Let’s keep it simple.

Over a year ago Rudd gave Toyota a stack of money they didn’t know what to do with or need, to build Camry hybrids in Australia, because Kevin’s wife once complained the existing hybrids were not Australian made. True story.

Sales of the vehicles have been very slow with the Victorian government the only ones buying the cars. Probably because they make no financial sense for buyers. The average person would have to drive something like 200,000 km before they get their money back on the fuel savings. Not including when the battery inevitably fries when the warranty runs out. That is a $10,000 replacement.

Anyway, in order to boost sales Gillard is giving away $2000 to people with worthless cars to go into debt to buy one of these government funded hybrids. These are cars that cost in excess of $40k.

So let me get this straight. If a person can only afford to drive around in a car worth less than $2000, how are they going to be able to afford a car worth $40,000 – $2,000 = $38,000?

Has the ALP completely lost its mind?!?!? So much for Ford and Holden. According to Gillard you guys better start looking for a new job. Hopefully people in Adelaide are awake to the way Gillard has stabbed her own home town in the back.

There are also a range of balance of payment issues and the impact this initiative could have in creating a boom and bust industry, aka the home insulation industry right now.

Liberal supporter and mining magnate Clive Palmer interview here. “The politics of envy will destroy the country.”

Sometimes ALP to apolitical mining magnate Andrew Forrest interview here. “…we can’t model for our stakeholders…” “…a major socialist agenda…”

Bob Brown is a fanatic. He does not care who is sacked, who he makes poor or what community he destroys as long as he gets his fundamentalist environmental agenda across the line.

Which brings us to the members of the Henry review. All, including Henry, have a public sector background except Heather Ridout, the chief executive of the Australian Industry Group. She was obviously appointed to give a business perspective.

After the report’s publication she talked warmly of the new mining tax. It was, she said, “a move in the right direction”. She must be the only business representative to think so.

A point I made a little while ago. Ridout is totally isolated on the mining tax. Any pretense she once had to representing the best interests of business has now gone.

The mining industry is aghast. The government’s business adviser, Rod Eddington, says it should restart the whole process. The chairman of the Future Fund, David Murray, said the tax ”should be abandoned” in its present form. The Business Council of Australia has come out against it. The ANZ Bank has warned about sovereign risk. Which leaves Ridout isolated.

….Ridout will have to account to her members. Henry will not be on the ballot paper at the election. Rudd and Swan will be. The government has to fix this problem.

Costello makes the point that Ridout should have stood against the tax from the very beginning. She has since disappeared on the issue.

….Internode has undercut its rivals to claim the best value monthly broadband plan starting at $29.95 for 15 gigabytes of data at a download speed of 25Mbps with 2Mbps upload.

Internode’s most expensive plan costs $139.95 a month for 200GB of data at 100Mbps (8Mbps upload).

So Internode’s cheap plan is no different from ADSL 2 while the monthly download restrictions on both plans make the download speed almost irrelevant.  Furthermore, unless the entire world is hooked up to a fibre to the node optic system then your never going to get any where near those download speeds. The whole system seems an even bigger waste of money than first thought.

“All I can say is you should take what big mining companies, very big mining companies have to say in this big debate about them paying more tax with a bit of a grain of salt sometimes,” Mr Rudd told the Seven Network’s Sunrise program.

So in other words Xstrata and by implication everyone else opposed to the tax is just lying. Tricking the public. Some grand conspiracy. Absolutely absurd. Rudd is desperate. Apart from a bunch of rang tag die hard socialist unionists and economists like Ken Henry and foreign governments that hope to benefit from capital flight from Australia, it seems everyone that is in the know thinks the Rudd tax is a bad idea.

The head of the council’s tax taskforce, Robert Milliner, said: ”Of most concern to the BCA is the failure of the [super-profits tax] to meet the principle that the taxation framework be characterised by stability and predictability, with any change prospective so as not to adversely affect existing investments or create perceptions of sovereign risk.

”The growing perception of sovereign risk has extended well beyond the resources sector to affect the business environment in Australia more widely. This is harming our international standing, and if not addressed will reduce investment and impede our growth prospects.”

This shows in a stark fashion to the ineptitude of the BCA’s main rival the Australian Industry Group, headed by ALP stooge Heather Ridout. This is what she said last month:

…the weight of expert opinion seems to be in support of this type of tax…

I mentioned at the time what an absurd claim this was, and the claim keeps on getting more and more absurd by the day. Just consider how Ridout is spinning it for Rudd on the news that the AIG’s own manufacturing index had recently dropped:

“The recovery remains patchy and consumer sectors in particular are clearly being affected by continuous interest rate rises, and there’s some undermining of confidence due to world conditions,”

So any cause other than Rudd’s record government debt and spending driving up the cost of borrowing and crowding out private sector investment. And as the BCA has pointed out, Rudd’s mining tax is undermining overall business confidence. Ridout’s ALP bias has become even more transparent. There seems to be – this is speculation – something suspicious about the relationship between Ridout and Rudd. Deals done? Maybe. Eventually what ever is really driving Ridout will come out in the wash.

Nationals Senate leader Barnaby Joyce openly dismissed the open letter.

“It wouldn’t be surprising in a globe of about six billion people that you could find a few people to support the mining tax,” he said.

Virtually every single investment adviser, major banks, hedge funds, international press, the entire mining industry, 5 state governments, superannuation managers, any economist with a free market ilk, etc… are opposed to the tax increase. It simply shows how out of touch and irrelevant the group of 20 economists that support the tax are.

Andrew Robb hits back at the ALP.

20100524-am-03-robb-mining.mp3

1. Fortescue Metals = $17 billion - Solomon and  Western Hub projects put on hold,

2. Xstrata = $30 million - copper exploration cancelled,

3.  BHP =$37.5 billion – Olympic Dam, Yeelirrie uranium project and the Bowen Basin being reviewed to put on hold,

4. OZ Minerals = $300 million - Prominent Hill put on hold,

5. Santos = $7.7 billion - Gladstone liquified natural gas ‘under threat’ of cancellation or being put on hold,

6. Cape Lambert Resources Ltd = $15 million - iron ore exploration cancelled,

7. Rio Tinto = $? – range of projects under review because of the mining tax,

8. Alcoa = $? – reviewing how the tax would negatively impact its operations, and

9. Origin Energy = $35 billion – coal seam gas project potentially delayed or put on hold.

UPDATE

The Coalition should push for a referendum to amend the constitution so that tax in general cannot be retrospective and so an individual or company/corporation cannot be charged more than 50 per cent tax on their income or profits. This would put Rudd in a bind – because the constitutional amendment would apply not just to mining corporations but to all individuals/’working families’.  It would also help sure up support for the dollar and stock exchange – restoring market confidence in the economy. Rudd, give us a referendum on the issue!

UPDATE II

It keeps on getting better:

ONE third of the value of new Pilbara iron ore projects will be wiped out by the Rudd Government’s new mining tax, a Citigroup report has warned, putting essential expansion plans by three major miners at serious risk. 

The report claimed the proposed Resources Super Profits Tax – which it labelled “ill-conceived” – would have a savage impact on iron ore, the commodity that has driven the boom.