Sam,
I really hope you’re not suggesting that winning an election nullifies the role of the Senate as a House of Review. I certainly hope that the Greens put the MRRT under close examination and negotiate for improvements to the bill where they see them as necessary.
Well the precise numbers probably don’t amount to much, but it certainly does show that this is at a minimum a common view, Sam@154.
A half truth. Bob Brown is not now, nor likely at any time in the foreseeable future, to be part of a governing party or coalition. Accordingly, grandstanding (put more politely, making the biggest splash he can over matters of principle) is exactly what he needs to do if he is to satisfy those of us who support The Greens. This allows our support to mean something clear and definable. If he didn’t do that, it would not be clear what support for The Greens really meant and we might as well not bother. In short, the 10-12% of people who support them would be utterly (as opposed to relatively) disenfranchised.
I do hope he tries to block it, but it’s hard to imagine that post defeat, Hockey or whoever it was who took over would do The Greens and the public this kind of favour.
Well the precise numbers probably don’t amount to much, but it certainly does show that this is at a minimum a common view, Sam@154.
A half truth. Bob Brown is not now, nor likely at any time in the foreseeable future, to be part of a governing party or coalition. Accordingly, grandstanding (put more politely, making the biggest splash he can over matters of principle) is exactly what he needs to do if he is to satisfy those of us who support The Greens. This allows our support to mean something clear and definable. If he didn’t do that, it would not be clear what support for The Greens really meant and we might as well not bother. In short, the 10-12% of people who support them would be utterly (as opposed to relatively) disenfranchised.
I do hope he tries to block it, but it’s hard to imagine that post defeat, Hockey or whoever it was who took over would do The Greens and the public this kind of favour.
@154 and 155 – the election will be about a lot more than the tax. Abbott will struggle to gain traction on it without a complementary Minerals Council campaign, and it’s pretty clear now that it can be sold to the public as a reasonable compromise which protects the national interest.
Whether or not he bleats about the “Great Big New Tax”, he’ll be bleating in the wilderness.
Let’s remember too that all we have is a Heads of Agreement with the detail still to be negotiated, and the legislation to be drafted.
The whole issue of mandates is vexed, but I doubt the government could claim that they have one to push this through in unchanged form. It would make no difference if they did anyway, since they won’t have a Senate majority.
It’s a very different sort of proposition from something like the repeal of WorkChoices, which was at the centre of the 07 campaign.
Bob Brown has denounced the negotiations as a “tour de force” by “mining barons” and I’m sure The Greens will be interested in amending the legislation. I’m also sure a Senate inquiry will be useful in testing the complexities of the thing.
@154 and 155 – the election will be about a lot more than the tax. Abbott will struggle to gain traction on it without a complementary Minerals Council campaign, and it’s pretty clear now that it can be sold to the public as a reasonable compromise which protects the national interest.
Whether or not he bleats about the “Great Big New Tax”, he’ll be bleating in the wilderness.
Let’s remember too that all we have is a Heads of Agreement with the detail still to be negotiated, and the legislation to be drafted.
The whole issue of mandates is vexed, but I doubt the government could claim that they have one to push this through in unchanged form. It would make no difference if they did anyway, since they won’t have a Senate majority.
It’s a very different sort of proposition from something like the repeal of WorkChoices, which was at the centre of the 07 campaign.
Bob Brown has denounced the negotiations as a “tour de force” by “mining barons” and I’m sure The Greens will be interested in amending the legislation. I’m also sure a Senate inquiry will be useful in testing the complexities of the thing.
JULIA GOT ROLLED BUT NO ONE CARES!
JULIA GOT ROLLED BUT NO ONE CARES!
Excuse me? If they go the election with the tax in this form, and the tax is a big part of the campaign, then they will have a mandate in spades.
Of course Brown will blah blah blah in his sepulchral way as he always does.
Excuse me? If they go the election with the tax in this form, and the tax is a big part of the campaign, then they will have a mandate in spades.
Of course Brown will blah blah blah in his sepulchral way as he always does.
Sam, give it a rest. You don’t have to prove you are a Labor party hack to anyone here. Your denigration of Bob Brown is rather pathetically asinine under the circumstances, particularly as he would be simply reflecting, as Kim pointed out, the wishes of those that voted for him.
While this is now clearly an alien concept to whoever it is that runs the ALP these days, ultimately it’s quite important to those who actually do the voting.
This will become particularly obvious in the NSW election, but quite possibly in the Federal election as well.
Sam, give it a rest. You don’t have to prove you are a Labor party hack to anyone here. Your denigration of Bob Brown is rather pathetically asinine under the circumstances, particularly as he would be simply reflecting, as Kim pointed out, the wishes of those that voted for him.
While this is now clearly an alien concept to whoever it is that runs the ALP these days, ultimately it’s quite important to those who actually do the voting.
This will become particularly obvious in the NSW election, but quite possibly in the Federal election as well.
Fran @52,
Of course this is a sign of corporate influence on government decision making. And that’s a good and normal thing.
There seems to be a pervasive naivity on this blog that all decisions should be made by government, and all the other pillars of a western liberal democracy should just blindly accept the ‘wisdom’ of whichever transient bunch was elected for the next three years.
There are many sources of wisdom, power and control in our society – the elected government, corporates, unions, courts, religious groups etc, etc….
The bewdy of our society is that no one group is so powerful that it can ride roughshod over the overs.
The RSPT is simply a great example of a situation where an elected government got a policy horribly wrong – and the checks/balances in our society ensured that the bad policy never saw the light of day.
People really need to stop their bleating that this is ugly corporate ‘thuggery’. Using perjorative terms such as ‘big dirt’ and ‘thugs’ really just reflects badly on the people using the terms and exposes their naivity on how our society operates.
Fran @52,
Of course this is a sign of corporate influence on government decision making. And that’s a good and normal thing.
There seems to be a pervasive naivity on this blog that all decisions should be made by government, and all the other pillars of a western liberal democracy should just blindly accept the ‘wisdom’ of whichever transient bunch was elected for the next three years.
There are many sources of wisdom, power and control in our society – the elected government, corporates, unions, courts, religious groups etc, etc….
The bewdy of our society is that no one group is so powerful that it can ride roughshod over the overs.
The RSPT is simply a great example of a situation where an elected government got a policy horribly wrong – and the checks/balances in our society ensured that the bad policy never saw the light of day.
People really need to stop their bleating that this is ugly corporate ‘thuggery’. Using perjorative terms such as ‘big dirt’ and ‘thugs’ really just reflects badly on the people using the terms and exposes their naivity on how our society operates.
Andrew provided irony as follows:
I guess it depends on whose barrow you are holding.
Nope … simple commentary on whom capitalist social arrangements serve.
Andrew provided irony as follows:
I guess it depends on whose barrow you are holding.
Nope … simple commentary on whom capitalist social arrangements serve.
That would be all 10% or so of the electorate who are Greens voters.
As for me being a Labor Party hack, you must be confusing me with someone else. IMO, the Australian Labor Party is a vile organisation run by horrible people. And that is on a good day. However, it does most of the time manage to get the vote, either directly or by preference, of about 50% of voters. Unlike some, I respect that.
That would be all 10% or so of the electorate who are Greens voters.
As for me being a Labor Party hack, you must be confusing me with someone else. IMO, the Australian Labor Party is a vile organisation run by horrible people. And that is on a good day. However, it does most of the time manage to get the vote, either directly or by preference, of about 50% of voters. Unlike some, I respect that.
Way up-thread, SaTP mentioned the small business and superannuation, and for the first time I find some agreement in what he says.
I feel a little bit skeptical about this deal and whether it is actually genuine, if I look at this purely from the perspective of a small business operator. When the increase in superannuation was announced, the reduction in company tax offset 2% of the 3% increase, so now it’s offset 1%, with the other 2% needing to be found by employers and for many employers that’s a big deal. For that to be occurring as a consequence of sweetening a deal with some very large, prosperous companies kind grates a bit. Especially so, when I work in environmental restoration and the miners are flat-out digging the country up.
