Proposed 40% Tax on Mining Profits

There's a crucial debate going on in Australia at the moment, the Labor Government wants to introduce a 40% tax on the mining sector's super profits and use the money to fund important improvements like our health system and other major beneficial projects.


I thought it was the wrong move. To my mind, if you penalise a billion-dollar industry too much, they might just move somewhere else. The other important factor is that working families are paying into superannuation funds that are likely to include mining stocks and over recent days, what with the awful situation in Europe and people getting edgy about their shares, prices have fallen quite alarmingly. As one elderly gentleman said on the 7.30 report last night, "I was a lot richer yesterday than I am today".


Now to confuse the whole issue, a group of 20 leading academics and economists has backed the tax, saying that the sector should fork out more of its profits and former Chairman of the Australian Competition and Consumer Commission Allan Fels is one of them. He says the debate has been dominated by misinformation.


The group said that mining is different to other industries in that it uses and depletes natural resources and some return on those resources should flow to the Australian public. Dr Fels said "There's no reason at all to think that the tax is going to affect the world price of these minerals and therefore that's not going to feed in any way into Australian consumer prices. It certainly is depressing to see this sort of scare tactic put up, it really is just distorting the debate".


Now the Minerals Council of Australia have also backed the new tax. Chief Executive Mitch Hooke said "We agree with the economists that the concept's fine". Their beef with the government was with "the practical implementation" and design of it and accused them of rejecting the mining industry's attempts for genuine consultation and implementation. Mr Hook doesn't like their approach and said that he had never seen any government in his 20 years experience in Canberra "pontificating from the mountain top" without consultation with industry.


This leave us, the little people who don't have a good grasp of how it all works, struggling to make sense of it all. All we want to know is - are the big miner's being taxed to little - will the tax lead to lost jobs and will it deter future investment in Australia. It's not really a lot to ask.