Super Profits Mining Tax

[Duck]

I honestly do not understand why we are even debating this. How many times must communism/socialism prove that the free market works far better than any government intervention?

[IntoTheNewWorld]

I honestly do not understand why we are even debating this. How many times must communism/socialism prove that the free market works far better than any government intervention?

I don't think it's quite that simple lol.

[Duck]

Bah. Economics is overcomplicated. The free market works and I even have doubts about Keynesian economics.

[TrueTears]

Government intervention is needed sometimes... free market does work well but often it ignores issues of fairness/equity and this is where governments come in etc.

[Duck]

I agree with that, the government should definitely act to ensure equity in distribution of income and wealth. However, I believe that the government currently intervenes far too much outside of equity/fairness. Honestly i'm far too ignorant to have fully formed economic opinions yet so I won't say that the government's actions should be confined to law and order and equity in distribution of wealth/income. I'll get back to you in three years when i finish my econ degree.

[TrueLight]

haha well they'll probably drown you in keynesian theory ... goodluck though... read some of the articles in the thread i have in news and politics see if you like that sort of stuff

[Eriny]

The reality is, the government needs money to invest in hospitals and schools and roads and defence and such forth. It can get the money from income tax, but that's generally unpopular. Taxes on big shopping stores like Safeway and Coles are also unpopular, because those sorts of taxes are always directly passed onto consumers. If they tax the mining industry, consumers may pay more for certain goods and services, but it won't really directly hit them the way other sorts of taxation would. (This is debatable, I know that the mining industry doesn't argue this). The idea though, is that with the money gained through the mining tax, the government could invest in infrastructure so that there is more diversification in Australia's industries. Which means that when the mining boom inevitable crashes, we still have other investments which could keep us afloat.

[Duck]

Alternatively, the government could use its revenue effectively (read: not force all schools to build halls when they don't need them/pay the majority of funds to 'management' then elect the orchestrator of this waste PM) and not tax us back to the stone age. I know, I know, it's a pipe dream.

[excal]

I read an insightful article on this somewhere (The Age/The Australian, can't remember) - basically saying that the mining tax, while it has the potential to reduce investment in mining in the short-term, it is in effect a positive in the long term. The argument basically boiled down to the fact that these natural resources aren't going anywhere and that in the future, demand will either increase or supply will decrease (or both) - in either case, increasing prices (and profit).

I'm otherwise of no opinion on this. I'd rather see a general cut to income tax and an increase to GST (which will essentially be applied to the royalties / unified federal fee [or resources tax as it were]?) across the board. Taxing consumption is less harmful than taxing income, especially if we're trying to balance the equality question by creating an incentive to save.