"Theoretically, government also has other options at its disposal. If a “capital strike” was to take place government could “step into the breach”. Abandoned mines could be commandeered, with fair compensation being paid to those who formerly held title."

Why not just compulsorily acquire them now with the same compensation paid to Aboriginal people in the NT when their land rights were compulsorily acquired and turned into 5 year leases, that is nothing!!

@Snake:

"Profit is directly related to risk. Take away the profit and no one wants to invest.  "

This tax does not take away the profit. Taking away the profit would mean having no profit at all. This shares the profit. It's a contract between the owner of a service/commodity and the buyer, no different to what happens a myriad of times every day in economies throughout the globe.

This all comes down to who has ultimate power over a particular good. The answer is always its owner, right? The Government as the seller has ultimate power over its own property in being able to set its price. It is however influenced by a need for a customer who will agree to the price, and so an equilibrium of sorts is met. Basic foundational economics.

You can only argue that mining companies will leave. I don't think they will, but even so I'm willing to accept the possibility I'm wrong. Even if I'm wrong and they leave – the tax will eventually be adjusted at a level to remain competitive, as Government also has an incentive for it to do so.

The miners don't like the idea of a resource tax. They know it places control in the hands of the legal owner of the good.

One further point worth remembering is that the Minerals Council itself recomended a profit based tax to the Henry review.

https://docs.google.com/viewer?url=http://taxreview.treasury.gov.au/content/submissions/pre_14_november_2008/Minerals_Council_Australia.pdf

I'm assuming there must be some support for such a thing within the mining industry, for its peakbody to recommend it to a Government review of taxation. Is it possible that it is only the big miners who are largely upset about this tax, the ones who know it "ruins the party"?

Tristan says: "the Australian people truly deserve a share when it comes the natural resources which belong, collectively, to all of them."

And: "And it is a very important principle to establish: as these non-renewable resources belong to the Australian people as represented by democratically-elected government; and there must be some reasonable kind of premium paid by miners on top of company tax to reflect this."

This is implying (framing?) that the miners are not paying anything now for the resource. Not so. In WA, the iron ore miners pay a royalty of 7.5% of the REVENUE. Not insignificant I would have thought.

The biggest spin in this whole debacle is the claim that Labor is losing support because of this issue. If that's the case, why has most of the shift in the polls been towards the Greens?

My major problem with this proposal is not that the mines weren't consulted first (does anyone consult me when my income tax rate is adjusted?) but that this was not part of Labor's election platform. Climate change was. Delivering something they didn't promise whether good or not is a strange substitute for failing on a core promise.

This combination has lost them the environment vote, followed up by losing the anti-environment side of politics. A poor political judgement, to be rewarded today almost certainly by Rudd being shown the door.

Grayzie

The comment on oil and gas was from an radio interview on the ABC with an industry analyst I have read similar comments elsewhere. You are free to investigate and contradict me if you can. But the recent major expansions have been in PNG which is rent tax exempt.

As for the superannuation, mining shares fell roughly 7% on the announcement of the tax, and based on super fund portfolios, this would reduce the average portfolio by 0.7%. Given the average portfolio is 20yrs old and the earlier half due to appreciation makes up to 60-70% of the final portfolio, this would make up nearly 20% of today's contribution, given the slow ramp up of the contribution this would even out in about 10 years.

This is bad news for anyone intending to retire in the next 10yrs.

Norway's mining income is overwhelmingly dominated by oil, and for a tiny country is a feeble comparison.

Try the USA, Canada, Brazil, Africa, Russia, China which are the major power houses of mining, and you will struggle to find a higher tax regime.

As for this tax hitting local miners harder than the multinationals, this gem I got from the recent TV interview with Colin Barnett.