Julia Gillard has suffered another two humiliations this week, firstly as the mining report recommended refunding all state royalties, and secondly, with the collapse of the green loans scheme.

Next for the chopping block is the cash for clunkers and perhaps even the NBN.

http://www.theaustralian.com.au/gillard-retreats-on-levy-to-save-hide/story-fn6nj4ny-1225974698079

WAYNE Swan has copped another hiding over another mining tax and another prime minister has had to retreat to save their political reputation.

Within 24 hours of the Gillard government defending its attempt to renege on a deal signed with Australia's biggest miners over compensation for state royalties under the planned new mining tax, Labor has given way, given in to the miners and sought a new fight with the states.

The Treasurer's backdown is palpable and Julia Gillard's predicament is clear: stick with an unconscionable argument or lose a mining war, a fate that cost her predecessor his job. This is probably a policy advance but it is undoubtedly a political humiliation.

http://www.theaustralian.com.au/national-affairs/m-payout-as-green-start-stops/story-fn59niix-1225974703151

TAXPAYERS will fork out $30m to pay thousands of energy efficiency assessors to complete or upgrade their qualifications for jobs that no longer exist.

This comes after the Gillard government shelved its Green Start scheme.

The decision to abort the $212m energy-efficiency program, cutting the government's financial and political losses from another bungled Kevin07 election experiment, also exposes taxpayers to compensation claims from 4400 assessors contracted to work for the Environment Department.

it only goes to show
govt isnt there to protect the people
smokers get an immediate new tax increase

a few miners get endless discussion/negotiation..
then an eventual back flip..because they get the big tax fre bucks..acces the peoples assets..for pennies

i thought the issue now was about any increase..needing to be compensated...but wtf...govt backflipping..now there is a thing you only see them do..for the allready rich

as for the green scam[sceme]...about time govt wokeup
ditto giving 2 billion to the wealthy enough..*to buy a new car

as for the nbn...cant wait till they drop that too
[ok after we get back the egsisting infastructure..jonny howhard..SHOULD NEVER HAVE SOLD IN THE FIRST PLACE]

all.. form,s of government..has become self-serving
doing as the allready rich..tell them to do
doing as gm..[etc]..wants them to do

and meanwhile the poor get poorer
lets make them backflip on privatisation of our water/power...roads

oh no thats a state issue
get rid of the lot of em

party loyalty is TREASON
ban party politricks

hold the publuic service to account

they all get base pension
not the overly generouse graduated/subsidised..super..they set up for them-selves and polititions...time to end govt cars too..let each use taxies...and use a limited travel allowence..

when in the coiurse of govt affaiors
governance has become too collusive...

its time the lot of em..got a wake-up call
NO MORE PUBLIC MONEY...to private enter=prize

and media will never do it
police wont do it

maybe we could get china to do it
naw the unionists allready sold us out
party politics is treason..audit the lot of em

The greens are right to with-draw, since the people of the world are being convinced by other influences. ( Capitalists still dealing the cards on both sides of the fence ) Oh dear.

BLUE

Becoming a bit boring but not unexpected.
I feel, true, comment so far in this thread is uninformed at best.
The product of these mines is not owned only by overseas interests.
The tax is meant to be a once only payment, that is all it can be, to Australia.
Badly put together at first, redrafted but subject to this inquiry, we have got a seeming consensus.
With at least the big mining company's.
Best results are never one sided but negotiated settlements.
Two solid conservatives,seem to support the Greens RADICAL VIEW that its not enough, bringing us right back to the idea [one I do not agree with]that mining will suffer.
The one thing we can see if we wish to, is this settlement is the best result all sides can expect.
I feel it wasts my time, but level headed fair minded people, with the ability to think clearly, not all have this ability.
Know in a hung Parliament consensus and changed policy's are normal.
Holding the firm belief no open balanced debate with SM is possible this is my only post here, thanks however SM for again underlining the lost nature of conservative politics.

The mining companies need to pay more. This is a simple fact.

The problem is that Swan is a total incompetent, as was Rudd. They have been comprehensively outplayed by the mining companies. That should never have been allowed to occur.

If the gov't believed that the resourcs profit tax was only meant to cover current royalties, they should have said so.

What they need to do now is agree that it must cover all future royalties increases as well. The gov't should then tell the states that any increases in royalties (which will be a gouge of Federal money) will be met by a similar decrease in the GST monies funelled back to the states.

The reciprocal trade, requires Australia to take in goods from the countries, and this opened up a trade of goods which has been destructive to our industries - the clothing and other fabric industries, Tool and other such manufacturing including that of our suburban rail units and the steel fabrication required for dam construction. Our companies such as Coles, Woolworths, with their subsidiaries and Lowes and another hundred companies get these foreign made goods only because they are cheaper, and they are only cheaper because the powerful countries put pressure on the third world countries like Australia, to sell their valuable non-renewable resources at a pittance of their value. Our stupid politicians – state and federal, have bowed to these countries, “acknowledging” that we are a “3rd world”country with no intelligent life form in our political community.
The Political parties which have been in power over the last 40 years have only produced a recession or three, there is no coherence in them as providers of a good economy nor have they provided any security for the wage earners, they have found this out, or at least Wayne Swan bragged to the world stage, that “we”were better off because out top tax was higher. We don't like living in a country with a destroyed economy.

