evidence rspt killing off capital investment, page-32

Hello Mick!

"I would beg to differ with you that Chile has got it right.
When were you last in Chile? It's a third world country
and while Governments of the day pander to multinationals and investors, a shameful percentage of its people are
below the poverty line. 'Tis a quaint place to go on a holiday like many third world country but you wouldn't want to live there. Just look at it's post 1960 political history."

- Just to remind you that Chile is the largest copper producer. If Chile is a third world country, it doesn't mean that Chile can't mine its resources efficiently. I guess mining is not a rocket science.

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"We own our resources and we ought to get a fair market value for them and so called risk capital investment is only a pittance in relation to the minerals' real worth.
Otherwise these investors would not invest...what are you!"

- You probably have no clue about how global capital market works. If implementation of RSPT will make Australia the highest mining taxed country in the world, then obviously the capital will move elsewhere.

In the last 10 years, Iron ore price has gone up by 900%. It is more or less the same for many other commodities. If the price moves too high, the alternate supply source will be discovered (may be not for Iron ore) which will lead to flight of capital out of Australia.

It is fairly common sense that if you tax an Industry 40% and that too before interest is accounted and then allow interest deduction of only 6%, and on top of that a further 28% is charged as corporate tax then few foreign investors would be interested in investing in mining industry in Australia. Mining is a highly capital intensive industry where risk/reward ratio is very high. Kevin Rudd is counting the reward without taking into account the high risk and large capital involved in mining.

There is always alternative available for investment. Australia has massive resources for the size of its population and that means Australia cannot generate enough capital investment internally and has to resort to foreign capital.