That is simply untrue. There is a definition of super profits used by economists. I am not an economist, but I understand that a super profit is profit in excess of what a company may make by being innovative and efficient, in a competitive market.
Further, economists are able to measure the super profit component of company profits.
In Australia, a lot of company profits arise from limited competition. This includes the banking industry. It is often cheaper for an incumbent to spend money on stifling competition than it is to innovate.
How would you describe the situation where profits are inflated by cartel or monopoly behaviour or by successful rent-seeking such as property developers who successfully arrange for their land to be re-zoned, thus multiplying its value at the stroke of a pen? Or are you going to say that isn’t ‘super profit’ but ‘excessive profit’ or another such synonym and thus doesn’t count?
The Lowy Institute released a paper in June discussing the way a Super Profit Tax on resources could benefit Australia, it would not be hard to extrapolate this to Banking.
I think both of you are missing my point. My point is: When government (the political class more generally) uses the term “super profits” they do so for the purposes of propaganda. Of course that is just an assertion by me. I am not psychic. I cannot look into the heads of the relevant government figures and see what their true motivations are. But I have seen enough politics to know how governments work.
As far as I can see, the gas market is working exactly as it should. The consequence of the Russian invasion of Ukraine is that there is a shortage (of many things, not just gas) and so the price has gone up.
That should encourage reduction in use and/or substitution with cheaper alternatives.
As far as banks go, the only RoI figure that has been mentioned in this topic looks modest to me - and the article that started this topic concluded that a “super profits” tax for banks would be inappropriate.
The demand spike due to the Russia/Ukraine “special military operation” - although I don’t know that demand has changed much. It’s a supply problem.
The energy market as a whole has some problems, largely due to 15 years of political paralysis but also influenced by privatisation - but that is wider than a call for a tax on “super profits”.
It is a truism that our whole tax system needs major review. Recent years have shown that really important elements of tax law needing URGENT change are those of tax on corporations, much tighter supervision of their (not) taxpaying, and proper taxation of corporations ripping off the owners (us) of the resources the companies dig up and sell at exorbitant profits. NOT just gas. Oil, minerals of all kinds, banks and finance companies that really do treat their customers as milch cows using our money and the nation’s credit power to gain their own super profits. And are barely punished at all for the criminal behaviours they have been proven to have engaged in. Fancy large scale theft from dead people who when living were their loyal customers. Treating large corporations with reverence is a major fault in our politicians and our political system.
Stepping back a little, globalisation and deregulation of the banks both seemed like good ideas at the time they were proposed. I think neither of these things have been without their major problems. If the government had retained more control over the banks, perhaps their misdeeds as discovered by the banking royal commission would have been less.
With foreign ownership, it is probably good to attract foreign investment (let them wear the risks), but control of companies should always remain Australian.
The counterfactual is always unknown but … the constitution gives the Federal government almost unlimited control over the banks. Lack of control is not the problem.
