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The Resources Super Profits Tax, twisted logic and why Henry must go.

June 7th, 2010 · Greg Atkinson · 98 Comments

Quite clearly the debate regarding the Resources Super Profits Tax (RSPT) in Australia and abroad has not died down. Despite what the Government would like people to believe, it is not just the foreign mining companies that are opposed to this new tax, but also small Australian mining companies, business owners and the public in general.

The Resources Super Profits Tax is quite simply a tax grab which the Rudd Government has tried to disguise as some honourable way to redistribute wealth from the nasty foreign mining companies, to the average man or woman on the street.

Ken “the armchair businessman” Henry reckons that a life spent behind a desk in Canberra has given him unique insights into how the global economy works and therefore in the parallel universe his lives in, increasing taxes on successful mining companies will actually encourage them to invest more in Australia.

The masters of the RSPT disaster are a group of people who between them have never run so much as a hot dog stand. Rudd, Swan, Gillard, Tanner and Henry have no experience in running a business or any significant private sector experience, yet they believe they know better than anyone else how to manage an economy. It’s truly a scary situation.

This group of power hungry people have a shared common belief that the government should have greater control over our daily lives and the private sector. They also believe that if we give them vast sums of money then they can spend this money wisely and work miracles. This is because most of us are far too stupid to understand the magnificence of their ideas and planning.

Those who do not appreciate that greater government control over their lives is necessary for the good of the nation will be invited to attend training at the Rudd Institute at the Australian National University. (okay, I made this up, but you get the point right?)

But I have wandered off subject so let me get back to why I believe the RSPT is a stupid tax. To do this, allow me trash the arguments or myths put forward by the Government, Henry and their supporters used to justify this new tax.

Resource Profit Tax Myths

Myth #1. The aim of the tax is to give all Australians a fair share of the wealth created from the resources sector.

Okay, if this were truly the aim of the new tax then the Government could simply give all of us a tax rebate each year based on how much money they collected via the RSPT. But since the money will actually flow directly to the Government then the idea that the tax will benefit all Australian’s is simply a lie.

In truth the money will flow towards a range of projects and millions will be wasted either by mismanagement (i.e. just like the home insulation program) or be spent on dubious projects in marginal electorates to effectively buy votes.

Anyone who seriously believes that the RSPT is genuine attempt to give Australian’s a greater share of the profits generated in the mining sector must be chewing on the same magic mushrooms as Ken Henry.

In any case, Australian’s already benefit from our mineral wealth via existing taxes & royalities and indirectly via Superannuation for example. In addition, Australian’s are able to buy shares directly in companies like BHP & RIO and perhaps this would be a wiser use of national wealth as opposed to purchasing imported flatscreen TV’s, imported iPad’s or heading overseas to Bali?

Myth #2. The tax is meant to stop foreign companies sending their profits offshore.

Nothing illustrates the twisted logic of the Government quite as well as their attempts to convince the public that they are trying stop or limit mining profits heading overseas. Then in almost the same breath, Government Ministers say Australia is still open to foreign investment and welcomes foreign investment in the mining sector. I am confused..aren’t you?

So what Rudd, Swan and the other clowns are effectively saying to foreign companies, fund managers and banks etc. is: please invest in our mines, but if your investment pays off well, we are going to tax you heavily. (oh and we are going to portray you as greedy money hungry foreign devils for political purposes)

It seems to me that if you really wanted to stop money heading offshore you could simply limit the stake that foreign interests could take in mining projects.

But the truth is that the Government has actively been talking up Australia as an investment destination and has approved the foreign ownership structure of such enormous ventures such as the Gorgon project.

So as a nation we have been out selling Australia as a great place for foreign companies to invest, we have allowed them to take majority stakes in a whole range of resources related projects but we don’t want them to take any profits back home.

It doesn’t make sense does it?

The RSPT will probably reduce money heading offshore, but it will also reduce dividends paid to Australian based shareholders and Superannuation funds as well reduce the money flowing into businesses that support mining projects in Australia.

It called biting the hand that feeds you.

So the RSPT won’t stop money heading offshore and will cause just as much pain in Australia as it will to shareholder/investors overseas.

In addition, if the tax is truly aimed at reducing how much money heads offshore then why aren’t all foreign owned companies subjected to a super profits type tax?

Finally don’t forget that all major car makers in Australia are foreign owned and send their profits offshore. Are they going to be hit with a super profits tax? No. In fact these companies receive tax breaks and grants courtesy of the Australian tax payer.

So it seems it’s okay to send profits offshore, as long as your not a mining company.

Myth #3. The tax will create growth in the mining sector.

Need I even discuss how crazy this idea is?

Apparently the logic behind this myth is that the extra tax collected from the miners making “super” profits can be used to offset losses for mining ventures that are basically not doing so good.

But this concept just illustrates how little Henry knows about business or understands what motivates business people.

Most of us business or company owners don’t plan on going into business with the sole aim of collecting tax deductions or tax offsets etc. We go into business to try and be successful, i.e. generate profits.

This is one reason why even the small mining companies that Rudd thought would support his new tax grab are not happy. Because at some point they aim to generate profits, and you can be sure that people don’t invest years of effort and a small fortune getting a mine operational just to earn a 6% or less return.

So the big mining companies will rethink their plans to invest further in Australia, and as we know now, they are already putting projects on hold and even cancelling some. The small mining companies will wonder if all the hard years in front of them is really going to be worth it since if they do make the big time, they are going to be taxed heavily.

But the knock-out “myth-buster” for the suggestion that the tax will create growth is simply this. If the RSPT will truly drive growth in the mining sector then why not apply to same tax to other sectors of the economy? Heck, why not apply the RSPT to every industry and every sector?

Of course an extra tax won’t drive growth, the whole idea is complete nonsense. The only reason the RSPT is on the table is because the Government needs money. It’s that simple.

Myth #4. The tax won’t/hasn’t affected the stock prices of Australian mining companies.

David Koch (from the Channel 7 Sunrise TV show) is one of the few market commentators around that supports the new mining tax and he also argues that since mining stocks on the Australian stock exchange have not fallen any more than most other stocks, that the tax cannot be said to have adversely affected Australian mining stocks.

The serious problem with Kochie’s logic in this area is that big mining companies like BHP have global operations and are not 100% focused on Australia. So if the RSPT comes into force they can look at moving production elsewhere, therefore they can protector shareholder value in this way and thus the hit on their share prices will be reduced.

But if you look at companies that only have operations in Australia then the story is very much different as The Australian reported on the 5th June in an article entitled: Local mining stock values plunge 12pc

According to the article:

“THE market value of local mining companies that operate solely in Australia has plunged 12 per cent since the Rudd government announced its controversial resources tax plan on May 2, as international fund managers reassess their Australian investments.

