iron ore miners npv, page-32

There are plenty of well meaning educated fools around, and if Ken Henry think this tax model won't affect investment in the real world he is even more naive than I feared.

from Terry McCrann's article on Senate hearings, and this should highlight to you the tenuous grip Ken Henry holds on business reality:

"Senator Eric Abetz first teased out the statement by Henry that a Resources Super Profits Tax at 50 per cent "would have no different economic impact" than the 40 per cent proposed for the tax.

Later 'Barnaby' - Senator Joyce - teased the question a bit further. What about a rate at 70 or 80 per cent? And got exactly the same answer: "It should not make a difference."

What about 100 per cent then? Just to be clear, that would mean the government taking all, repeat all any profit made by a mining venture above the long-term bond rate of just under 6 per cent.

Perhaps in part sensing the very blind alley he was being led up, Henry side-stepped, responding that at that rate the government might end up having to finance all the investment.

But then couldn't resist the killer sentence too far: that countries like Norway have managed to attract "very substantial amounts of private capital while taking 95 per cent of the profits".

Source: http://www.heraldsun.com.au/business/terry-mccranns-column/how-henry-lets-the-cat-out-of-the-bag/story-e6frfig6-1225873774975