Merv09,

I wonder what countries you think have done well with their economies?

Whilst we could definitely do with some diversification of industry, the fact is that Australians are very wealthy by global standards. Much of this wealth comes from primary industries, but we have always had a comparitive adavantge in this field.

One would need a very selective reading of events to suggest that it was only Australia's economy which had suffered " a recession or three .. in the past 40 years"

Ah, if only life were so simple, as Mervononomics09. But I do
understand that some of the elderly have fond memories of the past,
the human mind works by association. So according to Merv09,
just raise taxes and raise tariffs and all will be well!

Sorry Merv, its all far more complicated then that.

One of the best interviews that I've seen recently,
in understanding the global big picture and Australia's role in
it all, was when Paul Keating appeared on Charlie Rose, a few
nights ago. I checked and there is in fact a full length transcript
of the show, if you hit the transcript button.

http://www.charlierose.com/view/interview/11328#frame_top

I was quite impressed by what he had to say but it was hardly mentioned in the Australian press.

PaulL should pay more; his house and all his property should be confiscated to pay for his redistributionist opinions, commonly known as thieving - all for the public good of course. That is a simple fact.

Belly,

The MRRT is not a once off tax. While the price of minerals is high, it probably won't hurt the mining industry much, but when the boom comes to an end as it will inevitably, there is little doubt that the highest tax regime in the world will stifle investment and cost jobs.

PaulL,

When the mines make more, they pay more tax already, at a present rate of about 42% of profits. The Labor government is simply looking for a cash cow to pay for their profligacy.

The point of the discussion was however, that every time that Wayne Swan and Julia Gillard have made a stand on this issue, they have had to back down. Neither their word nor their resolve carry any weight.

Shadow minister, Peter Hulme,

Did you know that the royalty rates for iron ore are 2.5% of value. That means that at the current going rate of $130 a tonne the iron ore companies pay $3.25 for their resource. Coal is 8.5%. The business I work for pays all the same taxes as the mining companies and we pay 10 times that for our raw materials.

I'd me interested to see where you get your figures Shadow minister. I have little doubt that Rio is claiming the royalties as a tax as well.

Royalties are NOT a tax. Virtually every other business pays a significant proportion of its costs in its raw materials. In this case, those raw materials are ours. And they are paying very little for them, and making a lot of money at the same time.

Mining is vitally important to the economy and I do not wish to see it harmed. My own livelihood depnds upon it. The simple facts are that big mining can (and should) afford to pay a little more,.

Granted that Swan, Gillard and Rudd have been unforgiveably clumsy. But they would never have got mining to the table if they hadn't been aware that they were making super profits, and paying not much for the privelege.

PaulL

Royalties not a tax? On what planet?

tax Definition
A fee charged ("levied") by a government on a product, income, or activity. The purpose of taxation is to finance government

The states consider it a tax, the accounting profession considers it a tax, the Federal government considers it a tax. Pray tell, what luminary source can you provide to show that it is not?

The percentage tax figures were published in the papers as excerpts from the audited yearly results.

shadows miner
as croc dundee would say

tax...thats not a tax

[to quote]...paul l
<<the royalty rates..for iron ore are 2.5% of value...>>

shadow...lest we forget we got a tax on goods and services..of 10 percent...that they hope to raise up to 13 percent

lest we forget the exize tax..on fuel
[not farmers or miners of course]
how much that TAX run at?

then we got the smokers tax
NOW THATS A REAL TAX

we got capital..gains tax
what are miners doing if not making a gain..on their BORROWED capital

mate your defending the indefensable
govt should be doing the MINING ITSELF
then we would get the gross proffits..instead of ever more REAL TAXES

even the royalties on coal is a joke
especially in light of the 2 billion SUBSIDY..nsw put into the sale of their coal stations...somehow..CRYING POOR MATE..its pathetic

if mining isnt giving back..more than its costs
its a quango...[and its costing us heaps]..polution..leaving abandoned mines..spoil heaps..just think of asbestos-mine[spoil heaps]..still sitting there AS JAMES HARDLY LEFT IT

before running away to amsterdam
and even then their fund ...for victims..Needs a govt top up

LET NOT GET INTO THE RESIDUE OF THE GREAT CHEMICAL INDUSTRIES..POLUTING THE MANY RIVERWAYS ARROUND SYDNEY

BAH
MAKE MINERS PAY A real TAX

ITS COSTING US THE EARTH
for what..so polititions can get some policical gains

im still cursing ana blight selling out to clive palmer
and the half a BILLION...john howhard..and peter beatup EACH gave for a magnesia-plant..in gladstone..[that NEVER EVEN GOT BUILT]

im over govt quango's
over coorupt polutions
condoned and subsisised..by polititions..from the public purse

MAKE THE B"S PAY
what about keping the bar stewards honest...[there is no such thing]

*Did you know that the royalty rates for iron ore are 2.5% of value*

PaulL, I think you have the incorrect rate there. Its more like
5-7% in WA, where nearly all the iron ore is mined.

http://www.minterellison.com/public/connect/Internet/Home/Legal%2BInsights/Newsletters/Previous%2BNewsletters/A-ERU3%2Bmining%2Broyalties%2Boverview/

Colin Barnett is correct in not handing over his right to collect
royalties. As it is, WA gets back only about half of the GST that
we pay. Given the urgent infrastructure for growth required,
it stinks, it really does.

