Kloppers carbon tax - is it a dodgy boardroom deal?

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Isn't it highly suspicious that a lone mining CEO (i.e. BHP's Marius Kloppers) would suggest a need for a carbon tax just after his company (BHP), Rio Tinto and Fortescue Metal Corp won a huge tax concession over Resource Rent Tax. Maybe he is just a 'born again' liberal, or is there some sinister backyard deal here for Labor to get traction with this ugly tax. Science is not a popularity context. Business CEOs ought not be accepting "popular" scientific opinions.

I don't think this ought to strike anyone as a surprise given that Labor did exactly the same thing before the election. It shored up support with just 3 miners in order to imply that 'reasonable' miners can accept a Resource Rent Tax. It appears to be doing the same here with the Carbon Tax, with another dirty boardroom deal. You cannot trust politicians or CEOs. Its all about their political survival or financial interests. Maybe Gillard even has a Swiss bank account like Graham Richardson. It is not even necessary. It does not have to involve money to be corrupt. Gillard might actually just be a 'socialist', with nothing but contempt for money. But that is hard to fathom when you need it so much in politics. But one can draw a line between ones personal politics and personal lives....compartmentalisation comes easy to people with no principles.

What a shame we abandoned moral philosophy in the late 1890s...we could use it right now. You don't have to worry about corruption when reason is the standard of value. It only takes one right person to set the debate right.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

BHP chief executive 'selling out' Australia and the facts

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BHP Chief Executive Marius Kloppers has come out in support of a carbon tax. He thinks Australia should take the initiative because he thinks its inevitable. Really?

This is a very suspicious thing for him to say. It stands out in stark opposition to the interests of BHP shareholders....or does it. The only reason that would not be the case would be:

1. If there was some strategic benefit in BHP paying tax before Australia's international competitors. This is unlikely because it would result in a stronger AUD and a higher tax obligation by BHP.

2. If BHP is supporting the carbon tax in a 'secret deal'. It strikes me as rather coincidental that Kloppers would be supporting a carbon tax just after his company (BHP) and Rio Rinto won a huge tax concession over the Resource Rent Tax.

There is however the possibility that Kloppers is an idiot, or more specifically a 'liberal idiot', and that cannot be ruled out. There is no reason to think that bureaucratic enterprises like BHP are well-managed by critical thinkers. It would not surprise me if they accept the climate science of academics from the majority at face value, when they should be critically engaged in assessing it. Science is not a popularity contest. I have seen no evidence to suggest that critical arguments are being given the attention they deserve. Its all about having the 'popular' or political numbers.

It does not concern me that Rio Tinto is not supporting a carbon tax, because they would not have been privy to any 'possible deal'. The integrity of the BHP CEO is in question. We might ask if there is any strategic advantage for BHP in taking over a fertiliser enterprise like Potash Corp. There might be some more significant strategic game play here than I think. I can't see such a link though....so might be reading too much into it. Maybe its just another bulk commodities business it can dominate.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Is China really a threat to Australia?

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Maybe the problem with the administration of George Bush was not simply his poor policy judgement, but his choice of friends, and ‘advisers’. According to the SMH Online, Philippa Malmgren, an adviser to George Bush as well as Deutsche Bank, is suggesting that Australia should lock China out of owning Australian resource assets. The problem with this policy is:

1. Imperialistic fear peddling at its worst, i.e. The old ‘them & us’ talk of China taking over the world.

2. Poor role model. Are we not trying to encourage China to end its collectivist history of socialism, by adopting capitalism, i.e. free markets. This counter positioning of fascist imperialism is not the antidote. Intellectual integrity is.

3. Poor empirical evidence for his views. If we look at Japan, Australia was not taken over by Japan. China is 10x bigger, so it will have 10x the impact Japan did, if not more

4. How do we make China more threatening by making it depend on us less

5. Plenty of competition – if we make access to Australia difficult for China, they will go elsewhere

6. Respecting the role of China – If we respect the role of China as a processor of raw materials, we stand a better chance of being respected as a ‘reliable supplier; of minerals....it might then not look elsewhere for minerals

7. The Australian government retains the right to arbitrarily tax all production from Australia. A power it should not exercise.

8. Why would it make good policy to impose a specific tax or ‘control’ upon the Chinese. Does that not descend to the worst levels of political diplomacy.

9. China buying up a lot of resources can only be good for Australia. We will only benefit from the mass liquidation of wealth, which we can free up for other purposes.

10. Why should we fear China buying into Australian mines. It could only raise gross export revenues for Australia. Australians would be better educated to appreciate the value of iron ore and other mineral assets, so these assets are fully valued when sold to the Chinese.

We don’t need to resort to extortion in order to produce wealth...we need only do what we do best, and allow the Chinese to do the same. Capitalism is based on the principle of trading value for value for mutual benefit.

The greater issue for Australia is how we will squander the wealth that we derive from China's participation in our economy. We have to fear the prospect of 'easy money' resulting in excessive welfarism as well as decadence. The pertinent precedence in this instance is Norway.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com