Responses to The Super profits Tax

In Australia, The PM Kevin Rudd, and his cohorts, The Ruddy Gang, have successfully demonstrated that Paul Keating (love him or hate him) was the only economic visionary in that party in it's history.

It's not going to have an impact, it is having an impact already.

A 40% tax on any profits above 6% is tantamount to nationalization, and puts a large portion of wealth generated in this country into the hands of those who are least qualified and least likely to spend it wisely.

The argument is that these are Non-renewable resources. We get one chance to sell them, and we (Australia) needs to benefit from that.

Fair point.

But The Federal Government isn't Australia. We are. Raking off large scale profits, primarily out of Western Australia, so Canberra can squander this cash on bloated government spending, short term point scoring and pork barreling.

If miners are going to see this through, particularly miners with deep cyclical products such as nickel and zinc, then asset costs will need to be reined in, and in a sustainable manner.

This will mean substantial hardening of the asset management practices underlying many companies.

• A focus on more accurate capital projections up to five years out.
• Higher focus on whole of life management of asset performance, not only costs
• Alternative funding avenues for asset maintenance. (PPP, MARC, regulatory frameworks spring to mind)

The need for accurate short term forecasts and performance, tied with greater accuracy in longer term projections, is going to force a sea change on some miners in the short term.