Andrew Forrest interview on ABCTV

GOOD ON YA ANDREW..kEEP IT UP.


What I would have encouraged him to say, was to quote the applicable section of the constitution.
We Quoted this in an early post. There will be argument whether royalties are a tax, and issues relating to what the governement eventually introduces. Here's the transcript below.

http://www.abc.net.au/7.30/content/2011/s3243809.htm?
Australian Broadcasting Corporation
Broadcast: 14/06/2011
Reporter: Chris Uhlmann
The mining magnate speaks with 7.30's Chris Uhlmann about a possible High Court challenge to the Government's mining tax.


Transcript
LEIGH SALES, PRESENTER: A touch under a year ago Julia Gillard said she'd sort three things before calling an election: border protection; climate change; and the mining tax.

Two of those have been daily ordeals ever since, but the government insists the mining tax is settled.

But one high profile miner is threatening a high court challenge over the tax.

The CEO of Fortescue Metals Groups, Andrew Forrest, was in Canberra today for meetings with the Government, Opposition and Independents.

He also spoke with 7.30's political editor, Chris Uhlmann.


CHRIS UHLMANN, REPORTER: Andrew Forrest, welcome.

ANDREW FORREST, FORTESCUE CEO: Thank you very much.

CHRIS UHLMANN: Will you take the Federal Government to the High Court over its mining tax?

ANDREW FORREST: If it's unconstitutional, if it's unfair, if it discriminates against Australian companies and favours multinationals, I think, on behalf of so many other companies, and really, all Australians, that's a precedent too dangerous not to challenge.

CHRIS UHLMANN: You must have tested that with your lawyers, what are the answers to those questions?

ANDREW FORREST: At this stage it looks highly unconstitutional, but clearly Canberra has different lawyers.

CHRIS UHLMANN: On what grounds though, because it's not unfair if it's just being better for one company than another?

ANDREW FORREST: Certainly. But if it discriminates against the States, if a State is taxed more heavily against another State, then that goes straight against the Constitution. Western Australia recently, as is of course their right, increased their royalties, we immediately have discrimination now.

CHRIS UHLMANN: Why didn’t you complain about that?

ANDREW FORREST: Well simply because it's their sovereign right. They own the metals in the grounds, we don't, it's been under the Constitution, owned by the people of the State. So they have every right to put it up.

But further, schools, hospitals, police, etc, are getting paid. We're not funding a great big dinosaur called the NBN (National Broadband Network), where we're going to waste a good $30 billion.

CHRIS UHLMANN: But that really has nothing to do with it, the Federal Government, does have a right to raise taxes, it raises company taxes, against you for example, so it can raise another tax ...

ANDREW FORREST: And it can do it again, and I'll happily pay it. And I'll happily pay this tax as well, no problem, provided of course that it doesn't let multinationals off and just penalise Australians.

CHRIS UHLMANN: Is it penalising Australians, or is it just penalising you because you have a different business model, which is built more on debt?

ANDREW FORREST: No, no, no, no, it, the great big companies have a huge, hundreds of billions of dollars between them, depreciation advantage, which means they can depreciate their assets by hundreds of billions of dollars before they pay this tax. No-one else has that, because they have that huge market value. It directly hits Australian developers.

CHRIS UHLMANN: If this tax is so bad, why has your share price gone up 80 per cent since it was announced?

ANDREW FORREST: I think you can put that down to the fact that we believed in the iron ore industry, we've continued to invest heavily, because we were told the Argus Review would be proper consultation, and that fundamental flaws, like an unfair tax which discriminates against Australians, would be taken into account.

That hasn't happened, that consultation was a farce.

CHRIS UHLMANN: But the people who buy your shares clearly see that there's going to be value in them in the future and they are going up, not down.

ANDREW FORREST: Well we would hope so, because without the multiplier effect of the mining industry the Australian economy would sadly be in a recession. It's the only industry which has a multiplier effect which is positive.

CHRIS UHLMANN: Because commodity prices are continuing to climb, and doesn't the Australian Government have a right, on behalf of the Australian people, to try and get as much of the profits as it can?

