Respect for the RSPT
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Taxing the miners: Ben Aveling writes: Re. “How can you tell the mining industry is lying? It’s issued a press release” (yesterday, item 1) If the resource supertax does slow the growth in mining jobs, is that such a bad thing? Given that the “real” parts of the economy are at least anecdotally suffering in competition, taking some heat out of mining is probably a worthwhile goal in and of itself. Chris Main writes: “Business as usual: oil spill cost up to $12.5b … the end nigh for Camwest … unremitting gloom forecast in the UK …” (yesterday, item 23). Both Bernard Keane and Glenn Dyer both claim the Newcrest takeover of Lihir Gold is proof that concerns over mergers and acquisitions activity in Australia due to the Resource Super Profit Tax are overstated. As the majority of Lihir’s operations are located outside of Australia (88% of EBITDA for the six months to 31 Dec 09 from PNG & Africa, vs. 75% from Australia for Newcrest), this argument doesn’t stack up. Australian based companies with operations offshore won’t be affected, but companies with Australian operations will. Expect to see more investment in offshore operations and less investment in Australian operations, regardless of the location of the head office of the companies involved, if this goes ahead as announced. Backbenchers: David Lenihan writes: Re. “What the backbenchers will tell us” “Richard Farmer’s chunky bits” (yesterday, item 9). Perhaps if the backbenchers as a group had more spine and guts, they would have told Rudd, what Labor supporters generally have been trying to tell this very odd PM, they are not happy with his spin, grand talk, flip flops, lack of intestinal fortitude (climate change shelving) and above all loyalty to those who put him in the Lodge. Mr Rudd has a very short memory and seems to have completely lost the plot on how to retain Government. He said today, his job is to act in the national interest and he will continue to do just that. It may be time for Mr Rudd to contemplate just what the National interest is, instead of merely contemplating his navel and what his next unfunny line to a journalist will be. Small business: John Shailer writes: Re. “Henry Review: how did the government respond? It didn’t.” (Monday, item 1). I hope Australia’s 2.5 million small business proprietors and their employees don’t fall for the pea and thimble trick by Kevin Rudd and his media supporters, and believe the Henry Review tax package assists small business. The reduction in company tax (if it happens — can you name a promise Kevin has kept?) doesn’t apply to two thirds of the unincorporated businesses, and amounts to a saving of about $200m. p.a for all the remainder. The $5000 immediate tax write-off simply accelerates an existing depreciation claim. However the 33% increase in the super guarantee levy will cost businesses about $10billion p.a., and inevitably will be funded from a reduction of proprietors income and the loss of employee jobs. With a friend like Kevin, small business certainly doesn’t need enemies! Richard Farmer: Andrew Lewis writes: Re. “Richard Farmer’s chunky bits” (yesterday, item 9). I’m not sure what exactly is happening to Richard Farmer but I think I would like to imbibe some of what he is smoking. The normally sensible Farmer opined a few days ago about “it is only a rare beast like Howard who is prepared to tackle real change.” Well that stopped me in my tracks. When you consider that Howard genuinely effected one economic reform in 13 years of government, that being the GST, it hardly makes him a rare beast. All the rest, including WorkChoices, was either flummery or a problem for a future government to undo, witness the colossally stupid idea of paying only half your tax rate for capital gains. D’oh! And then yesterday’s effort, “I hope there are a few people out there practising their mea culpas re Jessica Watson.” No, not at all Richard, a stupid and pointless exercise remains that, even when it has been successfully completed. Well done Jessica, you have completed something that is pretty much pointless, scarily self-indulgent, and you have done it successfully. Bravo. I said it before you left and it’s only right that I should say it on your return. Pointless, meaningless, just-who-is-exploiting-who indulgence. Please stop now! Enjoy your fame Jessica and family. Please excuse my lack of admiration. |
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22 Comments
Excuse me, Ben Aveling? Exactly how is the mining industry not “real”?
Apparently I’m not the only one non-plussed by Richard Farmer’s positive remarks on Jessica Watson.
How long before an even younger adolescent decides to challenge for the dubious honour of Youngest Person To Sail the World? It will be sooner than we think, I guarantee. There appears to be no end to these fatuous exploits - a great deal of time, expense & effort to attain….what?
Oh ye with little imagination and a three inch world view! In this age where adventure and enterprise are measured in how long you can keep up your latest financial scam, and danger in terms of RBA rate announcements, what this amazing kid with the funny grin has achieved in physical and mental terms, her bravery, and that of her parents and friends obviously exist in a place well beyond your ken.
