Taxing times

There's no doubt that partisan interests are at play here - is there to be an election somewhere? - take the Mineral Council of Australia submission to the Henry Review

There is a strong argument to reform the basis of determining royalty payments to a profits based criteria from a revenue one. Royalties define the revenue sharing arrangements in the joint venture between the State and the company in the conversion of natural capital to societal capital. Thus a profits based system with an appropriate rate and base better takes account of the sharing of the risk in the joint venture arrangement. Royalties are a charge on cost of doing business, hence could be struck on a capacity to pay basis as a share of profits, thereby taking account of all of the matters affecting the profitability of the business.

and now

The Federal Government’s plan to introduce a 40 per cent national mining tax can only be described as a revenue grab not taxation reform. It is an unprecedented double-tax that will hit the industry’s workforce, the millions of Australians with shares in superannuation or minerals companies and the thousands of small businesses that service the industry

Individual miners, like the much quoted Clive Palmer, have also given voice to conflicting opinions

Support for Mr Henry has also come from some surprising quarters, including the Queensland mining magnate Clive Palmer. He dismissed other miners’ threats to leave Australia for lower tax regimes such as Brazil, saying they were ”whingers”.

”They can go offshore, but the minerals are onshore,” he said.

”I don’t think it’s unfair that members of the community contribute … to society as best we can.”

and then contrast that with this

“You’ve got this 40 per cent plus your 30 per cent corporate tax – 70 per cent tax – and it’s going to limit what people do in the future,” he told reporters on the Gold Coast.

Mr Palmer, who said he was speaking as an Australian, not a mining developer or political affiliate, said he would consider taking projects such as coal developments offshore to places such as Indonesia where he would be taxed at only 20 per cent.

“When I was taxed at 30 per cent I might have done it in Queensland, but now I’m going to be taxed at 70 per cent I’ll go ahead and do it in Indonesia.

“So the Treasurer is just a fool; that money he thinks he’s getting, he’s not going to get more money – he’s going to get less money.

“The Treasurer has lost the plot, but I don’t think it’ll happen”.

Who is it that has lost the plot?

HT possum