*Yabby that is just not so. Banks will bankroll anything they think will turn a profit*

What isn't so? Mining exploration companies can't guarantee anything.
They head out there with their geologists and drill rigs, they
sink holes. Most of the time they find nothing. Occasionaly one
hits paydirt, like IIRC recently Acacia, when they were down to
one geologist who sank one last hole and found gold. Banks simply
do not finance this kind of thing.

Any large mining development needs large investor equity which
banks won't cover either. Because of the uncertainty. If tomorrow
China pulls the plug for a while, iron ore and coal prices would
crash, banks simply don't take those sorts of risks.

For investors, if the Govt is taking most of any profits, its simply
not worth investing in mining. Better off just buy bank shares
for instance.

Yabby
I am not sure what Venezuela has got to do with anything, next you will bring Aldi and Woolworths into this debate.

Yabby, the government has cut other taxes and for many mining companies they will actually pay less as the emphasis will be on profit not on the royalty regime which is often greatly distorted according to Ken Henry (read the previous link).

So Yabby what you are saying then is that any business venture that carries great risk should not have to pay a fair tax on profits? As usual it is the middle classes paying a disproportionate amount of their income on tax while big companies continue to expect benefits.

Wayne Swan said recently "It's impossible to justify a system where Australians pay proportionately more tax as their income goes up, while mining companies pay proportionately less tax as their profits go up," he said."

Swan quoted as saying "It's impossible to justify a system where Australians pay proportionately more tax as their income goes up, while mining companies pay proportionately less tax as their profits go up

This is wrong though, tax is the same percentage be it 28%, 35% whatever it is the same percentage.

The difference is carried forward losses can cause a distortion in numbers. The profits have exploded last few years and would look more dramatic as the previous years were losses many of which are carried forward. So not an apple to an apple comparison and very dishonest on behalf of Swan or stupid, take your pick. Also a lot of profit is really from the investment miners have made themselves.

So in ground value for iron ore is about $8 a tonne. Now they sell for between $80 and $160. So if an aussie went to the outback and found a bunch or iron ore they would not get more than $10 a tonne tops. Then the value increases due to closeness to port, to roads and rail. If the miner has to build all this then they should get the profit from that part of the process. This tax actually steals that profit that is purely from the miners input, at the expense of minerals that are less economic. So trade of mineral income (royalty) for income based on miners hard efforts/improvements and financial investment. This is why many see it as appropiation...or theft.

So miner who raises money for ports, roads, rails wll be angry. the guy whose falls off the side of a hill not a ship may not be so peturbed. There is no logical to treat all equal.

Pelican, your comment about Venezuela at the time matters, because
it gave me an understanding about what you know, when it comes to
how economies function and why.

Under Ken Henry's scheme, if the BP oil spill had happened here,
taxpayers would be wearing 40% of the 35 billion $ plus damages.
Do you really think that is so smart? I, along with many
business commentators, think that Henry has this one wrong.
Relying on a single man's advice for the economic policies of
a whole country, is IMHO not a good idea, as the Americans found
out with Greenspan.

The mining companies don't pay less as turnover rises. Its
rubbish. As Swan has finally admitted, under the new tax they
could be paying 58% tax. Under the old one, BHP are paying 43%.

It makes great sense to have various forms of taxation and not
just one, that is why royalties are a good idea. Or clever
Chinese accountants will make sure that their miners pay nothing,
as the Missus points out.

Qld increased their coal royalty to 10%, for coal worth over 100$
a tonne. WA could do the same with iron ore, that would make far
more sense.

If you are really intersted, go to the Business Spectator website
and take a look what people like Alan Kohler and similar are saying.
You know, the guy on ABC TV each night. These are not miners,
these are not thugs, these are informed business journalists who
understand how and why economies operate as they do.

Hay Pelican, pot & kettle again.

Why did you only read the first 5 words of my post, then comment on that, without even looking at the subject.

I am not welded to anything, although I will admit I think Rudd is one of the worst people Oz has produced.

There is absolutely no doubt about character assassination of the PM,
if your looking at the Bolt article in the Herald Sun today, complete with doctored picture of the PM
in despotic costume, with accompanying hysterical headline.

Regardless of who is responsible for our current good fortune
(and it wasn't Costello Yabby), fact is we are in a fortunate position
compared to the rest of world. Treasury predicts return to surplus budgets in 3 years.
This massive debt claim you make can be repaid in 3 yrs by a tax change.
Costello sold the farm to resolve debt over 12 and half years.
Swan want's to resolve debt in 3yrs something Costello would never have had the courage to do.

We are not in dire straights because of the Rudd Gov't. That is gross overstatement,
as is the mining industry's own attempts to talk it's own prospects down
and grossly overstate the effects of an RSPT on it's business.

I heard criticism today of the new Hungarian Govt trying cast blame on
the old Hungarian Govt by saying their country was in a Greek like position.
EU reps suggested that was a naive thing to do for the new Govt, and also incorrect.

Not unlike the antics of our own opposition Yabby and Rehctub.
And your wrong I'm not a Rudd lover at all.

But I could not imagine a Tony Abbott Prime Ministership!.

And I'll be carful not to hit my head on the polling booth on the way in either Rehctub.