Swan’s Tax Avoidance Scheme

13 Feb

Quelle surprise!

A stunning revelation emerges.

From the Sydney Morning Herald:

Miners hoard credits to avoid resources tax

Mining companies Rio Tinto and BHP Billiton have built up a combined arsenal of $1.7 billion in tax credits that can be offset against future mining tax liabilities.

Exactly as predicted here on this blog, way back in December 2011 (GilSwan Conned – Mining Tax The Greens’ Pit of Despair)

Note well how the “progressive” (ie, international socialist) SMH follows the ALP (ie, international socialist) party line, by immediately switching the focus of this awful tale of inequity away from international companies, and onto an evil billionaire “Tall Poppy”.

Local Aussie miner, Andrew “Twiggy” Forrest:

And billionaire miner Andrew Forrest confirmed to Fairfax Media that his iron ore company, Fortescue Metals, would not be paying any tax under the Gillard government’s minerals resource rent tax this year.

Mr Forrest, who challenged Treasurer Wayne Swan’s claim that the tax would still raise billions in revenue for the government after being watered down during [exclusive] negotiations [by Gillard and Swan] with [foreign-owned multinational giants] Rio, BHP and Xstrata, appears to have been vindicated after Mr Swan’s admission that the tax has net a paltry $126 million in the six months to December 31.

”The record stands for itself,” Mr Forrest said.

And to make sure you do not miss the underlying propaganda message – that the real “evil” here is your fellow Aussie-made-good entrepreneur – the SMH chooses to headline the article with a photo of Mr Forrest.Not with one of the foreign-owned BHP, RIO, or Xstrata chief executives.

Wayne Swan would be pleased (The Galactic Hypocrisy of Wayne Swan ; Swan’s Anti-Australian Rant A Smokescreen For Treason).

While the focus has been on the dramatic shortfall in mining tax collections compared to original Treasury projections of more than $10 billion over four years, the most recent financial accounts of Rio Tinto and BHP Billiton show the two miners have built up $1.1 billion and $637 million in tax credits respectively.

The credits did not reduce the amount of company income tax they had to pay, but can be carried forward to offset future mining tax liabilities.

Just as predicted here.

Speaking of credit, we should give credit to the SMH for devoting one (1) whole paragraph to a misleading and deceptive recognition of the fact that the vomitous Wayne Swan singled out Aussie miners like Twiggy Forrest for exclusive vilification while belching out his galactically hypocritical smokescreen for treason:

Mr Forrest’s recent MRRT brawl with the government has seen him subjected to criticism from Mr Swan – part of which was his inclusion in the ”badly behaving billionaires” club that included Clive Palmer and Gina Rinehart. Sources have said that Mr Swan included Mr Forrest as a member of the billionaires in an essay in The Monthly – against the urging of his advisers.

Misleading and deceptive?

Yes.

In seeking to further the progressive (internationalist) agenda – in this case, through minimising damage to the PR image of huge multinational oligopolies, while enabling damage to the public image of successful local/national enterprises by invoking “Tall Poppy” syndrome – the SMH propagates the old revolutionary socialist strategy of “class warfare”.  And conveniently neglects to inform readers of the full picture.

You have to find that, at blogs like this.

Indeed, you have to read right down to the last two paragraphs of the SMH article to gain even an inkling of the truth – though of course, it is still not explicitly spelled out:

The major mining companies are loath to talk about the tax that they negotiated with the Prime Minister, Julia Gillard, and Mr Swan. They have kept their heads below the parapet this week as Mr Swan has been in the firing line.

The government has responded to the attack by suggesting various changes to the tax but the prospect of a big overhaul before the election is unlikely. The campaign by BHP, Rio and Xstrata that led to the super profits tax being replaced with the more benign MRRT was so potent that Ms Gillard will not take them on again over the next seven months.

Remember, the article is headlined with a generic “Miners hoard credits…” title.  And a photo of Aussie miner, Twiggy Forrest.

