Politics Benefits of mining in Australia?

[nut]

1) Australia has better wealth distribution (read the link)
2) we have more wealth

3) Norway has higher wealth tied up in real estate. Highest in the world! Higher than Oz!

4) we had $1.6 trillion in 2013 and increased since. Putting us behind the U.S., Japan and Britain but way ahead of Norway.


Norway is great but Oz wins.

have you taken onto account the sovereign fund? the one that has close to a Trillion USD in it and the pensions have been paid for.
Which country is better placed to move into the future?

 

[Elroo]

Oh and my 40% Australian risk free participation rate is only federal corporate tax and Gst and doesn't include other federal taxes. Nor does it include the rough 10% state royalties on a profit basis, annual rates, annual property rates, stamp duty, native title 2-10% of profit.

Jesus???

So many mistakes in one post but not unexpected from you.

 

[Power Raid]

have you taken onto account the sovereign fund? the one that has close to a Trillion USD in it and the pensions have been paid for.
Which country is better placed to move into the future?

and we have $1.6 Trillion but we structure ours differently which may explain why we have a better distribution of wealth

I am not slurring Norway as they clearly are a very good nation. I'm just highlighting we are different and in many ways better off.


in regards to norway's petroleum tax, you couldn't do the same thing with hard rock resources as they are very different risk profiles. that was a major oversight in the resource tax mark 1 and if it went through Australia would be bankrupt. Mark 2 was much better but still needed work as it favoured non-residents over australians.

 

[Power Raid]

Jesus???

So many mistakes in one post but not unexpected from you.

which are errors?

are you pointing out I have "converted" revenue based taxes to a profit base to create a comparison?

 

[Elroo]

which are errors?

are you pointing out I have "converted" revenue based taxes to a profit base to create a comparison?

For a start only 1 state and 1 Territory impose royalties on a profit basis; Tasmania in part and the NT. The rest impose royalites on either an ad-valerom or a specific rate for the raw materials.

 

[Power Raid]

For a start only 1 state and 1 Territory impose royalties on a profit basis; Tasmania in part and the NT. The rest impose royalites on either an ad-valerom or a specific rate for the raw materials.

yep and WA for example charges on a revenue basis which translates to about 10% of profit.

given the example above started with the corporate rates which are on profits, it was appropriate to continue the base for simplicity thus the word "rough"

http://www.dsd.wa.gov.au/docs/defau..._stakeholder_consultation_paper_2013?sfvrsn=5

"The basis for determining royalties is to return approximately
10 per cent of the mine-head value of the ore. The mine-head
value is the value of the ore at the first point at which the
ore could be stockpiled once extracted from the mine, and
excludes generally transport or processing costs"

"Royalties are applied to the minerals in their first saleable form,
whether as a bulk material subjected to limited treatment,
mineral concentrate, highly processed or finished form."

 

[Elroo]

yep and WA for example charges on a revenue basis which translates to about 10% of profit.

given the example above started with the corporate rates which are on profits, it was appropriate to continue the base for simplicity thus the word "rough"

WA imposes royalties on either an ad-valerom or specific rate, not profit basis. Totally different.

 

[Power Raid]

WA imposes royalties on either an ad-valerom or specific rate, not profit basis. Totally different.

I think that has been agreed thus the words "rough" and "translates"

 

[Elroo]

I think that has been agreed thus the words "rough" and "translates"

Your claims of states imposing a 10% profit based royalty rate on mining activities is rubbish; as usual.

You cannot even roughly translate an ad-valerom royalty with a profit based royalty rate. They are imposed upon on totally different segments of the mining process. Royalties by their very nature are the price imposed for purchasing a non-renewable resource from the owners.

 

[Power Raid]

Your claims of states imposing a 10% profit based royalty rate on mining activities is rubbish; as usual.

You cannot even roughly translate an ad-valerom royalty with a profit based royalty rate. They are imposed upon on totally different segments of the mining process. Royalties by their very nature are the price imposed for purchasing a non-renewable resource from the owners.

I never claimed it "was" royalty based on profit. I openly said it "roughly" "translated" to in profit terms for a comparative basis with other taxes

what % would you say it translated too? circa 10%

 

[Elroo]

I never claimed it "was" royalty based. I openly said it "roughly" "translated" to in revenue terms for a comparative basis with other taxes

what % would you say it translated too? circa 10%

Yes you did; "Nor does it include the rough 10% state royalties on a profit basis".