I think its naive to think that the superannuation will be paid for out of a reduction in wages, but even if that were true, I think it’s unfair on the low-waged, and part-time workers, because there is zero taxation advantage in superannuation for that section of the community.
Way up-thread, SaTP mentioned the small business and superannuation, and for the first time I find some agreement in what he says.
I feel a little bit skeptical about this deal and whether it is actually genuine, if I look at this purely from the perspective of a small business operator. When the increase in superannuation was announced, the reduction in company tax offset 2% of the 3% increase, so now it’s offset 1%, with the other 2% needing to be found by employers and for many employers that’s a big deal. For that to be occurring as a consequence of sweetening a deal with some very large, prosperous companies kind grates a bit. Especially so, when I work in environmental restoration and the miners are flat-out digging the country up.
I think its naive to think that the superannuation will be paid for out of a reduction in wages, but even if that were true, I think it’s unfair on the low-waged, and part-time workers, because there is zero taxation advantage in superannuation for that section of the community.
Sam @ 163 the Greens might adopt a different approach if ‘all 10% or so of the electorate who are Greens voters’ translated into 10% or so of the seats in parliament.
Sam @ 163 the Greens might adopt a different approach if ‘all 10% or so of the electorate who are Greens voters’ translated into 10% or so of the seats in parliament.
For maybe the fifth or sixth time in my life I went and purchased a copy of the AFR, in order to get information that wasn’t filtered 100% through the press gallery (the Fin Review would only be about 25% in line with the rest of the elite media when it comes to spin. Gotta give them credit—they know the moneyed class wants data before they want spin).
The operative paragraph from my skimming:
And now the Coalition is very cleverly attacking not only the evil radicalism of the GBTOE, but also questioning the forecasts that declare this tax will reap 90% of the revenue that the original Henry plan envisaged.
C’mon Senator Brown, the progressive sheeple are just ripe for feeling & expressing some outrage comparable to the response the govt. got last year when the emissions target was announced.
Gin it up, man.
If you can use the material that’s been dumped in your lap I promise I’ll give you my first preference in the election.
For maybe the fifth or sixth time in my life I went and purchased a copy of the AFR, in order to get information that wasn’t filtered 100% through the press gallery (the Fin Review would only be about 25% in line with the rest of the elite media when it comes to spin. Gotta give them credit—they know the moneyed class wants data before they want spin).
The operative paragraph from my skimming:
And now the Coalition is very cleverly attacking not only the evil radicalism of the GBTOE, but also questioning the forecasts that declare this tax will reap 90% of the revenue that the original Henry plan envisaged.
C’mon Senator Brown, the progressive sheeple are just ripe for feeling & expressing some outrage comparable to the response the govt. got last year when the emissions target was announced.
Gin it up, man.
If you can use the material that’s been dumped in your lap I promise I’ll give you my first preference in the election.
St. Furious #164: This is the 3rd thread (on this site) in which I have raised that point. Despite the simplicity of the year 7 maths involved, you are the first fellow commenter who has shown any inkling of grasping the meaning.
You comment that 30%-29%=1%, and that 3%-1%=2%. If (payroll)=(taxable profit) you would be correct.
Let us look at a (typical) small business. Say a pub. Say it is run by “Steve”, or “Steve & Son” or “Steve Brothers”. The numbers I now use are for simplicity of the exercise, & not meant to be representative of tax thresholds or anything else.
This pub has a taxable profit of (say)
$100,000 which under the current tax regime is taxed at (just say, I plucked this figure out of the air)
$30,000 this leaves the Steve’s with
$70,000.
Under the MRRT changes the Steve’s will be taxed at
$30,000 (yes the tax doesn’t change, stay with me)
The Steve’s have a payroll of (say)
$200,000 +
$18,000 employer superannuation guarantee +
$10,900 payroll tax +
$4,000 workers compensation premium.
Total direct cost of employees:
$232,900
Under the MRRT changes the Steve’s payroll inputs are:
$200,000 (wages/salaries)
$24,000 super guarantee (increase of $6,000) +
$11,200 payroll tax +
$4,000 workers compensation
Total direct cost of employees:
$239,200 An increase of $6,300 for no relief in income tax.
The after tax income of
$70,000 is reduced to:
$63,700
In the event the Steve’s are a company they get some tax relief.
$100,000 which is currently taxed at
$30,000
Under the MRRT changes this tax drops to:
$29,000
So if this small business is a company, it will save on tax:
$1,000 to offset $6,300 in extra costs, a net loss of $5,300
Thus the after tax income of
$70,000 is reduced to
$64,700
I struggle to see how this is anything but a shafting for small businesses.
St. Furious #164: This is the 3rd thread (on this site) in which I have raised that point. Despite the simplicity of the year 7 maths involved, you are the first fellow commenter who has shown any inkling of grasping the meaning.
You comment that 30%-29%=1%, and that 3%-1%=2%. If (payroll)=(taxable profit) you would be correct.
Let us look at a (typical) small business. Say a pub. Say it is run by “Steve”, or “Steve & Son” or “Steve Brothers”. The numbers I now use are for simplicity of the exercise, & not meant to be representative of tax thresholds or anything else.
This pub has a taxable profit of (say)
$100,000 which under the current tax regime is taxed at (just say, I plucked this figure out of the air)
$30,000 this leaves the Steve’s with
$70,000.
Under the MRRT changes the Steve’s will be taxed at
$30,000 (yes the tax doesn’t change, stay with me)
The Steve’s have a payroll of (say)
$200,000 +
$18,000 employer superannuation guarantee +
$10,900 payroll tax +
$4,000 workers compensation premium.
Total direct cost of employees:
$232,900
Under the MRRT changes the Steve’s payroll inputs are:
$200,000 (wages/salaries)
$24,000 super guarantee (increase of $6,000) +
$11,200 payroll tax +
$4,000 workers compensation
Total direct cost of employees:
$239,200 An increase of $6,300 for no relief in income tax.
The after tax income of
$70,000 is reduced to:
$63,700
In the event the Steve’s are a company they get some tax relief.
$100,000 which is currently taxed at
$30,000
Under the MRRT changes this tax drops to:
$29,000
So if this small business is a company, it will save on tax:
$1,000 to offset $6,300 in extra costs, a net loss of $5,300
Thus the after tax income of
$70,000 is reduced to
$64,700
I struggle to see how this is anything but a shafting for small businesses.
Andrew said
Yes, that was the song I heard being sung by those on the dole, the night Rudd announced his first stimulus package would be a cash transfer to Australia’s most vulnerable and poor.
Andrew said
Yes, that was the song I heard being sung by those on the dole, the night Rudd announced his first stimulus package would be a cash transfer to Australia’s most vulnerable and poor.
Nickws @ 166, I haven’t got out yet to get the weekend AFR yet, which I don’t have delivered any more since an old coot down the road decided to pinch them on his morning walk. 45% would be the absolute minimum for very profitable mines, and probably not reached in the real world.
I heard Abbott’s 90% schtick. It’s totally dishonest, of course, as he would know, and if he doesn’t know he shouldn’t be running for the PM’s job. If the ABC had half a brain they’d call him on it instead of amplifying lies.
Headline should be “Alternative PM can’t do simple maths!”
10.5 of 12 is 87.5% but this is a net figure. The revenue collected, which Abbott is querying at the 90% level, would be a lesser proportion than that but the new tax sheds some of the outgoings of the old.
Nickws @ 166, I haven’t got out yet to get the weekend AFR yet, which I don’t have delivered any more since an old coot down the road decided to pinch them on his morning walk. 45% would be the absolute minimum for very profitable mines, and probably not reached in the real world.
I heard Abbott’s 90% schtick. It’s totally dishonest, of course, as he would know, and if he doesn’t know he shouldn’t be running for the PM’s job. If the ABC had half a brain they’d call him on it instead of amplifying lies.
Headline should be “Alternative PM can’t do simple maths!”
10.5 of 12 is 87.5% but this is a net figure. The revenue collected, which Abbott is querying at the 90% level, would be a lesser proportion than that but the new tax sheds some of the outgoings of the old.
“… simple commentary on whom capitalist social arrangements serve.”
