So what was the big story yesterday?
The predictable price falls for big miners and their moans about the super tax on mineral profits?
Could be, but then while BHP Billiton and Rio Tinto fell, shares in Woodside Petroleum rose yesterday because it already pays A Resources Rent Tax on its oil and gas earnings.
Could it be the reaction to the rescue of Greece?
Could be, but then it’s over there and the higher tax is here.
Or is it the continuing spill of oil into the Gulf of Mexico, which is going to impose huge costs on offshore oil and gas drilling and production around the globe?
And of course, the move by China to lift the asset reserves of its banks, and crack down further on the hot property sector, holds more importance for Australia in the next couple of years than a resource rent tax does.
In the heady and short sighted reaction to the tax changes announced on Monday, the curious slowdown in retailing was overlooked (see the above story), while not many people were concentrating on the surge in house prices in the March quarter and what it means for the Reserve Bank’s interest rate decision later today.
BHP and Rio Tinto led the decline, and pushed the market down 2-odd points, after bigger falls during the day.
BHP fell 3%, or $1.22 to $39.53 and Rio Tinto dropped 4.3%, or $3.10 to $69.31.
Macarthur Coal fell more than 9% or $1.47 to $14 on the fear that the mooted bid from Peabody might not go ahead, or might be done at less than the $16 a share.
But Macarthur will not be impacted by the RRT unless there’s a crazy surge in coal prices.
Woodside Petroleum though rose 17c to $45.57 as oil prices edged higher on the worries about Greece.
Woodside pays the RRT on its profits, so it’s going to be situation normal for it.
Don’t expect too many analysts or media commentators to explain that difference.
Santos fell 4.6%, or $13.20 because it’s not paying RRT, or rather its LNG project in Queensland could be, if it gets off the ground.
In the past Governments has imposed tax on the gold mining industry (for the first time), introduced the RRT on oil and gas earnings and the NSW Government acquired the private coal rights in NSW.
The world didn’t end and the industries are now bigger, stronger (paying more tax to Australian governments, local, state and Federal) and more people are employed.
And don’t forget the favourable deal small explorers will get from the changes.
The bottom line is that the tax is a long way off and may not happen if there’s a change of government at the election.
But there’s a very good reason for the Government interest in the tax, a our second resources boom in three years.
