Australian Politics Forum - The right ditching the mining tax

Sprintcyclist Gold Member Offline OzPolitic Posts: 40772 Gender:	The right ditching the mining tax Sep 2^nd, 2013 at 10:29am this is why the alp deserve to be wiped from the face of the earth The libs will remove that tax. And save us money by doing it. this is a tax put on by the left that seriously angered the big end of the big economy in Australia. And it costs us money.
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longweekend58

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Re: The right ditching the mining tax
Reply #1 - Sep 2^nd, 2013 at 10:34am

Sprintcyclist wrote on Sep 2^nd, 2013 at 10:29am:

this is why the alp deserve to be wiped from the face of the earth

The libs will remove that tax.
And save us money by doing it.

this is a tax put on by the left that seriously angered the big end of the big economy in Australia.
And it costs us money.

you know a govt is in trouble when it LOSES money from a new tax.

the mining tax was an offensive attack on an industry that supports a lot of the economy and already pays the highest effective tax rates in the country.

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RightSadFred

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Re: The right ditching the mining tax
Reply #2 - Sep 2^nd, 2013 at 10:39am

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

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Karnal

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Re: The right ditching the mining tax
Reply #3 - Sep 2^nd, 2013 at 10:54am

Sprintcyclist wrote on Sep 2^nd, 2013 at 10:29am:

this is why the alp deserve to be wiped from the face of the earth

The libs will remove that tax.
And save us money by doing it.

this is a tax put on by the left that seriously angered the big end of the big economy in Australia.
And it costs us money.

The big end of the economy in Australia? BHP, Rio Tinto and Estrada are all foreign companies. They come in, dig our coal and iron ore out of the ground and ship it out.

It only costs shareholders money - global shareholders.

Anyway, mining companies pay bugger all in dividends anyway.

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longweekend58

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Re: The right ditching the mining tax
Reply #4 - Sep 2^nd, 2013 at 11:02am

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

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Karnal

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Re: The right ditching the mining tax
Reply #5 - Sep 2^nd, 2013 at 11:21am

longweekend58 wrote on Sep 2^nd, 2013 at 11:02am:

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

It's not in a slump, commodity prices have lowered due to decreased growth in China.

This is the benefit of a profit tax to miners. Some royalties charge on tonnage (depending on the mineral - royalties tax different minerals differently). A profits tax charges on income (as do some royalties).

Remember, the only reason we have mining in Australia is the price of coal and iron ore. Back in the 1960s, it wasn't worth shipping out.

Now, with the entire supply chain laid out, it's not worth not shipping out. If the coal price goes down, we'll continue shipping it out.

This is why a tax on profits - as opposed to stuff dug up - is in the interest of mining companies.

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longweekend58

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Re: The right ditching the mining tax
Reply #6 - Sep 2^nd, 2013 at 11:25am

Karnal wrote on Sep 2^nd, 2013 at 11:21am:

longweekend58 wrote on Sep 2^nd, 2013 at 11:02am:

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

It's not in a slump, commodity prices have lowered due to decreased growth in China.

This is the benefit of a profit tax to miners. Some royalties charge on tonnage (depending on the mineral - royalties tax different minerals differently). A profits tax charges on income (as do some royalties).

Remember, the only reason we have mining in Australia is the price of coal and iron ore. Back in the 1960s, it wasn't worth shipping out.

Now, with the entire supply chain laid out, it's not worth not shipping out. If the coal price goes down, we'll continue shipping it out.

This is why a tax on profits - as opposed to stuff dug up - is in the interest of mining companies.

we already have a tax on profits. its called Company Tax. And Royalties are paid ON TOP of that. so what exactly is the need for MORE taxes on the sector?

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Karnal

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Re: The right ditching the mining tax
Reply #7 - Sep 2^nd, 2013 at 12:02pm

longweekend58 wrote on Sep 2^nd, 2013 at 11:25am:

Karnal wrote on Sep 2^nd, 2013 at 11:21am:

longweekend58 wrote on Sep 2^nd, 2013 at 11:02am:

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

It's not in a slump, commodity prices have lowered due to decreased growth in China.