However, the market value of miners that operate mostly overseas only dropped 0.9 per cent over the same period.

In an analysis of the top 150 ASX-listed resource companies excluding oil and gas companies, Gresham Advisory Partners found the results were consistent with industry views that the new tax would increase the cost of capital for domestically focused miners relative to those with offshore projects.”

Therefore it is quite obvious that the proposed tax is causing havoc with mining stock prices and that overseas fund managers are clearly looking to get out of stocks that are likely to be hit hard by the RSPT.

So this myth is also well and truly “busted”!

————————————————————

I am not saying that the mining companies could not be paying more in taxes, but to suddenly announce such a tax during a time of global economic uncertainty and without a lot of consultation with the mining industry is just plain stupid.

The Ken Henry Taxation Review has now turned into a complete debacle and a lot of the blame for this has to fall onto the shoulders of Ken Henry himself.

Henry has either willingly or unknowingly become a pawn of the Government and has shown time and time again, that he just doesn’t understand how business works. He might be a great bureaucrat, but it is very clear that he is out of his depth when it comes to understanding how his policy suggestions will impact the real world.

His staunch defence of the RSPT has now undermined his independence and it is not his role as a public servant to be launching counter attacks against those who oppose his tax plan.

Therefore I believe it is time for Ken Henry to either resign, be stood aside or sacked. We simply can’t have the Head of Treasury openly supporting or pushing policy like he/she is somehow a member of Government.

Personally I don’t think the Resources Super Profits Tax (RSPT) will ever see the light of day in it’s current form. But I do hope it makes the public realise that the Government is over-spending and that this tax, is simply a way for Rudd and Co to fund a series of policies aimed not at doing much good, but keeping them in power.


98 responses so far ↓

  • 1 Ned S // Jun 7, 2010 at 5:09 pm

    Don’t throw the baby out with the bathwater Greg – There were 138 recommendations in the KHR. And after 5 months of navel gazing, Rudd and Swan basically chose to implement precisely ONE of them – For 100% political reasons – And did it about as badly as it’s possible to imagine it being done!

    As I’ve said before, the miners had been well and truly forewarned to expect to pay more. And they didn’t even seem to have huge issues with that as such – I think we’ve all been expecting to get whacked for a bit more?

    And IMO, there is still huge value in the KHR. But just don’t let Rudd and Swan implement ANY of it! Because, as I’ve also said before, I wouldn’t trust them to successfully take my dog for a walk.

    Well the Asian markets weren’t QUITE a bloodbath – But I suspect there aren’t many bandaids left in the packet either! Might be best if the G20 Finance ministers stop issuing communiques that basically say Yep, there is a lot of debt about, and we aren’t too sure what to do about it – To the point where we actively disagree!

    Did you see where the Milky Bar Kid has recently been reported as big noting himself back in the ETS/Copenhagen days by referring to the Chinese as “f*ckers” who are trying to “rat-f*ck” us – Whoever “us” might be? (He’s a HUGE liability and the sooner “we” all distance ourselves from him and say He was an aberration; One of those very bad mistakes democracies sometimes make, the bloody better!)

  • 2 Biker // Jun 7, 2010 at 5:34 pm

    All good points, Greg, strongest one of which may be that the miners will simply go elsewhere. Couldn’t help remembering a headline you once posted about nothing much changing with the KHR. In fact it may well take out Labor… !~

    I suspect it won’t be long before we see an argument put for “why Abbott must go”, if the polls are to be believed. But we may also see Labor attempt to dump the MWK, as Ned calls him… !

  • 3 Ned S // Jun 7, 2010 at 5:42 pm

    I agree with pretty much all of your article (with the rider being that I haven’t attempted to acquaint myself with the details of ONE tax that it apparently took a really smart fellah like Swanny 5 months to get his head around.)

    But I don’t agree with ditching Henry. He pretty much did what was expected of him and stood there and took it like a naughty schoolboy who’d messed up his homework while Rudd and Swan said what THEY were going to do – And used the KHR as a cover.

    He only barked (as I recall) when it was suggested by the media that his department might actually have recommended that tax to intentionally try to cool down the mining “boom”? (With it being logical enough for him to defend it given that he had recommended it; While specifically recommending against Rudd and Swan’s non-consultative approach to implementation I also recall? And knowing that the Senate could and would call on him regardless for a bit more info is also my recollection?)

    I’d forgive him that one mistake of opening his yap after having been provoked by BOTH his idiot politician masters AND the media perhaps – Given all his other good work on the KHR. But I wouldn’t like to see him fail to learn from the experience! 🙂

  • 4 Ned S // Jun 7, 2010 at 6:29 pm

    I’m starting to sound like a Ken Henry apologist – So one more then I’ll try to leave it alone – He was put into a HELL of a situation back in 2008 or whenever when they dumped him with the whole tax review thing. That should never have been a job that was given to a person in his position. (Who presumably had a few other things he could be doing anyway – Just as a by the by!)

    But hey, he just genuinely MIGHT have been the best available – With alternatives like contracting the work out to the likes of Steve Keen and/or Paul Krugman not giving ME warm and fuzzies?

    So Henry got the pooey end of the stick precisely because he did have some basic competencies. And seems to have made a pretty reasonable job of it regardless overall – IMO.

    But putting him in the position where he’d be exposed to the degree of public scrutiny he was, with lengthy and ongoing elevation of his public profile, plus the inevitabilty of pressures to reveal his own societal biasses, probably never was going to be ideal.

    However, we still got acceptable value for money for mine – Which Rudd and Swan have done what Rudd and Swan do with such results. If that pair can’t turn silk purses into sows ears, then no-one can! 🙂

  • 5 Vince L // Jun 7, 2010 at 8:50 pm

    Come on Ned. Henry gets paid a packet to be a top public servant and so he should be use to putting together reports that go nowhere. He should also know that his job is to stay away from politics and not pick sides.

    I reckon he has allowed his head to dictate his actions and needs to go. (just think of all the jokes you can get from that wordplay)

  • 6 Ned S // Jun 7, 2010 at 9:08 pm

    Never said Henry didn’t err Vince – But given what we got from him, given the pretty unreasonable position he was placed in; And given that (IMO) he did a pretty good job (a review of our entire tax system is a bit more than a “report”); I just DON’T feel to call for his head on a platter – Although Yeh, a better boss than Rudd might say Sorry mate, I set you up (albeit unintentionally?), and it’s time to pull your head in and let ME take the heat. Which isn’t really all that likely to be the attitude the Teflon Man adopts hey?

