Mining tax deceitful: Hockey
Christine St Anne  |  26/10/2012Text size  Decrease  Increase  |  
Christine St Anne: The mining tax has set a new benchmark in public policy by being the first tax to raise no money. Shadow treasurer, Joe Hockey, said at the recent Financial Services Council Breakfast in Sydney.  

Joe Hockey: This is a new benchmark in public policy around the world. Not even the Greeks could achieve that.

St Anne: Mr. Hockey also slammed the structure of the tax as being incompetent. 

Hockey: I'd say to you the spin from the government is classic. Yesterday, they said, oh, look, the deductions are upfront. They don't even understand their own tax. If they paid nothing on Monday then they expect to pay nothing in three months, nothing three months after that and nothing three months after that. And if they get it wrong, they get charged penalties. But wait, it gets even better. You know what, royalties are credited against their mining tax liability. Royalties are credited, state royalties. So, if they don't have a mining tax liability, there is a contingent liability for the common wealth to rebate the royalties. Here is the mining tax that not only doesn't raise a dollar, it owes money. Only the labor party could develop a taxation policy that cost the government money. It is quite extraordinary. 

St Anne: Given the lack of revenue generated by the mining tax promised government initiatives were in jeopardy. Mr. Hockey labeled these as the deceitful.

Hockey: The tears start flying when you realize that they've committed billions and billions of dollars of expenditure against the mining tax revenue they claim they are going to have. Regional infrastructure, billions of dollars; increasing superannuation from 9 per cent to 12 per cent, billions of dollars cost to the budget; school kids bonuses. Remember the budget they said they were going to share the benefits of the mining boom around, all paid for out of the mining tax. Everything you can think of is virtually being paid for out of the mining tax. The sad part is, there is no mining tax. The worst part of it is, it is an act of deceit by the government. They brought forward the midyear statement to less than four months into the financial year because they knew that on Monday on the other side of camera at the Australian taxation office the mining companies would be lodging a remittance on the mining tax of nil. It's a con. I have never seen anything more deceitful out of the government; they knew it. They haven't explained why they brought it forward to October. The only two previous occasions, you've ever had a media statement released in October was when there was an election called in November and they had to be an election in those years. And yet the government did this totally aware they were not going to raise a dollar from the mining tax, which would have blown a $2 billion hole in their budget, this year alone.

St Anne: Speaking to an audience largely made up of executives working in financial services, Mr. Hockey said that as an incoming treasurer he would make financial services a better export industry. He maintained his bearish views on both the European and US economies. As an incoming treasurer he would also launch a review in financial services in order to prepare for this ongoing market volatility.

Hockey: We need to prepare and we need to prepare now for what was going to be a capital market volatility, in my view, of fairly extreme proportions for the next 20 years. That's why we want to have a financial system review, a full financial system review. The son of Wallace, granddaughter of Campbell, whatever you may call it, this is one of the recommendations I made in the Coalition's nine-point plan on banking back in October 2010. I don't want you to think this is just another review. I know everyone has reformed fatigue. So what we are going to do is we are going to give you a commitment during the course of the review. We are not going to undertake any significant change and unless it is to the benefit of the financial services industry.

St Anne: Mr. Hockey was urged the financial services industry to keep its commitment to trust and transparency as the industry continues to remain a critical role in Australia's economy.

Hockey: I want to say to you, thank you. I know how hard it's been over the few years with the enormous volatility, with the massive amount of regulation, with consumer pressure and competition. But I just want to say to all of you who employ so many people, who help to create so much wealth, who work so incredibly hard, I want to say thank you. Thank you for being so successful. Thank you for being overwhelmingly one of the most honest financial services industries in the world, one of the most innovative financial services industries in the world. I want us to be better. We can be better. We can be the best. And if we are the best in the fastest growing region in the world there's blue sky opportunity and not only you benefit from that, but the whole of our country benefits from that. Thank you very much.

St Anne: Christine St Anne for Morningstar.

Video Archive...

to Morningstar Premium Membership

Increasing income from property
16/04/2014  While they may not be front of mind for many investors, there are smaller Australian property players that can provide both a quality asset and a high yield.
Why moats matter
04/04/2014  An economic moat provides a gauge of a company's competitive advantages and overall strength, and it is a highly valuable tool for investors of all levels.
Getting SMSF ready for SuperStream
03/04/2014  SMSF members who accept employer contributions will need to prepare for the government’s new measure called SuperStream.
Is your SMSF audit ready?
27/03/2014  SMSF trustees face new audit requirements from the Australian Taxation Office
Key rulings for SMSFs
20/03/2014  AMP's Peter Burgess outlines key legislative considerations for trustees
Do trustees know best?
17/03/2014  --
Getting ready for contribution cap rises
13/03/2014  The indexation of the contribution caps will give people the opportunity to put more into superannuation.
Stellar returns for the long term
06/03/2014  Perpetual chief executive Geoff Lloyd talks about the competitive advantage behind the company’s unrivalled performance and the transformation of the business.
Keeping faith in QBE Insurance
28/02/2014  Morningstar's Peter Warnes takes a look at the latest earnings results from QBE, Woolworths and Westfield Group and gives investors an idea of what to expect from these companies down the track.
Dividend upside for Rio Tinto
14/02/2014  Morningstar's Peter Warnes takes a look at the latest earnings results from ANZ, CBA, Telstra and Rio Tinto and gives investors an idea of what to expect from these companies going forward.
3 key legislative changes for SMSF trustees
07/02/2014  Trustees need to grapple with a number of legislative changes made by the ATO.
Finding value in small companies
03/02/2014  Morningstar's Tom Whitelaw gives us an insight into where managers are seeing value based on the latest Australian Small Companies Sector report.
Picking the right stocks
30/01/2014  NovaPort Capital's Sinclair Currie offers investors some insights into his team's stock-picking process.
5 new year resolutions
23/01/2014  Westpac's David Simon outlines five key new year resolutions that will maximise portfolio performance.
Getting value from your property portfolio
21/01/2014  Property expert Margaret Lomas outlines effective strategies for maximising a property portfolio and managing these assets in retirement.
Investment prospects in 2014
16/01/2013  Ibbotson Associates' Brad Bugg outlines what investors should expect in 2014 and which markets he thinks present the best opportunities.
Getting a better deal on capital raisings
09/01/2013  A new service being offered by the ASX aims to give investors better access to capital raisings such as IPOs.
Huntleys' Forecast 2014
19/12/2013  Morningstar's head of equities research Peter Warnes provides an outlook on the key investment issues for 2014.
What can SMSF trustees expect in 2014?
17/12/2013  A new government inquiry into financial services will be among the key issues trustees will have to grapple with in 2014.
Is cash the current king?
13/12/2013  Ibbotson Associates Australia managing director Chris Galloway gives investors his ideas on how portfolios should be positioned as we head into 2014.