This is the benefit of a profit tax to miners. Some royalties charge on tonnage (depending on the mineral - royalties tax different minerals differently). A profits tax charges on income (as do some royalties).

Remember, the only reason we have mining in Australia is the price of coal and iron ore. Back in the 1960s, it wasn't worth shipping out.

Now, with the entire supply chain laid out, it's not worth not shipping out. If the coal price goes down, we'll continue shipping it out.

This is why a tax on profits - as opposed to stuff dug up - is in the interest of mining companies.

we already have a tax on profits. its called Company Tax. And Royalties are paid ON TOP of that. so what exactly is the need for MORE taxes on the sector?

Longy, if you're asking what the need for taxes is, you mustn't understand how governments work.

The mining sector has created a "two-speed" economy in Australia, and the mining sector requires skilled workers. You tax them so that you can create jobs growth elsewhere in the economy, and provide training for the skills and infrastructure they need.

Also, the profits tax is what the big miners have advocated themselves. Part of the mining tax roll-out was meant to include compensation for increased state royalties - which the miners didn't want.

Mining states like Queensland and Western Australia instead played politics with royalties.

And anyway, it's all a moot point because the mining tax was diluted out of existence. Some companies have actually profited from the write-downs the tax package included.

Forget health, education, social security, etc, the imperative to tax the mining sector is to stimulate the rest of the economy which has suffered under the high Australian dollar mining is responsible for. We've been doing this with offshore gas and petroleum since Hawke, and more successful resource countries like Norway have been doing it with North Sea oil.

Resource profits taxes are how you resolve the glut in other parts of an economy that big mining creates. They don't stop investment because only profits are taxed at the federal level - unlike state royalties, which are much more clumsy and ad hoc.

Company taxes are very easy to get around. Just ask your old friend, Andrei.

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Rider

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Re: The right ditching the mining tax
Reply #8 - Sep 2^nd, 2013 at 12:07pm

longweekend58 wrote on Sep 2^nd, 2013 at 11:02am:

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

Slump is mostly contained in Australia, other countries (we aren't the only ones with sh1t that can be dug up) are still 'full steam ahead'. I wonder why?

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Dsmithy70

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Re: The right ditching the mining tax
Reply #9 - Sep 2^nd, 2013 at 12:11pm

Quote:

Why taxes would rise under Abbott

Date: September 02 2013

Ross Gittins

Election campaigns have become works of fantasy where, to enter the spirit of things, you have to suspend disbelief. And the greatest unreality this time is Tony Abbott's claim the budget can be returned to surplus in the coming decade while taxes go down, not up.

To most people the idea of permanently paying less tax is hugely attractive. And Abbott is promising to abolish the carbon tax and the mining tax, cut the company tax rate by 1.5 percentage points and abandon Labor's plan to end tax concessions for company cars. All this would cost about $28 billion over four years.

So what reason is there to doubt he would deliver a lasting reduction in taxes? Simply his promise to get the budget back to surplus - plus the knowledge government spending is set to grow strongly in the next decade.

To return to surplus and to do it while avoiding growth in tax collections would require a literally unbelievable degree of spending restraint.

Remember, though it gets little notice, Abbott is also promising to impose new taxes, increase taxes and eliminate tax breaks. These are partly to help cover the cost of the taxes he's getting rid of and partly to help pay for his new spending promises.

He's proposing a 1.5 per cent levy on big companies to cover the net additional cost of his paid parental leave scheme and a 0.5 percentage-point increase in all rates of income tax (aka the Medicare levy) to help cover the cost of the national disability insurance scheme (both raising $16 billion over four years).

To help cover the cost of abolishing the mining tax he's proposing to save $4.7 billion over four years by cutting business tax breaks: ending the instant asset write-off, removing accelerated depreciation for motor vehicles, ending the phase-down of interest withholding tax on financial institutions and ending the ''tax loss carry-back''.

Also to help cover the cost of abolishing the mining tax he proposes to save $3.7 billion in four years by effectively increasing the superannuation contributions tax for those earning up to $37,000 a year, and save $1.6 billion in four years on no-longer-forgone super tax breaks by delaying for two years phase-up in compulsory employer contributions.