ANDREW FORREST: Well unfortunately commodity prices have been falling, I think, which is, you know...

CHRIS UHLMANN: Historically they are at enormous highs.

ANDREW FORREST: Commodity prices go up and down. Commodity prices right now are high on average, but they have fallen a good 25 per cent. That's a solid fall.

You can't put into a budget and budget out predictable cashflows on a tax where it goes up and down like a madman. It's just not a responsible tax to try and plug a budget hole with.

CHRIS UHLMANN: We're seeing 140 year Terms of Trade surge; doesn't the Australian Government have a right, on behalf of the Australian people, to try and cash in on that?

ANDREW FORREST: I think they have every right to. But why would they let off the multinationals and penalise Australians.

Let's get to the issue ...

CHRIS UHLMANN: They're not though, they're saying they can pay more tax, and surely you can pay more tax?

ANDREW FORREST: No, no. Why I'm protesting against this tax, and you heard me say it again, I'm happy to pay this tax, on the record, but, not if they let off the multinationals.

Why were the multinationals the only ones in the room? Why were only they protected from this tax? Why was this trick put into this tax? This pup sold to the Australian Government and they're now trying to sell it to the Australian people, the Australian people are going to see through that. It lets off the multinationals who were funding the advertising campaign against the Gillard Government, it let them off, they stopped that campaign. Now, they're penalising those who are the Australian developers.

CHRIS UHLMANN: But you agree, at the end of the day, those companies will be paying more tax?

ANDREW FORREST: They will pay a lot less profits, a lot less tax ...

CHRIS UHLMANN: But they'll pay more tax.

ANDREW FORREST: ... per dollar profit than what the Australian developer will, and I think that's terribly important. If they pay one cent more, as a multinational, and we pay $10 more, do you think that's fair?

This tax is without precedent, it's dangerous.

CHRIS UHLMANN: But that's not the order of magnitude we're talking about though is it?

ANDREW FORREST: But we are, we are. They have hundreds of billions of dollars, and I'm really glad you're zoning in on this.

Our view is, our fellow Australians have been sold a pup by this Government, they've given multinationals, who were funding the campaign against Gillard and Rudd, a huge tax break. But those who weren't, they're penalising. They're penalising Australians as opposed to multinationals.

CHRIS UHLMANN: Just to clarify this then, you're saying you're not against the tax, you're against the fact that you believe it gives a competitor a break?

ANDREW FORREST: What it does. It is so obvious, I'm surprised Ferguson, Gillard and Swan can't see it like the nose on their face. All I can assume is that they do, but because those three are so powerful they can advertise against the Government, they have let them off and they're penalising everyone else badly.

It is a tax which is designed by those three to limit badly their competition. Their competition is the Australian home-grown companies. That a Government could fall for that is unbelievable.

CHRIS UHLMANN: Are all your shareholders Australian home-grown?

ANDREW FORREST: Many are, and many aren't ...

CHRIS UHLMANN: And many aren't.

ANDREW FORREST: ...but we have 55,000 shareholders, of which 54,900 are Aussies.

CHRIS UHLMANN: Alright, but from the Australian Government's point of view can't you understand that in the end they are going to get more tax dollars out of those companies, and they're going to get more tax dollars out of you, at a time when commodity prices are high; that's a reasonable thing for them to do?

ANDREW FORREST: Absolutely. And let's do, and let's do it fairly. Let's have the great country of Australia levy taxes wherever it pleases.

But not introduce, the first time in Australia's federation history, a tax which really discriminates against Australians and helps multinationals who were funding a campaign against the Government. And the Government needed to look clever, very quickly, after the Prime Minister rolled the Foreign Minister. She needed to look very clever very quickly, so she announced a solution, which could only have been cooked up in a prior agreement, which was just to say 'give us a huge tax break and we'll support a new tax.'

CHRIS UHLMANN: Andrew Forrest, thank you.

ANDREW FORREST: Thank you very much.