Saturday, May 08, 2010

Kevin Rudd Is A Nation-Destroying Socialist Who Needs To Be Stopped

Kevin Rudd, Krudd, is a nation-destroying socialist who needs to be stopped. When the media is stating that he's more destructive than Gough Whitlam ever was that's saying something. Gough Whitlam, as you may or may not know, headed the only Australian government in history that was dismissed by the Governor-General.

What has Kevin done this time to upset me? Well, it's actually taken a week for me to calm down enough to write something that's not as likely to have me charged with libel or sedition. He's called for a Resources Super-Profit Tax, RSPT, which is capable of ruining our great nation. This RSPT kicks in when miners earn more than the 10-year government bond rate of about 6%. Six percent people! This communist, socialist, fascist bastard obviously doesn't know anything about capitalism and profit. What about the risk and return model? Anybody worth his salt knows that a company needs to make 15-25% return to be profitable. I don't think Shell likes to have any assets not performing at at least 18% profitability. Wesfarmers looks for around 18% and I know that they had an asset (Wesfarmers Transport) producing about 15% and that was divested. What sort of a joke is this idiot?

Krudd claims that the miners aren't returning the money to Australia and are taking it all for themselves. He wants to ensure that all Australians share in the returns from our non-renewable resources. Ha! Why don't they invest in the shares of these companies? I think the fact that the states can obtain royalties from the miners and I don't believe that the federal government can do so is one reason to introduce this tax. Krudd wants to cut the states out of tax revenue altogether.

Krudd claimed that 40% of BHP Billiton and 70% of Rio Tinto were owned by overseas investors in his defence of introducing this new tax. I read today that there are over 3.3 billion shares listed for BHP Billiton. Well, 60% of 3.3 billion shares is an awful lot of money still which affects Australians directly so there are no faceless sufferers. Krudd actually thinks that this won't affect Australians and it's just some faceless foreigner who will cop it in the arse. Almost every Australian will be affected as those that have superannuation invested in shares will probably be affected as BHP and Rio will be in practically all superannuation funds. How much did the miners drop last week? BHP went from a close of $40.75 on Friday the 30th of April (the RSPT proposal was released on Sunday the 2nd of May) to $37.50 the following Friday. A drop of 8%. Rio went from $72.10 to $64.98 in the same time frame which was a drop of 8.75%.

The RSPT will lead to a considerable drop in foreign investment and Australia has long required foreign money to build infrastructure. Today is no different. And it's not only the foreigners that will limit investment as Cape Lambert Resources announced, almost immediately, that it would not invest in Australia but would look overseas. I mean, wouldn't you if the tax rate was going to reach approximately 57% and become the highest in mining in OECD countries? No wonder the Canadian Finance Minister is rubbing his hands with glee fully expecting miners doing business in Australia currently to turn their attention to his country.

One thing mining companies consider when investing overseas is sovereign risk. They want to be fairly certain that the rules of play don't change once they have started the game. I see this RSPT as something akin to nationalisation whereby a sovereign government takes some or all of a company's assets. Looks like Krudd and his crew are trying to nationalise the resources industry in Australia. Even Kim Jong-il is looking better than Krudd in turns of a popular socialist at this point in time.

Talk about killing the golden goose. Resources are returning billions of dollars annually in the form of taxes and royalties. Companies are taxed at 30%, still high by OECD standards, and workers, thousands of them country-wide, pay greater rates of income tax than that. Stopping many projects in this country is not going to increase revenue nor create wealth for our workers. It'll certainly put a halt to a two-pace economy though. More mining leads to greater employment, more training required for workers and more tax payments from wage earners.

Krudd has had five months to look over the Henry Tax Review, from Treasury Secretary Ken Henry, so how could he be so blind as to what the reaction from resources companies, and the stock market and foreign investors, would be? What is Krudd's modus operandi here? If he's so worried about inflation what better what to combat it than ruin the value of a major section of the Australian people's capital - the stock market. If he wants to sell this country off to his Chinese mates then why not destroy the value of all major business so that the Chinese can come in, all cashed-up, and take what they like at bargain prices?

What about boom and bust? Sure, the resources sector is booming at the moment. It's a once in a lifetime, not generation, boom with China (and India to follow) growing amazingly. Not even the rebuilding following World War II comes close to the super requirements of commodities that we currently have. There'd be no money to invest in a bust anyway. Why bring that forward by 20 years?

It's time for Kevin Rudd to go. He's hit the self destruct button but unfortunately it's not on a five second timer. We have to wait until the next election. Obviously Kevin wants us to all live on kibbutzes but where is the money to build them coming from? Everything he has touched since coming to office, if you'll pardon my French, has turned to shit. Household insulation installation - bit lump of expensive shit. Laptop for every secondary student - costly, not totally effective lump of shit. Stimulus Package - massive, almost completely ineffectual waste of billions of dollars we don't have - constitutes a dump of momentous proportions. Where are the nation-building stimuli that would benefit this country after having a war chest built up by the former Liberal government?

It's time the Governor-General came a-knocking on Kevin Rudd's door. Before someone with more evil intent does. Don't worry as that won't be me. I don't think he's even worth a bullet.


Anonymous said...

That dirty bastard!!

Anonymous said...

It's true! I saw him! He really is a bastard! A filthy stupid country selling piece of worse than useless poop!

Hammy said...

I couldn't have put it much better myself if I'd tried.