And all this is before we get to Labor's as-yet-unlegislated tax rises, which Abbott has quietly indicated he would proceed with: extra revenue of almost $10 billion over four years from measures to ''protect the corporate tax base'', cut research tax breaks, increase cigarette tax and impose a levy on savings accounts.

When you see the list of tax hikes that accompany Abbott's grand tax-cutting gesture, it doesn't exactly inspire confidence he could keep taxes down in a way none of his predecessors has managed to.

And when you realise that - according to the earlier reckoning of Saul Eslake, of Bank of America Merrill Lynch - his election promises involve extra government spending of almost $15 billion over four years, it doesn't inspire confidence he could achieve the herculean spending restraint needed to get the budget back to surplus as well as keep taxes down.

The medium-term projections in Treasury's pre-election economic and fiscal outlook, about which I suspect we'll be hearing a lot more after the election, demonstrate how challenging the budget task will be in the coming decade.

According to the projections, if the government elected this Saturday sticks to Labor's strategy of limiting average real growth in spending to 2 per cent a year and not allowing tax collections to exceed 23.7 per cent of gross domestic product, the budget surplus will recover to 1 per cent of GDP by 2020-21.

But, since spending is projected to grow at an underlying real rate of 3.5 per cent a year, this would require an unprecedented restraint. And, even so, it would still require tax collections to grow 1.5 percentage points faster than the economy - equivalent to an ultimate $26 billion a year in today's dollars - over the decade.

Alternatively, were spending allowed to grow at its underlying rate, this could still leave us with a growing surplus, provided unrestrained bracket creep was allowed to cause tax collections to grow 3.3 percentage points (an ultimate $56 billion a year) faster than the economy.

And, get this. Were you to let spending grow at its ''natural'' rate, but limit growth in tax collections to a ceiling of 23.7 per cent of GDP the rest of the coming decade beyond 2018-19 would see an ever-rising budget deficit.

Whoever wins this election, I'll be amazed if taxes do anything but keep rising.

http://www.smh.com.au/business/why-taxes-would-rise-under-abbott-20130901-2sytp....

But hey I'm sure Ross Gittins is a commie right?

I mean decreasing revenue whilst increasing spending is the ONLY way to achieve a surplus.

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longweekend58

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Re: The right ditching the mining tax
Reply #10 - Sep 2^nd, 2013 at 12:29pm

Karnal wrote on Sep 2^nd, 2013 at 12:02pm:

longweekend58 wrote on Sep 2^nd, 2013 at 11:25am:

Karnal wrote on Sep 2^nd, 2013 at 11:21am:

longweekend58 wrote on Sep 2^nd, 2013 at 11:02am:

RightSadFred wrote on Sep 2^nd, 2013 at 10:39am:

longweekend58

I find it an odd tax, so we have state based royalties which they can change but we want another tax to stop an organisation becoming too productive or profitable.

The logic is very odd, so if you make slim profits, invest in infrastructure that significantly reduces costs the government could punish you ?

exactly. and now that mining is in a slump it was all to no avail anyhow.

It's not in a slump, commodity prices have lowered due to decreased growth in China.

This is the benefit of a profit tax to miners. Some royalties charge on tonnage (depending on the mineral - royalties tax different minerals differently). A profits tax charges on income (as do some royalties).

Remember, the only reason we have mining in Australia is the price of coal and iron ore. Back in the 1960s, it wasn't worth shipping out.

Now, with the entire supply chain laid out, it's not worth not shipping out. If the coal price goes down, we'll continue shipping it out.

This is why a tax on profits - as opposed to stuff dug up - is in the interest of mining companies.

we already have a tax on profits. its called Company Tax. And Royalties are paid ON TOP of that. so what exactly is the need for MORE taxes on the sector?

Longy, if you're asking what the need for taxes is, you mustn't understand how governments work.

The mining sector has created a "two-speed" economy in Australia, and the mining sector requires skilled workers. You tax them so that you can create jobs growth elsewhere in the economy, and provide training for the skills and infrastructure they need.

