tag:blogger.com,1999:blog-5672498644411374237.post2627609647076833407..comments2023-12-30T03:23:35.965+11:00Comments on Australian Observer: More on the resource rent taxPAUL BARRATThttp://www.blogger.com/profile/13447792285944889375noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5672498644411374237.post-53406993446456015702010-05-30T17:22:08.808+10:002010-05-30T17:22:08.808+10:00I did in fact remember Tom Fitzgerald's observ...I did in fact remember Tom Fitzgerald's observation about the power and disposition of state governments - it is in the quoted portion of his observations.PAUL BARRATThttps://www.blogger.com/profile/13447792285944889375noreply@blogger.comtag:blogger.com,1999:blog-5672498644411374237.post-90242974040785343332010-05-30T00:07:54.456+10:002010-05-30T00:07:54.456+10:00Your blog is fantastic, I only just discovered it....Your blog is fantastic, I only just discovered it. Thank you for taking the time.<br /><br />When you said, "proposed imposition of resource rent taxation by the Commonwealth is a cash grab from the states", you neglected to remember Tom Fitzgerald's observation, "the power and disposition of <b>state governments</b>, without any reference to the federal government, to grant great mineral rights to companies, foreign or local, which would automatically mean <b>granting extraordinary federal taxation concessions</b> to the expansion of those deposits".<br /><br />I'm also brave enough to remind you that the basis for State mining royalties is hardly legal granite, and in any case could most probably be overridden by the federal government if they wanted a big enough fight. The word "CommonWealth" was chosen deliberately. In this case, they've gone for a workaround.<br /><br />Finally, although I'm something of a fan of Brian Toohey dating back to the seventies, I've yet to read a commentator who demonstrated that they really understood the mathematics of the proposed tax. Understanding is paramount to venturing any sort of opinion on how it might affect financing, investment, etc.<br /><br />As someone with not inconsiderable technical experience in mining royalties, I've spent the last couple of weeks trying to absorb everything that's been written on this subject, as well as any related tax research that I can find. The more I understand it, the more amazing it appears.<br /><br />From an investor's point of view, Australian mining ventures will become one of the global investment jewels. Every mine is a balanced risk proposition, with 40% of your investment capital-guaranteed and returning the Australian government bond rate. The remaining 60% is subject to a modest profit tax of 28%. And there are NO royalties!<br /><br />Coincidentally, this makes such ventures perfect investment vehicles for superannuation funds, and guess who's about to get an additional <b>third</b> in employer contributions from 10 million Australians?<br /><br />This potential change in capital origin, coupled with the extra retention of profits through taxation, could finally shift Australia's current account into positive territory. As I said, amazing!David Brownnoreply@blogger.com