  • 7 GoWest // Jun 7, 2010 at 10:02 pm

    Now that workers are being sacked and projects deferred it is a REAL problem for the power cabinet – Rudd, Swann, Gillard and Tanner. Now we will see their REAL leadership. The industry relies on the perception of windfall profits to get investment, now the govt is taking that away so it is unlikley new projects will get underway with existing finance methods. The irony of the current situation is that the govt has spent future taxes to facilitate the only growth part of our economy, now they are desparate to increase taxes “somewhere” to continue that level of expenditure and the mining industry seemed to be to be the golden goose. The sectors the govt chose to stimulate are still going backwards waiting for their next subsidy.
    Henry must know that mining capital is mobile and capital flight is predictable. He must also know the size of the downside credit payback to the industry is huge so I am still unsure how he justifies the incredible tax winfall predicted. If the industry currently makes about 12% ROI and the 40% tax applies after 6% then there seems to be only 2% of industry income available as tax offset against royaltys which generally start at 2% of product. The numbers just dont add up. All the States have to do is increase royalties (happening already) to stuff Ken up and steal any windafall. Seems the only thing taxpayers will inherent will be the writedowns!
    There is a growth industry in immigration – all the govt needs to do is find a way to tax immigrants – a HECS debt on boatpeople processing costs applicable against benefits or taxes would do the trick. You wonder how much of the benefits are sent overseas to finance the next boatload.

  • 8 Ned S // Jun 8, 2010 at 9:05 am

    Do I detect a backflip in the making? :

    http://www.adelaidenow.com.au/news/national/miners-could-pay-58-per-cent-tax-swan/story-e6frea8c-1225876669893

    Amongst Rudd’s many problems, the following just could be the core one:

    ‘”The advisers around him work on the idea that we are smart; the punters are dumb; they won’t recognise that we are running a scam,” a senior Labor source said.’

    http://www.theaustralian.com.au/politics/kevin-rudds-tilt-to-left-risks-alp-voter-base/story-e6frgczf-1225876700987

    Seems like he’s pretty much been reduced to trying an approach of “Well, Abbott WOULD be worse!” 🙂

  • 9 Jason // Jun 8, 2010 at 9:07 am

    I got to ask, does any one in government know whats going on, there was just a story on Sky Business that stated the government had got the tax proposal wrong regarding the 6% buffer before the tax kicks in, and that this 6% actually relates to the indexing of the tax credits.

    The guy from the Melbourne Business school said that it was clear they had not actually read the document both Rudd and Swan had made the same error.

    I got to say is it to much to ask for our pol’ies to actually understand what they say BEFORE they open their mouths, my business operates in the share market and it pisses me if this statement is true, and just shows that the gene pool for pol’ies must be very limited.

  • 10 Biker // Jun 8, 2010 at 2:49 pm

    Ned: “…With alternatives like contracting the work out to the likes of Steve Keen…”

    That distant echo you heard from the West was my scream of laughter bouncing off the Darling Range, Ned. 🙂

    My own view is that the bait (increased Super) was never picked up by the fish… most having suffered a major bite out of their burley a year or so earlier. Rudd may not have realised how very unattractive Super is to the set-and-forget school: a long time for many to catch it… and a questionable quantity when they do get to swallow it… .

    Our culture is gradually changing from one of delayed gratification to demand for instant rewards. We see evidence of it daily, from new drink-now style wines, to the absence of lay-by options in stores. Harvey Norman gets it right in this culture: take it now and paying nothing for three years.

    Rudd apparently has not caught-on to these changes. Had he proffered _instant_ rewards to the general populace, he might have garnered _instant_ support. When he states now that he should have ‘sold’ mining taxes better, I wonder if he’s about to rebait the hook and cast again… . 😉

  • 11 Greg Atkinson // Jun 8, 2010 at 3:41 pm

    Ned, Henry has allowed himself to be dragged into a political debate which is not his job and this means that he has undermined his own report. He should be out talking about all 138 recommendations, not defending just 1.

    He has also allowed his department to be used for political purposes by arranging for it to issue data to the press in order to undermine some claims made by some mining companies, which later we found out was not aligned with the view of the ATO. So what the heck is he doing?

    Do you see any other government department head acting in this way?

  • 12 Ned S // Jun 8, 2010 at 4:11 pm

    You’re 100% correct about the bait Biker – Raise the super rate to 12% progressively between 2013 and 2020? Not going to win a lot of 50 yo plus voters with that one. And let’s face it, even the likes of you and I have had a few quiet moments concern as to just what legistative restrictions could be placed on our super, so I can fully imagine the under 50’s are out and out skeptical.

    And at the end of the day, one still gets back to Macfarlane’s argument that super exposes Aussies to risks in the international markets that having their own little home paid off and a few bucks in the bank never would have – Wasn’t that a bloody prophecy come true! 🙂

  • 13 Ned S // Jun 8, 2010 at 4:42 pm

    Greg: “So what the heck is he doing?” – As you said, “he has allowed himself to be dragged into a political debate which is not his job”. (I assume he’s still at it is he?) Hmmm … Then maybe Quentin Bryce should rap him over the knuckles because I’m damn sure Rudd and Swan won’t if anything he is saying supports their position.

  • 14 Jason // Jun 8, 2010 at 6:10 pm

    Also the government does not pay the super contributions anyway, even the majority of the federal government employees dont “actually” have contributions made to their super as it was only about 2 years ago that the comsuper system was changed for new employees

    So what has super contributions got to do with it anyway

  • 15 Biker // Jun 8, 2010 at 10:02 pm

    “…one still gets back to Macfarlane’s argument that super exposes Aussies to risks in the international markets that having their own little home paid off and a few bucks in the bank never would have – Wasn’t that a bloody prophecy come true!”

    Spot on, Ned!~

  • 16 Ned S // Jun 9, 2010 at 3:54 am

    Kev’s calling the tax a “proposal” now and re chatting said proposal through with the miners, reckons he doesn’t think it’s right to actually put a timeframe around it:

    http://www.theaustralian.com.au/politics/state-politics/top-labor-reformer-peter-walsh-lashes-pm-kevin-rudd/story-e6frgczx-1225877242497

    When does the cartoon come out showing the little monkey with his hand stuck in the cookie jar looking around fretfully to see if anyone’s noticed? 🙂

  • 17 Futureproof // Jun 9, 2010 at 5:42 pm

    As I recall, the last famous “Gang of Four” received dinner, followed by a neck tie, finishing with a tailor made pine box – China mid seventies, if my history is right.

  • 18 Ned S // Jun 9, 2010 at 8:14 pm

    Fortunately, I doubt that Kev represents a fundamendal shift in the way that Gough was … We could still be OK? (Relatively speaking!) 🙂

  • 19 Ned S // Jun 9, 2010 at 8:42 pm

    errata: “Gough was” => “Gough did”

  • 20 Greg Atkinson // Jun 9, 2010 at 10:43 pm

    Jason, I think it is pretty clear that the Government is trying the smoke and mirrors routine. The RSPT is a tax grab and so is the extra Superannuation contribution, which is simply a pension tax by stealth.

