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.
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.