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This site may, in fact always will contain images and information likely to cause consternation, conniptions, distress, along with moderate to severe bedwetting among statists, wimps, wusses, politicians, lefties, green fascists, and creatures of the state who can't bear the thought of anything that disagrees with their jaded view of the world.

Oct 26, 2012

Mining tax fails to collect any money

Suppose they gave a war tax and nobody came paid.
One way to ensure that crime doesn’t pay would be to let the government run it. – Ronald Reagan
One of the old favorite libertarian adages, “Taxation is theft,” is justified by the contention that these impositions are involuntary in nature and the implied threat of the use of force is used in their collection.  Creatures of the state hotly contest this, insisting that our membership in society carries with it an implied social contract under which we all agree to pay whatever the government asks, whenever it likes.
The Reagan quote and the taxation is theft statement are appropriate to this story.  They come together with the result of the first collection, or should we say, scheduled collection of the brand spanking new mining tax instituted by Julia Gillard and Wayne Swan with an aim to take ‘excessive’ profits from mining companies and spread it about.
None of Australia's biggest miners - BHP Billiton, Rio Tinto or Xstrata - has any liability under the minerals resource rent tax so far in 2012-13 and the government did not receive any revenue by Monday's payment deadline. 
Tax revenues are also down from the oil and gas sector through the petroleum resource rent tax, and the mining companies - the biggest contributors to corporate tax - are warning that price cuts, the high dollar and falling profits will drastically reduce their company tax contributions. 
The government has already slashed predictions for the MRRT revenue in 2012-13 from $3.7bn at the May budget to just $2bn in Monday's mid-year economic forecast, which was prepared before the mining giants confirmed there would not be any payments under the tax. 
It was publicly estimated that BHP and Rio alone would provide between $1bn and $1.5bn in MRRT payments in 2012-13 but this now seems unlikely to be reached given that the first quarter has passed without payment and low commodity prices are predicted to continue.
It is difficult to pin down just how much this debacle has cost taxpayers.  Substantial amounts were spent in advertising just how good this was to be for us, bureaucrats were hired to administer it, and several thousand acres of timber has been felled to provide for the paperwork. 
The costs of the promises associated with the tax like helping cut the company tax rate, funding superannuation and providing infrastructure spending in the regions have not been a problem as these were reneged on very early in the piece.  They have not been saved though as they have been splurged elsewhere.
It’s not like the tax was designed by idiots like Gillard and Swan on their own.  The companies that were expected to pay the lions share of it, BHP Billiton, Rio Tinto and Xstrata, who have the best and brightest people around, helped to design and write the tax.  If they can’t get it right; who can?


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