Crikey! What a week.
The saga of the whacky-tax continues along it’s merry way to the bewilderment of members of the Labor Party and to the delight of the Liberal Party. Who would have thought that the Battle of the Bulge (bulging mining profits verses the shrinking bulge of Wayne Swan’s Treasury) would end up like this. The Government taking on the richest corporations in Australia for a great big new public brawl. Talk about Monty Python’s Black Knight.
Slowly, the haste in which this tax was conjured up in the Henry Report, then altered and refined by Rudd and Swan; then craftily manipulated through a Claytons consultations process and presented as a fait accompli , has been revealed. If it struts like a turkey, and gobbles like a turkey … it’s a turkey.
A short study of the history of whacky taxes might have given the gang of four, Kevin Rudd, Wayne Swan, Julia Gillard and Lindsay Tanner, some cause for hesitation. Past attempts at whacky, (or shonky taxes), have either failed or caused untold damage. Whacky taxes develop a life of their own.
Perhaps the whackiest tax ever, was that placed on the beards of the Boyars by Peter the Great of Russia. If you wanted to wear the traditional scruffy Russian beard, and you were a courtier or an government official you were hit with the Beard Tax and required to pay a yearly tax of 100 roubles.
Then there was England’s 1696 window tax. This was a sort of early version of The Rudd/Swan Resources Super-Profits Tax. It was called the Act of Making Good the Deficiency of Clipped Money. Really, you have to laugh. The Window Tax is explained as a tax designed to impose tax, relative to the prosperity of the tax-payer, but without the controversy that then surrounded the idea of income tax. The Window Tax was a bit, well a big bit, like the proposed RSPT we are all now chattering about.
With the Window Tax a person was hit with a 2 shilling tax for their house then an additional tax of 4 shillings if it had more than ten windows. If you had more than twenty windows you were hit with eight shillings. It was a sort of a Window Super-Profits Tax. In 1766 the number of tax-free windows you could have was reduced to seven.
The extremely unpopular Window Tax was despised as a tax on “light and air”.
A “resource” owned by all Englishmen. Sound familiar?
The result of the Window Tax was that windows were bricked up to avoid the tax, and new dwellings were built with less windows. It is from the Window Tax that some people suggest we get the expression “daylight robbery”.
But without doubt the most whacky tax, and the tax that caused catastrophic consequences was the Tree Tax. A tax placed on every living tree by the Ottoman Turks. The result of this tax can be seen today on the ravaged general landscape of Palestine, Israel and Syria. As a result of the Turkish Tree Tax the peasants of the Sultan’s Empire were forced to chop down their orchards, and timber trees to avoid having to pay the tax. Indeed any tree that grew on any land was counted by tax collectors and the tax extracted. Over the centuries, what had once been known as the Green Cresent became a barren wilderness.
Mark Twain, on seeing the desolation in 1867, wrote:
Palestine sits in sackcloth and ashes. Over it broods the spell of a curse that has withered its fields and fettered its energies. There is hardly a tree or shrub anywhere. Even the olive and cactus, those fast friends of a worthless soil, have almost deserted the soil.
Queen Victoria was so disturbed by the Ottoman Tree Tax that she reputably gave most of her Golden Jubilee Gift to the Save the Cedars of Lebanon Fund, to pay the tax each year, on the remaining cedars, so they wouldn’t be destroyed.
Back in Australia and Wayne’s World, the RSPT caravan rolls on. And the whole campaign is getting very grubby. Truth has various versions. Spin is king.
The first porky is the Rudd mantra is that mining resources are “owned by all Australians”. WRONG. The minerals underground are owned by each individual state. They are the rights of the Crown and each state in Australia owns those rights and minerals. Indeed any home-owner can check their title deeds and see that the mineral rights belong to the state government. If the RSPT ever gets anywhere near being implemented, the High Court of Australia is going to be very, very busy.
If there is a serious problem with the amount of royalties being paid by mining companies then it is the states job to correct the shortfall and collect the money. We are a federation, after all — not a Soviet.
The other major porky being told by Kevin Rudd and his ministers is that the so called “super-profits” of the mining industry is going to greedy shareholders. And greedy working families, and retired Australians, with superannuation. Perhaps Wayne Swan could publish the number of Australians with super shares in BHP and Rio Tinto so we can go out and stone them.
Strangely, Rio Tinto has been running advertisements stating that they in fact plough much of their profits back into infrastructure. A recent advertisement, just this week, stated that over the past 10 years the company has made $37 billion profit but has ploughed back into Australian mining $38 billion in infrastructure. This claim is certified by their auditors.
Indeed it seems that the ports and railways, roads and townships, have been built by the very same mining companies that Rudd/Swan claim are taking this country to the cleaners?
The real danger is that the government is in a desperate search for new taxes to finance the last two and a half years of mega-spend-ups. Why would they, if re-elected, stop at super-taxing just mining companies? Why not farmers who use the “resources owned by all Australians” or airlines who use the air owned by all Australians to fly in — or perhaps fishermen who use the seas, owned by all Australians.
And then, like King William III, why not tax sunlight — after all it’s owned by all Australians?
Now that would be whacky!