Comments on: Gillard’s mining tax a fix not a masterstroke

By: Russell W

Russell W — Mon, 05 Jul 2010 06:17:37 +0000

Graham,

You’ve misunderstood,or you’re using ‘strawman’ arguments,the paper doesn’t treat royalties as a tax discount,it in fact criticises the previous federal government for ‘compensating’ the mining companies for state royalties–more socialistic welfare to transnationals.

Well,I won’t argue then I’ll just expand on what what I said earlier,booms depress other sectors of the economy (1) they divert capital and (2) raise the exchange rate which reduces the competitiveness of domestic manufacturers.
The Australian economy has not been built on mining booms,they have, in fact,inhibited development,we’re still dependent on commodities.In this sense,our economy hasn’t changed much since Donald Horne wrote the “Lucky Country”,that’s not ‘building an economy’, that puts the truth, not the lie, to the argument.
Some of us who don’t live in the fantasy universe of neo-liberal economics and read economic history instead.
Remember economics is not a science.

G’day.

By: Graham

Graham — Mon, 05 Jul 2010 02:24:41 +0000

Russell, the Australia Institute paper is obviously not reputable if it treats royalties as a tax discount. They’re not – they are the price that companies pay to extract minerals and are a cost of goods which is paid as a levy to the state government that owns the minerals.

And as royalties amount to somewhere around 10% of profits from the models that I’ve been looking at it suggests that mining companies have been paying higher tax than other Australian companies.

Your point about mineral ownership is just nonsense, although it is fashionable nonsense at the moment. The constitution gives the ownership to the states and that is the end of that. The Commonwealth doesn’t own the minerals and the states are getting value for them – the eggs are being harvested.

Not much point arguing with you if you think booms are bad for economies. The Australian economy has been built on enough mining booms to put the lie to that argument.

By: Russell W

Russell W — Mon, 05 Jul 2010 01:07:02 +0000

Of course big business cannot and should not be relied on to look after the common interest, businesses look after the interests of their shareholders, often against the public good. The common interest is overseen by the government, as it is with this tax. Of course the minerals belong to all Australians it’s our ‘goose’ and our ‘golden eggs’.As I pointed out in an earlier post,resource booms are detrimental to small economies,Resource Rent Taxes help to compensate for this.

“Since the Howard Government introduced the New Tax System,the average tax rate paid by Australian Miners is 19% compared with an all-industry average of of 24%” (Australia Institute Newsletter Vol 62 June 2010 p2).
The lower rate is a result of miners receiving (1)tax discounts for royalties paid to state governments.(2) other generous tax concessions. I presume that you would argue against tax concessions for mining companies,I certainly would.

So,if I had any lazy money, I’d buy mining shares

By: Richard Pinsent

Richard Pinsent — Mon, 05 Jul 2010 00:03:43 +0000

It is curious that we demand that tradesmen go through an apprenticeship before qualifying, but we allow anyone to become an MP and possibly govern the country with no qualifications or experience of running any organization.
Should we demand that all politicians spend at least 5 years running a small business or in top management of a large one before they are allowed to stand for Parliament

By: Jennifer Marohasy

Jennifer Marohasy — Sun, 04 Jul 2010 09:37:21 +0000

Neat summary. And depressing.