February 16, 2013

Say what?

She said: 
The parliamentary defence by Julia Gillard and Wayne Swan of the minerals resource rent tax has taken on a surreal air. Sitting in the gallery has become like Waiting for Godot.

The Prime Minister and the Treasurer are blaming various people - Tony Abbott and rapacious Coalition premiers - and various factors - "inefficient state royalties" and a collapse in commodity prices - for the debacle that the MRRT has become and a looming $2 billion budget hole.

As part of the whole absurd parade, Gillard told parliament Labor was about "efficient" taxes of resources and efficiency. "Spreading the benefits of the boom" was not about Coalition state governments "just jacking up" royalties.

"Jacking up royalties" was obviously in the government talking notes yesterday.

Mental Health Minister Mark Butler earlier sheeted home the admitted failure of the MRRT to raise any real revenue to "state governments . . . jacking up their royalties, which means that those state governments are getting the taxes instead of the national government".
 As a political ploy it is a bravura performance, breathtaking in its illogicality, self-delusion and heroic belief that anyone could buy the argument.

When Swan got to his feet yesterday to respond to a question. he began by saying: "It is embarrassing . . ."
The opposition benches erupted in laughter and bristled with pointing fingers as the Labor backbench looked even more despondent and embarrassed.

It is embarrassing because the Treasurer is the principal architect of the resource super-profits tax under Kevin Rudd and the MRRT under Gillard, and rejected the Henry tax review recommendation to replace inefficient state royalties with a federal super-profits tax.

It was Swan who created the federal mining tax as add-on to state royalties against the recommendation of the Treasury head and the entire resources industry, and without even trying to get state co-operation.

It was Swan and Gillard who went further than the Rudd plan and agreed the commonwealth would allow mining companies to credit "all" state royalties against the mining tax - even those state governments "jacked up" - and granted huge tax deductions for the big three miners.

It was the Labor governments and premiers of South Australia and Queensland who jacked up royalties first and defended the miners' claims to credits.
He said: 
Treasury secretary Martin Parkinson has admitted the design of the mining tax is responsible for its failure to generate revenue, not the falling commodity prices, higher currency and state royalties blamed by the government. 
In explosive testimony to the Senate economics committee yesterday, Dr Parkinson said Treasury had compiled its budget forecasts in ignorance of the real cost of concessions agreed to by Wayne Swan and Resources Minister Martin Ferguson when they renegotiated the tax in private with the chief executives of BHP Billiton, Rio Tinto and Xstrata in mid-2010.

"We've adjusted those estimates for the things that we can see that have changed in the interim. What we haven't done is adjust the estimates for things that we can't see," he said.
Dr Parkinson said the two big variables it did not take into account - and which resulted in the tax raising only $126 million in its first six months - were the value that the mining companies put on their assets (the starting base for the tax) and the share of the profits that is attributable to downstream operations not covered by the mining tax.
..."When . . . the mining industry talked with us there was no legal obligation on them to have actually settled on the starting base," he said. "They actually had the opportunity to go back and think about what their starting base should be. They gave us their best estimate, as we understand it, their best estimate at the time, but they clearly had until the point they are legally obligated for the tax the opportunity to rethink that."

Asked by opposition assistant Treasury spokesman Mathias Cormann whether Treasury was "flying blind" when it compiled the forecasts, Dr Parkinson replied: "We can't see changes that may have been made."
A week after the tax was agreed, the then Coalition industry spokesman Ian Macfarlane suggested no tax would be paid: "The companies involved in the negotiations will be paying no more tax than they are now. We're starting to think the whole thing is a sham."
And it was, and is, and the Gillard Government never runs out of people to blame. 

Godot has nothing on PM for absurdity

Treasury exposes mining tax flaws and Martin Parkinson blames Labor's concessions

No comments:

Post a Comment