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The tax review, health reform and Rudd fatigue.

May 7th, 2010 · Greg Atkinson · 74 Comments

Well the Government’s response to the Henry Tax Review has been released and even Ruddites like David Koch from Kev07’s public relations program “Sunrise” seem annoyed by the way the report is basically being shelved. Suddenly the business media has woken up to the fact that Rudd and Swan are economic dills, but as reader’s of this blog will be aware I have been warning about what these two would do to the economy for years.

What has surprised me the most over the last few weeks has been the inability of most business and financial reporters and analysts to predict what would actually happen to the Henry Taxation Review when it was finally released. For days they wrote excitedly about what the Government’s response might be and waited with baited breaths to hear from Wayne Swan about his reform plans.

But way before the report was even released I wrote about what we could expect late last year in: Ken Henry and his tax review: should we be worried?.  In that article I wrote:

” Personally I think the tax review will end up being an expensive way to churn out door stoppers and although I don’t doubt a lot of good ideas will come from it, I do doubt that most of them will ever be implemented. “

Now isn’t that exactly what has happened? Most of Ken Henry’s recommendations have been parked (shelved) and the report is now probably filed next to the Australia 2020 Summit binder.

So unlike the self anointed business and finance experts in the mass media I was not eagerly waiting for the Government’s response to the taxation system review because I knew their response would be a dud, just like their responses have been in most other policy areas.

I also made this comment in January this year about Henry’s report:

“The best we can hope for as a consequence of this taxation review and the Governments meddling is that the few changes that will be made won’t cause us many problems. But my feeling is that we should brace ourselves for the review to turn into a revenue raising exercise. (the Government debt will need to be paid down somehow)”

(From: Why the Ken Henry taxation review will achieve little.)

Once again I seem to have made the right call. The Henry Taxation Review is being used as a cover for Rudd to slide in another tax on mining companies to pay for his lavish and wasteful spending plans.

Great plan Kevin you twit. The mining companies as we speak are shelving projects and the Canadians are happy to welcome any displaced miners to their shores. But never fear, I don’t think the mining super profits tax will ever see the light of day. Sadly however it will do untold damage to Australia’s reputation as a stable place to invest.

By the way, if you want an example of what a complete economic nutter Rudd is consider this. Rudd on one hand complains that the mining companies take profits offshore while at the same time handing over taxpayers money to support the car industry which is 100% foreign owned!

The scary thing about all this is how most of the Australian media got it wrong about the tax review. In general the financial media in Australia have once again shown they are unable to do much else but rehash wire reports and press releases, or jump on trending stories.

What is more surprising is that veteran business reporters like Alan Kohler from the Business Spectator are now saying that Rudd has shown his true colours over the last few months. Well actually Rudd revealed just what sort of economic manager he would be a long time ago and in February 2009 I outlined quite clearly what sort of leader Rudd was in Rudd’s new direction: Bad news for investors. In that article I wrote:

“Rudd is now showing his true colours, he is man who said anything to gain power and now will do anything to hold onto that power. He is almost child like in his sulking, things have not turned out as he expected and now like a child he will blame anything and everything for that.”

Kev07 has lashed out at neo-liberals, bankers, miners, the Chinese, the Japanese, corporate executives, John Howard and other’s because they have all conspired to ruin Rudd alternative parallel universe of make believe and fantasies.

But the reality is that Kevin Rudd is unable to deal with the real world and simply wishes to blame others for his own failures. The buck never stops with Kevin Rudd or haven’t you noticed that yet?

This lead me onto the subject of health reform which the Government has called “historic”. Well I guess the Rudd health reforms are historic in that they will cost billions and deliver outcomes which nobody can clearly define.

When for example will the number of patients who die because of accidents or mistakes in our hospitals be reduced? Well don’t look in the health reform details for the answer because it isn’t there. You see in the mixed up world of Kevin Rudd the spending is the most important part of reform, not achievement.

But I have ranted on about this before and in June 2009 I lamented that:

“Extreme socialists believe that the Government should jump in and help us through the bad times, distribute wealth so that we all can live in harmony and that they know how best to manage our schools, hospitals and utilities. Of course extreme socialists need a lot of money to create their fantasy land but no problem, they simply raise taxes for those greedy free market companies and for people they decide are wealthy.

The main problem is that extreme socialists only know how to spend as the concept of making a profit or seeking an economic return is something that only those evil neo-liberals would think of. So in their view of the world when a government funds a project there should be no detailed objectives, just some high level vague statements of what they they hope will be achieved.”

(From: Wasteful spending, poor planning and extreme socialism)

Back last year when I wrote about Rudd’s wasteful spending many in the media were praising the Government’s spending programs and economists were saying how good these programs were at supporting the economy.

But now it seems people have drifted across to my side of the argument and the Audit Office report into the Rudd Government’s Building the Education Revolution (BER) program has questioned how efficient it has been in creating jobs as well as finding numerous areas of mismanagement.

I will not even touch upon the home insulation program which tragically lead to the deaths of four people and wasted hundreds of millions of dollars. It has now been canceled and was a total waste of money. But it was good news for the Chinese companies who offloaded substandard pink batts onto Australian consumers.

