http://www.theaustralian.com.au/business/mining-energy/super-profit-tax-to-boost-canadas-competitive-advantage-says-jim-flaherty/story-e6frg9df-1225862465958

AUSTRALIA'S proposed new tax on its resources industry could be a huge competitive advantage for Canada, according to that country's finance minister, Jim Flaherty.

He said the “easiest thing” for a politician to do is raise taxes, which immediately increases revenues, but limits growth.

Considering that most of the school buildings have cost 3 x the normal cost that would mean that about $10bn of the $16bn was wasted and this is to be taken from the mines.

My Super has dipped about 3% this week, How about you?

Dear Shadow Minister,

You might need to flesh this out a little.

From Wikipedia about the situation in the Canadian Frontier Lands which enjoys their best royalty arrangement;

"The royalty rate is determined as an incremental rate from 1-5 percent of gross revenues until costs have been recovered, at which point the royalty rate increases to 30 percent of net revenues or 5 percent of gross revenues. In this manner risks and profits are shared between the government of Canada (as resource owner) and the petroleum developer. This attractive royalty rate is intended to encourage oil and gas exploration in the remote Canadian frontier lands where costs and risks are higher than other locations."

The government's proposal was to hit profits at 40%. I would put them neck and neck with the Australian scheme better for start up companies.

Perhaps your super returns were artificially high with the rest of us propping it up by not getting our fair share.

Yet to be convinced this is a bad thing.

Henny penny syndrome very much apparent here.
Happy to let my super ride it out.
Media no longer wants anything other than headlines and rabbott is a fraud.
history will cringe as this country looks back, a better country for the tax on this sky is falling childish time.

The tax does not add to the cost of mining. The cost of mining a ton of ore is roughly the same regardless of price the ore is sold at. There is a temporary jump in the profit because of the greater demand at this time. These resources in the ground belong to all the people of Australia. They are entitled to a share of the increased profits which are not due to actions of the mining company but to increased global demand. Mining companies are not going to abandon Australia because it takes time to set up a mine even when ore deposits are discovered. Mining companies know that the demand will go down, and ore price will decline. At that time the tax on superprofits will disappear. I doubt that the tax will do anything but add to the amount of revenue to the government. I hope this revenue will be spent wisely and possibly reduce taxes in other areas where taxes are an unreasonable burden.

Minerals unlike meat, grains, etc are not perishable .

The Resource can remain at home !

If big overseas mine owners do not want to participate in Australian Mining and pay a reasonable tax for their huge profits let the minerals stay in the ground .

More Australian Ownership is what is required - it will come .

CSteele et al,

The super funds are the single largest investor in the share market. Shares which are traded internationally are based on the profitability of company. When the profit falls, the investors pull out, the shares fall, and the company finds it more difficult to borrow money to invest. While the fall is hard to determine, it would be roughly in line with the loss in return on share value.

The pensioners about to retire would have a very different perspective as to who gets a fair share of their super portfolio.

Both BHP and Rio have assets and fields overseas that compete for development money. The ones with the greatest return get the investment. The reason that other governments have reduced the tax burden is not out of the goodness of their hearts, but because they know they need to compete for investment, and that 25% of something is more than 40% of nothing. Africa is littered with mines closed after greedy governments tried to take their "fair share", and the companies refused to invest further.

The concept that minerals in the ground is money in the bank is a little naive, as the mineral price is presently at a peak and there is no guarantee that it will remain there.

That the tax is paid on the profitable mines, and that overheads and losses on exploration are not deductible mean that the effective tax probably will exceed 50%.

Flogging of a non-renewable resource just because it's there is a bit like how we sold our gold reserves for a third of today's price for immediate political gain.

If we've got it and they want it, they will come for it.

60% of something is still better than 100% of nothing.

This idea that Canadia is awash with Iron ore and Coal seems to me a more than a little ludicrous. There is a reason the miners come to Australia and the main one is BECAUSE THATS WHERE THE MINERALS ARE.

