Australian study backs miners on new resources tax
SYDNEY: Australia's major miners scored a victory in their clash with the government over a controversial new mining tax Tuesday, when an official study backed their stance on the levy.
The tax triggered an angry backlash from the nation's most valuable export industry when it was first suggested in May, and was a key factor in toppling the then prime minister Kevin Rudd in a Labor Party coup the following month. A compromise agreed between Rudd's successor Julia Gillard and BHP Billiton, Rio Tinto and Xstrata has since appeared shaky after the miners accused the government of reneging on a deal to refund all state royalty payments.
But the government-commissioned report into the Mineral Rent Resources Tax (MRRT) supported the miners' view, saying they should receive tax credits for all state mineral and gas royalties paid.
"The MRRT should not be used as a mechanism to enable States and Territories to increase inefficient royalties on MRRT taxable commodities," it said. "All current and future State and Territory royalties on coal and iron ore should, therefore, be credited."
The report is at odds with the government's stance, which sets royalty rebates at their May 2010 level and does not factor in any future increases. Treasurer Wayne Swan said he would not endorse or reject any of the recommendations in the report immediately, and would respond early next year. "But I can say this: there is a lot of common sense in this report, a lot of common sense in these recommendations," he told reporters in Canberra.
He said he would work through all 94 recommendations in the report, which said that Australia's coal and iron ore industries needed certainty.
The mining tax, set to apply to iron ore and coal from mid-2012, will fund infrastructure, pensions and tax cuts for small businesses, Swan said.
"This type of reform is absolutely critical to the future strength and prosperity of our country," he said. -Afp