I, like many others, had some misgivings when she nudged a ship during work-up but she was judged ready by those best placed to make that judgement and, having staked her all, looks like earning her place amongst the heros of legend.
Jessica, this old mariner salutes you.
Not ‘real’ in the sense that most of what we mine goes overseas, the outputs of the industry don’t directly contribute much to Australian life.
If the industry vanished, the impact would be a loss of foreign income (much of which doesn’t stay in Australia) and a relatively small number of jobs - a significant impact to be sure, but much less than many, probably most other industries.
I assume you’re familiar with Dutch Disease?
There are regions and industries in Australia which are suffering because they can’t afford workers because their staff are all going into the mines. And it makes the dollar higher than it otherwise would have been, and that all means that interest rates are higher than they would otherwise be.
That said, given than mining is more profitable than other industries we probably do want to rebalance the economy towards mining, at least somewhat. But not totally, because there is a reasonable likelihood that mining could suddenly collapse (it always has in the past) and so it does make sense to put , not roadblocks, but perhaps speedbumps, in the way of the mining industry.
Andrew Lewis, your lack of admiration for Jessica Watson is an opinion you’re entitled to. Your pressing need to announce that opinion to all and sundry, at much greater length than it took to make your point, marks you out as having exactly the sort of mediocrity you tried to describe. You don’t even show talent as a knocker.
Good on you Jessica Watson. A very impressive feat. As I predicted, you now get to enter adulthood with the knowledge that you can achieve anything you set your mind to. Something the knockers will never understand.
@ James McDonald.
You are now supporting the irresponsible actions of those guardians who would happily put minors such as Jessica in harm’s way.
Consider this: Jessica is not of an age to be competent in decisions of life and death, especially her own death.
The decision for her to try to make it around the world was ultimately for her parents. Who would value parents who, for publicity purposes, place their child in harm’s way? Who? Come on… this involves a mercenary value system which places life (of daughter) beneath getting around the world without actually dying.
Jessica, I salute you and your backers. However, my own parents managed much better their responsibilities when it came to rearing 7 healthy kids of which I am happy to number 6.
If Jessica had six siblings, would mum and dad have tbeen similarly inclined to put one of them into such a situation? I doubt it.
Dr Harvey M Tarvydas
Small business:
John Shailer writes: Re. “Henry Review: how did the government respond? It didn’t.” (Monday, item 1). I hope Australia’s 2.5 million small business proprietors and their employees don’t fall for the pea and thimble trick by Kevin Rudd and his media supporters, and believe the Henry Review tax package assists small business.
I can only blame some sort of toxic spray emanating from politicians like RS Tony Abbott that is seriously poisoning basic human talents of ordinary Australians rendering them to be not only unable to be grateful to their PM K Rudd but rendering them to become unable to even appreciate that their own PM Rudd outperformed all the world leaders in the way, spirit and courage he applied to defeating the calamitous GFC. There are many other things he’s done , promises he’s kept all properly recorded and on the record but those he has served with all this as ignorant as stale shit and suddenly equipped with an aggressive audacity to spit in his face and scream their nonsense out loud.
I have heard world economics experts still flabbergasted at his astonishingly determined and courageous head on Keynesian attack on the GFC and even more astonished that he has by his so amazingly successful demonstration raised Keynesian economics from the grave to the Universities.
The worker pays the super so shame on you and shame on those Australians who (like RS Tony Abbott) are too ignorant to appreciate what their own government has done so well.
Loss of jobs?? loss of some of the jobs he’s just saved by the boatload??
Dr Harvey M Tarvydas
above item with SERIOUS CORRECTION in capitals below
Small business:
John Shailer writes: Re. “Henry Review: how did the government respond? It didn’t.” (Monday, item 1). I hope Australia’s 2.5 million small business proprietors and their employees don’t fall for the pea and thimble trick by Kevin Rudd and his media supporters, and believe the Henry Review tax package assists small business.
I can only blame some sort of toxic spray emanating from politicians like RS Tony Abbott that is seriously poisoning basic human talents of ordinary Australians rendering them to be not only unable to be grateful to their PM K Rudd but rendering them to become unable to even appreciate that their own PM Rudd outperformed all the world leaders in the way, spirit and courage he applied to defeating the calamitous GFC. There are many other things he’s done , promises he’s kept all properly recorded and on the record but those he has served with all this ARE BEING as ignorant as stale shit and suddenly equipped with an aggressive audacity to spit in his face and scream their nonsense out loud.
