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Tuesday, June 22, 2010

Who is affected by Rudd's tax

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I think Kevin Rudd needs to get a better sense for who is affected by his Resource Rent Tax. It is not just a case of certain people carrying an unfair burden, but the arbitrariness of the action. Ought the cost of any administration be shared across the taxpayers? Why is one industry targeted?
Ought we have greater empathy for those less fortunate than us? Ought we care about justice? On this occasion there just happens to be some billionaires affected by Rudd's new tax. Some people actually trust their whole retirement savings in mining companies because commodities are like money. i.e. When the US government debases 'paper' money, tangible commodities rise in price. So mining companies are a great way to hang on to your wealth. This is particularly the case for gold, silver and miners of other precious metals.
This tax actually attacks the 'smart money' who know how to invest. So what hope is there for anyone from 'arbitrary' government if they make decisions like this, which would breach the spirit of the Senate, if that body actually worked in protecting the rights of the minorities.
Perhaps Rudd is gaining some confidence because of the strong iron ore and coal prices. The problem is that they are the Chinese-linked commodities which are vulnerable to the Chinese economy, and in the short term, also vulnerable to a stronger AUD. We have to understand that commodity prices in real terms are falling because of the debasement of currencies around the world.
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Author
Andrew Sheldon
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