Ah the Henry Tax Review. My lips don’t lie, I don’t really get it.
However, the one talking point that the coalition has successfully driven home is the Great Big New Tax on the mining industry.
Once again, I’m not going to pretend to compute all the ramifications of this fiscal furore. All I know is that my share portfolio is bleeding blue chip.
But I read somewhere (The Australian), that the mining tax will scare off foreign investors, notably the resource guzzling China.
Hey conservative commentators and BHP/Rio! Not so.
In an article titled: “Australia’s super-tax on miners fails to deter Chinese investments,” the China Daily today reported the following:
Zhang Ye, vice-general manager of China National Minerals, a wholly owned subsidiary of metals trader China Minmetals, said the proposal would not affect Chinese companies’ decision to invest in Australian mining.
But it then went on to express concerns, and even challenging the Oz governments yellow peril fears:
“Some Chinese companies complained that the Australian government doesn’t have a favorable attitude toward Chinese companies investing in the nation’s mines, said industry analysts”
(BTW this is the worst type of journalism. Note the beautiful editorializing of “some say” – who say? Plus no attribution to “industry analysts”)
Publicly China is saying the TAX will not make a difference. Privately they are whinging not just because mining companies may have to raise prices, but because China owns huge stakes in Rio and BHP.
Ultimately it won’t make a huge lot of difference. China needs 62 million metric tones of iron ore, 4 million tones of coal, and 1.8 tonnes of uranium every month just to keep the economy moving.
Without Australia, I guess there’s always Africa.