Mining set to resume ad war

So, the MRRT truce is broken. From the AFR:

A truce in the mining industry’s advertising war against the government – agreed when Julia Gillard became Prime Minister and offered to renegotiate the mining tax – is about to be broken with new print ads set to complain about possible new imposts in the budget.

The Minerals Council of Australia will place full-page advertisements in broadsheet newspapers as well as The Australian Financial Review  and The West Australian  in the coming week telling readers that Australian mining is “not a bottomless pit” .

The ads say the mining industry “already pays 500 per cent more taxes and royalties than 10 years ago and will soon have to pay the new mining and carbon taxes as well. Now there are calls for even more new taxes”.

The target of the ads is primarily, but not only, the federal government. They are a warning shot ahead of expected increases in a number of mining-related taxes in next month’s federal budget.

They are also aimed at state governments calling for increased royalty payments and other groups including the Greens calling for increased taxes on some mining-related costs.

To my mind, mining is on a hiding to nothing this time around. Dutch disease is now obvious to the drover’s dog. Moreover, the current government is a dead duck. It has no economic narrative beyond the objective of slashing spending for a surplus and driving down interest rates and no choice either with ratings agencies breathing down its neck. Given the absence of a larger vision in the government, this is probably its best chance for re-election and it now has the support of the BCA, mandarins of the old services economy and the unions to achieve it.

With most of the economy feeling very sorry for itself, is it going to win friends and influence people for the boom mining sector to cry poor? With the caveat that I haven’t seen the ads yet, the campaign described risks driving people back to the government.
David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. I would suggest that the amount of taxes paid in royalties to states, Indigenous and the Commonwealth are more than enough already – the MRRT will just be another tax to repeal for Abbott, along with the carbon tax. Best chance for the ALP? Wedge politics and the fomenting of envy? Strange politics indeed!

    • Neill, royalties paid to states are not taxes they are in effect the purchase price of the assets reserved to the crown (in the form of the states or commonwealth in the territories) over almost all of Australia.

      These sorts of claims that royalties are taxes are exactly why so many people don’t trust the mining industry figures.

      The state governments shoulder most of the blame for failing to capture increases in royalties as commodity prices have boomed/bubbled in their royalty arrangements.

      • +1

        Mining companies should just be paying higher royalties, royalties that are proportionally linked to spot prices of extracted and shipped minerals.

        Just forget talking about higher taxes which is wrong. Mining is a business like any other. But the royalties they pay are not taxes, and they should go significantly higher if mineral prices go significantly higher.

        • It probably better captures both the commodity price achieved and utilisation of finite resources. The revenues go to the States.

          Federal Government unlikely to encourage it now though!

          The Federal Government is looking for a cash-cow and is little interested in other arguments (although spuriously raises them). Currently, mining is seen at it. In years past, if could have easily been the banks. If you think entities that pay all corporate taxes, State taxes and royalties legally required within a nation should then pay additional taxes applicable to no other sector within that nation because for a period they are fortunate enough to be achieving healthy profits, you are likely to rather like the ‘windfall’ profits tax. The more you think about the more ludicrous a concept it becomes.

          • So you agree mining companies should be paying higher royalties when spot prices go up and those royalties should actually be proportional to spot prices?

            It would be like buying the minerals that are in the ground, and prices for minerals that are in the ground should also move with the markets.

            Then mining companies should be paying 30% on profits like everyone else, and of course all the concessions and subsidies, should any be in place, should be removed.

      • Royalties – Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced.

        Explorer, Royalties come from the net or gross profit and are extracted like Taxation and having worked with Indigenous in remote Australia and seeing how those ‘royalties’ are divvied up, the Commonwealth & Sate Governments see them as rightful taxation for the traditional owners.

  2. Different China Fanboy

    Campbell Newman says he doesn’t mind a mining tax as long as revenues from mining operations in Qld are returned to Qld because resources are owned by the states constitutionally.

    So we might expect another front opened by WA and Qld in which they invoke the state equivalent of nationalism in the fight against federal labor.

  3. “Dutch disease is now obvious to the drover’s dog.”

    You would think so but anecdotally, most people I speak to STILL don’t see it. But then I live in a resource area, so I guess that’s probably to be expected. Anyway, I thought you posted a survey the other day that showed that nearly everyone in the survey believed that the mining boom was good for Australia, while at the same time saying that they had not personally benefited.

    I do tend to agree though that they are unlikely to be as successful with the new scare campaign as they were with the last one at making the federal government dance to their tune.

  4. Actually, for what it’s worth I have a theory that the federal governments drive for surplus will merely reinforce the “Australia rides on the back on mining” meme among the general public.

