The Deal Is Simple. Australia Gets Money, China Gets Australia

The way the tax was presented it made it look like a punitive grab for mining companies profits. In the mining-rich states people started worrying about their jobs, and so the government changed Prime Minister and policy to try and head off the issue.

The fact that the Labor party screwed up pretty badly is kind of irrelevant to the idea that this is pretty straight forward international trade.

There are questions about how and how much of those profits should be spread around the country but I think that's pretty standard when there is an economic boom.

Australians have all seen this before in the 1980's when the Japanese were buying real estate, companies and generally splashing cash around. I think this time around most people are more relaxed about it, and a feeling of 'make hay while the sun shines' is probably the most prevalent.

While the imagery of large parts of Australia being dug up forever are evocative, it's not very realistic for anyone who has visited this part of the world to think it's all going to run out soon. It's a massive, virtually uninhabited area and the ground you walk on is literally red from iron ore.

Given the price rises, the shareholders would be better off if they just sat on their leases and paid a capital gain.

However, there are laws against that too.

I believe government policy needs to consider resources are finite. The tragedy of the commons that is being played out at the moment prices the resouces at $0 for the future generation. Just like the way we are pricing fisheries. It is insane.

I agree with this

The mining tax was a disaster and, in it's original form, was reverse nationalism by stealth. The government was going to tax profits above 6% with a 40% 'super tax' - terminology straight from a Marxist script. They were then going to reimburse Miners for losses on projects. In reality, with the government participating in 40% of the profits and 40% of the losses, it was a part-nationalisation by stealth.

I agree the mining tax was a disaster, but it wasn't as bad as you are making out. The 40% thing was always something that got the headlines, but as you point out it isn't as simple as that because it would have reduced state based royalties.

The reason the mining tax was so rejected, particularly by the mining states, was that it was to replace state-based mining royalties with a Federal mining tax.

This is true.

The mineral states stood to lose power over their own revenues, and the non-mining states stood to gain income from activities that took place entirely outside their borders.

This is also true, but not necessarily a bad thing. Australian urban centres are a long, long way from the mines and some form of distribution probably makes sense.

The tax was beloved by pro-government tax-raising types and lovers of economic theory and hated by pretty much everyone else.

I don't think the tax was loved by anyone except Rudd's kitchen cabinet (and possibly only by 3 out of them too, judging from how quickly Gillard backed off it).

But the goals of the tax are perhaps more broadly backed. The original article touched on the fact that many mining companies avoid investing in the communities (as you'd expect from a profit making entity), and this has caused some issues. From the article:

One of the local councils in the Pilbara, Shire of Ashburton, recently refused permission to Rio Tinto to expand its camp around the Tom Price mine. Instead the company has been asked to invest in facilities that will remain after the mine is closed, to spend $247 million on housing, an air strip, and other infrastructure at the town of Pannawonica. This kind of investment, and the employing of locals, is the only move that is going to convince skeptics like Tony Wiltshire.

"We were at a town meeting the other day when a representative from a mining company said, 'Come on, we're all up here to make a dollar.' The locals in the room looked at each other and thought, 'What?' We live here. We can cope with the hot summers. We're here for the long term. We are actually better for the multinationals than the contractors they fly in and fly out. We just need them to wake up to the fact that they, and we, are all in it for the long haul."

The idea of the tax was to formalize this kind of investment. The way they went about it was probably the worst planned example of domestic politics in Australia since WW2, though!

If you wanted to disrupt this, I suspect you don't want to make it cheaper (the mining companies have plenty of money), but to do a better job somehow.

(Where are you?)