Then of course there is my favorite waste of taxpayers money the National Broadband Network (NBN) which has so far cost millions already just in reports and will be outdated by the time it is finished. If anyone thinks that the Government can deliver a huge technology focused project like the NBN on time and within budget then they are in the same fantasy land as Kevin Rudd.

There have been so many blunders and missteps made by the Rudd Government that when combined with the almost endless twisting of the facts and buck passing (aided by the Ruddites in the media) that this has lead to a new problem which I call “Rudd Fatigue”.

Rudd Fatigue is where your brain simply does not process anything Rudd says in order to protect your sanity. This is because it has been proven that constant exposure to Ruddish (see: Kevin Rudd and Criswell: can you spot the difference?) can result in people being unable to make a point in less than five minutes of speaking. (just look at Wayne Swan these days)

It appears now that more and more people are being affected by Rudd Fatigue every day and the only known cure is to ensure that Rudd is not in public office for much longer. So let’s hope that the majority of Australian’s remember this when the next federal election comes around and send Rudd and his band of incompetent Ministers looking for new work!


74 responses so far ↓

  • 1 Wade Short // May 7, 2010 at 12:10 pm

    Australian Insulation Installers Unite
    PLEASE HELP OUR VOICE BE HEARD

    The closure of the Home Insulation Program now finalises one of the most poorly managed government programs in Australian history. However IT IS NOT OVER!
    The media has reported on many occasions about 120 house fires and the tragic death of four young Australian’s. The Prime Minister and Ministers Garrett and Combet have also added comments about ‘dodgy insulation installers’. These defamatory and slanderous statements have brought this industry to a virtual shut down. However what is not being reported is the continuing aftermath.
    • Installers found to be dodgy and removed from the approved list of installers amount to 0.005%. The majority were well run quality businesses.
    • Insulation installers have not been paid for jobs completed prior to the shut down of the program, in some cases jobs were completed in November 2009 and either some or all the payments have not been paid.
    • Combet’s office refuses to follow up on these outstanding payments and refuses to honour Rudd’s election promise and pay interest on monies outstanding for more than 30 days.
    • Combet’s department have lied to installers about when their payments are to be made, passing the blame onto Medicare who have been given the charter of making payments (not approving them)
    • Combet’s senior staff will not even turn up to interdepartmental meetings, letting other departments cop all the flack, these departments being the Education, Employment and Training and Medicare.
    • Insulation installers are beginning to have telephones disconnected, locked out of businesses premises, losing motor vehicles to finance companies and some have had mortgagee possession notices on their family homes……. Because the government will not pay them what is legitimately owed.
    • Combet’s media release on the 20th of April 2010 stated GST deferral was to be made available to insulation companies, yet the Australian Taxation office has sent debt collectors after these same debts.
    • The closure of the scheme the second time was a further insult when businesses were trying to hold onto employees and stock, which have been made worthless.
    • The Insulation Industry Assistance Package (released 6/5/10) is another insult, offering 15% of the value of a businesses stock when the stock has devalued by 90% is the final slap in the face.
    Please assist us, there are thousands of families effected. We are holding a major protest in Canberra in late May. Please visit our web site http://www.ruinedbyrudd.com

  • 2 Greg Atkinson // May 7, 2010 at 12:38 pm

    Thanks Wade, it is good to get some information directly from the field and not some twisted version spun out by the Government or their media Ruddite mates!

  • 3 8020 // May 7, 2010 at 4:26 pm

    Agree 100%.
    The 40% tax on the industry most responsible for the relative prosperity of our country is completely incredible. Even I, a hardened Rudd sceptic, cannot believe the stupidity of it.

  • 4 Greg Atkinson // May 7, 2010 at 6:34 pm

    Hi 8020, yes I wonder sometimes if Rudd knows himself what he is trying to achieve. Why would anyone think of tampering with the resources sector at the moment? In any case, people seem to have short memories because a decade or so ago resource companies were struggling.

    So they are doing great now and paying plenty of tax..so what is the problem? The reason we don’t get the most out of the resources sector is because we don’t value add…it’s our own fault!

    I wonder if Rudd will apply a super profits tax to the banks? Of course not…not even he is that silly..or?

    Rudd seems to be on a mission to pull down the prices across all ASX 200 companies. So far he has caused havoc for shareholders in Telstra, BHP, RIO and Santos to name a few…amazing since he is at the same time telling people they need more Super!

  • 5 Peter Kahlbaum // May 8, 2010 at 1:13 pm

    Sadly I think Rudd will be able to push his resources super tax through due to the overwhelming support of uneducated voters. Lazy people want something for nothing, especially when they see others making lots of money. The capital risk and hard work required are ignored. It is an easy populist sell. A friend at work fully supported the idea of the tax for that reason. So I told him that the mining company wasn’t going to risk it’s investors’ capital to find it, dig it and refine it. Therefore he now “owned” 50 tons of iron ore somewhere out in the WA desert. It was his share of the nation’s natural resources. What was he going to do with it? There was a blank look on his face. Remember, 40% of nothing is still nothing.

  • 6 Greg Atkinson // May 8, 2010 at 10:43 pm

    Peter I hope the tax on top of a tax doesn’t get through. It isn’t what Ken Henry recommended in the first place and is simply a money grab by a Government hooked on spending.

