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Monday, June 14, 2010

Rudd to make concessions

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There is a suggestion that Kevin Rudd is about to make concessions to miners over the Resource Rent Tax. The reality is that Rudd's leadership is in jeopardy, regardless of whether he gives in on the Resource Rent Tax (RRT) or not. There is probably enormous appeal in appointing Julliard Gillard, the Deputy PM. I forget her exact name...but she has the punitive look of a school teacher.
She will be appealing for women. I suspect the Labor Party will want to spring her on the Australian electorate at just the right time. i.e. Not so soon that she can cause embarrassment, but not too late that people will be suspicious of her capacities. The question is - has she been tested?
Ultimately representative democracy is a farce, and you will get another bad representative of your political interests.
Anyway, what concessions might we expect from Rudd? I want to make the following points:
1. Rudd should not use taxpayers money to compensate miners for any scheme it adopts. There is no justification for denying rights for one group, and then compensating them with money extorted from taxpayers in general.
2. Rudd should acknowledge the wealth realised or created by miners, whether through acquisition, exploration or retention of mining rights. No mining company ought to be worse off because of any changes it makes.

At this point I want to challenge the idea that governments should be able to assign, own or grant mineral rights to miners on behalf of the people. I see no problem with this conception if the role of the state is to facilitate development of infrastructure, or other facilities which preserve and fund the administration of mineral resources. The idea that government should use mineral resource taxes or 'rent' for welfare is abhorrent. The problem with it is that it actually is a form of extortion. The practice does not become ok even if government gives notice because:
1. Governments ought not to be supporting people with welfare, as they are actually modelling unhealthy life strategies of dependency, reliance on others and parasitism.
2. Governments will quickly use the rationalism that miners have a choice to corner the market, in the same way that MPs created the illusion that we have a choice by amalgamating into two parties. Don't you think we would have more choice if parties did not exist.

There is nothing wrong with the notion of public ownership of resources...so long as any money raised is distributed on a 'user pays' principle. I acknowledge that a lot of the wealth realised by people like Hancock Prospecting was probably only realised by them because of nepotism, incompetence of others, and that they hardly had to do any exploration to realise such huge wealth. But that wealth generation was realised under a system they did not design. Having realised it, the government should not be able to reclaim it....under the rationalisation that they are going to help Australians. Rationalisation. Its the same extortion that Hitler would have used. i.e. extort from a group for the benefit of the collective.

I suggest that any public funds might legitimately be used for funding defense, but the approach to the issue ought to be well-conceived. There ought to be no impact on existing wealth owners. i.e. Perhaps any tax would be recouped only after the share price of a company recovers to its previous levels at which the tax was applied. The problem with that I guess is that you place a limit over the share price, so it actually never gets there, until some shareholders take a long term view. That takes time. Not an easy issue to resolve. Why not just drop the whole idea. I'd be more inclined to reform the whole concept behind the existing tax.
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Author
Andrew Sheldon
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