our mining tax

[Ken Gargett]

without wanting to get aussie politics banned, was wondering how many members offshore have heard much about the new 40% tax on miners in oz and how it is being portrayed (here, very badly unless you are a socialist ratbag wanting us all to live in caves - no offence to all socialist ratbags). have put an article below for those interested but was interested in the coverage offshore (suspect those members in investment or finance or resources the ones most likely to have heard things but may be wrong). here, we are told every other country with an emphasis on resources is overjoyed as we are self-destructing and helping our competitors.

Robert Gottliebsen

<H1 class=articleHeading>The huge bear raid on Australia</H1>

Australian currency and share dealers are being hit by a wall of selling from European and Japanese investors as it becomes clear that the government’s horrendous mining tax mistake is affecting the sovereign risk of Australia.

Australia’s currency and shares would have been expected to decline in line with the drop in commodity prices, but we are seeing panic selling of considerable proportions.

At this point I must add that the Australian Treasurer Wayne Swan vigorously disagrees with my stance on the mining tax and last night personally took me to task – which is his right – and I describe that development in a

separate article

.

Unfortunately the situation facing Australia gets even worse than a bear raid on our currency and share markets. I have been talking with some of the most senior bankers in the country and they say that the European sovereign risk crisis is going to make it more expensive for banks to borrow the vast sums overseas that are required to service Australian home mortgages and business loans.

Perhaps unfairly, the irrationality of the mining tax has lumped Australia into the high sovereign risk basket in the eyes of those overseas institutions who lend to our banks. In particular, the Japanese banks who have been prepared to borrow yen at token rates and lend to Australian banks in Australian dollars, have taken a beating which they may take years to forgive.

At the beginning of this month the Australian dollar was trading around 92.65 US cents. It has fallen an incredible 9 per cent in just under three weeks. Losses in yen have been worse. Over the same period the much maligned euro has fallen just over 6 per cent against the American currency.

The Australian share market has fallen much more steeply than the US share market and our declines have been much more akin those experienced on European exchanges, confirming that were are seen as a crisis country.

The government clearly not only did not understand the effect of the tax on the mining industry but had no concept that when you take such an action at a time when the globe is extremely nervous, there is grave danger that it will trigger a bear raid on Australia shares and currency and endanger our bank borrowing. And that’s what has happened.

Bear raids can fade, especially when there is a degree of irrationality. We are not in the same position as the PIIGS. But once a bear raid gets under way it is multiplied by heavy shorting and panic selling and it can take shares and currency very low. In Australia’s case we are probably overdue for a swing back, but if that swing back does not hold and we start sliding again, then we will fall even further. Remember that unhedged overseas investors are not only being hammered by the fall shares, but the currency as well. Our share market is one of the worse performers in the world to unhedged overseas investors.

The cabinet needs urgently to drastically change the RSPT. Changing it will not repair the damage because confidence has been lost, but it will stop an all-out collapse. Superannuation savings in Australia have already been hit. Another big blow would be devastating.

[Warren]

Boy you're on a roll tonight Ken.

I'm just waiting for Rudd to don his gymnastic tights and show as another of his gold medal back-flips.

I've got my score cards ready to grade him and I'm expecting big things. Since he had his spine removed he should be nice and flexible.

The hopes of the country hinge on his ability to land a 10 pointer.

Of course if he stumbles on the landing and brakes a leg perhaps we could just shoot him.

Personally I favor the last option.

[mazolaman]

Yes,BBc radio 4 were covering this story.

The coverage went along the lines of"the Australian economy will be looking good if they bring in the mining tax as proposed."

Going on to quote the amounts of money they will reap through this.

Also related to this,on the BBc radio programme"costing the Earth",the subject was the Rare earth metal mining idustry.

This has massive future importance,as all the future renewable enrgies,and lots of household things like Lithium ion batteries and flourescent bulbs,use these.

The gist was,China mines them all cheap,all other companies cannot compete,and are out of business(following right leaning cpitalist policies of buying the cheapest available..........keep the shareholders happy).

China therefore has the monoploy on the production of these minerals,and has found it cannot keep up with demand,so is going to cease exports,only supplying it's own markets.therefore,comanies will inevitably ship production to China,also benefitting from trouble free cheap labour(!),and we loose,until we develop our own mines.

It's an interesting programme,if you get the chance.

Love,your-anti-capitlist-socialist-ratbag...

[khomeinist]

http://www.foxbusiness.com/personal-financ...ning-tax-works/

perhaps a more balanced perspective.... and from your man Rupert's empire no less!!!

Seriously. We should use Australia as a heuristic tool to discuss the grand debates of political economy. Tax us. Jobs and investment leave. Don't tax us. Don't get mad when we use everything up and bugger off.

Surely raise the deductible asset rate of return? Compromise? Etc. Etc.

[El Presidente]

One of the major issues is the retrospectivity of the proposed tax. Projects are based on feasibility studies and those in various stages of operation had no idea this was being proposed.

One of the most disappointing aspects of our governments actions has been the language of class warfare in which they have engaged. Mining companies are now foreigners stealing from the "average working family".

They forget to tell us that these "Foreigners" (of which this country holds majority shareholding in the main) has paid some 18 Billion in taxes over the last decade as well as provide jobs and were the backbone of us missing almost entirely the global meltdown.

[khomeinist]

Retrospective? That is unacceptable. Bargaining manuever? With all due respect, I am hearing that this is at the discussion stage? Amazing difference of systems. Yankee politician proposing a massive taxation program during an election year (even if corporate)? I think not.

[El Presidente]

Retrospective? That is unacceptable. Bargaining manuever? With all due respect, I am hearing that this is at the discussion stage? Amazing difference of systems. Yankee politician proposing a massive taxation program during an election year (even if corporate)? I think not.

Except that they already have budgeted for the increase revenue in the Federal budget brought down two weeks ago.

They will tinker at the edges but anymore than that and their budget forecast is shot.

[Ken Gargett]

Except that they already have budgeted for the increase revenue in the Federal budget brought down two weeks ago.

They will tinker at the edges but anymore than that and their budget forecast is shot.

latest from alleged insiders is that it is likely to move to a sliding scale for different resources. if they are forced to backflip at all, the usual politicians' trick of blaming the opposition for not letting us do what we wanted and so the people suffer but not our fault. blame the other mob.

[Ken Gargett]

worth noting that one of the selling points, in government eyes, for this tax is that the government will refund 40% of any failed project.

so if you fail, we'll fund you. if you succeed, we'll bleed you. does this seem arse-about to anyone else?