Thanks to “capitalism” the working class lives longer and healthier and has opportunities that were hitherto unimaginable. That’s why nearly all of us gratefully acquiesce
Capitalism is also a prerequisite for social democracy.
“… simple commentary on whom capitalist social arrangements serve.”
Thanks to “capitalism” the working class lives longer and healthier and has opportunities that were hitherto unimaginable. That’s why nearly all of us gratefully acquiesce
Capitalism is also a prerequisite for social democracy.
Eight words; one of which so efficiently condenses the entire eight. Care to add some weight to the following seven?
Eight words; one of which so efficiently condenses the entire eight. Care to add some weight to the following seven?
“(the Fin Review would only be about 25% in line with the rest of the elite media when it comes to spin. Gotta give them credit—they know the moneyed class wants data before they want spin).” Nickws @166
Spot on, Nickws. Good to know it hasn’t changed much (albeit, I guessed as much from some of Brian’s refs, and from other posters confidence in Laura Tingle).
Back in the 70s when I was in tourist industry management, one perk was not only to fly cheaply but occasionally to travel first class. I’d often be seated next to executives who would complain about flight service matters such as no ice for their scotch. On one trip this industry captain was reading the AFR and fuming at what he was reading (the political section).
When I queried him about it, the reason was the journos left-liberal (or “pinko”) stance on things.[The style was a bit like the reporting in "AM" and "PM" or the then TV This Day Tonight.] I think Mungo was at AFR for a while after Nation Review folded.
I laughed and asked, “Well, if it upsets you so much, why read the AFR, or more specifically why read the political reporting?”
He sighed and said, “I must have reliable information.”
“(the Fin Review would only be about 25% in line with the rest of the elite media when it comes to spin. Gotta give them credit—they know the moneyed class wants data before they want spin).” Nickws @166
Spot on, Nickws. Good to know it hasn’t changed much (albeit, I guessed as much from some of Brian’s refs, and from other posters confidence in Laura Tingle).
Back in the 70s when I was in tourist industry management, one perk was not only to fly cheaply but occasionally to travel first class. I’d often be seated next to executives who would complain about flight service matters such as no ice for their scotch. On one trip this industry captain was reading the AFR and fuming at what he was reading (the political section).
When I queried him about it, the reason was the journos left-liberal (or “pinko”) stance on things.[The style was a bit like the reporting in "AM" and "PM" or the then TV This Day Tonight.] I think Mungo was at AFR for a while after Nation Review folded.
I laughed and asked, “Well, if it upsets you so much, why read the AFR, or more specifically why read the political reporting?”
He sighed and said, “I must have reliable information.”
Steve, you are right that in static terms the reduction in company tax does not offset the increase in super for most businesses. But if you think dynamically instead, the main impact of the increase in super will be to reduce nominal wages by a similar amount. That can’t and won’t happen overnight, but in the medium term the total cost of employing labour won’t change much, just the distribution of the costs between wages and super. This is basic economics. So, incorporated small businesses get a small company tax cut. They then face a higher super costs, which is an effective tax on businesses. In net terms they pay out more in the short-term, but overtime grant smaller nominal wage increases to employees as the latter are forced, in a competitive labour market to accept the tradeoff between super and wages.
Employees receiving the extra super aren’t really better off, except to the extent you think it is a good idea to force employees to defer more of their income until retirement. Even then, the net increase in savings isn’t equal to the increase in super because many people will reduce their other savings (or accumulate them more slowly) to offset the additional forced saving through super. The RBA published a paper a few years back explaining why this happens. For poorer households it is questionable whether forcing them to tradeoff current for future income makes sense, though if you think they tend to under-save during their working life, then you might be able to justify it.
On Abbott, he is trying to make the best of a situation that has turned bad for him. When they decided to oppose the tax outright, rather than seek amendments, there was always a risk the mining sector, or most of it, would cut a deal with the government. It is pretty hard now for him to turn around and support the tax without making his previous stance look stupid. So, he is left to try and undermine the tax through other means. He took a big risk when he called the government’s bluff on the ETS and that sort of worked for him. But this looks like being one risk too many.
Steve, you are right that in static terms the reduction in company tax does not offset the increase in super for most businesses. But if you think dynamically instead, the main impact of the increase in super will be to reduce nominal wages by a similar amount. That can’t and won’t happen overnight, but in the medium term the total cost of employing labour won’t change much, just the distribution of the costs between wages and super. This is basic economics. So, incorporated small businesses get a small company tax cut. They then face a higher super costs, which is an effective tax on businesses. In net terms they pay out more in the short-term, but overtime grant smaller nominal wage increases to employees as the latter are forced, in a competitive labour market to accept the tradeoff between super and wages.
Employees receiving the extra super aren’t really better off, except to the extent you think it is a good idea to force employees to defer more of their income until retirement. Even then, the net increase in savings isn’t equal to the increase in super because many people will reduce their other savings (or accumulate them more slowly) to offset the additional forced saving through super. The RBA published a paper a few years back explaining why this happens. For poorer households it is questionable whether forcing them to tradeoff current for future income makes sense, though if you think they tend to under-save during their working life, then you might be able to justify it.
On Abbott, he is trying to make the best of a situation that has turned bad for him. When they decided to oppose the tax outright, rather than seek amendments, there was always a risk the mining sector, or most of it, would cut a deal with the government. It is pretty hard now for him to turn around and support the tax without making his previous stance look stupid. So, he is left to try and undermine the tax through other means. He took a big risk when he called the government’s bluff on the ETS and that sort of worked for him. But this looks like being one risk too many.
Salient reckoned:
Shorter: four legs good!; two legs better!
Salient reckoned:
Shorter: four legs good!; two legs better!
“It is better to light a candle than curse the darkness. ” – Eleanor Roosevelt
“It is better to light a candle than curse the darkness. ” – Eleanor Roosevelt
Oh I’m all for lighting metaphoric candles, Salient. It is even better if the candle looks like a light on the hill.
Oh I’m all for lighting metaphoric candles, Salient. It is even better if the candle looks like a light on the hill.
Fran @ 152, when you ask a loaded question like
It’s remarkable if you get as much as a 20% “no” vote. Any influence, however slight must register in the positive.
By contrast, Abbott thinks the miners were bludgeoned into accepting Labor’s new minerals rent tax.
IMO Andrew’s point @ 161 stands:
Of course corporate views should be taken into account. When Gillard said she would “open the door” to negotiations if they would “open their minds” it implied that she would also open hers. To ‘negotiate’ with a closed mind is not negotiation.
Kim @ 157, That’s a very sane comment. I want to pick up on this part:
It happens, for example, that As Martin Ferguson explains:
People should be careful about making summative judgements when there is so much they don’t know. And statements like this one, KeiThy, illustrate what I meant earlier when I said some comments were more typical of Tim Blair’s place.
BTW in the link above Ferguson’s views on the demise of Rudd are more than interesting.
Fran @ 152, when you ask a loaded question like
It’s remarkable if you get as much as a 20% “no” vote. Any influence, however slight must register in the positive.
By contrast, Abbott thinks the miners were bludgeoned into accepting Labor’s new minerals rent tax.
IMO Andrew’s point @ 161 stands:
Of course corporate views should be taken into account. When Gillard said she would “open the door” to negotiations if they would “open their minds” it implied that she would also open hers. To ‘negotiate’ with a closed mind is not negotiation.
Kim @ 157, That’s a very sane comment. I want to pick up on this part:
It happens, for example, that As Martin Ferguson explains:
People should be careful about making summative judgements when there is so much they don’t know. And statements like this one, KeiThy, illustrate what I meant earlier when I said some comments were more typical of Tim Blair’s place.
BTW in the link above Ferguson’s views on the demise of Rudd are more than interesting.
LO @ 173, Derrida derider, an economist I do believe, has on occasion waxed eloquent about the true nature of super, and why it isn’t the unmitigated blessing most of us take it for, as I’m sure you are aware.
I tend to think that some form of compulsory savings is the only way we’ll get decently funded retirement incomes. In toto the super represents a very large pool of investment funds and saves the government in future taxes, surely. Also the pensions derived from super create demand in the economy.
So I always struggle to get into DD’s mindset.
