Tuesday, May 25, 2010

Five easy pieces - the Mining Super Profits Tax


"Yesterday, Rio Tinto boss Tom Albanese - the man who almost blew up the company and wanted to hand control to the Chinese government - claimed Australia posed a greater sovereign risk than any other country in which Rio operates. That's a rather bold claim, particularly given Rio "lost" a sizeable share of the giant Simandou mine in Guinea, in West Africa, a few years back when the government decided to simply resume it."


"The new arrangements need never stop a single mine going ahead. If a project is viable, 60 per cent of the same project is viable. With a global portfolio of projects, multinationals might put a few offshore projects ahead of ours but they will be delayed not stopped."

"Without the RSPT mining companies and their largely foreign shareholders would get virtually all the benefits of Australia’s superior resources while the bulk of Australians are either barely affected or made worse off."


"Under the RSPT the government shifts towards a higher risk, higher return tax base. When commodity prices are strong, this is a revenue plus. When conditions turn bad, it’s a revenue minus. The RSPT makes Australia’s tax base more risky - even if it is properly specified in all respects."


"Using the figures the Minerals Council of Australia cites in its defence, mining is taxed less at a federal level than all but five sectors: accommodation and food; electricity, gas and water; agriculture; real estate; and financial services. Comparing apples with apples, mining pays 0.57 percentage points less than manufacturing and 0.63 points less than construction. The highest-taxed sector is public administration and safety, which is 1.84 points above mining at 29.65 per cent".

Related Posts

. So what effective tax rates do mining companies actually pay?

. Okay so no-one likes to part with profit, but the mining fight is becoming a spectator sport

. It's not a tax, it applies to more than super profits, so how did so many people get it so wrong?

. Henry to miners: no compromise on where the tax kicks in

. We'll still be mining