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So what they do is they buy oil two years because it's a resource that doesn't go away, and you want to hedge into the long term. But what that means is that now this is when companies are going to have to renegotiate those contracts because it's one or two years down the line from what it was previously, which means that they're now going to have to pay far higher prices on this world. |
So they're going to face extreme high costs at the moment. But secondly, the windfalls that companies had previously have now been invested into things like green energy and renewable technology, which I'll go into my secondary section. So that means they have far less money with which to pay. |
But thirdly, we would say that in many markets, governments regulate energy prices to link them to global prices, which are falling because, you know, there's a supply chain shift from Russia whereby Europe gets lower energy from the USA, for example. And also, Russia now floods energy to countries that aren't sanctioning it, like, for example, South Africa, India. |
And what that means is that the energy price now has gone down, so again, companies don't have the capacity to pay this. And what that means is that profit is unlikely to be crazy high or abnormal during the period where there's continued windfall tax is implemented. And I'll say, "Oh, we won't tax it because it's a windfall," but it's a support motion. |
The question is how does this likely happen? The light of justification is that, as I'll get into, fortitude and stand up and are like, "Oh, these companies, they've just taken all the money away from people. They're terrible. They have the huge amount of capacity to now pay in the current period," which is wrong for all the reasons I've said. |
I don't want that banging moved. Robots in the whole case, right? So how is this taxation level set? Then governments demonize energy companies as profiteering of the public to push through these taxes. They use things like the populist rhetoric that we heard essentially of opening government, which is that everyone is struggling in these high inpatient periods. |
And so it's easy to demonize all companies resolved. And it's true that companies did make high profits, but as you've explained, those profits have massively reduced and that money has already been reinvested, and so it's therefore impossible for these people to pay. But also, there's a kind of competition that exists here where, as a state, that nationalized energy, it's far easier to justify. |
So essentially what happens is that this gets normalized to a large extent as well over time because governments use it as a tool. It's essentially very easy for them to justify taxing these companies. You say we're going to eat the rich or whatever, we're going to use, you know, close tax loopholes or whatever. And what that means is that these taxes are necessarily, in the light scenario, so at an extremely unsympathetic level unfairly. |
And they probably will eat into normal profit because the point is they're happening now when companies are making relatively normal profit rather than previously, and this continues beyond the current market conditions in the period it’s, you know, that exists right now and happens in the long term. The impacts, I think, are very clear. |
A lot of good companies who are just decent energy providers are obviously like out of business because they have to pay this huge increase cost of the taxes. But I want to link in a second. I want to link this directly to renewable energy and eternalness far more because opening opposition has correct headlines, but I think the reason they give is slightly flawed. |
Which essentially the ESG implies the money goes there. We're going to put out a few burglars. Firstly, why companies do this instead of things like shareholder buybacks. Secondly, why, you know, we're going to deal with the writing off response coming out of opening government. Thirdly, we're going to explain why governments don't invest in renewable technology, which interacts directly with closing government. |
And lastly, we're going to explain why you need this level of access profit in order to get this. The opening opposition reason is ESG, essentially, and that's definitely true. It's about ethical investing, and that's definitely true to some extent. But for that case to work, that requires proving that the majority of people within this company on the board are ESG investors. They do care about this. |
We think something different, which is that it is just rational for companies to do this because the way that their share price is determined is by long-term pricing, right? The cumulative present value of the company which exists indefinitely into the future and also the average shareholder has some people like pension funds, for example, who are very long-term incentives because they need to ensure that the people who they're managing money for get a pension like 40 to 50 years. |
They are extremely long term. They get massively about that long term, regardless of who they're, you know, if they have ethical direct things as well. But also, these like egos of individual CEOs who want to engage in green technology, and I think that's a far stronger set of reasons than just that some of these investors are quite ethical. Before I go on, yeah, yeah, okay, |
<poi> |
if these companies invested older profits into Capex, that's tax deductible, why would these companies make tax for money they don't have? |
</poi? |
It's not taxed. But this is like another nuance, right? Taxes action and so on. We actually show this happens in an extremely populous way. And so the way this tax is implemented is super problematic. |
You can't just say that we get 1,000 like best multiple versions back. You need to engage in the lighting scenario, which we've shown is bad. But responses like tax deductibility, but we say again the tax by the perfect section is going to be certified with which it engaging this. Now, the next thing I want to do is talk about why governments can't do this because that's a closing government push is that governments will invest in green technology instead. |
