100k @ $2.25, page-5

Hi Jeff.

The MRRT will be ditched by the Liberals. Because it's just a stupid way of taxing someone. It's complexity is breath taking.

In it's place will be an increase in the royalty system if extra funds are required by the Liberals. I'd say that the states will keep these extra funds to avoid any constitutional problems. But the new federal Liberal government won't be as forthcoming with funds for infrustucture etc on a state level. Basically the federal government will hand back more control to the states. And in doing so, that will mean that the federal government won't need to fork out as much money to the states. By the time the Liberal party gets in federally. Most mining states will have a sympathetic conservative state government as well.

Just a reminder, the current government is planning on using some of the MRRT money for infrustructure in the state of WA. It makes more sense to some anyway, that the federal government should just butt out. It's silly in my opinion anyway, to have a money goround.

This is how silly it will all become once the MRRT is/if it's, in place. The wa state government is about to increase royalties so that they have the funds to build more infrustructure. What I'm predicting the federal government will do is take back some of the wa state's GST pool of funds. Probably lowering it to around 6.35% (guess), to claw back some of revenue lost by them having to reimburse the state through the MRRT agreement. They will then reimburse the state of wa for lost revenue from them increasing the royalty rate through the MRRT agreement. They will concurrently tax the miners through the MRRT and then use some of those funds for wa state infrustructure works. YOU GOT ALL THAT!!!

The alternative is just let the state do their OWN infrustructure works and the federal government just butts out. Or is that too easy ... lol

Also, I know we maybe becoming slightly fickle about trusting pollies at the moment. But be that as it may, Tony will stay true to his word in that he did say he would ditch the MRRT. It's also a much easier way of taxing miners through royalties rather than a MRRT (example above). And there is no constitutional problem in raising royalties since resources are the property of the people of that state. And the royalty system is a state tax.

Further more. As I posted previously, the MRRT may not be constitutional. Sure the Labor government believes it is. But they also thought the Malaysian solution was constitutional.

I should also note, that the Mineral Resource Rent TAX will actually be revenue NEGATIVE for the current government. The Labor party needs to fund super increases, and they will loss revenue by lowering company tax. The current government will need to reimburse the states by $6B in lost revenue. Even if the miners do pay the $11B per annum by Treasury forecasts - (Good luck with that one). The MRRT will be revenue negative by as much as $6B. That's quite a feat. It's the same for the Carbon tax. From memory it's costing us $4B a year to have that tax as well. If the Libs were to ditch the carbon tax and the MRRT. The Libs have just added $10B to their bottom line. Since the current total federal revenue is around $348B per annum. This constitutes 3.48% of federal revenues. So far the libs have only promised to lift super from 9 to 12%.

Only my opinion.

Bye