Henry Report

You have got to wonder why we spent untold millions
of dollars to prepare a report that has been kept secret
for 4 months & largely ignored anyway. It was to have
reformed our whole tax system & bring us more in line
with most of the developed World. It hasn't. It has turned
into a just another tax grab. The larger mining companies
will not be happy to pay most of the $9 Billion in extra tax
& get a refund, in kind, of around $750 Million to pay for
infrastructure. Any international mining Company would
now, have to be having a very good look at moving to Hong
Kong, 16.5% or Singapore 18% tax, particularly when they
know that they are paying effectively 13% higher tax than
the big banks. I would love to be a fly on the wall at the next
Fortesque Board Meeting. It is also of note, that one of the
main reasons for the report was to get rid of as many of the
400 odd State taxes, as possible, that in many cases, cost
more to administer than they collect. It has got rid of none.
I wonder how many people in Western Australia, today, will be
discussing leaving the Commonwealth? The mining industry
of Western Australia is already paying the highest proportion
of tax in Australia & this super tax will potentially put them in
a wheel chair, when competing against their biggest
competitors in Brazil.


That would be another interesting attack on me, if your facts were correct, fwed.

When the Global crisis hit, the benchmark price for iron ore was cut by way

over 60% & the spot price, even more. The bench price has recovered a little

to just over $60US/tonne. However, the spot price HAS doubled, BUT is still

nowhere near the price prior to 2007. We exported $34Billion worth of iron ore

last year & the combined taxes from resources are 13% more than the banks.

BHP made an additional $1.5Billion & paid an additional $450Million tax on

iron ore alone. Just look at what the ANZ bank made last year, & they are not

up for super tax. The Australian Tax increase last year came entirely from

commodities!!! Where do you think your pension rise came from last

September? You say that most of the investors are foreigners. They are NOT.

The largest shareholders in BHP are Aust super Funds & BHP shares dropped

nearly $2,yesterday, a lot less than expected. Have you any idea what that cost

the super funds? Nobody mentioned the Company moving to Brazil, just

moving their mining & staff employment. As for running out of minerals, you

have got to be joking.

Innes, of course the minerals are going to run out one day, and what are we going to do then, we'll have to take the world's radio-active waste and fill up all the holes.

That would be another interesting attack on me, if your facts were correct, fwed

What attack innes ? Get your act together.

I believe that 40% of BHP Billiton and over 70% of Rio Tinto is owned by foreign investors.

And I am not joking when I say that at some time ahead it will not be feasable or profitable to continue mining as we know it today.

That day will come as any sensible person realizes.

What does the shareholding matter fwed? Australia already

earns 43% in various taxes & that excludes the tax on the

Australians who work the mines & earn an average of over

$150,000 P/A + Super etc. I might add that these earnings come

from totally offshore capital, from which we earn massive levels of

withholding tax. Of course the minerals will eventually run out,

but we have not come anywhere near peak supply yet, so

we have a very long time to go.

BTW, Rio Tinto is NOT an Australian Company. It is a joint UK/

Australian Company & that fact alone is going to cost a lot of

Australian money in the High Court. You might also enquire as

to how many of the 70% shareholders in Rio are actually held by

Rio UK & NOT by Rio Australia.

This reminds me of the running of the Melbourne Cup. You find the

best long distance horses in the World, then put so much weight

on them to make sure they can't win.

BTW again, I can't substantiate it, but I have heard this morning

that there have been over $40Billion worth of new mining ventures

cancelled since the announcement was announced yesterday & you

don't think that will effect job growth?

Here's something else to chew over.

AMP Capital Investors has $96.9 billion in funds under management and 240 in-house investment professionals - they are also the largest provider of pension plans. They say that Chinese demand for Australia metals will outweigh the higher taxes on mining companies and they have no intention of selling their shares in fact they think it's a good time to buy more after they went down yesterday. Nader Naeimi, a Sydney-based strategist for the firm said “The introduction of this tax doesn’t change our overall assessment of the mining industry,” and “The structural tailwinds behind the sector are so strong that tax increases won’t derail that.”

Confused? Me too.

It was an interesting comment from AMP Capital toot2000.

I don't want to appear too cynical, but they couldn't have sold

their shares , even if they wanted to. The share prices of the

leading miners fell too fast for anybody to get out. The drops

were virtually instantaneous, with nobody unloading on the way.

They could be just talking them up to save some of their

losses. Note that BHP has dropped nearly another 3% today,

with more than twice as many shares for sale as buyers numbers.