    The fiscal squeeze will very likely whack growth on the head and push up unemployment, the mining barons will shriek “See! See! We told you that doing anything to harm mining would damage the economy and wreak general havoc!”

    I see no reason why the average punter won’t believe this, because on the face of it, it would appear to make obvious sense to most. Just as the biggest surge of private sector credit in our history went virtually unnoticed by the public while the emerging mining boom that just happened to coincide with it got all the credit for the accelerating growth.

      • H&H – would that not beg the question as to why the current Commonwealth Government is a ‘dead duck’? What decisions have they made so that if an election were called now, it would be as damaging as QLD, but nationally…….most pundits blame it on the Rudd/Gillard stoush; but me thinks the real explanation of costs of living and increased taxes are the real reasons and before you wonder if I am in Tony’s pocket, I feel any Government is going to be against it in the future with huge unfunded liabilities (pensions, health care, welfare) and a flat housing market for at least 10 years………the blame is……drum roll please…….us all! We want it all now and want someone else to pay for it!

        • I doubt it would be as bad as QLD but certainly it would be ugly. And yes, I agree that whoever wins the next election is taking a poisoned chalice. The next term of government will preside over the steady (hopefully not sudden) decline of the Australian economy.

          You have to ask yourself, given what you outline, how is the Abbot anti tax agenda going to fix anything?

          • It would be a vote winner – that is too repeal the taxes – but short term gain, I agree. We can see where uber largesse of the welfare state in Europe has lead to and it will be ugly. I, to be honest, am pessimistic about the future, as far as Government is concerned, the more it hits the fan, the more people will look to the Government for solutions, until the control the Government has is overwhelming. It is more than socialism versus capitalism…….it is a loss of initiative, the ability to create, work and grow our own businesses and lives and a growing dependance on Orwell’s ‘Big Brother’ – I do get that big brother does ‘sincerely’ want to help and alleviate all ills….. it is just that vast swathes of the West will lose their souls, lose their ability to believe they can have a crack and make a fist of it…..belief in ones abilities is slowly bleeding away as we become more dependant on that nefarious organism called Government……our choices are being limited by unfathomable debts and a future that we cannot pay. What is needed is a ‘debt cancellation/jubilee’ and start all over again……but alas this will never happen, we will inflate our way into the future!

          • The next term of government will preside over the steady (hopefully not sudden) decline of the Australian economy.

            Yepp, Cant wait for Tony Abbott to win and preside over that! 🙂

          • Mav, at least Tony can do something about without being held to ransom by the Green’s – bit like Campbell Newman, cut waste & folly immediately!

          • We can see where uber largesse of the welfare state in Europe has lead to and it will be ugly.

            I’m kind of wondering how places like Germany, The Netherlands, Finland, Switzerland, etc, resemble your doomsday scenario.

          • Dr.Smithy – those Germanic countries you mentioned will be on the hook for the irrational irresponsibility of the southern Europeans – it will drain the fiancees out of those nations and the EU will have to disband. Serious stuff indeed!

          • drsmithyMEMBER

            Dr.Smithy – those Germanic countries you mentioned will be on the hook for the irrational irresponsibility of the southern Europeans – it will drain the fiancees out of those nations and the EU will have to disband. Serious stuff indeed!

            But they are also “welfare states of Europe”. I don’t understand, how can they be “on the hook” if they’re the problem !?

            Could it be you’re just spouting standard-issue right-wing rhetoric, rather than actual coherent points ?

          • drsmithy – that one my friend is so easy to reply to and has diddly squat to do with politics! The Germanic nations you have mentioned have very clear understandings of fiscal responsibility – they budget with their eyes open. They understand what happened to Germany in the 1920’s and WANT to and WILL to live within their means. Can some countries have welfare, cradle to the grave? Yes, but only if they have a culture whereby they can afford it. So yes, the Germanic countries have a culturally accepted system of welfare for all and had it paid for; BUT now they have to bail out the rest of Europe that does not have the same culture as those said Germanic countries. It will bankrupt Europe, unless the EU is disbanded. A one size socialism/welfare system does not fit all!

  5. Wow – 500% more taxes than 10 years ago ! Those are indeed impressive sounding figures, almost enough to make you think you’ve misjudged the poor put-upon multinationals. But then I was paying 1000% more in taxes 10 years after I first started out from Uni – at this rate of earnings’ growth I will be paying 1700% more taxes than 20 years ago. I have thus far shown restraint in lobbying my fellow upwardly remunerated bretheren to launch a disingenous yet stirring propaganda campaign against such an outrageous statistic, but the mining industry has shown me the light. In self-serving obfuscation there is strength !

    • Yeah, that 500% line is a disingenuous doozy that will catch out the uneducated masses.

