tax metals crash and recession target 17au

This tends to indicate to me that Rudd is not leading the country but being led by bad advice.

1. If the tax reduces profits by 40% a conservative pe ratio of 16, and I think thats quite generous in a recession. That result will give bhp a price of
$1.08 x 16 = $17.
Remember it reached around $21 last crash.

2. What Rudd fails to realise, that manny institutions including superannuation have holdings in BHP.
If he attacks BHP profits, super profits will also be hit, not only here but around the world.

Some investors see BHP safer than gold and have more than 40% of their super in BHP.
I have never seen an elected govenment adopt policy without thinking about such serious consequences.

Futhermore there are only so manny foolish moves you can make like this before the public revolt.

3. It takes 8 yrs for a mine to reach production and pay off debt, on average. The next 8 yrs are a balancing act to bounce around with metal prices. Also only 1% of exploration companies will ever become successful minners.

Treating minning companies like a printing press is unfair and eats into cash reserves that are needed to expand and ride out commodity cycles.

4. Minning companies will reduce production and this will cause inflation, there will be a change of government.

5. There has been media attention on Japan that has agreed to pay higher iron ore prices for brazil. Consequentally BHP apparently threatened to stop iron ore export, a tax like this would be a good incentive to carry out that threat.

6. If BHP did slow production this would seriously effect unemployment, and GDP. The negitive multiplier effect of slowing minning and taking jobs out of that industry will crush the country.
The minning industry pays some of the best wages in Australia and a signifcant interuption would have such shocking effect on the economy.

I know what you are thinking. What can I do now. Its quite easy. You all have your friend google.

Google australian parliament, google parliament house ring and ask for the Prime Ministers office, and they will put you through and go your hardest. Its very easy.

I rang today they have even set up a hot line, things are heating up. Push push and keep on pushing, call three times. If you let this take off then the liberals will keep the tax just like labour kept the GST.