Oh, please, Verrender get your facts straight

5263376-1x1-100x100There is only one thing you need to know about the final decline of the ABC and that is the appointment of ex-Fairfax journalist, Ian Verrender, as Business Editor, a person who hates business with a passion.

What was Mark Scott and the board thinking?  Verrender came to the ABC with a dubious reputation and zero broadcasting skills.  His appearances on the television are truly embarrassing.

But just in case you are in any doubt – and ABC Board members, wake up – you are responsible for the editorial standards of the organisation – check out Verrender’s howler from The Drum today:

If there’s one thing Abbott and his Treasurer, Joe Hockey, have never explained, it’s why a mining tax on iron and coal is evil and a “handbrake on the economy”, when they happily accept the revenue from a mining tax on oil and gas.

Australia is a raw materials exporter and, when it comes to minerals and energy, we are talking about non-renewable resources that belong to the Commonwealth, not the mining companies.

A Resources Rent Tax was the centrepiece of the Henry Tax Review and the former treasury secretary advocated a resources tax on all mineral and energy extraction.

It wasn’t an entirely original idea. Paul Keating introduced one almost 30 years ago on oil and gas deposits in Australian territorial waters. It’s worked brilliantly. And it is still in operation today. In fact, the Abbott Government endorsed its extension, to include oil and gas operations on land.

So, if there’s one thing Abbott and his Treasurer, Joe Hockey, have never explained, it’s why a mining tax on iron and coal is evil and a “handbrake on the economy”, when they happily accept the revenue from a mining tax on oil and gas.

Where is the outcry from mainstream economists over this anomaly? Apart from a few academics, it’s sadly missing. That’s because most are employed by big business, either directly or through consultancy work.

Has the Petroleum Resources Rent Tax been a “handbrake”? Has it deterred foreign investment?

Judging by the number of multi-national energy companies operating within Australia and in our waters, clearly not. Not one oil company has ever complained about the petroleum tax. It has not deterred one cent of foreign investment. In fact, more than $200 billion has been invested in LNG projects in Australia.

And it would have been the same for the minerals resources rent tax.

In a good year, the petroleum tax tips more than $2 billion in revenue into the federal budget coffers.

Here’s the thing, Ian: the PRRT applies in Commonwealth waters, beyond State government boundaries.  In other words, no state royalties are payable. When the PRRT was introduced, it replaced a very inefficient income/revenue levy which the producers were keen to see abolished. But, mate, there was no overlay of state royalties on top of the PRRT.

So you see, the clown is you.  The mining tax was a handbrake on investment in iron ore and coal, both of which pay state royalties.  In the case of PRRT, there were no state royalties.

In fact, it was many years before the PRRT delivered any significant revenue because of the way in which it was structured meant that companies could bring all past expenditure to book.  And with the low price of oil (and the renewed protection of recent investments), there is likely to be significant dip in PRRT revenue in the next few years.

And, maate, maate,  (land-based) minerals do not belong to the Commonwealth – they belong to the states.  Does this guy know anything?

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21 Responses to Oh, please, Verrender get your facts straight

  1. Infidel Tiger

    Does this guy know anything?

    He knows that if you want to earn a motza for doing sweet FA, the ABC is the place to be.

  2. C.L.

    Judith is the Cat’s Luca Brasi.

    And that’s a compliment.

  3. .

    Amateur hour. He should get a webcam because he should work as a journalist anymore.

  4. Entropy

    Verrender be clowns himself. News at Eleven.

  5. duncanm

    I don’t know how many times I’ve tried to explain the state ownership of resources to all and sundry.

    Its amazing how many (apparently educated) people are ignorant of this – and hence fall for the ‘mining pays no taxes’ bullshit that spouts from every known orifice of the ALPBC and their cohorts.

  6. Alfonso

    Verr matey won’t let ignorance slow him down. I believe he also has some valuable insight into orthopaedic surgical techniques.

  7. Milton Von Smith

    As soon as the minerals are dug out of the ground, they belong neither to the Commonwealth Government, the State Government, the “people”, or anyone else. They belong to the mining companies. Poor old Juliar never understood this. And neither, apparently, does Verrender.

