Gratuitious windsurfing snap.

Guys theses are not renewable resources. They come they rape our land an leave.

This is not trees and banking.

So a few jobs will be lost in the short term, whilst the mining companies try to scare us by putting their investments on hold.

This is just a bluff. They just cant go anywhere and get this, so in the end they come back.

What we as a nation have to do is get behind and support the government, help them nototiate better terms for our future and not let these guys pull the wool over our eyes.

Dont be naieve. Its so short sighted to let these mining companies strip us of our natural wealth for a bargain. And we let them do it to us again and again.

Costs of natural resources are going up, and so will their profits. So as the price of a barrel goes through the roof, how long do you think they can sit on their hands and avoid investment? How long will they wait for the goverment to back down a few %.

Its billions they will miss out on in the wait. Its who will flinch first with this.

They are spending big in the media and any outlet they can to lobby their cases, to try to convince the voters the govenments got it wrong so that they can save a buck. Some of us wont fall for it. Others will as we can see from the media reports.

Currently I pay more tax % wise than any of the mining companies. I am in the higest percentile. In the process of earning a living I dont destroy the environment, and i continually invest in Australian business purchsing australian goods and produce.

Mining companies take and give little back apart from the people that they employ.

But what happens when the resources run out? Where will you work then? Think the Mining company will keep paying you when the well dries up? Who will be paying your unemployment benefits?

The government will. I will. We all will.

My Comments.

Disclaimer:
1. I consult to several mining and allied companies
2. I own shares in mining companies

I think this proposed tax is completely wrong on a number of grounds.

1. A return on investment of 6% is not 'super' - I would be better putting my money in bonds. The weighted average cost of capital WACC should be used as any benchmark defining project profitability.
2. The method of introducing this tax was appalling to say the least. If the Govt had undertaken an appropriate level of consultation and review they may have realised just what they were thinking about.

3. The impacts of this announcement are immediate. I have already had one major project (that more than likely would have resulted in me hiring someone to help deliver the project) has been put on hold.

4. Other projects we have with mining companies are being delayed.

So in selfish sense that means less money for me, hence I spend less (less windsurfing gear) and...... It also means less job creation, less money circulating, less growth.

For anyone in any doubt, go and visit a large regional centre (like a Mt Isa) and just walk around town and see what an impact that the mining businesses are.

I am not opposed to the Govt re-assessing tax returns from mining to ensure that we get a fair share but the current approach is just utter rubbish, we need an approach that will allow our mining and extractive industries to remain globally competitive.

KRudd is grasping at straws

Dr J

Look, I agree with Australia getting more benefit from it's resources, but not by taxing the profit.

Company profit and personal income tax is not a great analysis.

A company has to invest significant capital to make more profit. You do not have to invest the same level of your income to increase it. You don't have the same ability to decide you income destiny as a company does. As an employee you are more constrained to a limited income band. Generally you cannot earn less by making risky decisions, your income is far more stable and protected.

Do we really want to have a principal that taxes success and reward failure ?

I see the solution to getting better value to be in gaining revenue from the mining process, not revenue from somebody else's ability to make profit thorugh efficiency and innovation.

By your own arguments higher royaltese or additional costs in the mining process would encourage better mining and processing techniques to obtain more mineral from less ore. This would then also 'rape' the planet less.

But OK, I'll come around and agree it is a great idea. Now, what exactly was the money going to be spent on ? Something that will mean when the resources run out Australia will still be rich ? or something to maintain the current government in power post the next election ?

You'd think so... hey mineral... particularly as it is sold as being after capital... Anyways... we went through this in another topic, and this is not the case: www.seabreeze.com.au/forums/topic.asp?TOPIC_ID=65856&whichpage=2

Here is the answer to the 40% rebate: http://www.futuretax.gov.au/documents/attachments/Announcement_document.pdf

I'm wondering why this topic is still here. It's a blatantly political thread in teh wrong section wiht a blatantly misleading thread title.
I hate to seem like the thread police, but c'mon, if ya want to talk politics, be honest and put it in the right place.

I hate this thread

I find discussion on the subject healthy... It is a very confusing proposition and both sides of the debate are exaggerating (or under stating) the impact.

There are many different opinions in this thread. There is no name calling, there are no insults, no hostility or bad blood. Just discussion and Q and A... Indeed there is very little said about either side of politics, just the tax (maybe I wrote a few things about Kev sorry). I think it is healthy, friendly discussion...

The only person who controls what you read (or write) on the internet is you...

Pugwash said
Irony? The most support for the tax seems to be coming from Victoria and NSW. Traditionally anti-mining states.
Have you been around Singleton and Muswellbrook lately? I think there are 25 open cut mines..the place looks like a lunar landscape..check out google earth ( I havent been game too depressing)..We have the worst air quality in the state..no wonder there is a lot of anti mine opinion..+ the $ doesn't adequately go back to the people affected. PS - Thats not even taking into account the fact that they are going to undermine us ( the Chinese..it all goes o/seas) with 3m subsidnece & 9" tilt on the house..Ive already had a neighbour have to go as her house is so badly damaged it has to be demolished..+ we could end up losing our dams and creeks into the underground mine..

My bad... there may be some direct cash payment for exploration from the government... This applies to companies that have income less than deductible expenditure (including exploration expenditure). In this case, the government will allow payable tax to fall below zero (it is a "refundable tax offset").

Exploration expenditure is deductible, then can be rebated at the company tax rate... It becomes a cash payment (tax return), when income is less than expenditure + rebate.

Basically, if you spend $10 mill on exploration and earn $20 million from existing assets/royalties, you can deduct the $10 mill + $2.8 mill (28% company tax) and pay 40% tax on $7.2 mill.

If you spend $10 mill on exploration and earn $12 million from existing assets/royalties, deductions are still the $12.8 mill, the government pays you a tax return of $800K.

Having lived in a town that exist for exploration and mining for 30 years , I have noticed a few trends.
when companies have profits coming in, the shareholders are making some money, THEN they will put money into exploration, when profits start going down exploration is the first to suffer,, which results in a slow down in discoveries and development, and it all goes quiet in the bush.
that causes a scarcity of minerals, price goes up, profits start to climb........
Strangely the companies dont seem to want the industry stable and steady, as the industry fluctuates, companies get stripped of assets, bought , sold , etc , .
The players, like those who seem to making all the noise in the media at the moment will be looking around at all the little profits to be made.
one thing that is consistent in all this is that the workers are always at the bottom of the list when the deals are getting done.
When I see Hugh Morgan , or Twiggy on the TV , I just know they will be making even more money , whichever way it all goes