• Pete

    Good points CIJ.

    Also, as Australia is a leading gold miner, I wonder what impact this might have on the price of gold, locally and globally?

    Plus, does the mining of sulphates and fertiliser material count? I suspect it does. Will this put up prices of fertiliser locally (and globally?) and hurt our farmers more?

    As Australia has mostly coal-powered electricity, will this further increase electricity prices? It could increase the cost of living in Australia?

    Government(s) are really coming into their own lately with all this meddling. Well done Rudd, you will be a famous PM after all! Not for the right reasons, but we'll remember you for the impact you had. I'm guessing the next time we'll see Labor in power is in at least a decade or so?

  • Good questions, Pete. With the super-profit tax, Australia may find itself having many resource competitors down the track.

  • Good questions, Pete. With the super-profit tax, Australia may find itself having many resource competitors down the track.

  • Good questions, Pete. With this tax, Australia may find itself many resource competitors down the track.

  • Good questions, Pete. With this tax, Australia may find itself many resource competitors down the track.

  • Good questions, Pete. With this tax, Australia may find itself many resource competitors down the track.

  • BubbleBoy

    Can you do an analysis on the impact of future mining profits on some miners, and how much in a rational market they should have fallen upon the announcement of this new tax? To me, shouldn't there have been a heavier fall?

  • There can be no rational pricing because the details of the tax has yet to be fleshed out. Until then, the market is flying blind.

  • Miner

    Iron ore miners made a steady margin going back decades. Since 2005, contract prices have increase 6X to 7X while costs stayed more or less the same per unit of ore. That's tens of billions of dollars worth of windall profits going back to England. The ore belongs to all Australians, so like the new tax or go mine somewhere else.

  • gavinwestonnfp

    The RSPT seems to assume that the current rate of production and returns from our ore bodies, the main source of the RSPT, will continue. It is apparent that China has indulged in an over production in many fields affecting our iron ore exports such as large shopping centres and cities being virtually unused and in moth balls.
    It appears that the RSPT is a dead horse before it begins because there is likely to be a depression of ore requirements. What provisions has the Rudd Govt made for such circumstances?
    I am a Puzzled 1.

  • Fernando198029

    This has to be a joke right? or are you seriously prentending to tell the everage jo that we earn less because we spend more?
    It may work for the everage Jo who never went to school, never reads, never speaks to anyone and does not have a bone of logic; but the average Aussie is far better informed.

    So, lets look at a simple figure,
    I earn $10,000
    Spend $15,000
    = -5,000

    This may mean that I am in a deficit because I spent more than I earnt but it does not mean that I am earning less.

    now if I charge more for my services/ resources, lets say
    I now earn $20,000
    and spend a bit more too $20,000
    = 0

    It does not take much to see that is we charge more for OUR resources, which to remind everyone are NON-renewable, meaning, we wont ever see them again then all Aussies will be better off.

    Ohh, but that’s right , poor mining sector.
    Really?, haven’t you noticed these guys boasting on their records earnings year after year, and then turn around to the public who owns these recources and make statements that sound like “any increase to the sector will crush the industry”
    Why?, should Aussies give companies like BHP and Rio Tinto tax cuts for exploiting our non-renewable resources when AU is prime real estate for the mining sector, in case you were not aware, AU is geographically strategically placed to provide these raw materials to the emerging markets like India and China cheaply, for many, many decades to come, so why are we giving away our resources at bargain prices?? Ohh that’s right, because the mining giants will go somewhere else. Do you really believe that these companies will pack up and leave AU?, think about it for a moment, you own your own mining company, would you leave a stable economy (the envy of the world), business security, the best infrastructure in the world, a pool of the best skilled proffesionals in the world, and most of all, one of the biggest deposits of raw material in the world?, most of all would you leave tomorrow, or could you leave when mining contracts differ from others in that they can run for decades.

    Thanks for the laugh.

  • Fernando1980

    ?Also, your claim that the mining giants have to charge more to compensate for the “risk” “fluctuation” in the market, made me laugh, it’s a joke right?

    All I have to say to you is, does any business invest billions of dollars into a venture where the chance of things going wrong are high?, the answer is no, the more you invest the more you look for certainty and stability, AU provides both and more, the mining giants work the same. They love AU because this is mining heaven, and now they love it even better since they have people like you joining their sorrowful chant, “don’t tax me more, I’ll go bankrupt and so will all the mining workers” and a Government that doesn’t have the backbone to do the right thing.

    Thanks for the laugh.

  • First, you are confused between the earnings/spendings of average Joe with the economic concept of current account deficit. We suggest you read more before opening your mouth.

    Your idea that we can just ‘charge more’ for our resources is flawed. Since we have no pricing power for most of our commodities, how can we just ‘charge more’?

    Third, you mentioned BHP and RIO but simply failed to see the huge load of Chinese investment money into our mining sector. If you tax the Chinese money more, guess what they will do? They will work out their sums and realise that for some of the projects, their returns in Africa is higher. The Africans are competing against Australia because (1) African wages are lower, (2) environmental regulations are more lax, (3) their government are more investment friendly, (4) Chinese are more free to import their own labour who are more willing to work at half of Australian wages and (5) Chinese are allowed to station their soldiers in some of the African countries to protect their investments. China has far more mining investments in Africa than in Australia. The RSPT would result in Africa taking a larger share from Australia than otherwise it would be.

    Fourth, you seem to contradict yourself by saying that businesses are looking for stability and certainty. Wouldn’t talk about the RSPT reduce stability and certainty?

    If we follow your logic, why don’t the government impose a 99.999% resource
    tax. By your logic, it would make no difference in investments decisions.