The Deal Is Simple. Australia Gets Money, China Gets Australia • Hacker News Board

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

#81

Post by dejb » Wed, Sep 08, 2010, 12:04 AM UTC

brc wrote: post #78

dejb wrote: post #63

Earlier quoted context omitted.

> I don't condone this type of government action just to make my life easier It is certainly easy to have one's opinions shaped by personal circumstances. But do you really think that Australia's long term future will be best served by relying on our minerals rather than our minds? It's like the economy is telling us 'this information economy stuff is all rather nice but the best thing you could be doing now is figur…

No, I'm not from WA and I don't have anything to do with mining. I do think Australias long term future is best served by minerals at this point. There's no way of knowing what the future holds, best to bank as much now while the price is good. Yes, it holds some risk over the geopolitical situation, but you can't get rid of that. Digging up minerals and selling them now puts Australia to work. drives down the Curren…

> best to bank as much now while the price is good

Possibly true but on the other hand who's to say the price won't go up further in the future? If we are going to consider the possibility of major price drops then shouldn't we model the impact on the economy? Would it make even more sense to make sure we aren't too reliant on that income and that we put some money aside for this eventuality?

> Unemployment is 5% because of the mining, not despite the mining.

I think that this is because the income from mining has allowed additional consumption and that consumption has supported employment.

> There's plenty of room for both. Australia can lead the world in minerals, and mineral extraction technology.

This sounds a pretty bland to me. Like the classic quite from a 'versatile' band "we play both types of music - Country AND Western". A vibrant modern economy requires a lot more than one sector. Beside that it doesn't take advantage of us being a modern westernized English-speaking nation. I've no doubt that China and India can produce highly skilled engineers and they will tend to want to use their own companies in new mining areas such as Africa. But when it comes to developing and designing information products for a western market they at a huge disadvantage.

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

#82

Post by dejb » Wed, Sep 08, 2010, 12:13 AM UTC

brc wrote: post #80

dejb wrote: post #64

Earlier quoted context omitted.

Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? I know there was to be some increase in funding but I'm actually not 100% sure because the govt did such a poor job of selling it. Anyway I think this may be one of those cases where the XX cents we typically get back from each dollar the govt taxes could be worth it to slow the party down.

It was called the MSPT or Mining Super Profits Tax. Super Profits is a Marxist term (don't know if Marx coined it, or it just became part of the canon) to reflect anything above a 'reasonable' rate of return. In this case it was set at the government bond rate. Which makes you question why any rational investor would invest money into a highly risky mining venture when they coudl get the same returns from government…

> It was called the MSPT or Mining Super Profits Tax.

Fair enough

> It's the ultimate definition of unfair.

When you are using a non-renewable resource then what is 'fair' has to be balanced with the changing value of that resource.

> You don't improve the economy by knobbling your best performer.

You need to measure their performance with regards to the inherent value of the asset. If we started selling huge tracts of our land to another country then you could also say that 'land selling' was the best performing part of our economy but that would not be accounting for the capital loss involved.

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

#83

Post by zmmmmm » Wed, Sep 08, 2010, 1:48 AM UTC

brc wrote: post #80

dejb wrote: post #64

Earlier quoted context omitted.

Actually wasn't the it called mining 'super' tax becuase it was to fund superannuation? I know there was to be some increase in funding but I'm actually not 100% sure because the govt did such a poor job of selling it. Anyway I think this may be one of those cases where the XX cents we typically get back from each dollar the govt taxes could be worth it to slow the party down.

It was called the MSPT or Mining Super Profits Tax. Super Profits is a Marxist term (don't know if Marx coined it, or it just became part of the canon) to reflect anything above a 'reasonable' rate of return. In this case it was set at the government bond rate. Which makes you question why any rational investor would invest money into a highly risky mining venture when they coudl get the same returns from government…

> Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair.

Umm, have you ever noticed how people are actually taxed? It's called a "marginal" tax rate and it's a feature of just about every tax system in the world, precisely because it is considered a "fairer" system to have people who can afford to pay more share more of the tax burden.

One might even argue that the "super profits" tax is fairer than marginal tax rates because it takes account of the amount of capital you have deployed to achieve the result (to relate it back to people, if I have a family of 10 people to support I don't get a lower tax rate ... but a company with 10,000 people to achieve the same profit as one with 1000 people will get that taken into account).

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

#84

Post by brc » Wed, Sep 08, 2010, 8:34 AM UTC

zmmmmm wrote: post #83

brc wrote: post #80

Earlier quoted context omitted.

It was called the MSPT or Mining Super Profits Tax. Super Profits is a Marxist term (don't know if Marx coined it, or it just became part of the canon) to reflect anything above a 'reasonable' rate of return. In this case it was set at the government bond rate. Which makes you question why any rational investor would invest money into a highly risky mining venture when they coudl get the same returns from government…

> Imagine how much you would be upset if they decided to start taxing you extra because they thought you were doing too well. It's the ultimate definition of unfair. Umm, have you ever noticed how people are actually taxed? It's called a "marginal" tax rate and it's a feature of just about every tax system in the world, precisely because it is considered a "fairer" system to have people who can afford to pay more sha…

I take it by those comments you've never actually invested any money? The number of people employed has zero to do with making decisions about investment returns. But that's been the problem all along - people with very little idea about how capital markets and mining investment works deciding they want some of the pie, and coming up with all types of justifications for it.

I'm not talking about marginal rates - I'm talking about - hey you! You're making too much money, I want some of that! Here's an extra 40% tax for you - no consultation, no transition period, no questions asked. Would you defend this tax if it was applied to technology startups because they made too much money?

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

#85

Post by justsee » Wed, Sep 08, 2010, 8:02 PM UTC

carlistixx wrote: post #79

justsee wrote: post #76

Earlier quoted context omitted.

Unlike the US we don't have a housing bubble, because of our increasing population. "Debunking the Australian Housing Shortage" http://www.unconventionaleconomist.com/2010/05/debunking-aus... The claim Australia has a housing shortage is not backed up by any decent data (only by very weak / spurious data provided by the property industry itself), and represents a continuing effort by the property industry to explain…

And a different view: http://www.rismark.com.au/pdf/Macsec_5.pdf

This is a presentation from Christopher Joye of Rismark, who has gained a lot of notoriety in Australia for being so bullish on Australian property.

Rismark sells an innovative shared-equity mortgage product. Shared-equity products require a rising housing market (as consistently advocated by Robertson) to be able to sell what is essentially a wholesale investment in residential property to investors.

So I wouldn't state he has a different view, rather his view is the view of the real estate industry, and as he has a vested interest in rationalizing away any bubble he wouldn't be the first analyst to turn to for unbiased, independent opinion.

People bearish on property would call him one of the leading property 'spruikers'. That he is continuing to claim there is a housing shortage in a recent presentation really confirms this.

Also, providing 'Source: Rismark' shouldn't really cut it for anyone wanting to get a clear picture of the Australian property bubble.