Miners dig holes in the ground for their own benefit. As for spending 30 billion on an infastructure job, i say there is more behind that than miners spending money. They are the first to screem when a road needs fixing, Iron ore and copper is being shipped 500 km's by road train, twice a day by each truck. There has got to be a lot of fat to do that.

The biggest whinger about the SPT is Andrew Forrester. It was revealed today that despite him being the richest man in Australia his company is yet to pay a single dollar of corporate tax.

To use a current vernacular, WTF?

Blue I could be wrong, but I get the idea you don't understand how this profit thing works. Not surprising really, if you were very good at it, they'd be paying you millions to hide it for them, to avoid super tax.

You don't go spend your $30b, get that back, then start paying taxes on your profits after that.

That $30b is capitalisation. It stays there. You start paying taxes on your profits from the moment you make any. So your income over operating costs, less any interest on borrowing, is taxed.

The miners do pay big taxes. If they make a couple of B, they would be paying half of that in various taxes. After paying dividends to share holders, [probably your super fund is one], they may retain $1/2b in retained profit to pay off borrowings, & fund future projects.

In a $30b project at that rate it would take 60 years to recoup the up front costs. That's assuming the price for their commodity holds up.

A bit over 20 years ago a mate of mine, a personal manager in the mining industry, thought his company would go under quite soon. They had granted high pay & incredible condition to their workers, in an earlier boom. He had no problem with this, he reckoned that to live in the ar's end of the world in a mining camp, you deserved it.

However South Africa was becoming big competition, & the Japs had screwed the price of coal so far down, they lost money on every ton. He was looking for a house to live in, when they closed.

Well another boom saved them, & made them rich. This allowed them to buy the best ulcer medication. They needed it.
Continued.

Continued
One of the main bitches with the mining tax is many believe thet a sweet heart deal has been done with the big 3 miners. It is believed that their size & clever accounting will allow them to hide much of their profit in interest payments.

Some would say good for them, but the smaller operators, [still bl00dy big to you & me] will not be able to do this. They believe their capitalisation will be destroyed, but the big blokes will get away scot free.

I have no idea. It is a long time now since I studied a balance sheet, & they give me a headache these days, but there are enough saying it for there to be more than a little truth in it.

If all those little miners shoot through, & the big blokes can avoid paying this "super" tax, all we will do is loose heaps of tax & jobs, while the idiot pollies smile at the camera.

Yabby
It is not a complaint about profits, that is what businesses are about, it is about sharing some of the largesse along the chain of production. Afterall taxpayers are footing the bill for infrastructure for these places for the most part and resources are worth something surely to their owners.

rehctub and Blue
I tend to agree with your comments in a general sense. In relation to the above statement to Yabby, if the goal is a more equitable (not equal) share of the boom a better taxation regime would be the ideal.

Royalties are good but how do we know what to charge a mining company until the profits are in. It would be unwise also to charge a very high royalty rate at the beginning if the business then failed to make reasonable profits. Maybe a basic royalty to start then adjusted according to profits, but then I don't see the difference other than in name, it would just be a different mechanism - same end.

On another front (digressing for a bit) there is far too much emphasis on mining and we are at risk of becoming too dependent on this income, ignoring the long term. There are also huge environmental impacts to be considered in the continual approval of new mines and damage to pristine areas such as the GBR. But that is another story I guess, but something to keep in context of the whole mining debate.

The miners already pay tax on profits, it's called company tax.

Now apart from company tax, they also generate millions, if not billion in the forms of GST and emplyees PAYG taxes, so they do pay tax. Do you really think it is smart to risk all this?

Now on the other hand, if governments said to miners, you invest your billions and we will give you a guaranteed return on investment of 12%, both on exploration and mining activities, I am sure most miners would jump at it, as most mining explorations result in failures.

Now of cause this would have to refer to new business only, as exploration is where the real risk is.

On my property alone, a CSG company is investing up to $10 million just to have a LOOK for gas. Now if they find it, that's great, wherever or not it's ready for extracting is another story.

The returns in CDG mining are huge, but come a distant second to the risks in exploration.

Royalties
It is my understanding these are applied at a set rate per ton.

Some mines are so low in productivity that they often make little to no profit once the royalties ar paid. Now if they were a percentage of the sale price, then they would rise and fall along with the markets. But that's just to easy.