Which Henry recommendations would the Coalition implement?

Quick question for the Liberal Party (and its supporters), busy whinging that hardly any of the Henry Review recommendations are being implemented by the government – which ones would you implement? To follow up – which suggestions, abandoned by the ALP (undoubtedly for reasons of political cowardice) would you be brave enough to put to the Australian people? Any? Tell us.

As for their unsurprising defence of the mining lobby’s commercial interests

Putting a great big tax on the mining industry is like handicapping our most successful athletes. It’s bound to drive investment and jobs overseas.

Or as Joe Hockey keeps putting it:

This is crucifying the golden goose.

…What utter garbage! The thing about resources is that those jobs can’t “disappear overseas” because the resources in question ARE ACTUALLY HERE. In the ground. Digging them out and taking them overseas is the entire industry. Which the government is proposing to tax. And as long as the tax isn’t so high that it reduces demand in these booming markets – which it won’t be – then all that’s happening is that the government is demanding that more of that goose (that goose that the mining multinationals didn’t make, but just found here) be shared with the rest of the country. And why the hell shouldn’t it be? They’re our natural resources.

Does anyone really think the mining giants are going to forsake the huge profits presently available in that market just because they have to pay some more of them in tax?

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34 responses to “Which Henry recommendations would the Coalition implement?

  1. I have yet to look into this very deeply but a tax rate of 40% of profits seems rather extreme to me Jeremy.
    This could very well be a deal breaker on new developments especially for commodities that are available elsewhere

  2. Well, ordinary Australians pay a higher rate in tax than that, and our incomes haven’t increased by anything close to the mining giants’. And we still go out to work.

  3. The miners already pay the states taxes on the stuff so a further federal tax on their profits at 40% is actually a greater impost than any income tax rate.
    Ah well this nonsense may not get through the senate and it will certainly be off the agenda when Rudd joins the one term club

  4. Splatterbottom

    Jeremy:

    those jobs can’t “disappear overseas” because the resources in question ARE ACTUALLY HERE.

    Could it be that 40% off the top will make marginal projects less viable, and new projects less attractive than competing overseas projects??

  5. confessions

    The OMG MINING TAX!!1! shriekers are just running a scare campaign. Such a tax is quite common in other countries. In Norway oil companies pay 50% tax on profits, and the oil industry has continued to operate in that country.

    Having a federally set tax rather than state-based royalty payments makes sense if ALL Australians are to benefit equally from the profits made on our natural resources.

  6. Jesus Christ. “I have yet to look into this deeply”

    No shit, Iain. It’s not on all profits.

    How about looking into things before shooting your mouth off?

  7. Keri
    “How about looking into things before shooting your mouth off?

    I am just being honest that my knowledge on this topic is not perfect and of course implying that I will seek more information. I made a rather general comment to a very general post on the subject from Jeremy. You seem to be suggesting that only a Tax expert should comment on this topic which is utter bollocks.

    BTW have you researched the details of ultrasound usage to respond to me on the other thread yet?

  8. Wisdom Like Silence

    Iain, small mining companies, mining companies with old mines, dead mines etc will actually benefit from the new scheme in place. The 40% tax will only come in for “Super” profits ie profits over something like 10billion or some such.

    Mining companies will also have royalties to states reimbursed by the fed govt.

    It should all work out in the wash. These reforms will actually be useful in terms of economic growth, but they aren’t bold, they’re just smart.

    Jeremy, since when is not wanting to lose cowardice?

  9. Splatterbottom

    Confessions, Australia also PRRT at 40% on Petroleum super-profits. The new tax is worse in that it doesn’t require full recoupment of capital expenditure before it kicks in, and it kicks in at a lower income threshold, so it is much more than a tax on super profits.

    The government could have been a lot smarter about the design, instead of bashing the mining industry with a blunt instrument.

    The state royalties are still payable, you just receive a credit for them. Twice the paperwork for no net effect.

  10. Wisdom Like Silence

    “I am just being honest that my knowledge on this topic is not perfect and of course implying that I will seek more information. I made a rather general comment to a very general post on the subject from Jeremy. You seem to be suggesting that only a Tax expert should comment on this topic which is utter bollocks.”

    Then why don’t you go read what it’s all about before regurgitating Joe Hockey’s morning breakfast? At least SB know’s what he’s talking about…kind of.

  11. I have often thought that mining companies’ bleats about going overseas were hollow for that very reason. Good luck to them if they want to compete with the other mining companies for the right to dig stuff up elsewhere…they’ll find that there are some pretty hefty costs associated with getting involved in those races as well. Plus there are the costs of relocating.

    I think it’s a win-win if the mining corps go overseas — Oz resources stay in the ground longer, which means when all the other resources are dug up, we still have some, thus assuring Australian hegemony in a post-peak Mad-Maxian world.

  12. WLS
    Your expertise on this topic is what precisely?

    General discussions like this one are to explore the issues , not a competition to show how well anyone has absorbed the ALP propaganda.

    🙄

  13. Wisdom Like Silence

    Cruising around in Monaro V8’s for bars of iron and that kind of thing?

  14. Wisdom Like Silence

    Iain, I’m not an expert…but I have read the policy.

    What have you done?

  15. Splatterbottom

    Slowing down the rate of resource attrition is no bad thing. It might also reduce inflation. The thing is to get the balance right. The resources tax as announced is a bit over the top. Hopefully it will be modified before it is implemented.

