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...

Trustees under the spotlight
--  SMSF Association’s Andrea Slattery talks about the growing professionalism of the industry and what it means for trustees.
An insight into 4 top managers
02/03/2015  Morningstar’s Tom Whitelaw outlines the qualities behind this year’s fund manager of the year awards.
1 top stock set to open doors
27/02/2015  Morningstar's Peter Warnes shares his thoughts on results from the likes of QBE, BHP, Ramsay Health Care and Woolworths as the curtains close on the half-year earnings season.
Telstra picks right man for top job
20/02/2015  Morningstar's Peter Warnes gives his take on the most recent batch of corporate earnings, while also sharing his views on the appointment to the top job at Telstra.
2 stocks in earnings sweet spot
13/02/2015  Morningstar's Peter Warnes takes a look at the latest results from two big names in healthcare, as well as earnings from CBA and Telstra.
A further rate cut?
11/02/2015  Further rate cuts are expected while the Australian dollar will remain overvalued, according to Ibbotson’s Brad Bugg.
What's in store for listed investments?
05/02/2015  While the growth in LICs is more cyclical, ETFs continue to develop from stronger structural growth.
Key issues for SMSFs
02/02/2015  A government inquiry and tax concessions are among the key issues confronting trustees.
Emerging supermarket competitors
22/01/2015  Recent increased sales numbers from global supermarket chain Aldi continues to add competitive pressure on Australia’s big players.
Top SMSF tips for 2015
21/01/2015  Keeping up-to-date on legislative changes, avoiding excess contributions and ensuring sufficient cash flow is in place are just some of the simple things trustees can do to get a better handle on their SMSF.
Overcoming home bias
15/01/2015  Beyond Australia's borders and within the global investment universe lies a much more diverse range of opportunities across multiple sectors.
3 investment ideas for 2015
09/01/2015  What are the key themes investors should be aware of over the next 12 months? We identify the red flags and opportunities facing investors in 2015
Get your game on with this stock pick
05/01/2015  Crown's long duration licenses will allow the casino operator to continue to earn returns above its cost of capital over the next decade and beyond.
Opportunities in internet stocks
23/12/2014  Focused on sustainable competitive advantages, Morningstar StockInvestor's Matt Coffina sees potential in a handful of Internet stocks today.
Market outlook for 2015
18/12/2014  Morningstar's Peter Warnes gives investors an idea of what to expect from the Australian share market over the coming year, while also providing some tips for a stronger portfolio.
Morningstar's new ETF ratings
10/12/2014  Morningstar’s Tim Murphy discusses the new ETF analyst ratings and reports that are now available to investors.
Top opportunities in hybrids
09/12/2014  After a recent broad widening in pricing, investors may find opportunities in some of the older-style bank notes and high-quality corporate issuers.
Iron ore's changing landscape
03/12/2014  With small, high-cost miners set to struggle, Chinese growth to flatten and the low-cost majors pushing hard on expansion, the face of iron-ore mining is set to look very different.
Will QE boost European stocks?
28/11/2014  As ECB members hint quantitative easing could come sooner than expected in the Eurozone, we examine the prospects for European stock markets. From Morningstar UK.
Quality stocks, sustainable yields
26/11/2014  Anton Tagliaferro of Investors Mutual shares his outlook for the market at last month's Morningstar Individual Investor Conference.