I have heard world economics experts still flabbergasted at his astonishingly determined and courageous head on Keynesian attack on the GFC and even more astonished that he has by his so amazingly successful demonstration raised Keynesian economics from the grave to the Universities.
The worker pays the super so shame on you and shame on those Australians who (like RS Tony Abbott) are too ignorant to appreciate what their own government has done so well.
Loss of jobs?? loss of some of the jobs he’s just saved by the boatload??
Dr Harvey M Tarvydas
Taxing the miners: Ben Aveling writes: Re. “How can you tell the mining industry is lying? It’s issued a press release” (yesterday, item 1) If the resource supertax does slow the growth in mining jobs, is that such a bad thing?
Ben you are spot on and its so Australian to vote in a tax (GST) to tax themselves and vote out a tax that will take fair tax from those foreigners carrying their country away for their own huge profits (which are not shared with the population that owns the country).
NEW human psychological discovery – obviously natural science – human psychology is UpsideDown DownUnder (just as they walk around upside down downunder).
Ben, I believe you begin to sense your own contradictions. How can the mining industry account for “a relatively small number of jobs”, yet at the same time be draining entire regions and industries of their workers? Why do you think those workers are going to the mining industry? Answer: not just jobs, but very well paid jobs. And where do you think the money from all those large salaries ends up, if not in the Australian economy?
Yes, the mining boom does result in some adjustment issues for the rest of the economy. But Australia’s current account is already thousands of millions into the red. How is it going to look after a massive hobbling of what is far and away Australia’s greatest source of export income?
Harvey Tarvydas, you say: “PM Rudd outperformed all the world leaders in the way, spirit and courage he applied to defeating the calamitous GFC.”
What, because the doctors’ orders were to “Spend, spend, spend,” and that’s the one thing Rudd felt comfortable doing? That’s like a stopped clock claiming perfect accuracy twice a day.
Even then he made a hash of it. There is nothing easier than pumping billions of dollars fast into the economy through the building industry. All you have to do is give tax breaks on construction projects, starting with the suspension of GST on new buildings. There was no need for a series of Chairman Mao programs to be micro-managed from Canberra.
What does he do when the advice is now “Save, save, save”? He blows a hole in Australia’s most productive sector.
And yet at the same time, the BER program is still doing “Spend, spend, spend”. The Auditor-General reports just $2 billion of the allocated $16 billion has been spent so far.
The whole BER farce still seems to be gathering speed. And it will waste a comparable amount of money to that which the mining super tax brings in. And you describe Rudd as a hero?
Relative to the whole, the number of jobs is small. Relative to a small region, the number of jobs can be large.
There are two answers to this comment. The first is that putting all of our eggs into the mining basket may increase export income in the short term, but it makes us more vulnerable to a collapse in mining receipts in the medium term - unless, this time is different?
The second answer is that increasing the price we as a nation charge for our resources will indeed lead to a lower rate of extraction, but will not necessarily lead to a lower total income, because the effective price per unit is higher.
PS.
Exports by industry in 2009:
* Agricultural exports accounted for 4.6 per cent of total exports in 2009, up from 3.9 per cent in 2008.
* Mining exports accounted for 37.6 per cent of total exports in 2009, down from 39.3 per cent in 2008.
* Manufacturing exports accounted for 32.5 per cent of total exports in 2009, down from 34.1 per cent in 2008.
* Services exports accounted for 21.3 per cent of total exports in 2009, up from 19.2 per cent in 2008.
* Exports not specifically classified to the above industries account for the remaining 4 per cent.
Ben that’s all very well if the extra tax harvested from mining were used to develop infrastructure and strengthen other industries. As opposed to pork barrelling, BER and other white elephants, and further subsidizing the housing crunch … er, I mean housing boom.
Whereas a classical economist might argue that mining profits generated the finance and prosperity that enabled the services export sector to take off. Much more efficiently than anything the government is likely to do. It might be different if Rudd spent the money on useful things like intermodal transport infrastructure or efficient renewable energy. Take a look at his spending record and tell me you believe that will happen.
@James
By “subsidizing the housing boom”, do you mean the first home buyers grant?
Dr Harvey M Tarvydas
@JAMES
I also said
“I have heard world economics experts still flabbergasted at his astonishingly determined and courageous head on Keynesian attack on the GFC and even more astonished that he has by his so amazingly successful demonstration raised Keynesian economics from the grave to the Universities.”
If the world (outside Australia) was going totally off when a young Aussie athlete smashed a bunch of world records like no one had ever done before and you became aware of him/her on being told what the world media were going off about I suppose you would look down in the mouth, screw your nose up and say “all she/he had to do was run a little faster” then you seriously would be surprised at the athletic world for writing you off as clueless.
Quoting you
“There is nothing easier than pumping billions of dollars fast” you would know?
“All you have to do is give tax breaks on construction projects” you would know, there have been in-depth expert discussion about exactly this and finding it not so for GFC purposes.
“just $2 billion of the allocated $16 billion has been spent so far” sounds like you could learn something about saving from our PM.
“There was no need for a series of Chairman Mao programs to be micro-managed from Canberra”
There are no communists anymore, we don’t even call Russia or especially China ‘communist China’ anymore so where are you borrowing you communist dreams from, RS Tony Abbott?
Even John Howard stopped ‘the communist thing’ (he travelled visiting important international people in his last important job and must have learned something) but he did invent a new boogie ‘the al-Qaeda candidate’ US President Barack Obama.
Dr Harvey M Tarvydas
@JAMES
James as a moral man would you like to join me to assist the Liberal Party in consistency and encourage them to really push for the expulsion of John Howard from the Liberal Party for his publically pronouncing Barack Obama as the al-Qaeda candidate for President just as they recently expelled the young Dr for insulting Barack Obama semi-privately.
From the top …
@John Bennetts, I don’t imagine Jessica Watson’s parents need or care about any support from me. I don’t second-guess your decisions on bringing up your kids, nor do I second-guess the Watsons.
@Ben, by “subsidizing the housing boom,” I am referring to a whole raft of measures:
- Increased first home owners’ grant, with only a trivial premium for new homes (recall that the original purpose of the grant was ostensibly to compensate for the GST which hit new homes only, unbalancing the market — a little private joke between Peter Costello and those who already owned homes, and continued by Kevin Rudd)
- Increased immigration throughout Rudd’s term, even when high unemployment was forecast
- $16 billion taxpayer investment in Residential Mortgage Backed Securities during 2008-9
- Deregulation of foreign purchases of Australian homes (partly reversed in 2010)
- Ceased FIRB monitoring of foreign purchases of Australian homes (no change in 2010)
- Building the Education Revolution raised the price of building services in some areas at a critical time
Don’t imagine for a minute that the housing crunch was accidental, not with over 60 per cent of voters already owning a home. And don’t imagine that rolling out stimulus money to the building sector is a difficult challenge — all it needed was a few tax breaks, starting with suspension of GST on new buildings. The BER program was a strategy for re-election, not for nation-building.
@Harvey Tarvidas … Sorry, no.
First of all, I am not a Liberal Party member. Second, the last thing the Liberal Party needs is people being afraid to express their views, even though I may find some of those views ugly, stupid, or both. There are already too many journalists trying to appoint themselves as party whips and challenging leaders to censure free speech — a very strange position for a journalist to take, in my view. They don’t need any help from me.
@Harvey Tarvidas, 9 May 2010 at 10:05 am:
Well, put it this way: even the Labor Party and the Greens agree that carbon mitigation is better done by market price signals than by central planning. So, what … price signals are appropriate for the energy market but not for the building market? Come on, pull the other one.
- Increased first home owners’ grant, with only a trivial premium for new homes (recall that the original purpose of the grant was ostensibly to compensate for the GST which hit new homes only, unbalancing the market — a little private joke between Peter Costello and those who already owned homes, and continued by Kevin Rudd)
Agreed. A shocker. Screwed me over nicely.
- Increased immigration throughout Rudd’s term, even when high unemployment was forecast
Yes, no. Immigration is a major factor in population growth which is probably the major factor in demand (although there are claims that ‘quality’ of domicile has changed), but population growth actually has a negative effect on unemployment - it drives demand for services even as it increases supply of labour - compare city/rural - the more populated area will almost always have lower unemployment.
- $16 billion taxpayer investment in Residential Mortgage Backed Securities during 2008-9
Is this a reference to underwriting the banking sector when the GFC hit?
