September 02, 2014 | Graham

Another promise honoured at a reasonable price

Bill Shorten thinks it is a “dirty deal” done “dirt cheap”, but the repeal of the Mining Resource Rental Tax merely returns money to its rightful owners.

The decision by Gillard Labor to mug the mining industry may have been justified by it on the basis that these minerals are “our assets” but in fact it was theft of money that belonged to the states and to shareholders.

Miners have always paid for the minerals that they mine to the people that own them – the electors of the states where they are found. There was never any ethical justification for a further charge – a reality that Labor effectively accepted when it allowed mining companies to deduct any increase in royalties from the MRRT.

“Super profits” in the mining industry was another excuse. As any mining investor knows “super profits” are generally followed by “super losses”. Averaged over a reasonable period of time mining industry profits are so-so.

So, the grime is all on the Labor side on this issue.

Which leaves us with “dirt cheap”.

The issue that Shorten has latched on to here is the deferral of increases in the superannuation guarantee levy.

He’s right. This was a dirt cheap price for the government to pay. Any increase in superannuation would have to be offset against increases in income.

This is what happened when the superannuation guarantee levy was first introduced, and was an integral part of the Wages and Prices Accord – wage moderation in return for increased saving.

Any Australian wanting to increase their superannuation to 12 or 15 per cent can do it voluntarily via a salary sacrifice. So the government, and Australians, paid no price for this.

Don’t expect the government to point this out, as it would embarrass the PUP, and they need to do more deals with them.

And don’t expect the Labor Party, or the superannuation industry, to point it out either, because they both know that absent compulsion, very few of us will save the additional money in super.

Labor wants to pretend that workers have suffered a detriment, and the superannuation industry is grieving the loss of additional fees (with Australians being ripped off by their super fund fees compared to the rest of the world).

Labor accuses Abbott of breaking promises, but apart from some nitpicking, the Liberal government is honouring all the major promises it took the election. When it does a deal with the cross bench it is not to break a promise, but to keep one. If it has to balance promises, it chooses to trade off minor ones against major ones.

The public seems to have no appetite for a double dissolution, in which case this has got to be good government.

Which ought to help to restore people’s faith in Australian government.


Posted by Graham at 10:46 pm | Comments (3) |
Filed under: Uncategorized


  1. Any tax that costs billions more to administer, than it returns, is a tax I’d like to junk!
    However, given the current cost of the highly convoluted complexity we call our tax act, and which incorporates an entirely unfair two tier tax system; that allows those making the most, to keep far more of it as a percentage!
    All while quite hugely hurting discretionary spending and the domestic economy in the process.
    And because this highly convoluted system supports entirely unproductive or parasitic practices, that arguably cost the country far more than any actual mining tax; and allow huge tax avoidance into the bargain!
    100 billion per perhaps? [and what was the debt and deficit position again?]
    How soon would 50 billion per fix it?
    A decade?
    How about 100 billion per? Two years!?
    Wow, (choke, gasp, oops, time to change the undies) how come neither of the major parties are on to this?
    Perhaps they are held back by entirely masochistic morons who love paying far more tax than they need to, as evidenced in the totally dumb mining tax.
    A super tax that collects no tax, is better replaced by one that does, and unavoidably, as and when repatriated profits are offshored; and or, avoided tax sent to this or that tax haven! [What’s fair play got to do with it, got to do with it! the rest of us should all pay far more tax than we need to!?]
    I for one, would welcome the complete junking of this seriously decayed, rotten egg omelet we currently refer to as an equitable tax system; and replacing it with a single stand alone tax system that everyone pays, and in totally fair comparison to their actual means.
    And if you think that repealing a mining tax was hard, it was a Sunday school picnic in caparison to REAL and long overdue total tax reform!
    And the only single tax system that does all of the aforementioned, fairly and equitably, is a single stand alone unavoidable expenditure tax.
    Repealing the mining tax was a useful start!
    However, all other current tax gathering models should also be junked; and for the same cost effective reasons! No ifs, buts or maybes!
    And replaced with a single stand alone, far less costly one; as envisaged, and for EQUALLY VALID cost effective reasons, that not even the largest corporations on earth, can successfully avoid!
    An equally compelling reform, if only to roll back a foreign debt burden; already as large as the 4 trillion, Chinese foreign exchange reserve!?
    And for which we Australians pay a 30%+ premium for virtually everything, as covert but still very real service fees!?
    And to give credit where ans when due!
    Well done Joe; but, you’ve only just scratched the surface of long overdue tax reform.
    Fear not fearless friend; a thousand mile journey always begins, with the first small tentative step! As does our journey through life!
    Alan B. Goulding.

    Comment by Alan B. Goulding — September 3, 2014 @ 12:04 pm

  2. First the treasurer tells us we have to work to 70 instead of 65 because we can’t afford the pension and our super won’t cut it…
    So the obvious answer is to peg back the super contribution and make us more dependent on the pension.
    Have any Australian politicians ever even considered the expression “long term”?
    This so called “horror” budget is very much a short term fix to what is very much a long term problem.

    Comment by Peter Grimley — September 3, 2014 @ 12:25 pm

  3. By putting the money in workers’ pockets rather than in their super accounts, the government has ensured that it will be taxed now and at full normal rates. Under the scheme which Mr Hockey has been pleased to destroy, the money in workers’ super funds would not have been taxed until drawn down and then only at the derisory special mates’ rates that Howard/Costello gave to the wealthy who (until Labor tried to do something about it) have always been the only ones with enough spare cash to stow away in super funds.
    As Mr Hockey clearly understood, to stop the workers from being able to postpone paying tax on their spare cash until they retire, and to stop them at that stage having access to the same favoured rates as the wealthy already enjoy, he had to put the money in their pockets immediately so that he could tax it high and tax it now.
    Had he not intervened, there was a slight risk that the natural order of things (from the Coalition’s point of view) — namely that that you should tax the poor, not the rich, because there are so many more of them — would have been reversed.
    Of course, he had the option of raising extra revenue by imposing proper tax rates on the proceeds of super investments but that would have hit the wealthy harder than the poor and you can’t have that. It might even have turned some of our very wealthy leaners into lifters and you can’t have that.
    Graham, your views are looking less and less Christian by the day. And are you seriously suggesting that Mr Abbott has not broken scores of promises?

    Comment by Glen Coulton — September 3, 2014 @ 10:18 pm

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