  • 21 Jason // Jun 10, 2010 at 7:33 am

    Yes i realise that, i just find it dirty that he links the two together when they have little to do with each over and one is not dependent on the other, he could increase the SGC to 12% any time.

    But your right of that rise he will get the 15% tax on it, so esentialy he give me the RSPT and i will then get more tax from your super as well.

  • 22 Jason // Jun 10, 2010 at 7:34 am

    I cant believe my brother plans to vote for this guy again

  • 23 Biker // Jun 10, 2010 at 9:00 am

    Clever sleight-of-hand which appears to have misfired badly. Major issue is still, of course, that Abbott is perceived as more ‘0n-the-nose’ than Rudd, by voters.

    Twiggy’s televised response to Gillard was interesting…

  • 24 Jason // Jun 10, 2010 at 9:03 am

    missed his response would you have it on youtube?

    Its also a little sad when you realise my brother works in a BHP Mine

  • 25 Senator13 // Jun 10, 2010 at 5:20 pm

    This is not Henry’s tax. This is all Rudd’s. Rudd chose one recommendation out of dozens and did not even implement it the way that it was recommended.

    There was zero consultation with the States and the mining industry.

    Rudd saw this as a ploy to make him look strong since his back down on the ETS. It was a tax build around a slogan – surplus 3 years early, 3 years ahead of time blah blah. He knows he has made a mess of the budget and a mess of his own policies and in a rush job he has thought this would win him points and it has back fired badly.

    It was not even designed well, was zero consultation and announced at the worst possible time just as global markets were jittery.

    Where is Rudd’s grand health plan that he was working on just a few weeks ago. That was not even finished because all the States did not agree to it. Must have been too hard so he moved onto something else that he thought would win him some points.

    So this tax is all Rudd and the blame should sit squarely with Rudd.

  • 26 Biker // Jun 10, 2010 at 6:11 pm

    “Rudd saw this as a ploy to make him look strong since his back down on the ETS…. this tax is all Rudd and the blame should sit squarely with Rudd.”

    Probably right… .

  • 27 Senator13 // Jun 10, 2010 at 6:42 pm

    You can see the cogs turning of Rudd tying to weasel out of this like everything else he has proposed.

    The worst thing about this is the motives behind it. It was not to reform the tax system or any other economic reason – but purely to boost his own numbers. Only this has backfired and now he is unprepared for the hard sell.

    Rudd’s answer to everything – throw money at it. Even if it is at a tax that is designed to collect money! Does not make sense to me…

  • 28 Greg Atkinson // Jun 10, 2010 at 6:59 pm

    Senator I am surprised how stupid Rudd has been in his handling of the mining tax and Henry Review. I have no idea why you would run around talking up the mining sector for 2 years and then suddenly go after their throats. I though bankers were the evil ones, or was that just during 2008/2009.

    By the way, here is a quote someone gave me from George Orwell. They told me it fit’s Rudd like a glove..and I agree.

    “The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns, as it were, instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink.”

  • 29 Ned S // Jun 10, 2010 at 7:19 pm

    I think Aussies know that if we have avoided the worst of the GFC, it had a heck of a lot to do with the fact that Asia kept buying our minerals. And we have also got the hint that big spending governments (be it the US spending lots of loot to do “overseas weapons testing” and get poor people into homes, or the UK doling it out on welfare direct) do not make for happy futures.

    And I guess lots of people are just fed up with his fibs – As I recall, in the lead up to the budget, he was on about how he was going to be fiscally conservative? – Whereas what did was look around for loot to redistribute to buy votes. What’s fiscally conservative about that?

  • 30 Biker // Jun 10, 2010 at 8:12 pm

    “…if we have avoided the worst of the GFC, it had a heck of a lot to do with the fact that Asia kept buying our minerals.”

    Likewise for Canada… .

    (And true for their housing market, too. 🙂 )

  • 31 Greg Atkinson // Jun 11, 2010 at 11:58 am

    It seems the Government is losing the fight with the miners. I think Rudd is going to have do back down in a way that he can try and spin as not being a back down.

    I would guess he will say that after consultation with the mining industry that they some changes will be made but that the concept of the tax remains largely in place.

    But can he appease the mining companies and fund the budget? I think not, so it is going to be really interesting to see how he balances the mess he has created.

  • 32 Ned S // Jun 11, 2010 at 3:04 pm

    Sounds like every national leader with the exception of Barack Obama and Kevin Rudd feel to become fiscal conservatives? :

    http://www.couriermail.com.au/news/breaking-news/naoto-kan-warns-of-greece-like-crisis/story-e6freonf-1225878531481

  • 33 Greg Atkinson // Jun 12, 2010 at 9:38 am

    Well Ned I don’t think Rudd will be a national leader for much longer. It looks like the RSPT is going to end his reign one way or another.

    Like a said quite a while back, I doubt the RSPT as it stands today will ever see the light of day and actually there is a good chance there will be few changes made to the current tax arrangements full stop.

  • 34 Ned S // Jun 12, 2010 at 3:05 pm

    I’m almost selfish enough to hope he stays there AND that the ALP gets a second term under him – That should mean we don’t get another Labour guv for a generation – But the damage wouldn’t be repaired even in a generation I guess. So yeh, best he goes now. It seems to be the potential risk with Labor – That every once in a while they’ll throw up another Gough – It doesn’t sound like an acceptable risk to me.

    Shame the Henry report has now been associatted with odium – Put it down as another Rudd guv casualty perhaps.

    This is a doozy – Less efficiency – Who cares about the extra costs:

    http://www.brisbanetimes.com.au/national/big-brother-wants-all-your-bits-and-bytes-20100612-y3wi.html

  • 35 Anon // Jun 12, 2010 at 4:58 pm

    “Well Ned I don’t think Rudd will be a national leader for much longer. It looks like the RSPT is going to end his reign one way or another.”

    If Rudd caves on the RSPT he might get some of the protest votes back that went to the Greens temporarily. Abbott still looks like a shakey leader to me…he doesn’t exude many leadership qualities and looks like the party is basically trying to control his extreme tendencies and dialogue.
    Whatever happens, the election will be very close.
    I’ve made some stock bets that will benefit from Rudds infrastructure plans (given they’ve been justifiably smashed), so I’m currently betting on a Rudd re-election. Given how rare it is for a new government to be thrown out after one term, the odds are with me (at least temporarily).

  • 36 Ned S // Jun 12, 2010 at 6:58 pm

    G’day Anon,

    I guess the nice thing for me personally is I’ve now decided that no Labor guv is worth the risk ever. They always have the potential to throw up the likes of a Whitlam/Rudd – Who truly believe they are doing good. And that as such, the ends justify the means.