I don’t have reliable details on the plan to introduce the extra 3%, but I think I heard that the first half a percent was not due until 2015. Neil Warren said that it would come in over 10 years, so 6 times 0.5% seems a minor variation in annual wage adjustments.
I struggle to see how it can be styled as paid for by the MRRT.
LO @ 173, Derrida derider, an economist I do believe, has on occasion waxed eloquent about the true nature of super, and why it isn’t the unmitigated blessing most of us take it for, as I’m sure you are aware.
I tend to think that some form of compulsory savings is the only way we’ll get decently funded retirement incomes. In toto the super represents a very large pool of investment funds and saves the government in future taxes, surely. Also the pensions derived from super create demand in the economy.
So I always struggle to get into DD’s mindset.
I don’t have reliable details on the plan to introduce the extra 3%, but I think I heard that the first half a percent was not due until 2015. Neil Warren said that it would come in over 10 years, so 6 times 0.5% seems a minor variation in annual wage adjustments.
I struggle to see how it can be styled as paid for by the MRRT.
Moreover, Brian, ALP Governments can use the old salami tactic and increase the tax by modest increments at later dates without the likelihood of a similar kerfuffle.
Gillard has shown us a beautiful set of numbers.
Moreover, Brian, ALP Governments can use the old salami tactic and increase the tax by modest increments at later dates without the likelihood of a similar kerfuffle.
Gillard has shown us a beautiful set of numbers.
Yes, salient, and it will likely be extended to gold, copper, uranium, bauxite and other minerals over time.
Yes, salient, and it will likely be extended to gold, copper, uranium, bauxite and other minerals over time.
Fran @162
“I guess it depends on whose barrow you are holding”
Exactly Fran…. by definition a compromise means that both sides give concessions – so both feel slightly screwed!
Personally – I think this has been a wonderful outcome. All the boxes have been ticked.
We’ve avoided the introduction of the RSPT (the worst tax policy I’ve ever seen)
We’ve introduced a true super-profits tax on iron ore and coal – BHP and RIO will pay more tax whilst iron ore and coal prices are at bubble levels, but Australian taxpayers won’t foot the bill when prices collapse (and one day the will)
We’ve got rid of one of the worst PMs in Australia’s history – the king of politics over policy. Mr 2020 Summit.
We’ve probably avoided having Abbott as the next PM
We’ve got Australia’s first female PM
Hooray for Australia I say. The checks and balances in our society generally result in the right outcomes!
Fran @162
“I guess it depends on whose barrow you are holding”
Exactly Fran…. by definition a compromise means that both sides give concessions – so both feel slightly screwed!
Personally – I think this has been a wonderful outcome. All the boxes have been ticked.
We’ve avoided the introduction of the RSPT (the worst tax policy I’ve ever seen)
We’ve introduced a true super-profits tax on iron ore and coal – BHP and RIO will pay more tax whilst iron ore and coal prices are at bubble levels, but Australian taxpayers won’t foot the bill when prices collapse (and one day the will)
We’ve got rid of one of the worst PMs in Australia’s history – the king of politics over policy. Mr 2020 Summit.
We’ve probably avoided having Abbott as the next PM
We’ve got Australia’s first female PM
Hooray for Australia I say. The checks and balances in our society generally result in the right outcomes!
Brian Said:
I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government. And while I see no problem taking “corporate views into account” they ought not be decisive as they were here.
We now have a dreadful outcome which in practice will blight public policy for probably a decade in practice, regardless of who is in office.
Brian Said:
I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government. And while I see no problem taking “corporate views into account” they ought not be decisive as they were here.
We now have a dreadful outcome which in practice will blight public policy for probably a decade in practice, regardless of who is in office.
Fran,
“I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government.”
I could lay the same ‘irony’ comment that you put to me!
The great thing about our society is that the government is not the be-all and end-all. When the government gets it wrong – teh checks/balances force compromise. That wouldn’t happen in many other countries!
You’re just cross because you don’t like the corporate sector. But imagine if the boot was on the other foot – imagine if a Coalition gov’t tried to introduce a really bad policy but it was defeated by one of the other checks/balnces – ay the courts or unions. You’d be cheering – not decrying the lack of absolute govenment control.
Just celebrate the fact that Australia has got the system just about right!
Fran,
“I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government.”
I could lay the same ‘irony’ comment that you put to me!
The great thing about our society is that the government is not the be-all and end-all. When the government gets it wrong – teh checks/balances force compromise. That wouldn’t happen in many other countries!
You’re just cross because you don’t like the corporate sector. But imagine if the boot was on the other foot – imagine if a Coalition gov’t tried to introduce a really bad policy but it was defeated by one of the other checks/balnces – ay the courts or unions. You’d be cheering – not decrying the lack of absolute govenment control.
Just celebrate the fact that Australia has got the system just about right!
Candles for Fran
Little sisters of the sun
Lit candles in the rain
Fed the world on oats and raisins
Candles in the rain
Lit the fire to the soul who never knew it’s friend
Meher Baba lives again
Candles in the rain
To be there was to remember
So lay it down again
Oh, lay it down
lay it down, lay it down again
Men can live as brothers
Candles in the rain
lay down lay down, let it all down
let your white birds smile up at the
ones who stand and frown
lay down lay down, let it all down
let your white birds smile up at the
ones who stand and frown*
we were so close, there was no room
we bled inside each others wounds
we all had caught the same disease
and we all sang the songs of peace
so raise the candles high cause if you
don’t we could stay black against the night
oh raise them higher again and if you
do we could stay dry against the rain
we were so close there was no room
we bled inside each others wounds
we all had caught the same disease
and we all sang the songs of peace
some came to sing, some came to pray
some came to keep the dark away
so raise the candles high
cause if you don’t we could stay
black against the sky
oh oh raise them higher again
and if you do we could stay dry against the rain
Candles for Fran
Little sisters of the sun
Lit candles in the rain
Fed the world on oats and raisins
Candles in the rain
Lit the fire to the soul who never knew it’s friend
Meher Baba lives again
Candles in the rain
To be there was to remember
So lay it down again
Oh, lay it down
lay it down, lay it down again
Men can live as brothers
Candles in the rain
lay down lay down, let it all down
let your white birds smile up at the
ones who stand and frown
lay down lay down, let it all down
let your white birds smile up at the
ones who stand and frown*
we were so close, there was no room
we bled inside each others wounds
we all had caught the same disease
and we all sang the songs of peace
so raise the candles high cause if you
don’t we could stay black against the night
oh raise them higher again and if you
do we could stay dry against the rain
we were so close there was no room
we bled inside each others wounds
we all had caught the same disease
and we all sang the songs of peace
some came to sing, some came to pray
some came to keep the dark away
so raise the candles high
cause if you don’t we could stay
black against the sky
oh oh raise them higher again
and if you do we could stay dry against the rain
Fran says:
“I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government.”
I’ll chip in for your ticket to North Korea if you decide to immigrate.
Fran says:
“I suppose I saw no need for “negotiation”. They are, or at least were in theory, the government.”
I’ll chip in for your ticket to North Korea if you decide to immigrate.
Fran, Mitch Hooke says the companies opened their books so that the Govt could see how it all worked out in practice. That’s genuine consultation. Better to get it right than think you know everything. We mightn’t like it but the capitalists have a legitimate role in our society, until the revolution comes!
Fran, Mitch Hooke says the companies opened their books so that the Govt could see how it all worked out in practice. That’s genuine consultation. Better to get it right than think you know everything. We mightn’t like it but the capitalists have a legitimate role in our society, until the revolution comes!
Some overdue links.
The World Today on Friday devoted the whole program to the issue.
Prime Minister announces new mining tax
Apart from quotes from Gillard and Swan most of it is from chief political correspondent Lyndal Curtis, who, after the bit about “Well it’s a pretty big back down” does give, I think, a balanced account.
Resources Minister says the Opposition is obstructing reform
Marn in fine form. Not such a rugged debate really, he says, compared with some others he can remember. All in a day’s work, really.
