Looks like Gillard has caved:
The government will make significant concessions to the miners, including cutting the headline 40 per cent rate of the RSPT. The rate at which the tax applies is expected to rise from the long-term bond rate of about 6 per cent to the bond rate plus 7 per cent, a total figure of 13 per cent.
Other concessions are likely to include exempting certain commodities – such as phosphate and possibly base metals such as nickel – from the tax and allowing miners to use the market, or current, value of their existing projects, when calculating the amount of tax they will pay.
This could save big miners billions of dollars and reduce the restrospective impact of the tax on existing projects.
I’m getting what I want – thanks, suckers!
Let’s quickly summarise the differences between the big three miners – BHP, Rio Tinto and Xstrata – and us ordinary taxpayers and businesses.
- Changes to the tax system shouldn’t apply to them if they started up beforehand (which is why in the rest of the country only businesses started after 1998 have to pay GST, and we taxpayers only have to pay tax according to the rates of the year we were born.)
- They’re entitled to have the rest of us pick up a large part of the tab for their ridiculously expensive campaign to destroy the 2% tax cut for every other Australian business.
- They’re entitled to have the Prime Minister pick up the phone when they call.
For the record, these were the profit margins by Australian industry last year:
The large mining firms came in with a profit margin of 46.1%, compared with, say, retail at 3.9%.
The big three miners claimed, with impressively straight faces, that they’d have to shut up shop and move overseas if they were taxed on these extra profits, and no-one would take their place. Seriously? All the other businesses in Australia, on much tinier profit margins, can manage to find investors – it’s ridiculous to claim no-one would find the money to fill the gap if the Big 3 decided, stupidly, to scale back their operations. (Investors never believed they’d be dumb enough to shut down just because there’d be a bit of extra tax – shares in the mining industry stayed strong throughout the “debate”.)
Seriously, what kind of “Labor” party couldn’t sell this?
Anyway, looks like it doesn’t matter now. Old money has won. We’ll be left with a boom-bust industry that is out of step with the rest of the economy; that raises prices and then sacks people at the drop of a hat. Neither major party will ever dare try to stand up to them again. The powerful will flog off our national wealth cheaply and we’ll be left, at the end of it, with nothing. Shame on the gullible who believed the big three miners’ lies: shame on the government for caving.
The next question is what’s going to be cut from the budget to pay for it? Don’t complain, everyone who whinged about the RSPT: this is what you demanded.
MEANWHILE: Bit bloody late for the other miners to suddenly want to talk:
Meanwhile, West Australian company Atlas Iron says small miners have been sidelined in the negotiations on the tax so far.
“I would be concerned if there was an announcement that took place before there was proper consultation and a consensus because after all, that’s where we thought we were heading with Julia Gillard,” managing director David Flanagan told ABC’s Lateline Business.
“But maybe not and maybe we’ve got a lot more reason to be concerned about the future of Australia.”
He says big miners cannot speak on behalf of smaller companies.
You’ve certainly let them speak on your behalf up till now. Where were you earlier? You didn’t try to negotiate the RSPT that was, let’s be honest here, in small miners’ interests – you let yourselves be bullied into silence by the big three. The Government offered you something to your benefit, and you wouldn’t say a word in favour of it. And now you’re whinging that they’re ignoring you! Have you no shame?
And same goes to you, corporate Australia, if you find that you won’t get that 2% tax cut that you didn’t give a damn about last week, after all. You rathered BHP, Rio and Xstrata got everything they wanted at the expense of the rest of everyone else – don’t you dare whinge if that’s now what happens.
ELSEWHERE: Alan Kohler, who has plummeted in my estimation since becoming a shameless shill for the big 3 miners, calls Rudd an “idiot” and proposes that we enshrine big party rule in the Constitution:
So what should be done? Preferably there should be a change to the constitution recognising the authority and responsibility of ministers. At the moment the constitution barely recognises their existence, let alone spells out what they are supposed to do and how the prime minister is supposed to treat them.
Failing that, since constitutional change is nearly impossible, Gillard should ask the Cabinet Office to prepare a ‘Statement of Governance Practice’ that spells out the proper way in which the Australian government is to operate. It should set out in writing what she has promised verbally to do.
This document could be passed as a law, or perhaps just affirmed, by both houses of parliament so that it binds all parties to the proper use of cabinet at all times, except in rare and specified circumstances.
The “proper use of cabinet” indeed. As defined by whom, Alan?
