Strong support for super and company tax changes

Our survey panel has given strong support to the Rudd Government’s announcements about super and company tax. They are less enthusiastic about the resource rental tax, particularly if they are swinging voters.

Resource Rental Tax

 50% supported this tax, compared to 40% who opposed it. This indicates a high level of certaintyand it was heavily polarised in line with voting intentions.

RRT_500

However, a snapshot of swinging voters showed that they were less likely to support the proposal than the overall group with only 42% approving and 44% disapproving, and those who neither approved nor disapproved were more likely to express concerns than support.

Reasons given for supporting the tax included:

Community-owned resource and should be shared

  • Most miners are foreign-owned
  • Finite resource
  • Miners are too profitable

Those opposed to it thought that it:

  • Was at an excessive level
  • Would destroy the mining industry
  • Would hurt ordinary Australians who were shareholders or lived in communities who benefited from mining

“I am sure the mining companies are getting a disproportionate benefit from Australia's natural wealth and ordinary Aussies should get a greater share.”

“It is outrageous to think that foreign companies can come into our country, strip it of natural resourses and we are only minor beneficiaries of the venture.”

“As I understand it, the tax will be levied on excessive profits. Therefore it shouldn't have a detrimental affect on the companied concerned. The resources they mine belong to all Australians so there is nothing wrong with taking a little more…”

“Because the coal and other minerals they mine do actually belong to the people of Australia. The Government went out on a limb by spending so much money for infrastructure and saved our economy going into recession.. This money has to be returned…”

“40% seems high and I am not sure of the details, ie is it 40% of all profit or 40% of profits above a certain level. If it is the former then it is definitely too high, if the latter it will depend on the cut in point.”

“I don't have sufficent information yet to have an informed opinion.  What I've heard from Rudd so far is only gobbley-gook, while Swann doesn't have a clue what he is talking about.  Also, the mining company reps will obviously slant their side…”

“1 effective tax rate is uncompetitive in international market2 superprofits do not start at the edge of the long term bond ratedisplays complete lack of understanding by government of how business works”

“Another of Rudd's short-sighted or "shoot from the hips" policy aimed at trying to get more votes for his re-election. This polciy can cause losses in the share markets for amny retirees and also potential job losses in the industry.”

“Cheap populist revenue grab that might have been acceptable as part of a comprehensive tax reform package as set out in the Henry Review, but as a standalone stunt, the policy is questionable. “

“don't kill the goose that laid the golden egg!”

“I have concerns about the economic and social impact on regional centres if mining companies either downturn operations or move offshore entirely.”

Superannuation Guarantee Charge

This was supported by 64% and opposed by only 23%. There was evidence of partisanship with Liberals split more or less evenly on the question while Labor and Greens voters were 90% and 87% in favour of it.

Super_500

Those in favour cited:

  • Need for provision for individuals for a proper retirement
  • Inability of government to fund pensions for all

Those against were concerned at the impact on business of an additional cost without an increase in productivity.

Company Tax

Compant_Tax_500

Again, most supported the decrease in company tax, but not as enthusiastically as the changes to super. Labor and Greens voters were more likely to disapprove, and Liberal voters were equivocal (only 53% approved). Nationals voters were opposed.

There was generally a view that lower tax rates were better for the community, and to be internationally competitive, and that this helps small business. It was also seen as being good for employment.

Those who neither supported nor opposed the change thought it was not particularly significant in size, and there was also a feeling that it might just be an election gimmick.

Criticism of the move came from two directions – those who thought it wasn’t enough (Liberals), and those who thought it was too much (Greens).

