kerry o"brien questions brand rudd , page-136

Thanks ACB and I repond to your items after the -

Upmarket, rather than attacking posters with a different point of view why don't you argue the tax's merits, there was nothing but vitriol in your post. - Due to lack of discussion on the details and responding in kind. Credit to you and so provide substantive response.

Plenty of people feel some kind of super profit tax is justifiable but personally I have the following problems with the policy

(1) a return over the risk free bond rate is too low for the "superprofit" threshold, it should be at a substantial premium to the bond rate to reflect the great risks in taking a project from exploration to production...do you think any returns over, say, 6% should cop the 40% tax? - As stated in my post above, I also hope the threshold is raised, and suspect this will be negotiated.

(2) the 40% rate itself is excessive and is likely to spook foreign investment, it will mean many projects that would have gone ahead will now potentially be mothballed or canned altogether e.g. Olympic Dam - Sounds excessive but we need to remember it will be replacing state will be less costly for exploration until they attain profits above the threshold. I doubt it will spook much foreign investment but let's see. The sector is already recovering (gold price helps :) including BHP, wait until XAO is around 5000 again.

(3) the lack of consultation with industry, I hear Rudd is now talking to 80 companies, all well and good, the time to do this was BEFORE the announcement not AFTER. This proposed tax has already damaged Australia's reputation as a place to do business....who knows which sector will be targeted next to paper over a budget black hole? - Maybe you are unaware of the consultative process following the Mining Council proposal for some sort of tax levy ACB, but if you look at the various peak bodies there really isn't too much angst about RSPT. Also you should be aware the tax is not covering a black hole, is cream for a number of positives, including reduced company taxes in general.

(4) the retrospective nature of the tax - how far back would you go, beginnings of the Pilbara? Bear in mind it won't start until 2012.

(5) the fact the revenues are put into a long term fund (as in Norway / Alaska etc) so that pollies from both sides are unable to raid it....what guarantees do we have this supertax won't be use to fund election bribes or to patch budget holes? the Future Fund has already been raided. - believe this is a little off topic. But if you want some good examples of Liberal gov't spending, they spent more than any other federal govt in the areas of health and education without a nurse, doctor or teacher in their spending. And what have we got to show in those areas after their largesse? Lot's of private school gymansiums and swimming pools and a health system in crisis. At least this gov't spent some money (albeit poorly managed) where it was chronically needed and DID help soften blow of GFC in Australia. Not just my opinion by the way, but IMF and OECD.

That's just off the top of my head. The idea if implemented more fairly and if it was preserved for future generations would have more merit, at the moment I just see it as a free kick for our competitors eg Canada, and a free kick for Tony Abbott and Julia Gillard. - Lived in Canada for a few years, wonderful people and they're soft (relative to competitiveness of say Australia and NZ) due to having this huge market just south of the border. Predict their next reform minded gov't will introduce similar mining tax. Not sure if you meant Gillard (re takeover from Rudd) or Julie Bishop (and I thought Gillard was bad). Either way, believe Mad Monk and his rabble will lose badly, and if they're smart they'll put Turnbull back in charge for a real tilt next time around.

Best wishes all mining investors and chill, will be OK.