    But sadly you are right in that many people believe that being in the “lucky country” means you can sit back and cash in on the hard work of others. Rudd likes to work that crowd.

    You make a good point about the costs/risks involved in the resources sector. I wonder if the Government handed out free shovels how many Australians would head out into the scrub to dig up their share of the fortune?

  • 7 Futureproof // May 9, 2010 at 4:36 pm

    What makes people think that any tax collected from the miners will end up benefiting the people. It will only benefit the ALP in making expensive re-election commercials.

  • 8 Greg Atkinson // May 10, 2010 at 10:46 am

    Well I don’t reckon they will collect as much money as they have forecast and much of what they do collect will be wasted. If Rudd and Co wanted a bigger share of the mining proceeds they could have set up a fund and purchased shares in the big miners, instead of blowing billions pink batts and school halls.

  • 9 Ralph // May 10, 2010 at 3:09 pm

    I fully agree with Greg and other posters on the shocking waste by KRudd & co on ‘stimulus’ measures such as pink batts, school halls, first home buyers grants, cash handouts etc. It’s waste of the highest order and a national disgrace.

    I also agree that Rudd’s handling of the country in other area is equally as shameful. He’s been weak on policy and even weaker when it comes to having some ticker. It’s hard to imagine a more do-nothing PM. His backflip on the ETS, while probably the right policy move, just underlines the guy’s complete lack of conviction. The guy stands for nought. I wasn’t as engaged back in 1996-98 in Howard’s first term, but plenty of literature says that he was a do-nothing first termer too. Even so, Howard emerged from the stupor with the GST – KRudd will probably go to the election asking us to re-elect him on the basis of bank guarrantees, handouts and wasteful spending.

    Where I differ is on the topic of the RSPT. Again, I come at it from a resource sustainability point of view. Australia’s mineral resources may be our most valued and productive asset. But they are finite and we have precious little to fall back on (short of buying and selling existing houses). I read in the papers over the weekend that our rapid usage in recent years has led to big downward revisions in the estimated number of years supply still left in the ground. Both coal and iron ore now have an estimated less than 100 years of supply remaining. Given that this is the foundation of the Australian economy, it surely makes sense to me to be managing these resources. With this in mind, taxing these resources more heavily serves as an incentive to manage them over a longer timeframe and therefore buy Australia some time to diversify into other stuff (although it’s doubtful that will happen). I think there’s room for tweaks in the RSPT – for example, making it apply to new projects only. But I think the rationale for the tax is sound.

  • 10 Greg Atkinson // May 10, 2010 at 3:45 pm

    Ralph I agree that we don’t get a good deal from our resources and have written about that before. See LNG billions: is Australia getting a good deal from the Gorgon Project?

    However I just don’t think a surprise tax grab is the answer. Why couldn’t the Government have sat down and worked this through with the miners first? Do you think they would surprise the unions in the same way?

    In any case I think it is bad form to bring in these things suddenly and apply them retrospectively. I can see why the mining companies are angry.

  • 11 Futureproof // May 10, 2010 at 6:35 pm

    So Swan appears to be selling the budget bottom line based on the miner’s Super Tax. If there is a failure of the budget to pass through the Senate, will the government call an election based on the blocking of supply, or will they run a campaign of, “see we came up with the plan, but the coalition and the minor parties blocked it.”

  • 12 Greg Atkinson // May 10, 2010 at 9:45 pm

    I reckon Swans next excuse will be: “the goat ate my homework” 🙂

  • 13 Greg Atkinson // May 11, 2010 at 2:59 pm

    By the way, I think Michael Pascoe raises some very good points about the “super profits” tax in this article: Who’s next to cop a super tax?

    I thought this comment by Michael might raise a few eyebrows with readers of this blog:

    “Once you get started, it’s easy it is to come up with suitable candidates for a super profits tax. What about property developers and real estate agents? They’re exploiting Australian land, one way or the other, and the nation belongs to all Australians, making developers prime candidates for the same resources super tax formula, resulting in a 57 per cent tax rate for them as well.”

    Interesting….

  • 14 Ralph // May 11, 2010 at 3:40 pm

    Fair point, Greg. I too can see why the miners are angry. However, I note that a few commentators are supporting the concept of a resources rent tax, including the Australian’s economic editor, Michael Stutchbury.

    While I fully agree there are many tweaks that can and should be made to make it better, a tax like this makes good sense for a one-trick pony like Australia. I think Norway has got the right idea with their sovereign wealth fund. We should be doing something similar. The resources are not going to be there forever and re-tooling the economy is something that will probably take many decades. And given that Australia is unlikely to transition away from a resources-based economy while ever there are plenty of rocks in the ground, it makes sense to begin salting away some funds for that inevitable rainy day. I reckon places like Nauru, not to mention those poor Easter Islanders, probably wish they had put a bit more thought into their resource extraction strategies.

    And on the topic of superprofits taxes, if there’s a sector that’s exposed to moral hazard perhaps more than any others, it’s the banking industry. I’m not saying that we need a superprofits tax on the banks, but the government ought to be demanding a bigger pound of flesh in return for the explicit and implicit guarrantees that our banks now enjoy.

