Here we go...
Myth 1 - Its not a tax. Its a Special Rental Fee.
Myth 2 - It has nothing to do with taxes although as a cost of doing business (not a tax) its a tax deductible expense.
Myth 3 - The Mining companies pay $19+ dollars a tonne royalties, not 25 cents...well actually no one said anything about it being a 25c royalty except the deceptive advertising campaign. The 25c Special Rent Fee has nothing to do with Royalties at all. Only thing they have in common is they're both set a per tonne rate. That's it. Get fooled by the advert?
Myth 4 - Rio/BHP are Aussie companies paying tax here. Well they pay some tax here, and recently one got slugged a back dated tax bill for millions they hadn't properly paid...but that's not relevant of course. Fact is they're not Aussie Companies, they're Multi National Companies listed on the ASX & the London FTSE. Having said that, there's also a vehicle that allows you to buy shares via the NYSX too even though they're not directly listed there...but that's not relevant too I guess.
Here's what is relevant on the "Aussie Company" angle.
Rio Tinto has been a multi national since its inception in 1873 when it started mining, as a foreign miner in Spain. Its listed on 2 stock exchanges. They pay dividends to lots of people, Australian & non Australian...that's their job. Just because a dividend is paid it doesn't mean WA citizens who own the ore have to subsidise others with an unfairly low rental fee. Not valid, not fair. As of mid-February 2009, shareholders were geographically distributed 42% in the United Kingdom, 18% in North America, 16% in Australia, 14% in Asia, and 10% in continental Europe. You see that right, only 16% of shares are owned by Aussies.
Equates to FOREIGN owned. Lets look at the figures closely another way...
60% OF THE SHAREHOLDERS LIVE OVERSEAS IN THE UK & NORTH AMERICA WHILST ONLY 16% ARE AUSTRALIAN.
Combined, Asia & continental Europe own more shares than Australians.
Now BHP -
Again listed on 2 stock exchanges directly...
Biggest shareholder...BHP multi national listed on ASX & London's FTSE - biggest shareholder is Bank of America. Goldman Sachs, Deutsche Bank, Royal Bank of Canada, State of Wisconsin Trading Board, Credit Suisse, Bank of Montreal all listed as the biggest shareholders, along with a big number of foreign investment & clearing houses, don't take my word for it, go check for yourself. All easily obtainable information. Good luck finding Aussie super funds or individual shareholders in the 50 biggest shareholders...or the Top 100
Multi National, not Australian.
Myth 5 - Its profits benefit our Aussie Super Funds so slugging them will harm us. Well No. Quite frankly No, No, No way in God's green earth. Super funds are managed daily & hourly. If a stock should look to be likely to become a non performer, falling below the required return level, the stock is quit & replaced by better performers. Your Super Fund is NOT Rio/BHP fixed for life. Its about returns, not locked in for life. Absurd to think otherwise.
2nd point, the Super funds invest in a balanced fashion, so only a percentage is listed shares, only a percentage of that are Australian listed shares, only a percentage of that are Mining & Industrials shares and only a percentage of that are actually RIO or BHP.
Raising the rent fee to a fair for WA level of $5 will not affect your super at all.
Now some more facts...it is unfair and unreasonable to leave a company's cost of doing business, that is tax deductible at 1960s levels...unchanged whilst power, transport and other costs sky rocket. That point cannot be argued.
Whilst infrastructure needs ongoing money, it has to come from somewhere. It'll come from the dwindling pot and who pays?
Struggling W.A. Mum & Dad citizens & their families.
As a result, WA's struggling Mum n Dads and elderly citizens are subsidising 2 wealthy foreign owned Mining Companies. Remember when the iron ore price hit $38/tonne we saw the miners claim that they were competitive & profitable at that rate.
Its now hit $90/tonne. I think they have capacity to pay what is undeniable fair & just.
Its not a tax, nothing to do with royalties, its not going to affect your super, they're not Australian owned, they're wealthy, exporting huge profits and an added subsidised bonus from you if you're a WA citizen.
But if we make it unprofitable for the mining companies, they'll pack up & leave.
Really? Well that might be 100% right, but raising the rent fee to $5 will not make them leave. Where exactly are they going to get the same high grade ore, with the same stable government and NOT have to spend the same amount of money already invested in infrastructure and still gained great profits at $38/tonne?
Where exactly is such a place all set up ready to go, or where exactly is another place that's also viable? Here's the thing, if there's equal or better margins available elsewhere, they'll be there now or as soon as the can afford to be there no matter what happens in Australia's north. They will just expand and soak it up. All of it, as much as they can.
The $4.75/tonne they've been unfairly soaking up since the mid 1960s is a sweet surgical gouge that remains an industry joke it has been for decades.
And we pay.
Myth 6 - "Forcing them to pay..." We can't. Here's the funny thing, the arrangement is called a State Agreement and they're being used less and less these days. It requires both the Mining Company & the State Government to agree to the change. One party says no, its off the table. There is no unconstitutional tax bill required. So why does Rio and BHP just ignore it all until it gets put on the table and then say no? Because of Corporate Social Responsibility. If they have any they'll just say yes because to say no is indefensible and would affect their share price as the Corporate damage to their image would be immense. Better to see it nipped in the bud waaaaaay before it is negotiated. Perhaps its just coincidental and fortuitous that the Liberal/Labor Duopoly, the Chamber of Commerce & Industry WA and the Chamber of Mines & Energy all came in trying to bury it BEFORE it could be accepted and presented at the negotiation table. The fact that mining interests poured big dollars into knocking Brendon Grylls out of parliament over it speaks volumes. He tried to cut the unfair Mums n Dads subsidy going offshore but a wealthy foreign mining plutocracy got its way & the mining industry got to influence who got into the WA Parliament and who didn't.
That Sovereign Over Reach is every bit as despicable as the gouging social theft it sought to protect.
THE CURRENT SITUATION IS UNFAIR AND INDEFENSIBLE.
Its time.
#Time2StandUp4WA or its time to accept you should always export bits of your pay packet overseas to wealthy foreign investors.
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