Political Economy, Academic Progress, Rabbit Health

[tcpip]

Dove-tailing with the Henry Review Prosper Australia have a petition calling for a review of costs of home ownership and the role of land prices (which the Henry Review was quite smart about. I have written an article on such matters entitled The Spectre of Henry, and have started a group called Land and Labor in support of the Henry Review. I am of the opinion that this is the most significant social justice reform that has been raised for decades, but alas, discussions public finance is typically a cure for insomnia.

On a related issue I received assignment results back from my two MBA courses for this semester; an 80% grade for Economic Decision Making, where I wrote on the implementation of an emissions trading scheme and subsidies for the electricity generating industry (where I suggested that they be treated like the tabacco industry) and 92% for Business Law, which was analysis of a recent Service Level Agreement. The former grade was docked a few percent because I forgot to include proper citations for two graphs - although in the process of tidying this up I did get in contact with one of the authors who seems to be a delightful chap.

One of our rabbits, Astaroth, has stopped eating which is a particular problem for a grazing animal. A visit to the local vet has diagnosed a sore tooth and has provided the usual medicines (anti-inflammatory and anti-biotic) for such a problem. At the moment we're feeding him baby food via a syringe, which he is hardly thrilled about. If he is not eating of his own accord by Monday it'll be off to the vet to get a tooth extracted. Presumably in the wild a toothache is a death sentence for a rabbit.

Comments

[tcpip.livejournal.com]

That was me btw.. Session cookies expired.. *mutter*

[kremmen.livejournal.com]

In the short term? "Short term" in regard to mining might well be way more than our lifetimes. Technology is creating new mining methods, so who can tell? While mining companies can only find minerals, the methods to extract them economically are changing all the time.

As for "Abnormal profits"? They've defined that as anything over the long-term bond rate. You can get that by putting money in an online bank account! Any investment that doesn't beat the long-term bond rate isn't worth having. So, it applies to any profit above the absolute minimum that any investor should be prepared to accept, and (with royalty charges, etc) amounts to a overall tax rate (according to various sources) of around 57%.

Here's an opinion that not only would the mining tax cripple our recovery, but hurt the whole world's recovery.

[tcpip.livejournal.com]

What is particularly amazing about this article is that it points out why a Resource Rentals Tax is so beneficial.

It is always better to derive public income from resources, which are both fixed in supply and with no moral justification for ownership. This is certainly better that produced goods and services which add to the cost, carry deadweight loss etc.

But even when natural resources are targetted there is an efficient and inefficient way of doing it. The inefficient way is the existing Royalties method, which, as the article points out, is based on a fixed value of tonnage regardless of market prices.

This means that in times of low resource prices, mining companies are doubly punished driving many of the small, competitive, companies out of business. In times of high prices, the companies that make hay will be those with the big economies of scale. It is little wonder then that outside of Rio Tinto and BHP, many mining companies support this change.

So the tax actually makes life more secure for the smaller mining companies, and will be massively more efficient. Let's have a look at the relative efficiency of taxes

http://taxreview.treasury.gov.au/content/html/publications/papers/Final_Report_Part_1/image/01_Part_1-6.gif

See the one at the top? That's the current method. See the one at the bottom? That's the proposed method.

Anyone who argues against the Resource Rental Tax is arguing for an inefficient tax base (which means that higher taxes are needed) and against the interests of small,competitive mining companies.

[kremmen.livejournal.com]

I guess the implementation is the main worry, assuming that this ever passes. It appears the royalties are not being removed, so the proposed method is only being added on to the current method, not replacing it. I recently saw that they are perhaps going to reimburse the royalties, but what a shambles. Sounds like it'll just employ lots of accountants.

[tcpip.livejournal.com]

Royalties are state-based legislation, so the Feds can't legislate them out of existence. They can, however, allow companies to claim royalties as a tax deduction until the states get rid of them.

One of the things that the Henry Review pointed out is that most of the regressive and inefficient taxes are state based - payroll tax, property transfer taxes, stamp duties on vehicles, fuel and rego charges etc.

[kremmen.livejournal.com]

It seems overly optimistic to suggest the states will ever get rid of them. If royalties become tax deductable, surely that's just an incentive for the states to raise them and claw back some extra revenue from the federal government by a back door.

[tcpip.livejournal.com]

Nah, the Feds will stare them down on that one. The States depend on at least 50% of their revenue from Federal grants (although that includes GST) and they know it.