  • 15 Greg Atkinson // May 11, 2010 at 5:10 pm

    Ralph, maybe Michael Stutchbury has been copying my homework? I wrote about setting up a fund over a year ago 🙂 See: http://www.shareswatch.com.au/blog/economy/is-it-time-for-another-australian-sovereign-wealth-fund/

    I was actually thinking about Norway when I wrote the post above. I don’t reckon we need an extra tax, we should simply ask for an equity stake in any project and take returns as shareholders. (and share some of the risk too)

    I guess you can tell I am not a fan of big governments 🙂

  • 16 Ned S // May 11, 2010 at 5:59 pm

    National equity in mining projects strikes me as a sensible way to go as well Greg.

    Still, Henry didn’t recommend it (that I know of), and he obviously put a bit of thought into his report, so I’d like to know his reasons for not recommending it before becoming an real vocal advocate. But either way, yes, I like the principle.

    It’s one of the problems of course; That we aren’t actually seeing any discussion of a potentially valuable document like the KHR.

  • 17 GoWest // May 12, 2010 at 8:45 pm

    Since the minerals belong to the states, the 40% super profits tax is a blatant smash and grab theft of the state’s tax base and future growth. No wonder the states are up in arms! This comes on top of the 30% tax grab for the states GST revenue for central-health fat cats, the attempted ETS tax theft on the air we breathe for central climate control (scary BS stories inc. currently being translated to massive increases in power to pay for greenies solar panels). Also we have Fair-Work (a central-wages control), My-Schools (a central Education control). Central immigration control (de-australization) and of course central environment-control to stop states building dams and other essential infrastructure required for the future de-australized Australia plus ensure that country residents (not trees) continue to perish in fires.
    The ALP-Greens Canberra control agenda of Australia continues to steam-roll onwards.
    The utter chaos caused to the people who pay the taxes by these parasites in Canberra is unsurprising. Unlike the state governments they don’t have to deal with the real people of Australia, they only fly in and fly out every time they have to sit in parliament. Henry and Rudd continue to demonstrate their comittment to central controlled destruction of the states wealth. We need to ensure they step down from pretending to run the country. We all know the people in the states do the real work and make the money for Canberra parasites!

  • 18 Ned S // May 12, 2010 at 8:53 pm

    Lots of perspectives GoWest – Some of our indigenous brethren might think the minerals belong to them? And the states might think they belong to them. And the nation might think they belong to them. And if one was a “citizen of the world” they might think they belong to everyone. And if one was poor they might figure they should get a chop. And if one was rich and had bought stocks (or poor but had bought stocks anyway) they might figure they belong to them. ??? Then one could ask what future generations might think about their heritage having been consumed by their mamas and papas because they felt it belonged to those mama and papa generations more than to future generations – And I’m a simple man with a limited ability to see or imagine other’s perspectives. So there’s presumably lots more.

  • 19 Ned S // May 12, 2010 at 9:13 pm

    Heck, if I found a 809 m2 24 carat gold vein going straight down for 5 km under my 809 m2 bit of dirt with house on top, I’d be tempted to think it belonged to me? 🙂

  • 20 Ned S // May 12, 2010 at 11:58 pm

    Ya remember all those movies where the past generations of evil dead rise up to devour the living? What would be an appropriate horror storey now maybe is future generations of the “unborn” in their various partial stages of development returning to suck what they need from those they reckon deprived them …

    Life’s a hoot!!! (Or as me old man says, Ya wouldn’t be dead for quids eh?! 🙂 )

  • 21 Greg Atkinson // May 13, 2010 at 9:08 am

    I don’t actually think it is such a good idea that the states “own” the resources. I would much prefer to see a Norway like approach where we manage our resources on a national level.

    What we have failed to do is use mining to move into valued added areas. As I have pointed out before, we import around 70% of all mining equipment and so we are essentially becoming a mining colony that doesn’t do much else but dig.

    Norway on the other hand developed competence in the oil sector and also branched off into shipbuilding and other related sectors.

    So would greater state control over resources deliver any benefits for Australia? I don’t think so, because it doesn’t seem to have served us well in the past.

  • 22 Anon // May 13, 2010 at 7:08 pm

    Well Abbotts coalition budget reply was pretty good! Light on detail and focusing on Rudds idiotic policies/decisions.
    Rudd really has no idea in terms of business plans/costing/indirect consequences etc.
    Abbott will release full detail closer to the election…no doubt because if he releases too early Rudd may do a “copy cat” routine that he got away with when going against Howard – not to mention attacking Abbotts policies and starting another round of distraction away from him towards Abbott.

    Time to fall on your sword Rudd!

  • 23 Senator13 // May 13, 2010 at 7:13 pm

    Yes it was a good budget reply by Abbott. He did a good job of highlighting the reckless spending of Rudd. Rudd did not look happy about it either. We might be in for another dummy spit from Rudd as he starts to get rattled.

  • 24 Anon // May 13, 2010 at 7:23 pm

    “We might be in for another dummy spit from Rudd as he starts to get rattled.”

    lol did you watch his 7:30 report interview where he got reamed by Kerry? Not pretty!
    …His true personality is starting to show through the cracks.
    For those who want to watch it:
    http://www.abc.net.au/7.30/

    Its good to see the first signs of cohesion and rationality within the coalition. Nomore silly bickering amongst politicians (well none that we can see anyway). They are appearing more humble, and not so “overconfident”, which is always a good sign.

