For folks like Bernard Keane, who have poured scorn on the validity of counter-arguments in the RSPT debate (eg, clear sovereign risks), the number of independent experts lending weight to the other side of the story is growing by the day. Yesterday there was Kevin Rudd's own advisor, Dr Rod Eddington. Today we have the CEO of ANZ, Mike Smith, and the Chairman of the Future Fund, David Murray. In Business Spectator, Murray is reported as saying:
"Australia's resource super profits tax (RSPT) should be redesigned or abandoned, according to Future Fund chairman David Murray.
Speaking in a KGB TV interview, Mr Murray said applying the tax to existing projects, and not proposing to save any of the returns, was short-sighted and the structure needed to be changed.
"It's a long term tax being applied to a short term purpose," Mr Murray said.
"If we can't achieve a design that does not penalise the existing projects, that's a sovereign risk issue and a design that does not discriminate between recurrent spending and long term inter-generational wealth creation. If those things can't be done, the tax should be abandoned."
Australia had traditionally been considered reliable in terms of tax regimes, but the "public brawl" between miners and the government will reduce foreign investors' confidence in the country at a time when sovereign risk issues are taking on a larger importance on the global stage, Mr Murray said.
"Investors are becoming a little bit concerned whether governments will become more desperate and impose things that might...that they might not otherwise have done," he said.
"For Australia to do this now is not good timing."
In The Australian today, ANZ's CEO Mike Smith is reported as saying:
"Smith stepped up his rhetoric on the government's controversial mining tax.
"I was in the United States talking to investors and that was one of the questions that was raised," Mr Smith told The Australian.
"Capital is mobile, it goes where it is welcome, and therefore the key things we have to really understand is that investment requires certainty and that it requires a lack of change, particularly for the long-term investment that these things (mines) require. Uncertainty frightens capital.""
Finally, there is a very good op-ed from Chip Goodyear in the AFR (pay-walled). Goodyear recycles the previous points I had made about the time-series inconsistency invoked by this policy.
