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The Henry Tax Report


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Rauul,

Thanks. The RSPT has done no one any good. Many jobs are lost and many more are under threat. Would the threat of being sacked make Rudd and Swan understand the immediate effects of the RSPT? Their jobs are under threat now and they are still waxing illogical.

 

Shareholders are good people, they save. Australian has many many good people. Everyone who is working is also compelled to save, building nest eggs in superannuation funds, and they fully deserve to draw an income from their hard earned savings.

 

Political advertisings are on. There are at least 3 major series, 1 sponsored by the miners and 2 sponsored by Kevin Rudd Esquire. There are only 2 messages: 1) the RSPT affects everyone, so there is concensus of a kind between the miners and Kevin Rudd; 2) also sponsored by Kevin Rudd....."...after the next election, Tony Abbott will be Prime Minister". Why is Kevin Rudd so generous in repeating the message? The more often he repeats it, the more effective the advertising, and it is free. So why charge us all $38 million for message 1?

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Hi Rauul, too true, though I'm all in favour of getting the facts right, and perhaps should not have dropped that comment by way of a one liner.

 

I did say $12,2 billion in earnings, and never spoke of the total dividend amount other than an unsaid comment which could be drawn from what BHP said. That is, an inference their dividends stayed in Australia, which clearly, 60% did not. A reader of BHP's line could easily get the wrong idea. If you know what I mean. (Half truths, which are common among the global mining set)

 

Further, the figures you supplied are in US$, whereas I reported $12.2b earnings in Aust$ ("our language"). As for how much of the dividend is going offshore expressed in Aust$, well it translated to about Aust$3200,000,000. No trifling sum, given that Krudd is looking for about $9b to squeeze from the exercise.

 

I'm far from a supporter of Rudd's aims, assuming that all he wants to do is balance his own books. However, the principal of maximising revenue from our natural assets needs to be addressed. Thus the stance

 

The biggest fear these miners have is contagion. They appreciate that other countries are studying the Canberra model, because they too know they not making the most of their one-off mineral endowments.

 

As one commentator recently said about resource life - "That might seem like a long timeframe, but think of it this way: a child born today could witness the complete exhaustion of our major mineral reserves in his or her lifetime."

 

Given that these same kids will probably see US$200 - $300 oil in their lifetime. .Think on it !

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All good Watchmaker,

 

It wasn't the $AUD/$US conversion i was quibbling about. More the inferrence that "most" of the company's earnings went overseas, which I couldn't leave alone.

 

I don't think there would be anyone on this thread that does not want to see benefit to the country & a greater share of profits re-invested here.

 

It makes me sick to the stomach seeing our great miners getting picked off & sold to overseas interests, OZ Minerals, MIM, Normandy etc. Problem is we just dont have the cash here to hang on to all of them & to fund all the developments. Sadly we rely on money from overseas to keep things chugging over.

 

We are fortunate that the worlds largest miner is domiciled in this country & pays income tax here. I feel the aussie miners pay their way pretty much. Some might disagree? (Please don't quote the ridiculous 17% tax figure & BHP in the same sentence or I will bitchslap you)

 

The international miners paying their tax overseas, well thats a whole other story. One which I dont have the answer to, but making our taxation levels uncompetitive and lumping them all together will just not work.

 

All parties need to get together & hash this out & pronto, because in the meantime it is killing our stockmarket & dollar with all the uncertainty. It is undervaluing our stocks just on speculation & making them more likely to become takeover targets to overseas interests & for that I will need a few more Bex pills. We could wake up tommorrow & see another mighty aussie miner go. Good if you hold it. Not good for Aust.

 

Frankly at the moment, I would trust BHP to invest the $9bill revenue slated from this tax, more than I would our govt and I bet more good would come of it. Sad but true :(

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Thanks again Raauuul.

Since the Nielson poll-shock, Rudd has at least admitted that the political battle for him is real. The message from Rudd is clear, crystal clear, that, in his view, the battle is about him. As long as this state of mind stays, there is no Labor team, there is only Rudd. Of the "Gang of Four", Tanner may already be a sacrificial lamb and he is reported to plan to move to the country side, Gillard is enjoying the limelight and is not being grilled, Swan still speaks of a tax that will promote economic growth, and the Prime Minister is now putting his best face forward.