  • 25 Greg Atkinson // May 13, 2010 at 7:40 pm

    It will be interesting to see how Rudd handles his decline in popularity. He strikes me as the sort of guy that will blame others for his problems and start to lash out at people. (well at least lash out at people who cannot lash back!)

    In any case it is good for the nation to have an Opposition that seems to be finally functioning. Malcolm Turnbull probably did us all a favor by being stubborn and losing his job.

  • 26 Greg Atkinson // May 13, 2010 at 7:48 pm

    By the way I found this on twitter. It shows the Government and Treasury have been massaging data to support the money they have blown: See: StimulusGate http://hey.ipa.org.au/2010/05/stimulusgate/

  • 27 Anon // May 16, 2010 at 7:00 pm

    “The horrid Henry Tax”

    http://ftalphaville.ft.com/blog/2010/05/04/218506/the-horrid-henry-tax/

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 28 Ned S // May 16, 2010 at 7:20 pm

    I’d heard it was a 57% tax Anon – Given that Kev and co DIDN’T drop all the add on taxes like Henry recommended.

    Reading that link, it would seem the minimum asked by counties is 38% by pretty desperate developing countries maybe? (With 50% being about on the money perhaps – The US isn’t exactly a big minerals or energy exporter last I heard?)

    It’s a tough call I think – One even hears thoughts like leave it in the ground – As it’ll just be worth LOTS more in time.

  • 29 Ned S // May 17, 2010 at 8:32 am

    Not my thing but an article I read recently suggested keeping an eye out for beaten down German stocks.

  • 30 Anon // May 17, 2010 at 9:50 am

    Hey Ned. Yeah I’ve seen a few go long Germany and short Spain as a pair trade — altho I dont know anything about the German or Spain markets (just an observation).

    The Euro 😉
    http://67.19.64.18/news/2010/5-14gl/image019.jpg

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 31 Greg Atkinson // May 17, 2010 at 10:16 am

    The problem with the mining tax is not just the level it is set at, but also the way it is being implemented.

    The message it is sending to all companies and investors is that if you invest in Australia don’t count on getting the returns you planned because the rules may change at any time.

    It will result in less inwards investment in the mining sector that is for sure. If you don’t believe me just watch Bloomberg and listen to what the mining heads and fund manages are saying. They control the investment dollars, not Rudd, Swan and Henry.

  • 32 Ned S // May 17, 2010 at 10:18 am

    One of my concerns in relation to the tax review now is that Rudd and Swan’s (mis)handling of the one bit they did rush to cash in on means that the whole report will just basically come to be equated with that in the public’s perception. And I see much value in the report. Rudd and Swan’s efforts to keep their bottoms on the parliamentary benches have become destructive to the national interest – IMO.

  • 33 Anon // May 17, 2010 at 11:17 am

    Euro is just falling off a cliff…bottom fishers getting burnt all over the place.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 34 Anon // May 17, 2010 at 11:32 am

    Closed EUR/USD shorts…will re-enter again…still think 1.15 is a possibility (albeit we may not get there in a straight line)
    Dont want to be on any short covering rally with record short levels.

    This doesn’t inspire any confidence:

    “Short-term there is no obvious reason to think the euro is going to stop declining here,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. ‘Growth is going to be extremely weak for a long time. Positioning clearly isn’t holding the euro back even though we’ve got record short spec positioning.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a3BWJ6pgC388&pos=1

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 35 Ned S // May 17, 2010 at 2:37 pm

    Is anyone else getting a feeling that global stocks could get hit with a “massive one day correction” one of these days – Like an 8% drop maybe? (Just to pull some ridiculous figure out of the air.)

  • 36 Anon // May 17, 2010 at 2:49 pm

    Hmm Ned…anything is possible! Intuition is a powerful tool, so pulling figures out of left field isn’t necessarily ridiculous if you have strong convictions and have done your homework.

    We need to break ~4430 on the XAO. If we do watch out!
    If this holds we could bounce. We are still below the 200dma, so until thats broken its clearly bearish (unless other indicators turn).

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 37 Greg Atkinson // May 17, 2010 at 2:51 pm

    Ned I reckon we might be getting close to some pretty strong support levels soon. There has already been quite a nasty sell off already and he EU mess has over shadowed some positive economic news out of the U.S. But don’t listen to me, my short term market reading skills are as good as my golf skills!

  • 38 Ned S // May 17, 2010 at 3:19 pm

    I guess it’s just a matter of me suspecting that the divergences in the EU politically/fiscally/philosophically are so great that it isn’t reasonable to expect the union to survive in it’s current form. And it is the world’s single largest economy as I understand it? So I’m asking what the chances of us really getting out of things without some sort of a “Black Monday” (pick a day) when the world figures that out really are.

  • 39 Ned S // May 17, 2010 at 3:47 pm

    re “when the world figures that out” – I think the world has already figured it out. But my question is, Have the markets “acknowledged” it yet. With my suspicion being that they have not.