    So I can retreat from wasting time listening to political commentary again – In the sure knowledge that the ALP always represents an unacceptable risk.

    Stocks – You both trade and invest. Whilst I avoid – As I have neither the skills nor the temperament.

    Cheers …. 🙂
    Ned

  • 37 Biker // Jun 12, 2010 at 8:16 pm

    I actually think Rudd will get back in. Have to agree with Anon that Abbott is just too shaky. Rudd’s the Devil-we-Know. Can’t think of him without hummin’ that Neil Young song “Why Do I?”* but love him or hate him, you can predict what he’s going to do.
    And, just when you figure it couldn’t possibly be worse, Abbott just might prove us wrong!~

    http://www.mp3lyrics.org/n/neil-young/fuckin-up/

  • 38 Ned S // Jun 12, 2010 at 9:36 pm

    While I’m a conscientious objector when it comes to voting for politicians, I try to participate in the political process.

    Email sent to Julia Gillard follows:

    “Rudd’s contact didn’t work so yours will do:

    I guess the nice thing for me personally is I’ve now decided that no Labor guv is worth the risk ever. They always have the potential to throw up the likes of a Whitlam/Rudd – Who truly believe they are doing good. And that as such, the ends justify the means.

    So I can retreat from wasting time listening to political commentary – In the sure knowledge that the ALP always represents an unacceptable risk.

    I can only hope it is a generation or more before the recollection of this guv is lost from the public awareness and voters feel tempted to err again.”

  • 39 Ned S // Jun 13, 2010 at 7:31 am

    Rudd could get back in given Abbott is the alternative – Yeh, the Libs need to try and market their party as the alternative rather than Abbott per se if that’s possible. Because he IS a loose cannon. BUT one that party process seems to be able to pull back into line pretty lickity split.

    And how could any reasonably honest person NOT see some potential good in a pollie who is reasonably honest enough to acknowledge he’s imperfect enough that he might occasionally exagerrate and/or distort; As opposed to the fundamentally dishonest alternative who is so bound up in his own sense of pefection that he’d be mortified by any suggestion that he might?

    It strikes me as a choice between whether we’d prefer a naive child or an arrogant manipulator. It has engaged the publc though – Even the likes of me and the check out lady at Coles seem to have an opinion these days … 🙂

  • 40 Biker // Jun 13, 2010 at 9:41 am

    “a choice between whether we’d prefer a naive child or an arrogant manipulator…”

    Couldn’t have put it better!~

  • 41 Senator13 // Jun 13, 2010 at 1:09 pm

    If people think that Gillard is going to be any better they better think again. Also, the likes of the Greens having any sort of power should scare anyone.

    I think Greg is right – the RSPT is dead in its current form. And I doubt we will see any form of it cemented before the election.

    Unfortunately Rudd was wrecked any chance of any kind of tax reform that could have come from the tax review. The entire process was flawed right from the start and has now been too overly politicised no one will trust it.

    So much for business certainty in Australia. Big business are already reconsidering their options. And I would not like to be a small business owner right now. Who knows what kind of changes could be sprung on them or what direction Rudd could take.

  • 42 Anon // Jun 13, 2010 at 1:30 pm

    ““a choice between whether we’d prefer a naive child or an arrogant manipulator…”

    LOL, that about sums it up Ned.
    I’m not sure who the Libs could put in power that could replace Abbott. Any ideas? Not many options.

  • 43 Biker // Jun 13, 2010 at 3:46 pm

    Another saintly religious figure perhaps?

  • 44 Ned S // Jun 13, 2010 at 5:40 pm

    That rules Bronwyn Bishop out! 🙂

    There just doesn’t seem to be anyone much at all does there?

  • 45 Senator13 // Jun 13, 2010 at 5:49 pm

    I think the Libs can rule out the other Bishop too and perhaps some of their other more “colourful” characters. They need to start getting some new talent back into their ranks fast as they are scraping the bottom of the barrel with the exception of 3 or 4 people..

  • 46 Biker // Jun 13, 2010 at 7:08 pm

    Someone has been grooming Hockey. He’ll definitely make a run. Has appeal to some Aussies. Copes well in Opposition when he smells blood, but I’m not sure how he’ll he’ll fare when it’s not someone else’s…

  • 47 Anon // Jun 13, 2010 at 7:51 pm

    Yeah i’ve noticed Hockey is becoming sharper with his delivery and responses. Lets hope he keeps improving with time.

    Off topic – Soceroos play very early in the morning v Germany, on SBS.
    Good odds for a Soceroos victory btw…i’m tempted to have a flutter 😉

  • 48 Biker // Jun 13, 2010 at 9:29 pm

    Used to come over pretty ‘casual’ but his current persona is very definitely ‘I’m-Management-Material’, isn’t it?!~ 🙂

    “Good odds for a Soceroos victory…”

    You’re definitely a gambler, mate. Now, see those two flies up there… .

  • 49 Senator13 // Jun 14, 2010 at 8:43 am

    Hope you saved your money Anon.. We got thrashed..

  • 50 Biker // Jun 14, 2010 at 9:06 am

    I’m patriotic, but high risk remains off-limits. There’s a reason the odds were so good. Feel for our 20,000 fans who made the trip… .

  • 51 Greg Atkinson // Jun 14, 2010 at 11:52 am

    Should be an interesting week for the RSPT issue. Will Rudd stand firm or will see a policy back-flip?

  • 52 Greg Atkinson // Jun 14, 2010 at 12:08 pm

    It will be interesting to see how much resources related foreign investment will head towards Afghanistan in the next decade or so. See: http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?pagewanted=2&hp

  • 53 Anon // Jun 14, 2010 at 12:44 pm

    “We got thrashed..”

    Thrashed is an understatement!
    Australia looked like amateurs last night 🙁

  • 54 Ned S // Jun 14, 2010 at 1:00 pm

    I was just reading something that sounds similar:

    http://www.msnbc.msn.com/id/37677987/ns/world_news-the_new_york_times

    I enjoyed the bit that said: “American officials fear resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth, which could upset the United States, given its heavy investment in the region”

  • 55 Ned S // Jun 14, 2010 at 1:57 pm

    QLDers don’t play soccer – Leastways as of last night we don’t! 🙂

  • 56 Anon // Jun 14, 2010 at 2:23 pm

    lol Ned.
    I don’t blame them. Pathetic!

    We couldn’t even cross the ball properly…and our headers were slower than a granny on an electric wheelchair!

  • 57 Biker // Jun 14, 2010 at 4:52 pm

    Holy Cow!!~

    http://www.watoday.com.au/business/bhp-to-spend-big-in-liberia-as-nasser-continues-tax-stoush-20100613-y60z.html

    Told you my missus’ family helped start Liberian Iron Ore, didn’t I? Held kazillions of shares returning good dividends, until the dividends disappeared, back when Lang Hancock opened up our north. Looks like history may have a rewind button!!!

