The mining tax

[Power Raid]

The mining sector would not have collapsed at all. They just would have made 500 million instead of 600 million.

Realistically, though, the tax should be on volume mined, not on the profits of the company.

Grin raised another issue that needs revue and that is native title.

I love the fact this is a policy that has the potential to provide the funds to pull the indigenous population out of poverty. The wholesale changes should be:
1) remove the requirement for mining companies to negotiate the fee with the indigenous groups:
- what happens in reality is native title is used as a tool by mining companies to warehouse tenements and hold up expenditure requirements.
- then mining companies refuse to negotiate in good faith knowing they can get around the payments by going to administrative tribunals
- lawyers and consultants of indigenous groups rob indigenous groups by charging extraordinary fees such as $30k a day for surveys meaning land doesn't get explored thus no future revenues are created
1a) The solution would be an automatic increase in state royalties and the state pays the funds received into a broader aboriginal development fund for education and business venture capital.

This would stop warehousing, promote expenditure, improve education prospects for indigenous people and allow them access to capital to start up business ventures. I would also be keen to see more and more indigenous groups working on the mine sites.

Twiggy has been an absolute "C" with the aborigines through his native title dealings but he has made amends somewhat with his recruitment of aborigines both on site and in his head office. I guess his philosophy is "the best form of welfare is giving someone a job".

 

[Power Raid]

Your points 1- 6 are just rhetoric.

3) for example, it doesn't collect returns, but scares off investment?
It is set up so it doesn't have any returns until the individual case has reached annual profits of $75 Million , and then it is only charged on the super profits.

When you say "the tax should only be on low risk commodities such as coal and iron ore". Do you mean "shouldn't"?

The tax should only be on low risk commodities like coal, iron ore, bauxite and other low risk commodities. The original tax was on all commodities and completely ignored the basic principle of risk reward. Only a monkey would have thought this was sensible.

You can call it rhetoric if you like and well done. but then you have gone on to highlight 3) which suggest you have not worked in finance or understand capital markets. There are so many aspects of this comment which demonstrates a lack a basic understanding.

 

[Power Raid]

The mining sector would not have collapsed at all. They just would have made 500 million instead of 600 million.

Realistically, though, the tax should be on volume mined, not on the profits of the company.

You're right as taxing profits reduces the motivation for investment to improve processes and improve efficiencies. By taxing volume, you ensure no clever cost shifting occurs and ensures only tonnes generating a return to the state are mined.

That said, I would still have a profit component which should just be an add on to the corporate tax.

Having to have financial accounts for reporting purposes, a second set with reconciliations for tax and then a third for the mining tax is ridiculous.

 

[slicedndiced]

If Rudd hadn't just rushed into introducing the legislation in his usual manor. If he'd 'war gamed' it and predicted the industry response...
If Hawk or Howard had implemented it, I imagine the approach and build up to the introduction of legislation would have been far more strategic.
It's a real pity that we missed out on getting a better return for our mineral wealth.

Agreed.

Like most things during his tenure, the basic fundamentals were sound, but the implementation, planning and fine detail were atrocious.

The country really missed a grand chance with this.

 

[Power Raid]

hang on Power Raid . Gina didn't inherit billions of dollars worth of untapped resources in tenements held by her father and Wright??

wut??

no, it wasn't worth billions then

it might be now but not then

"It was this mine and her father’s wealth that Gina stood to inherit as Hancock’s only child (he was worth $150 million when he died) if not for her step-mum Rose Porteous who she famously battled for over a decade in the courts to swing the 50:50 split in her favour.

That inheritance in 1992 (worth $75 million to Rinehart) put her on the BRW rich list for the first time, but it’s what Rinehart did next that truly saw her step from her father’s shadow."

 

[slicedndiced]

no, it wasn't worth billions then

it might be now but not then

Wut?

The ongoing royalties for the 'life of mine", (well over 100 years), for the Rio Tinto mines was worth how much?

Cloudbreak etc, etc had proven resources of 100 of millions tonnes of high grade hematite.

Even at $80 a tonne, you do the sums.

 

[Power Raid]

Wut?

The ongoing royalties for the 'life of mine", (well over 100 years), for the Rio Tinto mines was worth how much?

Cloudbreak etc, etc had proven resources of 100 of millions tonnes of high grade hematite.

Even at $80 a tonne, you do the sums.

mmmmmm

I would love to see how you can make $80/ tonne when the iron ore price was around $20-30/tonne (and that is for 62%fe not the crap grades exported from cloudbreak (don't you mean hope downs or other))

drugs are bad ok?

 

[slicedndiced]

mmmmmm

I would love to see how you can make $80/ tonne when the iron ore price was around $20-30/tonne (and that is for 62%fe not the crap grades exported from cloudbreak (don't you mean hope downs or other))

drugs are bad ok?

Call it $30 a tonne then and do the sums. 100's of millions of tonnes.

Take into account Langs vast real estate portfolio too, and don't forget all the other tenements and royalties.

You are attempting to make Gina a saint because she somehow "developed" her old mans legacy, when, in fact, she was given the keys to a treasure chest beyond most peoples imagination.

As usual, you are full of crap. What's next? You used to pork Gina before she became a behemoth?

 

[Power Raid]

Call it $30 a tonne then and do the sums. 100's of millions of tonnes.

Take into account Langs vast real estate portfolio too, and don't forget all the other tenements and royalties.

You are attempting to make Gina a saint because she somehow "developed" her old mans legacy, when, in fact, she was given the keys to a treasure chest beyond most peoples imagination.

As usual, you are full of crap. What's next? You used to pork Gina before she became a behemoth?

why not use the quoted inheritance rather than use the high level of revenue and ignore operating costs, royalties, taxes and capex.

