I just saw a BBC interviewer ask Equatorial Guinea dictator Teodoro Obiang Nguema Mbasogo what he’s been doing with all the money from the country’s oil – because it certainly wasn’t finding its way to his impoverished people. Mbasogo prevaricated.
That would be a pretty good question to put to the head of BP, too, I thought. Do the English do anywhere near as well as the Norwegians do from their oil rent?
For that matter, Australia has oil, natural gas, iron and coal in abundance, yet we don’t capture anywhere near enough rent from our natural resources either.
When Prime Minister Kevin Rudd tried to make the miners pay a little nearer to the fair rent for their licenses they revolted, got rid of Rudd for even contemplating Ken Henry’s 40% super profits tax, then negotiated the ludicrously small minerals resource rent tax in a back room deal with Rudd’s replacement, Julia Gillard.
They did a job on her.
But her economic ignorance was lost on Australians.
Are we really that thick?
The Norwegians aren’t: let’s take another look at the excellent video to which I put a link on Sunday.
“Entirely”? Nup! It’s USUALLY because it’s the easy way to go. Swan’s actually right on this occasion telling the states to use their OWN taxing powers – such as extending charges on land if their stamp duty on conveyances is dwindling.
One of the greatest mistakes was Gough Whitlam’s: he was certainly no financial genius when he agreed to pay half the running of local government out of federal revenue.
The states have become even more expert than local government over the long term. They’re over the moon to see their revenue-raising done by the feds. There’s no backlash if you allow Canberra to collect your taxation revenue for you, GST-like. Sure, there’s the odd crocodile tears when the feds move in on mining taxes. You’ve got to be seen to be defending your base, even as you chuckle behind your hand as you lose it.
Who’s responsible for hospitals? The states. Who kicks in enormous funds? The feds. … Etc., etc.
“Kevin trying to pinch state taxation”? And the states pay their own way as they should, I suppose – never putting their hands out to the federal government? Admit it, Chris, federal-state financial relations are a complete schemozzle, with NEITHER side doing as they were meant to do.
We have been ‘blessed’ with a succession of economically ignorant governments. Leaving aside she of the reverse Midas touch, you’ve got Kevin trying to pinch state taxation in the RSPT, and Costello pumping the housing bubble for a decade.
Will just have to wait and see if the next roll of he dice produces anything better.