  • 40 Anon // May 17, 2010 at 3:48 pm

    “Today newspaper reports say Mr Swan’s wife, Kim Swan, sold shares, including mining stocks, a month after Mr Swan received the Henry tax review.”

    lol

    http://www.abc.net.au/news/stories/2010/05/17/2901644.htm?section=justin

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 41 Ned S // May 17, 2010 at 4:12 pm

    New “improved” version:

    But it was part of the public domain at least 10 weeks before her selling Anon (which reflects badly on Swannfor being so slack looking at it even though he dozed through the initial November 2009 warning info maybe):

    http://www.heraldsun.com.au/business/miners-states-face-big-tax-hit/story-e6frfh4f-1225794108393

    As stated previously, Henry had already told the “world” all about it – Back in November 2009 – So, as I’ve said before, I figured it was public knowledge. And well and truly “factored in”. (Apart from any “let’s go WHACK” government factor maybe.) But even that doesn’t really make sense – They are talking about introducing “it” in 2012 or 2013 aren’t they? But either way, it’s all been extremely badly managed.

  • 42 Anon // May 17, 2010 at 4:18 pm

    “Asd stated previously, Henry had already told the “world” all about it – Back in November 2009 – So, as I’ve said before, I figured it was public knowledge and well and truly “factored in”. (Apart from any “let’s go WHACK” government factor maybe.)”

    Just because something was known as a possible beforehand doesn’t mean it would be factored in.
    The Euro disaster was not factored in yet everyone knew about it long before as a possibility.
    Same with the 2008 credit crisis. Lots knew it was comming but the market kept ignoring it.
    Again one could argue the Australian property bubble bust is comming but I definitely dont see the prices reflecting this well known situation.
    If you look back in history sometimes the most worst news etc takes awhile to get absorbed into the markets. They arn’t rational, so you can’t expect rational responses.

    If it was public knowledge there would be a big difference between the RSPT being in the public domain as a possibility, and actually knowing Wayne Swan was going to adopt it. However, he has said this isn’t an issue, and his wife’s selling is not related – so case closed.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 43 Anon // May 17, 2010 at 4:23 pm

    “So, as I’ve said before, I figured it was public knowledge and well and truly “factored in””

    Also if you had a quick look at BHP’s fundamentals (or most profitable miners) it would have told you that altho some prices had slumped, there was not enough of a discount in the share prices to reflect the RSPT.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 44 Greg Atkinson // May 17, 2010 at 4:24 pm

    I have to agree with Anon. I think Mrs Swan’s trade is pretty suspicious. What Henry suggested and what is being implemented are not the same so I think the Swan’s have some questions to answer!

  • 45 Ned S // May 17, 2010 at 4:31 pm

    I’m gobsmacked Anon – To anyone who’d followed the KHR (which I did), that tax was so much a foregone conclusion it didn’t rate a comment – I quote from the article:

    “Treasurer Wayne Swan, bluntly told State treasurers just over a week ago that he favoured a new resources tax” (and the article was published 4 November 2009)

    It was probably about as blindingly obvious as saying Greece is broke maybe? And saying that Oz isn’t going to drop neg gearing on housing anytime soon … Cheers hey! 🙂

  • 46 Anon // May 17, 2010 at 4:45 pm

    ““Treasurer Wayne Swan, bluntly told State treasurers just over a week ago that he favoured a new resources tax” (and the article was published 4 November 2009)”

    Ned you can’t copy and paste properly. lol 😉 You are a hard man to have a debate with though!

    Actual passage reads differently 😉

    “Dr Henry, who will shortly deliver his tax overhaul to Treasurer Wayne Swan, bluntly told State treasurers just over a week ago that he favoured a new resources tax.”

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 47 Ned S // May 17, 2010 at 5:05 pm

    “Ned you can’t copy and paste properly” – I stand corrected Anon! To my TOTAL embarassment!!! (As it WAS certainly my recollection that it was Henry who gave the boys ‘n girls the bads news back in November – Rather than Swan) – What can I say? I found the relevant aricle; copied (what seemed to be) the relevant bit; and pasted; and posted – Despite the fact it didn’t gel with my recollection it was Henry rather than Swan dishing out the bad news.

    I’m NO Swan (or Rudd) apologist as anyone who reads this site presumably knows! 🙂 My mistake – Apologies. But, I stand by my original point that the info was well and truly in the public domain last November at the latest. HOW BLOODY EMBARASSING!!! – Regardless!

  • 48 Anon // May 17, 2010 at 5:11 pm

    Ahh don’t worry about it Ned…we all know you are pretty sharp normally – we are only human!
    Even if you are wrong and hypothetically Greg and my suspicions have merit, it would be near impossible to prove.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 49 Greg Atkinson // May 17, 2010 at 5:21 pm

    The issue is that what Henry flagged and what is being implemented are not the same. Henry wanted to abolish the complicated state based royalties and replace it with a simpler resources tax. The Government is simply using the Henry report as a cover to hit the miners with a new tax.

    The mining executives have been pretty clear in saying that Swan told them to relax and not worry about any surprise that would emerge from the Henry Tax Review. He lied.

