In any case, if like me you’ve been sitting around wondering whether or not this tax is really the right thing for the country, this graph probably tells you just about all you need to know (p.47) [PDF]:
Surely it is only fair that the Australian people fare better out of all this plundering.
ABC Online confirms the Tony Abbott’s Opposition has formally announced it will not support the Government’s plan for a super tax on mining industry profits.
Until now the Opposition has given strong indications that it would not back the tax, but Tony Abbott has confirmed his position, describing the Government’s policy as a tax grab from the industry.
“You can’t trust Mr Rudd with the management of the economy. He is proposing to put the highest taxes in the world on the sector, which more than anything else has kept Australia going through the global financial crisis,” Mr Abbott said.
The Abbott Opposition continues to oppose things for opposition’s sake.
Mining Magnate Clive Palmer and QLD coalition supporter & financier told reporters today:
“You’ve got this 40 per cent plus your 30 per cent corporate tax – 70 per cent tax – and it’s going to limit what people do in the future.”
“When I was taxed at 30 per cent I might have done it in Queensland, but now I’m going to be taxed at 70 per cent I’ll go ahead and do it in Indonesia.”
However he is caught in a lie as Peter Martin does it again and points out this Resource Super Profits Tax was the brainchild of the Minerals Council of Australia.
Even going as far as the fact the MCA demonstrated “a graph showing that if 40 per cent excess profits tax had been in place instead of state royalties during the past decade the industry would have paid less between 2001 and 2004 and more between 2005 and 2008.”
Not to mention such a tax is supported in the arch conservative Alaska in the United States where it has been a real boon.
While many other [U.S.] states are confronting big budget deficits because of the troubled economy, Alaska officials are in the enviable position of exploring new ways to spend the state’s multibillion-dollar budget surplus.
On top of this, Clive Palmer has previously said:
“They can go offshore, but the minerals are onshore,” he said. “I don’t think it’s unfair that members of the community contribute … to society as best we can.”
Whilst there is every chance that he simply changed his mind after examining the evidence, but Possum Pollytics points out the much more likely shift from a theoretical framework to practical application has turned it into a lobbying exercise to cut the best deal.
Even the media has been caught out supporting the lie. A lie they are now backtracking from since Rio Tinto denies expansion plans have been shelved.
In amongst all this, it needs to be remembered it is a tax only on what has been dubbed ‘super profits’, not profits and it will only apply if a company achieves super profit status which is set to the long term Government Bond Rate.
There seems to be only two credible criticisms of the RSPT:
ONE is if the tax is a good idea why only apply it to the resource sector? If it is a low distortion tax then it should apply more generally, perhaps to the banking sector?
TWO is that it should be set a lot higher than the long term Government Bond Rate.
It seems we would be wise to listen to the caveats Bernard Keane expounded the other day.