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Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? I know there was to be some increase in funding but I'm actually not 100

by dejb 16y ago

Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? I know there was to be some increase in funding but I'm actually not 100% sure because the govt did such a poor job of selling it. Anyway I think this may be one of those cases where the XX cents we typically get back from each dollar the govt taxes could be worth it to slow the party down.

zmmmmm 16y ago
> Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? Hah! No. It was a "super profits" tax because it did not kick in unless a project was making a rate of return above 5 or 6 percent or so. So it only taxes "bonanza" profits and has no effect on companies that are making a "normal" rate of return. As for superannuation - there was some sleight of hand as well. The increased super was to be paid by companies. This was then to be partially (but not fully) offset by dropping the company tax rate, which in turn was funded by the super profits tax. So yes, they were linked, but not nearly as directly as they wanted you to believe.
brc 16y ago
It was called the MSPT or Mining Super Profits Tax. Super Profits is a Marxist term (don't know if Marx coined it, or it just became part of the canon) to reflect anything above a 'reasonable' rate of return. In this case it was set at the government bond rate. Which makes you question why any rational investor would invest money into a highly risky mining venture when they coudl get the same returns from government bonds. I suspect they thought they could kick off a nasty class war - which people seem to have forgotten now that Swan was muzzled by Gillard and Rudd deposed. But at the time Swan and Rudd were talking about 'evil foreign rich miners'. But it backfired with some good PR from the mining companies, and a higher level of awareness among the Australian people when someone is being deliberately obtuse. It was sleight of hand to link super profits tax with superannuation. In reality the two have nothing to do with each other because employers pay for employee superannuation out of their bottom line. The only superannuation the government pays is for public service employees. The reason they did a poor job in selling it was because if you actually looked at the details, the tax and the superannuation actually had nothing to do with each other. Lindsay Tanner actually quoted as much before changing his tune to the party line. >slow the party down. Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair. The miners struggled for decades - have a period of prosperity and are whacked with extra taxes. That is not only unfair, it raises sovereign risk and ultimately reduces foreign investment. You don't improve the economy by knobbling your best performer.
- dejb 16y ago
  > It was called the MSPT or Mining Super Profits Tax. Fair enough > It's the ultimate definition of unfair. When you are using a non-renewable resource then what is 'fair' has to be balanced with the changing value of that resource. > You don't improve the economy by knobbling your best performer. You need to measure their performance with regards to the inherent value of the asset. If we started selling huge tracts of our land to another country then you could also say that 'land selling' was the best performing part of our economy but that would not be accounting for the capital loss involved.
- zmmmmm 16y ago
  > Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair. Umm, have you ever noticed how people are actually taxed? It's called a "marginal" tax rate and it's a feature of just about every tax system in the world, precisely because it is considered a "fairer" system to have people who can afford to pay more share more of the tax burden. One might even argue that the "super profits" tax is fairer than marginal tax rates because it takes account of the amount of capital you have deployed to achieve the result (to relate it back to people, if I have a family of 10 people to support I don't get a lower tax rate ... but a company with 10,000 people to achieve the same profit as one with 1000 people will get that taken into account).
  - brc 16y ago
    I take it by those comments you've never actually invested any money? The number of people employed has zero to do with making decisions about investment returns. But that's been the problem all along - people with very little idea about how capital markets and mining investment works deciding they want some of the pie, and coming up with all types of justifications for it. I'm not talking about marginal rates - I'm talking about - hey you! You're making too much money, I want some of that! Here's an extra 40% tax for you - no consultation, no transition period, no questions asked. Would you defend this tax if it was applied to technology startups because they made too much money?

by dejb 16y ago

zmmmmm 16y ago

> Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? Hah! No. It was a "super profits" tax because it did not kick in unless a project was making a rate of return above 5 or 6 percent or so. So it only taxes "bonanza" profits and has no effect on companies that are making a "normal" rate of return. As for superannuation - there was some sleight of hand as well. The increased super was to be paid by companies. This was then to be partially (but not fully) offset by dropping the company tax rate, which in turn was funded by the super profits tax. So yes, they were linked, but not nearly as directly as they wanted you to believe.

brc 16y ago

It was called the MSPT or Mining Super Profits Tax. Super Profits is a Marxist term (don't know if Marx coined it, or it just became part of the canon) to reflect anything above a 'reasonable' rate of return. In this case it was set at the government bond rate. Which makes you question why any rational investor would invest money into a highly risky mining venture when they coudl get the same returns from government bonds. I suspect they thought they could kick off a nasty class war - which people seem to have forgotten now that Swan was muzzled by Gillard and Rudd deposed. But at the time Swan and Rudd were talking about 'evil foreign rich miners'. But it backfired with some good PR from the mining companies, and a higher level of awareness among the Australian people when someone is being deliberately obtuse. It was sleight of hand to link super profits tax with superannuation. In reality the two have nothing to do with each other because employers pay for employee superannuation out of their bottom line. The only superannuation the government pays is for public service employees. The reason they did a poor job in selling it was because if you actually looked at the details, the tax and the superannuation actually had nothing to do with each other. Lindsay Tanner actually quoted as much before changing his tune to the party line. >slow the party down. Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair. The miners struggled for decades - have a period of prosperity and are whacked with extra taxes. That is not only unfair, it raises sovereign risk and ultimately reduces foreign investment. You don't improve the economy by knobbling your best performer.

dejb 16y ago
> It was called the MSPT or Mining Super Profits Tax. Fair enough > It's the ultimate definition of unfair. When you are using a non-renewable resource then what is 'fair' has to be balanced with the changing value of that resource. > You don't improve the economy by knobbling your best performer. You need to measure their performance with regards to the inherent value of the asset. If we started selling huge tracts of our land to another country then you could also say that 'land selling' was the best performing part of our economy but that would not be accounting for the capital loss involved.
zmmmmm 16y ago
> Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair. Umm, have you ever noticed how people are actually taxed? It's called a "marginal" tax rate and it's a feature of just about every tax system in the world, precisely because it is considered a "fairer" system to have people who can afford to pay more share more of the tax burden. One might even argue that the "super profits" tax is fairer than marginal tax rates because it takes account of the amount of capital you have deployed to achieve the result (to relate it back to people, if I have a family of 10 people to support I don't get a lower tax rate ... but a company with 10,000 people to achieve the same profit as one with 1000 people will get that taken into account).
- brc 16y ago
  I take it by those comments you've never actually invested any money? The number of people employed has zero to do with making decisions about investment returns. But that's been the problem all along - people with very little idea about how capital markets and mining investment works deciding they want some of the pie, and coming up with all types of justifications for it. I'm not talking about marginal rates - I'm talking about - hey you! You're making too much money, I want some of that! Here's an extra 40% tax for you - no consultation, no transition period, no questions asked. Would you defend this tax if it was applied to technology startups because they made too much money?