The resources sector will be hit with a 40% tax on super profits in order to fund the Government’s changes to corporate taxes and superannuation reform, with treasurer Wayne Swan saying the initiatives “depend entirely” on the new mining tax.
However, the Government has been quick to say the new tax will not hinder the industry’s growth, with benefits to be given to companies undertaking exploration ventures.
The RSPT (Resource Super Profits Tax) will charge companies at a rate of 40% from 1 July 2012 on profits made from the “exploitation of Australia’s non-renewable resources”, according to the Government.
Currently, the Government says, resource charges are failing to collect an appropriate return for “the community” from the mining boom. Charging the previous Howard administration with failing at producing a long-lasting result from resources revenues, Swan says the Government must “have something to show” for the second stage of the boom.
“The RSPT will provide a more appropriate return to the Australian community from the exploitation of its non-renewable resources compared with the current charging arrangements.”
The RSPT will replace the crude oil excise, and operate in tandem with current State and Territory royalty regimes. Additionally, projects within scope of the Petroleum Resources Rent Tax will have the option of either opting into the RSPT or staying with the PRRT.
Additionally, under the RSPT a refundable credit for royalties paid to the State and Territory Governments will be available, with this credit to eliminate investment distortions associated with state royalty systems.
RSPT liabilities will also be deductible, with RSPT refunds being assessable for income tax purposes, with the Government to “effectively make a contribution of 40% to the costs of the project outlaid by the entity”.
However, the Government will attempt to ease the pain of the tax with the introduction of a new resource exploration rebate. This will see the Government provide a refundable tax offset at the prevailing company tax rate for exploration expenditure.
All mining companies will be able to access the new Resources Exploration Rebate, with about 4,300 firms estimated to benefit from the new initiative which is set to apply from 1 July 2011.
“The Resource Exploration Rebate is a simpler and more effective means of fulfilling the Government’s election commitment to support the development of Australia’s resource sector than a traditional flow-through shares scheme.
Expenditure incurred in exploring or prospecting for minerals, petroleum or quarry minerals can be immediately deducted, while for companies with little or no taxable income, the existing deductions add to tax losses that are carried forward and offset against future income.
Additionally, the Government is set to introduce a new infrastructure fund that it says will help resource-rich states develop mining projects, thereby benefiting participating entities.
The new fund, which will begin from 2012-13, will be used to increase development opportunities in resource-rich areas and will receive $700 million from the Government each year.
“This infrastructure fund will be distributed to the States in a manner which recognises that resources-rich States large associated infrastructure demands,” the Government has said.
“Resources-rich states will receive relatively more funding which can be used to support investment in infrastructure, including that necessary for the ongoing development of the resource industry.”
These are all crap ideas which allow Australia to continue to be sold off to the highest bidder and then under the punitive taxation rules shut down resulting in no income for the country. No thanks! All foreign owned or, beneficially foreign controlled, entities (that includes I believe RIO and BHP), should only be allowed to lease land and or mining rights for a given period. But they should be able to enjoy standard taxation levels for corporations. They would effectively pay their super taxes through their mining leases and land rents. They would not own our land and could be thrown out if they become obstreperous.
At the moment, these proposed super taxes will have the unintended consequences of inducing the major miners to move their operations to some poor African or South American nation and Australia will lose out totally. With the help of the international bankers, which I believe now beneficially control most major Australian miners, BHP is now the largest miner in the world. It couldn’t really care less if the Australian Govt decides to change its tax rates. It will vote with its feet and go somewhere else to dig its holes. It appears Ford Australia may be thinking along these lines as it trains up Indian workers to run its Indian plants, the logical conclusion being the closure of some or all Australian manufacturing facilities.
The major miners, irrespective of where they are listed, are global entities (persons according to law) which make their profits where they get the greatest exploitative return. Let them earn their profits here; just don’t let them own the land.
On another matter, the idea of making “we the people” pay tax on our homes (home plots) as a universal land tax by the way is Communism. It simply means that we consciously cede beneficial ownership of our own country to the State. We are granting the State the right to tax us for living on our own land and presumably, if we don’t pay the State can throw us off it. As I said, that is Communism folks. Many people including many retirees on fixed incomes living in a major capital city might be sitting on land that is likely to be worth $500,000. Under the Henry scheme, they would now be taxed $5000 for the privilege. Taxing us for owning our own land/house is the end game. Tell them to drop dead!