ELSEWHERE #2: Bernard Keane puts it beautifully:
Business groups are already bleating about the smaller corporate tax cut but the Government will, rightly, have precisely zero sympathy for them. It wasn’t the BCA or ACCI or AIG that was copping a battering over the tax. No CEOs got sacked over this. They instead stood mutely by while some of the biggest companies in the world mugged the Government. In fact, you got the impression they were only too happy to see a Labor Government getting beaten up.
Now they’ve paid a price for their silence. Enjoy. They can send a bill to BHP and Rio and Xstrata and Mitch Hooke and see how far they get.
I personally love how I can rent a house, strip out all the fittings and sell them, demolish the walls, roof etc and sell them for scrap, and only have to pay the owner 30% of the profit.
Gillard had to save face so she neutered the tax rather than abolishing it. At least sanity has prevailed, and the main defects in the tax have been addressed.
Looks like she will be a more conservative PM than the Lying Rodent, and just as meretricious.
It’s the backdown the government had to have, and just shows who really runs this country.
Again: what does Julia Gillard stand for?
Yeah, not surprised. Gillard’s a scumbag like the rest of them.
London must be pretty happy with their new sock puppet
“Yeah, not surprised. Gillard’s a scumbag like the rest of them.”
“Again: what does Julia Gillard stand for?”
Same as Rudd, re-election, self preservation etc
“Looks like she will be a more conservative PM than the Lying Rodent”
You’re referring to John Howard right? If so then I doubt it.
Then again SB you might be onto something:
“Prime Minister Julia Gillard has strongly backed John Howard’s bid for the vice-presidency of the International Cricket Council (ICC).”
(from ABC Grandstand website)
“Ms Gillard has told Fairfax Radio she supports Mr Howard’s bid.
“John Howard [is a] passionate, passionate cricket fan,” she said. ”
So am I! Nominate me 🙂
Interesting statistics Jeremy. I must say I was extremely surprised to see how small the average profits were for retail trade. I imagine that if you then exclude the profits by retailing giants like Harvey Norman, Coles, Woolworths etc., the droppings left over for small business must be miniscule.
On the larger topic however, I was stunned by people at work, the average Mums and Dads, railing against the Super Profits Tax, using the philosophy and language which the dastardly brilliant advertising campaign wanted them to.
I understand that there have to be consequences with any restructure, however it seemed to me that the difference here lay in the huge margins in profits which are illustrated in the table above.
Put simply, the miners could pay and on the face of it deserve to pay more.
The everyday people in my sphere were very concerned about their retirement superannuation, sons getting jobs as diesel mechanics and flow on effects of higher prices to subsidiary industry.
It struck me that there would only be higher prices if the miners chose to say “no, our profit margins are fixed and sacrosanct, hence any further taxes payable will be passed on to our customers”. Am I just a Goddamned Pinko to imagine that they could like, er, um, maybe pay the tax out of their profit?
On the subject of superannuation, there was a really good letter in our alleged newspaper here in Adelaide by a man who explained that he was a superannuant shareholder in BHP but was fully in favour of the SPT because as he explained, the increased dividend paid by the company during the years when they were making massive profits was paltry. He considered that taxes paid to the government to provide services would benefit the community and himself far more than the dividends received. I realise that the share values have climbed considerably but I think his point was still valid.
Back to Ms. Gillard. We know that politicians want to remain in power and it was clear that they were going to get spanked at the polling booth over this because whether I like it or not, everyday people were voicing concerns which favoured the mining companies.
I wish the plan had not been raised until after the election. I know that you are not supposed to take power under false pretences and lay an ambush but it would have been nice if they could have brought it in and had a couple of years for people to see that the sky did not fall in after all.
Problem is that without the argy bargy over this, Kevin would still be leader and Tony would win hands down.
Take a bow, Jeremy.
I really could not say that better myself, and lord knows I tried.
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What looks like another Gillard failure looms large:
Looks like the days of true leadership on divisive issues are well and truly over.
I’m glad to see that racist shit bag Howard blocked in his bid for the ICC. Eat shit and die asshole.
That’s bloody depressing.
It should mean a lunge back to the Greens for progressive voters, but I’m worried that some are a bit too impressed by federal Labor finally having a female leader to pay too much attention to what she actually stands for.
It should be more than enough to send left Labor flocking to the Greens! Pandering to the racist undertones in society is one thing, but quite another to be sucking up to Howard as a Howard mini-me. The whole article reads like an endorsement of Howard’s extreme Pacific Solution. WTF is going on?
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