Debt and Deficit - Coalition Budget Emergency

[Max zero]

Debt is very modest in regards to % of GNP. What the budget problem is long term. John Howard with his baby bonus and family concessions to the middle and upper class. Labor should have done something about but didn't.

So we need to be at what 60-70% of GDP before we worry about it?

While the total isn't high its one of the fastest growing in the developed world.

The real problem is this is all happening while our economy is apparently in a massive boom. If it wasn't for the mining boom where would we be?

What happens if the global economy tanks or China hits the skids? We have no savings and are already in debt.

What can't our government (either type) save money?

Where is our 950 billion dollor sovereign wealth fund based on mining proceeds? We collect plenty in tax and royalties (far more then Norway). So why do they have plenty of savings and us none?

Where is all our money going?

 

[swingdog]

Where is our 950 billion dollor sovereign wealth fund based on mining proceeds? We collect plenty in tax and royalties (far more then Norway). So why do they have plenty of savings and us none?

Well, that would have required our politicians on both sides to have balls, implement the original Henry Review version of the mining tax and stand up to Gina and her mates.

 

[eastfreo75]

So we need to be at what 60-70% of GDP before we worry about it?

While the total isn't high its one of the fastest growing in the developed world.

The real problem is this is all happening while our economy is apparently in a massive boom. If it wasn't for the mining boom where would we be?

What happens if the global economy tanks or China hits the skids? We have no savings and are already in debt.

What can't our government (either type) save money?

Where is our 950 billion dollor sovereign wealth fund based on mining proceeds? We collect plenty in tax and royalties (far more then Norway). So why do they have plenty of savings and us none?

Where is all our money going?

I agree on that. Debt is a big issue long term not short term. There should have a been proper super profit tax but the libs didn't want and instead want to the poor to pay.

 

[Max zero]

Well, that would have required our politicians on both sides to have balls, implement the original Henry Review version of the mining tax and stand up to Gina and her mates.

Actually the mining industry has paid roughly 10s of billion in tax and 10s of billion in royalties regardless of the mining tax. Over the course of the boom total tax and royalties from the biggest 22 mining companies was calculated be at least 145 billion dollars.

The original tax was any profit over 6% would be taxed at 40%. In additions to that there is the 30% company tax.

70% tax at anything over 6% profit is reasonable?

To put that in perspective that is investing $1000 and paying 70% tax on any profit above $60.

 

[Max zero]

So over the course of the boom, 22 mining companies paid a total of $145bn tax and royalties to Australia. What's the percentage of that to their net profit? (so, excluding all other costs completely, just purely the profit)

I don't know maybe you could go find out? While your at it compare it too other industries to see whether significantly higher or lower then average.

 

[Max zero]

Well could you give me a link to where you got your figures? Maybe it will be in that?

Why did you quote that statistic if you had no idea of its relevance?

Maybe when you actually contribute something of your own and do some of your own research I might help you.

As to where I found it it was from the minerals council. You may we call bias but you could easily verify (or disprove) the figures from financial statements. That would require work however.

If you have an arguement then put it up I not here to help you in your fishing expedition.

 

[Periphery]

http://www.afr.com/p/national/federal_budget_slash_and_burn_breaks_8tR4JBw1YvUhKBz4mhJEwN

 

[Floor Pie]

Maybe when you actually contribute something of your own and do some of your own research I might help you.

As to where I found it it was from the minerals council. You may we call bias but you could easily verify (or disprove) the figures from financial statements. That would require work however.

If you have an arguement then put it up I not here to help you in your fishing expedition.

I was actually asking you, as a general question. Then I asked reasonably politely. If you cannot actually back up your spin, don't try to take it out on me.

You say you got your information from the minerals council. Did you just come here and repeat verbatim what they wanted you to think, or did you look into the actual stats?

If you want to regress to hostilities we don't need to continue communication. I apologise for asking you a serious question, and thinking you weren't just pushing your bias.

 

[HPKS]

http://www.afr.com/p/national/federal_budget_slash_and_burn_breaks_8tR4JBw1YvUhKBz4mhJEwN

I asked this previously & I'll ask it again. The co-payment is number 2 on this list so why are we not using this to reduce debt ASAP if our debt is so terrible ATM?

 

[HPKS]

It's a good point, but a weak point.
I understand where you are coming from, and I plan on asking a question that is similar to your train of thought, but I'm not sure where to put it, to get an actual response instead of cheer leading.