      What has been the growth of the money earnt total mining industry in that time? (Largely based on increases in the value of the minerals being exhumed, new projects, and expanded existing projects.) And, what about in real terms? Add in all of these factors, and I am willing to bet that the miners are ahead, in tax terms, of where they were ten years ago.

  6. Mining employs such a tiny proportion of the workforce, I’m inclined to agree with you H&H. I think a lot of people see those current “This is our story” ads and realise that there’s a small group of people making a fortune while the rest of the country languishes in the doldrums; I don’t see how they can possibly change public perception to “look at us poor miners” when the high dollar is continuing to wreak manufacturing everywhere else.

    Another strategy that Gina & Co. had been talking seriously about was trying that old chestnut of WA breaking away from the Commonwealth… having just returned from Perth last month I don’t see any possibility of that succeeding just because half of WA is from or has family on the East Coast and wouldn’t support the idea of being an independent country. I think a lot of Western Australians also realise that the boom won’t go on forever and that they need to make plans for what happens after that…

    • WA will never secede because we won’t win any medals at the Olympics.

      There are plenty of people here in complete denial. Those that have been in the industry for a long period (ie more than one cycle) can see the changes afoot, others reckon they’re on a permanent winner.

  7. I disagree strongly that this will help the government. It will just be another nail in their coffin. Dutch disease might be obvious to some, but not to many, and even if it was it doesn’t change the fact that mining is important to our economy right now.

    The solution to dutch disease isn’t to make mining less competetive and/or stop it, it’s to make our other industries MORE competetive. The typical socialist nonsense of cutting the tall poppy to make the shorter ones feel better just doesn’t work. It forgets fact that poppies in neighbouring fields are growing quickly regardless of what we do.

    The mining sector aren’t crying poor at all, they are pointing out that despite the fact that they are paying far more taxes than they used to, the government now wants them to pay even more. I would expect any business in any industry to stand up and say enough is enough, not just mining. Why do you single out mining and jeer at them? Because they are profitable and other businesses aren’t?

    We need to be slashing red/green tape, de-regulating IR and lowering taxes in other areas in order to make them more competetive. Increasing taxes on mining and introducing the carbon dioxide tax is cutting our nose off to spite our face.

    • dumb_non_economist

      MattR,
      I agree with your 1st para, 2nd & 3rd to a degree, but your last especially IR is crap! At a time when large slabs of employees are struggling to make ends meet you wish to put employers in the position to drive wages down. When a company talks productivity it simply means more for less and this can be seen with retail/banking’s ambit claim to remove penalties and basically make the working week 7 days.

      • +10. As PJK says – For the last 30 years in the US, all the productivity gains go to profits and the richest 0.1% and none to the workers. We do not want to emulate that here in Australia.

        • Mav, capitalism creates wealth & jobs – I would rather be alive now than a 100 years ago, where my life expectancy would have been about 55……all Aussies and anyone in the West, including the USA CAN have accommodation and has access to food & clothing in ways that defy logic (from the Government & Charities). The less than 1% controlling all the wealth is a chestnut that is so tiresome, as even the poorest Australian’s, the Indigenous (and I’ve worked with them) have more than the normal African, Chinese and Indian.

          • Umm, the reference was to last 30 years of capitalism in the US, both under Republican and Democratic leadership, not to capitalism itself.

            I never said capitalism is bad – you are straw-maning an argument I never made.

            The less than 1% controlling all the wealth is a chestnut that is so tiresome

            Again, there is hard data to back this up. But I can understand if you want to ignore the data and keep pushing your ideological barrow.

          • Maybe I should define my ideology – I believe in capitalism & truly free markets (we have the rule of law, property rights and regulation to keep it honest – some good came from Britain!) I believe in looking after the truly poor & vulnerable and Australia does this very well – better than most nations. (Although waste is a reality in some Government spending.) I believe that if a man or woman can earn 1 billion dollars with a smashing idea (Google,Apple, Microsoft e.t.c.) then that is the free market at it’s best. Mav you need to look at this video by Tony Robbins about the US deficit and taxing the super rich…….it WILL not solve the problems of the USA at all; it is a chestnut. Robbins is not a Republican or Democrat, but an Independent.
            The National Debt and Federal Budget Deficit Deconstructed – Tony Robbins
            http://www.youtube.com/watch?v=jboTeS9Okak

          • Where did I say anything about deficits and taxing the rich ????

            I said the productivity gains have all gone to the rich for the last 30 years and we can’t have that happening here in Australia.

            When the CEOs and the BCA talk about improving productivity, they are talking their own books – It will not help the country or the vast majority of the people.