 

Are the political debates about Rudd? If it is, the Rudd debate is gathering momentum in the Labor camp. Many in the electorate are worried about their jobs, those in the steel town of Whylla are prominent examples. Rudd only figures as a threat to the entire town, a Labor town. Different people have different concerns on how the RSPT may impact upon their lives. Rudd figures as a threat to the life as they know --- or should I use the past tense already.

 

Take Rudd off the Labor leadership, and how many would raise a finger for Rudd? There is no pity in political space and Labor can still minimize the carnage.

 

Nor is there any pity in money space. Rudd has squandered a hard-earned treasury surplus and chalked up an easy national debt fives times or more before his term of office has run out. And, after his Treasurer announced his "economic conservative" budget, the same budget is pouring largess into the budget line of states with a Labor premier. The budget is neither conservative nor prudent, and the RSPT is clearly a big distraction. The distraction is so big that we can't ignore it, irrespective of which side of the political fence we sit. Indeed none can afford to sit!

 

Is this debate about tax or about Rudd? The tax debate will continue and governments will bring in annual budgets. And Kevin Rudd? How central is the political fortune of Kevin Rudd Esquire to the lives of the electorate? Mr. Rudd is good at asking rhetorical questions, may be he should ask himself a few rhetorical questions and spare us distractions.

 

Until the day after the next Federal Election, our discussions on economics and national prosperity are guided by political emotions. Meanwhile people suffer from the whippings of uncertainty.

 

When Mr Rudd is so sure of himself, why is he not setting the election date now?

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When Mr Rudd is so sure of himself, why is he not setting the election date now?

Plain and simple i reckon as he knows now he is up against it and until he is confident he has turned the camp around he will not announce it........He might be saying he is confident but he is not feeling it!! V1

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Watchmaker,

 

Resource projects can be funded by shareholders capital or debt. (putting internal cashflow to one side)

As Kloppers commented:

 

"The whole Henry tax proposal regards Australia as a closed system, which funds its own projects and completely neglects the fact Australia is part of the world and is a net capital-consuming country."

 

It seems only fair that foreign shareholders of any company are paid for the use of their capital.

If a project was funded by borrowings from offshore, then interest would be remitted offshore.

 

Is it unfair for foreign shareholders of the banks or any other company to receive dividends?

Is it unfair for any foreign lenders of capital to be paid interest or dividends?

Given that the banks have been underwritten by the government, and have been mining the public with "excess" profits, why shouldn't their tax also increase?

 

The whole thing appears to be irrational, inconsistant, and just plain incompetant policy and lawmaking.

If, however, we looked at it in the context of slowing down the mining industry and the general economy so that Australia reduces its requirement for offshore capital, and resources are left in the ground for future generations, then there might be a smidgen of logic - but that agenda has not been declared.

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The biggest fear these miners have is contagion. They appreciate that other countries are studying the Canberra model, because they too know they not making the most of their one-off mineral endowments.

 

Its only a matter of time before other countries crank up royalties/taxes on mining. Many of these countries are far worse off than we are fiscally speaking. We can already see budget pressures resulting in countries like the USA clamping down on cross border tax avoidance, for example.

 

Rudd's biggest mistake is he jumped the gun on the RRT. Should have left it until after the next election.

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Veeone,

Well well well V-1 or Victory-Won, well almost, for Rudd and his fellow Gang Members have just received a disciplinary order from Caucus to resume full-cabinet discussions. Read today's AFR, front page. The School Council is not happy with the run-away Head Prefect who somehow thought he was the teacher!!! Very naughty, very harmful, most inappropriate, and willfulness has to be reined in. Otherwise? Otherwise Prefects and Head Prefect can be replaced. Peter Walsh and R.J. Hawke are even more seriously concerned then what they have admitted! Aleluya.

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Rudd has many mistakes on record in such a short time, give him more time and he will make bigger ones.

 

I dont care about politics but making big mistakes is not unique to governments. What about the fabulous RIO management in the past couple of years and BHP management teams on various projects of yesteryear... an increase in a tax imposts is just one of many speed bumps mining companies need to deal with...

 

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