The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area



Syndicate
RSS/XML


RSS 2.0

Main Articles General

Sign In      Register

The Forum > General Discussion > mining boom or bust?

mining boom or bust?

  1. Pages:
  2. 1
  3. 2
  4. Page 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. All
Why is it that so many posters resort to derisive contumely in trying to make a point rather than intelligent argument based on some cogent principles?

It seems that anyone or any company that makes money legitimately get excoriated and always labeled "unfair". Return is always directly linked with risk and our miners and their investors have certainly taken plenty of risk. It costs a tremendous amount of money to develop an oil well or a mine and as has already been pointed out there are many listed companies and their investors who are putting their money on the line struggling to get that return. Those waiting on the sidelines for the profits to come in and want their share without having lifted a finger is "unfair".

Of course Australian companies that make good profits should pay their share of tax and they certainly do. With royalties the percentage is 43% compared to the banks and retail of 30%. With the extra that Rudd wants to take (as socialists always do) the rate will be about 55%. The dividends that the resources industry pay are not great because the ongoing investment in further development is so high. Africa has plenty of potential for investment and I would hate to see more money going overseas. We live in a global world now and we invest overseas in the same way as people in other countries invest here and any Mum and Dad can put money in the market and take the risk. It's the ones that don't that complain about excessive profits even though they don't realise they are losing out through their superannuation.

Kevin Rudd always tries to use spin and appeal to the electorate on an emotional basis, For some reason he quoted the 9 billion as the amount paid by the industry when it was only the royalties, but then that's the spin he tries to create.
Posted by snake, Wednesday, 5 May 2010 4:15:20 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
snake
No-one is saying that mining should not return a reasonable profit and it certainly does.

It is not only about who is 'lifting a finger'. It is about the ownership of the resources and the value of those resources that are ostensibly sold to the mining company (whether we call it a royalty or a tax probably doesn't matter much).

What value do the owners of those resources (us) place on the mineral content? Is the price charged for access to the resources fair given that in Australia's case, most of the mining companies are now owned by OS investors and much of the wealth of those minerals will not benefit Australians. Australians who also pay taxes to provide infrastructures to support the towns and the people involved in mining (often in remote areas).

We can balance profit motive with returning a fair rate of return to those who possess the resources. What is "fair" is of course always debatable and is not easy to derive.

Better yet we could mine the resources ourselves given the cost of exploration and extraction would be soon realised with healthy profits.
Posted by pelican, Wednesday, 5 May 2010 4:42:31 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
So I say again, "don't tax the miners, tax the minerals", we will end up with the same 'net' result. More dollars in our pockets.

If we add an excise of say 25%, then the customers, they being the ones who buy the minerals will have little choice but to pay the price.

If you shift the goal posts and make it less attractive for the miners to take the huge risks they take, then we risk what is almost our entire economy.

We used to ride off the sheeps back. Times have changed and now we ride of the miners backs.

Evidence of this is already emerging with the fall in miners share prices.

Life without them will be grim.
Posted by rehctub, Wednesday, 5 May 2010 5:53:48 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
What Rudd seems to intend to do with the tax (I say intend for I have no idea if he will carry through on it) is to fund the externalities associated with mining. One of the criticisms that can made of the way mining conducts its business globally is that the externalities are generally borne by the community - the cola industry for example is not hit with the costs associated with the health problems that people experience who live close to the mine, in Port Pirie atmospheric lead levels have done considerable harm to the children yet again the town is too dependent on BHP to make too much noise. If mines were supposed to pay for their externalities I doubt that there would be any mining; it would simply be too expensive.
Posted by BAYGON, Wednesday, 5 May 2010 7:11:01 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
*Australians who also pay taxes to provide infrastructures to support the towns and the people involved in mining (often in remote areas).*

Hang on Pelican, given the billions of $ income taxes, payroll taxes,
mining lease taxes, the money is pretty much going one way.

The ones coughing up for infrastructure are State Govts, who are
at present paid royalties by the miners. The problem for a State
like WA is, that the moment they cash in on royalties, the Federal
Govt decreases our % of the GST. We have 10% of the population,
contribute more then that in GST, get back around 6%.

Now Rudd wants to get his hands on that money too, so he has control.
It stinks, it really does.

I would say that if miners paid half their profits to Govts, for
their share of doing nothing, taking no risks, investing no capital,
that is more then enough.

Extortion is not going to work, it never has anywhere. But I think
they will review this tax, as Rudd just found out today, how
many miners are already rethinking the future and cancelling planned
projects.

Next Pelican, you will be saying, that we need more jobs.
Posted by Yabby, Wednesday, 5 May 2010 7:52:32 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Yabby

Companies only threatening to cancel planned projects - lot of hot air. There are plenty of other companies in the queue to get in on the resources boom should they pull out.

Secondly re jobs, well we don't need more jobs at the moment. Due to lack of training and education we have had to depend on skilled immigration to fill some roles. John Symonds made a good point the other night on Q&A that the mining boom has not helped smaller industries such as those requiring skilled mechanics. Service centres and trucking companies cannot compete with mining wages of up to $150,000pa for a mechanic. The mining boom has actually been of detriment to some industries.

rehctub makes a good point but how do we determine what is a fair price for the minerals in the ground? The tax/royalty regime perhaps could be viewed like a departure tax which I have paid in just about every country I have visited. You take money out of the country it gets taxed.

The problem is profits have become so exhorbitant - greed whether it be the greed of voters who only vote for what the government will do for them, to the greed of business who don't even honour the commitment of mum and dad shareholders and who allow (abetted by governments) vast sums of money to be squandered on executive bonuses, payoffs in the millions to get rid of shoddy executives and maladministration. Not to mention no government has yet outlawed the practice of ignoring completely the votes of shareholders on many financial decisions in relation to salaries and other options for executives and board members.

One mining company recently complained its profits went down to a mere $US5.877 Billion. I don't know about you Yabby but I reckon that is a pretty good return on the investment.

I am not going to pretend I know what the 'fair' price for the minerals are but so far I reckon the mining companies have got it pretty cheap.
Posted by pelican, Wednesday, 5 May 2010 10:13:17 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. 1
  3. 2
  4. Page 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy