While John Howard and Peter Costello did leave the federal Budget in structural deficit with all those tax cuts, you can always rely on a Labor government to crank up the spending and worsen the fiscal outlook. However, at least most of the Rudd government’s new initiatives have been one-offs such as pink batts and the building education revolution. And as most Western countries are now discovering after the GFC, budgets are severely in the red and no one wants to go the way of Greece. Which brings us to the extraordinarily comprehensive range of revenue-raising options presented by Ken Henry’s report and the selection of one single monster tax to save the Budget over the medium term. An extra $6 billion-plus a year in revenue from the Resource Super Profits Tax is no small beer but that also relies on some fairly heroic assumptions about commodity prices holding up. People forget that Australia suffered continuous terms of trade deterioration for almost 50 years until the China-driven boom really kicked in over the past decade. With a market capitalisation of $120 billion, Rio Tinto isn’t exactly about to go broke. And BHP-Billiton is trucking along quite nicely with a market value of $228 billion. Robert Gottliebsen’s Business Spectator column yesterday was head-lined: "Are we pushing BHP and Rio offshore?" Frankly, London-based Rio Tinto is effectively a foreign company already, given that Australians only own about 13% and there are just three Australian-based directors on the 14-person board. If the company had followed the advice given at the 2008 AGM and moved its global headquarters to Australia whilst wrapping itself in the flag, it wouldn’t be such an easy target now. Even BHP-Billiton is now down to Australian ownership of about 40%, largely thanks to the folly of former chairman Don Argus giving away 42% of the company to Billiton shareholders in 2001 for a bunch of assets that would struggle to deliver 15% of the value these days. The main reason a resources super profits tax works best for Australians is that more than 80% of our resource profits go to foreign owners. The North West Shelf is only about 10% Australian owned and we’ve got virtually nothing in Mt Isa since MIM fell to Xstrata in 2003. While BHP and Rio together have Australian operations worth almost $200 billion, there is another $200 billion-plus of projects down under controlled by the likes of Xstrata, Mitsui, Mitsubishi, Marubeni, Shell, Exxon-Mobil, BP, BG, Chevron, Anglo-American, Peabody, Conoco-Philips, Apache Energy, Alcoa, Newmont and the Chinese government. That’s another 16 players all of which would have Australian resource investments worth more than $10 billion. Each! If you want the detail on who owns and operates what, check out this comprehensive list of the major Australian resource projects that are majority foreign owned, along with shareholding breakdowns and royalty regimes where available. It is an indictment on the directors' club and institutional shareholders that Australia has not been able to develop and retain ownership of a major global player in oil, gas or gold, but at the very least we should claw back some of the super profits going to the foreign players who are doing it for us. Such a tax will also substantially improve the current account deficit because the $40  billion-plus a year currently being repatriated from Australian projects to foreign investors will be reduced somewhat. We’ve already seen the Fortescue Metals Group team led by Andrew Forrest rail against the new super profits tax, but besides Twiggy and his 31.5% stake worth a tidy $4.5 billion, there are very few major Australian investors on the FMG top 20. While the miners will gripe about the total tax bill at the top of the cycle, the state-based revenue regimes still apply at the bottom of the cycle when projects are making losses. This will make the federal Budget even more susceptible to wild cyclical swings, but if the total tax take is substantially up over time, then it doesn’t matter so much. All up, this is a very good initiative by the Rudd government and Tony Abbott should show some consistency with his anti-immigration policies by supporting a move that slugs huge foreign companies but benefits little Aussie battlers.