We think that governments don't this for a few different reasons. The first, they're far more willing to engage in actual dirty energy, right? Because the main thing that Master of Government is, like, a long-term success of that thing in 20 to 30 years is ensuring that energy prices are low at the minute you have an election that's right around the corner. |
And so you don't really care about where that energy is necessarily coming from. Just ensure that it exists at some extent so you can embrace things like LNG if you're Germany because, you know, even though the Green Party is in government at that period of time, because you need that energy to make up a threat. So that's why you embrace that kind of dirty energy as well. |
But also we say that governments are foreign. So what that means is that governments don't invest in real energy, in green energy, but these companies do. And I think they need an excess degree of profit because very obviously that means enables them to engage in far more bets about real energy that are all kind of effective. So you're able to invest in a far greater variety of green tech overall. |
But the last thing is even in that best case reading, this is still problematic because it leads to more inequality because the taxes implemented in countries where these energy companies are based rather than their global subsidiaries. So, this country now gets far more of the revenue whereas companies previously had invest incentive to invest globally because that is where how they're best able to maximize profits. |
So for all these reasons, very proud to have you, |
</mo> |
<gw> |
Okay, dealing with to dealing our principle of Harvard and OG's principle and then taking LOL two things on this. CO, yes. Okay, and theory maybe oil companies buy two years in advance, one year advance. Don't really care, and I understand the case, which is ultimately they might fail or they might struggle. |
Three things on this. First of all, given most pension funds, banks, and things like that are tied up in oil prices and oil stocks because most pension funds are tied up in what are considered stable monetary income companies or projects, oil and energy traditionally being something that a lot of banks and a lot of pensions have sold their money into, it seems highly unlikely that the government would do what Annika says. |
Like, it is correct that in this moment we have to talk about likelihood of how this policy is going to be implemented. CO's contention is that it will be done in a populist way. I think most governments at the moment who are under a cost of living crisis, who are in a situation that Jack said where we don't have enough money to back into our welfare systems, are highly unlikely to ever push this policy to the point of breaking claims. |
Why? So, because at the point where they push these companies to either fail, this books over the pensions, this books over the vines, and it means the next recession or the current recession we're in goes on even longer, even worse hurts all the people that Jack and I don't want to hurt and the government still want to hurt. I'll talk about that a little more. |
Or it means that they're even unlikely to push these companies to the point where they're struggling, where it is a realistic risk. So, what I mean there is it's not that they won't push them until they're to breaking point. They won't push them until they don't have sufficient people profits. So, this government is still likely to keep oil companies having a level of profits, i.e., likelihood analysis and justification as to why Jack's perception of the world where we allow these companies to have the amount of profit they used to make, we just don't allow them to absolutely take the piss in the time of a at anything crisis. |
Yes, you said the top sentence which didn't give the analysis. Stop finding the tables. A few things on this, I think. Secondly, another reason it is unlikely to live in the world of CO that these companies are ultimately too big to boss. I really enjoy that I get the perception of these really nice struggling small mom-and-pop shop energy companies. I don't know who the they are. |
Like, I don't think it is likely that Xiao is ever likely to get to the point where they are that desperate and that in need of support, right? People that we put up with oil companies, the energy company doing kind of crappy things to the oceans, to their customers and things like that. And ultimately, it is something that the world needs, and they're unlikely—this government policy is unlikely to ever be implemented in a way that completely populist implementation happens. |
Yes, it is a crossover issue, but so too are pensions being able to heat your house, being able to run their car, being able to run your tractor that gets the food to the people, the trucks to get the food to the people. So, in a cost of living crisis, in a world in which a recession is likely to last forever, and I just don't see the likeness analysis that, oh, closing opposition and standing up to the real world. |
Okay, let's talk about our principle, right? Black interacting so far as the state has bankrolled ultimately in Industry throughout both to an extent covered but mainly Ukraine crisis and various environmental crises that are flocked over both the supply chain and indeed just where we can, I don't get our oil and energy from. |
What does this mean? It means that the principle we signed over a proposition and definitely in closing government is that there's a duty to recoup as much of those funds without crippling these companies. What does that mean? It means that the government now is able to use that money regardless of whether it's OG's version of the world where it's 100% of that analysis goes into the poorest people's pockets. It definitely goes into the state's coffers. |