Note: the sample was 638 people weighted to reflect voting intentions as per the latest Newspoll federal results and randomly selected from a larger pool of 1026 respondents. They responded to an online survey on 5th or 6th of May, 2010

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Comments   

 
0 #1 I have no love for greedy mining magnatematin Trama 2010-05-07 16:58
I have no love for greedy mining magnates but a tax of this size hits all Australians as we are shareholders either directly or through super. Once again the Labor party in trying to do the right thing by the people of Australia have over reached and burned those they are trying to help, happened with the roof insulation and BERS. Less haste guys and put in place the resources to monitor and assess all these programes, I remember Gough and his fantastic vision, but you cannot make up for the useless conservatives in your first term.
 
 
0 #2 Re: “Because the coal and other mineraRonald Kitching 2010-05-09 12:05
Re: “Because the coal and other minerals they mine do actually belong to the people of Australia. The Government went out on a limb by spending so much money for infrastructure and saved our economy going into recession.. This money has to be returned…”

The statement above shows the appalling ignorance of economics of many of the intellectual community and public.

To say that all Australian's own the resources of the Nation is the same as saying that at all Australians own a share of profitable farmers, profitable manufacturers and profitable retailers like Woolies, Coles and Harvey Norman.

A resource is not a resource until some explorer, whether an individual or company puts up the risk capital, spends the money to discover, delineate and plan a (hopefully), profitable mine.

As for the government spending money on Economic "recovery". That too is an entire waste of Capital. The result will be even more Capital destruction, a skill in which all governments seem to excel.
 
 
0 #3 The moment anybody mentions ‘taxes’ Peter Hindrup 2010-05-09 12:21
The moment anybody mentions ‘taxes’ everybodies hackles rise — especially if ‘increase’ is mentioned at the same time!

Why or how the government ever portrayed this as a ‘tax’ is beyond my comprehension.

What is being missed in this ‘debate’ is the fact that those setting up a business have to pay various set up costs, including whatever market research they deem to be necessary, pay all the various government levels of licences and such, and pay payroll tax from day one. All businesses ‘provide employment’.

All businesses must pay for the materials that they use in production, or for the products/produc e that they intend to sell.

This is where the miners/extracto rs somehow seem to believe that they are different! They appear to believe that having set up the mining/extracti on business that the minerals ought to be free of cost, except for the cost of extraction.

The government, on behalf of all Australians ought to be saying ‘No!’.

There ought to be a formula used to set the price at any given time of all minerals and such, a price that varies with the market. The government ought to sell said minerals and such at a percentage — 40 percent sounds reasonable — of that price to anybody who wishes to run an extraction business.

The cost of setting up, production and compliance with environmental based regulation is simply the cost of doing business, no different to that of any other type of business.

Note that this means miners/extracto rs pay for the Australian assets that they are selling from day one. Nor does it require the company to be ‘profitable’.

Those companies that find the price too high will not undertake the project, just as those intending to set up a business might look at the market research and say that the potential return is not good enough.

Perhaps, Graham, your question ought to read: Are you in favour of mining companies paying the Australian people a fixed percentage of the price of whatever it is they are mining?

Or:
Do you believe that the because of the taxes that they pay when they make a profit, and the jobs that they provide they should get the minerals for nothing?
 
 
0 #4 My first comment disappeared so if it isDeb Smith 2010-05-09 14:20
My first comment disappeared so if it is posted twice I apologise.
What people have to be mindful of is that this super tax was submitted by the Mineral Council on behalf of the mining sector to the Henry review in 2008. This tax was their idea.
The giste of the tax was that during boom times all Australians, the whole economy would share in the profits. But during busts, we would support & maintain the mining sector.
Problem is that the fear they had with the GFC no longer exists. Now the mining sectors future is looking rosey they have renegged on their own submission.
It was not a tax as the media have played it that jumped out of nowhere. The mining industry lobbied to get this tax in for review.
As for the reported details well, we can't rely on that because the details are being thrashed out with the mining sector. It is pretty poor form to advocate for something for self protection from the nation then reneg when things are more favourable to your own circumstances.
They actually recommended a broadening of the GST base, and a rise in the GST tax. They also discussed welfare to work. Ala..Abbotts welfare cuts & ship to the mines.
This in turn will drive wages down in the mining sector whilst addressing labour shortages.
 