    Don’t know if the company still exists. Wonder how many drawerfuls of script they might still have in Vancouver???!!!
    (We sold ours at $19.00 down to $10.00… they were down around $2.00 back in the mid-eighties… .)

  • 58 Greg Atkinson // Jun 14, 2010 at 6:30 pm

    The push to find new sources of iron ore etc has been gathering pace in the last few years as prices climb. This is why I have been suggesting that Australia should not be counting on the resources boom lasting for decades.

    The higher we push up costs, the more attractive it makes mining projects in other regions.

  • 59 Ned S // Jun 14, 2010 at 7:24 pm

    Fascinating country Liberia:

    http://en.wikipedia.org/wiki/Liberia

    Not necessarilly the sort of place you’d take your missus if you like her though maybe? :

    http://www.smartraveller.gov.au/zw-cgi/view/advice/liberia

    Point taken though Greg!

  • 60 Greg Atkinson // Jun 14, 2010 at 8:41 pm

    Ned I don’t suppose we will be working there 🙂 But there are plenty of mines around the world in pretty ‘interesting’ locations so I don’t see why they can’t get something up and running in Liberia.

  • 61 Ned S // Jun 14, 2010 at 10:04 pm

    I’ve crossed Liberia off my “must have job in that location” list for now Greg. But certainly accept that there are younger and more adventerous types who might feel differently. 🙂

  • 62 Biker // Jun 14, 2010 at 10:17 pm

    Well, the old granddad made quite a lot of money there in his time. According to the family he didn’t need to _register_ any ships based in Monrovia. Not really sure why that was important, but knowing the canny old bloke, I figure it helped him avoid all kinds of fees or charges… or, perhaps, paying union wages.

    Different times… .

  • 63 Greg Atkinson // Jun 14, 2010 at 10:40 pm

    Mongolia is another location that is seeing a lot of mining investment. See: http://www.business-mongolia.com/?p=5816

  • 64 Ned S // Jun 14, 2010 at 10:51 pm

    Yes, things changed in the 1980s I gather. Not to say they can’t and aren’t changing back.

    Shame your missus wasn’t amenable to flogging off a house at inflation adjusted 2000 prices though; I was thinking of asking if she’d bought any bullion back then? Providing she didn’t want me to take her GM shares as part of the deal of course! 🙂

    Mongolia – No real show stoppers I’ve heard of there?

  • 65 Ned S // Jun 14, 2010 at 11:10 pm

    “Green Global also has recently announced plans to buy two alluvial gold mines in Mongolia for CNY 35 million.” – They still have alluvial gold mines! Life’s tough … 🙂 Russian production took a bit of a hit maybe 12 months back because their easy to get at alluvial stuff had gotten scarcer as I recall.

  • 66 Greg Atkinson // Jun 15, 2010 at 7:48 am

    The illogical nature of the RSPT comes under further fire daily and I think the passage below pretty much sums up the Government’s reason for pushing ahead with the RSPT fairly well:

    “The biggest problem is that there is a chasm between the pure theory and what the government’s resource rent tax proposes. The problem arises because the commonwealth wants tax money now and a genuinely neutral tax would raise no revenue for many years.”

    See: Nothing fair about this tax (The Australian)

    In other words, they need money now!

  • 67 Biker // Jun 15, 2010 at 12:01 pm

    “Shame your missus wasn’t amenable to flogging off a house at inflation adjusted 2000 prices though…”

    HaHa… . Never gives up, does he…?!~ 🙂

    We’ve had wins since, Ned. Last appreciable score was at the very top, about forty months ago, when we turned over a $125K block for $310K, rapidly. And stuff we bought five years ago has doubled.

    Getting a lot of queries right now. Think we may have rented AND sold this great little project we’re just wrapping up… . Wife is now trying to figure out how (and where) to replicate it. The plan for a bigger project has been paid for, but it’s sitting idle, at present.

    Heard last night about a humdinger of a high block with water views, for just $200K. Sounds crazy cheap. We were both pretty p*ssed when my mate mentioned it. I’m sure it will be at least $100K more… . But he has found some great blocks for us in the past. Off to check, now… .

  • 68 Greg Atkinson // Jun 22, 2010 at 7:44 am

    I say it again: Ken Henry must go! The guy is really starting to scare me as he is now talking about extending the RSPT into other industries. See: Henry urges wider profits tax

    What can you expect from a man who has risked nothing to start his own business and spent a life living off taxpayers money!

    I don’t think Rudd and Swan will enjoy Henry’s comments though as it will provide the Opposition with a line of attack. Maybe Swan will give Henry a call today and ask him to keep a lower profile?

  • 69 Firebug // Jun 22, 2010 at 8:28 am

    Greg, totally support the call on Henry

  • 70 Ned S // Jun 22, 2010 at 11:19 am

    I can see where he is coming from – The more you earn, the higher the rate you pay, has been a well established principal in personal taxation for donkeys’ years. So yes, it sounds to me like Ken probably really is a socialist in the very core of his being.

    It also points out that a quite real risk going forward, is that democracies will opt for socialist solutions – At least until it becomes screamingly obvious that they can’t afford them. But with a huge amount of damage being done in the meantime. At least as much to peoples’ work ethics as anything else.

    When it comes to the Marxist maxim “From each according to his ability; To each according to his need”, I incline to the view, that the very great majority, are capable of making themselves as useless and needy as the next bloke.

    Those sorts of things actually worry me way more than the fact the Ken is out there letting us know that he thinks them. Although his timing would seem to be potentially pretty crook from a business confidence perspective.

    Wonder if Rudd and Swan WILL be smart enough to tell him Shoosh, it isn’t part of the plan to tell them what the plan is! 🙂

  • 71 Ned S // Jun 22, 2010 at 11:52 am

    In fairness to Henry, his basic instruction was to review the tax system in view to doing a somewhat more sensible and logical rebuild from the ground up – With a specific directive being given, that Kev was not open to the option, that any such rebuilt system would collect less revenue than it currently does. So when one is dealing with socialists (and in many ways the Libs are socialists too), a core part of it was always going to be to figure out who might have the ability to pay more, and a plan for seperating them from it.

  • 72 Greg Atkinson // Jun 25, 2010 at 1:36 pm

    Well it looks like Andrew ‘Twiggy” Forrest is not fan of Ken Henry either: Andrew Forrest says Treasury secretary Ken Henry has blood on his hands

    It looks like when I said the RSPT would never see the light of day a month or so ago that I might have been right hey?

    If it does get dropped we can then safely say that most of Henry Taxation Review will be filed next to the recommendations from the Australia 2020 Summit and gather dust.