The co-payment, to me, is a way to set up a completely user-pays GP system. There has been no limit put on the co-payment, it's simply being set at $7 now to make it easier to push through the senate.

The only reason I say your point is weak, and I mean no offence, is because the budget covers a vast area of things, and to focus on one item and demand it be the sole debt repayment system, is just an easy attack on the budget.

No offence taken. I put it out there more as why is this not part of the whole debt package. And this is where I don't agree with this tax. Well let's call it that cause that's what it is. It's a backdoor job n I don't think many people see it for what it really is, a way to turn health into user pays GP system like you say.

 

[Max zero]

I was actually asking you, as a general question. Then I asked reasonably politely. If you cannot actually back up your spin, don't try to take it out on me.

You say you got your information from the minerals council. Did you just come here and repeat verbatim what they wanted you to think, or did you look into the actual stats?

If you want to regress to hostilities we don't need to continue communication. I apologise for asking you a serious question, and thinking you weren't just pushing your bias.

Ahh so you just wanted to take a shot. Still notice you haven't put up a single argument or data source. What was your last username banned for?

 

[Max zero]

http://www.afr.com/p/national/federal_budget_slash_and_burn_breaks_8tR4JBw1YvUhKBz4mhJEwN

Man I thought was budget was weak but thats awesome. Cuts in super tax and CGT. Hell yeah. I won't deny that this will have a positive effect for me. Why tax people trying to invest for their retirement?

But yes there should of been bigger cuts.

Less tax and less spending.

 

[HPKS]

Yeah, I may as well continue my line of thought anyway. It's basically what you are saying.
If we had to pay of our debt, right now, could we?
I mean, if we just scrapped everything for three months, we would pay the debt off, right?
So why do we need to introduce all of these odd changes that have a strong affect on the lower income class, and a soft affect on the high income class?

If we had to pay our debt I'd be very surprised if we couldn't. Class warfare. Liberal ideology sadly is what I think this budget is about, this budget is the first in many steps towards liberal utopia. Of course they have overstepped what they want now knowing after negotiations they will get what they want for their first step in a long line of slow changes. It's a very very sad time we live in n I think the majority can't see what the real game is.

 

[Max zero]

If we had to pay our debt I'd be very surprised if we couldn't. Class warfare. Liberal ideology sadly is what I think this budget is about, this budget is the first in many steps towards liberal utopia. Of course they have overstepped what they want now knowing after negotiations they will get what they want for their first step in a long line of slow changes. It's a very very sad time we live in n I think the majority can't see what the real game is.

Class warfare?

Yeah that was a Liberal invention. Gillard and Rudd never engaged of any of that.

457 visas ring a bell?

 

[Floor Pie]

Class warfare?

Yeah that was a Liberal invention. Gillard and Rudd never engaged of any of that.

457 visas ring a bell?

 

[HPKS]

Class warfare?

Yeah that was a Liberal invention. Gillard and Rudd never engaged of any of that.

457 visas ring a bell?

Both parties have. Unlike a few on here I couldn't give a $h!t about each party. I'm a swinging voter that votes for what I think is best for our country economically n socially. I'm not into blindly following a party for decades.

 

[Max zero]

Jokes on you I didn't vote for the Coalition or Labour. Can you say the same?

If It were up to me I would ban political parties.

Also what were you banned for again?

 

[Max zero]

Both parties have. Unlike a few on here I couldn't give a $h!t about each party. I'm a swinging voter that votes for what I think is best for our country economically n socially. I'm not into blindly following a party for decades.

Yeah people say that but if you are voting for the Coalition or Labour you are part of the problem.

 

[HPKS]

I

Yeah people say that but if you are voting for the Coalition or Labour you are part of the problem.

Don't vote for either regularly. Voted lib at fed election mainly because lab needed a good lesson to not jump into bed with others. Senate I didn't vote either party. It's amazing how many people blindly follow a party like the pied piper walking into a burning building.

 

[Max zero]

I


Don't vote for either regularly. Voted lib at fed election mainly because lab needed a good lesson to not jump into bed with others. Senate I didn't vote either party. It's amazing how many people blindly follow a party like the pied piper walking into a burning building.

I dummy voted in the Lower House because I thought none were worthy and...wait for it...hemp legalisation party in the senate. It was either them, Sex party or Wikileaks. I voted for the hemp party because they apparently had good preference deals and actually had half a chance of getting a seat. Looking at the senate returns they almost did it too (last party eliminated). They would of taken the 3rd seat off the Liberals.

