Julia Gillard and Wayne Swan have grossly misled the public on the cost of their abject surrender to the three big mining companies over the former resource super profits tax.
They claimed that almost halving the rate of the tax - from 40 per cent to an effective 22.5 per cent - and making various other concessions demanded by the companies would reduce tax collections by just $1.5 billion over its first two years - a mere 12.5 per cent of the originally budgeted $12 billion.
How was that always unbelievably small cost achieved? Partly by shifting the goalposts. As we now know, the revenue to be raised by the new version of the tax was estimated using higher prices for coal and iron ore than were used in estimating the revenue to be raised by the original version. Apparently, the new estimates also used different assumed production volumes. Read more.