Also, the profits tax is what the big miners have advocated themselves. Part of the mining tax roll-out was meant to include compensation for increased state royalties - which the miners didn't want.

Mining states like Queensland and Western Australia instead played politics with royalties.

And anyway, it's all a moot point because the mining tax was diluted out of existence. Some companies have actually profited from the write-downs the tax package included.

Forget health, education, social security, etc, the imperative to tax the mining sector is to stimulate the rest of the economy which has suffered under the high Australian dollar mining is responsible for. We've been doing this with offshore gas and petroleum since Hawke, and more successful resource countries like Norway have been doing it with North Sea oil.

Resource profits taxes are how you resolve the glut in other parts of an economy that big mining creates. They don't stop investment because only profits are taxed at the federal level - unlike state royalties, which are much more clumsy and ad hoc.

Company taxes are very easy to get around. Just ask your old friend, Andrei.

the miners don't want more taxes. NO ONE wants to pay more tax. and the idiocy of this tax was the royaties being deductions. so all the states had to do was increase the royalties and effectively take the money off the feds. it was DUMB and incredibly OBVIOUS.

now if you wanted to discuss a sliding scale of company tax that applies to ALL companies then you might have an argument. But simply taxing one industry above all others is intrinsically unfair.

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longweekend58

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Re: The right ditching the mining tax
Reply #11 - Sep 2^nd, 2013 at 12:32pm

Dsmithy70 wrote on Sep 2^nd, 2013 at 12:11pm:

Quote:

Why taxes would rise under Abbott

Date: September 02 2013

Ross Gittins

Election campaigns have become works of fantasy where, to enter the spirit of things, you have to suspend disbelief. And the greatest unreality this time is Tony Abbott's claim the budget can be returned to surplus in the coming decade while taxes go down, not up.

To most people the idea of permanently paying less tax is hugely attractive. And Abbott is promising to abolish the carbon tax and the mining tax, cut the company tax rate by 1.5 percentage points and abandon Labor's plan to end tax concessions for company cars. All this would cost about $28 billion over four years.

So what reason is there to doubt he would deliver a lasting reduction in taxes? Simply his promise to get the budget back to surplus - plus the knowledge government spending is set to grow strongly in the next decade.

To return to surplus and to do it while avoiding growth in tax collections would require a literally unbelievable degree of spending restraint.

Remember, though it gets little notice, Abbott is also promising to impose new taxes, increase taxes and eliminate tax breaks. These are partly to help cover the cost of the taxes he's getting rid of and partly to help pay for his new spending promises.

He's proposing a 1.5 per cent levy on big companies to cover the net additional cost of his paid parental leave scheme and a 0.5 percentage-point increase in all rates of income tax (aka the Medicare levy) to help cover the cost of the national disability insurance scheme (both raising $16 billion over four years).

To help cover the cost of abolishing the mining tax he's proposing to save $4.7 billion over four years by cutting business tax breaks: ending the instant asset write-off, removing accelerated depreciation for motor vehicles, ending the phase-down of interest withholding tax on financial institutions and ending the ''tax loss carry-back''.

Also to help cover the cost of abolishing the mining tax he proposes to save $3.7 billion in four years by effectively increasing the superannuation contributions tax for those earning up to $37,000 a year, and save $1.6 billion in four years on no-longer-forgone super tax breaks by delaying for two years phase-up in compulsory employer contributions.

And all this is before we get to Labor's as-yet-unlegislated tax rises, which Abbott has quietly indicated he would proceed with: extra revenue of almost $10 billion over four years from measures to ''protect the corporate tax base'', cut research tax breaks, increase cigarette tax and impose a levy on savings accounts.

When you see the list of tax hikes that accompany Abbott's grand tax-cutting gesture, it doesn't exactly inspire confidence he could keep taxes down in a way none of his predecessors has managed to.

And when you realise that - according to the earlier reckoning of Saul Eslake, of Bank of America Merrill Lynch - his election promises involve extra government spending of almost $15 billion over four years, it doesn't inspire confidence he could achieve the herculean spending restraint needed to get the budget back to surplus as well as keep taxes down.