- Deregulation of foreign purchases of Australian homes (partly reversed in 2010)
- Ceased FIRB monitoring of foreign purchases of Australian homes (no change in 2010)
Disagree. The fear of rich foreigners has always been overdone - remember when the Japanese were about to buy everything?
- Building the Education Revolution raised the price of building services in some areas at a critical time
True, but at a time when demand was chronically low. I’d call this an overreaction, but not a major contributor.
OK, I’ll concede the immigration was free stimulus more than anything else.
The Japanese did buy everything in some parts, causing a price bubble on the Gold Coast and in areas of Perth, followed by massive price crashes when they ran out of money.
You agree with me on the grant. That leaves the RMBS scheme. When you say “underwriting the banking sector”, I don’t think there was ever any suggestion that any of the Big Four would go out of business, with or without any taxpayer help. Rudd certainly didn’t give a toss about the lesser banks and non-bank lenders, as events made clear.
During the GFC there were two things that concerned the average Joe in the street above all else: maintaining employment, and maintaining house prices. They’re closely related: high unemployment would have caused a housing market correction. But the converse is not true; if anything, a housing correction might have forced some young retirees out of their early retirement.
These were also among the main concerns of the banks, so there was little dissent when they became the top priorities for Cabinet. I could have included the AAA wholesale borrowing guarantee in my list above, by the way. Very little of that cheaply-borrowed money was lent to business, capital adequacy laws being what they are. (Banks have to keep twice as much capital reserve against business lending as they do against housing lending.) Interestingly, no one seriously suggested adjusting the capital adequacy laws to help business lending, so lots of firms were unable to refinance, and went bust. Strange because unlike businesses, houses don’t collapse when their prices go down, they just temporarily stop being assets and start being houses.
Anyway, along came Christopher Joye, the highly gifted and single-minded housing-market analyst, lobbyist, and of course investor. With support from some big names, he lobbied intensively for the taxpayer to “rescue” the RMBS sector, which we did to the tune of $16 billion. I think it’s a bit hard to credibly call this a “bank rescue”, this was a home-owner and housing-investor rescue. There are a hell of a lot more of those, voting Labor, than business people.
Consider the alternative. As David Gruen of the RBA explained, building is a very efficient way to distribute funds into an economy. What he did not explain, was why a centrally-managed program of overpriced tin sheds and libraries without books, could do the job any better, or any faster, than adjusting market price signals to encourage building activity in general.
Consider what would happen if it was done the way I suggest.
1. The money would have got out into the community faster, with no need for central management and its well-recognized efficiency problems
2. The community would have got far more value for money, due to competition and closer involvement of the buyers in the transactions
3. The overall number of home purchases would have increased, even while individual home prices decreased, so the total housing-mortgage cashflow would have been far less affected than individual prices
4. The housing bubble which Glen Stevens politely warned “might” eventuate (I think we all know what he meant there) would have been alleviated
5. This is the most important one — there would have been actual production and actual wealth creation, as opposed to what we have in the second-hand housing market, wealth being merely reshuffled from one group of people to another.
@Andrew Lewis: I am rarely inclined to entering debate with beige people, but for you Mr Lewis, I need to make a point or two.
People like yourself tend to see life not as a series of hurdles, or challenges, but rather, as a set of boxes to be ticked. Like the current NAPLAN rubbish, designed to do not much more than achieve lowest common denominator, and show how we do in terms of the mob, thereby reducing, even removing perhaps, the need or the want or the simple urge, to excel at something.. anything.. in Jessica’s case, a sail around the world, simply because you can.
The Andrew Lewises of the world, perhaps most of us, have no desire to achieve beyond what is required of us, so the energy and the skills and the pleasure of achieving far more than our peers, is gone, so that no one feels disadvantaged… like kids at an athletic carnival getting “participation” ribbons, instead of first, second and third.
I used to think the calamity of our lost sense of striving, winning and being the best was caused by short haired women in overalls at child care centres, and perhaps to a degree it still is, but after reading your tribute to someone who has, before she is half your age, sailed single handed around the world, without assistance, I think you may be the next knife wielder in the emasculation of Australia.
Another respondent noted your right to an opinion. As an ex-serviceman, it would have been my job to fight for your right to express that opinion. But right now, as a 50 something weekend sailor, waiting for that little girl to get back here, all I want to do, is suggest that next time you want to expose your mediocrity for public comment, shut up instead.
Well said, Daemon.