  8. Balatro

    The astonishing thing about this is – he is not alone in thinking this is the case.
    Many people have forgotten that in the 70’s Neville Wran confiscated the coalfields south of Sydney because they were privately owned under the Old Title system of land tenure. As a consequence, no State royalties were paid. Wran solved the problem by claiming a clerical error at the time of adoption of the Torrens Title ( which confers surface rights only on the owner – the rest is retained by the Crown). Wran permitted the rightful owners to lease back their tenements after the clerical error was rectified. Verrender probably thinks Sovereign risk is a figment of the miners imagination.

    I can recall something about searching for oil of the Great Barrier Reef. Joh Betjlke Petersen was keen to proceed because the great state of Quinceland would be the benefactor. I think Gareth Evans killed it off by declaring no export licence would be granted. It was this that prompted the move by Keating as treasurer to introduce the rental tax in Commonwealth waters.

  9. Peter from SA

    Is this the guy that wasn’t shot down over Afghanistan as well?

  10. Baldrick

    And, maate, maate,  (land-based) minerals do not belong to the Commonwealth – they belong to the states.  Does this guy know anything?

    He’s not paid to know things. He’s paid for his ABC group-think opinions.

  11. Gavin R Putland

    Judith Sloan wrote:

    The mining tax was a handbrake on investment in iron ore and coal, both of which pay state royalties.

    By that logic, the extension of the PRRT to onshore oil and gas — imposed by the Gillard government and quietly accepted by the Abbott government — was a handbrake on investment in onshore oil and gas, which also pay state royalties.

    In the case of PRRT, there were no state royalties.

    There are now. But there’s no need to repeal Labor’s handbrakes if the punters don’t know about them. We’ll just pocket the revenue and boast about our fiscal rectitude, thank you.

  12. Judith Sloan

    No net change from that change Gavin. The companies negotiated that way. Check out disappointing PRRT revenues.

  13. Gavin R Putland

    No net change from that change Gavin. The companies negotiated that way.

    You mean like they did with the MRRT?

    Check out disappointing PRRT revenues.

    Due to disappointing oil and gas prices.

  14. Judith Sloan

    I should have added that all state royalties and other taxes are fully rebated before PRRT is paid.

  15. Judith Sloan

    Not just increase in state royalties as was case with MRRT.

  16. Gavin R Putland

    I should have added that all state royalties and other taxes are fully rebated before PRRT is paid.

    That’s the way the MRRT worked: http://www.miningweekly.com/article/greens-calls-on-parliament-to-scrap-mrrt-royalty-rebate-2012-06-11 .

    Not just increase in state royalties as was case with MRRT.

    The MRRT credited the lot. The Greens tried to amend the MRRT so as to credit only those royalties payable as at 1 July 2011 (not the subsequent increases), but were rebuffed.

  17. Myrddin Seren

    He’s not paid to know things. He’s paid for his ABC group-think opinions.

    Well Verrender doesn’t seem to have been selected for his economic knowledge.

    So bastion of diversity TheirABC tosses another taxpayer funded parachute to a middle-aged, white, Anglo, english-as-first language hacktivist. Verrender better be gay, because other than hacktivist females being allowed into the hive mind – they are a pretty whitebread and reactionary old boys club.

  18. Bruce of Newcastle

    A Resources Rent Tax was the centrepiece of the Henry Tax Review and the former treasury secretary advocated a resources tax on all mineral and energy extraction.

    Wouldn’t Mr Verrender look silly right now if the Federal Government was paying mining companies $10 billion a year under the original Henry mining tax plan? That is because iron ore and coal prices have collapsed.

    Mr Verrender seems to have forgotten about this.

    But I am pleased he has managed also to escape his Fairfax bunker before the tanks arrive.

  19. Empire

    But I am pleased he has managed also to escape his Fairfax bunker before the tanks arrive.

    The tanks will be coming to Ultimo too Bruce 🙂

  20. One can be forgiven a single own goal in a lifetime, but two in the same match?

    Can you write another column next week, please Ian?

  21. Normative

    Verrenders explication of Greek debt was hilarious. He thinks banks etc are bad. So Greeks should of course refuse to pay. No idea of the remarkably slack government. In fact a benchmark for what pollies do when they keep buying votes with debt.
    Verrender is supposed to be a reporter. He is is lazy minor ideologue.

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