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Chavez - in Australia?

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  • #16
    Originally posted by Oerdin View Post
    A total tax rate of 70% sounds extremely high but I don't know what type of tax credits are available in Australia for businesses. In the US most of the large companies get away without paying any net taxes because of the huge number of tax credits, subsidies, loop holes, and what not.

    Remember, these are non-renewable Australian assets we're talking about. No second bite of the cherry.

    (The tax is on profits exceeding about 6% return on investment, by the way).

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    • #17
      The that doesn't sound so bad though there will no doubt be a million accounting gimmicks employed to insure that 99% of the return falls with in the 6% return on investment category even if it uses a dozen different puppet corporations created just for that purpose all of whom just happen to have the same owners. Hiding profits can be an art form.
      Try http://wordforge.net/index.php for discussion and debate.

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      • #18
        Originally posted by Oerdin View Post
        The that doesn't sound so bad though there will no doubt be a million accounting gimmicks employed to insure that 99% of the return falls with in the 6% return on investment category even if it uses a dozen different puppet corporations created just for that purpose all of whom just happen to have the same owners. Hiding profits can be an art form.

        Absolutely, particularly in the modern era of globalisation and multi-nationals.

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        • #19
          (The tax is on profits exceeding about 6% return on investment, by the way).
          The implementation of such a thing is very complex, and is only fair if spread over life of a project to counter years when prices are low reducing profits to losses in those years. The tax has been announced, its method of implementation is being 'negotiated' by our incompetent prime minister, the companies have no idea how it will be assessed, 6% return on investment is actually not much more than a suggestion as to how it will be done. So with so much uncertainty and no actual implementation policy, companies are certainly hedging their bets by prioritizing overseas projects.

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          • #20
            Originally posted by ricketyclik View Post
            The expansion was approved two years ago, but then suspended in late 2008 as a result of the global credit crisis.


            So it was happening anyway. Later in the article Rio has a dig at the tax, which of course they will do after any announcement.

            Plus, we've more than enough mining going on in Oz, the Canadians can have some - more for us later when iron ore is more scarce and thus more expensive.

            Yeah, you can't discount the possibility of Rio being dishonest about their intentions. I am very familiar with such behaviour from resource companies when tax schemes are changed.

            I just thought it was interesting and wanted to pass it along.
            (\__/)
            (='.'=)
            (")_(") This is Bunny. Copy and paste bunny into your signature to help him gain world domination.

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            • #21
              Originally posted by trev View Post
              The implementation of such a thing is very complex, and is only fair if spread over life of a project to counter years when prices are low reducing profits to losses in those years.

              I agree. As Oerdin pointed out, there's already too much wriggle room for mult-nationals when the tax is simply applied to profit.

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              • #22
                Australians should pay close attention to shale-oil strip-mining efforts. It's very inefficient and very destructive. Especially near the reef.
                Everybody knows...Democracy...One of Us Cannot be Wrong...War...Fanatics

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                • #23
                  We do not have shale.
                  Our companies actually do pay a lot of tax already, we have had large personal income tax cuts over the last 6 years or so, because company taxes were keeping the budget in a large surplus (until the current incompetent PM anyway)

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                  • #24
                    Originally posted by trev View Post
                    We do not have shale.

                    Well-explored deposits, potentially classifiable as reserves, include the Green River deposits in the western United States, the Tertiary deposits in Queensland, Australia...

                    Environmental activists, including members of Greenpeace, have organized strong protests against the oil shale industry. In one result, Queensland Energy Resources put the proposed Stuart Oil Shale Project in Australia on hold in 2004.




                    The project was heavily criticized by environmentalists. Over 20,000 people and 27 environment, tourism and fishing groups opposed the shale oil plant.[9] Greenpeace claimed that greenhouse emissions from the production of shale oil are nearly four times higher than from the production of conventional oil, although SPP promised to reduce greenhouse emissions from production of shale oil to 5% below those of conventional oil by stage 3. Greenpeace also claimed that the Stuart Oil Shale Project is a significant source of highly toxic dioxins and would damage the Great Barrier Reef World Heritage Area during stage 3. Also public health concerns were mentioned.





