hahahahaha tell us what you really think Paul


What a whopper of a green-eyed monster
By Paul Murray | View Archive May 11th, 2010, 11:52 am

If you are going to tell a lie in politics, it seems the current rule of thumb is to make it a whopper.

From Prime Minister Kevin Rudd down, Government heavies have justified their new resources profits tax by claiming that the massive Gorgon gas project had been approved under the same fiscal regime. So where's the worry?

It's a powerful argument and, at first blush, it takes the wind right out of the sails of the protesting miners.

But it's simply untrue. And the lie is biggest at the heart of the issue of this so-called super profits tax.

The petroleum resource rent tax (PRRT) under which Gorgon will operate kicks in after profits reach the long-term bond rate - about 6 per cent - plus another 5 per cent.

It is calculated at the same 40 per cent rate as the new tax, but that extra 5 per cent makes the world of difference. As do the complicated depreciation allowances and the taxation timelines which are far more favourable under the PRRT than the new tax.

All the Government ministers mouthing the Gorgon analogy must have known this - but none saw fit to tell the truth to the Australian public.

Just to put the analogy completely to bed, when the PRRT was introduced in 1987 it was only for new projects. Mr Rudd's new tax hits existing mines - and any project which might start under its more difficult economics.

And, most importantly for WA, the PRRT operates in offshore areas which are a Commonwealth jurisdiction and therefore outside the ambit of State royalties.

As an aside, no West Australian should forget Mr Rudd's pre-election promise to remit to us $100 million from the Gorgon and Pluto developments to be paid into a WA infrastructure fund which would be quarantined from the Commonwealth Grants Commission processes.

But the major difference with the new tax is that onshore minerals are owned by the States, which is why Canberra has to hit corporate profits to have any leverage over our lucrative resources.

It is to be hoped that anything the Rudd Government says in today's Budget has a little more regard for the truth than those deceitful justifications for the iniquitous resources super profits tax.

Only a government comprised of cloth-capped trade union officials could come up with something as divorced from the real world of business as that.

Interestingly, when Communications Minister Stephen Conroy was trying to justify the risky investment of $26 billion of taxpayers' money in his broadband network adventure, he described its potential to make money eventually as "a modest return of six to seven per cent".

But under Mr Rudd's new tax, a 7 per cent return is a super profit. Hardly modest.
Ken Henry made no mention of super profits in his review, merely recommending a "uniform resource rent tax". Super profits were first mentioned by Karl Marx in Das Kapital.

So Mr Rudd's resort to the term is quite Orwellian. Excuse me if I refer to the tax only as the green-eyed monster because that is all it is.

Frankly, the proper response by the miners to such treatment would be a campaign in popular newspapers, TV and radio with a tag line something like "You Lied". Or simplify that to "Liar".

Mr Rudd doesn't mind blowing off WA and Queensland and bludgeoning the industry's reputation because his eyes are firmly on average Australian voters in NSW and Victoria who look enviously at our success.

Yesterday's Nielsen poll showing most Australians oppose the green-eyed monster will come as a big shock to the Government because its whole rationale was that it would receive overwhelming support in the non-mining States. True to his duplicitous nature, and to win public support for the tax, Mr Rudd painted companies which he once boasted to be great Australians as greedy multinationals who haven't been paying their way.

And he fudged the figures to make a dishonest point, showing only the miners' contribution to State-based royalties and ignoring their huge and escalating payment of company tax.

That shamelessly made invisible $80 billion worth of company tax payments over a decade and obliterated the important story that the annual take had grown almost tenfold over that time from $2.6 billion to $21.9 billion in 2008-9.

Mr Rudd has also been openly misleading the public that the green-eyed monster will fund the planned increase in superannuation contributions from 9 to 12 per cent.

Defending the tax last week to 6PR's Simon Beaumont, Mr Rudd said he wanted to explain "what actually this does fund on the other side of the equation".

"It means a big change for superannuation," Mr Rudd said.

"Working families need more for their long-term super and, by increasing the superannuation guarantee from 9 to 12 per cent, we're giving better retirement incomes to working Australians."

That was completely untrue.

Even if you use the convoluted argument that the planned two percentage point fall in company tax will ease the burden on employers who have to fund the lift in contributions, it has nothing to do with the resources tax.

He lied.

He lied about Gorgon and super profits.

He lied about the contributions of the mining companies to national revenue.

He lied about the new tax funding the superannuation guarantee changes.

Our Prime Minister is simply a liar.

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