Not the tax reform Henry had in mind
Economics correspondent Stephen Long sees the tax as falling short of what Henry envisaged, which could have provided a corporate tax rate of 25%. It’s a big win for the Government but doesn’t tick the boxes for a tax *reform* which should have efficiency, simplicity and equity.
Mitch Hooke has his say. It’s worth a read. he says there is a way to go, but things are in a better space. This is worth noting:
Tax changes up for debate
Stephen Long talks to Neil Warren from the Australian School of Taxation at the University of New South Wales and the national president of the CFMEU which covers the mining industry, Tony Maher.
Mining shares rally on mining tax back-flip
Note the term “back-flip” in the title.
Business editor Peter Ryan talks to CommSec economist Savanth Sebastian.
Really there is more going on in the world than just this, especially for multinationals.
WA Premier still unhappy with mining tax
They’ve forgotten who owns the resources and that’s the people of Western Australia.
Compromise integral to tax reform: Ridout
Heather Ridout, chief executive of the Australian Industry Group, is “deeply disappointed”. I noticed that this morphed in “bitterly disappointed” in other ABC news reports. She was on the Henry review and it didn’t go nearly far enough. There is a compelling case for a lower corporate tax rate in these straightened times, she says.
Queensland welcomes coal seam gas changes
It’s full steam ahead for the CSG industry in Qld. Farmers beware.
Mining industry wins the advertising war
1300 ads from the Mining Council against 450 from the Government. One guru reckoned they both bored us to death, but by and large the mining industry seems to have won, or rather the government lost.
Pollster says majority of Australians want a mining tax
Well, how about that?! Only 14% did not want the tax to proceed in any form.
Abbott declares war on the mining tax
As he would.
In sum, I thought our ABC did a pretty good job with a few hours to work in.
Some overdue links.
The World Today on Friday devoted the whole program to the issue.
Prime Minister announces new mining tax
Apart from quotes from Gillard and Swan most of it is from chief political correspondent Lyndal Curtis, who, after the bit about “Well it’s a pretty big back down” does give, I think, a balanced account.
Resources Minister says the Opposition is obstructing reform
Marn in fine form. Not such a rugged debate really, he says, compared with some others he can remember. All in a day’s work, really.
Not the tax reform Henry had in mind
Economics correspondent Stephen Long sees the tax as falling short of what Henry envisaged, which could have provided a corporate tax rate of 25%. It’s a big win for the Government but doesn’t tick the boxes for a tax *reform* which should have efficiency, simplicity and equity.
Mitch Hooke has his say. It’s worth a read. he says there is a way to go, but things are in a better space. This is worth noting:
Tax changes up for debate
Stephen Long talks to Neil Warren from the Australian School of Taxation at the University of New South Wales and the national president of the CFMEU which covers the mining industry, Tony Maher.
Mining shares rally on mining tax back-flip
Note the term “back-flip” in the title.
Business editor Peter Ryan talks to CommSec economist Savanth Sebastian.
Really there is more going on in the world than just this, especially for multinationals.
WA Premier still unhappy with mining tax
They’ve forgotten who owns the resources and that’s the people of Western Australia.
Compromise integral to tax reform: Ridout
Heather Ridout, chief executive of the Australian Industry Group, is “deeply disappointed”. I noticed that this morphed in “bitterly disappointed” in other ABC news reports. She was on the Henry review and it didn’t go nearly far enough. There is a compelling case for a lower corporate tax rate in these straightened times, she says.
Queensland welcomes coal seam gas changes
It’s full steam ahead for the CSG industry in Qld. Farmers beware.
Mining industry wins the advertising war
1300 ads from the Mining Council against 450 from the Government. One guru reckoned they both bored us to death, but by and large the mining industry seems to have won, or rather the government lost.
Pollster says majority of Australians want a mining tax
Well, how about that?! Only 14% did not want the tax to proceed in any form.
Abbott declares war on the mining tax
As he would.
In sum, I thought our ABC did a pretty good job with a few hours to work in.
Thanks Brian – good links.
And well done on covering this issue – you’ve presented a well balanced view.
Thanks Brian – good links.
And well done on covering this issue – you’ve presented a well balanced view.
Thanks, Andrew. Appreciated
Thanks, Andrew. Appreciated
Not just well balanced, Brian, but very helpful for guiding people like me to some understanding of what has transpired over the past few weeks. The problem of the complexity of the SPRT (astonishing that it could be described as ‘elegant in design’ when simplicity is usually implicit in elegance!) was compounded by the stridency of the Opposition’s political distortions and the rather more understandable interest weighted arguments of the mining lobby.
Surely it wasn’t entirely Rudd’s fault that it all looked so complicated and had reached such an impasse that it took our Julia to cut the Gordian knot? Seriously though, if Martin Ferguson had been front man on this from the word go I think we could all have followed it. I was very impressed with him this morning, particularly his even- handedness on the spill.
PS checking that I had ‘Gordian knot’ spelling and context right I also checked your use of ‘straightened’ which my pedantic nit picker thought should be ‘straitened’. Well, it may have been half a century ago. Now, either is acceptable, and your use is now more common. Dammit and I was hoping to have one over you on spelling even if I can’t cope too well with tax reform.
Not just well balanced, Brian, but very helpful for guiding people like me to some understanding of what has transpired over the past few weeks. The problem of the complexity of the SPRT (astonishing that it could be described as ‘elegant in design’ when simplicity is usually implicit in elegance!) was compounded by the stridency of the Opposition’s political distortions and the rather more understandable interest weighted arguments of the mining lobby.
Surely it wasn’t entirely Rudd’s fault that it all looked so complicated and had reached such an impasse that it took our Julia to cut the Gordian knot? Seriously though, if Martin Ferguson had been front man on this from the word go I think we could all have followed it. I was very impressed with him this morning, particularly his even- handedness on the spill.
PS checking that I had ‘Gordian knot’ spelling and context right I also checked your use of ‘straightened’ which my pedantic nit picker thought should be ‘straitened’. Well, it may have been half a century ago. Now, either is acceptable, and your use is now more common. Dammit and I was hoping to have one over you on spelling even if I can’t cope too well with tax reform.
Patricia WA, my spelling peaked in Gr 6 and has been going downhill ever since!
John D has consistently called for simplicity, and I think he’s right.
One commenter recently said that Ferguson has come through with his reputation enhanced. That’s probably right.
I’ve been on a journey trying to understand this tax myself. One of the costs is that I’ve had to neglect other threads. So I don’t know whether anyone has linked to this long article from 10 journalists at the Oz. There’s some half decent journalists amongst them and no Shanahan. If what they say is even half right Rudd’s adventure as PM was always going to end in tears. It’s a wonder he lasted as long as he did.
It would seem he needs some counselling, but self awareness that there is a problem would be an essential prerequisite. Having his political head lopped might just do it.
I should put up a separate thread about it but I don’t have the time to stay with it this week.
Patricia WA, my spelling peaked in Gr 6 and has been going downhill ever since!
John D has consistently called for simplicity, and I think he’s right.
One commenter recently said that Ferguson has come through with his reputation enhanced. That’s probably right.
I’ve been on a journey trying to understand this tax myself. One of the costs is that I’ve had to neglect other threads. So I don’t know whether anyone has linked to this long article from 10 journalists at the Oz. There’s some half decent journalists amongst them and no Shanahan. If what they say is even half right Rudd’s adventure as PM was always going to end in tears. It’s a wonder he lasted as long as he did.
It would seem he needs some counselling, but self awareness that there is a problem would be an essential prerequisite. Having his political head lopped might just do it.
I should put up a separate thread about it but I don’t have the time to stay with it this week.
Salient tried another iteration of the 1970s why don’t you go live in Russia jibe when saying:
There surely can’t be many people less enamoured of arranagements in North Korea than I am. That said, one thing that may be said of this brutal, oppressive, dynastic, xenophobic, autarky is that public policy is determined by North Koreans, rather than rich South Africans and Americans.
Salient tried another iteration of the 1970s why don’t you go live in Russia jibe when saying:
There surely can’t be many people less enamoured of arranagements in North Korea than I am. That said, one thing that may be said of this brutal, oppressive, dynastic, xenophobic, autarky is that public policy is determined by North Koreans, rather than rich South Africans and Americans.
