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Jobs hope as mining tax gets the axe; Resources sector believes there will be a surge in jobs and investment after mining tax finally killed
Topic Started: 3 Sep 2014, 04:41 PM (593 Views)
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Jobs hope as mine tax gets axe

Shane Wright Economics Editor
The West Australian September 3, 2014

The resources sector believes there will be a surge in jobs and investment after the mining tax was finally killed by Federal Parliament yesterday.

But the superannuation industry is already warning the deal struck between the Government and the Palmer United Party to axe the tax will end up costing almost nine million Australian workers hundreds of billions in superannuation.

Created through a deal between former prime minister Julia Gillard and the nation's three biggest resources companies, the mining tax had failed to generate anywhere near the revenue forecast by Treasury.

This year it was forecast to raise just $131 million.

Along with the carbon tax, the abolition of the mining tax was one of Tony Abbott's key election promises.

The Prime Minister said the mining tax had dragged down the Australian economy and the mining sector for too long.

"We have seen the back of the mining tax - possibly the most foolish tax in the history of our country - a tax that destroyed jobs, a tax that damaged investment, a tax which cost money and a tax which did not raise any revenue," he said.

Association of Mining and Exploration Companies chief executive Simon Bennison said the abolition of the tax would produce tangible economic benefits.

"This will improve investor confidence and create more jobs for Australians," he said.

Australian Mines and Metals Association chief executive Steve Knott said with more than $200 billion of investment still in the pipeline, ending the tax would remove a problem.

"It does get us back on a level playing field and better supports Australian enterprises to pursue efficiencies, innovate and compete in a highly globalised marketplace," he said.

Axing the tax was only achieved after an agreement with PUP, which will cost the Budget $6.6 billion over the next four years.

The biggest change was a delay in the increase in the superannuation guarantee levy that was due to reach 12 per cent by mid-2019. Now it will not reach that level until mid-2025.

Ahead of the election, Mr Abbott pledged there would be no "adverse changes" to superannuation in his Government's first term.

Rejecting claims he had broken that promise, Mr Abbott said there would now be "more money in workers' pockets".

However, the superannuation sector estimated that for people on average earnings, the cost to ultimate retirement earnings could be up to $100,000. By 2025, total national savings will be $128 billion lower.

Association of Superannuation Funds chief executive Pauline Vamos said more people would now have less to retire on.

"The reality is at the present SG rate of 9.5 per cent, most people will not build up enough super to provide them with adequate financial security when they finish working," she said. PUP leader Clive Palmer said his party had struck a deal that helped ordinary people.

As part of the deal, the Schoolkids Bonus will be means tested and restricted to families earning less than $100,000 a year. The Government is also committed to eventually axing the bonus, which flows to 1.1 million families.

The low-income superannuation contribution, which the Government also wants to end, has been retained until mid-2017.

It benefits 3.6 million low-income earners, of which two-thirds are women.

PUP also retained the income support bonus which goes to very low-income earners, although it too is slated to end after the next Federal election.

Read more: https://au.news.yahoo.com/thewest/a/24882902/jobs-hope-as-mine-tax-gets-axe/
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Jimbo
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I call BS on the mining industry saying it will increase investment. They have known since last year that it was going to be abolished and there is no guarantee that it won't be re-instated at some point in the future.

This is just a bit of PR from the big boys.
Edited by Jimbo, 3 Sep 2014, 05:05 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Ned Flanders
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Bwa ha ha ha ha ha :lol
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" ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility."
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Lef-tee
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It's abolition will not of itself create jobs and investment because it never took them away. The so-called mining tax as it stood until yesterday was not the creation of government - it was drawn up by the mining companies themselves. Naturally, they designed it so that any redistribution of $$$ from them as they exploited Australia's mineral wealth back to Australia more broadly was as close to zero as possible. It was never anything more than window dressing and taking it away changes nothing.
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Lou Ellen
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Mining does need to boost its competitiveness as the boom goes bust. And a housing bubble is no way to offset that implosion.

But scratch the veneer of sanity here and what you find is the its dribbling and eye-spinning opposite. A tax that collected nothing does not destroy jobs and an RBA that has explicitly egged on a housing boom and slashed interest rates without preparing macroprudential insurance against the potential rise of speculation is in no position to jawbone the speculative genie back into the bottle.

What we have here are two gentleman standing on the right ground but looking entirely the wrong way. Two mighty lighthouses, if you will, both shining their powerful beams inland.

There is no doubt whatsoever that Australian mining needs to improve its competitiveness. But the the one thing that could do it in leaps and bounds – really, the only thing that can do it in time to prevent the coal, iron ore and the coming LNG busts from wreaking economic havoc – is a lower currency. Only a lower dollar will swiftly enough boost profits and our edge against the global competitors that are queuing up to take our business. If the Prime Minister is serious about helping tradables, and he sure aught to be, then he should be focused entirely upon achieving this goal.

In the way of that outcome is Glenn Stevens’ rampaging housing bubble, which is lifting Australia’s interest rate structure and feeding the global carry trade into the currency. It is doing so in the name of what everyone now knows is a temporary asset boom that is going to bust and hobble the banks. That is explicitly what Captain Glenn said yesterday. Yet the good Captain is trapped so long as APRA isn’t delivering enough macroprudential thrust.

So, what should the Prime Minister do? Let’s not get caught up in too much bureaucratic concern about central bank independence for a moment and ask what reform proposals could the PM’s office pursue to fix this?

The best reform would be to cut back the fiscal incentives fueling housing speculation. It could be shifting negative gearing to new builds only. It could be reversing the fateful Costello cut to capital gains tax. It could even be a fair dinkum supply side reform to planning laws, though that will be too slow to help now. If none of these appeal then the obvious solution is to get on the blower to the heads of APRA, RBA and Treasury and tell them that an explicit macropdrudential regime in the mold of New Zealand has the support of the PM.

That is how to save mining, Tony.
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