Thread: Taxes

You want to put our politicians in charge of mines?

Perhaps something like this could work?

http://en.wikipedia.org/wiki/Minerals_Resource_Rent_Tax

Wonderful idea ... with one problem ... it does not work very well.

Do a search and you will find plenty of examples of how badly government owned mines have performed around the world.

If such an approach actually worked, long term, you can bet most mines would be government owned. There would be too many benefits to do otherwise. Training ... better income for the government ... and so on, as you mentioned.

When the Germans tried it many years ago their government owned mines had twice the capital cost of private mines in Germany, and three times the capital cost of best practice around the world.

Government enterprises are be more concerned with equity, perceived fairness, dotting every I and crossing every T and due process; private enterprises must be more concerned about profitability. Can any of us think of a single industry where government ownership did not in time result in significantly higher operating costs?

Privatisation is getting overdone, I think. However, there are two reasons why it has been so popular. Cash from the sale is lucrative and in most cases operating costs reduce. But beware ... there is a world of difference between privatisation and semi-privatisation (think the power distribution industry). When government contracts/regulation etc regulate prices, smart business people will find a way to cheat the system. We only have privatisation when the market governs prices and where there is real competition. This does not apply, for instance, to British Rail.

Nor does it apply fully to power distribution in Qld, where the distribution networks were sold at a time when they needed a massive cash injection for maintenance because for ten years the government had ripped cash out of the system and neglected maintenance. The government sold them just in time, so the new owners would get blamed for the price rises and not the government.

All these things are a matter of record and may be found by searching the web. I personally believe that some infrastructure should be publicly owned. Large training hospitals are one example, but the rest I would hand over to the private sector, who perform operations at a far cheaper rate. If most procedures for public patients were done in private facilities and paid for by the government, the cost per procedure would drop, and waiting lists would follow.

One official report into hospital costs stated: "A disaggregation of the experimental cost estimates by diagnosis-related groups (DRGs) suggests that in 2007-08:
– half of DRGs had an average cost in public hospitals that was more than 10 per
cent higher than in private hospitals..."

It does not say how much more than 10% the public hospital costs were ... how about that ...

Yeah!What we need is a mining tax...




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Maybe I am being simplistic, but we have a country that is debt and the politicians are talking stupid - what point is there in raising the pension age to 70 when people in their 50's can't get work.
I just think it's wrong when a select few can get obscenely rich of what is essentially public property.

Originally Posted by smidsy

Maybe I am being simplistic, but we have a country that is debt and the politicians are talking stupid - what point is there in raising the pension age to 70 when people in their 50's can't get work.
I just think it's wrong when a select few can get obscenely rich of what is essentially public property.

Raising the pension age to 70 is clever. It just means that pensions are not payable until then. (I did not say this is right).

Does that apply to the pollies as well?

I don't have a problem with people getting rich from their own endeavour, be this physical or mental effort. I do have an issue with those, otherwise capable in body and mind, that expect to have the same as others without the same effort.

Regards from Perth

Derek

Hi Smidsy,

Well may you use the term "obscenely rich" when describing the likes of Gina Rinehart, but she got there through the efforts of her father Lang Hancock, one of the founders of the iron ore mining industry in the Pilbara.
Throughout Australia there are thousands of people who got where they are because of Lang Hancock and I'm one of them.
From going to work in the Pilbara in 1971, marrying and raising a family there, seeing two sons complete apprenticeships there and paying thousands of dollars in tax to the government along the way, until retiring in 2007.
I didn't work for the mining companies directly but always contractors to the miners, none of these contractor outfits, which paid millions in tax, would ever have arrived in the Pilbara if not for the likes of Ms Rinehart and her father.
Cheers,
Geoff.