Again, I urge you to read the senate transcripts. Both Rio and BHP pay tax on their Australian operations profits. The only tax advantage they get from operating in Singapore is due to the physical placement of the offices/employees there. In this way they are no different to all those companies that outsource their call centres to India, The Philipinnes, etc. Transfer pricing, which is what is insinuated by suggesting IO is supplied to Singapore at low/no cost to reduce taxes, is carefully monitored by the ATO and customs.
I take the point on demand forecasts. However, no one is Nostradamus here and those decisions were made years ago. Leaving capital idle is anathema to business so, unless the state is willing to compensate the companies for economic loss, they can do little but watch the show. In the longer term it will be to the ultimate advantage of the state as it has been, and I argue, still is.
Also, people lose sight of the likelihood that the state gained more from the construction phase (in employment taxes, GST, and parallel multiplier effect business) during that construction phase than it would from the supposed royalties on a fantasised higher IOP.
The much hyped augment that the IO belongs to the state (underline state, not Australia) is a complete red herring. Those resources would never have been developed if it were up to the state. The current morbidity in the exploration industry again underlines the incredibly high risk of the business. Unless their is adequate reward at the other end we will see the resources industry decline markedly. While this may be welcomed by many, it will lead to a substantial fall in Australians income and therefore quality of life. Australia simply has too few internationally competitive industries to take the mining industry's place. Most state governments went to an ad valorem royalty precisely to counter these risks. How quickly we forget when self interest reigns!
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