          • drsmithyMEMBER

            The less than 1% controlling all the wealth is a chestnut that is so tiresome, as even the poorest Australian’s, the Indigenous (and I’ve worked with them) have more than the normal African, Chinese and Indian.

            Not nearly as tiresome (nay, flat-out offensive) as the “chestnut” that because we’re not living in rags sat out around campfires barbecueing rats for dinner, there’s nothing to be angry about.

          • dr.smithy – not sure what you mean? I understand that the ‘System’ is rigged – your on a treadmill and we want to get off, but I owe, I owe it is off to work I go! BUT, the reality is, we are very much better off than anytime in human history, for the majority, not just the 1% in the Western world – how this can be offensive to say so is strange!

          • You are obsfucating Mav – the under 1% rich is a red herring. Even if you are correct about the ‘productivity gains’ going to the rich, have you not read about the trickle down effect? Those rich spend that fabulous wealth and benefit the whole economy. I understand you want to spread & share the wealth through taxation, but it leads to decreased productivity and only a minority getting the Lions share of wealth/contracts.

          • dumb_non_economist

            Neil,
            Capitalism was around 300 yrs ago and we had 8 yr olds working coal mines. Changes was forced against those who had the money.

            What are you smoking?

            Quote “all Aussies and anyone in the West, including the USA CAN have accommodation and has access to food & clothing in ways that defy logic”

            Explain that one to me please.

            As to you having worked with Abs, I lived across northern Australia from Bamaga, Gove, Darwin, Kununurra, Wyndham, Halls Creek, Derby, Alice Springs, Cairns and Karratha. I seen more indigenous housing than I can poke a stick at and to claim they live better than the “normal” Chinese or Indian is absolute crap, you may get away with African, I haven’t been there. I have been to China and India.
            Your grand assertions are “tiresome!”

          • drsmithyMEMBER

            dr.smithy – not sure what you mean?
            Because your argument is basically that we should be happy getting thrown the scraps off the table just because those other guys over there have to go and scrape up roadkill to eat.

          • drsmithyMEMBER

            Even if you are correct about the ‘productivity gains’ going to the rich, have you not read about the trickle down effect?
            The “trickle down effect” has been comprehensively debunked by the reality of the last 40 years in America (and increasingly, the rest of the world), where wealth is becoming more concentrated amongst fewer people, real wages for most people have gone nowhere, and increases in living standards have been largely fuelled by debt.

            I understand you want to spread & share the wealth through taxation, but it leads to decreased productivity and only a minority getting the Lions share of wealth/contracts.
            No, it really doesn’t.

            What is it with Libertarians being almost entirely disconnected from reality ? They’re like the ultimate contra-indicator.

          • DNE, I too have spent my fair share of time in remote communities. I reckon Neil might have meant in terms of absolute dollars: social funding and welfare provided, which would be beyond the wildest imagination of almost all in the third world.

          • Great argument drsmithy – No, it doesn’t! Well that settles it then. Let me ask you DS, are you better off than 20 years ago, in real wealth terms? Wage & property ownership – I thought so DS – much better off!

        • Mav, this has far more to do with government regulation and protections for big business than anything else. Under true free markets wealth is shared due to competition. When you have small, but powerful groups lobbying governments for concessions, then you end up having a few protected mega-rich and everyone else.

          Flexibility is a good thing, protecting big business and mega-rich through regulation is very bad.

          • Not sure, the same country that unicorns roam free I guess.

            The ideal is a system where the government does only what it 100% needs to. We are not even close to that.

          • drsmithyMEMBER

            The ideal is a system where the government does only what it 100% needs to. We are not even close to that.

            The problem your theory has is the rather large disagreement over what “it 100% needs to” actually means.

          • “The problem your theory has is the rather large disagreement over what “it 100% needs to” actually means.”

            Doesn’t change the fact that it should be the goal, nor the fact that we aren’t anywhere near that place right now.

      • Yet under workchoices wages and conditions actually went up. Nobody is saying people should take less, just that employers need to be more able to hire/fire employees as needed or ask them to take less hours. A minimum wage is fine, but if it’s set too high it just makes us uncompetetive.

        Tell me, what would you prefer, a job with less pay, or no job at all? I know what I’d take, I certainly know what my wife and son would want me to take!

        Wages are a major factor in pushing jobs overseas right now. It’s simply too expensive to do business here.

        • “Yet under workchoices wages and conditions actually went up.”

          Pardon? I must have missed it. For how many people outside the mining-related sectors and the upmarket sections of the labour market did they go up? What you should have said is that people in the lower part of the labour market – the most vulnerable – were most affected and that the experiment was only one year old when the no-disadvantage test was reinstated.

