The New Prime Minister & The Resource Super Profits Tax

     I suppose that it's not so surprising that one of the first things Julia Gillard would do when stepping into power is to begin to backpedal on the resource super profits tax.  The bad sentiment towards Kevin Rudd that everybody involved with mining developed over the new tax was, after all, the final bit of backing she needed to take power.  I hope this only extends to advertising changes, but it'd be a fairly naive view to actually expect that.

     The resource super profits tax is a good idea, we're talking about a finite resource that cannot be replaced.  From that point of view, there's almost no value you can place on it that would be too high.  The government has looked at the mineral wealth of Australia and realised that we (the Australian people) aren't getting a fair price for our resources.  I think the implementation of the tax could even be on the soft side - it's not as though more is being charged for prospecting rights, which may or may not pan out.  With the tax in place the mining companies simply pay more as they pull more from the ground.

     If the level of tax is right (I don't know enough about the mining industry to judge this, but I certainly haven't seen anything from the "Pro Mining" community that shows mining is now unsustainable.) it will funnel more money to government for essential services, while at the same time slowing the rate at which we're losing our mineable materials.  Win Win.

     The mining companies aren't going to walk away from the profits they're still able to generate under the new tax scheme, however there will be an incentive for them to do things on a smaller scale.  What this means that rather than being in and out of a place in a few years,  the overall process will be slowed down - acting more like traditional forms of employment for people, possibly even allowing communities to develop.  Even if that doesn't happen, not rushing all of Australia's mineral onto the table at once means that we'll get a higher price for it in the longer term.

     Before Julia Gillard became the PM, she apparently felt the same way, quoting her from a television interview before the leadership debacle:

"These minerals, you can only dig them up once, you can only sell them once, we've got to make sure the nation gets a fair share,"

     I hope that the pressure she'll be feeling from her new backers to rescind the tax doesn't mean that the cost of our first female Prime Minister is billions of dollars lost that could've be spent on healthcare, education,  sustainable power & industry, public transportation, etc, etc etc....

Link to a document explaining the tax: Resource Super Profits Tax