                    Like I said... very inefficient and very dangerous, especially near the reef. You don't think the oil-shale industry will try again?


                    ps. I am not a fan of GreenPeace (at all, I prefer Earth Liberation Front [ELF] even), but they were right about this.
                    Last edited by Ecofarm; May 8, 2010, 23:27.
                    Everybody knows...Democracy...One of Us Cannot be Wrong...War...Fanatics

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                    • #25
                      In April 2004, the new owners of the Stuart resource, Queensland Energy Resources Ltd (QERL) requested that the Coordinator-General defer evaluation of the Stage 2 Environmental Impact Statement material until such time as additional investigation and analysis of potential environmental impacts could be completed. The Coordinator-General granted this request subject to a number of conditions relating to ongoing information exchange.

                      On 7 December 2004, Queensland Energy Resources advised the Coordinator-General that it wished to discontinue the EIS process for the proposed Stage 2 development.
                      It appears the project was abandoned at the behest of the company owning the resource, this would suggest it was not financially viable to proceed with the project at that time. There does not seem to have been any attempt to resume the project since oil prices have risen either.

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                      • #26
                        This policy looks to be a problem.

                        1. The tax is imposed in addition to the normal tax on company profits. Thus company tax rates (30%) are charged towards mining profits up to 6-7%. I recall that the precise percentage figure is fixed to the government bond rate from an ABC radio interview with Kevin Rudd. Profits above that rate are taxed at an additional 40%, making a total 70% tax on mining profits.

                        2. Why is this tax being imposed on mining companies? There have been a few justifications.

                        3. The first and most apparent is apparent from its name: the 'super profit tax.' That is, because the company's profits are inordinately high, the company can afford to hand more of its profits to the government.

                        4. The second is that the taxes are from resources which are said to 'belong to the Australian people.'

                        5. The fact that the resources 'belong to the Australian people' is in my view not to the point. All trade or commerce produced by Australians is in some sense the use of an "Australian" resource. Nor is the fact that we don't get a 'second bite at the cherry' relevant. What is relevant is how to create good conditions for investment into the industry and provide tax income to the government to funds its programs.

                        6. The fact that a company is experiencing high profits is no reason to tax it more (or, if it is, the logic applies in the same way to all companies--a disturbing result). To the contrary, it will discourage investment in that company, particularly in the mining industry because of the inherent risks of mining companies. These risks mean that investing in mining companies will grant a much lower return as compared to previously, and investors will be unwilling to engage in exploration in Australia as a result.

                        Just imo.
                        "You say that it is your custom to burn widows. Very well. We also have a custom: when men burn a woman alive, we tie a rope around their necks and we hang them. Build your funeral pyre; beside it, my carpenters will build a gallows. You may follow your custom. And then we will follow ours."--General Sir Charles James Napier

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                        • #27
                          No Zevico, you've got that wrong. The "super" refers to superannuation - it is a tax to fund Australian citizens' retirement.

                          The second bite of the cherry issue is highly relevant, and unique to the mining industry. They are profiting from non-renewable resources. Other resources are renewable.

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                          • #28
                            Copying Chavez style economics, will lead Australia to economic ruin. The only lesson we should take from Venezuela, is what not to do to your economy.
                            Please put Asher on your ignore list.
                            Please do not quote Asher.
                            He will go away if we ignore him.

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                            • #29
                              BC, let's be honest. Australia isn't talking about putting stupid price controls in place (which is absolutely what caused the shortages and crashed Venezuela's economy) and instead is simply talking about the tax rate to charge corporations for extracting minerals in Australia.
                              Try http://wordforge.net/index.php for discussion and debate.

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                              • #30
                                talking about the tax rate to charge corporations for extracting minerals in Australia.
                                Estrata today has announced suspension of exploration activities in Australia. This new tax is already within a week costing jobs. A supplier to the Olympic uranium mine has also found that BHP has 'quietly' suspended some orders it had to supply the massive mine. So not all suspensions of explorations and developments are being made public, some companies are anxious not to get on the governments bad side, but are still holding back on spending money in the industry.

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