War of words over mining tax continues 23
EMILY BOURKE: To some it’s the tax the mining industry had to have, an overdue and essential correction, a reform that will boost fairness and share the wealth.
Canada Goose Parka But to others, it’s an egregious impost on a booming sector that’s driving the Australian economy. Canada Goose Parka
To discuss some of the sticking points of the policy, I spoke to Alan Moran, the director of the Deregulation Unit at the Institute of Public Affairs and Richard Denniss the executive director of the Australia Institute.
Alan Moran what’s your overarching position on the Minerals Resource Rent Tax?
ALAN MORAN: What the mining tax seeks to do is put another additional 22 per cent tax on this industry which to me is like trying to kill the goose that lays the golden eggs.
cheap Canada Goose It’s an additional tax on an industry which has created our present standard of living and one which in the future could start undermining that standard of living. cheap Canada Goose
EMILY BOURKE: Richard Denniss do you think this tax can deliver as is promised?
uk canada goose RICHARD DENNISS: Oh look it’s certainly going to deliver a lot more revenue than not having a mining tax and no budget forecast is ever canada goose outlet trillium parka black entirely accurate. We don’t know what commodity prices will be in five years time so we can’t possibly predict with accuracy exactly what the revenue will be but you know canada goose black friday usa Alan said we’re going to kill the goose that laid the golden egg. uk canada goose
I think it’s we the taxpayer who have been feeding the goose all these years; we’re going to collect some of the eggs. I mean this is not a mining tax; it’s a Mining Resource Rent Tax.
The only miners that will pay this tax are the ones that are particularly profitable and the more tax that the particularly profitable mining industry pays then the lower the taxes that other people can pay or the more that we can spend on goods and services and it’s just ridiculous to suggest that this tax is going to have any substantial impact on the amount of mining investment.
There’s something like 94 major projects on the books at the moment worth $173 billion, a fifth of a trillion dollars in mining investment all planning, all rushing ahead.
You know we’ve got infrastructure bottlenecks, we’ve got skills shortages. The mining industry is so desperate to build these mines for the simple reason they’re so enormously profitable.
EMILY BOURKE: Alan you’ve talked about the dampening effect that this might have on new developments. Dampening doesn’t equate to extinguishing interest in Australia’s resources sector does it?
buy canada goose jacket ALAN MORAN: No and Richard’s correct in one sense that basically this is a tax on the most affluent, the most successful companies. It’s like having a tax on Apple or Microsoft and saying well this won’t have any effect on the rest of the IT industry in the United States. Of course it will. buy canada goose jacket
Canada Goose Coats On Sale Mining actually has about the same level of average return on capital, that is over the last 20 years, as industry as a whole; it’s about 14.7 per cent. Canada Goose Coats On Sale
The point about mining is that this tax is a tax only on the most profitable mines. But basically you’ve got a portfolio of mining interests there, some of which, one in ten, is going to really hit pay dirt and become really profitable.
Canada Goose sale I mean another one in ten or two in ten will have some profits, the rest are duds. And that’s what the mining is canada goose 3xl uk like. It is risky. You go looking, you do your R D, you do your exploration, you spend a lot of money mainly you’re going to find dry holes. Canada Goose sale
You’ve got to earn a lot of money canada goose outlet on those successful mines, those successful holes that you drill to compensate for the poor holes and if you actually say, well we’re going to cream it off the top of these successful holes, you will see less activity.
EMILY BOURKE: Richard, would you concede that? That might some foreign investors, some miners pack up and leave? Might they desert Australia because the opportunities here are too difficult to explore?
RICHARD DENNISS: Look there’s two quite different responses to that. One is that to the extent that the Mining Resource Rent Tax is actually substituting for royalties then if anything we’re actually encouraging some of the lesser profitable, the lower profit mines, encouraging them to go ahead because they’ll pay less royalties while the very profitable mines will pay more Mining Resource Rent Tax.
Canada Goose Jackets So a well designed resource rent tax, in particular the first one https://www.fabulalitera.de we saw that the mining industry was most opposed to, the first version of the tax would have not only collected a lot more revenue but it would have actually given more incentive for people to build more mines, not less. Canada Goose Jackets
But even if Alan’s right, and I don’t think he is, let’s be clear about this. We’ve got such a massive mining boom going in Australia at the moment with, as I said, $170 billion worth of projects in the pipeline that that expansion, because it’s happening so quickly, because it’s so concentrated it’s driving up our exchange rate to record rates. It’s actually pushing manufacturing jobs offshore and you know Clive Palmer, the proponent of the China First mine in Queensland, his canada goose mens uk own economic impact assessment says quote, “The manufacturing sector canada goose outlet store new york is estimated to record a considerable decline” over the period of his mine’s operations.
EMILY BOURKE: There’s some analysis that suggests that Australia is one of the world’s most benign destinations for miners. In fact they’ve equated it to being a tax haven.
Alan Moran, if I can ask you, how does this tax, in the Australian setting, really compare with other resource rich countries? Countries like those in Africa, Indonesia and China that have moved to aggressively impose taxes over the last couple of years to capture the benefits of the boom.
ALAN MORAN: Not so. There’s a lot of information by the brokers. I mean they’ve got a very strong interest in this, various brokers examining the taxation uk stockists of canada goose jackets regimes across the whole world.
What they find is that basically our regime is about on a par with that of the United States or Brazil and other countries is somewhat higher than that in South Africa, Russia and Canada and other mining concerns.
canadian goose jacket What this tax will do for iron ore and for coal, which are the star industries canada goose outlet in our mining sector, this will push us way above all those other industries canadian goose jacket.