Canberra has long treated WA as little but a cashcow. If they keep slicing
more, we might as well just send our tax cheques to Perth rather
then Canberra. We'd be better off without the burden of the Eastern
States, we really would.

Shadow minisiter.

A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government […] a payment exacted by legislative authority."[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority

A royalty is a ROYALTY. It is a usage right. It applies when one party (the owner) licenses another (the user) to use/sell the property of the owner.

The fundamental difference between a royalty and a tax is that in the case of the former, the foundation of the economic activity is the ownership of the asset. In the latter, the gov't tithes individuals and corportaions independent economic activity.

No other business calls the actual cost of its raw materials, a tax.

We build switchboards. The money we pay for sheetmetal isn't tax.

If we were allowed to claim the cost of our inputs as a tax, then it would look like we were paying a lot of tax too.

Yabby and others,

Apologies for the inncorect rate on iron ore. I was looking at the qld gov't royalty rates. It is more like 7.5%.

PaulL,

You give the definition of a tax, and then completely fail to show how the royalty differs.

The royalty is a tax per ton of ore removed, irrespective of the quality. The Henry review recommended changing the mining tax regime from a royalty basis to a tax on profits, which is why the royalties are credited against the MRRT.

Next you will be saying stamp duty is not a tax.

Please provide one reference to support your view.

royalty...is a tithe..payed to the crown

much like patent right..its a condition by which they have authority to collect the wealth..of the common weal

is regestration a tax?
is patent fees a tax?

can we put gst..tax on a tax
sems we have a term...that is used by legal right
but needs cleaning up

for a start lets mandate..all royalties be the same..globally
set at the tithe rate..10 percent

so the answer is clear
federal govt initiates a new tax
the royalty balincing tax

where all royalties are frozen..to the state..as is
and federal govt collects..the top-off balancing royalty tax

that makes all royalty/rates..top off at an equal 10 percent..
right across the common wealth..regardless of what the state royalty rate is..ON EVERY item..that belongs to the people

regardless if it be mineral..vegetable or animal..air or water

we are either all equal..or we arnt

have you noticed..*the NEW*..tax

seems were all going to get..[next year]..
a NEW TAX..60 dollars..on our POWER BILLS

to cover the cost..of the federal renewable energy SCEME

great scam...even the least users pay 60 bucks
and the biggest users pay 60 bucks

thats whats wrong with govt
my electicity bill is going to double
and to..those..USING THE MOST POWER...its a fraction..
of their HUGE abusive power usage...thats whats wrong with govt

the poor ned to pay the same as the rich

it SHOULD BE..
the MORE*..YOU USE..
the MORE ..*YOU pay..

but no...[i have no income..yet need to raise 60 bucks just the same
on top of allready increased electrick power charges

and none of the party machine men give a hoot
damm them all to hell

Shadow Minister,

You can pretend all you want that I haven't demonstrated any difference. But I did. And the difference is simple. It is OWNERSHIP. Who owns the asset/or income stream.

Royalty " in law, the payment made to the OWNERS of certain types of rights by those who are permitted by the OWNERS to exercise the rights. The rights concerned are literary, musical, and artistic copyright; patent rights in inventions and designs; and rights in mineral deposits, including oil and natural gas. "

Next you'll be telling us that an author/artist taxes their publisher/dealer by expecting royalties.

When it comes to coal and iron ore etc. (royalties) the gov't owns the asset and by payment of royalties, transfers that right to the mining companies.The gov't owns the asset which it receives the royalty on.

Stamp duty is a tax on the exchange of goods in which the gov't is NOT the principal owner. Payroll tax, GST, death duty, sales tax etc are also are taxes on economic activity/assests that the gov't does NOT have ownership of.

The Royalty is an input cost. Like every other business which has to pay for the goods it sells, so do the mining companies. To claim that these are taxes isn't so much a problem in and of itself. It becomes a problem when the mining companies use this definition to claim that they pay exrbitant tax rates. My business would also look like it paid massive taxes if we included the cost of our raw inputs as a Tax.

PaulL,

Perhaps you should share your new found knowledge with those who seem not to understand such as Wayne Swan, Julia Gillard, Ken Henry, etc who have all recently referred to the royalties as taxes.

I strongly suggest you read the definition of a tax again, and point out where the royalties do not apply. So far I have yet to see any.

PS. the law was changed from ownership of mineral rights specifically to enable a tax to be levied.