"Mining creates the two speed economy, heating up the Queensland and Western Australian economies while leaving New South Wales, South Australia, and Tasmania out in the cold. This presents an impossible choice to the RBA of either tightening monetary policy and depressing NSW or loosening it and allowing QLD and WA to boom, along with the inflation and bubble problems that booms entail. This is exacerbated by the inherently volatile nature of the resources industry, where prices can soar during times of high global growth and plummet during slumps, leading to structural unemployment. But how do we prevent these mining booms from making a bubble in WA without exacerbating the unemployment in rough times? This is where the beauty of a super-profits tax comes in. The tax only kicks in during the booms, and leaves the industry alone when it’s down. This is fondly referred to by economists as an “automatic stabilizer”.
"The mining sector also has a negative impact on other export industries. Mining has a significant effect on the AUD exchange rate, making it harder for our agricultural and manufacturing sectors to compete internationally. As these other sectors shrink, we risk becoming dependent on mining, an inherently temporary industry, as our only export industry".
"There seem to be hardly any credible economic arguments against this tax. The only cries I’ve heard from Abbott on this are that it will decrease the value of super investments and that it will force mining companies overseas".
"The share prices of mining companies may take a small hit, but because they’re only hit with the tax when they are making large profits, they should still maintain relatively high share prices. If anything, the tax will help stabilize their share prices at a stable and consistent level of growth".
"The offshore outsourcing argument doesnt make any sense at all when talking about the mining industry. Labour intesive jobs, like telemarketing and computer programming can be moved overseas, but our soil cannot be moved. So long as Australia holds such a large share of the world’s minerals, mining companies are going to continue to mine on Australian soil".
"The finite nature of resources means the price is going to keep on going up and up in the long term, until eventually we run out of it all".
"The tax is to pay for the stimulus package, and consider this a perfect example of counter-cyclical fiscal policy. It is wholly appropriate for our government to spend in the slumps to hold up the economy and save in the booms to reign it in".
"I am worried that this tax is being used to fund other government expenditure and it might make Australia’s budget particularly vulnerable to fluctuations in global demand. Do you think this tax will make any future GFC-style loss of revenue (causing a budget deficit) more likely or more severe?"