    Another problem I have is that Henry does not decide what becomes policy, so he could favour a tax on red haired golf players for example but that doesn’t mean it will happen. Swan does not decide policy on his own either, so the question is this: when did the new resources tax look like it was going to be implemented and did this influence Mrs Swan’s decision to sell stocks?

  • 50 Ned S // May 17, 2010 at 5:24 pm

    Thanks Anon – I do try to keep my “facts” seperate from my “hypotheses”. Insider trading happens – While I never reached the dizzy heights in any organization to be able to confirm that suspicion, a couple of mates who got a step higher up than me almost certainly could I suspect? 🙂

  • 51 Anon // May 17, 2010 at 5:57 pm

    Have no shorts now…will just wait on the sidelines and do nothing.
    Really wanting to get some longterm investments set…but feeling its still abit too early.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 52 Ned S // May 17, 2010 at 6:09 pm

    As Anon says, we’ll never really be that likely to know hey? 🙂

    Must admit that stuff which worries me more (given that Swan is just an incompetant bit of poo that will eventually go away), is that like the following – There’s serious dollars (and just a bit of corruption potential?) involved here:

    http://www.smh.com.au/business/future-fund-enjoys-tax-break-in-cayman-islands-20091029-hnnx.html?skin=text-only

    Re stocks – The Brits are trying to hold the line? Give it away as a bad joke I think fellahs – Unless you are absolutely sure everyone is going to print lots and lots and lots of money. Which WOULD seem to be the likely end result.

  • 53 Greg Atkinson // May 17, 2010 at 6:45 pm

    I think this article is interesting: Wayne Swan double-crossed us: miners

    Maybe the mining companies are justified in being so angry at the Government?

  • 54 Anon // May 17, 2010 at 6:46 pm

    http://3.bp.blogspot.com/_pCDyiFUv9XU/S_AOlmk6YvI/AAAAAAAAJu4/NaKtC1flc6U/s1600/Utb2XJ1AjDeqt1xks3LKJE.jpg

  • 55 Anon // May 17, 2010 at 7:06 pm

    This government is so dodgy!
    Worrying patterns of behavior and disclosure for awhile now.
    Is there a Rudd Index I can short? Its probably lock limit down :).

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 56 Ned S // May 17, 2010 at 8:10 pm

    Maybe Aussies could line up like Tibetan monks to commit “kevikku” – As a protest against our mistreatment? 🙂 (With “kevikku” being a lay around quietly on Bali beaches without getting stressed maybe sort of thing?)

    Finally got my lappy back today (replete with a replacement fan that goes) – But it won’t dial up the www like it used to a month ago or more before it broke? It’s SO hard to get good help!

    Hmmm … They can stick all their technology and regulations etc where the sun don’t shine for mine! 🙂

  • 57 Anon // May 18, 2010 at 7:42 am

    dear lord, I am rooting for Abbott – but he has to stop speaking! lol! Remain silent and let Rudd fall on his sword.

    “Only believe me if it is ‘scripted’: Abbott”

    http://www.theaustralian.com.au/politics/only-believe-me-if-it-is-scripted-tony-abbott/story-e6frgczf-1225867949322

    What a shocking interview!

  • 58 Anon // May 19, 2010 at 9:44 am

    Aussie dollar in freefall.
    Need to be careful of this USD bullishness…at the right price the USD is a sell. Consensus is bullish USD – but perhaps still more to go…the trend is your friend 🙂

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 59 Anon // May 19, 2010 at 9:51 am

    Need to watch pound for breakout…the pound is not the EURO and has suffered unjustifiably from contagion, hung parliament, just about everything is priced in and has gone wrong.
    My position in the pound is huge. However I do have hedges at critical support levels incase the pound goes down the gurgler.
    GBP/AUD looks strong.

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 60 Anon // May 19, 2010 at 5:25 pm

    UK shows housing capital gains potentially could be taxed higher:

    “The Chancellor is to increase duty on capital gains even though the plan was not included in the Conservatives’ election manifesto.

    CGT on “non-business assets”, including second homes, buy-to-let properties and shares, could rise from the current 18 per cent flat rate to a top rate of 40 or even 50 per cent, to fall in line with the higher rates of income tax.

    The move could double tax bills for hundreds of thousands of investors and has been denounced as “legalised theft”. There has been speculation that the changes may be backdated to stop a “fire sale” of second homes and other assets.”

    http://globaleconomicanalysis.blogspot.com/2010/05/legalized-theft-uk-proposes-50-tax-on.html

    Found via:
    http://neuralnetwriter.cylo42.com/node/2872

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 61 Greg Atkinson // May 20, 2010 at 10:15 am

    Well the new mining tax is being slammed by the global business and finance media as this Bloomberg article clearly illustrates: Mining Profit Tax ‘Contagion’ Set to Spread From Australia

    Well done Rudd, Swan and Henry. You have helped cause the markets across the world to drop. I wonder what their next trick will be? A new tax on tourism?

  • 62 Anon // May 21, 2010 at 6:21 pm

    Resource tax not linked to falling dollar – Kevin Rudd

    http://www.news.com.au/business/breaking-news/resource-tax-not-linked-to-falling-dollar-kevin-rudd/story-e6frfkur-1225869667858

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 63 Ned S // May 21, 2010 at 6:45 pm

    “The Teflon Man” as Greg calls him?

