Greedy government eyes off mining profits…

Pre and post war Australia, rode the sheep’s back. It was literally Australia’s golden fleece. However, unless my memory, or more pertinently the history books have changed, Australian farmers were not slugged with additional taxes.

Every promise the government has made for initial reform hinges on resource companies and the states agreeing to a new way of taxing miners – a 40 per cent Resource Super Profits Tax. And, of course the senate.

Let’s face it, the big mining companies employ a lot of people. Then there’s all the businesses that support the mining industry, do these guys get taxed extra for piggy backing Australia’s No. 1 breadwinner?

How about the people coming up for retirement who have shares in conservative mining companies such as BHP? The type of blue chip shares that mum and dad investors should have. Are they better off with concessions for supplementing their super or watching their mining shares go south? Ah…firm share prices please.

Wool gave Australia a chance to rebuild after the war. Donald Horne coined the term “The Lucky Country” to reflect (albeit in some ways ironically) Australia’s prosperity in the 1960s.

Mining gives Australia breathing space. Some time to develop sustainable industries that are not completely dependent on physical resources.

Perhaps take a Leif (excuse pun) from the Scandinavians who succeed through intellectual property and technical innovation.

Apart from Cochlear, the orbital engine and vaccine or two, what have we launched to the world in the last 30 years? (Drumroll)….the Ugg boot.

Mr Henry recommended that businesses with revenues up to $5 million should enjoy a tax break of 2%. In short, 30% down to 28%. Mr Rudd moved the goal posts, declaring that to classify as a small business, revenues must be $2 million or under. Well, it will certainly be a test of SME innovation to see what can be developed with a 2% tax break on %^$#@ all!

Anyway, the prospect of a  tax cut from 30-28% hasn’t stopped people calling us. That’s because it’s a prospect not a reality and also a few years away. SME’s operate in typically short cycles – tactical survival. Most SMEs only have negligible assets to write-down. They’re more interested in paying wages. We’ve got clients using accounts receivables to cover leases.

In short SMEs do what’s practical. And, governments do, what they think they should do to win elections. Which in this case, I bet they wish could undo what’s already done.

Back to the big game. An Uber tax on mining is like a Stalinist tax on Kulak grain holdings. The Marxist redistribution of wealth philosophy. Maybe next we can move on to a five year plan to get us war ready.

Maybe I could localize Kev’s redistribution idea. Try it in my own neighborhood. My neighbor is much wealthier than me. I am going to ask him if I can have access to his fridge around meal times and drive his car on week nights. He’s got a pretty wife too. I don’t have a wife, plus she winked at me the other day. Maybe I could ask him if was willing to lend her……nuh!