INEPTOCRACY 27 May 2012 Bryan Kavanagh 5 Comments NOTHING AT ALL TO DO WITH ALLOWING BILLIONAIRE MINERS TO CAPTURE THE PUBLIC’S RENTS, OF COURSE! 🙂
5 thoughts on “INEPTOCRACY”
Thanks for the link. I’ll accept that argument for now, and think about it a bit more over time.
Regarding the MRRT – two place where they went wrong. First was applying it to existing operations. It’s a bit like trying to rewrite a contract mid project – just not the done thing, and the miners were quite rightly able to swing public opinion behind them on that. The time to make those changes is before the contract is written. Now the government has the ability to rewrite at will – but that doesn’t make it right.
The second is that the states should be the ones rewriting mining conditions. It has been, and should be, a state’s perogative. Resource rents – whether land or mineral or other – are a states true assets. The commonwealth should butt out.
Now a state that rewrote its royalty scheme around the MRRT for new projects would probably do quite well…
AND THEY SAYS LETS ABOLISH THE BABY BONUS, BUT OF COURSE WE WILL NOT TOUCH THE BABY BOOMER BONUSES, which flow like vote buying nectar or holy water from the sacred lake of Burley Griffith, so sacred that it cannot be touched, and that TAFE funding and all other essential services and stipends must be cut to younger generations, but which keep coming to older people to pump prime the limp and low standing in the polls by pork barrelling three huge generous pension rises, unmeans tested, so your free to capitalise and capture all that income from rental property’s and superheat all 5 rooms in your giant empty nester home, now rent free, and leave lights on with everything on standby, while your children pay huge rents and uni fee’s and turn their fridges off at night and go without heating in the winter and cooling in summer. No it’s not a scene out of
The cold damp flat out of Dostoyevsky novel, Crime and Punishment, or Down and out in Paris and London by Orwell, this is in modern Australia, and it’s an intergenerational disgrace perpetrated by Baby Boomers on younger generations. (Sarcasm) this is not intended as advice or reflects the advice or terms of the author.
Don’t dismiss a super profits tax as a correct and practical way to establish rent, Chris. Whilst there are other ways it may be done, such as assessing the value of the particular mineral won, and establishing a royalty rate as between the public (resource-holders) and the operator, there’s good valuation precedent for a 50:50 split of net profit before tax between landlord and tenant for such going concerns. Whereas a royalty rate has inherent problems insofar as it usually has to be struck very low so that that the operator may start to recover capital investment costs in the early days of extraction, this isn’t a problem with a “super profit” tax @50% because, by definition, the miner is now running at a profit. See https://thedepression.org.au/?p=2931 for valuation evidence that this is a ration and respected technique.
Has anyone come up with a rational method of pricing mineral rents – and no, a percentage of profits is not rational.
It’s not enough to suggest that mining secures public rents unfairly, when they pay for the rights to do so.
If all you are going to argue about is how much they pay, then there is probably more thinking to do.
It isn’t nearly as simple as real estate, as so much more of the value is contributed by the works done.