ken henry talking sense, page-14

simplesimone

I invest in companies operating globally and the one thing that spooks me is tax changes as it indicates unstable governments and deficient treasuries. I like a stable environment as most capital projects are long term and need a constant tax base for lenders to have assurance that cash flows will be as expected. Australia has changed its tax environment enormously in the last ten years and foreign corporations are looking at the risk of more changes in the future, and weighing them up vs third world countries where projects are of higher quality and taxes are lower.

Governments mess with taxes at their peril - look at Ghana at present where the hike in taxes has caused several gold projects to be reconsidered (and the market has slammed the prices already). And South Africa where BEE has caused a capital drought.

The carbon tax is one of the dumbest policies I have ever seen a government do in my life and I pray that Abbott sticks to his word and gets rid of it.