Thursday, June 24, 2010

Australians turning capitalists

From the WSJ,

The tax, which the government thought would win popular support by spreading the wealth from the booming mining sector, has instead backfired as the public worries it will damage Australia's credibility as an investment destination. Mining giants BHP Billiton Ltd. and Rio Tinto Ltd. warned billions of dollars of investment are at risk, and they have led a fight against the 40% levy, saying it would make Australia one of the highest-taxed jurisdictions in the world.

Kevin Rudd miscalculated that Australians would welcome the punitive resource tax that allows for redistributing the profits. There is more trust in the market than the government. He has now paid for it with the premiership. 

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