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Analysis: how to drive a Haulpak through the Tax Act

The late Robert Holmes a Court loved what he called “black letter law” - written so tightly by governments that they thought no-one could find a loophole, but which to him was merely a mental puzzle - the sort solved by BHP Billiton as it revved up a 320-tonne Komatsu ore-truck and drove it through the minerals resource rent tax.

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From inception, this governments predicting the future was doomed for failure. One hopes their track record continues next September, if not sooner.

I may stand to be corrected, but I believed that Access Economics 1/4ly reports on the state of the nation consistently showed, until the QLD floods, WA & QLD variously No1 & No2 best performing economies in Aust. Between then the most recent (which had NT as No2 to WA), the 2nd best performing economy in Aust has been ACT...??? ...which produces nothing!! (except maybe porn). How could that be allowed to happen? Wouldn't the govt's efforts to improve Aust be better directed to reducing the burden of govt., & therefore taxes; which would then flow through to greater prosperity, more jobs, less dysfunctional citizens (greater sense of self-worth arising from being productive), etc?? Wasn't GST supposed to be about broadening the tax base? So, the questions should be directed to diminishing the negative impacts of tax and over-government, not to increasing taxes. Typical on the run, shallow, policy making.

A lot of ducking and diving being done by Canberra. Too late she cried! Wayne Swan blames it on the volatility of resource prices. Don't think he understands exactly how this tax works!

Create a complex tax law, then the smart players will find LOOPHOLES the size of the super pit in Kal. Set a tax at 5% of super profits for eg iron costs $40/t to mine(develop, operate, maintain etc). Allow 15% profit, thats $46/t. Set the super tax at 5% of anything above $46. So if the average price of iron ore for a 1/4 is say $120. Thats .05*(120-46) = $3.70 per ton. No loop holes etc. Smaller or new mines may need a higher offset. Dave

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