The coal seam gas industry will be greatly impacted if Rudd's tax goes ahead, as will a lot of the smaller, marginal gold producers with shorter project lives.
This is the most blatant abuse of power I've seen since President Magabe seized farming assets from whites in Zimbabwe, President Chiraz nationalised the oil industry in Venezuela and Saudi Arabia nationalised its oil industry in the 1960s. This is not a tax, which would be bad enough, as you can plan for an incremental tax. This is extortion by a government looking to opportunistically grab a share of private wealth. It is government speculating on asset values, and grabbing a share before the prices rise. Consider the impact on asset prices, the higher cost of capital because of the blow-out in sovereign risk. Rudd is not smart enough, or too fascist to be a prime minister. This strategy is a desperate attempt to stay in power and he's extorting wealth from asset owners to pay for it. It is your super money, its your more expensive housing mortgage, its your personal mining investments, its your opportunity cost from Rudd wasting billions on dubious investments. I estimate that the cost of a home loan will rise by 0.2% because of this decision by Rudd. There will be less job creation, loss of investment income, and offsetting losses in tax receipts which will override the benefits of Rudd's tax take. This is the silliness of the proposal. He will cost billions in investment which would otherwise have made the government money. Read about the impact on Qld coal seam gas industry. It will also impact on the coal industry. Even the oil & gas industry will be impacted. Why? The majors will instead commission projects in Oman and Yemen....previously (before Rudd) considered to have a sovereign risk disadvantage. Shell will be saying to the Yemen government....this is what happens when you lack respect for property rights....investment dries up....CASE STUDY Zimbabwe, Middle East, Venezuela and now Australia.
This is the most blatant abuse of power I've seen since President Magabe seized farming assets from whites in Zimbabwe, President Chiraz nationalised the oil industry in Venezuela and Saudi Arabia nationalised its oil industry in the 1960s. This is not a tax, which would be bad enough, as you can plan for an incremental tax. This is extortion by a government looking to opportunistically grab a share of private wealth. It is government speculating on asset values, and grabbing a share before the prices rise. Consider the impact on asset prices, the higher cost of capital because of the blow-out in sovereign risk. Rudd is not smart enough, or too fascist to be a prime minister. This strategy is a desperate attempt to stay in power and he's extorting wealth from asset owners to pay for it. It is your super money, its your more expensive housing mortgage, its your personal mining investments, its your opportunity cost from Rudd wasting billions on dubious investments. I estimate that the cost of a home loan will rise by 0.2% because of this decision by Rudd. There will be less job creation, loss of investment income, and offsetting losses in tax receipts which will override the benefits of Rudd's tax take. This is the silliness of the proposal. He will cost billions in investment which would otherwise have made the government money. Read about the impact on Qld coal seam gas industry. It will also impact on the coal industry. Even the oil & gas industry will be impacted. Why? The majors will instead commission projects in Oman and Yemen....previously (before Rudd) considered to have a sovereign risk disadvantage. Shell will be saying to the Yemen government....this is what happens when you lack respect for property rights....investment dries up....CASE STUDY Zimbabwe, Middle East, Venezuela and now Australia.
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Andrew Sheldon www.sheldonthinks.com
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