Dont fall for this propaganda from the fat cats. They can afford to remove their snouts from the trough by just a smidgen and allow the rest of us to get a fair return on what after all belongs to every Ausralian citizen both present and future.

Mikk, nobody claimed that Canada was loaded with iron ore and
coal, but those are just two minerals that miners mine.

BHP has in fact already put its paw on a Tier 1 Potash deposit
in Canada, which will suck up around 10 billion$ in development
costs. They are going to push ahead with projects, where they
are left with the most profit, so Australian projects will simply
be put on the backburner. Miners are patient people.

Once a mine is up and running, most of it is automated and they
don't really employ so many people. Its in building these projects
that a huge amount of jobs occur. But then Australians clearly don't
need those jobs.

So yes, mining of iron ore and coal will still continue, any remaining
profits from those ventures, will simply be invested in other
parts of the world.

The investors who have lent us 1 trillion$ will look at our rising
current account deficit, and wonder how they will be repaid.
They will want a premium from Australia for those funds, just
like they now want a premium from Greece. For more risk to them
means higher interest rates, to cover the higher risk.

Banks will have no choice but to pass this on to homeowners and
businesses.

Mikk and his friends might well then be demonstrating in the streets,
like the Greek unions, who burned down a bank just yesterday.
It will do them a fat lot of good, for reality will not go away.
And there won't be an EU nanny to bale us out either. The
Chinese will move in and buy our resources cheaply and I can
assure you that they won't pay 43% tax, as BHP now pay!

But as they say, some people need pain to learn the hard way.
So we live in interesting times indeed

When this discussion started I thought the tax was a good thing. However, I have changed my mind due to the arguments made against it.

Don't overlook the fact that most of the profits leave the country anyway- based on the overseas ownership of each mining company.
The new tax isn't taking ALL their profits, just an increased share and is actually in line with their own submissions to the Mineral Council not so long ago.

They wanted something like this in place to increase their profits after the boom inevitably finishes.

Then again, maybe we should give all overseas majority companies a free ride to attract their investment. Then we can watch even more of our GNP leave the country while the taxpayer picks up a bigger share of the running cost of the country.

Rache,

I can hardly believe this "Don't overlook the fact that most of the profits leave the country anyway- based on the overseas ownership of each mining company."

These big mining companies are formed from many different companies around the world. Much of the profit flowing to Australian share holders comes from mines overseas. If the overseas governments also treated the big mining companies like their own personal piggy banks, the minerals would remain in the ground.

Now that manufacturing industries have moved overseas, it is the turn of the mining companies to be fleeced for short term gain.

I was listening to an ex head of the Mining Council on the ABC this morning saying the Tax was fair .

If we can slow down the depletion of our resources by the " GET rich Quick" mining Companies and still give them a profit, then as someone often says "It's in the national Interest "

Personally I have mining shares. I have them because they pay dividends and have an investment growth that is better I feel than property Growth. I am an Australian, I invest in Australian mining progects and thus invest in big multinational companies that are exploring Australian resources for its mining. I pay tax on the dividends I recieve from the Mining companies I have invested in. Are we all going to suffer... yet again... for another bundle from the labour parties missuse of time nd effort? i would like to know what funds Kevin Rud and Wyane Swan have their investments in, and if they sold some of shares particularly mining ones before they planed to propose this nex tax on mining?
not all investors are form overseas
not all profits go overseas
so why punish a working class Australian for investing in a company that just happenes to be a mining sector company when im going to pay tax on my dividens anyway?

chef mjp and some others,
Also have a few minining shares .
I think that the taxes should be in line with the Petroleum Industry Profit Tax .
The Super Profits Tax is about Australians getting an owners' slice of the pie .
The rich ARE getting richer on the backs of Australian Workers and Resources.
It is an oportune time to give more help to smaller companies and the less well off workers .
Good on you Kev !