By one North Korean, Fran. The Dear
LarderLeader and maybe a few of his acolytes.Not by North Koreans (plural) as in a democracy -say like South Korea.
Still if that state of affairs gives you pleasure, well I’m not surprised.
By one North Korean, Fran. The Dear
LarderLeader and maybe a few of his acolytes.Not by North Koreans (plural) as in a democracy -say like South Korea.
Still if that state of affairs gives you pleasure, well I’m not surprised.
The word “determined” is just plain wrong, Fran.
The word “determined” is just plain wrong, Fran.
GregM added that public policy in North Korea was determined:
Well it’s probably more by the army faction that backs him over all potential rivals — what is called “the party centre”.
The fact is though that they are all North Koreans. Most people in most countries doi harbour the quaint notion that the affairs of state should be determnined by citizens of their own state. Indeed, in America, you have to be a natural born American to be President. The anti-communist Voorhis Act specifically makes it illegal to have a political organisation run in part by those outside the territory, thiough of course this doesn’t reatrain businesses outside the territory helping to shape their governance.
One may think local sovereignty a good thing or not, but most favour it.
In a world in which inclusive governance was nearly ubiquitous, I’d be very happy for people from Switzerland, South Africa, Sweden and Surinam to have a say in arrangements here. At the moment though, that is clearly not the case, and the fact that a handful of mining thugs can trade in political outcomes here strikes me as being a long way from the kind of governance I’d like to see.
GregM added that public policy in North Korea was determined:
Well it’s probably more by the army faction that backs him over all potential rivals — what is called “the party centre”.
The fact is though that they are all North Koreans. Most people in most countries doi harbour the quaint notion that the affairs of state should be determnined by citizens of their own state. Indeed, in America, you have to be a natural born American to be President. The anti-communist Voorhis Act specifically makes it illegal to have a political organisation run in part by those outside the territory, thiough of course this doesn’t reatrain businesses outside the territory helping to shape their governance.
One may think local sovereignty a good thing or not, but most favour it.
In a world in which inclusive governance was nearly ubiquitous, I’d be very happy for people from Switzerland, South Africa, Sweden and Surinam to have a say in arrangements here. At the moment though, that is clearly not the case, and the fact that a handful of mining thugs can trade in political outcomes here strikes me as being a long way from the kind of governance I’d like to see.
So who determines policy in North Korea, Brian?
So who determines policy in North Korea, Brian?
Yes Fran. We call this democracy. Not rule by a single person, which is called dictatorship – and a particularly vile form of it exists it in North Korea, which seems, despite your protestations, to find your approbation.
To spell it out for you- the affairs of the North Korean state are not determined by the citizens of that state, if indeed, in their degraded condition they can be called citizens at all, but by a dictator and his cabal.
Yet this wins your approval.
The world has moved on from the Treaty of Westphalia of 1648 and the Divine Right of Kings, Fran.
There was a thing called popular sovereignty invented in the 18th century. It seems to work rather well.
That is the way the world is moving. Do try to catch up with it.
Yes Fran. We call this democracy. Not rule by a single person, which is called dictatorship – and a particularly vile form of it exists it in North Korea, which seems, despite your protestations, to find your approbation.
To spell it out for you- the affairs of the North Korean state are not determined by the citizens of that state, if indeed, in their degraded condition they can be called citizens at all, but by a dictator and his cabal.
Yet this wins your approval.
The world has moved on from the Treaty of Westphalia of 1648 and the Divine Right of Kings, Fran.
There was a thing called popular sovereignty invented in the 18th century. It seems to work rather well.
That is the way the world is moving. Do try to catch up with it.
Brian @ 191 the article in question illustrates everything that is wrong with contemporary journalism: a long series of anecdotes, 90% attributed to anonymous sources (why? surely all these alleged politicians and captains of industry can’t still be scared that Rudd will destroy them if they come out and say something publicly?), linked by some undergraduate-level interpertation intended to justify a pre-determined conclusion, namely, that News Ltd was totally correct to campaign for Rudd’s removal.
We saw similar ex post facto stories about Keating after the 1996 election. I place no credence on any of it.
Brian @ 191 the article in question illustrates everything that is wrong with contemporary journalism: a long series of anecdotes, 90% attributed to anonymous sources (why? surely all these alleged politicians and captains of industry can’t still be scared that Rudd will destroy them if they come out and say something publicly?), linked by some undergraduate-level interpertation intended to justify a pre-determined conclusion, namely, that News Ltd was totally correct to campaign for Rudd’s removal.
We saw similar ex post facto stories about Keating after the 1996 election. I place no credence on any of it.
GregM quoted me as follows:
then said:
I know your own paradigm makes things like this hard for you to get your head around, but give it a go anyway.
To be ruled by citizens of your own state does not entail democracy, even in the caricatured form we have it here. It requires no more than that executive power be exercised by one or more persons who are citizens of the jurisdiction in question. Democracy is a subset of local sovereignty in which the executive power derives from a mandate from the citizenry, rather than from merely being a citizen.
The Head of State in the UK is The Queen who, as we know, derives her title from inheritance. By coincidence, she happens to be British meaning that the state is ruled by a national within the UK. We recognise, as a matter of practice that her rule is merely an archaic formality and that the leader of the UK parliament holds the effective executive power, and he happens to be British too. The fact that he got there by means generally regarded as democratic is not essential to national sovereignty, though it adds to his popular legitimacy.
I reject your silly attempts to position me as some sort of endorser of North Korean governance. I welcome the fact that Australia has secured its first female PM. That doesn’t make me some kind of supporter of Julia Gillard or the form of governance that got her there.
GregM quoted me as follows:
then said:
I know your own paradigm makes things like this hard for you to get your head around, but give it a go anyway.
To be ruled by citizens of your own state does not entail democracy, even in the caricatured form we have it here. It requires no more than that executive power be exercised by one or more persons who are citizens of the jurisdiction in question. Democracy is a subset of local sovereignty in which the executive power derives from a mandate from the citizenry, rather than from merely being a citizen.
The Head of State in the UK is The Queen who, as we know, derives her title from inheritance. By coincidence, she happens to be British meaning that the state is ruled by a national within the UK. We recognise, as a matter of practice that her rule is merely an archaic formality and that the leader of the UK parliament holds the effective executive power, and he happens to be British too. The fact that he got there by means generally regarded as democratic is not essential to national sovereignty, though it adds to his popular legitimacy.
I reject your silly attempts to position me as some sort of endorser of North Korean governance. I welcome the fact that Australia has secured its first female PM. That doesn’t make me some kind of supporter of Julia Gillard or the form of governance that got her there.
Salient @170 states:
This comment is so historically uninformed it cannot go unchallenged. Salient may “gratefully acquiesce” but others don’t. In so far as we appear to acquiesce it is in the knowledge of what has happened in the past. Howard Zinn, for example, provides a magisterial summary of how the working classes of the USA were clubbed into submission as industrial capitalism forged the class alliances it needed to flourish in that country. Without reading at least Chapter 13 of A People’s History of the United Statesyou just don’t have anything like a complete understanding of the history of modernity, capitalism, industrialism or democracy. For an even broader understanding you need to look at E.P. Thompson’s The Making of the English Working Class which shows, conclusively, that the working classes as they came into being struggled valiantly to do anything but acquiesce. Their non-acquiescence (resistance, otherwise) is what gave rise to modern democracy and, importantly, the welfare state.
On that latter point you need to understand that the welfare state, which is one of the mechanisms allowing for what TH Marshall called “social citizenship” is part of what is referred to as the “historic compromise” that social demcoracy managed between capital and labour. The compromise meant that surplus was produced and shared in the name of common interests. This was not “acquiescence” for which workers ever ought to feel grateful. The welfare state was an alternative for the ruling classes to socialism and the nationalisation of the means of production. They saw the light.