 
0 #5 Around 1937 Menzies and others proposed John Ward 2010-05-09 18:17
Around 1937 Menzies and others proposed a super tax (annuation that is)of one third employee, one third employer and one third government to pay for retirement.
Of course the Country party defeated it. But imagine if we did have a 5% each of wages contribution from that time what our savings would be now?
Why not start right now with the govt putting back 5% we would go straight to 15% contribution and our savings would begin to really put this counrty on the front foot.
 
 
0 #6 I wasn't sure if my replies to you went Mary Sharah 2010-05-10 01:12
I wasn't sure if my replies to you went through to you.
Just the same I am happy to continue answering your polls.
 
 
0 #7 The popularity of the Rudd Govt. has decDr Max Whisson 2010-05-10 11:33
The popularity of the Rudd Govt. has declined recently and the results of recent surveys do not appear to explain this. A factor which has not been adequately explored is the extreme actions taken on smoking. We do not hear much criticism of these new restrictive laws in the street and the mass media exclude such comments. The reasons for this however may be that the massively funded ASH propaganda has been successful in creating a culture of disapproval of smoking and smokers. It is my impression that there is deep shock and anxiety about the sweeping social engineering going on and the feeling that it is not socially acceptable to question this is silencing discussion. In fact my own suspicion is that this change to social compliance is the main objective of the anti-smoking campaign.

There are some very disturbing features of the campaign. For example the ETS or passive smoking story has radically transformed all workplaces and entertainment centres, as well as fractured many personal relationships and widely disrupted camaraderie. Now this massively promoted ETS story appears to be a blatant lie, as I can find no scientific studies to support it. Only smokers are damaged by smoking. There are many other worrying features but the most recent one is particularly worrying: the modification of cigarettes to make them FIRE SAFE. The cigarettes are already on sale and they go out if they are not frequently puffed. This change in smoking habit might be dangerous, but more seriously, the quality of the smoke is changed. This change could well be very dangerous. IT IS GROSSLY IRRESPONSIBLE TO INTRODUCE SUCH A POTENTIALLY DANGEROUS CHANGE WITHOUT EXTENSIVE ANALYSIS AND CLINICAL TRIAL.
 
 
0 #8 The promises are in the future estimatesJohn Peach 2010-05-12 15:07
The promises are in the future estimates and thus not set in stone. Company Tax rates has been reduced along with other measures over a long period prior (but not in the last 3 Years under Labor). This forward 'promise' is basically an election sweetener & no more a certainty than under a Coalition Gov from later this year. Basically it is window dressing and once again an expected policy.
The forward from 2011-2014 increases in Employer contribution to employee Super although not recommended by the Henry Report will of course be welcomed by both ACTU and Super Funds, but are a two edged sword (as Henry review pointed out). In reality this policy change has little to do with the 2010-2011 Gov Budget and should have been separately debated & decided in the Federal Parliament. It is an Employer Expense and thus has wide implications to all business enterprise.
Of course it would be welcomed by those on wages but in the long run it will be another added cost for everyone or lost by other increases in living costs it also helps generate.
 
 
0 #9 If the government wish the taxpayers to John Clarkson 2010-05-12 20:11
If the government wish the taxpayers to share in 40% of the mining companies profit, then should not the taxpayers also share 40% of the risks as well? If the answer is No, then the tax is grossly unfair.
 
 
0 #10 I am wondering why the mining companies Sandy Davey 2010-05-12 22:10
I am wondering why the mining companies are considered fair game for a super tax ( @ anything above the bond rate currently @ 6%) but the banks are quarantined. Wouln't have anything to do with the "shock and awe" that the banks could unleash on the electorate would it??? or am I just being cynical? Seems to me that mining profits are obscene but bank profits are just and decent