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The Henry Tax Report


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T: Fair enough, but the two sides in this are diametrically opposed in their politics, that is just a fact of life.


International's dont care: Put yourself in the position of somebody say in the UK who wants to invest money in our market mainly because UK is a basket case/exchange rate, and he isnt talking peanuts, lets say $AUD250K. He likes the resource sector. He visits Oz regularly, understands the OZ cultures, values etc, and admires them. He selects the area--commodities, selects some stocks--and THEN along comes the tax proposal.---He asks questions both here and in the UK and he can find no answers but understands our election cycle--so he sais "this is too hard"-----get my drift? Multily one person by a few hundred thousand--see my point?


Currency/stock volatility:----You really dont see this as a contributory factor?---The government claim the tax a done deal--as its a done deal companies look forward 2 years; If you were finance director would you recommend to your board you move ahead with an embryonic project--or shelve it?


Banana Republic: This takes us right back to you know who---like Harold Wilson following Winston Churchill and Harold Macmillan, Wilson's era ended in tears--do we have to repeat history? Can't we keep to the centre--do we have to swing left to right and back again?


So I trivialise the situation--apologies if that offends, but it all depends on which side of the fence you sit, only the next election will prove one side more correct than the other. Have you watched house of reps question time this week, if so are you ashamed, embarrassed, mad as hell? Sometimes the only way one can rationalise it personally is to trivialise.


The tragedy is that Australia is in reality the the outstanding star in the firmanent, and it should not be subjected to the current debate which--IMHO--should never have been started.


It is DIVISIVE---nothing works in divided societies.


I didnt start this thread lightly, but never saw this as the actual outcome, at least it shows that the general public are very much awake to what is happening.


A political compromise had better soon be reached.

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Sharkie, you have been asking people to leave Political Agenda out of the conversation, but you seem to keep re-introducing or accusing posters of swinging one side of the political fence, when all they are doing is quoting facts which you may or may not agree with. This is a discussion forum after all.


Please scroll down to yesterdays posts & read why an average of 16% tax might be correct for 2009 FY, but does not however tell the bigger picture. If new & non-profitable mines were removed from that average, it would be much much higher.


Once again look at BHPs annual report for 2009, which was issued before this tax was announced. If they are telling lies about the amount of tax paid, ASIC would be all over them.


My interests are in the investments I have made, mostly in Australian Mining & Oil companies and blind freddy can see that the RSPT in its current form will have a negative impact on the industry & indirectly on my superfund if I keep the $$$ invested where they are.

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flower - fair enough.


But just to put this current debate into some perspective, the wheels are not about to fall off the Australian economy, and we are not about to slide into some marxist or even facist morass. For instance by one count, of the major economies - apologies to HK and Singapore, who are after all effectively city states - we are about as good as it gets, whether that be due to good government or less government.



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Rauul, that's actually a vital point I left out--SUPERANNUANTS.


This whole tax proposal started--as I understand it--to take a bit from the miners and redistribute it to the population at large, superannuants included, On the face of very laudible.


Our SMSF superannuant in pension phase HAD a capital base if $1million.


He now has a capital base of $750K


Next tax year he HAS to draw down the laid down age based percentage (instead of being capped at 50% the last 2 years) he is two years older and therefore has to pay himself much more than he may require out of an SMSF depleted by 25% at a higher rate than two years ago--(not saying its all the tax's fault).


Government SAID it was to help superannuants and those contributing, so whats happened--or hopefully is planned to happen:


SMSF's in pension phase are getting massively WEAKER, the employers have to contribute another 3% of their wage bill transferring that into pension funds that are in some cases 25% weaker than a month ago:


Where is the JUSTICE--the LOGICALITY in that?


And what makes superannuants madder than a cut rattlesnake this weekend is that the government now plan to bombard us with advertising paid for by the self same SUPERANNUANT!!!

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g'day sharkie,


No apologies for calling me "a manipulator of the truth". Did not expect it really.


I am only presenting facts. The mining company are presenting facts. The governement are presenting facts.


The governement ignore income tax when they talk about royalties, and they ignore royalties when they talk about income tax. They refuse to add the two together.


The miners add royalties and income tax and present this as the total government take.


Clearly the two sets of figures presented appear different. However if you add the government's royalty figures and the governments income tax figures, I beleive that this would be close to the mining companies' figures. So it is mostly a matter of how the figures are being presented.


Personally, I believe that the total government take (royalties and income tax) is the more appropriate measure. What do you think?