Finally, Salient’s claim that capitalism is the pre-condition of democracy is so preposterous that one only need mention that this would be news to a classics scholar and the Athenians alike to dispense it. However, it needs grinding into nothingness because capitalism in fact is the enemy of democracy. John Keane’s The Life and Death of Democracy is replete with numerous examples of pre-modern, pre-capitalist forms of democracy. There are so many that it is clear that democracy is a flourishing form of human social organisation that takes an immense commitment of time, energy, money and power to corrupt and undermine. The only historical agents on the planet at the moment with that capacity are the global ruling classes.
So, Salient, hopefully this might alert you to the fact that there is significantly more to adopting a critical approach to politics than bush regeneration. It is assumed that critical green thinking knowes something about human history, for a start.
Salient @170 states:
This comment is so historically uninformed it cannot go unchallenged. Salient may “gratefully acquiesce” but others don’t. In so far as we appear to acquiesce it is in the knowledge of what has happened in the past. Howard Zinn, for example, provides a magisterial summary of how the working classes of the USA were clubbed into submission as industrial capitalism forged the class alliances it needed to flourish in that country. Without reading at least Chapter 13 of A People’s History of the United Statesyou just don’t have anything like a complete understanding of the history of modernity, capitalism, industrialism or democracy. For an even broader understanding you need to look at E.P. Thompson’s The Making of the English Working Class which shows, conclusively, that the working classes as they came into being struggled valiantly to do anything but acquiesce. Their non-acquiescence (resistance, otherwise) is what gave rise to modern democracy and, importantly, the welfare state.
On that latter point you need to understand that the welfare state, which is one of the mechanisms allowing for what TH Marshall called “social citizenship” is part of what is referred to as the “historic compromise” that social demcoracy managed between capital and labour. The compromise meant that surplus was produced and shared in the name of common interests. This was not “acquiescence” for which workers ever ought to feel grateful. The welfare state was an alternative for the ruling classes to socialism and the nationalisation of the means of production. They saw the light.
Finally, Salient’s claim that capitalism is the pre-condition of democracy is so preposterous that one only need mention that this would be news to a classics scholar and the Athenians alike to dispense it. However, it needs grinding into nothingness because capitalism in fact is the enemy of democracy. John Keane’s The Life and Death of Democracy is replete with numerous examples of pre-modern, pre-capitalist forms of democracy. There are so many that it is clear that democracy is a flourishing form of human social organisation that takes an immense commitment of time, energy, money and power to corrupt and undermine. The only historical agents on the planet at the moment with that capacity are the global ruling classes.
So, Salient, hopefully this might alert you to the fact that there is significantly more to adopting a critical approach to politics than bush regeneration. It is assumed that critical green thinking knowes something about human history, for a start.
Anthony said:
There is neither entirely accurate nor entirely spurious. Clearly, it very much turns on what counts as democracy. Athens had a kind of slaveholders’ democracy, if such an idea is not inherently paradoxical. Democracy, if it is not to be a sham, entails the capacity for something very much like the informed consent one insists upon in consensual sex acts. Absent that and the populace really is getting screwed without consent.
It’s in that sense that capitalism is the enemy of democracy, because, capitalism has also been an enabler of democracy. This is the perversity with which socialists have to work.
There can be little doubt that urban society, industrial development, the aggregation and specialisation of labour and the material surplus that resulted from these developments at the expense of hitherto existing forms of social organisation are the sine qua non of democracy. Therese in turn made it possible and indeed essential to develop mass education and what we sometimes call the knowledge economy. Those developments were co-extensive with capitalism almost everywhere they took place in the 19th and early 20th century.
To say therefore that capitalism is the enemy of democracy is thus wrong. Capitalism authors the kind of democracy which shrinks from inhibiting the security of its right to extract labour power as cheaply as possible. As in Athens, it’s a kind of slaveholder democracy, only in this case these are wage-slaves.
And as we note, it doesn’t make a fetish out of democratic forms either. We have seen often enough that given the choice between the forms of democracy and the security of its property forms, it is willing to privilege the latter over the former, to the extent necessary to preserve them.
Anthony said:
There is neither entirely accurate nor entirely spurious. Clearly, it very much turns on what counts as democracy. Athens had a kind of slaveholders’ democracy, if such an idea is not inherently paradoxical. Democracy, if it is not to be a sham, entails the capacity for something very much like the informed consent one insists upon in consensual sex acts. Absent that and the populace really is getting screwed without consent.
It’s in that sense that capitalism is the enemy of democracy, because, capitalism has also been an enabler of democracy. This is the perversity with which socialists have to work.
There can be little doubt that urban society, industrial development, the aggregation and specialisation of labour and the material surplus that resulted from these developments at the expense of hitherto existing forms of social organisation are the sine qua non of democracy. Therese in turn made it possible and indeed essential to develop mass education and what we sometimes call the knowledge economy. Those developments were co-extensive with capitalism almost everywhere they took place in the 19th and early 20th century.
To say therefore that capitalism is the enemy of democracy is thus wrong. Capitalism authors the kind of democracy which shrinks from inhibiting the security of its right to extract labour power as cheaply as possible. As in Athens, it’s a kind of slaveholder democracy, only in this case these are wage-slaves.
And as we note, it doesn’t make a fetish out of democratic forms either. We have seen often enough that given the choice between the forms of democracy and the security of its property forms, it is willing to privilege the latter over the former, to the extent necessary to preserve them.
I was talking short hand Fran which I ought not to do. I’ll be more specific: it is certain elements of the global ruling class who are the enemies of democracy especially those at the core of the US military industrial complex. Humanised capitalism can be a central component of a market economy within a democracy.
I was talking short hand Fran which I ought not to do. I’ll be more specific: it is certain elements of the global ruling class who are the enemies of democracy especially those at the core of the US military industrial complex. Humanised capitalism can be a central component of a market economy within a democracy.
Fran @ 196:
In the context of this thread it doesn’t matter.
You were saying that “rich South Africans and Americans” determined public policy.
I would accept influenced, but not determined.
Fran @ 196:
In the context of this thread it doesn’t matter.
You were saying that “rich South Africans and Americans” determined public policy.
I would accept influenced, but not determined.
So, the policy objectives of Henry Higgins, Ben Chifley, and conservative Billy Hughes vis-à-vis the government having power over the private sector?
Totalitarian.
We really are down the rabbit hole.
So, the policy objectives of Henry Higgins, Ben Chifley, and conservative Billy Hughes vis-à-vis the government having power over the private sector?
Totalitarian.
We really are down the rabbit hole.
Suppose you get a $20 return on a $100 investment.
30% (headline rate) of 75% (after allowance) the $8 above 12% returns is paid for MRRT, $1.80.
The remaining $18.20 is taxed at 29% (company rate), $5.28 for a total of $7.08 on $20 profit, or 35.4%.
According to the same treasurer who’ll be celebrating this new deal as a success, the effective rate under royalties and 30% company tax is 37.6% at a 20% return.
Effectively the miners have negotiated a 2.2% tax cut at 20%, and a tax cut right up until 20-something% returns, and it doesn’t take too much creative accounting to keep the reported and/or book figure down to this value if necessary…
These are the same calculations that Swan used in his table to get the right-most column for 40% RSPT above 6%, or at least I’ve stumbled upon a fantastic coincidence in that my method comes up with the same values to three significant figures. And even if I’ve got the allowance wrong, supposing the 30% rate already factors in 25% off 40%, we still end up, at 20%, with a lower effective rate (albeit only marginal, 37.5% compared to 37.6%) than we started.
I’d love for someone more knowledgeable to point out what I’m missing and show me that Gillard hasn’t sold out a fantastic piece of legislation for something absolutely abysmal in the name of a few cheap political points.
Suppose you get a $20 return on a $100 investment.
30% (headline rate) of 75% (after allowance) the $8 above 12% returns is paid for MRRT, $1.80.
The remaining $18.20 is taxed at 29% (company rate), $5.28 for a total of $7.08 on $20 profit, or 35.4%.
According to the same treasurer who’ll be celebrating this new deal as a success, the effective rate under royalties and 30% company tax is 37.6% at a 20% return.