 

[HPKS]

I dummy voted in the Lower House because I thought none were worthy and...wait for it...hemp legalisation party in the senate. It was either them, Sex party or Wikileaks. I voted for the hemp party because they apparently had good preference deals and actually had half a chance of getting a seat. Looking at the senate returns they almost did it too (last party eliminated). They would of taken the 3rd seat off the Liberals.

Politics in Australia is a lot closer to the US system than most people realise. Corrupt, politicians that have never been out of party politics & influenced by lobbyists.

 

[Power Raid]

So over the course of the boom, 22 mining companies paid a total of $145bn tax and royalties to Australia. What's the percentage of that to their net profit? (so, excluding all other costs completely, just purely the profit)

not the easiest thing to see through without a full analysis given the top 22 companies would have international operations which means corporate tax and royalties will be effected by different jurisdictions.

However, the mining boom has only started when everyone has called the end of the boom. The mining boom as most people know it was actually the exploration and development boom. The mining boom only started a few years ago and will continue for a generation or two. The reason this is important to acknowledge is because net profits grew during the boom but the full effect of the boom is only starting to be realised.




Just looking at BHPs accounts you will see the corporate tax rate is 30% but due to timing and permanent differences they paid 38%, 32% and 23% for the last 3 years as a percentage of their "accounting profit". This of course simply unwinds to 30% of tax profit.

In regards royalties they are designed to achieve 5% of net profit and are adjusted up and down accordingly. In addition to that, BHP pay 1% of pre tax net profit to local programs and on top of the 1-2% to native title where appropriate.

So ignoring payroll tax, mining rents (in addition to royalties), GST and other taxes they pay 38%. Adding these back brings it to closer to 50% and then adding to the top marginal tax bracket for the recipient of the dividends brings that to closer to 65%.

 

[nylexbandit]

not the easiest thing to see through without a full analysis given the top 22 companies would have international operations which means corporate tax and royalties will be effected by different jurisdictions.

However, the mining boom has only started when everyone has called the end of the boom. The mining boom as most people know it was actually the exploration and development boom. The mining boom only started a few years ago and will continue for a generation or two. The reason this is important to acknowledge is because net profits grew during the boom but the full effect of the boom is only starting to be realised.




Just looking at BHPs accounts you will see the corporate tax rate is 30% but due to timing and permanent differences they paid 38%, 32% and 23% for the last 3 years as a percentage of their "accounting profit". This of course simply unwinds to 30% of tax profit.

In regards royalties they are designed to achieve 5% of net profit and are adjusted up and down accordingly. In addition to that, BHP pay 1% of pre tax net profit to local programs and on top of the 1-2% to native title where appropriate.

So ignoring payroll tax, mining rents (in addition to royalties), GST and other taxes they pay 38%. Adding these back brings it to closer to 50% and then adding to the top marginal tax bracket for the recipient of the dividends brings that to closer to 65%.

Given the real boom coming/in train is the Oil and Gas boom, have you got any idea what their effective rate ends up being and how it compares to the miners? I work in the area so should know, but get the impression that the PRRT achieves something similar to what the mining tax was intended to?

 

[Power Raid]

Given the real boom coming/in train is the Oil and Gas boom, have you got any idea what their effective rate ends up being and how it compares to the miners? I work in the area so should know, but get the impression that the PRRT achieves something similar to what the mining tax was intended to?

Although we deal in O&G, we only invest in overseas assets and offshore. So I am not a close to the PRRT as I am with the MRRT. I can ask around the office for those in a better position to give an answer (but they are less likely to know about the MRRT).

It should be highlighted O&G has a very different operating risk profile to hard rock mining, very different ownership and ownership structures and very different capex. Which means the PRRT shouldn't be compared to most hard rock mines and the MRRT other than they are designed to increase the effective tax rates.

 

[nylexbandit]

Although we deal in O&G, we only invest in overseas assets and offshore. So I am not a close to the PRRT as I am with the MRRT. I can ask around the office for those in a better position to give an answer (but they are less likely to know about the MRRT).

It should be highlighted O&G has a very different operating risk profile to hard rock mining, very different ownership and ownership structures and very different capex. Which means the PRRT shouldn't be compared to most hard rock mines and the MRRT other than they are designed to increase the effective tax rates.

Cheers. I'll probably do a bit of my own research as well given that I work in tax and should know this stuff! Given all the talk now is about oil and gas rather than hard rock, I would think that the area will be the focus of any future changes. Particularly with the move towards floating, and the potential loss of federal revenue from the JPDA.