Wayne Swan - Too Stupid to be Treasurer

Wayne Swan continues to be a dangerous embarrassment to Australia.

The Labor Government tried to introduce a mining 'super profits tax' that can be best described as 'let's tax to death the one industry propping up the Australian economy.'

The original version of this tax was that if a mining company earned more than the rate of return on government bonds, the government would impose an additional 40% tax.

Students of Finance 101 everywhere thought to themselves, 'Wait, aren't mining company shares significantly more risky than government bonds? Why would anyone invest in a security with the same or lower return than a government bond, but more risk than a government bond? Won't that send Australian mining companies broke?'

Even former Labor Party ministers like Barry Cohen pointed out how dumb this was. Wayne Swan was too stupid to realise this basic economic point, but thankfully the Australian electorate (watching their superannuation funds crater) saw through it.

But in case you thought he might have learned his lesson, he's back at it again. Here's a great example of Swan-onomics.

Treasurer Wayne Swan has seized on BHP Billiton's 72 per cent jump in first-half net profit today, saying it showed why Australia needed a tax on resource company profits.

"But what you will see in terms of the future of the resource industry is that it is very strong, that's why Australia does need a resource rent tax."

Got that? Australian business is showing strong profits, ergo we need higher taxes.

There's so much stupid packed into that sentence that I don't know where to begin.

For a start, we could note that this parasite views all corporate profits as potential revenue for the government, rather than realising that it's not his damn money. 

We could next move on to the assumption that the government should tax successful businesses until they're no longer showing successful profits, and whether this is likely to produce more successful businesses or fewer.

We could wonder about what incentives it will create for economic growth when companies that do well are hit with unpredictable taxes, and how business will respond in terms of investment and job creation.

We could take a detour via the observation that setting different tax rates for different industries based on which ones seem to be doing well is the favored policy of banana republics, corrupt autocracies, and communist kleptocrats.

But honestly, what's the point? It's just whistling into the wind with this moron in charge.

The Labor Party seems to have completely abandoned its reputation for solid economic stewardship so carefully (and deservedly) built up under the Hawke and Keating governments.