Only the fully alert and informed reader, one who knows that BHP, RIO, and Xstrata are majority foreign-owned multinational giants, is likely to note the above bolded words at the very end.

And possibly, just possibly, have a dawning realisation that something fishy … something against the best interests of Australians … is the real truth behind this story.

UPDATE:

Too late, Independent Andrew Wilkie wakes up and smells the coffee; says Andrew Forrest was right –

Mr Wilkie told Fairfax Media that he had been wrong to believe Treasury predictions of company liabilities under the renegotiated tax instead of the alternative arguments put forward at the time by Mr Forrest.

Mr Forrest had complained that the compromise to allow miners to write off the long-term value of assets from their mining tax liabilities had allowed the big three miners off the hook.

It is beyond argument that the government was wrong, is wrong, and Andrew Forrest is right,” he said.

For readers who have not read my earlier posts on this topic, the key point to understand from the above is this: A major reason why the redesigned mining tax favours the multinationals – unsurprising, since they designed it, in secret, with Gillard and Swan – is that the Big 3 miners have vast existing assets. Their redesigned tax allows them to write off the “market value” of their existing projects, and thus claim credits against any MRRT liabilities.

UPDATE 2:

Via Andrew Bolt’s blog:

Wayne Swan specialises on perhaps this government’s defining characteristic – to meet argument with personal abuse. And there is no fouler example than this – Swan accusing miner Twiggy Forrest in 2011 of being a tax dodger for warning of exactly the flaw that has made Swan’s mining tax a colossal flop:

Wayne Swan has accused mining magnate Andrew ‘’Twiggy’’ Forrest of trying to avoid paying tax, describing as ‘’bunkum’’ new analysis suggesting the world’s biggest miners would get a free ride under Labor’s mining tax..

Mr Forrest said new analysis by accounting firm BDO revealed Treasury forecasts of an $11 billion budget boost from the MRRT were an ‘’absolute fiction’’.

He said tax would allow the world’s biggest miners to wipe out Australia’s smallest because of the huge deductions available for the industry’s biggest players

EXACTLY what I argued back in 2011. A mining tax, designed by the Big 3 foreign-owned multinationals, behind closed doors, with the local miners locked out, in cahoots with the traitorous Gillard and Swan, one that enables the Big 3 to increase their oligopoly over the Australian mining industry, at the expense of far smaller, locally-owned competitors.

And claim tax credits and deductions for doing so.

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6 Responses to “Swan’s Tax Avoidance Scheme”

  1. JMD February 13, 2013 at 12:44 pm #

    Somewhat off topic, but this headline was on Bullshit Spruiker, sorry, Business Spectator this morning;

    NAB to raise capital through hybrid securities

    What does this remind me off? Ahh… I know;

    How goes the Hybrid Securities, becomes the gen’ral Cry.
    Rather than fail we’ll at Nine Hundred Buy.
    Instead of Scandal, how goes Hybrid Securities the Tone,
    Ev’n Wit and Beauty are quite useless grown……

    One point I might make re. your article. Is it all some grand globalist, communist conspiracy, or is it just a bunch of incompetent me people, trying to milk it for all it’s worth?

  2. betty February 13, 2013 at 12:48 pm #

    Enjoy all your posts. Keep up the good work. Betty W.

  3. mick February 13, 2013 at 2:52 pm #

    Tax avoidance at work. Whilst the mega wealthy miners continue exporting the nation’s wealth and refuse to pay other than a small pittance to taxpayers the government continues to fiddle when it should be putting these bullies in their places. So who is running this nation, the government or the mining industry? I think I know the answer to this question. The real question is how long will taxpayers stand by whilst the wealth of the nation is plundered.

  4. Kevin Moore February 14, 2013 at 5:17 am #

    Humphrey McQueen calls himself a Marxist but he is no friend of Gillard.

    http://www.surplusvalue.org.au/Contributed.html

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