What does that mean? It means that they are able to fight to recoup the deficit they have brought into this industry. Well, I have this industry some sort of a safety net through a heart through a hard time. It is therefore a legitimate opening opposition for us to do this. It is legitimate insofar as they've received a safety net from the government. Their duty is to now allow that safety net to be passed on to someone else. |
What does that mean and why is that likely? It means that either it is passed, it ensures that states are able to tackle the money they lost, and then deficit is not as hard, or it means they're able to support other sectors that have been impacted throughout both the pandemic and just people's inability to travel and things like that, like the hospitality service or just insert any industry that has been massively over in the last three years. |
Finally, it means that if everyone in opposition cares so much about, like, your granny's ability to pay her heating bill, and what is more important to your granny is not necessarily whether the oil company is doing all these economic safeguarding's that opening opposition talks about. So, what's more important is that the state is stable enough and able to either, as Jack tells you, fund your welfare and ensure that you're not as reliant, or sorry, ensure that you're not as reliant on state services as you will be if you can't afford the future to feed yourself, feed your home, etc. |
I will take you at the end of this point. It is more important to her that the state functions and citizen to recoup in this way. Therefore, I think taxes overall. But I'll do a little bit more. |
<poi> |
So, to be clear, the only country that really engaged in these Southeast—they suddenly you're talking about is the UK because we have trust in competent countries. Europe, for example, engage in a price cap system where they didn't directly fund these companies. |
</poi> |
The Irish government did it as part of an EU policy, like I'm sorry, and supported across so many EU countries. It was also done in a lot of Latin American countries. Yes, not to the ridiculous extent your parable government did it, but it still was a level of support. |
There was equally a level of support. They didn't pay, even if they weren't given direct money from the state's office. They were given essentially money by not having to pay certain forms of taxes or certain points. It's exactly maybe it enhances them as much money as your government did for a like fast claim. I just don't think it would connect. |
Okay, next thing. I think that this becomes, when it comes to green energy in the green energy debate, I think this is the way in which we can justify having companies actually invest in green energy themselves rather than forcing the government to have to do it long term. Why is this the case? At the point where you are likely to have to recoup these costs, it becomes that you need to invest in either new forms of energy that become less expensive long term because they are less likely to be taxed high, or you're likely to get benefits. |
But technology is that their customers are more willing to engage with them, are more capable of engaging with them in a world where there isn't a massive recession and people are not able to maybe spend a little bit more on implementing solar panels, etc., themselves and engaging with you as a company in that way. Finally, on how this microphone is really annoying—sorry. |
Finally, on how companies are able to ensure that they get profit on turn, Jack is correct me just to say that if you can only get, say, 30 quid worth of profit, your duty now instead of increasing your profit becomes having a good service and making sure you've got as many customers as possible. Because where we see things like energy companies actually engaging and looking after their customers, maybe not turning off the lights so much, maybe looking after people to keep their custom, I beg you to oppose. |
</gw> |
<ow> |
What continued is a funny thing because you only need to believe two things. First off, on this debate, number one, that looking at the market as it is now, companies, when you continue to apply a model of windfall taxes, are unlikely to be making the types of profits which would have historically been a basis in justification for those taxes but don't warrant those taxes right now. |
You see government accessible continually. But number two, the way that these taxes are likely to be applied—let's either get through in five reasons, which I will repeat because I've responded to—means that you are likely to get an unfair level of taxation which will actually erode into companies' normal profits. And by normal profits, I don't mean the money that they used to make. I mean the money that they need to sustain their businesses in the future. |
Given that with the windfall taxes, they did things, as Aniket said, like investment green and the investment supply chain, which means that they now have increased costs because they scaled as a result. Important because, as Anakin proved, there was an incentive invested pressure to do something. If those two things, we win the district that made the two weeks. |
The first opposition says, whether it's about consolidation or whether it's about green energy tipping point, based on the assumption that these companies are harmed by these taxes, but the natural God responses to say they made profits they didn't expect in the first place. So, what is the tipping point for this investment? We are able to explain why, firstly, the likely comparative is that they would have invested in these good things that we all care about. |
But secondly, the culture which comes as a result of the way that this tax is likely to work means that they are going to be screwed over and lack the capacity to do the things that opening opposition a bit more confusing with Virgin career. So, let's just move into that in terms of how our case works. |
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