          I certainly recall an extremely embarrassing (for the Howard government) survey 1 year on from the implementation showing that EVERBODY in the survey had lost something. I also witnessed with my own eyes people being terminated and being offered their jobs back at lesser renumeration or replaced if they refused. The original workchoices only lasted 12 months because the shock caused Howard to backflip and immediately water it down (it was still rotten for those with limited bargaining power).

          So I’m unsure of the point of your assertion – if increased power to fire only led to increasing wages and conditons, why bother with a renewed attack on IR?

          Further, you say “Nobody is saying people should take less”, but then you follow that up with “Wages are a major factor in pushing jobs overseas right now. It’s simply too expensive to do business here.” Pardon me for interpreting that as you saying that people should take less.

          The Australian economy is heavily driven by household consumption – if large numbers of people were to have their incomes – and therefore their ability to purchase firms output – reduced, exactly how does that improve general employment prospects?

          • “Pardon? I must have missed it.”

            Yes, you must have, but hey, it happend. I guess you weren’t paying attention.

            “I certainly recall an extremely embarrassing survey”

            Yet the facts actually showed this wasn’t the case. Funny that.

            Workchoices had a ‘no disadvantage’ test, you realise that right? Anyone ‘losing’ something after it had grounds to claim against their employer.

            “if increased power to fire only led to increasing wages and conditons, why bother with a renewed attack on IR?”

            Increasing power to fire increases jobs available. Getting paid for being productive means you are more productive and you get paid more for it.

            This isn’t rocket science you know.

            “Pardon me for interpreting that as you saying that people should take less.”

            It’s saying that people should be paid for what they are worth, for what their labour brings to their employer in the way of revenues and profits. If that means some people are paid less, then so be it, it also means they were over paid to start with.

            It also means people should be paid more for working harder. What have you got against that? Jealousy?

            “if large numbers of people were to have their incomes – and therefore their ability to purchase firms output ”

            Well right now we are living beyond our means, but I’ll take your assumptions.

            If everyone in the economy tomorrow had a 20% pay cut, prices of goods and services would drop as well, provided the markets are competetive.

            An extreme example I know, but just highlighting that your strawman is nonsense.

          • drsmithyMEMBER

            If everyone in the economy tomorrow had a 20% pay cut, prices of goods and services would drop as well, provided the markets are competetive.

            You’ve just blown your own argument completely out of the water.

          • “You’ve just blown your own argument completely out of the water.”

            Logical fail?

            Incomes drop so prices drop in order make sales and can do so because costs are lower.

            Not rocket science, really not.

          • dumb_non_economist

            Lef-tee,
            Thanks, far better response than I would have gotten out without it being deleted.

            One aspect I loved about work choices was removing your right to discuss your “contract” with other employees!!

    • “Why do you single out mining and jeer at them? Because they are profitable and other businesses aren’t?”

      Because they are making money by extracting minerals from the ground and the minerals that are in the ground belong to the public. So we need to understand if they are paying enough for those minerals which are in the ground and which belong to the public, where is the money they make going etc.
      Simple market at work.

      There’s also the issue of interaction with the public environment, which mining is involved into by definition, and which is of interest to many people.

      And it’s time we attach a cost to pollution, any pollution, whatever that is (obviously not only related to mining).

      • “Because they are making money by extracting minerals from the ground and the minerals that are in the ground belong to the public”

        Yes, they belong to the states, and the states charge royalties and can lift these as they please.

        “Enivronment, price on pollution, etc…”

        Spare us please. Carbon Dioxide is not pollution and mining has far less effect on the environment than Green groups would have you believe.

        • Great, let’s raise all royalties then in line with spot prices. Let’s say 50% higher.

          Actually let’s also make part of the royalties payable to the federal govt, laws can be improved no?

          “Carbon Dioxide is not pollution and mining has far less effect on the environment than Green groups would have you believe”

          sure

        • MattR, again agree 100%. Carbon dioxide is not a pollutant. Resources companies operate under strict environmental control procedures, both self-imposed and heavily (over)regulated for.

          • oops, and course the obvious one, minerals belong to the States.

            SSEC, there is little likelihood States (other than be severe coercion) would relinquish royalties to the Federal Government (MRRT may ensure Feds reimburse miners royalties paid to States by miners)

          • Federal should introduce extra federal royalties over and above the local ones and drop MRRT.

          • “Federal should introduce extra federal royalties over and above the local ones and drop MRRT”

            Sure, pity about that whole constitution thing…

          • dumb_non_economist

            2d0k,
            Pretty sure everyone is aware that by strict definition that C02 is not pollution. It’s the effect it has on the environment dependent on its concentration, as I’m sure you well know.
            Yes, I’m sure the mining industries concerns and self regulation in regards to the environment are likely to be to the same standard as maintenance was on Varanus I.

