It seems that the Rudd-Gillard-Rudd government can put pretty well everyone out of business except the people smugglers.
There’s now a lot of squealing following announcements of proposed changes to vehicle fringe benefits tax being proposed by Kevin Rudd. So that’s two birds with one policy stone — the car yards and the leasing industry.
Carbon tax? As so many have pointed out in the past few days, it won’t disappear because the change to the law required will never pass the senate, now or even after the Upper House changes on July 1 next year. So there’s that leaden boot on the throat of any company that uses electricity.
We all know the mining industry is hurting. True, that’s not your fault Kevin — but not for want of trying. After all, wasn’t it your intention last time around to slug the greedy miners? I mean, really slug them? It was only the intervention by the faceless men that stopped you in your tracks. By then, the mining giants had well and truly seen Julia Gillard coming. Have we got a deal for you, they oozed to the new prime minister.
But in terms of bringing the mining sector, if not to its knees at least to parlous times, the world economy has succeeded where you failed.
Once you have got that hair looking right, have a glance at this morning’s The Australian, which reports on how though things are in the mining services sector in the northern Queensland city of Mackay. Apparently there has been a 20% fall in the town’s property and rents. According to a Deloitte executive, the town’s problems stem from the mining services sector. With work drying up, many people are moving elsewhere looking for jobs, which has sunk the property market. Mackay, as the paper notes, is the gateway to Bowen Basin coal industry. You all know what is happening there now.
Presumably, the downturn in mining activities is affecting other parts of Australia.
Globally, coal prices are down 6.15% so far this year, but that figure does not indicate the other side of the ledger, the rising costs (especially in Australia).
Zinc prices, based on last week’s numbers, are off 11.32%, aluminium 16.58%, copper 16.39%, nickel 18.92%, gold 26.28% and silver 35.25%.
The US housing start numbers out overnight won’t be much of a market booster — they certainly threw the London Metal Exchange into a minor tizzy, although nickel gained 1.5% in the session, but mainly due to heavy short covering.
Tin was also up a tick, but don’t get too excited. It looks like the Indonesians are going to water their plan to tighten smelter quality standards. PT Timah, as a result, expects its exports this year to exceed previous forecasts by about 33%.
So here’s the thing, Kevin. Should you pull off a miracle and win the upcoming election, you are going to need some solid revenue to plug the various holes created while you were on the backbench. You won’t be able to do that if the resources sector is doing poorly.
And just think, what policies will Tony Abbott be left with if you promise to abolish the mining tax? Really, it’s not going to cost you much and it’s a good deal easier a bitter pill to swallow than owning up to the dead insulation installers or all the bodies the navy has to pick up out of the Indian Ocean on a weekly basis.
Kevin, the mining industry saviour! What a thought to conjure as you check in the full-length mirror of a morning. Think of the photo opportunities with those sunburnt miners. And that glad-handling around Harbour Town in West Perth, pausing every now and then for selfies with admiring voters.
After all, while you don’t have a clue about how the mining industry works, you’re in luck. Neither, it seems, does Tony Abbott. He’s promised to abolish the mining tax, but that really is neither here nor there so far as the wider industry is concerned.
OK Tony, after you’ve abolished the tax that doesn’t work, what then?