In fact the PWC report that you quoated agrees with me. The PWC ETR for Miners in part states


In summary, many effective tax rates appear to have fallen, driven in part by the reduction in statutory rate in a number of territories. However, it is important to note that this study focuses on corporate income tax. A mining company will pay many taxes in addition to corporate income tax and while it is important to manage and balance corporate income tax, other taxes making up a company's Total Tax Contribution should also be given due attention. For more information on your company's Total Tax Contribution, please see the report 'Total Tax Contribution of the Mining Industry, available at the following link.


In addition, the seven Oz companies in the study, 3 (LGL, OZL, SBM) have carried forward losses and would pay no actual tax despite making a profit in 2009, and 4 (BHP, RIO, NCM and CNA) would pay actual tax.


Total tax contribution report is here if you want to do a bit of research for yourself.



I am not politically motivated, I simply follow up the source quoted to verify that the conclusion of the journalist is fair and reasonable.




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Half the problem with this "debate" is the lack of definitions... how about when someone (including our pollies) says "x percentage" they say percentage of WHAT!? If the "6%" starting point is supposed to represent the baseline Return on Investment compared to Treasury Bonds, does one assume that this 6% is a return on total funds invested? Or is it on Invoiced sales? Or is it some vague polliewaffle by people who have never had to worry about dirty stuff like ROI or profit? (the real kind that keeps your bank happy).


I would like to see a simple example worked through with and without the brave new tax, showing how funds invested, costs, capital expenditure, depreciation, resource depletion, exploration costs, and state royalties, etc. are accounted for in arriving at a final profit, then maybe we could have an informed debate.


BB. :ph34r:

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Hi, Can someone tell me why the Govt has chosen to target the mining industry, as opposed to, say, the banking industry? Did they think there were less superannuants holding mining shares compared to banks, so less overall fallout??
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You won't have long to wait for examples, BB


There will be heaps of them once the gov'mint unleashes an advertising fury on the washed and unwashed. None of which will lack spin and show the full picture - you don't do that in propaganda. After all, this is war, and the survival of Labor in gov'mint is at stake.


As to why miners and not banks, that's also easy to explain:

Count the number of banks headquartered in Perth and compare them to those in Melbourne and Sydney.

Then do the same with the mining operations, and paint the map in colours of governing parties in the respective States.


Got the picture? :ph34r:

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Personally, I can't believe any Australian can look at this and not be concerned by the Labor party's deceitful approach to all of this (e.g. Swan's misrepresentation of tax paid by mining companies for a start). There are far too many aspects brought up by their approach, both here and their dealings with Telstra that reek of absolute thuggery that I cannot see how these people are allowed to govern in a democratic country like Australia. If you disagree, then fine, but have a read of Animal Farm and then decide where this 40% super profits tax might stop. The argument is that our resources are finite. So, you could extend that to all industries relying on resources (including all plastics and metals) are similarly finite, so why not tax them similarly? Valid? Maybe a bit extreme, but not impossible, and that is the point-where is the line that separates 'me' from 'them' when it comes to being subject to the arbitrary introduction of a high tax regime like this one?

Anyway, a bit on 'The truth about the super tax-myths and facts' is attached. It is from the Minerals Council of Oz. Make of it what you will. At least they're not spending MY money trying to highlight the issues, unlike the government. I did not vote for Rudd and I never will. His incompetence on so many aspects has been jaw-dropping. Bring on the election.


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Can someone tell me why the Govt has chosen to target the mining industry, as opposed to, say, the banking industry? Did they think there were less superannuants holding mining shares compared to banks, so less overall fallout??



Sook---IMHO 2 main reasons:


1. ENVY pure and simple


2. The K.Rudd government is the very first Labour government that does not have to answer to the Labour caucus, that was his terms on winning the last election. He knows his deputy--who hails from the left faction is far more popular than he is, and this tax slug is---again IMHO---a bid to placate the left faction.


But above all he sees the miners as enemies, enemies of his utopian do gooding happy clappy sort the world out nonsense, but he has gravely miscalculated--he has forgotten that every Australian deep down wants to be another Twiggy--that is ambition of which he appears envious.


Miners are easier targets than banks, tax targetting miners only causes chaos in the mining world, tax targetting banks would likely cause financial chaos--even he isnt ready for that just yet.


You dont have to look any further than two other "do gooding" governments, the UK and the US.


Blair/Brown went down exactly this course, bash capitalism, dont solve the illegal immigration problems--and above all tax everybody out of existance---but in the end they imploded---13 years later


Obama trying exactly the same thing--he has had already taxed the oil companies to the point that many are moving tax domicility over the border into Canada and a 23% tax regime, but Obama is taking a less dictatorial approach, but his reign is only just starting--& his problems havent really started yet.


I dont think this tax slug had anything to do with trying to help superannuants, Rudd blew the $billions he inherited and now he has to pay the bill, he thinks Twiggy RIO BHP et al are easy targets.

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