          • That’s why they are going the wrong way with MRRT, but it’s the only politically viable solution.

            That does not changes the fundamental fact that miners are not paying enough royalties when spot mineral prices go up so much. So the govt is trying to work around that with extra taxes.

            Let’s see what the other side will do when they are elected.

      • “it’s time we attach a cost to pollution, any pollution, whatever that is (obviously not only related to mining).”

        I agree.

        We need to hold business responsible for their ‘negative externalities’.

        • Which are?

          Pollution controls have been in place for decades (any smog outside) and CO2 isn’t an externality.

          • CO2 IS an externality unless the organisation that produces it holds onto it. When it is released into the environment (and is no longer under the control of that organisation) it is externalised.

            Perhaps what you mean is that CO2 is not a negative externality, which is a debatable point (if you don’t understand climate science)

            See here for a further definition:
            http://economics.fundamentalfinance.com/negative-externality.php

          • “unless the organisation that produces it holds onto it”

            or makes it magically disappear

          • SSEC it’s the gas that you exhale and trees and plants need to grow. It’s an element required for life on Earth.

            But hey, I guess it is an externality, but a positive one. Maybe we should be paying firms to emit?

            “Perhaps what you mean is that CO2 is not a negative externality, which is a debatable point (if you don’t understand climate science)”

            Yes, this is what I meant. Love the “oh but if you are wrong, you don’t understand climate science”. Sorry mate, but I understand it quite well (after spending a decade reading about and discussing it I would hope so) and no, it’s not a negative externality and never will be.

          • “it’s the gas that you exhale and trees and plants need to grow. It’s an element required for life on Earth.”

            Thank for the science lesson. 🙂
            You forget a little variable. The amounts. Mercury too exits in nature, but in high enough doses is lethal. Like many other things.

          • drsmithyMEMBER

            SSEC it’s the gas that you exhale and trees and plants need to grow. It’s an element required for life on Earth.

            This is what’s called a non-sequitur.

            Is your contention here that there is no maximum amount of CO2 that can have a negative impact ? If not, and you agree there is a threshold at which CO2 concentration becomes a negative factor, what is that value and how did you arrive at it ?

          • “The amounts. Mercury too exits in nature, but in high enough doses is lethal.”

            Ditto for water, oxygen and pretty much everything?

            Guess we should just ban everything right? Lol…

            “Is your contention here that there is no maximum amount of CO2 that can have a negative impact ? ”

            How is a 100%, backed by all evidence available, factual statement a non-sequiter? Are you saying that we don’t exhale CO2 or that life would be fine without it? 😀

            My contention is that mans ability to emit CO2 is irrelevant and that there is little chance we can emit enough to do any amount of noticable damage and even if we could, the benefits of emitting CO2 far outweigh the costs and it isn’t even close to being close.

          • “My contention is that mans ability to emit CO2 is irrelevant and that there is little chance we can emit enough to do any amount of noticable damage and even if we could, the benefits of emitting CO2 far outweigh the costs and it isn’t even close to being close.”

            I agree to disagree! 🙂

            The costs of this externality are completely unclear at this stage and could be having a huge impact many generations down the road.

    • Hmm – the old “race to the bottom” approach. Scorch workers living standards in an attempt to become more competitive. Hey, why not? After all, I think it’s so much more fitting and just to attack the rights and conditions of Wally the worker instead of taxing poor old Marius, Twiggy and Clive a bit harder, and I’m sure that the rest of Australia agrees.

      Except…..cast your mind back to the years between 2004 and the culmination in 2007 to see how that approach tends to fare in Australia. People may regard mining as a sacred cow but anything resembling a return to workchoices is not going to be accepted.

      Not that putting downward pressure on the wages of millions in the lower half of the labour market would have any negative impact on domestic consumption, I’m sure.

      • Ah class warfare at it’s best.

        “cast your mind back to the years between 2004 and the culmination in 2007 ”

        You mean the time where, despite the propaganda of unions and the ALP, workers conditions actually got better, real wages went up and unemployment dropped?

        Oh noes, save me from all that!

        “Not that putting downward pressure on the wages of millions in the lower half of the labour market would have any negative impact on domestic consumption, I’m sure.”

        It’s not about putting downward pressure on wages, it’s about workers being paid WHAT THEY ARE WORTH. Workers need to be paid for what they produce, right now they are getting paid MORE than what they produce and it’s hurting business and threatening said workers jobs.

        The flip side to that is that workers who produce more should be paid more. Under the current system it doesn’t matter if you are a better employee, you get paid the same as the numb nuts at the end of the line.

