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# The Global Intelligence Files

On Monday February 27th, 2012, WikiLeaks began publishing The Global Intelligence Files, over five million e-mails from the Texas headquartered "global intelligence" company Stratfor. The e-mails date between July 2004 and late December 2011. They reveal the inner workings of a company that fronts as an intelligence publisher, but provides confidential intelligence services to large corporations, such as Bhopal's Dow Chemical Co., Lockheed Martin, Northrop Grumman, Raytheon and government agencies, including the US Department of Homeland Security, the US Marines and the US Defence Intelligence Agency. The emails show Stratfor's web of informers, pay-off structure, payment laundering techniques and psychological methods.

## Re: INSIGHT - AUSTRALIA - Tax - CN65

Released on 2012-02-29 14:00 GMT

Email-ID | 1769113
Date | 2010-07-02 10:20:55
From | chapman@stratfor.com
To | analysts@stratfor.com, marko.papic@stratfor.com, jay.young@core.stratfor.com

The big miners have signed an MOU with the government on the Mineral
Resources Rent tax, which is a substantial climbdown by the government,
but which removes one of three obstacles to Gillard as she prepares to
call a general election at the end of August. Gillard will now tackle her
other two immediate problems - the big increase in the number of asylum
seekers arriving by boat, which is a hot political issue, and the
reintroduction of some kind of move to reduce carbon emissions. Rudd's
decision to drop the emissions trading scheme after championing climate
change as "the most urgent issue facing the planet" were, along with the
mining tax, the reason Labor dumped him as leader 8 days ago.
Gillard is likely to deal with these two issues in the next fortnight in
order to enable her to call this early election. The asylum seekers issue
will probably be resolved by Australia and a number of other SE Asian
nations, including Indonesia, supporting a proposal to process asylum
seekers to the region on East Timor. At present those seeking asylum in
Australia are detained on Christmas Island, which is full to overflowing.
The Mineral Resources Rent Tax, with its lower rate of 30 per cent, will
only cover iron ore and coal, not all resources. On shore oil and gas,
including coal seam gas, will now come under the Petroleum Resources rent
tax, where the rate is 40 per cent. Other big minerals like gold,
uranium(Australia is the world's biggest producer) and copper are not
covered, but discussions will go on about them.
There is to be a task force, chaired by Don Argus, former chairman of the
world's biggest miner, Australia-based BHP Billiton, to work through these
and other outstanding issues, and to join in the drafting of the
legislation.
It is important to note that the legislation will not be presented to
Parliament for about one year - in other words after the election. If
Gillard loses the election, then the whole thing will be dropped, as the
Coalition remains opposed to it. However the big miners have left
Opposition leader Tony Abbott high and dry by signing up with the Gillard
government - after he had supported them tooth and nail. Gillard's sure
footed start as PM has white anted him, the polls have turned back to
Labor, and it is hard to see her not being elected. The big miners clearly
drew that conclusion in coming to a deal.
The Government intends to pay for its concessions to the miners by
dropping plans to cut company tax by one per cent for the time being.
Incidentally, while it is true that Australia always needs foreign
capital, that argument can be exaggerated. First, as Matt indicated, it
has not inconsiderable capital of its own, largely due to a very high
savings ratio and investment in the nation's super funds rose by $30
billion last quarter to over $1 trillion. It also has several
multinationals with substantial overseas assets like BHP Billiton
(mining), Westfield (property and retailing), Boral (building materials)
Leighton Holdings (construction) Santos (oil), Macquarie (Banking) etc
etc. It also has had no problem in attracting capital in the past 50
years, and while some of the miners were threatening to withdraw future
projects, they continued to invest even during the dispute, as the numbers
show. It will still require more capital as it moves towards challenging
Saudi Arabia as the world's leading energy producer in 15 years' time. The
most unexploited mineral here is uranium, because the government limits
mining to three mines and has not embraced nuclear power.
Colin
On 02/07/2010, at 11:29 AM, Jennifer Richmond wrote:
SOURCE: CN65
ATTRIBUTION: Australian contact connected with the government and
natural resources
SOURCE DESCRIPTION: Former Australian Senator. Source is
well-connected politically, militarily and economically. He has become
a
private businessman helping foreign companies with M&As
PUBLICATION: Yes but with no attribution
SOURCE RELIABILITY: A
ITEM CREDIBILITY: 1/2
DISTRIBUTION: Analysts
SPECIAL HANDLING: None
SOURCE HANDLER: Jen
Gillard claims there will be no RSPT. She says, however, that there
will be a Mineral Resources Rent Tax.
These are the details of the proposed changes to the tax regime:
* coal and iron ore to be subject to the tax at a threshold rate to be
changed from 5% to LTBR +75
* the headline rate for these resources to be 30%
* tax will not be restrospective, i.e. existing mines will not be
subject to the tax until they hit the hurdles
* oil, gas, CSG to be subject to the PRRT regime at the rate of 40%
The changes will reduce the tax take by A$1.5 billion, but the total tax
was anticipated to be A$9 billion per annum, so there is still a large
tax take.
The big issues will be as follows:
* the government will claim that the small miners chasing other
resources such as moly, nickel, manganese, gold, uranium, etc won't
be affected
* the opposition will argue it is still a massive tax take, but will
be forced to face compliance by BHP, and Rio, so they will highlight
the impact on small businesses that hang the off the mining industry
* the other issue will be that the money is going from the states to
Canberra, further exacerbating vertical fiscal imbalance
Source also sent this link on the tax:
http://production.miningaustralia.com.au/news/mining-tax-slashed?utm_source=20100702&utm_medium=email&utm_campaign=newsletters
Source sent this from another of his politico buddies:
http://www.futuretax.gov.au/documents/attachments/Fact_Sheet_resource_taxation.pdf
It looks like no change between the RSPT and the MRRT in terms of the
treatment of State Royalties....
"The MRRT will also provide a full credit for state royalties paid by a
taxpayer in respect of a mining project. Unused credits for royalties
paid will be uplifted at the long term government bond rate plus 7 per
cent, as per other expenses. Unused royalty credits will not be
transferrable between projects or refundable."
This policy debacle has been a missed opportunity for States to point
out the flaws in Comm-State financing arrangements. The lone voice has
been Colin Barnett in WA, but his voice alone is not strong enough - we
need more Liberal Premiers. I fear this debate will have to wait
another 5 years before we get anywhere. Nonetheless, the LNP needs to be
ready to argue the case for more control over State revenue. This will
undoubtedly involve a higher and broader GST at some stage in the next
decade.
--
Jennifer Richmond
China Director, Stratfor
US Mobile: (512) 422-9335
China Mobile: (86) 15801890731
Email: richmond@stratfor.com
www.stratfor.com