  16. Wisdom Like Silence

    Course it will be, as is known of politicians, they generally dont want to murder well performing parts of the economy.

    It’s like cutting Ian Thorpes hair, it might look weird but he’ll go faster in the long run.

  17. err, yes, Wisdom … who wouldn’t want that, besides Ford people?

  18. Wisdom Like Silence

    Anything to put Bizzle behind the wheel of a supercharged V8 is a bad idea imho

  19. WLS
    Have you read the actual policy or just reports about the policy?

  20. I like the idea of the 40% tax, these resources are finite, they belong to us (Australia) once they’re gone they’re gone forever so we should maximise our benefits.

    If some projects get canned then so be it, they’ll be back when they’ve mined the overseas resources. (what’s the hurry in selling our resources?)

    That the miners and Tories don’t like it comes as no surprise, the miners have the shareholders interests at heart and the Tories have the (big, massive, corporate) miners best interests at heart.

  21. confessions

    The chief reason royalties have to stay is because WA in particular refused point blank to give it up. So returning credits was a way of getting around that.

    And also what Rob said.

  22. As Jeremy says, these aren’t the sort of jobs that can go overseas. They’re a finite resource.

  23. usesomesanity

    A more equal distribution of Australia’s income and wealth within Australia needs these mesures.

  24. confessions

    Mark @ LP:

    The claim, typical of business rhetoric in a globalised world, that operations will be moved offshore is particularly egregious in this context. The resources are in the ground. What they mean, what they can only mean, is capital, and in any case the threat is almost certainly an empty one.

    Indeed. The mining industry said exactly the same thing about native title laws, so certain they would spell the end of the industry in this country. Of course nothing so hysterical has eventuated.

    Mark is also right about the likely benefits accruing to employees (particularly those with insecure attachment to the labour market) from the increased compulsory superannuation.

  25. summing up the governments intention…

    tax cuts for business (company tax drops 30% to 28%), more tax for workers (no change, but tax brackets not inflation adjusted), and continue shifting the public welfare burden to the private sector (+3% super)

    any questions?

  26. Wisdom Like Silence

    Just one. Why didn’t they do more?

    As an aside, Christine Milne blew a huge opportunity last night on Q&A to show that the Greens dont *just* want to have sex with all the tree’s in the world. If she had just said something about housing, education, hospitals ANYTHING about something that had nothing to do with trees, people could have seen there is actually an alternative. Henry review is out, Minchin on the bench, Symons and Howe on there as well, and she couldnt pull her green thumb out of her arse for 2 minutes to say something coherent about something that didn’t involve trees.

    Also on that, it was nice to see that Symonds want to help out young, impressionable homeowners, but he didnt say anything about his company being a contributor to all those investors out there rorting the market.

    Further reading of the Kenny’s review shows just how meek this reform of the tax system is.

    Some cool stuff the govt ignored:

    Increasing benefits for Not For Profits
    Progressive Tax after 25k income
    Abolishing Stamp Duty and Conveyance Stamp Duty and replacing it with Land Tax
    Merging Medicare Levy into a progressive tax scheme instead of having it as a seperate component
    Increasing the Small-Business Turn-Over Threshold from 2 to 5 million
    Stopping Resource Rent Taxes from being used to direct companies to cheaper mines
    State Auction of exploration land for mines
    Cash Flow tax being phased in to replace Pay Roll Tax, Insurance Tax and Consumption Tax
    Abolishing the Luxury Car Tax
    Introducing a Student Assistance Category for full time students aged 21
    Integrating State and Local taxes into a single assesment.

  27. @Wisdom Like Science, Ms Milne talked about plenty of things beyond having “sex with all the tree’s (sic) in the world“.

    You only have to look at the transcript to see that. For example, on taxation she said (in small part) ” I thought there was a real opportunity for the government here to radically transform the taxation system… ”

    Get your facts right in the future.

  28. Wisdom Like Silence

    How does one line in an hour of questions count?

    BTW “I thought there was a real opportunity for the government here to radically transform the taxation system. After all, the biggest problems facing the planet today are overpopulation and, indeed, resource extraction and the climate change and peak oil and so on”

    I noticed the other things she said, because I’m a greens supporter. I was talking about political stereotyping, and she played into it big.

  29. usesomesanity

    It seems the govt. reponse to the Henry tax review has collaped global stock markets.

  30. I agree. The Greens have a big opportunity on issues like housing, public transport and the internet filter, to really break through – but, to an outside observer, it looks like they’re squandering it.

  31. confessions

    The stock market slide is in response to concerns about the level of debt in Greece. I hardly think world markets are hanging onto what the Australian government does with its domestic revenue arrangements.

  32. Splatterbottom

    That is just a self-serving assumption, confessions. Recent statements from Canadian politicians indicate that they understand what has happened, and see the opportunities for Canada as a result.

    At a basic level most Australians understand that the mining industry was a big factor in Australia not having a GFC induced recession. they will not support a moron who wants to neuter it. Grab some popcorn, sit back and enjoy Rudd’s death spiral.

  33. usesomesanity

    It really is about time the govt. put a super profits tax on the banks, as they unfairly raise rates ahead of the reserve and make record massive profits out of their customers.

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