I don't think Kevin Rudd is malicious but simply a short sighted marxist bureaucrat. Big short term (less than 1 term of gov't) plans with lots of initial glory which then crash and burn badly -> home insulation, BER, NBN and now the Mining Super Profits Tax.
I'm not altogether opposed to a super profits tax, particularly on banks, but any such tax needs to take into account the high levels of risk & long term investments mineral companies face. Having a capital cost rate set at RBA ("free risk rate") is simply stupid. It would have to be around say RBA+8% to give a reasonable return on capital.
A RBA+8% super tax would also be useful in managing Bank capital adequacy because penalised banks who maintained too low a capital base or tried to achieve too a risky P&L. A return on equity (ROE) of around 12-15% for banks would be reasonable and then anything above that taxed at 25% to decrease the incentive for riskier behaviour (much more effective than the proposed liabilities tax). The same also goes for miners in that the ROE trigger level would ensure appropriate capital investment and avoid companies stripping out profits too quickly and to the detriment of the environment or being anticompetitive.
However, any such tax should be broader than one industry, not penalise particular states, and should be **widely consulted** before settled.