Dr Harvey M Tarvydas
It’s too late Richard.
It’s all sold.
Gough was the last PM to hatch up a brilliant plan to help Aussie’s try and get the country back using the very techniques that the foreign banks used to distribute Australia to the worlds highest bidders.
It was so clever (the ‘Ken Henry’ at the time thought it up) that nobody got it and the opposition at the time poisoned it feverishly or freaked out not understanding it.
But its too late now, we are just part of the globe and our future is our brains competing with others for global capital.
Borders are a sport where has-been pollies can shot at a couple of wet brown humans sinking in a dinky.
RS Tony Abbott thinks the ETS is an unnecessary experiment that Australian’s shouldn’t put up with but he doesn’t know that 30 EU nations have had an ETS working successfully for 15 years.
When an intelligent Aussie PM tries to get this country up to date you see what he’s got to put up with, any hope do you think? Dopey pollies, sick media, god help us.
Dr Harvey M Tarvydas
There is one job as hard or harder than that for an intellegent Aussie PM these days.
That’s for a medical scientist and Dr (me) to try and bring the so called leaders of the medical profession up to date.
Trouble is they’ve learned to lie and deny just like brainless pollies.
@RICHARD WILSON- “On another matter, the idea of making “we the people” pay tax on our homes (home plots) as a universal land tax by the way is Communism”
what a load of rubbish? What about Canberra? Nobody owns land in Canberra, you lease it for 99 yrs! What’s the difference? Anyway, who gave/sold the land to state govts or LJ bloody Hooker or????It wasn’t ours in the first instance!
As if this govt Federal Govt would embrace anything remotely resembling communism? Goodness me!
Richard, who told you the land is yours? Aboriginal people never relinquished their rights to the land – it was stolen during a 100 yr war that killed off too many of them. It’s a damned cheek to start whingeing about the ‘state’ owning the land your house is built on.
Funny how the areas that have the vast amounts of minerals etc is on/under the land in Northern Qld, the Northern Territory and West Australia – these areas have the worst living standards not only in Australia, but in the whole developed world, with obscenely high infant mortality rates, lack of rights to education and health care, and too many other essentials that the rest of the country take for granted as their right – as they should, but we draw a collective line that excludes aboriginal people in remote areas! If you’re so outraged at this new policy of the govt, you should be championing the cause of aboriginal people in the NT who have just lost their rights and land that they’ve fought for over multiple decades!
“Resources-rich states will receive relatively more funding which can be used to support investment in infrastructure, including that necessary for the ongoing development of the resource industry.”
Well that’s just great for the grim reapers from the resource industry and as I’m constantly chided: “it’s the economy stoopid” but who’s paying the cost of pollution and other damage to the biosphere caused by the world’s biggest miners who hang out in Terra Australis where they’ve been busily sabotaging any action on climate change?
A yet to be published report commissioned by the UN says that the cost of pollution caused by 3,000 of the world’s biggest companies would wipe out more than one-third of their profits if they were held financially accountable. About $2.2 trillion of environmental damage! Tsk tsk!
By the way, who will pay for the thousands of abandoned mines (including the more recent shabbily rehabilitated sites) in Australia, which leak lethal toxins into the environment (including heavy metals and radioactive isotopes)? Or is anyone concerned about the thousands of native animals slaughtered with impunity each year by mining operations?
And if a bloke wishes to adorn his loved one with gold or diamonds or even a modest opal from Coober Pedy, is he aware that our threatened species are being used as cannon fodder to appease human vanity?
Does the bloke know of the paper published in the Ecological and Restoration Journal where author, Reece Pedler (SA Arid Lands Natural Resources Management Board) suggested that uncapped opal mines in the area may be killing as many as 10-28 million reptiles per year?
http://www.conservationmaven.com/frontpage/millions-of-australian-reptiles-falling-victim-to-mine-shaft.html
http://cooberpedyregionaltimes.wordpress.com/2009/09/25/filmmaker-david-bradbury-red-dust-dump-originating-at-woomera-is-grave-concern-for-public-health/
Lemmings – ahhhh……..tenn……..shun! Fall…..in! On the ready! Quick march, quick march – oops!