Do an NPV if you prefer not to use the number calculated and quoted by third parties. In the mean time, I will use BRW's $75m and others quoting between $55m and $80m.


Further it has nothing to do with a mining tax other than highlight the ugly and jealous side of your personality.

 

[Jiska]

I think it's better on the profits because of the fluctuating value of minerals.

Except that it results in companies diverting revenue elsewhere in order to report lower profits to avoid tax.

 

[Power Raid]

Except that it results in companies diverting revenue elsewhere in order to report lower profits to avoid tax.

not only reducing profits by shifting costs from head offices overseas to the project but uglier tactics like:
- shifting profits into operating companies providing supplies (shifting profits sideways); and
- producing an ugly con like gold with arsenic which means you are selling a product with no market and a low value. the result is not only a loss on mining related taxes but also corporate taxes and value added operations here in Oz.

 

[slicedndiced]

why not use the quoted inheritance rather than use the high level of revenue and ignore operating costs, royalties, taxes and capex.

Do an NPV if you prefer not to use the number calculated and quoted by third parties.


Further it has nothing to do with a mining tax other than highlight the ugly and jealous side of your personality.

Yes, it's a worthy thread and I apologise to Jiska for adding to the derailment, however your white-knighting of Reinhart is a little hard to take.

The 'quoted" inheritance? Sweet Jesus. Lang was a little more cagey than that.

Jealousy? Why would I be jealous of a sloth who has been spoon-fed since birth, denies her indigenous siblings existence, ostracises her own children and deliberately uses her wealth to push a neo-con ideology through purchases in the media.

The truth is that if Lang didn't get lucky, Gina would have been another busted arse housewife on a struggling cattle station.

 

[Tiger08]

This tax sums up the previous government in a nutshell

http://news.smh.com.au/breaking-new...urns-from-trickle-to-drip-20140730-3ct44.html

600k in the last three months? That's less tax than Rudd's wife pays.

Half arsed. Half thought through.

At least it didn't burn peoples houses down though.

 

[Power Raid]

What do you think the tax is on???

And it is all rhetoric. You talked about the constitution, that it doesn't raise enough money, but scares off investment, attacks Aussies but not international, and "the tax should only be on low risk commodities such as coal and iron ore."
It does only tax coal and iron ore...


You are just shooting off the usual anti MRRT talking points.
Nothing but rhetoric. "You haven't worked in finance ipso facto, my rhetoric is correct"

try and concentrate for a full post or even a full sentence. If you read the next word, I was suggesting it should be expanded to all low risk commodities which are generally bulk commodities and include bauxite.

The other reason why this issue was raised was the original tax covered all commodities. I won't repeat why it was ridiculous as you probably haven't read this far anyway.

 

[Power Raid]

Yes, it's a worthy thread and I apologise to Jiska for adding to the derailment, however your white-knighting of Reinhart is a little hard to take.

The 'quoted" inheritance? Sweet Jesus. Lang was a little more cagey than that.

Jealousy? Why would I be jealous of a sloth who has been spoon-fed since birth, denies her indigenous siblings existence, ostracises her own children and deliberately uses her wealth to push a neo-con ideology through purchases in the media.

The truth is that if Lang didn't get lucky, Gina would have been another busted arse housewife on a struggling cattle station.

we are in agreement. I don't think much of her either.

so what is your point? If you don't like the $75m inheritance value, please show me your calculations.

 

[slicedndiced]

75 mill?? Good grief.

You make more sense waffling about mining taxes than you do with this.

I am done derailing.

 

[Power Raid]

75 mill?? Good grief.

You make more sense waffling about mining taxes than you do with this.

I am done derailing.

DYOR

 

[slicedndiced]

DYOR

wut?

 

[Power Raid]

wut?

it suggests your fingers must be broken

 

[slicedndiced]

it suggests your fingers must be broken

ahhh, do my own research. I see.

And the stated valuations at Lang's death wouldn't have been manipulated by clever accountants for tax purposes? Things squirrelled away in Family Trusts, offshore etc??

You're, apparently, smarter than this.

 

[Power Raid]

ahhh, do my own research. I see.

And the stated valuations at Lang's death wouldn't have been manipulated by clever accountants for tax purposes? Things squirrelled away in Family Trusts, offshore etc??

You're, apparently, smarter than this.

you don know we don't a death tax and it is better for CGT purposes to have a high cost base? even foreign entities which don't normally have to pay CGT, have to in the case of land rich companies or assets.

so yes, I am aware of the tax issues and in this case a high value is a good value.



I look forward to your next dribble which is a veneer cover for your lack of control over emotions such as jealousy and hatred.

 

[slicedndiced]

you don know we don't a death tax and it is better for CGT purposes to have a high cost base? even foreign entities which don't normally have to pay CGT, have to in the case of land rich companies or assets.

so yes, I am aware of the tax issues and in this case a high value is a good value.



I look forward to your next dribble which is a veneer cover for your lack of control over emotions such as jealousy and hatred.

75 million in 1992 to near 30 billion in 2013.

All on the back of developing a mine.

ok then PR.

Again with the jealousy card.

 

[Power Raid]

75 million in 1992 to near 30 billion in 2013.

All on the back of developing a mine.

ok then PR.

Again with the jealousy card.

she has never developed a mine. what are you talking about?

and can't you read a graph?

 

[Gough]

I guess if the mining boom is over, we could diversify into renewables, oh wait....

 

[Power Raid]

I guess if the mining boom is over, we could diversify into renewables, oh wait....

we are waiting.....for renewables to work, for Australia to become an R&D nation, for Australia to become a leader in electrical and electronic engineering etc etc

or do you mean we a customers waiting to buy renewable technology?

Sure let's buy these products. but I think one is sector is a part of the economy whilst the other is what we can buy with the wealth generated by the other.