Effectively the miners have negotiated a 2.2% tax cut at 20%, and a tax cut right up until 20-something% returns, and it doesn’t take too much creative accounting to keep the reported and/or book figure down to this value if necessary…
These are the same calculations that Swan used in his table to get the right-most column for 40% RSPT above 6%, or at least I’ve stumbled upon a fantastic coincidence in that my method comes up with the same values to three significant figures. And even if I’ve got the allowance wrong, supposing the 30% rate already factors in 25% off 40%, we still end up, at 20%, with a lower effective rate (albeit only marginal, 37.5% compared to 37.6%) than we started.
I’d love for someone more knowledgeable to point out what I’m missing and show me that Gillard hasn’t sold out a fantastic piece of legislation for something absolutely abysmal in the name of a few cheap political points.
I note that Ken Henry is now admitting that the new figures showing that the budget is only 1.5bn worse off is because the new figures are being calculated on higher commodity price assumptions….. apples with oranges
I note that Ken Henry is now admitting that the new figures showing that the budget is only 1.5bn worse off is because the new figures are being calculated on higher commodity price assumptions….. apples with oranges
Brian@203
The ALP dumped a PM in a winning position who was apparently unwilling to implement policies acceptable to those rich South Africans and Americans, in favour of someone who would do so, on a timeline acceptable to them.
Determined is the right word in these circumstances.
Brian@203
The ALP dumped a PM in a winning position who was apparently unwilling to implement policies acceptable to those rich South Africans and Americans, in favour of someone who would do so, on a timeline acceptable to them.
Determined is the right word in these circumstances.
Fran, only if you accept that the principle reason for dumping Rudd was his handling of the RSPT. I don’t think that stands up.
I’m about to put up a new post (give me half an hour) on the matters raised by John and Andrew @ 204-205. Won’t resolve the issue, but we could do with a new thread.
Fran, only if you accept that the principle reason for dumping Rudd was his handling of the RSPT. I don’t think that stands up.
I’m about to put up a new post (give me half an hour) on the matters raised by John and Andrew @ 204-205. Won’t resolve the issue, but we could do with a new thread.
Fran,
Give it a rest – describing BHP and RIO as South African and American thugs just sounds petulant and xenophobic.
As the two largest participants in Australia’s mining industry, BHP and RIO have right, indeed an obligation, to get involved in the formulation of policy that affects mining.
Rudd & Swan (with the help of Henry) originally got this horribly wrong. Now thanks to some sensible input from the corporate sector we’ve ended up with a workable super profits tax on mining.
BHP and RIO would have much preferred to have done all this negotiation across the table and in private, rather than through the media – but the Rudd government didn’t give them that option.
Thankfully it looks like the government has learnt it lesson.
Fran,
Give it a rest – describing BHP and RIO as South African and American thugs just sounds petulant and xenophobic.
As the two largest participants in Australia’s mining industry, BHP and RIO have right, indeed an obligation, to get involved in the formulation of policy that affects mining.
Rudd & Swan (with the help of Henry) originally got this horribly wrong. Now thanks to some sensible input from the corporate sector we’ve ended up with a workable super profits tax on mining.
BHP and RIO would have much preferred to have done all this negotiation across the table and in private, rather than through the media – but the Rudd government didn’t give them that option.
Thankfully it looks like the government has learnt it lesson.
From memory BHP Billiton and Rio are worth about 10% and 8% respectively of the market capitalisation on the ASX. Both have significant Australian shareholdings. There would hardly be a super account in the country that didn’t own shares in both.
To call them foreign companies is wrong.
The new thread is now up.
From memory BHP Billiton and Rio are worth about 10% and 8% respectively of the market capitalisation on the ASX. Both have significant Australian shareholdings. There would hardly be a super account in the country that didn’t own shares in both.
To call them foreign companies is wrong.
The new thread is now up.
John @205: “Suppose you get a $20 return on a $100 investment.”
Suppose that the hoped-for “second boom” doesn’t eventuate, and the commodity prices drift back down to historical levels?
Suppose that instead of a $20 return, you only get a $12 return on $100 investment? No MRRT. No money for the planned government infrastructure and super boost. Hopefully the mining companies still pay the royalties, and it is only a deduction off the MRRT, not off their company tax obligations?
Suppose that the commodity prices soften – a highly probable situation at this point, for those who don’t use rearview mirror forecasting. So far, the implicit assumption is that prices can only go up. Meanwhile, thanks to the generous arrangements proposed, the planned increased capacity will probably go ahead, and land on the market concurrent with a long-term slowdown from EU and US. With concommitant effect on commodity pricing…
At what return do the miners pay anything more than currently to the Australian people, via company taxes, state royalties &/or MRRT taxes? How likely is that, people?
John @205: “Suppose you get a $20 return on a $100 investment.”
Suppose that the hoped-for “second boom” doesn’t eventuate, and the commodity prices drift back down to historical levels?
Suppose that instead of a $20 return, you only get a $12 return on $100 investment? No MRRT. No money for the planned government infrastructure and super boost. Hopefully the mining companies still pay the royalties, and it is only a deduction off the MRRT, not off their company tax obligations?
Suppose that the commodity prices soften – a highly probable situation at this point, for those who don’t use rearview mirror forecasting. So far, the implicit assumption is that prices can only go up. Meanwhile, thanks to the generous arrangements proposed, the planned increased capacity will probably go ahead, and land on the market concurrent with a long-term slowdown from EU and US. With concommitant effect on commodity pricing…
At what return do the miners pay anything more than currently to the Australian people, via company taxes, state royalties &/or MRRT taxes? How likely is that, people?
Andrew said
No they don’t. Sure they can hav an opinoon, and the Henry process allowed them one. In the end though, it is the governments duty to make a call.
Now as I’ve said elsewhere, I think there were probably better ways to tax anomalous profits, but in the end, the government, for better or worse, has to make a judgement. Being bullied into singing the companies’ tune is offensive to those of us with an interest in inclusive governance.
Yes … all done behind closed doors with a nod and a wink. How much more democratic could it be than that?
Andrew said
No they don’t. Sure they can hav an opinoon, and the Henry process allowed them one. In the end though, it is the governments duty to make a call.
Now as I’ve said elsewhere, I think there were probably better ways to tax anomalous profits, but in the end, the government, for better or worse, has to make a judgement. Being bullied into singing the companies’ tune is offensive to those of us with an interest in inclusive governance.
Yes … all done behind closed doors with a nod and a wink. How much more democratic could it be than that?
Fran @212, you would be entertained to read this about the big miners.
“We’re in the process of re-opening studies in relation to our Pilbara expansions,” Rio iron ore chief executive Sam Walsh told reporters on the sidelines of a function.
Yep, Rio apparently shut down their studies group and laid off everyone or reassigned them to other projects a few weeks back,… and whoops they are all back on the case again. Just like that. C’mon Sam – don’t take us for mugs. We know all you really did was suspend the final board approvals during the negotiations.
While we are suspecting Gillard and Swan of severely misrepresenting the truth with the MRRT, we may as well call the big miners as well, for blowing their own smokescreens.
Fran @212, you would be entertained to read this about the big miners.
“We’re in the process of re-opening studies in relation to our Pilbara expansions,” Rio iron ore chief executive Sam Walsh told reporters on the sidelines of a function.
Yep, Rio apparently shut down their studies group and laid off everyone or reassigned them to other projects a few weeks back,… and whoops they are all back on the case again. Just like that. C’mon Sam – don’t take us for mugs. We know all you really did was suspend the final board approvals during the negotiations.
While we are suspecting Gillard and Swan of severely misrepresenting the truth with the MRRT, we may as well call the big miners as well, for blowing their own smokescreens.
Fran, in the end the Government did make a judgement, albeit under duress through the threat of the miners renewing their advertising campaign and campaigning in marginal seats. As I’ve said before such activities should be made illegal.
If you take that big stick away from them you get back to how these things should be handled. As LO said, a green paper first up would be the way to go, but given the situation Gillard faced, I think she did OK.
Fran, in the end the Government did make a judgement, albeit under duress through the threat of the miners renewing their advertising campaign and campaigning in marginal seats. As I’ve said before such activities should be made illegal.
If you take that big stick away from them you get back to how these things should be handled. As LO said, a green paper first up would be the way to go, but given the situation Gillard faced, I think she did OK.