There is no way to roughly translate the WA imposed ad-valerom royalty system with a value added or profit based system. Totally different.

 

[Power Raid]

Yes you did; "Nor does it include the rough 10% state royalties on a profit basis".

There is no way to roughly translate the WA imposed ad-valerom royalty system with a value added or profit based system. Totally different.

OK just ignore the words rough. If I claim it was a revenue basis I would have said "the state royalties which are 10% of profits" but I said rough and basis which was a clue there was a calculation.


regardless, what % of profit do you think the state govt tries to achieve "on a profit basis".

go on, be brave and accept you were arguing for the sake of arguing and say "10%"

 

[medusala]

For a start only 1 state and 1 Territory impose royalties on a profit basis; Tasmania in part and the NT. The rest impose royalites on either an ad-valerom or a specific rate for the raw materials.

Tasmania charges a fixed rate I thought?

http://www.mrt.tas.gov.au/portal/royalties

 

[Elroo]

OK just ignore the words rough. If I claim it was a revenue basis I would have said "the state royalties which are 10% of profits" but I said rough and basis which was a clue there was a calculation.


regardless, what % of profit do you think the state govt tries to achieve "on a profit basis".

go on, be brave and accept you were arguing for the sake of arguing and say "10%"

I ignore most of your posting as they are so full of crap.

Your entire post on the taxation imposed on miners was your usual rubbish. There is in no way to translate on a rough basis or any basis an ad-valerom royalty with a profit based royalty. Totally different types of royalties imposed on totally different aspects of the mining process.

Go learn about Mineral Economics or mineral financing.

 

[Power Raid]

Tasmania charges a fixed rate I thought?

http://www.mrt.tas.gov.au/portal/royalties

That is correct. The commonwealth can not legally tax property of the states and thus the royalties are admistered by the states on different basis to reflect the different endowments and economic needs.

WAs royalty collection is about 4 times more than Qld and NT. Whilst Qld and NT would be 3 times more than NSW and SA. Tassie half again and Vic hardly registers.

 

[Power Raid]

I ignore most of your posting as they are so full of crap.

Your entire post on the taxation imposed on miners was your usual rubbish. There is in no way to translate on a rough basis or any basis an ad-valerom royalty with a profit based royalty. Totally different types of royalties imposed on totally different aspects of the mining process.

Go learn about Mineral Economics or mineral financing.

not ballsy enough to answer despite a link

http://www.dsd.wa.gov.au/docs/defau..._stakeholder_consultation_paper_2013?sfvrsn=5

"The basis for determining royalties is to return approximately
10 per cent of the mine-head value of the ore. The mine-head
value is the value of the ore at the first point at which the
ore could be stockpiled once extracted from the mine, and
excludes generally transport or processing costs"

"Royalties are applied to the minerals in their first saleable form,
whether as a bulk material subjected to limited treatment,
mineral concentrate, highly processed or finished form."


go on have a guess!

 

[Elroo]

Tasmania charges a fixed rate I thought?

http://www.mrt.tas.gov.au/portal/royalties

No as per your own link raw materials listed in schedule 1 have a royalty rate imposed on a fixed or ad-valerom basis, whilst raw materials not in schedule 1 have a rate imposed upon a % of net sales and profit.

 

[Elroo]

not ballsy enough to answer despite a link

http://www.dsd.wa.gov.au/docs/defau..._stakeholder_consultation_paper_2013?sfvrsn=5

"The basis for determining royalties is to return approximately
10 per cent of the mine-head value of the ore. The mine-head
value is the value of the ore at the first point at which the
ore could be stockpiled once extracted from the mine, and
excludes generally transport or processing costs"

"Royalties are applied to the minerals in their first saleable form,
whether as a bulk material subjected to limited treatment,
mineral concentrate, highly processed or finished form."


go on have a guess!

Your now telling me WA imposes their royalties on an ad-valerom basis rather than on a profit basis?

 

[Power Raid]

Your now telling me WA imposes their royalties on an ad-valerom basis rather than on a profit basis?

correct they are not profit based but for the basis of context I converted it

which are errors?

are you pointing out I have "converted" revenue based taxes to a profit base to create a comparison?

