Beware the Green/Labor 'super profits' tax – it could be coming to ruin an economy near you

I was shocked when I was asked by the Labor and Greens participants in a parliamentary inquiry a month ago why a super profits tax shouldn’t be applied to the coal mining industry.

Hadn’t this sort of nonsense been laid to rest years ago?

I’d thought when the Labor government raised the royalties on coalmining to a tiered maximum of 40% that they were just opportunistically slugging an industry, unpopular because of climate change, that had received a windfall because of temporarily high commodity prices.

The questions assume they have a more methodical and ideological approach to royalties. If that’s the case, and they think super profits taxes are a good thing in principle, then that would be a financial, and sovereign risk, threat to miners of other minerals, like gas, oil, iron, alumina, copper, lithium, vanadium, graphite and so on.

They quoted the Henry Tax Review to me. Well that was 14 years ago, so I was a bit rusty on exactly what it recommended for mining, and I have little regard for Ken Henry.

They had treasury officers lined-up after me who they indicated they would also quiz on the Henry Tax Review, specifically on this issue.

Henry was the treasury secretary who came up with the plan to save us from the Global Financial Crisis involving subsidising pink batts in suburban houses and building over-priced school halls, all of which arrived after the crisis had passed.

A Labor favourite, but not what I would call a successful, practical economist.

Now I find it wasn't just an idea that was being floated.

Today I see the Greens were serious about the tax.

According to The Australian, under the heading "Greens go ‘Robin Hood’ in $514bn big business tax threat to Labor":

Adam Bandt will demand a $514bn tax hit on big business in return for the Greens supporting Labor in a hung parliament, under what the party trumpets as “Robin Hood” reforms targeting miners, coal and gas companies, banks, telcos and retailers.

The left-wing minor party, which is picking off seats from Labor and the Coalition across the country, will take a Big Corporations Tax package to the next election involving a 40 per cent tax on companies’ “excessive profits” to fund new cost-of-living measures.