    Wonder how many reports he commissioned to figure out if it is a good thing or a bad thing so he could could decide whether to claim it or not – Bet Swanny couldn’t tell him!

  • 64 Greg Atkinson // May 23, 2010 at 10:12 pm

    Here is a good article about the new mining tax and Ken Henry. It seems I am not the only person who reckons Henry has lost the plot! Resource super-profits tax plan a complete nonsense

  • 65 Ned S // May 24, 2010 at 2:07 am

    One other strange comment I read on the tax is that it’s supposed to make “marginal” mining projects more attractive – When I read that, I asked myself Who would want to support/invest in a marginal mining project? With the answer apparently being the Aussie government??? On the theory that it will generate more jobs and other goodies I guess? I see the logic alright – But I’m extremely uncomfortable with it.

    It’s almost as if someone should say Kev, Wayne, Julia, Tanya, Penny, Pete, Steve, Nicola – You’ve shown Aussies your stuff, and based on what they’ve seen, they’ll be able to make an informed decision on whether they want you to continue doing it for another 3 years – Time to back off and just play it cool now for a while please.

  • 66 Greg Atkinson // May 25, 2010 at 3:36 pm

    Seems more people are coming out against the RSPT. In an article today in The Australian John Ralph says:

    A decision to impose a 40 per cent tax rate on earnings above the bond rate will reduce future investment because of the substantive effect on projected after tax returns. Projects that promised to meet, or just exceed, the company’s cost of capital without the new tax would not do so with the new tax, and so would not proceed. Only those projects with a very high projected return would proceed. A suggestion that an increase in taxation would result in an increase in investment could only be made by somebody not living in the real world.

    See: http://www.theaustralian.com.au/news/opinion/retrospective-tax-a-risk-to-national-sovereignty/story-e6frg6zo-1225870760693

    Seems I am not the only one who thinks Ken Henry has lost the plot.

  • 67 Anon // May 27, 2010 at 8:27 am

    Is this the start of a complete backdown? Does Rudd stand for anything?
    I think Greg is right, this tax isn’t going to see the light of day.

    “THE Rudd Government is moving towards a major backdown on its $12 billion tax on resources and is now expected to increase the threshold at which its proposed super-profits levy kicks in from 6 per cent to 11 or 12 per cent.”

    http://www.news.com.au/business/prime-minister-kevin-rudd-to-backflip-on-mining-tax-rate/story-e6frfm1i-1225871830341

    None of my posts constitute financial advice – so do not act on it in that manner. Its just chit chat. Always see a financial advisor for decision making / advice / info.

  • 68 Vince L // May 27, 2010 at 8:53 am

    Rudd stands for tax and spend, that is it. He is a classic power hungry politician and is trying to use tax revenues to shore up his power & popularity.

    He tries to tax areas where he thinks he will not lose many votes, and then spends money in vote buying areas.

    Does he have a long term plan? I don’t think so. He is just focused on being in control a day at a time.

  • 69 Senator13 // May 29, 2010 at 2:36 pm

    Tax and spend all right! Rudd is kicking off his new tax by spending $38.5 million in advertising!! What a rort.

    http://www.smh.com.au/national/pm-defends-ad-blitz-on-mining-tax-20100529-wm5n.html

    Coincidently this comes out on a Friday and is the same day that the Govt says they want to take Japan to court over whaling…

  • 70 Anon // Jun 2, 2010 at 12:23 pm

    This about some sums up the next election!

    http://www.geelongadvertiser.com.au/images/uploadedfiles/editorial/pictures/2010/06/02/TOON1_CROP-1_N10706790_343279.JPG

  • 71 Greg Atkinson // Jun 27, 2010 at 9:10 am

    Well it seems like the ALP party machine had Rudd fatigue more than the Australian people. I am somewhat amazed though how quickly Rudd fell from grace and was knifed in the back by his own party. With friends like the ALP power brokers who needs enemies!

  • 72 Ned S // Jun 27, 2010 at 9:31 pm

    Dunno about the party machine, but having suffered both Whitlam and Rudd in one lifetime has been enough to put me off the ALP irretrievably for ever regardless of who might head it.

    As for the Red Barren specifically – Well the very real possibility is that she just could be worse than either of them given a chance. And at the moment all she has to do is pick the stuff that she and Kev got up to together that the people most hated and say Well, I was just being loyal and truly did reckon it should have been done different. Which may very well be enough to get her lot over the line given that poor ole Tony is the other mob’s idea of talent. Shame though.

  • 73 Greg Atkinson // Jul 29, 2010 at 9:36 pm

    Well when I wrote this post back in early May few in the media thought that Rudd would lose an election let alone be removed from office by his own side! How quickly things change.

    From early 2008 I wrote about how Rudd was all spin and no substance and so for me, the only surprise was how long it took for Rudd’s poll numbers to tumble. Mind you I did not expect him to be stabbed in the back by his own party!

    Looks like Rudd was a one hit wonder, just like Gordon Brown in the UK and probably Barack Obama in the U.S.

  • 74 Biker Pete // Jul 30, 2010 at 11:54 am

    But Latham is _really_ helping Gillard’s case!~
    (With fiends like these, who needs enemas?)

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