        If I was an award worker, first I’d be peeved, then I’d say “well if I’m going to get paid the same for slacking, I guess I’ll just slack then! I can’t be fired because the union will protect me”

        Class warfare is pointless and, these days, just childish.

        • drsmithyMEMBER

          Workers need to be paid for what they produce […]

          Then why are you advocating the people who produce nothing, but just happen to have been lucky enough to buy rights on the right patch of land, be paid the most ?

          Surely you should be arguing the people actually out there digging the dirt up should be getting paid more, not less ?

          • So I guess you are going to go out, explore and test for minerals, then front up the massive capital costs required to set up the mine?

            No?

            Didn’t think so.

            Valuable dirt is just dirt if it’s left in the ground for ever.

          • drsmithyMEMBER

            So I guess you are going to go out, explore and test for minerals, then front up the massive capital costs required to set up the mine?
            That argument is reasonable up until the point where said costs have been recovered.

            Valuable dirt is just dirt if it’s left in the ground for ever.
            That’s kind of the point. Why should the people doing all the work digging it up be getting stiffed ?

          • “That argument is reasonable up until the point where said costs have been recovered”

            So no risk premium?

            Royalties, company taxes, payroll taxes, etc etc etc..

            Shall we just tax 100% once a company reaches a certain level of profit. What could go wrong?

            “That’s kind of the point. Why should the people doing all the work digging it up be getting stiffed ?”

            Who? The workers who get paid top dollar to dig it up? The companies who risk billions to dig it up? The governments that have grown rich on royalties and tax re

    • You should have a word to those trenchant capitalist overlords in waiting about selectively levying a 1.5% tax on big-business to fund a paid paternity leave scheme that would make a Scandanavian blush.

      • Yeah the Liberals aren’t great but they are better than the incompetent rabble we have in charge.

        Plus despite his policies being ‘meh’ Tony Abbott seems like a pretty good bloke.

          • theponz – you funnily enough are in the very small minority – your prejudice and contempt show how small your thinking is and how sad!

          • MattR. Agree – there is an increasing dilemma in what is acceptable and what is not. I do hope it is not ideologically driven…but determined by strictly and impartially by Comments Rules.

          • FFS MiningBot – I was on lunch.

            Maybe you missed this bit in the comment rules:

            The operator reserves the right to remove any material at any time without giving any reason.

            Your and others – Mav and a few more – constant bickering and aggressiveness is pushing away others who want to listen or have a slightly different point of view, or just want to learn something.

            So this is your final warning – either get with the program or find another site to do your turfing.

      • the ponz – what would rather Champ, paid paternity leave for your missus or a phoney tax on phoney science? Bit of a no brainer really!

        • dumb_non_economist

          Neil,
          (initial comment self deleted)

          You know not of what you talk. Every recognised research institute to university around the world, from Nasa to our BoM, CSIRO, UK CCU state the science is valid.The science would be beyond most on this website for starters as it seemingly covers numerous disciplines. I doubt basic undergrad study in any of the sciences/maths would cut it either. I’d say you haven’t been anywhere near science.

  8. I haven’t seen the ads yet

    3d1k, here is your chance for an MB exclusive. Can you give us an inside scoop? :p

    Seriously, this time round, as much as I dislike the Gillard government, they should get a blank cheque from the taxpayers to counter the mining ad campaigns.

    What’s $15 million in ad spend versus billions in forgone revenue?

  9. Hmmm Friday the 13th. I hope that explains the discourse in the comments so far today, because its well below par.

    Across all posts actually.

    • I think this thread it sticking to the post quite well (in comparison to lots I’ve seen). Commenters are presenting their views in a sensible manner, and a couple of humourous comments to boot!

  10. Can anyone explain what we can’t have a super profits tax on all industries rather than just mining and I think oil?

    Banks for example can cause a lot more community damage forclosing loans that could be paid in time, not lending to innovative businesses, and the list goes on. The debt, for that loan, is created on their balance sheet and if you audited banks on a lower delta timeline you’d find they don’t have the say 9% reserves to back the loan book in the first place; this has been explained to me by an investment banker – daily meeting to see if the are sufficient funds to cover obligations.

    Tell me to shut it if I’m missing the point. I think we need a tax system that does capture mining profits, but don’t forget about the rest. We also, need to make sure or political elite don’t squander it as well.

    • +1

      I’ve often wondered about this – if there’s another industry making super profits due to some sort of effective monopoly or monopolistic market situation, then presumably there’s an argument to tax it more?

      As with a63, would be more than happy to be proven wrong or shown that I’m missing the point.

      • “if there’s another industry making super profits due to some sort of effective monopoly or monopolistic market situation, then presumably there’s an argument to tax it more?”

        No, I think it’s an argument to act to break the monopolistic market situation. Monopoly = End of competition.

