Does anyone else feel slightly uncomfortable that a bunch of foreign owned mining giants can force a change of Prime Minister and renegotiate a substantially more favourable tax regime? Yes, I’m being naive, but shouldn’t the government be more concerned about my opinion, as a voting citizen of Australia, than it is about South African Marius Kloppers’ views of the world?
Of course they were going to kick and scream and launch a massive PR campaign. Surely Rudd didn’t think it would be any different. But how about we wait and see if they carry through with what, so far, have been nothing but threats, before we cave in?
I don’t have a strong opinion on the tax itself. It makes much more sense to have a hurdle rate somewhere near the required return most companies are using to evaluate their projects, probably in the order of 15%. That way, a project that would have delivered 15% would still deliver 15% and no one can argue they’re cancelling a project just because of the tax.
What worries me is that we have large corporates deciding who will be Prime Minister and what our tax policy will be. We’re supposed to live in a democracy.
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