 

[Elroo]

correct they are not profit based but for the basis of context I converted it

Glad you finally except they aren't a value added or profit bases royalty; you stupidly made that mistake from the start and i corrected you.

How do you convert an ad-valerom royalty to a profit based royalty since they are applied at totally different stages of the extraction and then the downstream processing of materials?

 

[Power Raid]

Glad you finally except they aren't a value added or profit bases royalty; you stupidly made that mistake from the start and i corrected you.

How do you convert an ad-valerom royalty to a profit based royalty since they are applied at totally different stages of the extraction and then the downstream processing of materials?

a rough estimate that simply offset the revenue not recognised through value add processing or transport and the associated expenses. In some cases this could result in a much higher % of profit especially for marginal assets.

Looking at FMG which are marginal assets paid $515m this year and $775m last year representing ~30% of gross profit (before royalties) and 12% of gross profit (before royalties) in a better year. Note most of FMGs ore would be 7.5% royalty and the rest 5%. The other adjusting factor is having to pair back FMGs borrowing costs as the opex is about USD$23-25 these days but the full cost including funding would be around USD$44.

more profitable miners like BHPs and Rios which would dominate the royalty scheme in WA would be lower than FMG and thus without researching would be more similar but lower than the FMG PY 12%.

 

[Total Power]

w

"Australia’s wealth per adult in 2014 is USD 430,800, the second highest in the world after Switzerland. Its median wealth of USD 225,400 is the highest in the world"

This is one of the most useless stats ever. There are various factors contributing to this including highly inflated real estate prices. Italy ranks higher than Germany and Austria here, it does not necessarily mean Italy has more wealth/equality than Germans. Stats dont always tell you the right thing.

We also have better wealth distribution than Norway.

Can you provide a link to this argument? Gini coefficient disagrees with you, The official OECD inequality index also disagrees with you.
http://www.oecdbetterlifeindex.org/topics/income/

You can clearly see Australia ranks 21st out of 36 OECD nations, while Norway ranks in the top 5.

Having lived in Sweden for over 10 years, i dont need to look at any stats though, i would rate Norway higher than Australia (in terms of standard of living). Also you have to wonder how much that median net wealth is worth after a 25% devaluation of the A$?

 

[Elroo]

a rough estimate that simply offset the revenue not recognised through value add processing or transport and the associated expenses. In some cases this could result in a much higher % of profit especially for marginal assets..

Your usual rubbish and you have no idea what your talking about.

Go and learn about mineral economics rather than wasting my time pest.

 

[Power Raid]

This is one of the most useless stats ever. There are various factors contributing to this including highly inflated real estate prices. Italy ranks higher than Germany and Austria here, it does not necessarily mean Italy has more wealth/equality than Germans. Stats dont always tell you the right thing.


Can you provide a link to this argument? Gini coefficient disagrees with you, The official OECD inequality index also disagrees with you.
http://www.oecdbetterlifeindex.org/topics/income/

You can clearly see Australia ranks 21st out of 36 OECD nations, while Norway ranks in the top 5.

Having lived in Sweden for over 10 years, i dont need to look at any stats though, i would rate Norway higher than Australia (in terms of standard of living). Also you have to wonder how much that median net wealth is worth after a 25% devaluation of the A$?

read the report
- Norway has a larger net wealth factor tied up in real estate than Oz
- The report also highlights we have better wealth distribution

I'm sure there are different measures which will result in different outcomes. If you go back, that isn't the key take away as both nations are in good positions. All it suggests is Oz vs Norway's way of taxing resources are different but both netting good results. The reason why they are different is because the risk profiles of mining hard rock vs O&G are also different.

 

[Power Raid]

Your usual rubbish and you have no idea what your talking about.

Go and learn about mineral economics rather than wasting my time pest.

again, others support my assessment

http://www.smh.com.au/business/mini...d-by-royalties-and-taxes-20150303-13tkrz.html

"Mr Pearson said Australia was a comparatively high-tax jurisdiction despite the abolition of the Minerals Resource Rent Tax and the carbon tax, pointing to recent MCA analysis that showed 47.1 per cent of mining companies' profits are paid in tax or royalties."

working back from 47% by removing the federal taxes, its pretty close.

nothing from you? no numbers? no links? just chest puffing?