If you look at the amount of Super money invested in BHP, Rio,

Newcrest & others, a lot of retirees have become eligible for part

pensions since yesterday morning

I wish we could read the Henry Report but it seems the hoi polloi who are affected and will be expected to pay more broad based taxes under it and particularly the age pensioner who seems is a target in particular of Ken Henry - maybe he was abused/frightened by one as a child! Who Knows.

Found this one interesting.

Making the burden equitable

* George Megalogenis

* From: The Australian

* May 04, 2010 12:00AM

IF Ken Henry had had his way, the states would deliver the circuit-breaker reforms to allow Australia to reduce its reliance on personal income tax.

The heart of the tax review is the recognition income tax will continue to fall as a share of the economy as the population ages.

This means other taxes have to bear a heavier load. The Rudd government has picked up one option: the super-profits tax on miners. It has washed its hands of another: broadening state-based land tax to fund abolition of stamp duties.

But the sleeper, which is still on the table, is the recommendation for a new style of consumption tax, levied by the states. It would replace payroll tax and sidestep the Rudd government's reform roadblock to the GST rate and base.

Where the vision for a simpler, fairer tax system departs from its predecessors is the new taxes don't necessarily pay for a reduction in personal tax because personal tax has already been reduced.

In fact, the report to Wayne Swan canvasses an increase in personal tax collections over time to help plug the hole in the budget.

The vision for a simpler, fairer, and more productive tax system is best understood by the trade-offs.

From cradle to grave, the favoured households in the Henry review are working mothers, lower-income earners and bank account holders.

They would get more at the expense of the favoured households under the present regime: stay-at-home mothers, higher earners who fudge their work-related expense claims, mum and dad landlords and [b]age pensioners.[/b]

Yet this isn't an exercise in picking winners and losers, but removing biases for all time.

To break through the fog of short-term politics, here is a snapshot of what the ideal tax system would look like if the main recommendations were picked up by these, or future federal and state governments. The tax system would have fewer signed-up taxpayers, but more people working than would otherwise be the case.

The tax-free threshold of $25,000 would replace all existing tax offsets, leaving about one in 10 taxpayers -- 1.2 million on today's numbers -- not paying any tax.

A flatter, two-tier tax scale would apply after that: 35 per cent for most workers, and a top rate of 45 per cent on every dollar earned above $180,000.

Families would still get a payment to help with the cost of raising children, but there were would be no bonus for stay-at-mothers.

Read between the lines and the Henry review is saying the present regime pays women more than it should to stay at home, because those who want to work are discouraged by the penalty they pay in tax and withdrawn benefits.

The $25,000 tax-free area is part of the puzzle. Mothers who work for a few hours a week get to keep all the income they earn.

The Henry review takes the same approach to welfare payments. [b]Those on the age pension would be put back on the same indexation formula as everyone else -- a relative win for those on other payments such as the dole.[/b]

The theory of removing bias extends to how people spend and save. The GST was off limits for the review, but the son of GST was recommended -- a second consumption tax levied by the states.

The proposal for land tax to replace stamp duties would reduce the cost of buying a house, and increase the number of properties sold in any one year. A win for real estate agents, perhaps.

But house prices won't rise by as much, because mum and dad landlords will lose their present incentive to invest in bricks and mortar over shares or bank deposits.

The Henry review achieves this, taking bias out of the way savings are taxed. The negative gearing that can be claimed is cut, the capital gains tax break is reduced, but a new tax break is introduced for bank savings.


Now does anyone feel the wind of change for the worse arriving with this government of Rudd after all he dearly wanted to do away with the supplements that Howard had given us like utilities allowance but was told it was not to be - just yet seemingly.

He held back on a rise and then begrudgingly gave it only to the singles and had to raise it recently because of the rise in costs from his own incompetence in running the economy - we can only thank God that we had peter Costello at the financial helm for 12 years and gave us the cushion which road us out of danger - pity was Rudd could have saved billions and not made so many bungles if he had only stopped after giving out the Christmas monies which kept the retail spending rolling along and got us over the hump.

Nearly $24 billion was written off the value of London's largest mining companies yesterday. As a result, shares of BHP Billiton, Rio Tinto, Xstrata and Anglo American have all fallen sharply. Naturally the miners are screaming their heads off, but I think they'll eventually come to the party - unhappily - but they'll come.

We are only giving opinion, so only time will tell who is right. Fact,

over $4Billion has been wiped off the Super funds in the last 2 days.

Fact, if the Government is correct & the new tax will raise $5Billion

P/A, the first 2 years income will be needed to balance the loss of

value in Australia alone, that they have created in the last 2 days &

it will drop a lot further yet. The Ruddites are all stating that this

Government saved Australia from the International money crisis.