    I also reckon we will be seeing and hearing a loss less from Henry from now on.

  • 73 Biker // Jun 25, 2010 at 2:17 pm

    HaHa…! Yes, you may be right, Greg!~ 🙂

    (And so may I, having said, for a l-o-n-g time here (and elsewhere) “The more things change, the more they stay the same.”

    Deja vu (again!~) 😉

  • 74 Anon // Jul 1, 2010 at 9:45 pm

    Super profits Tax watered down:

    http://www.heraldsun.com.au/news/pm-julia-gillard-strikes-deal-to-end-bitter-brawl-over-mining-tax/story-e6frf7jo-1225886897755

    Time to buy resources? A catalyst for our market?

    *All posts by this poster is not financial advice.

  • 75 Greg Atkinson // Jul 2, 2010 at 10:47 am

    Well the RSPT is dead. Like I said, it would never see the light of day.

    So what have we now? The MRRT which applies to just iron ore and coal. Lol..so if you dig other stuff out of the ground it doesn’t belong to “all” Australian’s bit seems.

    What a complete face saving illogical back-down by Gillard.

    I notice Ken Henry is not around much. Looks like his tax review is being buried.

  • 76 Ralph // Jul 2, 2010 at 10:56 am

    I think it’s a reasonable compromise. The government needed to get something out of the miners in return for having a one-trick economy based on mining non-renewable resources. The great tragedy is that the proceeds from this tax is not being used as a sovereign wealth fund (as per Norway), but will be p*ssed up against the wall.

    If the miners were to complain about what has been a significant back-down by Gillard, they would just come off looking greedy. And I’m sure they don’t want that. The interesting thing now is where Abbott is positioned. Does he still keep wailing about rescinding it? If so, I reckon he’s going to look as irrelevant as Kim Beasley did saying he’s going to wind back the GST.

    The interesting take-out of this is that Gillard has flagged loud and clear that she can be bought by vested interests. Don’t expect any more attempts at tough reform from this government. Or if they do, we can just take bets on how long it will be before they fold under the weight of lobbying.

  • 77 Ralph // Jul 2, 2010 at 10:58 am

    Yes, I agree that the Henry tax reform is buried. What a colossal waste of time and money. One of KRudd’s finest legacies!

  • 78 Anon // Jul 2, 2010 at 11:38 am

    Sigh…politics is just too hard to understand for me 🙁

  • 79 Greg Atkinson // Jul 2, 2010 at 11:39 am

    Ralph I agree that it will be hard for the big miners to knock back this deal, but the smaller miners don’t appear too happy.

    The problem is now is that the MRRT does not make any sense. What is the reason for this tax? What happened to the fundamental ideology behind the RSPT?

    Also won’t the mining companies still get the 1% corporate tax cut? If so I wonder really how much overall this tax will contribute?

    Finally what will happen if commodities prices fall or weaken? Are the miners outflanking the government because perhaps they see some price weakness in the future and reckon they won’t be paying much extra tax (if any) anyway?

  • 80 Ralph // Jul 2, 2010 at 11:54 am

    I’m not sure the numbers mattered much – it was a political deal to get it off the table to enable Gillard to look tough but fair and compromising in order to get her to the election in reasonable shape. But I agree that commodity prices will probably weaken, particularly if China is serious about its enforced slowdown.

    I think it’s mainly a case of the miners coming to the conclusion that they’d ultimately lose any argument that they shouldn’t pay handsomely for the privelige of digging up non-renewable resources in a country that doesn’t have anything else to offer. And until Australia develops a world class nanotechnology industry (or something similar), we’ve got little choice but to try to profit from mining while we can. And that will probably be until the last bit of ore is dug up.

    RSPT is out of the way. Next cab off the rank will probably be the ETS. Then Gillard will be off to the gov-general to call the election.

  • 81 Greg Atkinson // Jul 2, 2010 at 12:26 pm

    Well I think Robin Bromy in The Australiam today sums up the situation well in this article A dog’s breakfast

    For example according to the article:

    BHP Billiton will pay the new tax on the coal it produces on the eastern seaboard and iron ore in the Pilbara because that is fair and equitable to all Australians who ultimately own these resources (the government’s thinking) but not on what it rips out of the ground at Olympic Dam in South Australia (the world’s largest uranium deposit, and another non-replaceable asset) or its Cannington mine in Queensland (the world’s largest silver producer)

    I don’t think this is a simplification of the tax system or what Henry had in mind.

    Just looks plain stupid to me.

  • 82 Ralph // Jul 2, 2010 at 1:01 pm

    Yes, that is a dog’s breakfast. That’s what happened with the ETS too, which resulted in the final product being so useless it was no good to anyone.

    But this is what governments have encouraged of late – special pleading from vested interests. And it’s worked. The new play book has been written – if you’re big enough, come to the government on bended knee and we’ll carve out a special position for you. Scream loud enough and the government will put its tail between its legs and crawl up in a ball in defeat.

  • 83 Biker // Jul 10, 2010 at 12:55 pm

    A kinder view?~

    http://www.watoday.com.au/business/a-victory-of-sorts-20100709-1048u.html

  • 84 Senator13 // Jul 10, 2010 at 3:16 pm

    Yes, it is a dogs breakfast.

    It is now even more complicated yet collects less tax.

    What is the point in that?

  • 85 Greg Atkinson // Jul 12, 2010 at 11:03 am

    Biker according to the article you provided the link for some of our nations best and brightest go to the Treasury Department. Well if that is so why couldn’t these “geniuses” correctly model the luxury car tax or the alcopops tax?

    In any case I find it a bit rich that anyone in Australia would take credit for avoiding a major recession when we know our commodities exports played such a major role in supporting the economy.

    So what have the Treasury done? Well they advised the Government to borrow and spend, but let’s just wait and see what value we get for all these billions in the years ahead before we call the Governments stimulus plan a success.

  • 86 Biker // Jul 12, 2010 at 5:21 pm

    Well, both our fearlessly optimistic hopeful PMs tell us we’ll be out of the mire in just three years, Greg.

    I certainly believe WA will be:

    http://www.watoday.com.au/wa-news/wa-growth-burst-tipped-by-chamber-20100712-1070y.html

  • 87 Ned S // Jul 12, 2010 at 6:29 pm

    But what are you going to do for a labour force Biker – They both reckon they are going to tell all the willing workers to stay home? 🙂

  • 88 Biker // Jul 12, 2010 at 9:54 pm

    Well, labour shortages are gonna be horrific, Ned. If Abbott gets in, he’ll quickly rescind any promises made re immigration, to appease business and industry. If Gillard gets in, she’ll exercise the backflip more gently, to appease the unions.

    Either way, I visualise the following:

    – Wage rises

    – Inflation

    – Interest rate rises

    – Rent rises

    – More winters travelling(!)