The medium-term projections in Treasury's pre-election economic and fiscal outlook, about which I suspect we'll be hearing a lot more after the election, demonstrate how challenging the budget task will be in the coming decade.

According to the projections, if the government elected this Saturday sticks to Labor's strategy of limiting average real growth in spending to 2 per cent a year and not allowing tax collections to exceed 23.7 per cent of gross domestic product, the budget surplus will recover to 1 per cent of GDP by 2020-21.

But, since spending is projected to grow at an underlying real rate of 3.5 per cent a year, this would require an unprecedented restraint. And, even so, it would still require tax collections to grow 1.5 percentage points faster than the economy - equivalent to an ultimate $26 billion a year in today's dollars - over the decade.

Alternatively, were spending allowed to grow at its underlying rate, this could still leave us with a growing surplus, provided unrestrained bracket creep was allowed to cause tax collections to grow 3.3 percentage points (an ultimate $56 billion a year) faster than the economy.

And, get this. Were you to let spending grow at its ''natural'' rate, but limit growth in tax collections to a ceiling of 23.7 per cent of GDP the rest of the coming decade beyond 2018-19 would see an ever-rising budget deficit.

Whoever wins this election, I'll be amazed if taxes do anything but keep rising.

http://www.smh.com.au/business/why-taxes-would-rise-under-abbott-20130901-2sytp....

But hey I'm sure Ross Gittins is a commie right?

I mean decreasing revenue whilst increasing spending is the ONLY way to achieve a surplus.

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but you think the rudd alternative - increased borrowings - is better?

we all know - or at least those of us with a brain - that no matter who wins, there will be spending cuts and revenue increase measures. Despite Rudds comments to the contrary he would have no option. a $30B deficit is already appalling. He couldn't make it worse without risking economic problems.

so will there be tax rises and spending cuts? of course. and it was always going to be thus.

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Dsmithy70

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Re: The right ditching the mining tax
Reply #12 - Sep 2^nd, 2013 at 12:58pm

longweekend58 wrote on Sep 2^nd, 2013 at 12:32pm:

but you think the rudd alternative - increased borrowings - is better?

No but lets just drop the bullsh!t that under the coalition COL will decrease, you'll get more services for less money & life will be wonderful.

longweekend58 wrote on Sep 2^nd, 2013 at 12:32pm:

so will there be tax rises and spending cuts? of course. and it was always going to be thus.

And yet this is fine but Gillard is a liar FFS

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Karnal

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Re: The right ditching the mining tax
Reply #13 - Sep 2^nd, 2013 at 1:01pm

longweekend58 wrote on Sep 2^nd, 2013 at 12:29pm:

the miners don't want more taxes. NO ONE wants to pay more tax. and the idiocy of this tax was the royaties being deductions. so all the states had to do was increase the royalties and effectively take the money off the feds. it was DUMB and incredibly OBVIOUS.

now if you wanted to discuss a sliding scale of company tax that applies to ALL companies then you might have an argument. But simply taxing one industry above all others is intrinsically unfair.

It's not unfair - it's how taxation works. If you don't tax mining companies, the burden of paying for government services falls on income earners. In a two-speed economy, this source of revenue is not enough. The high dollar pushes manufacturing offshore. Where are the mining projects going to get all their skilled workers from?

Mining requires infrastructure and skilled workers - these things cost money. If the rest of the economy is sluggish, the tax revenue is not always there to pay for them.

And this is exactly the problem Australia finds itself it no matter what party gets in next week.

Just think, if you can't get a hundred FIFO electricians for your new project, you need to look elsewhere. If the government can't afford the track maintenance on the railway line, you need to pay for it yourself. Rail, ports, roads, skilled workers - these are all things mining companies rely on governments for.

They therefore need to be taxed accordingly. This is what tax is for.

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Karnal Gold Member Offline Australian Politics Posts: 96491	Re: The right ditching the mining tax Reply #14 - Sep 2^nd, 2013 at 1:58pm longweekend58 wrote on Sep 2^nd, 2013 at 12:32pm: so will there be tax rises and spending cuts? of course. and it was always going to be thus. And yet, Mr Abbott wants to pretend it won't always be thus. Axe the tax. Cunning, no?
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