    • Well, then you are advocating a higher company tax rate for profits above a certain level.. I disagree with that, as it actually punishes good companies, the more you make the more you have to pay. For instance, also the personal tax income rate should be flat IMO.

      • I can understand having a principled objection to progressive taxation in general. I guess I’m more interested in knowing if there is a purely economic case against progressive taxation for companies that goes beyond the standard arguments against progressive taxation? Or alternatively if there’s some aspect of progressive taxation that, when applied to companies, leads to substantially more perverse outcomes than when applied to individuals?

        • Splitting into multiple entities comes to mind…. would the super-profit be measured on ROI or just above an absolute level?

          Booking the profits in a different countries and leave the expenses here.

      • “…then you are advocating a higher company tax rate for profits above a certain level.. I disagree with that”

        SSEC. As I noted in a response to you above, the more you think about it (windfall profit tax) the more ludicrous a concept it becomes.

        It would seem you are in agreement. Wisely so.

        • So you also wisely agree mining companies should be paying higher royalties when spot prices go up, and those royalties should actually be dynamic and proportional to spot prices?

      • SSEC, I just wanting to know why we can’t have a super profits tax on all industries (why just mining – I’ve seen arguments, but don’t think they cover the topic that well), and I don’t have the figures, but there aren’t many in that category I believe.

        I know for small miners it’s a hard slog and not many are profitable (maybe one in ten if your lucky). So an apple is not always an apple. It’s hard to get a non emotional discussion going on mining in this country. Both side are a fault, how do you get a good outcome for everyone, and it seems never to happen.

        I’m all for a fair tax system and to the extent that small business can flourish and employ more. I don’t believe anything will be done I’m just thinking out aloud. In fact fair tax for everyone; never going to happen. Ken Henry tried and got a good kicking.

        • We can obviously have whatever taxation system we think serves us better, but I never understood why the more you earn the more proportionally you have to pay to the govt. The tax rate is already proportional e.g. 30% of what you make.

          Re the mining, I think the issue is to properly price minerals that are in the ground (royalties), not to tax “super-profits”. My view is that miners are making a lot of money because they are not paying enough for the minerals that they are extracting and shipping, the Australian people are giving away mining rights too cheaply.

          • Fair enough. It’s a tough one, and I don’t know the answer, but we need a better tax and monetary system, but I doubt it will ever happen.

            It’s pretty tough now to keep ahead with negative real interest rates, and falling asset prices to name a few.

          • Prince. I am a sea of calm, as always. 🙂

            It was not an ad. I am surprised you saw it that way. It was no more an ad than views expressed here arguing the alternative.

            Moreover I have expressed the identical point here at MB on a number of occasions previous (even late-ish one night in discussion with yourself and Lorax) – minus the final sentence – was it that perceptive expression of a truth that required censoring?

            For clarity as to the actual transgression and if you have a moment I would appreciate advice.

            Thanks and cheers.

          • drsmithyMEMBER

            We can obviously have whatever taxation system we think serves us better, but I never understood why the more you earn the more proportionally you have to pay to the govt.

            Because the more you earn, the more you can afford.

          • drsmithyMEMBER

            you make 100, you pay 30
            you make 50, you pay 15
            no?

            Sorry, I have no idea what this is supposed to be saying.

          • SSEC – Lol. Very good.

            DrSmithy – Good grief, what with the house near the coast, the holiday shack down south, tier 1 private school fees, dining and wine – there’s no bloody money left!!!

  11. The whole issue of the inflated profits from the mining sector comes about because of the weakness of the USD which distorts things. I still reckon Saul Eslake automatic stabiliser version of the MRRT was a winner, particularly if additional tax breaks when the curreny was adverse to the miners

  12. If we had a simple tax system with a clear vision of where this country is headed, I would fear for the future of MB – there would be nothing to talk about it.

    As it stands, I get the feeling this conversation is going to go on forever….

    • Indeed, you hit it on the head Jackson.

      And also its forgotten – by commenters here who should know better – that taxation is not about raising revenue, but changing behaviour and “robustifying” the economy, not maximising output or making things “efficient”.

      • drsmithyMEMBER

        And also its forgotten – by commenters here who should know better – that taxation is not about raising revenue, but changing behaviour and “robustifying” the economy, not maximising output or making things “efficient”.

        This seems oversimplified. Surely some taxation is simply about raising revenue (else how would we fund even the most basic Government) and some is about changing behaviour (though even here I would argue it’s not about changing behaviour, but about paying for the measures necessary to minimise the negative impacts of whatever that “behaviour” is) ?

        • Dr Smithy, I agree. Let’s not kid ourselves. It is mostly if not all about raising revenue.