    Note that I didn’t include capital appreciation of property.
    I see it as gradual… inevitable…. part of the whole inflationery trend…. .

  • 89 Ned S // Jul 12, 2010 at 10:38 pm

    Yes, I reckon I saw their lips move when they were talking about immigration too Biker – NO question! 🙂

  • 90 Ned S // Jul 13, 2010 at 2:29 am

    – Wage rises

    – Inflation

    – Interest rate rises

    – Rent rises

    Suspect that probably even covers the stagflation scenario Biker.

    Stagdeflation is a different storey as we both know from our family anecdotes. It’s the wild card in the deck I guess. Not all that sure it’s worth getting too excited about it though. Cash is king in such circumstances – Except it earns no income. But then neither do most investments most likely! 🙂

    Apart from having a very secure job, there aren’t a lot of ways to prepare I suspect. And while it might sound like a cop out, I suspect the regulatory changes that would occur would be so great as to make a lot of prior preparation seem a bit ridiculous in hindsight. Super would be open slather for both ‘young and old’ for starters I’d imagine – Just as one example.

  • 91 Ned S // Jul 13, 2010 at 4:55 pm

    You’re having a quiet one today I gather Biker? 🙂

    Just to keep you up to date:

    http://www.couriermail.com.au/money/sour-outlook-for-house-prices-as-investors-are-the-only-source-of-growth-in-market/story-e6freqoo-1225890967795

    Of course it seems that India is sniffing after QLD coal now:

    http://www.couriermail.com.au/business/india-interested-in-queensland-coal/story-e6freqmx-1225890924715

  • 92 Biker // Jul 18, 2010 at 9:57 am

    “Ned S // Jul 13, 2010 at 4:55 pm:

    You’re having a quiet one today I gather Biker? 🙂 ”

    Well, we were pretty knocked around when the laptop went down, Ned. Fortunately we had printed off all our flight details, hotel bookings, etc… 🙂

  • 93 Ned S // Jul 18, 2010 at 6:48 pm

    One re tax that gobsmacked me very recently Biker, was the realisation that a Low Income tax offset exists – And that it now effectively means that there is no tax on the first $16K for those whose taxable income is that or less. Next question – Does one’s ‘tax free’ income from super after 60 count towards their taxable income or not???

    ‘Cause ma ‘n pa each having $16K pa coming in from investments in their names and/or discretionary trusts, plus another $9K pa each tax free from super doesn’t sounds too bad at all if that’s the case. As I can imagine a debt free couple with only modestly hungry needs getting by OK on $50K pa tax free in their dotage.

    Especially if that $50K doesn’t touch the assets. I’m looking at re-juggling my retirement sums (and strategy) again! 🙂

  • 94 Greg Atkinson // Jul 19, 2010 at 8:45 am

    Well during the dark days of the GFC the Government could have set up a sovereign wealth fund and then the Australian public could own a greater stake in our mining assets by being equity holders as I wrote in: http://www.shareswatch.com.au/blog/economy/is-it-time-for-another-australian-sovereign-wealth-fund/

    But instead the nation has borrowed and blown millions on school sheds, home insulation and a range of other projects that will do nothing to increase productivity and provide any reasonable economic return.

    So now we just watch other overseas pension funds or semi-government bodies come in any buy up our mining assets.

    We ain’t the greatest long term thinkers in Oz I am afraid to say.

  • 95 Biker // Jul 19, 2010 at 9:34 am

    “Does one’s ‘tax free’ income from super after 60 count towards their taxable income or not???”

    We’re allowed to earn $48K from any source (say rents), without tax, after retirement, Ned. My understanding is that, on top of that amount, all income we derive from Super is tax-free. One of the greatest problems we’re experiencing currently, is getting value-free, unbiased information from sources committed to promoting their own agenda (ie own kickback$$).

    “So now we just watch other overseas pension funds or semi-government bodies come in any buy up our mining assets.”

    The classic would have to be the Canuck pension fund buying up east coast toll roads, Greg.

    I see JG is planning to give 15 councils $15 mil each to build low-coast housing in regional centres. This is supposed to cover 1000 homes in each centre. If you do the sums, you’ll see this _must_ align with your prophecy on future directions, Ned. At $150K per home we must be talking apartments / units; probably medium-high-rise. To what extent might this mean that councils may relax building laws, to meet tender requirements?

  • 96 Biker // Jul 20, 2010 at 7:49 am

    “One of the greatest problems we’re experiencing currently, is getting value-free, unbiased information from sources committed to promoting their own agenda (ie own kickback$$).”

    Our list of Key Questions continues to grow, Ned. We’ve recently been harassed by an FA who figured he might steer us towards over-leveraged east coast properties. Faced with The List, yesterday, he backed off… and advised that he couldn’t meet our needs. (I used your parents’ retirement as one example, BTW.)

    One of our ‘needs’ was to obtain, in writing, clear responses to the questions we raised. His other objection might have been that we’d pay him an hourly rate, rather than set him up with lucrative fees and commissions… and trailing commissions for decades to come.

    Once we _do_ find someone who is prepared to provide written responses, we’ll forward them to you, Ned. Your situation appears to align with ours in many respects.

  • 97 Ned S // Jul 20, 2010 at 6:48 pm

    “Faced with The List, yesterday, he backed off… and advised that he couldn’t meet our needs.” – Translation: “There’s way easier ‘marks’ out there than you pair!!!” 🙂

    “we’d pay him an hourly rate” – You are purchasing a one off service from him Biker; Not asking him to manage the assets and be available 24/7 for advice on same ’til death do you part. (I’m not going to go near ANY of them if I reckon I can possibly avoid it!)

    Would love to see your responses – Thanks.

    Think I’ve got to turn one of my spare bedrooms into a retirement planning office replete with a big whiteboard on one wall to list pertinent known facts and figures and to show a timeline re what needs to happen when! 🙂

  • 98 Biker // Jul 20, 2010 at 9:33 pm

    “…replete with a big whiteboard on one wall…”

    When my kids were younger I purchased an immense whiteboard and hung it from hooks in the ceiling timbers… hard to describe it, as our main room is a great pyramid… with a mezzanine floor.

    First son was right into brainstorming… and we spent hours each week thrashing out ideas. Second son took a look (of utter derision) and avoided the exercise like the plague!

    I’m convinced it IS possible to find an FA who IS dinkum, Ned.
    We’re at the stage where it’s _critical_ we do so. A misstep at this stage might mean the loss of many tens (if not hundreds) of thousands of dollars.

    I completely agree with your assessment: “There’s way easier ‘marks’ out there than you pair!!!” 🙂 What we outlined meant some hard work at fair rates, with requirements this FA just couldn’t deliver in writing. We continually find that these guys know far less than the missus. Scary!~

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