40% super tax, page-44

there's been many a good point on this forum and i agree with the majority of you in that this super tax (RSPT) is a terrible policy for this country.

how can discouraging foreign investment be of any good to us?

K-Dudd's couldn't explain how the tax works - this is what he said on live radio:

Speaking on Radio 6PR this morning, the Prime Minister was asked what a superprofit - which his government intends to tax at 40 per cent - was.

Mr Rudd was at his verbose best in response.

"A superprofit will be defined as if you've got a company that's investing a certain amount of money what you then do do (sic) is deduct their expenses," he said.

"What you then do do (sic) also is deduct further the amount which would be collected if for example they were investing their funds in the long-term bond market. In other words what would constitute a reasonable rate of return on investment."

A somewhat-confused presenter Simon Beaumont then repeated his original question.

"Well, it's the formula that I just described," Mr Rudd said.

"Which is you have the total investment of the company, the total earnings of the company, you deduct their expenses.

"And then of course you look at what would be a normal rate of return for that company if it were investing its money elsewhere, and it's only if they go in excess of that is a superprofit tax imposed."

Don't know about you guys but i'm seriously embarrased that this bloke is our PM.

How can he not even be in a position to explain one the biggest changes ever to corporate tax in this country?

And his reference to foreign ownership makes no sense either - should we not applaud the fact that offshore investors invest in our companies?

How exactly does K-Dudd's foreign ownership test work? There are many great Australian listed companies that have significant foreign investors on their registers - All the 4 major banks, Wesfarmers, Qantas, Telstra, News Ltd, Channel 7 - should they also be penalised for having foreign investors?

K-Dudd and the government clearly haven;t thought through the ramifications of introducing this tax. The opinion poll yesterday probably means they won't be around to make the final decision anyway.

Long live Capitalism.