They didn't !!! We were saved by the Chinese continuing to purchase

our iron ore, coal, copper, nickel & uranium etc. Of course the existing

mines will continue, regardless, but, you wont see any new ones until

well after the Upper House rejects this crazy Bill. The whisper around

tow, this morning, is that some of the Labor back room boys are beginning

to wonder if it might be better to replace Rudd with Gillard before the

looming election.

Innes, Australia has been riding on the backs of these big miners for years, why shouldn't we make them pay through the nose for ripping the guts out of our country. The resources aren't going to last forever so why not get in while we can? I don't feel the least bit sorry for them.

Innes, you may be interested to read how Rudd's great big miners' tax has affected the markets overseas as well as here.

The Federal Government's plans to impose a new tax on Australian miners have hit global share markets and the local dollar.

London's FTSE 100 closed 2.6 per cent lower in its first trading session since the Rudd Government announced its tax plans.

London-listed shares in BHP Billiton shed nearly 8 per cent, Rio Tinto shares lost more than 6 per cent and BG Group, which has a gas project in Queensland, lost more than 4 per cent.

Some brokers say they are worried Australia's tax move might pave the way for other mining countries to follow suit.

Concerns about the mining tax added to fears for the financial health of Europe.


We agree wholeheartedly on one point toot2000. I don't feel the

least bit sorry for them either. I feel sorry for Australia. We will not

have any new mines open, until well after the Upper House rejects this

Bill. This Bill will not achieve it's aim. It will not even be revenue equal

for at least 3 years, let alone, pay for the Health hand outs to most States.

The only thing it has achieved is to stop any discussions on Health,

insulation, school buildings & child minding centres etc etc etc. The

proposed Bill has the potential to destroy our biggest export income

& achieve nothing. Added to this, I suspect that Colin Barnett is about to

increase the mining royalties in Western Australia, by a lot more than the

blackmail money he was offered by Rudd. Only time will tell & we will see.

Toot2000 and Fwed - neither of you seem to think that mining companies pay enough taxes. They pay tax on their profits at 30% just the same as any other business today.

Just because the left wing MSM forgets to tell you this in order to stir up the hoi polloi and send Rudd's image for action up - does not mean that they have got away without paying taxes and send all their income overseas. They actually reinvest their profits here in new ventures which also pay more tax when profitable and meanwhile the employees all on huge salaries pay income tax too so we all profit from our mining resources. Shareholders in these companies do live all over the world and we are always glad to get their monies invested in our country so we can hardly turn around and say they cant take the dividends it earns now can we? Many SFR and even Age Pensioners like the dividends and not all on Australian earnings either. Tax paid on these too which benefits all of us. And of course that future super is invested in mining as well as other businesses and due to this proposal have lost billions off their investment by the share price going down due to loss of confidence on the part of investors.

Thing is this is a very complex matter and the effects are already being felt the world over and once again Rudd has rushed in to shore up the hole he has left in our budget by a band aid tax grab which will hit him right up the backside and hopefully kick him out of office once everyone actually bothers to think it through for themselves instead of taking the easy way offered by those who feed mushrooms bullshit.

BTW if anyone does better out of our biggest industry, mining - it is the aborigines who get the royalties that once were paid to the States for the benefit of all on top of the dole money plus grants and extras and no one every asks where this royalty money goes now do they? I don't know where - does anyone ? Bet not because if one asks - immediately shut down by shouts of 'racist'

Our dollar is down today on the back of this huge extra tax grab on mining and dont think that super profits are just that because it has been revealed today that the "super bits" cut in at 6% above the costs of running the business - ludicrous.

MSM refer often to the Petroleum Resource Rent Tax also a Labor initiative and you can read that here [url=www.aasb.com.au/admin/file/content105/c9/INT1003_11-07.pdf]link[/url] Need a reader for this as PDF file. Foxit is good and takes up a lot less than Adobe. [url=www.foxitsoftware.com/pdf/reader/ -]link to Foxit[/url]

I don't know if any of you follow the stock market, but if you are

receiving super money, you should be frightened. A rumour,

which is reported to have started in the Treasurer's office, a

couple of days ago, has it that the Government is about to

apply the Super Tax to the Banking sector. Result; The ASX

top 200 Companys went into melt down yesterday & fell 200

points. The bulk of the drop came from the 4 major miners

& the 4 major banks. It is not all bad. Saint Kevin's efforts, this

week have reduced the $A from over 92 cents to 88 cents, which

is great news for BHP etc. We saw another 25 point rise in the

interest rate, on Tuesday, largely, because of the continued

stimulous package. That was the last straw, for the bottom

end of the real estate market. It has been reported that we

now have 90,000 first home buyers in mortgage default.

BTW. BHP & Rio have taken another big hit in the USA

overnight so the will take another hiding in Australia to-day.

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